RICK L. KNUTH is the keeper of the Banking and Finance Law Spotlight Site.

Rick's practice focuses on assisting institutional and private lenders and borrowers in asset-based loan transactions, real estate financing, accounts receivable and inventory-based financing. He has over 30 years experience in loan documentation, mortgage and trust deed foreclosures, loan participations, credit opinion letters, workouts, and insolvency proceedings of all kinds. He counsels banks large and small in all aspects of their commercial credit relationships.

Look for postings by the other attorneys in our Commercial Lending and Banking Practice Group.

Keven M. Rowe (Group Leader)
Tom Berggren
Rick L. Knuth
Kyle V. Leishman
James W. Peters
Susan B. Peterson
Jacob Redd
George R. Sutton
Glen D. Watkins
Randon W. Wilson

Published Articles

"Fraudulent Checks- the 'Same Wrongdoer' Defense"
by Rick L. Knuth

Originally Published in Utah Banker Magazine Fall 2013.

Important Resources
How Do You Enforce a Lost Promissory Note?
Posted on Sep. 2, 2015

One of my first solo trips to court as a baby lawyer was to get a default judgment on a promissory note. The judge reviewed the file of my meticulously prepared papers, looked up and asked for the original note, so that he could cancel it and put it in the court’s file.

Two problems flashed across my cortex: First, I’d gotten all the way through law school without learning that the original promissory note must be surrendered and canceled as a condition of enforcement. Second, I didn’t have the original promissory note, and neither did my client. The client had a copy, but the original had gone missing years before and couldn’t be found.

Well, when my 27-year-old Adam’s apple began bobbing like a yo-yo, the judge took pity on me and said “Look at the UCC and come back with an affidavit, and I will revisit this.”

Requiring the holder of a promissory note to surrender it as a condition of enforcement is intended to protect the payor from claims of multiple creditors on the same instrument. The Uniform Commercial Code, enacted in Utah as Title 70A, provides specific provisions in Section 3-309 that cover enforcement of a lost or stolen instrument, such as a promissory note. An instrument that one does not have possession of can still be enforced if: (1) you were in possession of it and were entitled to enforce it when possession was lost; (2); the loss of possession was not the result of a transfer or lawful seizure of the instrument; or (3) it was lost, destroyed, stolen or is in the wrongful possession of a person who cannot be brought into court.

So, if the creditor can come forward with an affidavit or proffer testimony the note was in the creditor’s possession when it was lost or stolen, that when it was lost or stolen you were entitled to enforce it, and that it has not been transferred or legally seized by third party. The creditor must also be able to provide proof of the terms of the lost instrument. Where you have a copy that can be authenticated as a true copy of the original, it is easy to prove the terms. Where you don’t, testimonial evidence will be required.

In addition, the UCC requires that the court must require the creditor seeking to enforce the lost or stolen note to provide “adequate protection” against any loss that might befall the payor under the instrument by reason of a third-party claim of right to enforcement; in other words, if the instrument turns up later or someone else claims the right to enforce it. Adequate protection may be provided by any “reasonable means,” which usually is a written undertaking or an insurance bond.

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Rick Knuth is a member of the American College of Mortgage Attorneys.

George Sutton was recognized in 2012 as Utah Attorney of the Year in Financial Services Regulation Law by Best Lawyers in America.

Rick Knuth was recognized in 2012 as Utah Attorney of the Year in Banking and FinanceLaw by Best Lawyers in America.

All eligible attorneys in this group are ranked AV Preeminent by Martindale-Hubbell.

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