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Hello, Fellow Members of the Redress Commission Great news!

I went to court today and sued a manger company for violating my rights and taking my property. And yes I wonnnnnnnnnnnn. The settlement was for $4,500.00 in small claims court. Now that I have won the judgment, I will file civil case against the same company because they violating my fee schedule. I informed them in my administrative process that if I had to appear in court, it would be a $25,000.00 fee each court appearance. So wish me will To everyone that has email, call or try to text me. The number that I gave out is my business number and it is a land line, and you will not be able to leave a text. I live in Windsor Hills, and anyone who knows Los Angeles knows that were I live it is in the hills and cell phone service is very poor. Now Im glad that everyone made it home safely, we know that there were many of you who were from out of town, and the airports can be a hassle and prolong your stay. So I hope that everyone made it home to your families safely. I received many emails from many of you from the conference thanking me for my information, and many of you were requesting my help and offering to pay me for services on helping you on discharging mortgages, debts, tickets and even court cases. Now heres the thing, Im letting everyone know that I dont know everything; Im still searching for this knowledge, but Im willing to share what I know as of today. Charging for this information I feel we should not do. But you know that there are many people out there that have so many questions and want you to do all the work and not study for them self. I also understand that many people just dont have the time to study. So for those people I will charge for my time. But my goal is not to charge anyone for this information that we all work together and learn from each other. Because there are many things I myself am still leaning and many of you have information that we all can share. I dont know everything and we all are strong in different areas. We need to support each other because debts, foreclosures, creditors, banks, and the courts dont discriminate. We need to pull together and support each other because when we act as one we become stronger. When I spoke at the conference, and discussed about who I was to all of you and how I discharge my debts, and showed you the proof, it was not for praise but for you, because this government system has lied and deceived as well as beat many familys down, and as the Word says HE HAS C0ME TO KILL STEAL AND

DESTROY and this is why many feel that theres no hope. I know that feeling; my life was not too great about a year ago I lost my wife and my family. I was a man who had a lot of pride and a tremendous ego. A typical man right. So I clearly understand many of you because Ive been there and I want you to feel the power of knowing that we are in control of our own life and were my motivation is coming from. Know man or women should feel like they are defeated. And to the married couples that I talked to, please remember what I said, support your husbands and study, and vice versa. Dont let the burden of debt destroy and strangle your familys. So everyone feel free, email and lets become creditors. Here is some powerful information that I have put together for all of you to help in just about everything you are having problems with. I have study all of this information, all of it is Law that you can use to receive redress and remedy.USC = United States Codes. (Ex: 18 means Title 18, 241 means Section 241). These are available on line and are Federal Laws lawfully binding on all States. ATTORNEYS: Today in America, we are subject to criminal and civil actions of attorneys. These are usually commenced and prosecuted in the name of some Imaginary Person (Corporation), the corporate STATE or corporate UNITED STATES. All cases of this nature are prohibited by the11th Amendment. All these Foreign States are prohibited by the 11th Amendment of the Constitution for the united States of America to commence or prosecute any action. To file any cause of action with one of these as Plaintiff is Fraud18 USC 1001 and Conspiracy against rights 18 USC 241.Criminal Actions: The 6th Amendment secures the accused the right to face all witnesses against him. Therefore, this law requires the Plaintiff (injured party) be a physical human being that can be cross examined. The only time an attorney can act without a human Plaintiff is in the case of murder. All

other cases require the Plaintiff be present in court. Lawful Challenge: Demand your 6th Amendment right to face your accuser. Demand the Prosecutor produce the Injured Party. If Prosecutor cannot produce an injured party demand dismissal of complaint for lack of injured party. The court has no jurisdiction to proceed. Principles of Law: To establish a crime has been committed, there must be present evidence that you injured another human being or damage his/her property. Attorneys have created imposter laws that establish victimless crimes. This is Fraud 18 USC 1001 for any attorney to present these imposter crimes, without injured party, claiming authority to prosecute. When a Plaintiff cannot be cross examined, no judge can prove due process of law was administered. Conspiracy against rights 18 USC 241 of the Prosecutor and Judge acting in Prosecutorial Misconduct in Conspiracy to convict must be reported to the proper authority. Failure of that authority to prosecute the Attorney and Judge is Misprision of Felony 18 USC Demanding Rights: When you are arrested on a warrant, demand to be taken before the judge who issued it, right then. Taking you to jail is kidnapping and being held for ransom. Every warrant issued is to bring you before the court, not take you to jail. You are guilty of nothing and can not be subjected to possible violence of jail, with out due process of law. Demand to betaken before the judge. If the Officer refuses, tell Officer **** I now charge you with Kidnapping and will be talking with a US Attorney when I am released. Bond: A bond is for one purpose to insure your appearance in court. Tell the judge my word is my bond I will appear. I will not allow you to extort money on my word. Any amount you demand of me to retain my freedom is extortion. I state for the Record My word is my Bond and I will appear. Challenges to Judge: Universal to all cases. A judge who refuses our law is loyal to some other authority. Ask the Judge if he/she is a member of the STATE BAR ASSOCIATION. If so, challenge the Judge under 22 USC611 as a Foreign Agent. All Judges are lawfully required by 28 USC 372 to have

an Oath of Office. Ask the Judge if he/she has an Oath of Office. If yes, accept the Oath of Office in Admiralty Jurisdiction. Now the Judge is subject to criminal prosecution and civil litigation for any injury he/she may cause you. If no, the attorney is not a judge and has no lawful authority to proceed. Your State Representative should be informed by Petition for Impeachment of Judge. Present the facts of the case, the law is not necessary. Have it notarized and send it by Certified Mail. As we remove the unlawful judges, lawful judges will take their place. Civil Actions: Most of the cases filed as civil actions are Fraud of attorneys claiming a Corporation has rights, privileges and immunities in court, common knowledge dictates a Corporation is an artificial person without natural rights. For an attorney to file a civil action with a Corporation as Plaintiff is clear Fraud on the Court. A Corporation cannot sign a Power of Attorney or give any attorney verbal instructions to act on its behalf. Therefore, no attorney can lawfully represent any Corporation in court. Lawful Challenge: Demand the Plaintiff appear. Because the 6th Amendment secures that no person will be deprived of life, liberty or property without due process of law. Therefore, the Plaintiff must appear and state he/she is owed a debt, the debtor must be given the right to challenge this debt for validation 15 USC 1692g. Only an injured party can claim a debt is owed. Imaginary persons can not appear or give testimony and can not be the Plaintiff of any cause of action. Challenge the attorney as a Foreign Agent 22 USC 611acting for a Foreign State (Corporation) who has commence action in violation of the 11thAmendment. Demand dismissal for lack of jurisdiction. Principles of Law: The people have rights, Corporations do not have rights. Among these Rights is the right to contract, the people have this right under 42 USC 1981. The people exercise this right by their signature and/or Social Security Number. Corporations can not sign and therefore can not enter into any contract, with any attorney. The right to contract is reserved to the people. This is established by the age old principle of Agency.

To establish an Agency, the Principal must ask the Agent to perform a task. The Agent must agree to perform the task. It is a time tested principle, of American Jurisprudence that the Court must not rely upon the Agent to prove Agency. The Court must follow the Principal to establish Agency. The law is simple no Principal no Agency no Capacity to Sue. Case must be dismissed. There are many Organized Crime Operations being conduct in the Corporate Courts of the UNITED STATES GOVERNMENT. There are two classifications of courts in the United States of America, these are, one Supreme Court, and such inferior courts as the Congress may from time to time ordain and establish. According to Article III, Section1 of the Constitution for the united States of America. Since the Civil War these Courts have been operated as Corporate Courts for the profit of attorneys, who engage in the business of Organized Crime in these courts. Some of these are as follows: Foreclosure Proceedings: This has become a Conspiracy against rights 18 USC 241 of judges, attorneys and banks to steal private property under the color of law. Foreclosure is noting more than intimidation, threats and coercion of a person to forfeit their private property to an attorney and the judge who sell it to a bank for profit. Foreclosure Sale is the attorney selling your private property, usually to a bank by sealed bid at a fraction of the value of the property, without proof of ownership. Then the attorney acts on behalf of the Corporation to commence and enforce Eviction by force of arms of the police, sheriff, deputy or federal marshal. This is the widest spread Organized Crime of Extortion in American History. The following is the method to defeat this criminal conduct. Dispute the Debt. The Attorneys first step is usually to send you notice of foreclosure, giving you 30 days to dispute this debt. The answer is simple dispute the debt. Method of Disputing Debt Send a business letter to the judge, attorney and mortgage company, by Certified Mail, stating as follows: I dispute this debt, I dispute all claims of contract 15 USC 1692g.Note: 15 USC 1692a-n, known as the Fair Debt Collection

