Current through Register Vol. 49, No. 8, August 19, 2024
Section 336.9-628 - NONLIABILITY AND LIMITATION ON LIABILITY OF SECURED PARTY; LIABILITY OF SECONDARY OBLIGOR(a)Limitation of liability of secured party for noncompliance with article. Subject to subsection (f), unless a secured party knows that a person is a debtor or obligor, knows the identity of the person, and knows how to communicate with the person: (1) the secured party is not liable to the person, or to a secured party or lienholder that has filed a financing statement against the person, for failure to comply with this article; and(2) the secured party's failure to comply with this article does not affect the liability of the person for a deficiency.(b)Limitation of liability based on status as secured party. Subject to subsection (f), a secured party is not liable because of its status as secured party: (1) to a person that is a debtor or obligor, unless the secured party knows: (A) that the person is a debtor or obligor;(B) the identity of the person; and(C) how to communicate with the person; or(2) to a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows: (A) that the person is a debtor; and(B) the identity of the person.(c)Limitation of liability if good faith belief that transaction is not a consumer goods transaction or consumer transaction. A secured party is not liable to any person, and a persons liability for a deficiency is not affected, because of any act or omission arising out of the secured party's reasonable belief that a transaction is not a consumer goods transaction or a consumer transaction or that goods are not consumer goods, if the secured party's belief is based on its reasonable reliance on: (1) a debtor's representation concerning the purpose for which collateral was to be used, acquired, or held; or(2) an obligor's representation concerning the purpose for which a secured obligation was incurred.(d)Limitation of liability for statutory damages. A secured party is not liable to any person under section 336.9-625(c)(2) for its failure to comply with section 336.9-616.(e)Limitation of multiple liability for statutory damages. A secured party is not liable under section 336.9-625(c)(2) more than once with respect to any one secured obligation.(f) Exception: Limitation of liability under subsections (a) and (b) does not apply. Subsections (a) and (b) do not apply to limit the liability of a secured party to a person if, at the time the secured party obtains control of collateral that is a controllable account, controllable electronic record, or controllable payment intangible or at the time the security interest attaches to the collateral, whichever is later: (1) the person is a debtor or obligor; and(2) the secured party knows that the information in subsection (b)(1)(A), (B), or (C) relating to the person is not provided by the collateral, a record attached to or logically associated with the collateral, or the system in which the collateral is recorded. ARTICLE 10
CONTROLLABLE ELECTRONIC RECORDS
Amended by 2024 Minn. Laws, ch. 93,s 9-50, eff. 8/1/2024.This section is set out more than once due to postponed, multiple, or conflicting amendments.