(a) Subject to subdivision (e), 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 both of the following rules apply:
(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 this division.
(2) The secured party’s failure to comply with this division does not affect the liability of the person for a deficiency.
(b) Subject to subdivision (e), a secured party is not liable because of its status as secured party to either of the following persons:
(1) To a person that is a debtor or obligor, unless the secured party knows all of the following:
(A) That the person is a debtor or obligor.
(B) The identity of the person.
(C) How to communicate with the person.
(2) To a secured party or lienholder that has filed a financing statement against a person, unless the secured party knows both of the following:
(A) That the person is a debtor.
(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 either of the following representations:
(1) A debtor’s representation concerning the purpose for which collateral was to be used, acquired, or held.
(2) An obligor’s representation concerning the purpose for which a secured obligation was incurred.
(d) A secured party is not liable under paragraph (2) of subdivision (c) of Section 9625 more than once with respect to any one secured obligation.
(e) Subdivisions (a) and (b) 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, both of the following conditions are satisfied:
(1) The person is a debtor or obligor.
(2) The secured party knows that the information in subparagraph (A), (B), or (C) of paragraph (1) of subdivision (b) 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.
(Amended by Stats. 2023, Ch. 210, Sec. 73. (SB 95) Effective January 1, 2024.)