Higgins v. BAC Home Loans Servicing, LP
673 F. App'x 514
| 6th Cir. | 2016Background
- Multiple Kentucky landowners sued financial institutions for failing to record mortgage assignments within 30 days as required by Ky. Rev. Stat. § 382.360(3), alleging harms and statutory $500 damages per unrecorded transfer.
- Plaintiffs’ theory: every time a promissory note was transferred within the MERS system, the mortgage was thereby "assigned" and required recording under Kentucky law.
- District court initially denied defendants’ motion to dismiss and certified that order for interlocutory appeal.
- On interlocutory appeal this Court (Higgins I) held that Kentucky’s recording statute applies to transfers of mortgage deeds, not transfers of promissory notes; because defendants transferred only notes, plaintiffs’ claims failed.
- Following that mandate, the district court dismissed the case. Plaintiffs moved to set aside the dismissal, arguing (for the first time) that some claims alleged failures to record mortgage-deed transfers; the district court denied relief.
- The Sixth Circuit affirmed, holding the district court correctly followed the mandate, that plaintiffs waived the mortgage-deed theory by failing to raise it earlier, and that plaintiffs had not met Rule 59/60 standards to reopen and amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether transfers of promissory notes through MERS are "mortgage assignments" requiring recording under KRS § 382.360(3) | Note transfers via MERS effect mortgage assignments that must be recorded; failure entitles landowners to statutory damages | Note transfers do not constitute recorded mortgage-deed transfers; recording statute applies to mortgages, not notes | Transfers of promissory notes are not mortgage-deed assignments under KRS § 382.360(3); plaintiffs’ claims based on note transfers fail (affirming Higgins I) |
| Whether the district court was bound to dismiss after this Court’s prior mandate | Plaintiffs argued dismissal was premature because complaint also includes claims for mortgage-deed transfer non-recording | Defendants argued the appellate mandate required dismissal because the only transfers at issue were note transfers | District court properly followed the mandate and dismissed; the prior opinion is law of the case |
| Whether plaintiffs waived the mortgage-deed-transfer theory by not raising it earlier | Plaintiffs claimed the complaint included mortgage-deed claims and that those survive dismissal | Defendants argued plaintiffs had multiple opportunities to raise that theory and did not, so it’s waived | Plaintiffs waived the mortgage-deed theory by failing to timely raise it during district and appellate proceedings |
| Whether plaintiffs could amend the complaint or set aside judgment under Rule 59/60 | Plaintiffs sought to amend and reopen judgment based on newly asserted mortgage-deed claims | Defendants argued plaintiffs failed to meet the standards for reopening or amendment after judgment | Plaintiffs failed to satisfy Rule 59 or 60 requirements; amendment and relief denied |
Key Cases Cited
- Higgins v. BAC Home Loans Servicing, LP, 793 F.3d 688 (6th Cir. 2015) (held KRS § 382.360(3) applies to mortgage-deed transfers, not promissory-note transfers)
- Hanover Ins. Co. v. Am. Eng’g Co., 105 F.3d 306 (6th Cir. 1997) (trial court must follow appellate mandate and prior law of the case)
- Leisure Caviar, LLC v. U.S. Fish & Wildlife Serv., 616 F.3d 612 (6th Cir. 2010) (post-judgment requests to amend must meet Rule 59/60 standards)
- Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) (clarified Article III standing analysis for statutory violations)
- O’Shea v. Littleton, 414 U.S. 488 (1974) (Article III standing requires at least one plaintiff with a concrete case or controversy)