Act says what Debt Collectors can and can not do in the process of collecting a debt. You should copy this for your information. If you go to Court: a.Challenge Agency of attorney with Plaintiff. Challenge Attorneys Capacity to sue for a corporation. As outlined above. b.Demand the attorney produce the Original Note for return by the judge if Foreclosure is granted. The Plaintiff can not keep the Note and take the property, it is lawfully required to give up one or the other. Tell the court you will keep the property until the Original Note is produced. c.Should the judge refuse to comply with the law, place a 2 cent postage stamp on the back of his order in the lower right hand corner, of each and every page, and sign your name across it. This establishes any further action by the judge is Mail Fraud 18 USC 1341.This crime should be reported to the postal inspector for investigation and prosecution. Note: Every Foreclosure can be beat by this simple method. When a corporation receives a Promissory Note signed by you they deposit it and receive the amount plus additional money for the purchase of their contract, by the Federal Reserve Bank. The Promissory Note once monetized is removed from circulation can not be enforced. Therefore a copy of your note is not admissible, only the original will do to establish right to property. Demand it, it is your right to its return if Foreclosure is granted. Tax Collection: Another, favorite Organized Crime Operation of attorneys and judges is Tax Collection. In this scam, the United States Attorney acts in Fraud to claim the IRS is government and fraudulently claims a debt is owed to government under Title 26 of the United States Codes. But the IRS is not government, it is a For Profit Corporation. Therefore, it must be dealt with like any other Debt Collector under Title 15, specifically15 USC 1692a-n, commonly referred to as the Fair Debt Collection Act. Step One: Dispute all debts in writing. By answering the claim and placing it in dispute, the IRS is required to prove their claim in court. 15 USC 1692g. (Dispute as above)Step Two: Challenge the IRS Agent to prove he is a government official. False or

misleading statements by a Debt Collector is prohibited 15 USC 1692e. This establishes the crime of Fraud 18 USC 1001 by the IRS Agent. Demand the Agent produce the contract you signed with him. When he can not no contract is present no jurisdiction for the court can be established. Step Three: Validate the debt. The IRS Agent always claims you owe this debt. So make them prove their claim. Demand the IRS Agent, produce the physical human being who assessed your taxes. They have not produced one to date. By not being able to produce the person who assessed your taxes, they can not validate the debt because it can not be proven correct or incorrect by cross examination. Demand a dismissal of all claims. Step Four: If a debt can not be validated, there can be no collection of it. This is established by 15 USC1692g (b). Disputed Debts a debt collector must cease collection of the debt until it is validated. Step Five: Challenge attorney for Agency with IRS as outlined above. Step Six: Challenge Judge for jurisdiction without a lawful claim as outlined above. Dealing with Law Enforcement: When a Debt Collector comes to steal your property. Call the police. Ask the officer to get the copy of the Judgment signed by the judge. If none is present, ask the officer to re-move the trespassers from your property. If a Judgment is presented turn it over and put a 2 cent postage stamp on the back lower right hand corner of every page and sign across the stamps. Hand it back to the officer and tell him this document is Mail Fraud 18 USC 1341 a felony crime and you want the officer to return it to the judge for investigation. The document lawfully challenged can not be enforced. Ask the Officer to identify all persons present by proper identification for possible prosecution. Then ask the Officer to remove these criminals from your property. Police Officers protect rights, if you express your rights, they must enforce them. All Debt Collectors: Corporations of all kinds fall into the classification of Debt Collectors. If a Corporation is attempting to collect money from you, it is a Debt Collector and must act within the Fair Debt Collection Act 15 USC 1692 a-n. Whether it be credit card company,

auto finance company, loan company, bank, mortgage company or other lending institution all are accountable to law. When you understand the principles of law you cannot be defeated by lies of what is or is not law spouted by incompetent attorneys who are ignorant of law by law. Article I, Section 10 prohibits Titles of Nobility, issued by states. All attorneys have unlawfully accepted the title of Esquire. Thus they are clearly in competent in law and should not be relied upon as a source of legal advice. Their acceptance of a British Atoned Registry(BAR) Title of Nobility establish their loyalty to the crown, challenge them as Foreign Agents 22 USC 611.Principles of Law to remember: No attorney can appear in court without the physical human being he represents. Agents can not testify for principals. Challenge every witness to prove they are the principal, by asking for their Drivers Licenses, proving they are the principal i.e. BANK OF AMERICA. If they are not, demand their testimony be removed from the record as Hearsay testimony. An imaginary person can not appear no agent can speak for them. All agents are defeated by this process.

No Debt Collector can collect any debt without the Original Wet Ink Signed Contract being present in court. Copies are not admissible, object to them as forgeries. I dont remember this contract my signature could have been copied from anywhere. This contract is the subject matter of the Courts jurisdiction. Without it the court has no jurisdiction to proceed. The court must dismiss for lack of subject matter jurisdiction. If a judge refuses your lawful demands, challenge him as a last result as outlined above. Then send a Petition for Impeachment of Judge *** to your state representative and demand his removal from Public Office. In this manner all, in court become accountable for their conduct. In the words of the great Robert Fox when you go to court you have two options, accept what the judge says

without controversy and suffer the consequences or fight for your rights. I believe we have just gone along for far too long, I say challenge every case no matter how small. By bringing your claim as yourself the man/woman (NOT pro se), you are competent and must be respected by your public servants. Their failure to act properly is grounds for their removal from public office. When you hire an attorney, you declare yourself incompetent and in need of court direction. You are a ward of the court. I can speak for myself and so can you. With a basic understanding and your refusal to let those issues slide, the court is forced to act in your interest. Failure to do so establishes a Conspiracy against rights 18 USC 241 by the judge and attorney to deny you your rights in court. Contact the US Attorneys Office and file a Criminal Complaint. If they refuse, jurisdiction is established for JAG in Admiralty Jurisdiction 28 USC 1333. File your complaint with the Judge Advocate Generals Office in Washington. Other tools of interest: Every American should study and learn the Constitution for the united States of America and their individual State Constitution. These can be obtained through the Secretary of States Office in your State Capital. Usually they are free. The United States Codes:18 USC 4 Misprision of Felony refusing to prosecute felony crime.18 USC 8 Bank Bonds is Currency18 USC 514 Fictitious Obligation prohibited 18 USC 2113 Bank Robbery commercial or private 18 USC 241 Conspiracy against rights 18 USC 891-894 Extortionate Credit Transactions 18 USC 1961 Definitions of Racketeering Activities18 USC 1951 Interference with commerce 18 USC 1001 Fraud 18 USC 1341 Mail Fraud18 USC 1343 Wire Fraud18 USC 1344 Bank Fraud18 USC 2381 Treason Note: The United States Supreme Court has repeatedly held that any judge who acts without jurisdiction is engaged in an act of treason. U.S. v. Will 499 US 200, 216, S. Ct. 471, 66 L. Ed 2d 392, 406 (1980); Co hens v. Virginia, 19 U.S. (6 Wheat) 264, 404, 5 L. Ed. 257(1821).18 USC 2382 Misprision of Treason5 USC 556(d), 557 and 706 once due process is denied all jurisdiction ceases.10 USC

333 Interference with federal or state law28 USC 1333 Admiralty Jurisdiction28 USC 372 Oaths of Judges5 USC 557(c) (3) Findings of Facts and conclusions of law required for all decisions.42 USC 1981 Equal Rights under the law.42 USC 1983 Civil Rights Violations 15 USC 1692a-n Fair Debt Collection Act22 USC 611 Foreign Agents of Foreign Principals46 USC 781 Public Vessels Act HJR 192 Act of Congress Corporate Congress Banks can not refuse currency.31 USC 3123 Payment of obligation and interest on Public Debt.31 USC 5103 Commercial instrument is legal tender28 USC 33 Federal Bureau of Investigation Limits and restrictions.31 USC 5118 Commercial Instrument are legal tender for payment of debt. UCC = Uniform Commercial Codes, These regulate all financial institutions engaged in commerce.UCC3-503 Dishonor of Commercial InstrumentsUCC3603 Full payment refuse, debt is paid in full.UCC4-105(1)Bank means a person engaged in the business of bankingUCC9-105 Records authenticated, identifiable, and unalterable. From here you start your own quest for knowledge. Everything you learn, know and can communicate is yours for your lifetime and those you share it with. Educate the young, because they will need it. Teach a friend and help him understand. When you speak our law do it with conviction, because you speak for all the people against injustice. When we all stand together in knowledge there will be no controversy, we can not over come. When they perjure their oaths, go after their bonds. If they have no bond, go after everything they own. Without a bond, they are GUILTY of a theft of public funds! If they are ever going to repent, they must be brought to their knees! Before there can be mercy, there must be repentance! It's a VIOLATION of the 11th Amendment for a FOREIGN CITIZEN to INVOKE the JUDICIAL POWER of the State. Article XI. The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State. US citizens (FEDERAL

