IN THE CIRCUIT COURT OF THE 4TH JUDICIAL CIRCUIT IN AND FOR DUVAL COUNTY, FLORIDA

LIBERTY ATLANTIC INVESTMENTS, LLC, a Florida limited liability company, Plaintiff, vs. MAYPORT PROPERTIES, LLC, a Florida limited liability company, KIRIT PATIDAR, an individual, STATE OF FLORIDA, DEPARTMENT OF REVENUE, and ALL OTHER UNKOWN PARTIES, Including all claimants, person or parties, natural or corporate, or whose legal status is unknown, claiming under any of the above named or described Defendants, Defendants. ____________________________________/ DEFENDANTS MEMORANDUM IN OPPOSITION TO PLAINTIFFS MOTION FOR FINAL SUMMARY JUDGMENT AS TO LIBERTYS CLAIMS AND MAYPORTS COUNTERCLAIMS Defendant, MAYPORT PROPERTIES, LLC (Mayport) by and through its undersigned counsel, hereby submits this memorandum in opposition to Plaintiffs Motion for Entry of Final Summary Judgment as to Libertys Claims and Mayports Counterclaims pursuant to Fla. R. Civ. P. 1.510(Motion). Genuine issues of material fact exist which have not been effectively factually challenged and refuted by Plaintiff thereby precluding a grant of summary judgment. TABLE OF AUTHORITIES Cases AAR Aircraft & Engine Group, Inc. v. Edwards, 272 F.3d 468 ............................................................................................................................. 24 Case No.: 16-2010-CA-001931 Division: FC-B

Acquadro v. Bergeron, 851 So. 2d 665 (Fla. 2003)........................................................................................................ 37 Alvarez v. Fla. Ins. Guaranty Assoc, 661 So. 2d 1230 (Fla. 3rd DCA 1995) ................................................................................ 34, 35 Arrigoni v. Ring Power Corp., 529 So. 2d 803 (Fla. 1st DCA 1988) ........................................................................................ 43 Bank of China v. Chan, 937 F.2d 780 ............................................................................................................................. 24 Bank of New York Trust Co., N.A. v. Rodgers, 79 So. 3d 108 (Fla. 3d DCA 2012) ........................................................................................... 17 Brenowitz v. Central Nat'l Bank, 597 So.2d 340 (Fla. 2nd DCA 1992) ........................................................................................ 20 Brown v. Marion Mortgage Co., 107 Fla. 727, 145 So. 413 (Fla. 1932) ...................................................................................... 15 Bunner v. Florida Coast Bank of Coral Springs, N.A., 390 So.2d 126 (Fla. 4th DCA 1980) ......................................................................................... 12 Capello v. Flea Market U.S.A., Inc., 625 So. 2d 474 (Fla. 3d DCA 1993) ......................................................................................... 35 Carpenter v. Longan, 83 U.S. 271, 21 L. Ed. 313 (1872) ............................................................................................ 17 City Fed. Sav. Bank v. Fla. E. Dev. & Mgmt. Corp., 536 So.2d 1057 (Fla. 4th DCA 1988) ................................................................................. 23, 30 CSX Transp., Inc. v. Pasco Cty., 660 So. 2d 757 (Fla. 2nd DCA 1995) ....................................................................................... 34 De Las Cuevas v. Nat'l Enterps., Inc., 927 So. 2d 41 (Fla. 3rd DCA 2006) .......................................................................................... 43 Deutsche Bank Nat'l Trust v. Clarke, 87 So. 3d 58 (Fla. 4th DCA 2012) ............................................................................................ 43 Don L. Tullis & Assocs., Inc. v. Benge, 473 So. 2d 1384 (Fla. 1st DCA 1985) ...................................................................................... 42 Enterprise Leasing Co. v. Demartino, 15 So. 3d 711 (Fla. 2nd DCA 2009) ......................................................................................... 34 ESL Federal Credit Union v. Bovee, 9 Misc.3d 256, (N.Y. Sup. 2005) ........................................................................................ 23, 24 Feltus v. U.S. Bank National Association, 80 So.3d 375 (Fla. 2nd DCA 2012) .......................................................................................... 31 First Bank of Marianna v. Havana Canning Co., 142 Fla. 554, 195 So. 188 (Fla. 1940) ...................................................................................... 15 Florida East Coast Railway Co. v. Eno, 99 Fla. 887, 128 So. 622 (1930)................................................................................................ 17 Ford Motor Credit Company v. Lototsky, 549 F.Supp. 996, n34 (E.D.Pa.1982) ........................................................................................ 24 Fred S. Conrad Const. Co. v. Exch. Bank of St. Augustine, 178 So.2d 217 (Fla. 1st DCA 1965) ......................................................................................... 17 Griffiths v. Barnett Bank of Naples, 603 So.2d 690 (Fla. 2nd DCA 1992) ........................................................................................ 20

Holl v. Talcott, 191 So.2d 40 (Fla.1966)............................................................................................................ 12 Holly Hill Acres, Ltd. v. Charter Bank of Gainsveille, 314 So.2d 209 (Fla. 2d DCA 1975) .......................................................................................... 15 Jones Constr. Co., Inc. v. Fla. Workers' Comp. JUA, Inc., 793 So. 2d 978 (Fla. 2nd DCA 2001) ....................................................................................... 37 Kearney Const. Co., LLC v. Bank of Am., N.A., 8:09-CV-1912-T-33TBM, 2011 WL 693573 (M.D. Fla. Feb. 18, 2011) ........................... 22, 30 Kemper v. First National Bank of Dayton, Ohio, 277 So.2d 804 (Fla. 3rd DCA 1973) ......................................................................................... 12 Law Office of David J. Stern, P.A. v. Security Nat. Servicing Corp., 969 So.2d 962 (Fla. 2007)......................................................................................................... 16 Lubowicki v. Oxford Resources Corpo, ratiuon, 697 So.2d 924 (Fla. 4th DCA 1997) ............................................................................ 12 Marine Midland Bank v. CMR Industries, Inc., 159 A.D.2d 94 07, 559 N.Y.S.2d 892 (2d Dept.1990) ........................................................... 24 Marine Midland Bank, N.A. v. Kristin International, Ltd., 141 A.D. 2d 259, 534 N.Y.S.2d 612 (4th Dept. 1988) ............................................................. 23 Mason v. Flowers, 91 Fla. 224, 107 So. 334 (Fla. 1926) ........................................................................................ 15 Maynard v. Cent. Nat. Bank, 640 So. 2d 1212 (Fla. Dist. Ct. App. 1994) .............................................................................. 20 Miami Nat'l Bank v. Forecast Constr. Corp., 366 So.2d 1202 (Fla. 3d DCA 1979) .................................................................................. 41, 42 Moore v. Morris, 475 So.2d 666 (Fla.1985).......................................................................................................... 12 Motorola Commc'ns v. Nat'l Patient Aids, Inc., ., 427 So.2d 1042 (Fla. 4th DCA 1983) .................................................................................... 23 Murphy v. Green, 102 Fla. 102 (Fla. 1931) ............................................................................................................ 41 Rainey v. State Dep't of Revenue, 353 So. 2d 207 (Fla. 1st DCA 1977) ........................................................................................ 43 Rever v. Lapidus, 151 So. 2d 61 (Fla. 3rd DCA 1963) .......................................................................................... 37 Rose v. Teitler, 736 So.2d 122 (Fla. 4th DCA 1999) ......................................................................................... 16 Salomon v. Pioneer Co-op. Co., 21 Fla. 374 (Fla. 1885) .............................................................................................................. 43 Scott v. Taylor, 63 Fla. 612, 58 So. 30 (Fla. 1912) ............................................................................................ 17 Shaw v. State Farm Fire and Cas. Co., 37 So.3d 329 (Fla. 5th DCA 2010) ........................................................................................... 17 Sink v. Abitibi-Price Sales Corp., 602 So. 2d 1313 (Fla. 4th DCA 1992) ...................................................................................... 42 Taines v. Capital City First Nat'l Bank, 344 So. 2d 273 (Fla. 1st DCA 1977) .................................................................................. 41, 43

Vance v. Fields, 172 So.2d 613 (Fla. 1st DCA 1965) ......................................................................................... 17 Voges v. Ward, 98 Fla. 304, 123 So. 785 (Fla. 1929) ........................................................................................ 15 Weinsten v. Fleet Factors Corp., 210 A.D.2d 74, 620 N.Y.S.2d 946 (1st Dept.1994) .................................................................. 24 West Edge II v. Kunderas, 910 So. 2d 953 (Fla. 2nd DCA 2005) ....................................................................................... 34 Zoda v. Hedden, 596 So. 2d 1225 (Fla. 2nd DCA 1992) ..................................................................................... 34 Statutes 209.10 Fla. Stat .......................................................................................................................... 41 559.541, et seq., Fla. Stat. (2007) .................................................................................. 26, 28, 29 559.546, Fla. Stat. (2007)........................................................................................................... 28 673.1061(1)(b), Fla. Stat. (2007) ............................................................................................... 15 90.604 Fla. Stat .......................................................................................................................... 34 90.952......................................................................................................................................... 40 90.953......................................................................................................................................... 40 501.201-501.213, Fla. Stat ....................................................................................................... 30 559.544(1),(2), Fla. Stat. (2007) .............................................................................................. 28 90.952 and 90.953 Fla. Stat .................................................................................................... 40 90.801(1)(c) Fla. Stat. (2007) ..................................................................................................... 35 90.803(6) Fla. Stat. (2007) .......................................................................................................... 36 11 U.S.C. 541(c) ................................................................................................................... 22, 25 Fla. Stat. 673.1011 et seq. ........................................................................................................ 5, 6 Fla. Stat. 673.3091 ............................................................................................................... 43, 44 Fla. Stat. 763.3011 ..................................................................................................................... 20 Fla. Stat. Ann. 201.09 (2007) ..................................................................................... 8, 39, 41, 42 Fla. Stat. Ann. 559.542 .............................................................................................................. 26 Fla. Stat. Ann. 559.543(1) (2007) .............................................................................................. 27 Fla. Stat. Ann. 559.543(2).......................................................................................................... 27 Fla. Stat. Ann. 559.544(1) (2007) .............................................................................................. 27 Fla. Stat. Ann. 559.544(2).......................................................................................................... 27 Fla. Stat. Ann. 671.201(21)(a) (2007)........................................................................................ 13 Fla. Stat. Ann. 673.1041 (2007) ..................................................................................... 13, 14, 40 Fla. Stat. Ann. 673.1041(1) .................................................................................................. 14, 15 Fla. Stat. Ann. 673.1061 ............................................................................................................ 14 Fla. Stat. Ann. 673.1061(b) (2007) ........................................................................................ 9, 16 Fla. Stat. Ann. 673.3011 ............................................................................................................ 20 Fla. Stat. Ann. 673.3-104(1)(b) .................................................................................................. 15 Fla. Stat. Ann. 673.3-105(2)(a) .................................................................................................. 15 Fla. Stat. Ann. 679.1011 et seq. (2007) ................................................................................... 5, 6 Fla. Stat. Ann. 679.1021(1)(bb) ........................................................................................... 22, 23 Fla. Stat. Ann. 679.1021(1)(ggg) ......................................................................................... 22, 23 Fla. Stat. Ann. 679.1091(1)(a) (2007).......................................................................................... 5 Fla. Stat. Ann. 679.602(7).............................................................................................. 22, 24, 29

