Chapter 4-8 Standing to Enforce a Lost Note

4-8 Standing to Enforce a Lost Note

A lost instrument can be enforced if the person seeking to enforce the instrument was entitled to enforce it when the loss occurred or acquired ownership of it from someone entitled to enforce it when the loss occurred, the loss was not the result of a transfer or seizure, and the instrument cannot reasonably be obtained because of the loss.⁷⁸ In addition, the court must determine that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument.⁷⁹ Adequate protection may be provided by any reasonable means.⁸⁰

Fla. Stat. § 673.3091 does not create an independent cause of action; rather, the statute recognizes that an entity not possessing an instrument is still entitled to enforce it if the entity meets certain conditions.⁸¹ The cause of action is the enforcement itself.⁸² The right to enforcement of a lost note travels with the breach that triggers the need to seek enforcement; i.e. default by a mortgagor.⁸³

The person seeking to enforce the instrument must prove the terms of the instrument and the right to enforce it, and then it is as if the person has produced the instrument.⁸⁴ The person may do so either through a lost note affidavit or by testimony from a person with knowledge.⁸⁵ The terms of the instrument can be proven by introducing a copy of the note.⁸⁶

Standing to enforce a lost note that has been reestablished must be proven in the same manner as an original note that had not been lost.⁸⁷ A plaintiff that is in constructive possession of a blank indorsed note at the time of loss is entitled to enforce a lost note.⁸⁸ A plaintiff who cannot prove that it was entitled to enforce the note when the loss of possession occurred must prove that it directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when the loss of possession occurred.⁸⁹

It is sufficient for a bank witness to simply testify that he or she conducted a search for the lost note but could not locate it.⁹⁰ There is no requirement that the plaintiff prove exactly how possession was lost.⁹¹ Proving the circumstances of the note's loss is necessary only if it is required to prove that the plaintiff was entitled to enforce it when the loss occurred.⁹²

The witness may provide testimony that the seizure, transfer, or sale of the note would have been recorded in the bank's records in the ordinary course of business.⁹³

A note may be assigned or transferred, even though it is lost.⁹⁴

A court may not enter judgment enforcing a lost, destroyed, or stolen instrument "unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument."⁹⁵ However, adequate protection is not an element of the bank's prima facie case. Rather, it is a post-proof condition of the entry of final judgment.⁹⁶ Generally, this post-proof...