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Florida Appeals Court: Contract Lawsuit Dismissed After Creditor Failed to Produce Original Note


On April 22nd, 2019, the Florida First District Court of Appeal reversed a ruling on the grounds that a lower court failed to properly apply Florida’s lost note statute. In the case of MBC Gospel Network, LLC v. Florida News Channel, LC, the appeals court determined that a debtor could not be ordered to pay back a promissory note because the creditor lost the original note and it never established its collection rights. In this article, our skilled Miami commercial litigation attorneys analyze the appeals court’s ruling and explain Florida’s lost note statute.

Case Review: MBC Gospel Network, LLC v. Florida News Channel, LC 

The Background and Facts 

The underlying debt in this case dates back to 2004. It was at that time that MBC Gospel signed a promissory note from Florida News Channel. By 2005, the debt allegedly became delinquent. An agreement was eventually reached, and a second note was signed to guarantee the original note. Several individuals co-signed the second note and agreed to be held personally responsible for interest payments that were owed.

In 2015, Florida News Channel filed a lawsuit for payments that were allegedly missed on the second note. After the case made its way to court, a trial court accepted the second note as sufficient evidence, and entered a judgement against the debtors, which by this time included both the company (MBC Gospel) and several individuals  

Ruling: Florida’s Lost Note Statute Was Misapplied  

Upon reviewing the case, the Florida First District Court of Appeal reversed because the creditor failed to produce the original note or to satisfy Florida’s lost note statute. Under Florida state law, plaintiffs in debt collection lawsuit are legally required to either produce the original note or to reestablish the note in accordance with the standards set forth under Florida Statutes § 673.3091.

When a creditor no longer has access to the original note — as was the case with Florida News Channel — it must take proactive steps to prove that the requirements of the lost note statute have been satisfied. Among other things, this includes establishing the validity of collection rights of the underlying debt and proving that the missing note is unreasonably difficult to obtain, either because it has been destroyed, its whereabouts are unknown, or it is otherwise not retrievable.

This decision serves as a reminder of some of the intricacies involved in collecting debt. Ultimately, debts are contracts. Florida courts use specific rules and procedures in determining if a creditor can hold a debtor legally liable for payments that were not made. It is essential that parties involved in a commercial lending agreement retain all relevant documents and records. Missing documents could undermine a legal claim. 

Speak to Our Florida Commercial Litigation Lawyers Right Away

At Pike & Lustig, LLP, our Florida commercial litigation lawyers have extensive experience handling complex breach of contract disputes. With an office in Miami and a location in West Palm Beach, our law firm is well-positioned to handle contract litigation all over South Florida. To get a fully confidential review of your case, please call us today.




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