CITIZENS) are FOREIGN to the several States and SUBJECTS of the FEDERAL UNITED STATES/STATE of NEW COLUMBIA/DISTRICT OFCOLUMBIA.ATTORNIES are considered FOREIGN AGENTS under the FOREIGN AGENTS REGISTRATION ACT (FARA) and are SUBJECTS of the BAR ASSOCIATION. Government Is Foreclosed from Parity with Real People Supreme Court of the United States 1795"Inasmuch as every government is an artificial person, an abstraction, and a creature of the mind only, a government can interface only with other artificial persons. The imaginary, having neither actuality nor substance, is foreclosed from creating and attaining parity with the tangible. The legal manifestation of this is that no government, as well as any law, agency, aspect, court, etc. can concern itself with anything other than corporate, artificial persons and the contracts between them. "S.C.R. 1795, Pen hallow v. Doane's Administraters (3 U.S. 54; 1 L.Ed. 57; 3 Dall. 54),Supreme Court of the United States 1795 ----- (Let's not get all pissy over whether this is an exact quote, read the rest of the cites below)And, "An attorney for the plaintiff cannot admit evidence into the court. He is either an attorney or a witness".(Trinsey v. Pagliaro D.C.Pa. 1964, 229 F. Supp. 647)Subject: Trinsey v Pagliaro, 229 F.Supp. 647: when you read it you will find that it is THE case cited for FR Civ P 12(b) (6).Now, while keeping these in mind, think about when someone like an attorney for the IRS comes forward and "testifies" about how you did such-and-such. Are they a First-Hand-Witness, or simply a "Statement of Counsel in Brief or Argument?" Shut them down! Hit them with Trinsey and get the "Judge" to take official Judicial Notice of it. If the "Judge" does not sustain your object, you need to immediately file an oral "Affidavit of Prejudice "against the "Judge" as he has shown his prejudice and then file the same Affidavit in writing into the record with witnesses to the same. Once your Affidavits are filed, get a record of what has been filed and show that you are the only one who has actually introduced FACTS into the case and move for Summary Judgment

upon the Facts... while reminding the "Judge" that the ONLY thing he is to consider is the FACTS of the case ON THE RECORD, that the opposing "counsel" has only been "enlightening" to the Court, but not sufficient to rise to the level of FACT. This applies both with Federal Rules of Evidence and State Rules of Evidence.... there must be a competent first hand witness (a body). There has to be a real person making the complaint and bringing evidence before the court. Corporations are paper and can't testify. "Manifestly, [such statements] cannot be properly considered by us in the disposition of [a]case." United States v. Lovasco (06/09/77) 431 U.S. 783, 97 S. Ct. 2044, 52 L. Ed. 2d 752,"Under no possible view, however, of the findings we are considering can they be held to constitute a compliance with the statute, since they merely embody conflicting statements of counsel concerning the facts as they suppose them to be and their appreciation of the law which they deem applicable, there being, therefore, no attempt whatever to state the ultimate facts by a consideration of which we would be able to conclude whether or not the judgment was warranted." Gonzales v. Buist. (04/01/12) 224 U.S. 126, 56 L. Ed. 693, 32 S.Ct. 463."No instruction was asked, but, as we have said, the judge told the jury that they were to regard only the evidence admitted by him, not statements of counsel", Holt v. United States, (10/31/10) 218 U.S. 245, 54 L. Ed. 1021, 31 S. Ct. 2,"The prosecutor is not a witness; and he should not be permitted to add to the record either by subtle or gross improprieties. Those who have experienced the full thrust of the power of government when leveled against them know that the only protection the citizen has is in the requirement for a fair trial." Donnelly v. Dechristoforo, 1974.SCT.41709<http://www.versuslaw.com> 56; 416 U.S. 637 (1974) Mr. Justice Douglas, dissenting. "Care has been taken, however, in summoning witnesses to testify, to call no man whose character or whose word could be successfully impeached by any methods known to the law. And it is remarkable, we submit, that in a case of this magnitude, with every means and resource at their command, the

complainants, after years of effort and search in near and in the most remote paths, and in every collateral by-way, now rest the charges of conspiracy and of gullibility against these witnesses, only upon the bare statements of counsel. The lives of all the witnesses are clean, their characters for truth and veracity un-assailed, and the evidence of any attempt to influence the memory or the impressions of any man called, cannot be successfully pointed out in this record." Telephone Cases. Dolbear v.American Bell Telephone Company, Molecular Telephone Company v. American BellTelephone Company. American Bell Telephone Company v.. Molecular Telephone Company, Clay Commercial Telephone Company v. American Bell Telephone Company, People's Telephone Company v. American Bell Telephone Company, Overland TelephoneCompany v. American Bell Telephone Company,. (PART TWO OF THREE) (03/19/88)126 U.S. 1, 31 L. Ed. 863, 8 S. Ct. 778."Statements of counsel in brief or in argument are not sufficient for motion to dismiss or for summary judgment," Trinsey v. Pagliaro, D. C. Pa. 1964, 229 F. Supp. 647."Factual statements or documents appearing only in briefs shall not be deemed to be a part of the record in the case, unless specifically permitted by the Court" Oklahoma Court Rules and Procedure, Federal local rule 7.1(h).Trinsey v Pagliaro D.C.Pa. 1964, 229 F. Supp. 647. "Statements of counsel in brief or in argument are not facts before the court and are therefore insufficient for a motion to dismiss or for summary judgment." Pro Per and pro se litigants should therefore always remember that the majority of the time, the motion to dismiss a case is only argued by the opposing attorney, who is not allowed to testify on the facts of the case, the motion to dismiss is never argued by the real party in interest. "Where there are no depositions, admissions, or affidavits the court has no facts to rely on for a summary determination." Trinsey v. Pagliaro, D.C. Pa. 1964, 229 F. Supp. 647. Frunzar v. Allied Property and Casualty Ins. Co. (Iowa 1996) 548 N.W.2d 880Professional

statements of litigants attorney are treated as affidavits, and attorney making statements may be cross-examined regarding substance of statement. [And, how many of those Ass-Holes have "first hand knowledge"? NONE!!!]Porter v. Porter (N.D. 1979 ) 274 N.W.2d 235 The practice of an attorney filing an affidavit on behalf of his client asserting the status of that client is not approved, in as much as not only does the affidavit become hearsay, but it places the attorney in a position of witness thus compromising his role as advocate. Deyo v. Detroit Creamery Co (Mich 1932) 241 N.W.2d 244 Statutes for bidding administering of oath by attorney's in cases in which they may be engaged applies to affidavits as well "SALUS POPULI SUPREMA LEX ESTO" "Let the good of the People be the Supreme Law" JOHN LOCKE" Wise men are instructed by reason; men of less understanding, by experience; the most ignorant, by necessity; the beasts, by nature. "Marcus Tullius Cicerohttp://consumers.creditnet.com/Discussions/credit-talk/t-how-spot-invalid-judgement13761.html Citibank South Dakota, NA,Respondent,v.Laurence R. Otto, Appellant. No. A08-0446.Court of Appeals of Minnesota.Filed December 23, 2008.Jason A. Adams, Rausch, Sturm, Israel & Hornik, S.C., Minneapolis, MN (for respondent)Laurence R. Otto, Warroad, MN (pro se appellant)Considered and decided by Klaphake, Presiding Judge; Lansing, Judge; and Worke, Judge.UNPUBLISHED OPINIONWORKE, Judge.On appeal from summary judgment in favor of respondent to recover money owed by appellant under the "account-stated" theory, appellant argues that (1) genuine issues of material fact preclude summary judgment; (2) respondent's attorney improperly acted as a witness and respondent failed to produce a witness to testify as to the account or

the amount owed; and (3) the affidavit of Shauna Houghton was improperly admitted into evidence. We affirm. DECISION On appeal from summary judgment, this court reviews two determinations: whether a genuine issue of material fact exists, and whether an error occurred in the application of the law. Offerdahl v. Univ. of Minn. Hosps. & Clinics, 426 N.W.2d 425, 427 (Minn.1988). This court reviews the evidence in the light most favorable to the nonmoving party without deferring to the district court's application of the law. Id."[S]ummary judgment is proper when the nonmoving party fails to provide the court with specific indications that there is a genuine issue of fact." Thiele v. S tich, 425 N.W.2d 580, 583 (Minn.1988). No genuine issues of material fact exist "when the nonmoving party presents evidence which merely creates a metaphysical doubt as to a factual issue and which is not sufficiently probative with respect to an essential element of the nonmoving party's case to permit reasonable persons to draw different conclusions. " DLH, Inc., v.Russ, 566 N.W.2d 60, 71 (Minn.1997). Account-Stated Theory Appellant Laurence R. Otto argues that the district court improperly awarded summary judgment because it erred in its application of the doctrine of account stated. The doctrine of account stated is an alternative means of establishing liability for a debt other than pursuant to a contract claim. Am. Druggists Ins. v. Thompson Lumber Co., 349 N.W.2d 569, 573 (Minn. App.1984). An account stated is a man infestation of an agreement between a debtor and creditor that a stated amount is an accurate computation of an amount due. Id. The retention of a statement of account without objection for more than a reasonable period of time demonstrates debtor acquiescence, implies a

