CO Code § 4-9-628 (2021)
2021 Colorado Code|Title 4 - Uniform Commercial Code|Article 9 - Secured Transactions|Part 6 - Default|§ 4-9-628. Nonliability and Limitation on Liability of Secured Party - Liability of Secondary Obligor

  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:   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    The secured party's failure to comply with this article does not affect the liability of the person for a deficiency.       A secured party is not liable because of its status as secured party:   To a person that is a debtor or obligor, unless the secured party knows:   That the person is a debtor or obligor;    The identity of the person; and    How to communicate with the person; or       To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows:   That the person is a debtor; and    The identity of the person.          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:   A record authenticated by the debtor concerning the purpose for which collateral was to be used, acquired, or held, or indicating that collateral is not a consumer deposit account; or    A record authenticated by the obligor concerning the purpose for which a secured obligation was incurred.         A secured party is not liable under section 4-9-625 (c)(2) for its failure to comply with section 4-9-616. (d) (1) A secured party is not liable under section 4-9-625 (c)(2) for its failure to comply with section 4-9-616.    Repealed.       A secured party is not liable under section 4-9-625 (c)(2) more than once with respect to any one secured obligation.      History. Source: L. 2001: Entire article R&RE, p. 1421, § 1, effective July 1. L. 2002: (d)(2) repealed, p. 939, § 9, effective August 7.    Editor's note - Colorado legislative change: Colorado substituted the phrase “A record authenticated by the debtor” for the phrase “A debtor's representation” and added the phrase “or indicating that collateral is not a consumer deposit account” in subsection (c)(1), substituted the phrase “A record authenticated by the obligor” for the phrase “An obligor's representation” in subsection (c)(2), and did not adopt subsection (d) of the uniform act. The uniform act's subsection (e) states: "A secured party is not liable under section 4-9-625 (c)(2) more than once with respect to any one secured obligation."   OFFICIAL COMMENT   1. Source. New.   2. Exculpatory Provisions. Subsections (a), (b), and (c) contain exculpatory provisions that should be read in conjunction with Section 9-605. Without this group of provisions, a secured party could incur liability to unknown persons and under circumstances that would not allow the secured party to protect itself. The broadened definition of the term “debtor” underscores the need for these provisions.   If a secured party reasonably, but mistakenly, believes that a consumer transaction or consumer-goods transaction is a non-consumer transaction or non-consumer-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 non-consumer 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.