DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
July Term 2012
CHRISTOPHER W. HENDERSON,
Appellant,
v.
LITTON LOAN SERVICING, LP,
Appellee.
No. 4D10-1167
[July 18, 2012]
Whether the appellee is entitled to enforce the promissory note remains a disputed issue of material fact. In Harvey v. Deutsche Bank Nat’l Trust Co., 69 So. 3d 300, 303 (Fla. 4th DCA 2011), we explained that the person entitled to enforce a negotiable instrument such as a note is the “holder of the instrument.” (quoting 673.3011, Fla. Stat.) A “holder” is the person in possession of the instrument that is payable to bearer or to an identified person in possession. 671.201(21)(a), Fla. Stat. “Bearer” means “a person in possession of a negotiable instrument … that is payable to bearer or indorsed in blank.” 671.201(5), Fla. Stat. The note presented in these proceedings does not appear to have an endorsement in blank. Instead, the endorsement is to a specific entity, Wells Fargo, which is not the plaintiff in this case.
* * *
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Meenu Sasser, Judge; L.T. Case No.
502009CA001464XXXXMB.
Copy of opinion below…
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4closureFraud.org
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HENDERSON vs LITTON LOAN SERVICING
to zurenarrh
An examination of the Official Comments to the UCC are pertinent. In particular, Official comment §3-110 states: “This provision merely determines who can deal with an instrument as a holder. It does not determine ownership of the instrument or its proceeds.”
Official comment §3-203 ”The right to enforce an instrument and ownership of the instrument are two different concepts. Ownership rights in instruments may be determined by principles of the law of property, independent of Article 3………….
A thief can seek to enforce a promissory note endorsed to blank as long as it is able to prove with competent evidence the amount it seeks is actually the remaining value of the note as it resides on the owner’s balance sheet ledger. Identification of the owner is necessary along with intimate knowledge of the liability residing on the owners books of account.
A thief by defintion doesn’t purchase anything and therefore the liability which offsets the subject note does not reside on its books.
The ownership allegation is necessary to further plead the note has value on somebody’s balance sheet ledger and that lien rights still exist. A note whose value has already been realized on the books can’t be enforced or transferred. Once the lender is made whole, even if by a stranger to the debt instrument, lien rights cease to exist. Foreclosure is an in rem action to enforce a lien instrument and if nobody alleges ownership of the note, the borrower is left to deduce that value of the subject note has somehow been realized and lien rights are expired.
To summarize, ownership is necessary for lien rights to exist because section 13 of the mortgage instrument covenants that the security instrument binds and benefits the successor and assign of the lender. A lender or its successor can only exits if the note has remaining value on somebody’s books of account.
That is why foreclosure in Florida is by the owner and holder of the subject note and mortgage. Without pleading somebody, anybody, owns the present value of the note, the plaintiff can’t state a cause of action on the lien instrument. A party seeking foreclosure must demonstrate that it owns and holds the note and mortgage in question—otherwise, the plaintiff lacks standing to foreclose. See Lizio v. McCullom, 36 So. 3d 927, 929 (Fla. 4th DCA 2010) Plaintiff must allege that he is the present owner and holder of the note and mortgage see Edason vs Central Farmers Trust Co., 129 So 698, 700 (FLA 1930)
I disagree. If someone steals a note endorsed in blank, then they are in fact the holder/owner. That’s the danger of endorsing in blank. That’s why they have to keep the notes somewhere secure. If they don’t, they’re shit outta luck. That”s also why endorsement in blank is not really a great idea, because there’s always the danger that notes will be stolen, and whoever is in possession of a note endorsed in blank IS the payee of that note. The UCC is pretty clear on that.
That doesn’t even get into the question of whether or not the endorsements are genuine.
It would be interesting to lean the differences between Investor, Lender, Owner of the Note, Holder of the Note, Assignee, and what this means in regards to the Title. Every time I think I get it, I get confused.
They have NOT gotten it right yet.
Is a thief of a note endorsed in blank a “holder” entitled to foreclose? I don’t think so. That is absurd outcome that the courts refuse to consider.
Someday, all states will recognize, as the Supreme Judicial Court in Massachussetts has recognized, that holder MUST equal “owner” when considering standing to foreclose. As a foreclosure necessarily involves the attempted taking of real property, this must implicate UCC-9.
Encouraging courts to analyze a party’s “right to foreclose” under UCC-3 is a red herring and a bankster industry favorite past time…
It’s good that that’s what the court decided, because that’s what the law says about what a “holder” is. In this sense, “holder”=owner. In my reading of the UCC (and I’m not a lawyer and proud of it), “holder” is the important concept, while “ownership” is derived from being a holder. There’s been a lot of confusion on the blogs about holder vs. owner, but I think the law is and has always been clear on this point.