Not A Holder In Due Course? Not Necessarily A Standing Problem

by:  Peter J. Gallagher

By now, all lenders have likely been faced with at least one situation where a borrower alleges that the lender lacked standing to sue on a note because the lender was not the holder of the note. While New Jersey courts have largely eliminated this defense, at least in the post-judgment context (see here), a recent decision from the Appellate Division reminds us that a lender can have standing to sue even when it is not a holder in due course.

In Lynx Asset Services, LLC v. Simon Zarour, National City Bank loaned defendant $190,000, and defendant executed a mortgage as security for the note. Thereafter, National City merged with PNC Bank. Sometime later, PNC Bank delivered the original note to Lynx Asset Services, LLC and issued an assignment of the note and mortgage, but did not indorse the assignment. Defendant eventually defaulted on the note and Lynx sued. Defendant admitted that he signed the note and mortgage and that he had stopped paying on the note. He nonetheless argued that Lynx lacked standing to sue because it did not have a signed assignment. The trial court rejected this claim, and the Appellate Division affirmed, holding that, although Lynx was not a holder in due course, it nonetheless had standing to sue on the note because it was a non-holder with the rights of a holder.

 

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A Look At What The Occupy Wall Street Protesters Are Really Occupying

by: Peter J. Gallagher

The Wall Street Joural Law Blog had an interesting article — "Private Owners Of Public Spaces In 'Occupy Wall Street's' Wake" — on the property that the so-called 99%ers are actually occupying in the Wall Street area. Parks like Zucotti Park are known as "privately owned public spaces" or POPS, which are "part of New York’s incentive zoning program, under which buildings are granted additional floor area or related waivers in exchange for providing these spaces."  (Zucotti Park, formerly known as Liberty Plaza Park, is actually named for the chairman of the entity that now owns the park.)  The owners of Zucotti Park claim that they have not been able to clean the park since the day before the protests began.  This has led some to call for the Department of City Planning to create new rules for POPS that would allow the private owners to close the parks at a set time, which Stephen Spinola, head of the Real Estate Board of New York, claims would “add to security and allow maintenance.”  As a practical matter, the article notes, this might be difficult because each of the 516 POPS in New York City has its own contract with the City and its own rules.  Moreover, changing the rules governing the City’s POPS to allow the private owners to control access, even for seemingly benign purposes, would surely spark protests of its own.