Max Gardner on Standing

22 Aug

From: Charles Cox [mailto:charles@bayliving.com]
Sent: Wednesday, August 22, 2012 10:47 AM
To: Charles Cox
Subject: Max Gardner on Standing

Standing Updates

By Tiffany Sanders on August 22, 2012

See the online link to Max’s site on Standing: http://newsletter.maxbankruptcybootcamp.com/2012/08/standing-updates/

The most recent updates includes several new cases on “holder of the note” standing:

In re Knigge, 2012 WL 1536343 (Bankr. W.D. Mo., April 30, 2012): The creditor, as the party in possession of a promissory note endorsed in blank, was the “holder” of the note and was entitled to enforce the note; while the deed of trust referred to in the note required the debtors to perform a variety of undertakings beyond the payment of money, such as “occupy[ing] the property, refrain[ing] from wasting or destroying the property, maintain[ing] insurance on the property, and giv[ing] notice to Lender of any losses relating to the property,” these additional undertakings did not undermine the negotiability of the note under Missouri law.

In re Griffin, Case No. 11-1362 (9th Cir. B.A.P., April 6, 2012), appeal filed, Case No. 12-60046 (9th Cir., filed June 18, 2012): The stay relief movant’s providing a copy of the Chapter 7 debtor’s promissory note, along with a declaration stating that the copy was a “true and correct copy of the indorsed Promissory Note,” was sufficient to demonstrate that the movant was in possession of the note. Under Fed. R. Evid. 1003, “[a] duplicate is admissible to the same extent as an original unless (1) a genuine question is raised as to the authenticity of the original or (2) in the circumstances it would be unfair to admit the duplicate in lieu of the original,” and the Chapter 7 trustee had not presented a genuine question as to the note’s authenticity such that the original would be required; since the note was properly endorsed in blank, the movant was a holder of the note entitled to enforce it.

In re Balderrama, — B.R. —-, 2012 WL 1893634 (Bankr. M.D. Fla., May 16, 2012): In Florida, standing to enforce a note depends on the type of negotiable instrument the note becomes upon execution. If the note is endorsed in blank, it becomes a bearer instrument and can be enforced by the party in possession, regardless of how that party obtained the note. When a note is payable to an identifiable party, however, the instrument becomes a “special instrument,” and only the party or its assignee, specifically identified as the proper holder, i.e., the holder in due course, may enforce the note. Here, because the movant claimed that it held a special instrument specifically endorsed to the movant, it needed to prove that it was a holder in due course.

In re Fennell, 2012 WL 1556535 (Bankr. E.D. N.Y., May 2, 2012): A party holding the debtor’s mortgage note endorsed in blank is entitled to enforce the note and has standing to move for relief from stay.

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