McLerran v. Flagstar Bank, FSB
4:12-cv-00718
E.D. Tex.Jun 7, 2013Background
- Plaintiff David McLerran sues to quiet title against Defendant Flagstar Bank FSB after alleged foreclosure on the property in Corinth, Texas.
- Plaintiff asserts the September 25, 2012 Assignment of Deed of Trust to Flagstar is invalid due to alleged lack of knowledge, authority, and capacity of the MERS signatory.
- Plaintiff argues the defective assignment clouds title and seeks a temporary restraining order and permanent injunction.
- Court reviews Rule 12(b)(6) dismissal standards and determines Plaintiff’s quiet-title claim must allege superior title and a cognizable cloud.
- Court finds that Texas law permits assignment of the Deed of Trust through MERS and that production of the original note is not required for non-judicial foreclosures in Texas.
- Conclusion: Flagstar’s Rule 12(b)(6) motion to dismiss is granted and Plaintiff’s claims are dismissed for failure to state a claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether McLerran’s quiet-title claim states a plausible claim | McLerran alleges a cloud on title from the MERS assignment | Assignment valid; Plaintiff lacks standing to challenge it | Dismissed for failure to state a claim |
| Whether McLerran has standing to challenge the assignment | Plaintiff has rights to clear title | Borrower lacks standing to challenge MERS-to-Note assignment | Dismissed for lack of standing |
| Whether MERS had authority to assign the Deed of Trust | Signatory lacked authority/knowledge | Texas law recognizes MERS assignments as valid | Dismissed; authority established by case law |
| Whether HOEPA preemption or other defenses affect the claim | Preemption may nullify the claim | No preemption shown | Dismissed on the merits of the quiet-title claim |
| Whether injunctive relief can save the action | Injunctive relief could preserve title | Injunction cannot save a deficient quiet-title claim | Ignored; dismissal affirmed for failure to state a claim |
Key Cases Cited
- Hahn v. Love, 321 S.W.3d 517 (Tex. App.—Houston [1st Dist.] 2009) (burden to prove ownership and cloud on title in quiet-title actions)
- Fricks v. Hancock, 45 S.W.3d 322 (Tex. App.—Corpus Christi 2001) (plaintiff must prove title; cannot rely on adversary’s title)
- Wright v. Matthews, 26 S.W.3d 575 (Tex. App.—Beaumont 2000) (plaintiff must allege right, title, or ownership with certainty)
- Athey v. Mortgage Elec. Registration Sys., Inc., 314 S.W.3d 161 (Tex. App.—Eastland 2010) (Texas recognizes MERS/assignee authority for note/Deed of Trust)