promise to pay the balance owed without further proof, and operates to create an account stated. Meagher v. Kavli, 251 Minn. 477, 487, 88N.W.2d 871, 879 (1958). An account stated constitutes prima facie evidence of the liability of the debtor. Erickson v. Gen. United Life Ins.Co., 256 N.W.2d 255, 259 (Minn.1977).In May 2001, appellant received his first credit-card statement from respondent Citibank South Dakota, NA. From May 2001 through February 2007, appellant received monthly statements from respondent, which he paid in full every month until September 2004. From September 2004 to May 2005, appellant made minimum monthly payments on the account, and in June 2005 appellant paid the account in full. Appellant continued to use the credit card, but in December 2005 he stopped making payments on the account. In February 2007, the outstanding balance on the account was $5,491.50. Based on the evidence, appellant retained the statement of account for approximately three years, which constitutes a reasonable amount of time. See Meagher, 251 Minn. at487, 88 N.W.2dat 879. This demonstrates that appellant acquiesced to the statement of account, a promise to pay the balance incurred since June 2005without further proof was implied, and an account stated has been created. Id. Therefore, respondent has presented prima facie evidence of appellant's liability. See Erickson, 256 N.W.2dat 259. Because there are no genuine issues of material fact and there was no err in the application of the law, the district court did not error in granting summary judgment in favor of respondent. Basis for Summary Judgment Appellant next argues that the district court relied solely on the statements of counsel in briefs, memoranda, and oral arguments as a

basis for granting respondent's summary-judgment motion. Appellant relies on Trinsey v. Pagliaro in support of his argument. 229 F. Supp. 647 (E.D. Pa. 1964). The court in Trinsey held that "[s]tatements of counsel in their briefs or argument while enlightening to the Court are not sufficient for purposes of granting a motion to dismiss or summary judgment." Id. at 649.However, this holding was in reference to a motion to dismiss that was unsupported by affidavits or deposition s. Id. Respondent's summary-judgment motion was supported by affidavits as well as other evidence. There is nothing in the record to show that the district court relied solely on the statements of counsel in granting respondent's summaryjudgment motion. Houghton Affidavit Finally, appellant argues that the affidavit of Shauna Houghton was improperly admitted into evidence because no "admissible evidence" was attached to the affidavit. "Evidentiary rulings . . . are committed to the sound discretion of the [district] court and those rulings will only be reversed when that discretion has been clearly abused." Pedersen v. United Servs. Auto.Ass'n, 383 N.W.2d 427, 430 (Minn. App.1986).Minn. R. Evid. 803(6) sets forth the businessrecords exception to the hearsay rule. To qualify for the exception, the evidence must meet three requirements: (1) the evidence was "kept in the course of a regularly conducted business activity"; (2) "it was the regular practice of that business activity to make the memorandum, report, record, or data compilation"; and (3) the foundation for this evidence is shown by the custodian or other qualified witness. Minn. R. Evid. 803(6). The affidavit of Shauna Houghton provides that respondent "maintains books and records of regularly conducted business activities,

and that [she] is a custodian of those books and records, and that those books and records include copies of a credit card agreement between [appellant] and [respondent]." Because Shauna Houghton is a custodian of the records of respondent, she was a qualified witness and permitted under the Minnesota Rules of Evidence to lay the requisite evidentiary foundation for the business records. Further, attached to the affidavit areappellant's monthly credit-card statements from May 2001 through February 2007. The credit-card statements are records kept by respondent in the course of a regularly conducted business activity and are made as a part of the regular practice of respondent's business activity. Therefore, the credit-card statements are admissible as business records. The district court did not abuse its discretion in admitting the affidavit of Shauna Houghton and the attachments pursuant to Minn. R. Evid. 803(6).Affirmed. This is very powerful and empowering and I hope that you use it to fight back..

I will be very busy this week I will be helping a friend with a traffic ticket, wish us luck and also I will be forwarding a copy of this email to Bret, because you always want to act in honor, and you always want to remember where you came from
The recorded form assignment I prepared as a young associate is not well-suited to use in these transactions. Because transactions involve the assignment of hundreds or even thousands of mortgages, there is a temptation to skip the step of recording an assignment in the public records, particularly when

the assignment is only a temporary collateral assignment. Transactions sometimes take the form of nothing more than an unrecorded pledge of the mortgages in bulk to the bank, together with delivery of the original notes to the bank for perfection. In many instances, even the task of holding possession of the notes is outsourced to a bailee who holds the notes for the banks benefit. The mortgages might be transferred many times by unrecorded assignment in bulk without physically moving the notes, but with the bailee simply signing a receipt changing the name of the lender for whom it holds the notes.

The attorneys who pioneered these transactions were comforted that the structure would work by legal conclusions they drew from Article 9 of the Uniform Commercial Code (UCC), the Official Comments to the UCC (Comments),2 and favorable case law.3 The law was clear enough that attorneys were able to give legal opinions concerning perfection, but as the amount of securitized mortgages reached into the trillions of dollars, the uniform law commissioners decided to revisit Article 9 and make it safe for securitizations by officially sanctioning these practices.

It is useful to observe the simplicity of a mortgage assignment in its purest form. F.S. 673.2031(1) (2010), governing negotiable instruments, states that *a+n instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument. Even before the UCC, the Florida Supreme Court ruled that a mortgage can be transferred without a written assignment simply by delivering the note with intent to assign it.4 So at its core, between the parties to the assignment, assigning a mortgage is very much like selling a used lawn mower. What makes it more complex in practice is the potential for disputes and the precautions that must be taken to protect the parties. There are a number of contexts in which mortgage assignments might be considered:

1) The rights of a mortgage assignor and assignee vis-a-vis each other;

2) The rights of a mortgage assignee relative to the rights of its creditors, including lien creditors and bankruptcy trustees;

3) The rights of a mortgage assignee relative to the rights of a subsequent assignee;

4) The obligation of a mortgagor to make payment to the mortgage holder;

5) The right of the mortgage holder to foreclose in the event of default; and

6) The rights of a person acquiring an interest in the real estate.

The drafters of Article 9 focused primarily on problems one through three because these related to the issues that most concerned securitization participants and their attorneys. The rules the drafters set up treated mortgages as personal property that could be transferred without regard to the real estate records.5 Article 9 extends to sales of promissory notes, as well as assignments for security purposes.6 Although Article 9 recognizes some differences between collateral assignments and sales of notes, the UCC does not provide rules to distinguish a collateral assignment from an absolute assignment.7 Thus, the term secured party includes a collateral assignee as well as a purchaser of promissory notes,8 and the term debtor includes both an assignor of promissory notes for security and a seller of promissory notes.9

Problem 1 Attachment Article 3 governs the transfer of negotiable instruments. Article 9 governs security interests in and sales of both negotiable and nonnegotiable promissory notes. Thus, there is some overlap. The principal effect of extending Article 9 to sales of promissory notes was to apply the perfection and priority rules to those transactions.