Fla. Stat. Ann. 679.610 .................................................................................................. 22, 24, 29 Fla. Stat. Ann. 687.0304 ................................................................................................ 20, 21, 22 Fla. Stat. Ann. 90.901 .................................................................................................. 6, 7, 31, 34 Fla. Stat. Ann. 679.602, 679.610 (West) ................................................................................. 11 Sections 679.610(2), 679.611, 679.613, and 679.614................................................................... 29 West's F.S.A. 679.602 .......................................................................................................... 24, 29 Rules Fla. R. Civ. P. 1.080(d) ........................................................................................................... 38, 40 Fla. R. Civ. P. 1.510 .................................................................................................................. 1, 31 Fla. R. Civ. P. 1.510(e) ................................................................................................... 6, 7, 31, 34 Florida Rule of Civil Procedure 1.110(d) ............................................................................... 21, 22

ARGUMENT Plaintiff has failed to disprove or establish the legal non-sufficiency of Defendants Affirmative Defenses and Counterclaims. The nexus of all claims and defenses by both parties hereto is a determination as to whether the purported Amended, Consolidated, Restated, Increased, Extended, Renewed and Superseding Promissory Note (Note) is a negotiable instrument governed by Uniform Commercial Code (UCC) Article 3, Fla. Stat. 673.1011 et seq.. (2007) or whether it is a non-negotiable instrument governed by UCC Article 9, Fla. Stat. Ann. 679.1011 et seq. (2007). The Note is a non-negotiable instrument governed by Article 9 of the Uniform Commercial Code (UCC), Fla. Stat. Ann. 679.1091(1)(a) (2007). A transaction, regardless of its form, that creates a security interest in personal property or fixtures by contract. Plaintiff cannot be a holder in due course of a non-negotiable instrument as a matter of law. Mayports First, Second, Third, Fourth, and Eighth Affirmative Defenses and Counterclaims, Counts I thru III, all revolve around whether Plaintiff is the real-party-in interest to enforce the debt evidenced by the alleged Note filed with the Court with standing therefore to foreclose the mortgage. Mayports Second Affirmative Defense (Def. Answer, p.3, 2nd Aff. Def.) challenges Plaintiffs claimed authority to enforce the debt (evidenced by the alleged

imaged copy of the Note in the original complaint) as a holder in due course through indorsement and negotiation under 673.302.1, Fla. Stat. (2007). Plaintiffs bald and conclusory statements attempting to disprove or establish the legal non-sufficiency of Mayports defenses and counterclaims fail. Plaintiffs claims that the imaged and unauthenticated copy of the Note is a negotiable instrument based on it being titled a promissory note, are misplaced and fail to disprove or establish the legal non-sufficiency of Defendants Affirmative Defense. Id. The Court must regard the substance, not the form, of a transaction as controlling, and is not bound by the labels that have been appended to Note by the parties. Plaintiff has not met its burden under Florida law to disprove or establish the legal non-sufficiency of Mayports First, Second, Third, Fourth, and Eighth Affirmative Defenses and Counterclaims, Counts I thru V. Plaintiffs claim of ownership of the purported imaged copy of the Note by way of indorsement and negotiation under Uniform Commercial Code (UCC) Article 3, Fla. Stat. Ann. 673.1011 et seq. as opposed to assignment and sale under UCC Article 9, Fla. Stat. Ann. 679.1011 et seq., fails as a matter of law. Plaintiffs pleadings fail to establish a prima facie case entitling it to enforce the subject debt obligation and mortgage and Plaintiff is not entitled to summary judgment. Moreover, Plaintiffs Affidavit of Punit Shah in Support of its Motion (the Shah Affidavit) is inadmissible under 90.604 and violates Fla. Stat. Ann. 90.901 and Fla. R. Civ. P. 1.510(e) Fla. Stat. for failure to attach documents referred to in the Shah Affidavit. The

purported Note attached to the Complaint as Exhibit A is a copy of an image of a copy of the purported Note. Nowhere in the Shah Affidavit has Mr. Shah attested he reviewed any

documents let alone he ever inspected the original wet-ink Note or original custodial/collateral file. The Shah Affidavit lacks personal knowledge with regard to the original wet-ink Note,

establishing no foundation for admissibility of the image copy of the Note or the later filed alleged original Note. In addition, on June 14, 2006 Bridger Commercial Funding LLC (Bridger) Senior Vice President David H. Colton executed a California notarized Assignment and Conveyance of the yet-to-be executed and funded Note subject this action and the yet-to-be executed Mortgage subject this action, to Bank of America, N.A. (BOA) (Bridger Assignment) notarized June 14, 2006. The subject Note and Mortgage were entered into and executed by the Defendants the day after the Bridger Assignment. Defendants owed Bridger no debt and had executed no security instruments with Bridger for any debt on June 14, 2006. The Bridger Assignment is a void assignment transferring no right title or interest in the Note or Mortgage to any subsequent assignee throughout the purported chain of title claimed by Plaintiff Liberty. Furthermore, evidence strongly suggests that the allonges produced appear to never have been permanently attached to the Note and were placed with the Note at a later date or even created after the foreclosure action was initiated. The imaged copy of the Note originally filed with the Court attached to the Complaint does not have any allonge indorsed to U.S. Bank from Wells Fargo Bank associated with it. The imaged copy of the alleged Note filed with the Complaint varies significantly from the alleged originals filed with this Court on February 7, 2011. The discrepancy between the image copy of the purported Note filed at the inception of this action and the alleged original Note filed with the Court in support of the instant Motion begs the question whether the Plaintiff may be fabricating evidence in support of its claim that the Note is a negotiable instrument under UCC Article 3. The Shah Affidavit does not attach the documents referred to by the affiant in violation of Fla. Stat. Ann. 90.901. and Fla. R. Civ. P. 1.510(e). The Shah Affidavit merely states that the

copy of the image of a copy of the Note attached to the Complaint as Exhibit A is a true and correct copy and fails to effectively disprove or establish the legal non-sufficiency of Mayports First, Second, Third, Fourth, and Eighth Affirmative Defenses and Counterclaim Counts I thru V, challenging Plaintiffs claimed authority to enforce the debt evidenced by the Note as a holder in due course through indorsement and negotiation under 673.302.1, Fla. Stat. (2007). Finally, discovery is still ongoing and the grant of summary judgment is premature prior to the close of discovery. The copy of the purported Note is an incomplete copy of the original Note. The copy of the purported Note is missing the copy of the original Colony Bank, Southeast, note in the principal amount of $1,661,900.00 (the "Prior Note") as an attachment. Under Fla. Stat. Ann. 201.09 (2007), the prior note is required to be attached to the Note for all qualifying transactions under Fla. Stat. Ann. 201.09. Until discovery of the journal, account and general accounting ledger entries related to Plaintiffs claim of ownership of the debt purportedly evidenced by the Note is complete, a grant of summary judgment is premature. UNDISPUTED FACTS 1. 2. 3. 4. 5. 6. 7. The Colony Note Was Sold & Endorsed To Bridger; The Colony Note Was Made A Part Of The Bridger Note; Bridger Only Paid Taxes On The Difference Of Value & Increase In Loan; The Colony Note Is Missing & Lost; The Colony Note Has Not Been Cancelled; The Colony Note Has Not Been Reestablished; The Original Wet-Ink Colony Note Was Not Attached To The Original Bridger Note Filed With The Court; No Copies Of The Original Wet-Ink Colony Note Were Attached To The Original Bridger Note Filed With The Court Or With Any Exhibit Of The Bridger Note Filed In The Verified & Amended Complaints; No Allonge To U.S. Bank Was Attached To Bridger Note Exhibit In Original Verified Complaint When It Filed Foreclosure Action;

8.

9.

10. No Allonges Whatsoever Were Attached To Bridger Note Exhibit Filed With Amended Complaint; 11. The Original Bridger Assignment to BOA Was Pre-dated & Notarized Prior To Execution of Note & Mortgage; 12. The Original Bridger Assignment to BOA Contained a Blank Space For Instrument No. That Was not Filled in Until Months Later & Rerecorded; 14. Affiant Did Not Attach Servicing Records & Spreadsheets To His Affidavit that He Testified He Used to Prepare Affidavit; 15. No Servicing Transaction Histories or Other Records Attached to Affidavits to Prove up Debt, Amount of Default, Default, and Balances; 16. No Accounting and Financial Entries or Other Records Attached to Affidavits to Prove up Ownership of Note As Asset of Plaintiff; 17. Per Diem Default Interest Figures Provided In Affidavits Differ from Prior Figures in Affidavit and Pleadings.

