Burnett v. Mortgage Electronic Registration Systems, Inc.
2013 U.S. App. LEXIS 2303
| 10th Cir. | 2013Background
- Burnett sued Woodall, MERS, and fifty unnamed individuals over foreclosure-related FDCPA and UCSPA claims.
- She purchased a home in Weber County, Utah, with a loan guided by a trust deed naming MERS as beneficiary (as nominee) and Woodall as successor trustee.
- The trust deed authorized MERS to foreclose and appoint a substitute trustee to initiate nonjudicial foreclosure upon default.
- After August 2008 default, MERS filed a Substitution of Trustee appointing Woodall and Woodall filed a Notice of Default; a trustee's sale occurred May 19, 2009.
- Burnett filed suit the sale day, seeking damages and declaratory relief; she did not serve MERS or the unnamed defendants.
- The district court dismissed all claims against Woodall with prejudice; Burnett appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| FDCPA §1692f(6)(A) applicability | Woodall lacks present possession authority; MERS lacked beneficiary status. | Trust deed authorized MERS to foreclose and Woodall to act as substitute trustee; thus no violation. | No §1692f(6)(A) violation; Woodall had present right to possession per trust deed. |
| FDCPA §§1692e and 1692g plausibility | Woodall/MERS engaged in false representations and failed notices in collection activities. | Allegations are too vague and conclusory to show who did what; insufficient details fail plausibility standard. | Claims under §§1692e and 1692g were not plausibly alleged; properly dismissed. |
| UCSPA preemption and plausibility | UCSPA claims survive despite state trust-deed scheme; misrepresentations constitute UCSPA violation. | UCSPA may be preempted or subsumed by Utah trust-deed provisions; intentional allegations lack detail. | UCSPA claim plausibly alleged but rejected for insufficient factual detail; claim dismissed. |
| Breach of duty and slander of title | Woodall violated duty by delaying sale; MERS lacked standing; note production required. | MERS had authority; Woodall not obligated to investigate beyond deed terms; no slander of title proved. | Breach of duty and slander of title claims dismissed for lack of authority and factual support. |
Key Cases Cited
- Kaltenbach v. Richards, 464 F.3d 524 (5th Cir. 2006) (§1692f(6) applies to security-interest enforcement.)
- Commonwealth Prop. Advocates, LLC v. Mortg. Elec. Registration Sys., Inc., 680 F.3d 1194 (10th Cir. 2011) (MERS authority survives securitization; explicit foreclosure rights persisted.)
- Maynard v. Cannon, 401 F. App’x 389 (10th Cir. 2010) (Nonjudicial foreclosure initiation may pressure payment; not necessarily debt collection.)
- Iqbal v. Ashcroft, 556 U.S. 662 (U.S. 2009) (Pleading must show plausibility, not mere conclusory allegations.)
- Twombly v. Bell Atl. Corp., 550 U.S. 544 (U.S. 2007) (Plausibility standard requires enough facts to raise inference of liability.)
- Khalik v. United Air Lines, 671 F.3d 1188 (10th Cir. 2012) (Rule 8 plausibility requires plausible claims, with supported facts.)
- Carli e v. Morgan, 922 P.2d 1 (Utah 1996) (UCSPA preemption when a more specific state law governs the issue.)