5th Circuit Affirms Rule 11 Sanctions For Frivolous “Show-Me-The-Note” Foreclosure Defense

This is a nonprecedential disposition, but it is an example of a trend to sanction foreclosure defense lawyers who use the “show-me-the-note” defense. There is well-settled law in, I believe, all of the states that the defendant cannot defend a foreclosure action by asserting that the plaintiff does not have the original note. (Because mortgage notes are often assigned, this can be difficult to prove.)

In this particular case, plaintiff did show the defendant a copy of the note with an original signature. Despite this, defendants continued to assert the “show-me-the-note” defense in two further pleadings after they had seen the note.

The court also rejected the argument that the Defendants had abandoned the “show-me-the-note” defense by not raising it in their opposition to a motion for summary judgment.

However, Appellants dispute the district court’s finding that Appellants had not affirmatively withdrawn the show-me-the-note claims during the “safe harbor” period. Appellants argue that they abandoned the show-me-the-note claims by not making specific arguments in defense of those claims as part of their opposition to Select Portfolio’s motion for summary judgment. Appellants cite no authority for the proposition that abandoning a claim for summary judgment purposes is the equivalent of withdrawing or correcting the claim under Rule 11. Regardless, Appellants in this case did not merely fail to affirmatively indicate to the district court that they intended to withdraw the show-me-the-note claims; they also urged the court to deny Select Portfolio’s motion “in its entirety” and argued that genuine issues of material fact existed “on elements in each of Plaintiff’s remaining causes of action.

Source: BARRETT-BOWIE v. SELECT PORTFOLIO SERVICING, INCORPORATED, Court of Appeals, 5th Circuit 2015 – Google Scholar

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