DISPUTED FACTS Mayport disputes the facts alleged in the Complaint in its Answer to the Verified Amended Complaint (Answer) at 6-8; 10-20. Mayport objects to Plaintiffs disingenuous claim that there are undisputed facts in the instant Motion. Specifically, Mayport denies any default at 17 in its Answer. Mayport further disputes Plaintiffs authority to enforce the purported Note as a result of the Note being a non-negotiable instrument. Def. Answer, p.3, 2nd Aff. Def. By virtue of its express[] incorporat[ion] by reference of the Loan Documents at 10.15 (Compl. Exh. A, p. 7, 10.15), the Note conditions the makers promise to pay subject to any and all possible conditions contained in the Loan Documents. Under Fla. Stat. Ann. 673.1061(b) (2007), this renders the promise to pay the sum certain conditional and the Note non-negotiable. Whether or not the Loan Documents incorporated contain any such conditions or contingencies is a matter

beside the point. Because separate documents have been made a part of the Note by its express terms, the promise contained therein is conditional, and the note non-negotiable. Defendants assert that even if the Note was found to be a negotiable instrument, which Defendants explicitly deny, it has not been negotiated as a matter of law. The Note filed with the original U.S. Bank complaint and the subsequent Amended Complaint of Plaintiff Liberty is not indorsed to anyone, specifically not Liberty, nor is any allonge indorsed to U.S. Bank from Wells Fargo attached with the original Amended Complaint filing. Mayport disputes Plaintiffs status as a holder under the UCC and claims that the Note has not been negotiated as a result of it not being indorsed to the holder. The exhibits attached to the Amended Complaint control the conflict between the pleadings and the exhibit. Genuine issues of material fact remain with regard to Plaintiffs ownership and/or authority to enforce the Note and Mortgage at the time the original U.S. Bank Complaint was filed and at the time Plaintiff Liberty filed the Amended Complaint. Mayport disputes Plaintiffs claim of ownership through indorsement and negotiation. Mayport asserts that the Note was improperly transferred out of compliance with Article 9 of the UCC provisions which govern non-negotiable instruments from the originating lender all the way through to Plaintiff. Moreover, Mayport asserts Plaintiff lacks standing for failure to plead an equitable mortgage. Mayport further asserts that any default alleged by Plaintiff was the result of knowing and intentional inducement by Plaintiffs non-party special servicer, LNR, as agent of Plaintiff. Def. Answer, p.4, 3rd Aff. Def. Mayport claims genuine issues of material fact exist as to the validity of all the various assignments attached to the Amended Complaint. All the various assignments of the Note are void ab initio as a result of the Bridger Assignment being executed and notarized in California

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on June 14, 2006 one day before the Note and Mortgage subject this action were executed in Florida by Defendants. All the assignments before this Court are therefore nullities transferring no right, title or interest in the Note or the debt evidenced by the Note or the Mayport property subject the Mortgage. Mayport additionally asserts a genuine issue of material fact claiming Plaintiff is equitably estopped from declaring the loan in default and the entire balance due and owing as a result of Plaintiffs inequitable conduct through its agent, non-party LNR. Id. Additionally, Mayport asserts that Plaintiff waived default, if any, asserting the purported acceleration was factually improper and unauthorized. Def. Answer, p.4, 4th Aff. Def. Finally, Mayport disputes the enforceability of the Limited Guaranty as a matter of law and public policy. The action to enforce the debt against Defendant Pitadar is barred under the Florida UCC until the foreclosure action is decided and the collateral disposed of in a commercially reasonable manner. In effect the conversion of the Limited Guaranty to a full guaranty upon filing for bankruptcy protection by Mayport or the Guarantor is an imposition of liquidated damages not provided for in the Loan Documents, and is an impermissible waiver notwithstanding any such agreement under Fla. Stat. Ann. 679.602, 679.610 (West). Def. Answer, p.4, 5th, 6th, 7th Aff. Def. Plaintiff alleges it desired and chose to purchase certain the purported Note and chose to assume the risk associated with a non-negotiable instrument and is liable to all defenses Mayport has against the originator of the subject debt. Def. Answer, p.5, 8th Aff. Def. LEGAL ANALYSIS A. Summary Judgment Standard

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In order to be entitled to summary judgment, the record must be clear that no material issues of fact remain as to either [Respondents] claim or the affirmative defenses Appellant raised . Lubowicki v. Oxford Resources Corporatiuon, 697 So.2d 924 (Fla. 4th DCA 1997). See also Moore v. Morris, 475 So.2d 666 (Fla.1985). A summary judgment should not be granted until the facts have been sufficiently developed to enable the court to be reasonably certain that there is no genuine issue of material fact. Kemper v. First National Bank of Dayton, Ohio, 277 So.2d 804 (Fla. 3rd DCA 1973). In order for a plaintiff ... to obtain a summary judgment when the defendant asserts affirmative defenses, the plaintiff must either disprove those defenses by evidence or establish the legal insufficiency of the defenses. Bunner v. Florida Coast Bank of Coral Springs, N.A., 390 So.2d 126, 127 (Fla. 4th DCA 1980). The burden is on the plaintiff, as the moving party, to demonstrate that the defendant could not prevail. Moore v. Morris, 475 So.2d 666 (Fla.1985); Holl v. Talcott, 191 So.2d 40 (Fla.1966). Contrary to Plaintiffs assertion that it is undisputed in this case that Borrower defaulted under the terms of the Note (Pl. Memo of Law, p. 8, 1), Mayport explicitly denies: i) default of the Note, ii) Plaintiffs status as the real-party-in-interest with authority to enforce the Note, and iii) Plaintiffs standing as a result of failure to plead any legal or equitable interest in the property with the authority to foreclose the mortgage. (Answer, 17, 21-42). The burden is on Plaintiff to demonstrate that Mayport cannot prevail on its affirmative defenses. Plaintiffs Motion fails to meet that burden. Mayports Second Affirmative Defense in its Answer states: The Plaintiff lacks standing to bring this claim. The assignments were not executed with proper authority. The subject Note is not negotiable and has not been properly transferred to Plaintiff. The beneficial interest was improperly transferred from the originating lender to

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Plaintiff as it was performed without compliance with Uniform Commercial Code Article IX required to be used when the promissory note is non-negotiable. Plaintiff has failed to allege an equitable transfer of the underlying mortgage and note [emphasis added]. Def. Answer, p.3, 2nd Aff. Def. Plaintiffs Memorandum of Law at B claims the Note is a negotiable instrument and that Plaintiff is a holder as defined by Fla. Stat. Ann. 671.201(21)(a) (2007), that acquired its interest in the debt evidenced by the purported Note by way of assignment, indorsement and negotiation (Pl. Memo of Law, p. 9, 2). There is a genuine issue of material fact, set forth more fully below, as to whether or not the Note is a negotiable instrument subject to transfer by indorsement and negotiation under UCC Article 3 or whether the Note is a non-negotiable instrument governed by assignment and absolute sale under UCC Article 9. Until this Court determines the nature of the Note and its governing provisions under the UCC, a summary judgment is improper. In order for this Court to make that determination, discovery of the facts as to chain of title and transfer related to Plaintiffs ownership and authority to enforce the debt evidenced by the Note must be completed. Until discovery is complete there remains a genuine issue of material fact and a summary judgment is improper. B. Plaintiff is not the Real Party in Interest to Enforce the Debt and Lacks Standing to Foreclose the Mortgage as a Matter of Law Based on the Pleadings. 1. The Note is a Non-Negotiable Instrument Governed by UCC Article 9 and Based on the Pleadings Plaintiff is not the Real-Party-In-Interest to Enforce the Debt as a Holder in Due Course under UCC Article 3. A negotiable instrument is defined by statute as: Fla. Stat. Ann. 673.1041 (2007) Negotiable instrument (1) Except as provided in subsections (3), (4), and (11), the term negotiable instrument means an unconditional [emphasis added] promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it:

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(a) Is payable to bearer or to order at the time it is issued or first comes into possession of a holder; (b) Is payable on demand or at a definite time; and (c) Does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain [emphasis added]: 1. An undertaking or power to give, maintain, or protect collateral to secure payment; An authorization or power to the holder to confess judgment or realize on or dispose of collateral; or A waiver of the benefit of any law intended for the advantage or protection of an obligor.

2.

3.

. (3) An order that meets all requirements of subsection (1), except paragraph (a), and otherwise falls within the definition of check in subsection (6) is a negotiable instrument and a check. (4) A promise or order other than a check is not an instrument if, at the time it is issued or first comes into possession of a holder, it contains a conspicuous statement, however expressed, to the effect that the promise or order is not negotiable or is not an instrument governed by this chapter. . (11) A warrant of this state is not a negotiable instrument governed by this chapter. For the purpose of determining negotiability of a note under Fla. Stat. Ann. 673.1041 an unconditional promise to pay is defined by statute as: Fla. Stat. Ann. 673.1061. (2007) Unconditional promise or order (1) Except as provided in this section, for the purposes of Fla. Stat. Ann. 673.1041(1), a promise or order is unconditional unless it states [emphasis added]: (a) An express condition to payment; (b) That the promise or order is subject to or governed by another writing [emphasis added]; or (c) That rights or obligations with respect to the promise or order are stated in another writing. A reference to another writing does not of itself make the promise or order conditional.

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.... The note having incorporated the terms of the purchase money mortgage was not negotiable. The appellee Bank was not a holder in due course, therefore, the appellant was entitled to raise against the appellee any defenses which could be raised between the appellant and [appellee]. Since appellant asserted an affirmative defense of fraud, it was incumbent on the appellee to establish the non-existence of any genuine issue of any material fact or the legal insufficiency of appellant's affirmative defense. Having failed to do so, appellee was not entitled to a judgment as a matter of law; hence we reverse Holly Hill Acres, Ltd. v. Charter Bank of Gainsveille, 314 So.2d 209, 211 (Fla. 2d DCA 1975). [Emphasis added]. The note, incorporating by reference the terms of the mortgage, did not contain the unconditional promise to pay required by Fla. Stat. Ann. 673.3-104(1)(b).1 [Emphasis added]. Rather, the note falls within the scope of Fla. Stat. Ann. 673.3-105(2)(a) .2 Although negotiability is now governed by the Uniform Commercial Code, this was the Florida view even before the U.C.C. was adopted. E.g., the Supreme Court in Brown v. Marion Mortgage Co., 107 Fla. 727, 145 So. 413 (Fla. 1932), held that certain bonds which were to be received and held subject to a certain mortgage were non-negotiable. See also, First Bank of Marianna v. Havana Canning Co., 142 Fla. 554, 195 So. 188 (Fla. 1940); Voges v. Ward, 98 Fla. 304, 123 So. 785 (Fla. 1929); Mason v. Flowers, 91 Fla. 224, 107 So. 334 (Fla. 1926). Incorporation by reference has been defined as: The method of making one document of any kind become a part of another separate document by referring to the former in the latter, and declaring that the former shall be taken and considered as a part of the latter the same as if it
1

Currently found in 673.1041(1), Fla. Stat. (2007). Currently found in 673.1061(1)(b), Fla. Stat. (2007).

15

were fully set out therein.

(Black's Law Dictionary (Revised 4th Ed.).

