(a) Subject to Subsection (f) of this section, 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 Chapter 55, Article 9 NMSA 1978; and (2) the secured party's failure to comply with Chapter 55, Article 9 NMSA 1978 does not affect the liability of the person for a deficiency. (b) Subject to Subsection (f) of this section, 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) A secured party is not liable to any person, and a person's 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) A secured party is not liable to any person under Paragraph (2) of Subsection (c) of Section 55-9-625 NMSA 1978 for its failure to comply with Section 55-9-616 NMSA 1978. (e) A secured party is not liable under Paragraph (2) of Subsection (c) of Section 55-9-625 NMSA 1978 more than once with respect to any one secured obligation. (f) Subsections (a) and (b) of this section 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 Subparagraph (A), (B) or (C) of Paragraph (1) of Subsection (b) of this section 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. History: 1978 Comp., § 55-9-628, enacted by Laws 2001, ch. 139, § 125; 2023, ch. 142, § 94. OFFICIAL COMMENTS UCC Official Comments by ALI & the NCCUSL. Reproduced with permission of the PEB for the UCC. All rights reserved. 1. Source. New. 2. Exculpatory Provisions. With respect to subsection (f), see Section 9-605, Comments 2 and 3. If a secured party reasonably, but mistakenly, believes that a consumer transaction or consumer-goods transaction is a nonconsumer transaction or nonconsumer-goods transaction, and if the secured party's belief is based on its reasonable reliance on a representation of the type specified in subsection (c)(1) or (c)(2), then this article should be applied as if the facts reasonably believed and the representation reasonably relied upon were true. For example, if a secured party reasonably believed that a transaction was a nonconsumer transaction and its belief was based on reasonable reliance on the debtor's representation that the collateral secured an obligation incurred for business purposes, the secured party is not liable to any person, and the debtor's liability for a deficiency is not affected, because of any act or omission of the secured party which arises out of the reasonable belief. Of course, if the secured party's belief is not reasonable or, even if reasonable, is not based on reasonable reliance on the debtor's representation, this limitation on liability is inapplicable. 3. Inapplicability of Statutory Damages to Section 9-616. Subsection (d) excludes noncompliance with section 9-616 entirely from the scope of statutory damage liability under section 9-625(c)(2). 4. Single Liability for Statutory Minimum Damages. Subsection (e) ensures that a secured party will incur statutory damages only once in connection with any one secured obligation. The 2023 amendment, effective January 1, 2024, added a provision clarifying the limitation of liability of a secured party in certain circumstances; in Subsections (a) and (b), in the introductory clause, added "Subject to Subsection (f) of this section"; and added Subsection (f).
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