F.S. 679.2031 (2010) determines when an assignment attaches or in other words, when it becomes effective between the assignor and assignee. That section requires that a) value be given; b) the debtor has rights in the collateral; and c) either the debtor has authenticated a security agreement describing the collateral or the secured party is in possession of the collateral pursuant to the security agreement.10

In the case of an assignment of a promissory note, the promissory note is the collateral11 and the assignment is the security agreement.12 Thus, the assignment becomes enforceable between the assignor and assignee when value is given, the assignor has assignable rights in the promissory note, and the assignor has either executed a written assignment describing the promissory note or the assignee has taken possession pursuant to the agreement of the assignor to assign the promissory note. Attachment of the security interest to the promissory note also constitutes attachment of the security interest to the mortgage, effectively adopting the pre-Article 9 case law that the mortgage follows the promissory note.13

A written assignment of the promissory note will satisfy the security agreement requirement whether the assignment is made pursuant to a sale or for the purpose of collateral. Similarly, an indorsement pursuant to Article 3 should satisfy that requirement.14 However, the implication of F.S. 673.2031 and 679.2031 (2010), and of Johns v. Gillian, 184 So. 140 (Fla. 1938), is that the security agreement need not be in writing, so long as there is intent to assign and the promissory note is delivered to the assignee.15

Problem 2 Perfection Third parties lacking notice are not bound merely because the assignor and assignee have agreed among themselves that the mortgage has been transferred to the assignee. To protect the assignee from claims of third parties dealing with the assignor, the assignment must be perfected. Perfection of the security interest in the promissory note operates to perfect a security interest in the mortgage.16 The assignee may perfect its rights against the conflicting rights of a lien creditor (including a judgment lien holder, bankruptcy trustee, or receiver)17 by taking possession of the original promissory note18 or by filing a financing statement in the applicable filing office19 (which for a debtor located in Florida is the Florida Secured Transactions Registry).20 Possession may be effected by means of a bailee, provided that the bailee authenticates a writing acknowledging that it holds possession for the benefit of the secured party.21 However, not all modes of perfection are equal. As discussed below in connection with priority, possession of the promissory note generally offers more protection than filing a financing statement. All modes of perfection, however, provide protection against the rights of a subsequent lien creditor.22

In the case of a sale of the promissory note (as opposed to a collateral assignment), perfection is automatic upon attachment.23 Thus, neither possession nor filing is needed to perfect against the rights of subsequent lien creditors, provided that the assignment is a true sale rather than a secured transaction. However, for several reasons, absolute assignees often perfect by possession of the promissory note and/or filing, even though perfection is automatic in the case of a sale.24

Problem 3 Priority The question of whether an assignee prevails over another assignee is one of priority. Pursuant to F.S. 679.322(1)(a) (2010), if both assignments are perfected, then priority is generally determined by the time of filing or perfection. Perfection is accomplished by filing automatically in the case of sales, or by possession of the promissory note. However, 679.322(3) refers to F.S. 679.330 (2010), which states in part: *A+ purchaser of an instrument has priority over a security interest in the instrument perfected by a method other than possession if the purchaser gives value and takes possession of the instrument in good faith and without knowledge that the purchase violates the rights of the secured party.

Regardless of whether the assignee receives absolute ownership pursuant to a true sale or merely an assignment for the purpose of security, the assignee is considered a purchaser.25 If the second assignee takes possession for value in good faith and without knowledge that it violates the first assignees rights, then the second assignee takes priority over an assignment perfected without possession. Mere filing of a financing statement by the first assignee (and even actual knowledge by the second assignee of such a filing) is not enough to charge the second assignee with a lack of good faith or knowledge that the second assignment violated the first assignees rights.26 It is not clear precisely what facts might disqualify the assignee in possession from relying on 679.330(4) for its priority, but F.S. 671.201(20) (2010) provides a general definition of good faith, which requires honesty in fact (an

actual knowledge standard), and observance of reasonable commercial standards of fair dealing. Given this nebulous standard, the party who perfects by filing or automatically should assume that it will not be protected against a subsequent assignee who takes possession.

The foregoing principles are demonstrated in American Bank of the South v. Rothenberg, 598 So. 2d 289 (Fla. 5th DCA 1992). In that case, the bank took a security interest in a note and mortgage, perfected by possession. The assignor then sold the same note to a second assignee. The second assignee recorded his assignment in the public records before the bank did, but received only a copy of the note. The court held that though he recorded first, the second assignee lost because the bank had possession. Although the case did not involve a UCC filing by the losing assignee, that would not have changed the result since possession generally trumps a UCC filing. In fact, because the mortgage was sold (rather than assigned as collateral), the second assignees interest was perfected automatically. However, like filing, automatic perfection does not generally protect the assignee from a conflicting assignment perfected by possession.

If the assignment is intended only as secondary collateral on unspecific assets, then possibly the assignee would be satisfied with such ethereal rights as are created by merely filing, but if the assignee is giving new value to acquire specific mortgages, then greater protection is usually required namely, possession of the promissory note.

Problem 4 Who Does the Mortgagor Pay? Comment 6 to UCC 9-308 explains that Article 3 (not Article 9) dictates who the maker of a negotiable instrument must pay. F.S. 673.6021(1) (2010) states that with limited exceptions (knowledge of injunction or theft, etc.), the instrument is discharged upon payment to a person entitled to enforce the instrument.

F.S. 673.3011 (2010) states:

The term person entitled to enforce an instrument means:

(1) The holder 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. 673.3091 or s. 673.4181(4).

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.

In general, it is the holder who is entitled to enforce the instrument. The person in possession of a negotiable instrument that is payable either to bearer or to an identified person that is the person in possession is a holder.27 In some instances, a nonholder may enforce the instrument. The comment to UCC 3-301 states that a person who under applicable law is a successor to the holder or otherwise acquires the holders rights can enforce the instrument under subsection (2), even though not a holder. This would include an assignee from the holder who for some reason did not become a holder, perhaps because it did not receive a proper indorsement.28 Subsection (3) would include an assignee who is not a holder because the instrument was lost.

One might wonder whether these provisions make any sense. The mortgagor cannot be expected to ascertain the holder by demanding exhibition of the promissory note whenever it makes a payment,29 nor would the lender likely accommodate such a demand, even if made. Usually, the note expressly waives presentment, so that the original need not be exhibited on demand for payment.30 In the real world, the mortgagor simply pays whomever the note says should be paid (often a servicer), until the mortgagor receives a notice to pay someone else. The law of contract and agency will often lead a court to give effect to payments made in this manner, despite Article 3.31 Nevertheless, unless the parties have expressly or impliedly agreed otherwise, Article 3 requires the mortgagor to ascertain the status of the payee as holder by demanding exhibition of the promissory note, and the holder must comply as a condition for demanding payment.

Article 3 does not control payment of nonnegotiable notes.32 The common law of contract generally applies. The common law rule is that payment of a nonnegotiable promissory note can be made to the payee without demanding delivery of the original promissory note, and will be effective so long as the maker does not have notice that the payee has transferred the promissory note to a third person.33 In other words, the result is not very different from the real world practice of making payment on a negotiable promissory note, as described above.

Problem 5 Who Has Standing to Foreclose the Mortgage? The provisions of Article 3 speak in terms of who is entitled to enforce an instrument. Thus, the solution to problem four must also be the solution to problem five. Unlike problem four, however, there are a number of reported cases concerning standing in foreclosures that must be considered. It should come as no surprise that the holder of the promissory note has standing to maintain a foreclosure

action.34 Further, an agent for the holder can sue to foreclose.35 The holder of a collateral assignment has sufficient standing to foreclose.36

Failure to file the original promissory note or offer evidence of standing might preclude summary judgment.37 Even when the plaintiff files the original, it might be necessary to offer additional evidence to show that the plaintiff is the holder or has rights as a nonholder. In BAC Funding Consortium, Inc. v. Jean-Jacques, 28 So. 3d 936 (Fla. 2d DCA 2010), for example, the court reversed a summary judgment of foreclosure, saying the plaintiff had not proven it held the note. The written assignment was incomplete and unsigned. The plaintiff filed the original note, which showed an indorsement to another person, but no indorsement to the plaintiff. The court found that was insufficient. Clearly, a party in possession of a note indorsed to another is not a holder, but recall that Johns v. Gillian holds that a written assignment is not needed to show standing when the transferee receives delivery of the note. The courts ruling in BAC Funding Consortium was based on the heavy burden required for summary judgment. The court said the plaintiff did not offer an affidavit or deposition proving it held the note and suggested that proof of purchase of the debt, or evidence of an effective transfer might substitute for an assignment.38

In Jeff-Ray Corp. v. Jacobson, 566 So. 2d 885 (Fla. 4th DCA 1990), the court held that an assignment executed after the filing of the foreclosure case was not sufficient to show the plaintiff had standing at the time the complaint was filed. In WM Specialty Mortgage, LLC v. Salomon, 874 So. 2d 680 (Fla. 4th DCA 2004), however, the court distinguished Jeff-Ray Corp., stating that the execution date of the written assignment was less significant when the plaintiff could show that it acquired the mortgage before filing the foreclosure without a written assignment, as permitted by Johns v. Gilliam.39

When the note is lost, a document trail showing ownership is important. The burden in BAC Funding Consortium might be discharged by an affidavit confirming that the note was sold to the plaintiff prior to foreclosure. Corroboratory evidence of sale documents or payment of consideration is icing on the cake, but probably not needed absent doubt over the plaintiffs rights. If doubt remains, indemnity can be required if needed to protect the mortgagor.40

In the case of a defaulting mortgagor, someone presumably has a right to foreclose. Excessively strict standing requirements might result in a windfall to the mortgagor at the expense of the lender. At the same time, courts must ensure that the mortgagor is not subjected to double liability. A review of the cases shows that while there are a few cases in which mortgagors paid the wrong party and were later held liable to the true holder, there is a dearth of cases in Florida where a mortgagor was foreclosed by one putative mortgagee, and later found liable to another who was the true holder. The lack of such nightmare cases is a testament to the fine job courts have done in enforcing the standing requirements, but it also begs the question whether the risk of double liability may be overstated. Given the long foreclosure process in Florida, a defaulting borrower is unlikely to remain unaware of conflicting demands long enough to complete a foreclosure. It seems that in such an event, either the borrower

must have ignored conflicting demands, or one of the putative mortgagees sat on its rights. While both are plausible scenarios, they each present clear equities that should assist a court in positioning the loss.