Here, the Note

expressly incorporate[s] by reference the terms and conditions of the Loan Documents at 10.15 (Compl. Exh. A, p. 7, 10.15) and conditions the makers promise to pay subject to any and all possible conditions contained in the Loan Documents. Under Fla. Stat. Ann. 673.1061(b), the Notes express[] incorporat[ion] by reference of the Loan Documents renders the promise to pay the sum certain conditional. Whether or not the Loan Documents incorporated contain any such conditions or contingencies is a matter beside the point. The germane point is that all of the essential terms of the Note cannot be ascertained from the face of the instrument itself. Because separate documents have been made a part of the Note by its express terms, the promise contained therein is conditional, and the note non-negotiable. As a matter of law, Plaintiff cannot be a holder in due course of a nonnegotiable instrument. Based on the pleadings, Plaintiff is not the real-party-in-interest with authority to enforce the Note and the instant Motion should be denied. 2. Plaintiff Failed to Allege an Equitable Interest in the Mortgage and Lacks Standing to Foreclose on the Mortgage Based on the Pleadings. Assignee of nonnegotiable note was not a holder in due course . Holly Hill Acres, LTD, at 210, supra. As a general rule, the assignee of a nonnegotiable instrument takes it with all the rights of the assignor, [if any,] and subject to all the equities and defenses of the debtor connected with or growing out of the obligation that the obligor had against the assignor at the time of the assignment. Law Office of David J. Stern, P.A. v. Security Nat. Servicing Corp., 969 So.2d 962 (Fla. 2007) citing authorities; see also Rose v. Teitler, 736 So.2d 122 (Fla. 4th DCA 1999). Based on the pleadings, Plaintiff has failed to meet its burden of proving standing to invoke the subject matter jurisdiction of this Court to foreclose the mortgage. It is apodictic

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there can be no cause of action to foreclose a mortgage unless we know where the paper is and that it actually represents something. There is much sand in the gears of our property transfer system in these times. However, we cannot bend the rules. A person seeking to enforce an instrument conveying an interest in real property must demonstrate he has directly or indirectly acquired ownership of the instrument. Bank of New York Trust Co., N.A. v. Rodgers, 79 So. 3d 108 (Fla. 3d DCA 2012), reh'g denied (Feb. 23, 2012),. Assignment of a mortgage without assignment of the debt to an assignee that has no pecuniary interest in the debt is void and transfers no legal or equitable interest in the property. Carpenter v. Longan, 83 U.S. 271, 21 L. Ed. 313 (1872), see also Vance v. Fields, 172 So.2d 613, 614 (Fla. 1st DCA 1965) ([t]he mortgage is a mere incident of and ancillary to such note. Scott v. Taylor, 63 Fla. 612, 58 So. 30 (Fla. 1912). An assignment of the mortgage without an assignment of the debt creates no right in the assignee. 6 Am.Jur.2nd, Assignments, Sec. 26, page 210; 22 Fla.Jur. Mortgages, Sec. 540, page 621, and the cases cited therein.). The [] assignee, occupies the same position as did [assignor] with respect to the moneys, having the same rights, and being subject to the same equities, conditions, and defenses, the assignment not being a negotiable instrument. The mere assignment of all sums due and to become due the contractor in and of itself creates no different or other liability of the owner to the assignee than that which existed from the owner to the assignor. Florida East Coast Railway Co. v. Eno, 99 Fla. 887, 128 So. 622, 626 (1930), see also Fred S. Conrad Const. Co. v. Exch. Bank of St. Augustine, 178 So.2d 217, 219 (Fla. 1st DCA 1965) (It is fundamental that the assignee of a contract or non-negotiable chose in action occupies the same position as its assignor and is subject to the same equities, conditions and defenses that could have been asserted against the assignor.); Shaw v. State Farm Fire and Cas. Co., 37 So.3d 329 (Fla. 5th

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DCA 2010) (In discussing the general rule that an assignee steps into the shoes of the assignor, the majority asserts that this rule simply means that the assignee acquires no greater rights than the assignor.). Here, the very first assignment of Note and Mortgage from the originating Lender Bridger, to BOA, is void ab initio and transferred no right title or interest in the Bridger Note or debt evidenced thereby nor the Mortgage on the Mayport property to BOA or any subsequent assignee of BOA. On June 14, 2006 Bridger Senior Vice President David H. Colton executed the Bridger Assignment, a California notarized Assignment and Conveyance of the yet-to-be executed and funded Bridger Note and the yet-to-be executed Bridger Mortgage, to BOA notarized June 14, 2006. The Bridger Note and Bridger Mortgage were entered into and

executed by the parties the day after the Bridger Assignment. Defendants owed Bridger no debt and had executed no security instruments with Bridger for any debt on June 14, 2006. The Bridger Assignment is a void assignment transferring no right title or interest in the Bridger Note or Bridger Mortgage to any subsequent assignee throughout the purported chain of title claimed by Plaintiff Liberty. Restatement (Second) of Contracts 321 (2) (1981)(Except as otherwise provided by statute and as stated in Subsection (1), a purported assignment of a right expected to arise under a contract not in existence operates only as a promise to assign the right when it arises and as a power to enforce it. ) Moreover, the Assignment dated November 22, 2010 and recorded on December 13, 2010 in Book 1549 at page 732 in Duval County from U.S. Bank, NA as Trustee for the certificate holders of Banc of America Commercial Mortgage, Inc., commercial mortgage passthrough certificates series 2006-5 (US Bank) to Plaintiff attached to the Complaint as Exhibit I, is a nullity. The only interest assigned by US Bank to Plaintiff was an interest in the

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Mortgage, Rents and Leases and the Security Agreement and/or Instrument including the Fixture Filing. No assignment of the debt or an interest in the debt was transferred and assignment of the mortgage without the debt creates no rights to the property in assignee Plaintiff. As a result of the void Bridger Assignment, no enforceable legal or equitable interest in the debt or mortgage was transferred to any of the each subsequent purported creditors including Plaintiff and the U.S. Bank Assignment was a nullity. Furthermore, Mayport disputes the authority of the parties in the Assignments of the Loan Documents attached to the Complaint. There are genuine issues of material fact whether the assignments were fabricated and ultra vires acts without lawful authority to affect any transfer. Plaintiff admits in its Motion that the non-negotiable debt was improperly transferred by way of indorsement and negotiation beginning with the original lender Colony Bank, Southeast, (Colony Bank) all the way through the chain of each purported prior creditor to claimed current owner, Plaintiff Liberty. ( Liberty is in possession of the original Note and the allonges indorsed to each successive holder of the Note . (Pl. Memo of Law at p. 9, 2)) see also, Shah Affidavit p. 3, 7, ([t]he Mortgage, Guaranty, and other related documents were assigned and the Note was endorsed from and to separate entities over the course of several years, eventually being owned and held by Liberty .). [Emphasis added]. Beginning with the Bridger Assignment up through the U.S. Bank Assignment, each assignment is a nullity transferring no interest in the debt creating no rights in the property. As a result of the impermissible transfers by way of indorsement and negotiation of a non-negotiable instrument and the null Assignments including the U.S. Bank Assignment, no enforceable legal or equitable interest in the debt or mortgage was transferred from the original lender Colony Bank and/or Bridger to any of the each subsequent purported creditors including Plaintiff.

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Nowhere in Plaintiffs Complaint does it allege it has an equitable interest in the mortgage. If Plaintiff is not the real-party-in-interest to enforce the debt because of

impermissible transfers, Plaintiff has no legally enforceable interest in the mortgage aside from a possible equitable interest in the mortgage. Plaintiff did not plead an equitable interest in the mortgage and lacks standing to maintain the foreclosure action therefor. Plaintiff has failed to disprove or establish the legal non-sufficiency of Mayports First, Second, Third, Fourth, and Eighth Affirmative Defenses and Counterclaim Counts I thru III all centered on the challenge of Plaintiffs claimed authority to enforce the debt as a holder in due course through indorsement and negotiation under 673.302.1, Fla. Stat. (2007). Plaintiffs sole claim of ownership of the debt evidenced by the Note is that it is a holder of the Note and mortgage as a result of indorsement and negotiation pursuant to UCC Article 3, Fla. Stat. Ann. 673.3011.3 (Pl. Memo of Law at p. 8 B. 1). Under the law, Plaintiff cannot acquire an interest in non-negotiable debt by way of indorsement and negotiation. Plaintiffs Motion fails as a matter of law and should be denied therefor. C. Fla. Stat. Ann. 687.0304 Does not Prevent Mayport from Asserting the Affirmative Defenses of Estoppel and Subsequent Waiver. [A]ffirmative defenses of subsequent waiver, estoppel, and bad faith are outside of the operation of Fla. Stat. Ann. 687.0304. Maynard v. Cent. Nat. Bank, 640 So. 2d 1212 (Fla. Dist. Ct. App. 1994) citing Brenowitz v. Central Nat'l Bank, 597 So.2d 340, 343 (Fla. 2nd DCA 1992), see also, Griffiths v. Barnett Bank of Naples, 603 So.2d 690, 692 (Fla. 2nd DCA 1992) (recognizing that Brenowitz provides that estoppel, fraud and other available affirmative defenses

Plaintiff cites Fla. Stat. 763.3011 Pl. Memo of Law at p. 8, B, 1; however, Mayport assumes Plaintiffs citation is a typographical error and its intention was to cite to 673.3011 Fla. Stat. since Fla. Stat. 763.3011 represents no codified Florida law.

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may be asserted pursuant to Florida Rule of Civil Procedure 1.110(d) and are not barred by Fla. Stat. Ann. 687.0304. Plaintiff is not making a claim did not make an independent claim that can be construed in the nature of an action for damages for the breach of an unwritten agreement.). Mayports Third Affirmative Defense (Def. Ans. p. 4, 3rd Aff. Def.), asserts that LNR, was acting at all times relevant herein within its actual or apparent authority as an agent for the purported owner of the Note. LNR as Plaintiffs agent had a duty to use commercial reasonableness as a purported secured creditor in dealing with Mayport and any disposition of the secured collateral under the Florida UCC. Mayport asserts LNR knowingly made false representations that LNR would assist Mayport with debt relief and induced Mayport to alter its payment schedule while LNR purportedly assisted Mayport. LNR, Mayport and Mayports bankruptcy counsel had extensive negotiations on refinancing, buyout and modification options. Such an act is a predatory mortgage servicing practice known as a manufactured default that was identified by Mayports expert in the 90s (Lavalle Affidavit). Mayport asserts the negotiations with LNR were futile as a result of LNR operating in bad faith on behalf of its principal, Plaintiff Liberty. Evidence of the negotiations is LNRs commissioning multiple appraisals on the property including multiple Broker Price Opinions (BPOs). Mayport asserts it had a right to rely on and reasonably did rely on LNR' s

representation to its detriment. Mayports Fourth Affirmative Defense (Def. Ans. p. 4, 4th Aff. Def.) asserts subsequent waiver of default, if any, and estoppel of the right to accelerate the loan under the facts. Both estoppel and waiver are determined by resolution of the facts. Mayports Third and Fourth Affirmative Defenses raise genuine issues of material fact and the Motion should be denied therefor.

