## Facts

- In 1985, Robinson Broadcasting Corporation executed a promissory note to Madison National Bank in exchange for a loan.
- Several individuals executed unconditional guarantees of payment for the note in favor of the bank.
- After the bank failed, the FDIC, as receiver, acquired the note (1991) and later transferred it to 4M Communications.
- The FDIC lost the original promissory note and later provided an affidavit of lost note to 4M (March 1997).
- 4M assigned its interest in the note to Dennis Joslin Company, LLC (about May 1997).
- Joslin sued Robinson Broadcasting (as maker) and the individual guarantors to recover an unpaid principal balance, accrued interest, and fees.
- Defendants moved to dismiss under Rule 12(b)(6), arguing Joslin could not enforce a note it never possessed at the time of loss under D.C. U.C.C. § 3-309.

## Issues

1. Whether D.C. Code § 28:3-309 permits enforcement of a lost promissory note by an assignee who was not in possession of the note when it was lost.
2. Whether guarantors who signed unconditional guarantees can assert the maker’s lost-note defense under D.C. Code § 28:3-309, or instead waived it by contract.

## Decision

- The court granted the motion to dismiss as to Robinson Broadcasting Corporation (the maker).
- The court denied the motion to dismiss as to the guarantor defendants.
- The court held that § 3-309 requires the plaintiff suing on a lost instrument to have been both (i) in possession and (ii) entitled to enforce the instrument at the time the loss occurred; Joslin did not satisfy those conditions.
- The court held the guarantors’ unconditional guarantee language waived defenses that would otherwise arise from the note’s unenforceability against the maker under § 3-309.

## Legal Principles

- Under D.C.’s version of U.C.C. § 3-309, a person not in possession of an instrument may enforce it only if the person was in possession and entitled to enforce when the loss occurred, and the loss was not due to transfer or lawful seizure, and the instrument cannot reasonably be obtained.
- The statutory requirements of § 3-309 apply to the party bringing suit; an assignee cannot satisfy the “possession at time of loss” condition by pointing to possession by a prior holder.
- An unconditional guaranty may create liability independent of the maker’s defenses if the guarantors have contractually waived defenses that would otherwise defeat enforcement.

## Conclusion

The court dismissed the claim against the note’s maker because the assignee could not enforce a lost instrument under D.C. U.C.C. § 3-309 without having possessed it when it was lost, but allowed claims to proceed against the guarantors because their unconditional guarantees waived that lost-note defense.


Dennis Joslin Co. v. Robinson Broad. Corp., 977 F. Supp. 491 (D.D.C. 1997)