Problem 6 Real Estate Transactions The UCC deals with problems one through five, but the Article 9 Comments expressly disclaim intent to deal with problem six because it is an issue of real estate law beyond Article 9s scope.41 In Florida, a mortgage is not an interest in real estate, but rather personal property.42 On the other hand, the statutes permit persons taking an interest in real estate to rely on the real estate records to determine ownership of a mortgage without regard to the UCC. F.S. 701.02 (2010) says in part:

701.02. Assignment not effectual against creditors unless recorded and indicated in title of document; applicability

(1) An assignment of a mortgage upon real property or of any interest therein, is not good or effectual in law or equity, against creditors or subsequent purchasers, for a valuable consideration, and without notice, unless the assignment is contained in a document that, in its title, indicates an assignment of mortgage and is recorded according to law.

(2) This section also applies to assignments of mortgages resulting from transfers of all or any part or parts of the debt, note or notes secured by mortgage, and none of same is effectual in law or in equity against creditors or subsequent purchasers for a valuable consideration without notice, unless a duly executed assignment be recorded according to law.


(4) Notwithstanding subsections (1), (2), and (3) governing the assignment of mortgages, chapters 670680 of the Uniform Commercial Code of this state govern the attachment and perfection of a security interest in a mortgage upon real property and in a promissory note or other right to payment or performance secured by that mortgage. The assignment of such a mortgage need not be recorded under this section for purposes of attachment or perfection of a security interest in the mortgage under the Uniform Commercial Code.

(5) Notwithstanding subsection (4), a creditor or subsequent purchaser of real property or any interest therein, for valuable consideration and without notice, is entitled to rely on a full or partial release, discharge, consent, joinder, subordination, satisfaction, or assignment of a mortgage upon such property made by the mortgagee of record, without regard to the filing of any Uniform Commercial Code

financing statement that purports to perfect a security interest in the mortgage or in a promissory note or other right to payment or performance secured by the mortgage, and the filing of any such financing statement does not constitute notice for the purposes of this section. For the purposes of this subsection, the term mortgagee of record means the person named as the mortgagee in the recorded mortgage or, if an assignment of the mortgage has been recorded in accordance with this section, the term mortgagee of record means the assignee named in the recorded assignment.

One can accept that a person taking an interest in real estate should be charged with notice only of what appears from the real estate records. However, the statute seems overly broad in that it says an assignment must be recorded to be effectual against creditors and purchasers. Subsections (1) and (2) seem to contradict the rules of Article 9, which permit perfection against lien creditors merely by taking possession of the note or filing a financing statement. Also, under Article 9, a good faith purchaser with possession takes free of a prior assignment, even if recorded. Although subsection (4) says the statute does not alter the perfection requirements of Article 9, what does the statute mean if not that an unrecorded assignment of mortgage is not enforceable against creditors of the assignor?

One might argue that 701.02 means that an absolute assignment must be recorded in the real estate records, while a collateral assignment need not be recorded.43 Subsection (4) discusses perfection of a security interest, but it does not specifically mention a sale of the mortgage. However, the term security interest in the UCC includes an assignment pursuant to a sale,44 and the term assignment in subsections (1) and (2) is not, on its face or in the case law, limited to absolute assignments.45 Such a limitation would undercut the 701.02 protections given to real estate purchasers (particularly considering the case law holding that a collateral assignee in possession may enforce the mortgage). Likewise, requiring a sale to be recorded in the real estate records for validity against subsequent purchasers from the mortgagee would undermine the protections for purchasers of mortgages under the UCC. Clearly, the statute says that an assignment need not be recorded to be perfected under the UCC, but that does not necessarily mean that an unrecorded assignment will be effective against a person taking an interest in the realty in reliance on the real estate records.

Perhaps the term creditors refers only to creditors of the fee title owner of the land not to creditors of the mortgage assignor. There is no need to protect creditors of a mortgage assignor with this statute. The priority of a lien creditor of the assignor is adequately addressed by Article 9. By contrast, creditors of the fee title owner are not protected by Article 9 and might rely on the real estate records in acquiring an interest in or lien on the real estate.46 Also, the subsection (5) phrase purchaser of real property supports that interpretation. There is no mention of purchasers of the mortgage.

If that is the intent of the statute, then the unqualified use of the term creditors is unfortunate. The statute should say the protection extends to creditors, purchasers, or other persons acquiring an interest in the real property, but not to persons acquiring a mortgage from the mortgagee (whose rights are determined instead by the UCC). Even though it could be clearer, the foregoing interpretation is not

plainly refuted by the statutory language. Moreover, there is case law support. In American Bank of the South v. Rothenberg, 598 So. 2d 289 (Fla. 5th DCA 1992), also discussed above, the bank received a collateral assignment and took possession of the note. However, the note was sold to a second assignee who recorded first in the real estate records and argued that 701.02 gave him better title. The court disagreed, stating:

The confusion in this case arises from the failure of both parties to recognize that section 701.02is inapplicable. This case, involving as it does the competing interests of successive assignees of a note and mortgage, is governed by negotiable instruments law, not the recording statute. Section 701.02 was enacted to protect a creditor or subsequent purchaser of land who has relied on the record satisfaction of a prior mortgage, which satisfaction was executed by the mortgagee after he made an unrecorded assignment of the same mortgage. Manufacturers Trust Co. v. Peoples Holding Co., 110 Fla. 451, 149 So. 5 (Fla. 1933).47

The courts reading is unduly narrow in that 701.02 protects more than just persons relying on mortgage satisfactions, but the idea that it governs only real estate transactions seems correct.48

However, some courts have confused the rules applicable to problem six with those applicable to problems one through five. In JP Morgan Chase v. New Millennial, LC, 6 So. 3d 681 (Fla. 2d DCA 2009), rev. dism., 10 So. 3d 632 (Fla. 2009), for example, the closing agent in a real estate transaction telephoned AmSouth Bank concerning two mortgages that it appeared to own of record and was told they had been paid. AmSouth Bank faxed a printout to the closing agent showing a balance of $0 and stating PD OFF. In fact, AmSouth Bank had merely sold the loans to JP Morgan, which failed to record an assignment. The transaction closed in reliance on the fax. Later, JP Morgan sought to foreclose, and the purchaser argued that JP Morgans unrecorded assignment was ineffective under 701.02. JP Morgan argued that 701.02 protected only assignees of the mortgagee, not grantees of the land owner, and the court agreed.49 In other words, the courts interpretation was exactly opposite that in American Bank of the South. Yet, the idea that persons acquiring the land may rely on 701.02 seems required by the statute and the case law.50

Although JP Morgan Chases interpretation of 701.02 seems wrong, one might argue the case was correct for another reason. The court said the closing agent never received a satisfaction, but simply relied on the fax. Although F.S. 701.04 (2010) permits the purchaser to rely on an estoppel letter, the court said the fax did not qualify for that protection. Arguably, the true holding of JP Morgan Chase is that the party relying on the real estate records must obtain a satisfaction, and informal assurances are inadequate. Nevertheless, JP Morgan Chase will add to the confusion until the Florida Supreme Court rules decisively on the meaning of 701.02.

Even if one accepts the interpretation in American Bank of the South, one must admit there is inherent tension between 701.02 and Article 9. The tension is demonstrated in Rucker v. State Exchange Bank, 355 So. 2d 171 (Fla. 1st DCA 1978). In that case, South 41 Corp. gave a mortgage to Harrell and deeded the land to Rucker. Harrell assigned the mortgage to the bank as collateral, which recorded the assignment, but did not notify Rucker. Rucker then paid the mortgage to Harrell. After not receiving payment, the bank foreclosed on Rucker. On appeal, Rucker argued the collateral assignment was not perfected under Article 9. The court erroneously said that Article 9 does not govern a collateral assignment, but came to an arguably correct result, affirming the judgment of foreclosure.

A threshold issue not discussed was whether Rucker, having acquired the real estate from South 41 Corp., was entitled to rely on the real estate records, or whether she simply paid the mortgage pursuant to the UCC. Clearly, Rucker did acquire the real estate, but that was months earlier, so perhaps by the time of payment, the real estate records were no longer relevant.