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Plaintiffs unsupported legal conclusion that Mayports Third and Fourth Affirmative Defenses are precluded under Fla. Stat. Ann. 687.0304 fails as a matter of law. Plaintiff cites no case law in support of its interpretation of the statute. Plaintiffs interpretation of the law is disingenuous at best and outright misleading the Court at worst. Mayports Third and Fourth Affirmative Defenses are just that defenses, not new claims for damages. Estoppel, subsequent waiver, fraud and other available affirmative defenses may be asserted pursuant to Florida Rule of Civil Procedure 1.110(d) and are not barred by Fla. Stat. Ann. 687.0304. Plaintiff has failed to disprove or establish the legal non-sufficiency of Mayports Third and Fourth Affirmative Defenses and the instant Motion should be denied. D. The Limited Guaranty is Secured by the Mortgage and 7(b)(iii) of the Mortgage Conditioning the Filing of Bankruptcy as an Automatic Default is an Impermissible Post-Default Waiver of the Parties Duties Under Fla. Stat. Ann. 679.602(7) and Unenforceable as a Matter of Law Under 11 U.S.C. 541(c). Mayports Fifth, Sixth and Seventh Affirmative Defenses are properly raised under the law and Plaintiff has failed to disprove or establish the legal non-sufficiency of Mayports Fifth, Sixth and Seventh Affirmative Defenses and the instant Motion should be denied. The Guarantor is a debtor within the definition set forth in UCC Article 9, Fla. Stat. Ann. 679.1021(1)(bb) as a secondary obligor under Fla. Stat. Ann. 679.1021(1)(ggg) and, therefore, may not waive the defense of commercial reasonableness under 679.601; 679.602(7); and Fla. Stat. Ann. 679.610. The Guarantor and the secured party have non-waivable duties regarding the disposition of the secured collateral in a post-default context under 679.602(7); 679.610, Fla. Stat. Florida law and the UCC do not allow [Plaintiff Liberty] to pursue the Defendant Patidar until [the debt is proven and the secured creditor] has sold the [Mayport] collateral in a commercially reasonable manner and applied such proceeds to any alleged deficiency. Kearney Const. Co.,

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LLC v. Bank of Am., N.A., 8:09-CV-1912-T-33TBM, 2011 WL 693573 (M.D. Fla. Feb. 18, 2011), citing Motorola Commc'ns v. Nat'l Patient Aids, Inc. ., 427 So.2d 1042, 1047 (Fla. 4th DCA 1983) (finding action for deficiency against guarantors could not proceed until creditors' seizure and sale of collateral was determined). Even though the secured party's remedies are cumulative ... [a] secured party cannot repossess the collateral, do nothing with it, and then commence an action on the underlying debt; under such circumstances, the secured party is barred from enforcing the debt until it has completed the proceedings against the collateral ... 47 Fla. Jur.2d Secured Transactions 309 (2004); City Fed. Sav. Bank v. Fla. E. Dev. & Mgmt. Corp., 536 So.2d 1057, 1058 (Fla. 4th DCA 1988) (Article 9 of the Uniform Commercial Code governing secured transactions does not allow a secured creditor to harass a debtor by pursuing contemporaneously two or more remedies .... [T]he creditor's suit on the note was premature, when it had already repossessed the debtor's collateral.) Id. Additionally, Mayports counsel offers New York State case law for supplemental instruction and persuasion in support of its legal analysis see, ESL Federal Credit Union v. Bovee, 9 Misc.3d 256, 261, 262, (N.Y. Sup. 2005), citing Marine Midland Bank, N.A. v. Kristin International, Ltd., 141 A.D. 2d 259, 261, 534 N.Y.S.2d 612 (4th Dept. 1988), (guarantor is a debtor within the definition set forth in Uniform Commercial Code 9105(1)(d) [now 9 102(a)(28)4 (debtor); 9102(a)(71)5 (secondary obligor)], and, therefore, a guarantor may not waive the defense of commercial reasonableness, pursuant to Uniform Commercial Code 9 501(3) [now 9601; 9610]6.

679.1021(1)(bb) Fla. Stat. 679.1021(1)(ggg) Fla. Stat.

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UCC Article 9-601; 602; and 610 ( 679.601; 679.602; 679.610, Fla. Stat. respectively) specifically governs the disposition of any collateral remaining to secure the debt. ESL at 262, supra, citing Ford Motor Credit Company v. Lototsky, 549 F.Supp. 996, n34 (E.D.Pa.1982), See also, Weinsten v. Fleet Factors Corp., 210 A.D.2d 74, 620 N.Y.S.2d 946 (1st Dept.1994); Marine Midland Bank v. CMR Industries, Inc., 159 A.D.2d 94, 10407, 559 N.Y.S.2d 892 (2d Dept.1990); Bank of China v. Chan, 937 F.2d 780, 78586 (2d Cir.1991). The non-waiver rule of 679.602(7) Fla. Stat. (disposition of collateral) applies to this contractual context. See West's F.S.A. 679.602, Comment 2 (in the context of rights and duties after default, our legal system traditionally has looked with suspicion on agreements that limit the debtor's rights and free the secured party of his duties. As stated in former Section 9-501, Comment 4, no mortgage clause has ever been allowed to clog the equity of redemption. The context of default offers great opportunity for overreaching); see also AAR Aircraft & Engine Group, Inc. v. Edwards, 272 F.3d 468, 47273 (7th Cir. 2001) (non-waiver rule prevents economic waste and unjust enrichment because creditors who believe that they have obtained a waiver have no incentive to behave in a commercially reasonable manner). The Mortgage attached to the Complaint as Exhibit B secures the Limited Guaranty attached to the Complaint as Exhibit D. The purported Note incorporates the Mortgage and Loan Documents. Documents. (Compl. Exh. A, p. 7, 10.15). The Mortgage secures the Note and Loan The Mortgage states it is

The Guaranty is a part of the Loan Documents.

enforceable upon the filing of a Bankruptcy Petition by Guarantor, securing the Guaranty with the Mortgage thereby. (Compl., Exh. B, p.23, 7(b)(iii)).

679.601; 679.610, Fla. Stat.

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In 7(b)(iii) of the Mortgage (Compl., Exh. B, p.23.) Plaintiff expressly conditions the filing of bankruptcy by the Guarantor to be an automatic default trigger for enforceability of the Mortgage. Upon a trigger of the automatic default provision of the Mortgage, conversion of the Limited Guaranty to a full guarantee in effect is an impermissible waiver of both the Guarantors and secured creditors duties to use commercial reasonableness regarding the disposition of collateral. In effect, the conversion of the Limited Guaranty to a full guaranty is a liquidated damages clause impermissibly being used as a substitution for the disposition of secured collateral and is unenforceable. Moreover, 7(b)(iii) of the Mortgage (Compl., Exh. B, p.23.) is unenforceable as a matter of law under 11 U.S.C. 541(c) as what is known as an ipso facto clause. Section 541(c) of the Bankruptcy Code provides that an interest of the debtor (the bankrupt company or person) in property becomes "property of the estate," meaning that the debtor does not lose the property or contract right, despite a provision in an agreement: that is conditioned on the insolvency or financial condition of the debtor, on the commencement of a case under this title, or on the appointment of or taking possession by a trustee in a case under this title or a custodian before such commencement, and that effects or gives an option to effect a forfeiture, modification, or termination of the debtors interest in property. 11 U.S.C. 541(c). This statute means that a clause that terminates a contract because of the "insolvency" or "financial condition" of the debtor, or due to the filing of a bankruptcy case, will be unenforceable once a bankruptcy case has been filed. 7(b)(iii) of the Mortgage is unenforceable under federal bankruptcy law. 7(b)(iii) of the Mortgage is an unenforceable liquidated damages clause as a substitution for a collateral disposition agreement and an impermissible waiver of Guarantors non-waivable duty of commercial reasonableness and non-waivable post-default duties under UCC Article 9. Plaintiff

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has failed to disprove or establish the legal non-sufficiency Mayports Fifth, Sixth and Seventh Affirmative Defenses and the instant Motion should be denied. E. Mayport Requests to Amend nunc pro tunc Counterclaim IV to Cite the Correct Statute. Mayport admits it made a mistake in the citation to law in Counterclaim IV and respectfully requests the Court to allow it to amend nunc pro tunc Counterclaim IV with the correct citation under 559.541, et seq., Fla. Stat. (2007), the Florida Commercial Collections Practice Act (FCCPA). [C]ommercial collection practices in this state are not governed by the federal and state laws relating to the collection of consumer claims and that current criminal laws are inadequate to deal with certain unlawful and fraudulent activities specifically involving the collection of commercial claims in this state. . . . Therefore, the Legislature intends by this part to

specifically regulate commercial collection activities, separate and apart from consumer collection activities, to prevent unlawful and fraudulent commercial collection activities that otherwise may go unpenalized. The Legislature seeks to do so by requiring the registration of persons and businesses engaged in soliciting the collection of commercial claims or in collecting commercial claims, by prohibiting collection activities in this state by unregistered persons, and by providing effective mechanisms for enforcement of this part. Fla. Stat. Ann. 559.542. Claim or commercial claim means any obligation for the payment of money or its equivalent arising out of a transaction wherein credit has been offered or extended to any person, and the money, property, or service which was the subject of the transaction was primarily for commercial purposes and not primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment. The term claim or commercial claim

