Robert Ferguson v. Bank of New York Mellon
2015 U.S. App. LEXIS 17265
5th Cir.2015Background
- Fergusons defaulted on a residential mortgage and sought to enjoin foreclosure by BNY Mellon.
- Deed of trust named MERS as beneficiary and nominee with authority to foreclose; note and DOT treated as separate instruments.
- In 2011 MERS assigned the DOT to BNY, trustee of the CWMB CHL Mortgage Pass-Through Trust 2006-9.
- Fergusons filed suit for injunction/declaratory relief and alleged a false lien under Texas §12.002 against BNY and MERS.
- District court dismissed the claims under Rule 12(b)(6); Ferguson plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether MERS’s assignment to BNY was void, preventing foreclosure | Fergusons argued MERS cannot be a beneficiary under Chapter 51 and the assignment is void. | BNY/MERS argued MERS validly acted as beneficiary and could assign the DOT. | Assignment not void; Fergusons lack standing to attack as void-casting. |
| Whether PSA violation or NY law renders the transfer void and supports a false-lien claim | Fergusons claim the PSA violation makes the transfer void under NY law; supports standing to challenge foreclosure. | Reinagel-based standing bars challenge to PSA; NY law would render violation voidable, not void. | Even under NY law, the transfer is at most voidable; Ferguson lack standing; no false lien. |
Key Cases Cited
- Reinagel v. Deutsche Bank Nat’l Trust Co., 735 F.3d 220 (5th Cir. 2013) (standing to challenge assignments limited to void, not voidable, grounds)
- MERSCORP Inc. v. City of Dallas, 791 F.3d 545 (5th Cir. 2015) (MERS valid as mortgagee/beneficiary under Chapter 51)
- Farkas v. Mortg. Elec. Registrations Sys., Inc., 737 F.3d 338 (5th Cir. 2013) (MERS beneficiary authority to assign DOTs; no fraudulent misrepresentation)
- Martins v. BAC Home Loans Servicing, L.P., 722 F.3d 249 (5th Cir. 2013) (MERS qualifies as mortgagee with authority to initiate foreclosure)
- Athey v. Mortg. Elec. Registration Sys., Inc., 314 S.W.3d 161 (Tex. App.—Eastland 2010) (inaction of MERS as beneficiary under Texas law)