The Rucker court seemed to rely on both problems one through five and problem six rules. The court said that Rucker did not demand surrender of the mortgage,51 which is irrelevant under 701.02. However, the court also relied on the assignment recorded in the real estate records, which is not important to problems one through five, but is important to problem six. Even though the court did not clearly state which rules applied, it came to the correct result. Rucker lost because she did not comply with either set of rules. She would have become aware of the assignment to the bank if she had checked the real estate records, and she would have (presumably) discovered that Harrell did not have the note, if she had demanded surrender of the note. The court did not discuss when it is that a person acquiring an interest in the land (entitled to rely on the real estate records) ceases to be such a person and becomes instead a person acquiring or paying the promissory note who must follow the UCC, but the case shows the issue will inevitably arise, creating tension between 701.02 and the UCC.

Summarizing, the UCC attempts to solve problems one through five and 701.02 attempts to solve problem six. There is some overlap and potential for conflict, causing confusion in the cases. Courts should interpret those statutes so that they are consistent, limiting the protection of 701.02 to persons taking an interest in the real estate, and the protection of the UCC to persons taking an interest in the promissory note and mortgage.

Conclusion Ironically, while the drafters of Article 9 sought to make mortgage assignments as simple and foolproof as possible, the handling of mortgage assignments is now at the center of the foreclosure crisis that has gripped the nations financial system. To be fair, the changes to Article 9 did not really cause the problem. In fact, the changes mostly codified existing case law and served to lessen the chaos by eliminating uncertainty. However, the revisions to Article 9 fostered confidence that the simple, foolproof rules intended to protect parties rights in mortgages would in fact do so. The false sense of

certainty led to an increase in the number of transactions accomplished with minimal documentation designed to meet the attachment and perfection requirements of Article 9, but not the standing requirements in foreclosures. Moreover, missing or irregular indorsements or lost instruments compounded the problem by leaving gaps even in this minimal documentation. The result was a deluge of disputed cases fortuitously stopping or delaying foreclosures while the mortgagees struggled to reconstruct a document trail proving ownership.

Despite the sloppy practices of the mortgage industry, attorneys practicing in this area should not find themselves on the losing end of a court decision holding that their client does not have standing to foreclose. The question of whether the client has standing should be addressed before filing the case. If the documentation is inadequate, then missing documents should be located, or if necessary, reexecuted before filing suit. An attorney unavoidably faced with ambiguous documentation might take comfort that, as shown by Johns v. Gillian and the UCC, Florida law concerning standing is not very demanding. Nevertheless, the requirements for standing must be proved, and the attorney should determine before filing that these requirements can be met.

1 See Fla. Stat. 673.2041 (2010).

2 See National Bank of Sarasota v. Dugger, 335 So. 2d 859, 860-861 (Fla. 2d D.C.A. 1976), cert. den., 342 So. 2d 1101 (Fla. 1976) (citing Comments as interpretive guide).

3 Florida has long held an assignment of a note includes an assignment of the mortgage. See Taylor v. American Nat. Bank, 57 So. 678, 685 (Fla. 1912); First Nat. Bank of Quincy v. Guyton, 72 So. 460 (Fla. 1916); Collins v. W.C. Briggs, Inc., 123 So. 833 (Fla. 1929); Miami Mortgage & Guaranty Co. v. Drawdy, 127 So. 323 (Fla. 1930); and Warren v. Seminole Bond & Mortgage Co., 172 So. 696, 697 (Fla. 1937). Thus, a recorded assignment seemed surplusage. By contrast, a mortgage assignment without the note has been held ineffectual. Sobel v. Mutual Development, Inc., 313 So. 2d 77, 78 (Fla. 1st D.C.A. 1975).

4 Johns v. Gillian, 184 So. 140, 143 (Fla. 1938).

5 Fla. Stat. 679.1091(4)(k)(1) (2010) (Article 9 extends to a transfer of a lien in real property).

6 Fla. Stat. 679.1091(1) (2010).

7 See UCC 9-109, Comment 5.

8 Fla. Stat. 679.1021(1)(sss) (2010).

9 Fla. Stat. 679.1021(1)(bb) (2010).

10 Fla. Stat. 679.2031(2) (2010).

11 Fla. Stat. 679.1021(1)(l) (2010).

12 Fla. Stat. 679.1021(1)(ttt) (2010) and 671.201(38) (2010) (security interest includes the interest of a buyer of a promissory note).

13 Fla. Stat. 679.2031(7) (2010).

14 Fla. Stat. 673.2041(1) (2010), defining indorsement. Fla. Stat. 673.2011 (2010) requires an indorsement for a transferee to become a holder, if the instrument is payable to a specific person, but even a nonholder transferee may often enforce the instrument. See Fla. Stat. 673.2031(2) (2010).

15 The delivery requirement has also been weakened by some cases. See Beaty v. Inlet Beach, 9 So. 2d 735 (Fla. 1942); Harmony Homes, Inc. v. United States, 936 F. Supp. 907, 913 (M.D. Fla. 1996), affd, 124 F.3d 1299 (11th Cir. 1997).

16 Fla. Stat. 679.3081(5) (2010).

17 Fla. Stat. 679.1021(1)(zz) (2010).

18 Fla. Stat. 679.3131(1) (2010). Florida law applies to a security interest perfected by possession if the promissory note is located in Florida. See Fla. Stat. 679.3011(2) (2010).

19 Fla. Stat. 679.3121(1) (2010) (perfection by filing where the collateral is instruments). The term instrument under Article 9 includes non-negotiable promissory notes, unlike the same term defined in

Article 3. Compare Fla. Stat. 679.1021(1)(uu) (2010) with Fla. Stat. 673.1041(2) (2010), and see Comment 5(c) to UCC 9-102.

20 Fla. Stat. 679.5011(1)(b) (2010). A registered organization organized in Florida is deemed located in Florida. See Fla. Stat. 679.3071(5) (2010).

21 Fla. Stat. 679.3131(3) (2010).

22 Fla. Stat. 679.3171(1)(b) (2010) (security interest is junior to the rights of a person who became a lien creditor prior to perfection).

23 Fla. Stat. 679.3091(4) (2010). This is one of the few areas wherein collateral assignments and sales are different. Purchasers of promissory notes had not in the past been required to file financing statements, and the drafters of Article 9 wanted to continue that practice. See Comment 4 to UCC 9309.

24 First, the priority rules determine if the assignee prevails over another assignee, and possession is more protective than automatic perfection. Second, courts may find what appears to be a sale is actually security that cannot be perfected automatically. See, e.g., Torreyson v. Dutton, 198 So. 796 (Fla. 1940); Hulet v. Denison, 1 So. 2d 467 (Fla. 1941); Howard v. Goodspeed, 135 So. 294 (Fla. 1931). Also, the assignee usually wants possession to ensure standing to foreclose. See Abbott v. Penrith, 693 So. 2d 67 (Fla. 5th D.C.A. 1997); Pastore-Borroto Development, Inc. v. Marevista Apartments, M.B., Inc., 596 So. 2d 526 (Fla. 3d D.C.A. 1992); Figueredo v. Bank Espirito Santo, 537 So. 2d 1113 (Fla. 3d D.C.A. 1989).

25 See definitions of purchase and purchaser at Fla. Stat. 671.201(32) and (33) (2010).

26 See Comment 7 to UCC 9-330 (a purchaser who takes even with knowledge of the security interest qualifies for priority under subsection (d) if it takes without knowledge that the purchase violates the rights of the holder of the security interest). Fla. Stat. 679.3171(2) (2010) seems to adopt a different rule, saying that a buyer, other than a secured party takes free of a security interest if the buyer gives value and takes delivery without knowledge of the security interest and before it is perfected. However, a buyer, other than a secured party under Fla. Stat. 679.3171(2) (2010) is not a purchaser under Fla. Stat. 679.330(4) (2010). Comment 6 to UCC 9-317 says that unless the sale is excluded from Article 9, the buyer is a secured party, and 679.3171(2) does not apply, adding *r+ather, the priority rules generally applicable to competing security interests apply.

27 Fla. Stat. 671.201(21)(a) (2010).

28 C.f., Ederer v. Fisher, 183 So. 2d 39, 42 (Fla. 2d D.C.A. 1965) (unauthorized indorsement deprived plaintiff of holder in due course status, thus, permitting defense on instrument). As in Ederer, inability to prove holder status does not necessarily mean the plaintiff lacks standing under Fla. Stat. 673.3011 (2010), but may expose the plaintiff to additional defenses.

29 See Fla. Stat. 673.5011(2)(b)(1) (2010), permitting the maker to make such demand.

30 See Fla. Stat. 673.5041(1) (2010), giving effect to such waivers.

31 See, e.g., Scott v. Taylor, 58 So. 30 (Fla. 1912) (payment effective if made to authorized agent); McChesney v. Herman, 176 So. 565 (Fla. 1937); Posey v. Hunt Furniture Co., Inc., 43 So. 2d 343 (Fla. 1949); Fla. Stat. 671.103 (2010) (UCC does not displace law of agency).

