Dallas County, Texas v. MERSCORP, Incorpora
2015 U.S. App. LEXIS 10923
| 5th Cir. | 2015Background
- Dallas, Harris, and Brazoria Counties sue MERSCORP, MERS, and Bank of America over recording real-property interests in Texas.
- Plaintiffs challenge MERS’s beneficiary status on deeds of trust and alleged failures to record related assignments under Texas law.
- They rely on Texas Local Government Code § 192.007 and Texas Civ. Prac. & Rem. Code § 12.002, plus common-law claims of fraudulent misrepresentation and unjust enrichment.
- The district court granted summary judgment for Defendants on all claims; the Counties appeal.
- Texas law allows recording as permissive; 192.007 is interpreted as a procedural directive to clerks, not a public-record recording duty.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 192.007 create a private right of action for declaratory relief? | Counties contend § 192.007 supports declaratory relief. | District court held no private right exists; Declaratory Judgment Act is procedural. | No private right of action; Declaratory Judgment Act is procedural. |
| Does § 192.007 impose a duty to record assignments of deeds of trust or note transfers? | Counties read § 192.007 to require recording subsequent actions. | § 192.007 is a procedural directive to clerks; not a recording mandate on the public. | § 192.007 imposes no duty to record assignments or note transfers. |
| Is Dallas County’s § 12.002 fraudulent-lien claim viable? | Dallas County alleges injury from avoiding filing/recording costs. | No duty to record means no cognizable injury; no § 12.002 violation. | Claim fails due to lack of cognizable injury. |
| Is the fraudulent misrepresentation claim viable based on MERS being labeled as “beneficiary”? | Misrepresentation to county records because MERS claims beneficiary status without debt interest. | Designation as beneficiary is not false; dual role allowed; no reliance/injury shown. | No actionable misrepresentation; no reliance or injury established. |
Key Cases Cited
- Reinagel v. Deutsche Bank Nat’l Trust Co., 735 F.3d 220 (5th Cir. 2013) (section 192.007 is a procedural directive to county clerks, not a duty to the public)
- Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249 (5th Cir. 2013) (note and deed are separate; split-the-note theory rejected in Texas)
- Pope v. Beauchamp, 219 S.W. 447 (Tex. 1920) (note transfer passes mortgage with deed; foreclosure rights persist)
- Univ. Sav. Ass’n v. Springwoods Shopping Ctr., 644 S.W.2d 705 (Tex. 1982) (strict interpretation of deed-of-trust terms; contract-like rules apply)
- Lamar Homes, Inc. v. Mid-Continent Cas. Co., 242 S.W.3d 1 (Tex. 2007) (interpret statutes as a whole and harmonize provisions)