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includes an obligation of a person who is comaker, endorser, guarantor, or surety as well as the person to whom such credit was originally extended. Fla. Stat. Ann. 559.543(1) (2007). Commercial collection agency means any person engaged, as a primary or secondary business activity, in the business of soliciting commercial claims for collection or in the business of collecting commercial claims, asserted to be owed or due to another person, regardless of whether the collection efforts are directed at the primary debtor or some other source of payment. Fla. Stat. Ann. 559.543(2). No person shall engage in business in this state as a commercial collection agency, as defined in this part, or continue to do business in this state as a commercial collection agency, without first registering in accordance with this part and thereafter maintaining such registration. Fla. Stat. Ann. 559.544(1) (2007). Each

commercial collection agency doing business in this state shall register with the department and annually renew such registration, providing the registration fee, information, and surety bond required by this part. Fla. Stat. Ann. 559.544(2). In the instant action, the debt evidenced by the purported Note constitutes a Commercial Claim as defined under Fla. Stat. Ann. 559.543(2). Plaintiff Libertys, its employees, agents and/or assigns activities subject the instant action to collect the debt evidenced by the purported Note through foreclosure is proof in and of itself that Plaintiff is in the business of collecting commercial claims, asserted to be owed or due to another person, regardless of whether the collection efforts are directed at the primary debtor or some other source of payment. Fla. Stat. Ann. 559.543(2). As argued above, the purported Note is a non-negotiable instrument. Plaintiff cannot demonstrate ownership by indorsement and negotiation therefor. As a result, Plaintiff is

attempting to collect the purported debt on behalf of an undisclosed party. Plaintiff, therefore, is

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not a holder in due course of the purported Note as a matter of law and is subject to all claims and defenses Defendants assert in this Amended Answer. The US Bank Assignment to Plaintiff is a nullity transferring no interest in the debt creating no rights in the property. As a result of the impermissible transfers by way of

indorsement and negotiation of a non-negotiable instrument and the null Assignment from US Bank, no enforceable legal or equitable interest in the debt or mortgage was transferred from the original lender Colony Bank to any of the each subsequent purported creditors including Plaintiff. Nor does Plaintiff allege any equitable interest in the mortgage. Plaintiff by and through its agents and/or employees and/or lawful representatives continues to knowingly and intentionally falsely claim, attempt, and threaten to enforce the debt evidenced by the purported Note through impermissible means under 559.541, et seq., Fla. Stat. (2007). Moreover, upon information and belief, Plaintiff is not registered as a commercial collection agency in this state nor has Plaintiff posted the surety bond required under 559.546, Fla. Stat. (2007). Plaintiffs activities subject the instant action are unlawful therefor under 559.544(1),(2), Fla. Stat. (2007) constituting a felony of the third degree subjecting Plaintiff to penalties under the statute. Plaintiffs illegal acts raise genuine issues of material fact and the instant Motion should be denied. Plaintiff has knowingly and intentionally falsely charged and collected money from Defendants that was not owed Plaintiff; forced Defendants further into indebtedness; and failed to meet its contractual conditions precedents and statutory obligations before filing the instant action in an intentionally and knowingly illegal attempt to collect a commercial debt in violation of the FCCPA.

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Defendant admits that it incorrectly cited the consumer statute as opposed to the proper commercial statute but the allegations remain and under the FCCPA state a claim for which a genuine issue of material fact remains specifically with regard to Plaintiffs ownership of the debt evidenced by the purported Note. Defendant respectfully requests it be allowed to amend Counterclaim IV nunc pro tunc to bring its allegations against Plaintiff under the proper statute, 559.541, et seq., Fla. Stat. (2007), and that this Court deny the instant Motion. F. Genuine Issues of Material Fact Remain as to Whether Plaintiff Violated Florida Deceptive and Unfair Trade Practices Act ("FDUTPA") UCC Articles 9-601; 602; and 610 ( 679.601; 679.602; 679.610, Fla. Stat. respectively) govern the disposition of any collateral remaining to secure the debt. The non-waiver rule of 679.602(7) Fla. Stat. (disposition of collateral) applies to this contractual context: 679.602 Waiver and variance of rights and duties.

Except as otherwise provided in s. 679.6247, to the extent that they give rights to a debtor or obligor and impose duties on a secured party, the debtor or obligor may not waive or vary the rules stated in the following listed sections: ... (7) Sections 679.610(2), 679.611, 679.613, and 679.614, which deal with disposition of collateral; ... 679.610 ... (2) Every aspect of a disposition of collateral, including the method, manner, time, place, and other terms, must be commercially reasonable. If commercially reasonable, a secured party may dispose of collateral by public or private proceedings, by one or more contracts, as a unit or in parcels, and at any time and place and on any terms. ...
7

Disposition of collateral after default.

679.624 allows waiver by consent agreement entered into and authenticated after default. Defendants deny default and no such agreement has been entered into between the parties.

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Florida law and the UCC do not allow [Plaintiff Liberty] to pursue the Defendant Patidar until [the debt is proven and the secured creditor] has sold the [Mayport] collateral in a commercially reasonable manner and applied such proceeds to any alleged deficiency. Kearney Const. Co., LLC , supra, 2011 WL 693573 (M.D. Fla. Feb. 18, 2011). Even though the secured party's remedies are cumulative ... [a] secured party cannot repossess the collateral, do nothing with it, and then commence an action on the underlying debt; under such circumstances, the secured party is barred from enforcing the debt until it has completed the proceedings against the collateral ... 47 Fla. Jur.2d Secured Transactions 309 (2004); City Fed. Sav. Bank, at 1058 (Fla. 4th DCA 1988), supra. Mayports Counterclaim for violations of the FDUTPA, 501.201-501.213, Fla. Stat., properly state a claim under the law that Plaintiff has knowingly and intentionally engaged in a deceptive or unfair trade practice by bringing a wrongful foreclosure action and an impermissible action on the debt against the guarantor; that Plaintiff has intentionally failed to provide any loss mitigation as required under the Florida UCC before prematurely bringing this action to enforce the debt; that Plaintiffs and/or its agents and/or assigns and/or its lawful representatives knowingly intentional actions have caused Defendants statutory and actual damages including attorneys fees and court costs associated with the instant action. Genuine issues of material fact remain as to Plaintiffs authority to enforce the purported Note against Defendant Patidar and Mortgage on the Mayport property. Plaintiffs claims for money damages from Defendant Patidar are barred by law until the foreclosure action is decided and the collateral disposed of in a commercially reasonable manner. The filing of the instant action against Defendant PAtidar is an illegal act under FDUTPA and Plaintiffs motion fails to

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disprove or establish the legal non-sufficiency of Defendants Counterclaim V. The instant Motion therefore should be dismissed. G. Plaintiffs Affidavit in Support of its Motion is Inadmissible. When affidavits are filed to establish the factual basis of the motion [for summary judgment], they must be made on personal knowledge, demonstrate the affiant's competency to testify, and be otherwise admissible in evidence. Feltus v. U.S. Bank National Association, 80 So.3d 375 (Fla. 2nd DCA 2012)(citing authorities). 1. Failure to Attach Documents Referred to in the Affidavit of Punit Shah in Support of Plaintiffs Motion Violates Fla. Stat 90.901 and Fla.R.Civ.Pro. 1.510(e) The Affidavit of Punit Shah in Support of its Motion (the Shah Affidavit) violates Fla. Stat 90.901 and Fla.R.Civ.Pro. 1.510(e): 90.901 Requirement of authentication or identification. Authentication or identification of evidence is required as a condition precedent to its admissibility. The requirements of this section are satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims. Fla.R.Civ.Pro. 1.510 (e) Form of Affidavits; Further Testimony. Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence, and shall show affirmatively that the affiant is competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith. The court may permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, or by further affidavits. Fla. Stat. 90.901 states, in pertinent part, that identification of evidence is required as a condition precedent to its admissibility. See also Fla. R. Civ. Pro. 1.510(e) (which reads, in pertinent part, that affidavits... shall show affirmatively that the affiant is competent to testify to the matters stated therein). The failure to identify documents referred to in an affidavit renders an affiant incompetent to testify as to the matters referred to therein.

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In the present case, the Shah Affidavit affirmatively states: [Mr. Shah is] an authorized representative of the Plaintiff, Liberty Atlantic Investments, LLC, a Florida limited liability company ("Liberty"). [He is] the person from Liberty who is charged with collecting the loan made by Bridger Commercial Funding LLC, a Missouri limited liability company [Bridger] to Mayport Properties LLC, a Florida limited liability company ("Mayport") (assigned to Liberty as more fully set forth herein), that is the subject of this case [sic]. (Shah Aff. p. 1, 1). The Shah Affidavit makes no further mention as to any proof relating to a grant of authority from anyone at Bridger or otherwise to act as an authorized representative of Plaintiff. The Shah Affidavit contains no attached documents identifying any appointment of authority for Mr. Shah being an authorized representative of Plaintiff. Moreover, Mr. Shah attests he has knowledge based upon business records that are regularly maintained by Liberty made at or near the time by, or from information transmitted by, a person with knowledge. Further, such business records are kept in the course of regularly conducted business activity of Liberty and it is the regular practice of Liberty to make such business records. (Shah Aff. p. 2, 2). Mr. Shah does not testify that he has reviewed any business records or that he maintains any of the records he is attesting to. Moreover, Mr. Shah is testifying to Libertys business practices and business records and the knowledge of other unidentified people when in fact he has not established any relationship with these people and does not identify himself to even be an employee of Liberty let alone show he is an authorized representative of Liberty. Furthermore, mortgage servicing, accounting, and financial records are generally maintained on computerized mortgage servicing systems of record and mortgage and financial accounting ledger systems that Mr. Shah fails to even mention and identify, let alone attach copies of such records.

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The Shah Affidavit purports to attest to personal knowledge of: All Assignments from the original creditor to each prior creditor to Plaintiff, including personal knowledge that the Note, the Mortgage and the Guaranty were in no way modified, amended, or changed by any of the previous holders of the Loan Documents or servicers of the Loan. (Shah Aff. p. 3., 7). The legal conclusion that Liberty owns and holds the Loan Documents. (Shah Aff. p. 5., 13). The legal conclusion that Mayport defaulted under the Loan Documents by (i) failing to pay the September 1, 2009 payment, as well as all subsequent payments due under the Loan after demand, notice and opportunity to cure was given, and (ii) failing to pay and/or promptly discharge a lien which may attain priority against the property that is the subject of the Mortgage (as required in Paragraph 6.8 of the Mortgage) as evidenced by that certain Warrant filed by the State of Florida and recorded in Official Records Book 13924, Page 2228, of the Public Records of Duval County, Florida. (Shah Aff. p. 5., 14). The legal conclusion that Mayport and Patidar are obligated to pay Liberty all amounts due and owing under the Note. (Shah Aff. p. 6., 18). The retention and fee agreement of the undersigned counsel without any such undersigned counsel appearing on the document. (Shah Aff. p. 6., 19). The legal conclusion that Liberty is entitled to recover in this action from Mayport all attorneys' fees and costs incurred by Liberty as a result of Mayport's defaults under the Loan Documents. Id. That Liberty is owed a total debt of $5,611,343.02. (Shah Aff. p. 6., 20).