32 Fla. Stat. 673.1041 (2010) determines negotiability. See, e.g., Locke v. Aetna Acceptance Corp., 309 So. 2d 43 (Fla. 1st D.C.A. 1975) (note stating pay to seller not negotiable because not payable to order of seller); City Bank, N.A. v. Erickson, 18 FLW Supp. 283 (Fla. Cir. Ct. 2011) (home equity agreement not negotiable where amount not fixed); Holly Hill Acres, Ltd. v. Charter Bank, 314 So. 2d 209 (Fla. 2d D.C.A. 1975) (note incorporating terms of mortgage not negotiable).

33 Johnston v. Allen, 22 Fla. 224 (Fla. 1886).

34 Philogene v. ABN AMRO Mortgage Group, Inc., 948 So. 2d 45 (Fla. 4th D.C.A. 2006); Fla. Stat. 673.3011(1) (2010).

35 Juega v. Davidson, 8 So. 3d 488 (Fla. 3d D.C.A. 2009); Mortgage Electronic Registration Systems, Inc. v. Revoredo, 955 So. 2d 33, 34, fn. 2 (Fla. 3d D.C.A. 2007) (stating that MERS was holder, but not owner and We simply dont think that this makes any difference. See Fla. R.Civ. P. 1.210(a) (action may be prosecuted in name of authorized person without joining party for whose benefit action is brought)).

36 Laing v. Gainey Builders, Inc., 184 So. 2d 897 (Fla. 5th D.C.A. 1966) (collateral assignee was a holder); Cullison v. Dees, 90 So. 2d 620 (Fla. 1956) (same, except involving validity of payments rather than standing to foreclose).

37 See Fla. Stat. 673.3091(2) (2010); Servedio v. US Bank Nat. Assn, 46 So. 3d 1105 (Fla. 4th D.C.A. 2010).

38 BAC Funding Consortium, Inc. v. Jean-Jacques, 28 So. 3d at 938-939 (Fla. 2d D.C.A. 2010). See also Verizzo v. Bank of New York, 28 So. 3d 976 (Fla. 2d D.C.A. 2010) (Bank filed original note, but indorsement was to a different bank). But see Lizio v. McCullom, 36 So. 3d 927 (Fla. 4th D.C.A. 2010) (possession of note is prima facie evidence of ownership).

39 See also Glynn v. First Union Nat. Bank, 912 So. 2d 357 (Fla. 4th D.C.A. 2005), rev. den., 933 So. 2d 521 (Fla. 2006) (note transferred before lawsuit, even though assignment was after).

40 Fla. Stat. 673.3091(2) (2010); Fla. Stat. 69.061 (2010).

41 See Comment 6 to UCC 9-308.

42 Shavers v. Duval County, 73 So. 2d 684 (Fla. 1954); City of Gainesville v. Charter Leasing Corp., 483 So. 2d 465 (Fla. 1st D.C.A. 1986); Southern Colonial Mortgage Company, Inc. v. Medeiros, 347 So. 2d 736 (Fla. 4th D.C.A. 1977).

43 See, e.g., Thomas E. Baynes, Jr., Florida Mortgages (Harrison Co. 1999), 7-2 (West pocket part for 2009), stating *s+ection 4 was added to establish that perfection of a security interest in a mortgagewould be governed by the Florida Uniform Commercial Code. This type of assignment of mortgage, sometimes characterized as a collateral assignment, does not need to be recorded under F.S. 701.02.

44 Fla. Stat. 671.201(38) (2010).

45 See, e.g., Gardner v. McPherson, 151 So. 390 (Fla. 1933) (dismissing foreclosure by unrecorded collateral assignee where mortgage had been satisfied by record mortgagee); Williams, Salomon, Kanner & Damian, as Trustee v. American Bankers Life Assurance Co., 379 So. 2d 119 (Fla. 3d D.C.A. 1979) (subordination unenforceable where recorded collateral assignee had not agreed). However, these cases predated subsection (4).

46 See, e.g., Manufacturers Trust Co. v. Peoples Holding Co., 149 So. 5 (Fla. 1933).

47 American Bank of the South v. Rothenberg, 598 So. 2d at 290 (Fla. 5th D.C.A. 1992).

48 See also Chandler v. Davis, 190 So. 873 (Fla. 1939) (assignee from record mortgagee took subject to holder in possession of note); Karn v. Munroe, 6 So. 2d 529 (Fla. 1942) (subsequent assignee with possession prevailed over first); Vance v. Fields, 172 So. 2d 613 (Fla. 1st D.C.A. 1965) (first assignee recorded first, but took possession of wrong note; court correctly ruled for the second assignee with possession without discussing distinction between a real estate transaction and note sale). Compare Tamiami Abstract & Title Co. v. Berman, 324 So. 2d 137 (Fla. 3d D.C.A. 1976), cert. den., 336 So. 2d 604 (Fla. 1976) (purchaser of original mortgagees assets did not own mortgage assigned of record to another by collateral assignment that later became absolute upon default). Because the buyer purchased the mortgage (not the real estate), the court should have applied rules regarding transfer of the mortgage as personal property, but focused instead on the land records. Yet the court said the defendant claimed outright possession of said mortgage, which left the possibility that his claim also arose from possession. Otherwise, it seems at odds with Cullison, cited in fn. 36.

49 The court cited Kapila v. Atlantic Mortgage & Investment Corp. (In re Halabi), 184 F.3d 1335 (11th Cir. 1999), and Bradley v. Forbs, 156 So. 716 (Fla. 1934). In Kapila, 184 F.3d at 1338, the court held the assignees failure to record did not render the mortgage unperfected in the mortgagors bankruptcy. The court said 701.02 protects only an assignee of the mortgagee, not a person acquiring the real estate. However, the question of who owns a mortgage is distinct from whether it is perfected against grantees of the real estate owner. Bradley includes some ambiguous language, but stands primarily for the proposition that a purchaser cannot rely on informal assurances by the record mortgagee, but must obtain a satisfaction. See Bradley, 156 So. at 717. The Kapila court also said the Florida Supreme Court may have implicitly receded from Bradley in Hulet v. Denison, 1 So. 2d 467, 468-469 (Fla. 1941), presumably because it discussed the statute as though it applied to persons acquiring the land, even though its decision was on other grounds, i.e., actual notice. The purchasers relied on a satisfaction by the mortgage assignee of record. However, the original mortgagees surviving widow claimed the assignment was for collateral and had been discharged. The court said the purchasers had actual notice, but cited the failure of the purchaser to demand surrender of the note as the basis. If that is what is meant by actual notice, then what is the point of the recording statute?

50 In addition to American Bank of the South v. Rothenberg, Gardner v. McPherson, Bradley v. Forbs, and Manufacturers Trust Co. v. Peoples Holding Co., see Housing Authority v. Macho, 181 So. 2d 680 (Fla. 3d D.C.A. 1966).

51 Rucker v. State Exchange Bank, 355 So. 2d at 172 (Fla. 1st D.C.A. 1978). The court spoke of surrender of the mortgage, but it is surrender of the promissory note that is important under the UCC. See also Perry v. Fairbanks Capital Corp., 888 So. 2d 725, 726 (Fla. 5th D.C.A. 2004).

David E. Peterson is of counsel at Lowndes, Drosdick, Doster, Kantor & Reed, P.A., in Orlando, and practices primarily in the area of foreclosures, bankruptcies, and creditors rights, generally. He earned his J.D. from the University of Michigan Law School in 1983.

To put a dash of serious humor on the topic, an old Patriot friend of mine told me he'd carry NO identification and when asked for ID by a cop he'd reply, "You're looking at it" "Why, you can't identify me"? "What is a piece of paper gonna do for identifying me when you are looking at the real McCoy?" I had to think a bit at what he was trying to say, but I got it. If the cop had problems with his answer he'd ask, "Well, do you have a pen & a piece of paper?" When the cop gave it to him he'd sign his first name, lick his thumb and apply a print on his paper and say, "What better ID do you have than my signature and fingerprint?" (now you can add DNA to the answer) The cop would just shake his head & tell him to get on his way and don't come back around. The old man traveled in his motor home for 35 years with just a paper/cardboard identification tag on it that said "Private Property not for Commercial use" and he traveled all around the country and only had two (2) altercations/tickets

and beat them both. That old man inspired my continued education on the subject. I know it don't really answer your question directly, but KNOWING who you are and coming up with Your Own solutions when thought out and acted on (you'll get it sooner or later on what works and what doesn't). Glenn says he doesn't have problems with his ID and I believe him, why not? I use my own myself (a little different but with the same results). Just study and the answers will come with the level of one's understanding and trial & error. We are all at different levels of understanding and with persistence & perseverance one will get where one wants to be, sometimes it will take just that, time.