2023 New Mexico Statutes › Chapter 55 - Uniform Commercial Code › Article 9 - Secured Transactions › Part 6 - DEFAULT › Subpart 2 - NONCOMPLIANCE WITH ARTICLE › Section 55-9-628 - Nonliability and limitation on liability of secured party; liability of secondary obligor. (Effective January 1, 2024.)

(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.
ANNOTATIONS
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).