By now we all know the dangerous and absurd fiction that the MERS menace has wrought across the property records and courts across this land. The MERS menace is predicated on the fiction that tens of thousands of so-called limited signing officers spread all around the world can execute documents that purport to bind corporations when the very procedures of the corporation may not have been followed expressly.
In this particular case, the homeowner defendant claimed the foreclosure case was fraudulent and invalid because of a fatal flaw in the MERs procedures….procedures that exist all across this country. Now if a federal judge in one state has now issued a Final Order that puts a major crack in the foundation of the entire MERS foundation….what happens in all the other states?
Defendants assert that Plaintiff’s section 12.002 claim lacks plausibility because it rests on legal conclusions instead of facts and that Plaintiff has failed to allege facts to show that MERS made, presented or used the assignment with knowledge that it was a fraudulent court record or a fraudulent lien or claim against the Property, that MERS intended the assignment be given the same legal effect as a court record evidencing a valid lien against the Property, and that MERS intended to cause another person to suffer financial injury.
Defendants argue that Plaintiff alleges that MERS’ corporate secretary appointed Blackstun as a MERS assistant secretary, and the appointment was not valid because Blackstun’s appointment was not also approved by MERS’ board of directors, as allegedly required by MERS’ by-laws. Defendants argue that this is negligence at best, and not fraud. Defendants also assert that the party that would be the defrauded party would be MERS, not Plaintiff, and that Plaintiff’s interest in the Property is wholly unaffected by the assignment.
Plaintiff argues that the Assignment filed in the property records is a fraudulent lien claim. Plaintiff alleges that the assignment is void because it was executed by a person neither employed nor authorized by MERS to execute a conveyance. Plaintiff alleges that MERS intended that the document be given the same effect as a lawfully executed instrument, and the execution and filing of the documents were done for the purpose of harming Plaintiff. Plaintiff alleges that there was a scheme on the part of a MERS officer to bypass the Board of Directors and cloak others with authority only allowed by the Board of Directors. Plaintiff argues that this is not an inadvertent failure to comply with a duty, but rather an intentional act, done knowingly with the specific intent that the consequences of his action be brought to fruition.
In this case it is alleged that MERS did not properly appoint Blackstun as an officer of MERS and that Blackstun did not have authority to bind MERS, and when Blackstun executed the assignment, it caused MERS to file a fraudulent document in the deed records. The Court finds that Plaintiff has stated a plausible claim, in part, because Defendants fail to address the issue of the legal effect of Blackstun not being authorized to execute the assignment. If he had no such authority, MERS would know that fact. It appears to be more than mere negligence by MERS. Discovery should be allowed, and after discovery is completed, the issue of whether there is a valid claim under ß12.002 can be determined by a motion for summary judgment.
