Christian County Clerk v. Mortgage Electronic Registration Systems, Inc.
515 F. App'x 451
6th Cir.2013Background
- Clerks sue MERS and 15 financial institutions alleging violation of Kentucky recording statute KY Rev. Stat. Ann. § 382.360(3) by failing to record mortgage assignments; district court dismissed for lack of private remedy; court affirms dismissal on private-right-and-standing grounds.
- MERS operates a national electronic registry where mortgagees are recorded as nominee for lenders, allowing transfers of notes without recording separate mortgage assignments.
- Kentucky amended §§ 382.360 and 382.365 in 2006 to require recording of mortgage and lien assignments; recording of note assignments is not required.
- Statutory scheme traditionally protects lienholders and landowners, not county clerks as mere custodians of records; no private remedy is provided in § 382.360/§ 382.365 for clerks.
- Plaintiffs seek damages for unpaid recording fees and injunction to stop non-recording practices; court addresses whether Kentucky’s negligence-per-se remedy (KRS § 446.070) or common-law theories apply.
- Court affirms the district court: clerks have no private right of action under Kentucky law to enforce § 382.360/§ 382.365 and § 446.070 does not create a remedy for them; thus no damages or injunctive relief available.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do Clerks have a private right of action under Kentucky recording statutes? | Clerks allege statutory violation and seek fees as remedy. | Statutes lack explicit private remedy; no cognizable private right for clerks. | No private right of action under § 382.360/§ 382.365. |
| Do Clerks have Article III standing to sue the Defendants? | Injury to financial interests and duties as record custodians supports standing. | Standing requires a personal, concrete injury traceable to defendants. | Clerks have Article III standing, but no private remedy exists. |
| Does § 446.070 provide a private negligence-per-se remedy for clerks? | Violations of § 382.360 justify damages under § 446.070. | Statutory remedy not available to clerks; they are not within protected class. | § 446.070 does not apply to clerks; no private remedy. |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requires injury that is concrete and particularized)
- Napier v. Duff, 136 S.W.2d 1083 (Ky. 1939) (assignment of note transfers interest in mortgage)
- United States ex rel. Chapman v. FPC, 345 U.S. 153 (1953) (secretarial standing to challenge agency authority)
- Union Planters Bank v. Hutson, 210 S.W.3d 163 (Ky. Ct. App. 2006) (illustrates legislative intent to protect landowners; fee remedies absent)
- Hargis v. Baize, 168 S.W.3d 36 (Ky. 2005) (section 446.070 private remedy applies to penal/statutory violations)