- Court: 9th Circuit Court of Appeals Archives
- Area(s) of Law: Property Law
- Date Filed: 06-12-2014
- Case #: 11-17615
- Judge(s)/Court Below: Circuit Judge Fletcher for the Court; Circuit Judges Nguyen and Tashima
- Full Text Opinion
A numerous amount of plaintiffs, who reside in several different states, appealed the dismissal of their case by the Judicial Panel on Multidistrict Litigation. The plaintiffs sued various financial institutions that use or used the Mortgage Electronic Recording System (“MERS”), which records ownership and servicing rights of mortgages. Count I, which concerned claims under Ariz. Rev. Stat. § 33-420, was held by the Ninth Circuit to be improperly dismissed because the claim was sufficiently stated and an incorrect statute of limitations was applied. The panel found that Count II, in which the appellants alleged the tort of wrongful foreclosure had been committed under Arizona, California, and Nevada law, was inadequately stated in the appellant’s consolidated amended complaint. Count III concerned Section 107.080 of the Nevada Revised Statutes and the proper procedures for nonjudicial foreclosures. The appellants argued that when the respondents appointed MERS as a beneficiary under the deed of trust, but kept possession of the note, it “split” the note and deed of trust, effectively relinquishing its position as a beneficiary and ability to foreclose. Therefore, the respondents improperly sent the notices of the foreclosures because the respondents were not beneficiaries on the loan. While the panel agreed that a “splitting” of the note and deed of trust ends an entity’s right to foreclose, it found that MERS's assignment of the deed of trust to the note holder “reunifies” the documents and rectifies the entity’s position as a beneficiary and ability to foreclose. DISMISSED in part, AFFIRMED in part, REVERSED in part, and REMANDED.