State ex rel. Flaiz v. Merscorp, Inc., 2017 Ohio 7126

Geauga County and Brown County sued MERSCORP, MERS, and multiple banks alleging they avoided county recording of mortgages/assignments (and associated filing fees) by using MERS as a private registry during securitizations.
Plaintiffs filed a second amended class-action complaint under Civ.R. 23 asserting violations of Ohio recording statutes (R.C. 5301.25 and 5301.32) and causes of action for unjust enrichment, civil conspiracy, and public nuisance.
Plaintiffs sought recovery of unpaid recording fees and relied on R.C. 309.12 to give county prosecutors standing to sue where "money is due the county."
Defendants moved to dismiss under Civ.R. 12(B)(6), arguing (1) the recording statutes do not create a private cause of action or an obligation to record, and (2) plaintiffs lacked a legally cognizable claim to fees.
The trial court dismissed the complaint, reasoning the statutes were permissive (no identified duty-who/when to record; no penalty) despite using "shall." Plaintiffs appealed.
The appellate court affirmed dismissal on the ground that the statutes do not impose a duty to record mortgages/assignments; it also held plaintiffs lacked standing under R.C. 309.12 and that the common-law claims were moot.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Does R.C. 5301.25/5301.32 impose a mandatory duty to record mortgages/assignments?	"Shall be recorded" is mandatory; therefore recording is required and counties are owed fees.	The statutes merely prescribe where to record to preserve priority; recording is optional—"shall" limits location, not creates duty.	Statutes do not impose a universal duty to record; "shall be recorded" prescribes the place to record to preserve priority but does not compel recording.
Do counties/prosecutors have standing under R.C. 309.12 to recover unpaid recording fees?	R.C. 309.12 authorizes prosecutors to recover money due the county for unpaid fees from defendants' failure to record.	No statutory obligation to record means no money is legally due; R.C. 309.12 requires a fixed/settled obligation.	Plaintiffs lack standing under R.C. 309.12 because, as a matter of law, no fees were owed absent a statutory duty to record.
Were plaintiffs’ unjust enrichment, civil conspiracy, and public nuisance claims viable?	These claims seek recovery tied to avoided fees and harms from incomplete records.	Those claims rest on entitlement to fees/recording duty; absent duty, claims fail.	These claims are moot/without merit because they depend on an entitlement to fees that does not exist.

Perrysburg Twp. v. Rossford, 103 Ohio St.3d 79, 814 N.E.2d 44 (Ohio 2004) (standard of review for Civ.R. 12(B)(6) dismissal)
Perez v. Cleveland, 66 Ohio St.3d 397, 613 N.E.2d 199 (Ohio 1993) (pleading inference and factual-allegation standards)
York v. Ohio State Hwy. Patrol, 60 Ohio St.3d 143, 573 N.E.2d 1063 (Ohio 1991) (plaintiff survives dismissal if any set of facts consistent with complaint allows recovery)
State ex rel. Hanson v. Guernsey Cty. Bd. of Commrs., 65 Ohio St.3d 545, 605 N.E.2d 378 (Ohio 1992) (Civ.R. 12(B)(6) tests sufficiency of complaint)
Risner v. Ohio Dept. of Natural Resources, 144 Ohio St.3d 278, 42 N.E.3d 718 (Ohio 2015) (statutory interpretation and legislative intent)
Union County v. MERSCORP, Inc., 735 F.3d 730 (7th Cir.) (interpreting similar recording statute: "shall be recorded" does not create a duty to record)
Montgomery County v. MERSCORP, Inc., 795 F.3d 372 (3d Cir.) (same conclusion under Pennsylvania law)
County of Ramsey v. MERSCORP Holdings, Inc., 776 F.3d 947 (8th Cir.) (same conclusion under Minnesota law)
Harris County v. MERSCORP, Inc., 791 F.3d 545 (5th Cir.) (similar holding under Texas law)
Pinney v. Merchants' Natl. Bank of Defiance, 71 Ohio St. 173, 72 N.E. 884 (Ohio 1904) (importance of public recording system for title information)