Nevertheless, Mr. Shah fails to attach any of the books, records or documents referred to in the Shah Affidavit. The failure to identify documents referred to in an affidavit renders an affiant incompetent to testify as to the matters referred to therein. In addition, Mr. Shah does not meet the definition of custodian, being a person or institution that has charge or custody (of... papers). Black's Law Dictionary, 8th ed. 2004, custodian. By Affiant's own admission, rather omission, nowhere does Mr. Shah attest that he 33

reviewed any documents or that he maintains any of the documents relied upon in his testimony. Thus, Affiant has not examined the books, records, and documents to which he refers, while the true custodians of these documents are the employees or agents whose duty it is to keep the books accurately and completely. In essence, Mr. Shah avers to records that he did not submit, nor that he can testify to the authenticity of, similar to the affiant in Zoda v. Hedden, 596 So. 2d 1225, 1226 (Fla. 2nd DCA 1992). Affiant's failure to attach the documents referred to in the Shah Affidavit and without being the custodian of the same is a violation of the authentication rule promulgated in 90.901 Fla. Stat. Therefore, the Shah Affidavit is inadmissible and should not be considered by this Court. Furthermore, Fla. R. Civ. P. 1.510(e) provides, in part, that [s]worn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto or served therewith. Failure to attach such papers is grounds for denial of summary judgment decisions. CSX Transp., Inc. v. Pasco Cty., 660 So. 2d 757 (Fla. 2nd DCA 1995). 2. The Shah Affidavit is Not Based on Affiant's Personal Knowledge and is inadmissible under 90.604 Fla. Stat. 90.604 Lack of personal knowledge. Except as otherwise provided in s. 90.702, a witness may not testify to a matter unless evidence is introduced which is sufficient to support a finding that the witness has personal knowledge of the matter. Evidence to prove personal knowledge may be given by the witness's own testimony. The admissibility of an affidavit rests upon an affiant having personal knowledge as to the matters stated therein. 90.604 Fla. Stat.; Fla. R. Civ. Pro. 1.510(e); Enterprise Leasing Co. v. Demartino, 15 So. 3d 711 (Fla. 2nd DCA 2009); West Edge II v. Kunderas, 910 So. 2d 953 (Fla. 2nd DCA 2005) (Citing atuhorities). The Third District, in Alvarez v. Fla. Ins. Guaranty Assoc, 661 So. 2d 1230 (Fla. 3rd DCA 1995), noted that the purpose of the personal knowledge requirement is to prevent the trial court from relying on hearsay when ruling on a motion for

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summary judgment and to ensure that there is an admissible evidentiary basis for the case rather than mere supposition or belief. Id. at 1232(citing authorities). This opposition to hearsay evidence has deep roots in Florida common law. See Capello v. Flea Market U.S.A., Inc., 625 So. 2d 474 (Fla. 3d DCA 1993)(citing authorities). Thus, if the Court relies upon the Shah Affidavit as to the amounts due and owing as sworn to by Mr. Shah, there is ample precedent to suggest that said affidavit is inadmissible evidence for a summary judgment as it is not based on Mr. Shahs personal knowledge and relies on hearsay. Because Mr. Shah does not have any personal knowledge of the underlying transaction between the Plaintiff and Mayport, nor any subsequent transaction involving the Note, Mortgage and Loan Documents between prior creditors, any statement given that references the underlying transaction (such as the statements that Liberty owns and holds the loan documents; Mayport is in default; Liberty retained undersigned counsel; [a]s of May 29, 2012, Liberty is owed a total debt of alleged sums of monies in excess of $5,611,343.02) is, by its very nature, hearsay. Again, by Mr. Shahs own admission his testimony is based upon business records that are regularly maintained by Liberty made at or near the time by, or from information transmitted by, a person with knowledge. Mr. Shah does not state the he maintains any of the records he attests to nor does he even state that he reviewed said records. Mr. Shahs testimony is based solely on hearsay and is inadmissible therefor. The Florida Rules of Evidence define hearsay as a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted. 90.801(1)(c) Fla. Stat. (2007). In this matter, Mr. Shah thus avers to a statement (that, among others, Plaintiff is allegedly owed sums of money by Mayport and

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Pitadar) and offers this as proof of the matter asserted (that Plaintiff is entitled to a judgment as a matter of law.) Plaintiff may argue that while Mr. Shahs statements are hearsay, they should nevertheless be admitted under the business records exception pursuant 90.803(6) Fla. Stat. (2007). This rule provides that, if a statement is [a] memorandum, report, record, or data compilation, in any form, of acts, events, conditions, opinion, or diagnosis, it is admissible, so long as it is made at or near the time by, or from information transmitted by, a person with knowledge, if kept in the course of a regularly conducted business activity and if it was the regular practice of that business activity to make such memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness... unless the sources of information or other circumstances show lack of trustworthiness. Id. However, there are no memorandums, reports, records, or data compilation that have been offered by the Plaintiff only the purported Note and Loan Documents. Furthermore, the books, records, and documents referred to by Mr. Shah in his testimony were not managed by him and Mr. Shah does not attest he is a custodian of said records. Mr. Shah, in fact, does not even attest to knowledge of the underlying originating transaction between Colony Bank and Mayport. At most, Mr. Shah has simply reviewed a computer screen and a part of a file in preparation of litigation, and thus, he lacks the requisite trustworthiness and fails to conform with 90.803(6) Fla. Stat. As no hearsay exception applies to these statements, the Shah Affidavit cannot be been relied upon by the Court to grant a summary judgment and the Motion should be denied. 3. The Shah Affidavit is Composed of Impermissible Conclusions of Law.

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An affidavit in support of a motion for summary judgment may not be based upon factual conclusions or opinions of law. Jones Constr. Co., Inc. v. Fla. Workers' Comp. JUA, Inc., 793 So. 2d 978, 979 (Fla. 2nd DCA 2001). Furthermore, an affidavit which states a legal conclusion should not be relied upon unless the affidavit also recites the facts which justify the conclusion. Acquadro v. Bergeron, 851 So. 2d 665, 672 (Fla. 2003); Rever v. Lapidus, 151 So. 2d 61, 62 (Fla. 3rd DCA 1963). Here, the Shah Affidavit contains inappropriate conclusions of law that are not supported by facts stated therein. Specifically, Mr. Shah avers that: Mayport defaulted under the Loan Documents by (i) failing to pay the September 1, 2009 payment, as well as all subsequent payments due under the Loan after demand, notice and opportunity to cure was given, and (ii) failing to pay and/or promptly discharge a lien which may attain priority against the property that is the subject of the Mortgage (as required in Paragraph 6.8 of the Mortgage) as evidenced by that certain Warrant filed by the State of Florida and recorded in Official Records Book 13924, Page 2228, of the Public Records of Duval County, Florida. (Shah Aff. p. 5., 14). Mayport and Patidar are obligated to pay Liberty all amounts due and owing under the Note. (Shah Aff. p. 6., 18). Liberty is entitled to recover in this action from Mayport all attorneys' fees and costs incurred by Liberty as a result of Mayport's defaults under the Loan Documents. (Shah Aff. p. 6., 19). Liberty is owed a total debt of $5,611,343.02 as of May 29, 2012. (Shah Aff. p. 6., 20).

Four legal conclusions, but in none of the statements does Mr. Shah cite any documents that he reviewed let alone with particularity. In fact, there is no mention of any review save for one cryptic line, wherein Mr. Shah states, [a]ll matters stated in this affidavit are based upon my own personal knowledge or knowledge based upon business records that are regularly

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maintained by Liberty made at or near the time by, or from information transmitted by, a person with knowledge. (Shah Aff. p. 2, 2). Nevertheless, Mr. Shah fails to attach any of the books, records or documents referred to in his personal knowledge statement. Even if Mr. Shah had the expertise to make the legal conclusions he states in his affidavit, which Mayport explicitly denies, the Shah Affidavit is devoid of any reference or mention that Mr. Shah reviewed and read the subject promissory note in order to determine which terms and provisions the constitute a defaulted. He references the note, but makes no reference as to which paragraphs of the Note and Mortgage support his conclusions.Nowhere in the Shah Affidavit does Mr. Shah state that Plaintiff is entitled to enforce the Note and Mortgage against Mayport, nor that Plaintiff is entitled to a judgment as a matter of law because Mayport owes Plaintiff anything other than attorneys fees and costs. (Shah Aff. p. 6, 19 [p]ursuant to the terms of the Loan Documents, Liberty is entitled to recover in this action from Mayport all attorneys' fees and costs incurred by Liberty as a result of Mayport's defaults under the Loan Documents. At best the Shah Affidavit accuses someone of owing Plaintiff $5,611,343.02 as of May 29, 2012 and that Plaintiff should be able to enforce the Loan Documents against someone. By not clearly identifying the documents reviewed and failure to attach the documents reviewed to the Shah Affidavit, Plaintiff does not adequately factually support its four legal conclusions. The Court cannot reasonably rely upon the Shah Affidavit in granting a summary judgment and the Motion should be denied. H. The Purported Note Attached to the Complaint as Exhibit A is an Incomplete Copy and is Inadmissible. Fla. R. Civ. P. 1.080(d) provides: (d) Filing. All original papers shall be filed with the court either before service or immediately thereafter, unless otherwise provided for by general law or other rules. If the original of any bond or other paper is not

