Reality vs Obscurity — How to Change the Tide

Failure to apply the law does not mean that the law should not have been applied.

“I think you are confusing the current reality of multiple erroneous court decisions with the legal reality of what is meant to be followed by statutes and case decision is going back to a time before this country was ever created and then afterwards the universal adoption of a National Code (now the UCC) as statutory law in each of the 50 states.” — Neil F Garfield in email to long-time follower of this blog.

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Virtually all the people who “take issue” with what I write here do so by pointing to case decisions that do not follow what I have written. That is because I don’t write the laws. I just write about them.

For example, consider my response to such a reader who is quite convinced I am wrong about some things especially when it comes to Bills and Notes (i.e., negotiable and nonnegotiable isntruments).

  1. There is a HUGE difference between what is sufficient for pleading purposes and what is required for proof at trial.
  2. These foreclosure cases are first about money not title. The avoidance of this single premise is responsible for nearly all foreclosures being approved by courts who simply do not understand Bills and Notes and who are presented with “cases” by lawyers who do not understand about bills and notes.
  3. Going back centuries in statutory and common law the purpose of those laws was to “settle” the issue of when a transaction shall be considered completed so that people in the marketplace could have confidence in what they were buying and trading.
  4. There was never an intent by anyone writing those laws or case decisions to untether the paper from the transaction with one potential exception — a holder in due course.
  5. There was ONLY the intent to legitimize the paper memorializing the origination or transfer of a debt or delivery of financial instruments, services or goods. And other than an HDC the presumption that the paper is tied to some actual transaction is and always has been fundamental for anyone seeking relief based upon the paper.  The fact that courts for the last 20 years have erroneously treated the holder as a holder in due course does not change what the law requires and what it should require.
  6. Notes and other instruments are only as good as the transactions memorialized by those instruments. If there is no transaction, the existence of a document is irrelevant, like a wild deed — unless (potentially) a third party in good faith and without knowledge of the borrower’s defenses (i.e., “that’s not my debt”), purchases the paper with money in an enforceable contract. Ignoring the “for value” wording in Article 3 and Article 9 is popular but it is wrong.
  7. The Courts are prematurely shifting the burden of proof and the burden of persuasion to homeowners and other types of borrowers. The opposition presents a claim that at its essence is “because we said so.”
  8. There are only two types of authority to enforce. (1) The owner of the debt (original loan) and (2) an agent who has authority from the owner of the debt.
  9. The fact that the courts, so far, have largely untethered the debt from the fabricated paper only means that the courts are erroneously ruling on the ownership of the fabricated paper, rather than ownership of the debt arising out of a transaction in the real world.
  10. I don’t dispute that, for purposes of filing a lawsuit or even recording a notice of sale, parties can claim whatever they want and if their claims state a cause of action upon which relief can be granted then the burden of pleading falls on the homeowner to deny those claims and raise affirmative defenses. But the burden of proof does not, by law, shift to the party named as “borrower”.
  11. First the borrower must have entered into some enforceable actual transaction in the real world which in our current context would be a loan of money.
  12. Second, the successors must have paid money for the loan for an assignment or endorsement to be supported by evidence.
  13. In the end, appellate decisions will start moving back to legal fundamentals, to wit: that no rights accrue to an intermediary (“Trustee” or “Servicer”) who fabricates paper, commits forgery or robo-signing — all to enforce a debt that does not exist within their chain of players.
At the risk of creating the appearance of pulling rank, I remind you that
  1. I am a lawyer with 41 years of experience in trying cases based upon theories and proof regarding Bills and Notes and the UCC.
  2. I received numerous academic awards for scholarship one of which was the “Bills and Notes” book award from American Jurisprudence. I have read and studied that treatise along with hundreds of laws and cases interpreting the laws and decisions on matters relating to both negotiable instruments and nonnegotiable instruments.
  3. I wrote the Harrison Publication Update on Florida Real Property Law in 1975 while still in law school under the direction of my property law professor.
  4. In my law practice I was lead counsel for either the bank or borrower, the lien holder or the title owner in at least 500 cases.

