§ 355-9-628

355.9 -628 Nonliability and limitation on liability of secured party -- Liability of secondary obligor. (1) Subject to subsection (6) of this section, unless a secured party knows that a person is a debtor or obligor, knows the identity of the p erson, and knows how to communicate with the person: (a) 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 (b) The secure d party's failure to comply with this article does not affect the liability of the person for a deficiency. (2) Subject to subsection (6) of this section, a secured party is not liable because of its status as secured party: (a) To a person that is a debto r or obligor, unless the secured party knows: 1. That the person is a debtor or obligor; 2. The identity of the person; and 3. How to communicate with the person; or (b) To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows: 1. That the person is a debtor; and 2. The identity of the person.

rson; or (b) To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows: 1. That the person is a debtor; and 2. The identity of the person. (3) A secured party is not liable to any person, and a person's liabi lity 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) A debtor's representation concerning the purpose for which collateral was to be used, acquired, or held; or (b) An obligor's representation concerning the purpose for which a secured obligation wa s incurred. (4) A secured party is not liable to any person under KRS 355.9 -625(3)(b) for its failure to comply with KRS 355.9 -616. (5) A secured party is not liable under KRS 355.9 -625(3)(b) more than once with respect to any one (1) secured obligation. (6) Subsections (1) and (2) 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

ith respect to any one (1) secured obligation. (6) Subsections (1) and (2) 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 pa yment intangible or at the time the security interest attaches to the collateral, whichever is later: (a) The person is a debtor or obligor; and (b) The secured party knows that the information in subsection (2)(a)1., 2., or 3. 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. Effective: January 1, 2025 History: Amended 2024 Ky. Acts ch. 10, sec. 93, effective January 1, 2025. -- Created 2000 Ky. Acts ch. 408, sec. 146, effective July 1, 2001.