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placed in the court file, a certified copy shall be so placed by the clerk. [Emphasis added]. The copy of the image of a copy of the purported attached to the Complaint as Exhibit A filed as a true and correct copy of the original purported Note is not a certified copy and is incomplete. The purported copy of the Note attached to the Complaint as Exhibit A is missing a copy of the Prior Note from Colony Bank and the later-filed undated allonges that have evidence of only one attachmen. Further, the evidence suggests the allonges were not attached to the Note at the time of the filing of the instant action. The purported Note at 2.2 states [i]t is the intent of Borrower and Lender that this Note constitutes a renewal note in accordance with Section 201.09, Florida Statutes. 201.09 Fla. Stat. states in pertinent part: 201.09 Renewal of existing promissory notes and mortgages; exemption. (1) When any promissory note is given in renewal of any existing promissory note, which renewal note only extends or continues the identical contractual obligations of the original promissory note and evidences part or all of the original indebtedness evidenced thereby, not including any accumulated interest thereon and without enlargement in any way of the original contract and obligation, such renewal note shall not be subject to taxation under this chapter if such renewal note has attached to it the original promissory note with the proper notation thereon as required by 201.133. [Emphasis added]. The purported copy of the Note attached to the Complaint as Exhibit A is missing a copy of the Prior Note from Colony Bank as required to be a qualifying transaction under 201.09 Fla. Stat. Either the parties did not comply with the statute as intended in 2.2 or the copy of the image of a copy of the Note attached to the Complaint as Exhibit A is incomplete. Either way it raises a genuine issue of material fact as to the authenticity of the purported Note and a summary judgment is improper. If the original Plaintiff did not file the original Note at the time the Complaint was filed then the Clerk was statutorily required to make a certified copy of the original and place that in

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the file. Fla. R. Civ. P. 1.080(d). The copy of the Note attached to the Complaint as Exhibit A bears no indicia of it being a certified copy by the Clerk of Court as proscribed in the rules. Id. Mayport directs the Courts attention to Plaintiffs admission that the original of the purported Note was not filed at the initiation of this action in violation of Fla. R. Civ. P. 1.080(d). See Pl. Notice of Flng. Orig. Docs. filed in this Court on February 7, 2011. The purported Note attached to the Complaint as Exhibit A is an uncertified and undated copy of the original and is an incomplete copy of the original that is inadmissible under 90.952 and 90.953 Fla. Stat. (Florida Rules of Evidence). 90.952 Requirement of originals. Except as otherwise provided by statute, an original writing, recording, or photograph is required in order to prove the contents of the writing, recording, or photograph. Non-certified copies or duplicates of the purported Note are not admissible under Fla. R. Civ. P. 1.080(d) and the Florida Rules of Evidence. 90.953 Admissibility of duplicates. A duplicate is admissible to the same extent as an original, unless: (1) The document or writing is a negotiable instrument as defined in s. 673.1041, a security as defined in s. 678.1021, or any other writing that evidences a right to the payment of money, is not itself a security agreement or lease, and is of a type that is transferred by delivery in the ordinary course of business with any necessary endorsement or assignment. [Emphasis added]. (2) A genuine question is raised about the authenticity of the original or any other document or writing. [Emphasis added]. . Mayports opposition to the instant Motion raises genuine issues of material fact about the authenticity of the original document purported to be the Note in this matter. Plaintiff has failed to disprove or establish the legal non-sufficiency of Mayports opposition. Exhibit A of

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the Complaint is a non-certified copy of an image of a copy of the purported Note. It is not a true and correct copy of the original as testified to in the Shah Affidavit. Moreover, the Note states it was established with the intent that the Notes terms and operation be deemed in accordance with 201.09 Fla. Stat. which requires the Prior Note be attached to the purported Note in order to be a qualifying transaction under the statute. The purported original Note filed with the Court February 7, 2011, the copy of an image of a copy of original purported Note as filed with the Complaint and attached to the instant Motion are incomplete. In order to satisfy the intent of the Note transaction and qualify for tax favorability under 209.10 Fla. Stat., the Prior Note from Colony is required to be attached to the Note. Genuine issues of material fact remain as to the authenticity and admissibility of the purported Note and the Court should set it aside and deny the instant motion. I. The Bridger Promissory Note Was Not a Novation: Novation is a mutual agreement between the parties concerned for the discharge of a valid existing obligation by the substitution of a new valid obligation. Miami Nat'l Bank v. Forecast Constr. Corp., 366 So.2d 1202, 1204 (Fla. 3d DCA 1979); see Murphy v. Green, 102 Fla. 102, 108 (Fla. 1931) (creditors express agreement to receive note as absolute payment constitutes extinguishment or payment of precedent debt, whether note is paid or not; clear agreement or manifestation of intention of both parties is essential to show that creditor accepted note as absolute payment of precedent debt). To determine whether a novation occurred at the time of the Bridgerf transaction depends on whether the parties intended the new agreement to be the discharge of a valid existing obligation by the substitution of a new valid obligation, Taines v. Capital City First Natl Bank, 344 So. 2d 273, 276 (Fla. 1st DCA 1977)( Novation is not satisfied by the substitution of one paper for another or one evidence of a debt for another,

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but only by the substitution of a new obligation for another with intent to extinguish the old.) The existence of a novation is controlled by the intent of the parties. Don L. Tullis & Assocs., Inc. v. Benge, 473 So. 2d 1384 (Fla. 1st DCA 1985). Florida law is clear that a novation consists of an agreement extinguishing an old debt, and another substituting a new debt in place of the old debt. Id. The four elements necessary to demonstrate a novation are: (1) the existence of a previously valid contract; (2) the agreement to make a new contract; (3) the intent to extinguish the original contractual obligation; and (4) the validity of the new contract. Sink v. Abitibi-Price Sales Corp., 602 So. 2d 1313 (Fla. 4th DCA 1992) (citing authorities). In addition, the new agreement must be supported by sufficient consideration. Miami Natl Bank v. Forecast Constr. Corp., 366 So. 2d 1202 (Fla. 3rd DCA 1979). The Bridger transaction did not constitute a novation, because it is clear that the parties did not intend the new agreement to be a novation. There is no evidence that the evidence of the Colony debt was discharged or cancelled. Evidence to support this finding includes the express language of the Bridger Note states in paragraph 2.2: It is the intention of Borrower and Lender that while this Note amends, consolidate, restates, increase, extend, renew and supercede the Prior Note, it is not payment or satisfaction thereof, but rather is the consolidation and substitution of one evidence of debt for another without any intent to extinguish the Prior Note. It is the intent of Borrower and Lender that this Note constitutes a renewal note in accordance with Section 201.09, Florida Statutes. Further evidence to support that it was not a novation is the payment of documentary stamps tax upon only $3,307243.90 increase, rather than the entire new note amount of $4,500,000.00. This is particularly important because when the borrower signs a new note that replaces the original note and increases the amount of the debt, it is not a renewal, it must be cancelled and satisfied and is taxable on the full amount of the debt. However, where the borrowers only signed an amendment to note and mortgage, changing the name of the payee and

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the interest and payment provisions no documentary stamps are due. Where the new agreement merely increases the amount of the note, documentary stamps are only due on the increased amount because documentary stamps were previously paid on the prior advancements. Rainey v. State Dept of Revenue, 353 So. 2d 207 (Fla. 1st DCA 1977). The undisputed evidence reveals that the Colony Bank promissory notes that evidenced the prior debt was not extinguished by the express terms of the Bridger Note. See De Las Cuevas v. Natl Enterps., Inc., 927 So. 2d 41, 44 (Fla. 3rd DCA 2006) (the documents made clear that there was no novation, because the earlier notes were not marked paid by renewal, and the Modification Agreement unambiguously shows by its language the intent of the parties that it was not intended as a substitute for Note I). Therefore the failure of this element renders the subject note not a novation. J. The Colony Bank Note Must Either Be Cancelled or Re-established Pursuant to Fla. Stat. 673.3091 Because the Bridger Note Is Not a Novation Although there has been general disagreement concerning the effect of a renewal note upon the original, the view in Florida is that a renewal note does not operate as a payment or discharge of the note in renewal of which it is given unless there is an express agreement between the parties to that effect. Taines v. Capital City First Natl Bank, 344 So. 2d at 277 (citing authorities). One Florida Court, construing Taines, held although the subsequent security agreement perhaps alters the terms of the original obligation, as in Taines, it does not operate as a cancellation of the original note, as a matter of law. Arrigoni v. Ring Power Corp., 529 So. 2d 803, 804 (Fla. 1st DCA 1988) (emphasis added). It is axiomatic that promissory notes must be surrendered prior to the issuance of a judgment so that they cannot be negotiated by another party. See, Deutsche Bank Natl Trust v. Clarke, 87 So. 3d 58, 62 (Fla. 4th DCA 2012)(citing authorities): Salomon v. Pioneer Co-op. Co., 21 Fla. 374, 382 (Fla. 1885)

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(Where it appears on the trial that a negotiable bill or note has been given on account of the debt sued on, but there is no express agreement by which it operates as a payment or satisfaction, the plaintiff will not be permitted to take judgment unless he produces and cancels the note or bill, or shows that it has been surrendered to the defendant, or otherwise satisfactorily accounts for it.). See also Fla. Stat. 673.3091, supra. Applying the law to these facts it is clear that the Bridger Note subsumes the Colony Bank Note but does not extinguish the debt it represents. In this case, the failure to reestablish or produce for cancellation the Colony Bank Note is fatal to Plaintiffs claim. Plaintiffs claim is based upon a non-negotiatble promissory note, which is based wholly upon presumably8 negotiable promissory notes that are missing, and may be enforced if not removed from the stream of commerce. A third party possessing the wet-ink Colony Bank Note could seek to enforce it against DEfendants.

CONCLUSION Genuine issues of material fact exist which have not been effectively factually challenged and refuted by Plaintiff and, therefore, a grant of summary judgment is improper. Plaintiff has failed to disprove or establish the legal non-sufficiency of Defendants Affirmative Defenses and Counterclaims and the instant Motion should be denied therefor.

Jacqulyn Mack

A copy of the Colony Bank Note has not been produced but because the Bridger Note indicates that the Colony Note was indorsed to Bridger it appears to have been a negotiable instrument.

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CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by U.S. Mail on August 2012, to R. Travis Santos, Esq., Hill, Ward & Henderson P.A., 101 East Kennedy Blvd, Suite 3700, Tampa, FL 33602 and eservice: tsantos@hwhlaw.com J. Michael Lindell, Esquire, and D. Brad Hughes, Esquire, 12276 San Jose Boulevard, Suite 126 Jacksonville, Florida 32223-8630.

Jacqulyn Mack FBN 0134902 MACK LAW FIRM CHARTERED 2022 Placida Road Englewood, FL 34224-5204 Attorney for MAYPORT and for PATIDAR 941 475 7966 941 475 0729 FAX jacqulyn@macklawfirm.org

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