2023 Hawaii Revised Statutes
Title 27. Uniform Commercial Code
490. Uniform Commercial Code
490:9-628 Nonliability and limitation on liability of secured party; liability of secondary obligor.

§490:9-628 Nonliability and limitation on liability of secured party; liability of secondary obligor. (a) 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 shall not be 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 shall not affect the liability of the person for a deficiency.

(b) Subject to subsection (f), a secured party shall not be liable because of its the status as secured party to:

(1) 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) 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 shall not be liable to any person, and a person's liability for a deficiency shall not be 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 the 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 shall not be liable to any person under section 490:9-625(c)(2) for its failure to comply with section 490:9-616.

(e) A secured party shall not be liable under section 490:9-625(c)(2) more than once with respect to any one secured obligation.

(f) Subsections (a) and (b) shall 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) 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. [L 2000, c 241, pt of §1; am L 2023, c 132, §63]