9 Responses

  1. if the “instrument” (a note or other attached security document) in question does not make direct reference to the legitimate and absolute recorded transfer of a debt obligation of a borrower from the original owner of a debt to a third party by way of an actual recorded purchase of such debt, for value, and does not also comport with the state UCC rules of a “Holder in Due Course” purchasing such paper without knowledge of defenses or claims on the part of the named borrower, then such instrument stands void of enforcement rights by such an inferior claimant…


  2. Another win for homeowner per this but except for Chase/PMac obscuritybut homeowners lose even if holder unlawful? WaMu FDIC in the mix

    “A “person entitled to enforce” an instrument is: “1) [t]he holder [1 ] of the instrument; 2)[a] nonholder in possession of the instrument who has the rights of a holder; or 3)[a] person not in possession of the instrument who is entitled to enforce the instrument pursuant to s[ection] 673.3091 or s[ection] 673.4181(4).” § 673.3011, Fla. Stat. (2014); see Mazine v. M & I Bank, 67 So.3d 1129, 1131 (Fla. 1st DCA 2011). “A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.” § 673.3011, Fla. Stat.”


  3. @ Yo Mama ,

    I know that 2 + 2 = 4 ,, if the courts now say 2 + 2 = 5 does that make them right? Even though for 200 years prior they agreed that the sum is 4.

    There is such a thing as objective truth… and words do have a certain meaning.

    Liked by 1 person

  4. Thanks Neidermeyer, here’s a key part “Because the count to reestablish a lost note fell out of the case, PennyMac’s standing hinged on whether it and its predecessor in interest were the holders of Mr. Winchel’s note or nonholders in possession with the rights of a holder. See § 673.3011(1), (2);  Creadon v. U.S. Bank N.A., 166 So. 3d 952, 954 (Fla. 2d DCA 2015). PennyMac was required by law to prove standing under either theory both at the time of trial and also at the inception of the case. See Powers v. HSBC Bank USA, N.A., 202 So. 3d 121, 122–23 (Fla. 2d DCA 2016). Because PennyMac was substituted as plaintiff for JPMorgan after the complaint was filed, proof of standing at inception required proof that JPMorgan had standing when it filed the complaint. See Russell v. Aurora Loan Servs., LLC, 163 So. 3d 639, 642 (Fla. 2d DCA 2015).

    There was a complete absence of any such evidence here. Because no one has argued otherwise, we assume that the magistrate properly considered the purported original note in the court file. But see Heller v. Bank of Am., N.A., 209 So. 3d 641, 644 (Fla. 2d DCA 2017). That note, however, was filed after the complaint was filed, did not show that JPMorgan was the original lender, and bore an undated, blank indorsement. There was no testimony or other evidence to explain when the indorsement was placed on the note. As such, PennyMac failed entirely to show that the note had been indorsed at the time the complaint was filed or that JPMorgan was in possession of the note at that time. It thus failed entirely to prove that JPMorgan was either a holder or a nonholder in possession at the inception of the case. See Phan v. Deutsche Bank Nat’l Tr. Co., 198 So. 3d 744, 747 (Fla. 2d DCA 2016) (“Under the law, without the requisite proof of possession at the time a foreclosure action is commenced, the plaintiff’s status as the holder of the note—and, hence, its authority to enforce the note in foreclosure—remains unproven, and its complaint untenable.” (citing Focht v. Wells Fargo Bank, N.A., 124 So. 3d 308, 310 (Fla. 2d DCA 2013)));  Corrigan v. Bank of Am., N.A., 189 So. 3d 187, 190 (Fla. 2d DCA 2016) (en banc) (“Though Bank of America later filed the original note and mortgage along with an assignment, these documents did not establish standing at the time the original complaint was filed because the endorsement was undated and the assignment was dated after the original complaint was filed.”).”


  5. there is always a difference between “the truth” – that which one testifying believes – and “that which is true” – the actual facts on the record beyond what one testifying believes… the judge is charged with the duty to parse the one from the other in the interest of justice…


  6. If one is continually blindsided by the way courts interpret the law, one might consider the possibility that the problem is that one isn’t correctly understanding things


  7. Good case to review related to notes, standing in FL
    Winchell v PennyMac can’t paste link for some reason


  8. Neil. Your knowledge and experience has helped me fight for 8 years or more. I know you are correct in your arguments. You can not do anything about (nor can I) rulings that do not follow the letter of the law.


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