ORDER AND OPINION GRANTING DEFENDANTS’ JOINT MOTION TO DISMISS THE AMENDED CLASS ACTION COMPLAINT
Pending is Defendants’ Joint Motion to Dismiss (Doc. # 68). The Motion is granted.
I. BACKGROUND
Plaintiff, Jackson County, Missouri, filed this putative class action on April 23, 2012, in the Circuit Court of Jackson County, Missouri, which was subsequently removed to federal court on May 31, 2012. The Defendants are MERSCORP, Inc., n/k/a MERSCORP Holdings, Inc. (“MERSCORP”); Mortgage Electronic Registration Systems, Inc. (“MERS”); Bank of America, N.A.; Citimortgage, Inc.; Corinthian Mortgage Corporation; Everhome Mortgage Company; GMAC Residential Funding Corporation; HSBC Bank, U.S.A., N.A.; JPMorgan Chase Bank, N.A.; Suntrust Mortgage, Inc.; BAC Home Loans Servicing L.P.; Wells Fargo Bank, N.A.; WMC Mortgage Corporation; and John Doe Defendants 1-100. Amended Complaint (“AC”), ¶ 13-26.
Plaintiff seeks to pursue claims on its own behalf and on behalf of all other similarly situated counties in the State of Missouri and the City of St. Louis against MERS and its parent company, MERSCORP, the owner and operator of a national registry that tracks ownership interests and servicing rights associated with residential mortgage loans. The other Defendants are various mortgage companies and John Doe defendants, which are alleged to be members of MERS, shareholders of MERSCORP, or both.
The facts of this case are derived from the factual allegations in Plaintiffs Amend
Defendants and others allegedly “conspired to develop a confidential, electronic registry that would track ownership and servicing rights for residential mortgage loans ‘in-house.’” AC, ¶4. MERSCORP, MERS, and the MERS® System were created as a result. Id. MERS was created “to save the mortgage industry money — recording fees — that lenders and other paid to county recorders to secure or maintain the first lien status of mortgages as mortgages were assigned multiple times during the securitization process. AC, ¶ 73. Before MERS, assignees of mortgages would record the assignments. AC, ¶ 73
MERS works as follows: when a lender issues a mortgage, the lender names MERS as “nominee” for the lender and the lender’s successors and assigns and the “beneficiary” of the security instrument. AC, ¶ 5. MERS is the mortgagee of record on the mortgage, and listed as “Grantee” when the mortgage is recorded with the appropriate county recorder. Id. MERS has a valid first lien security interest in the mortgage by virtue of the initial recordation. Id. Once MERS is listed as the mortgagee in the county records, the lender (a “member” of MERS) registers the mortgage on the MERS® System. Id. When the lender assigns the mortgage, “instead of recording the assignment with the county [recorder] of deeds in order to ensure priority against subsequent purchasers, it ‘transfers’ the note to another MERS member and MERS remains the beneficiary of record for both the lender and the transfers, and the holder of the security interest.” Id. Subsequent transfers are tracked by the MERS® System and not recorded because “the MERS® System allows MERS Members to claim that the transfers are not assignments and, therefore, need not be recorded.” Id.
But for MERS, Defendants “would have paid to record assignments in order to inoculate the security interest against subsequent good faith purchasers, mortgagees, or creditors without notice.” AC, ¶ 6. Defendant’s conduct “has broken once transparent chains of title in Missouri counties’ public land records by creating gaps when Defendants transfer mortgages on the MERS® System instead of recording mortgage assignments in county land records.” AC, ¶ 8.
Although Plaintiff alleges that Missouri has a statutory framework “that encourages the recording of land instruments, and specifies the consequences of failing to record land instruments,” AC, ¶ 30, it does not maintain that there is a legal duty to record assignments under Missouri law. To the contrary, and as shall be discussed later, Plaintiff concedes no such duty exists.
Plaintiff asserts five causes of action: (1) Unjust Enrichment; (2) Civil Conspiracy; (3) Prima Facie Tort; (4) Declaratory
Defendants have moved to dismiss this class action on various grounds, many of which are related. Defendants contend that the Missouri recording statutes create no private cause of action in favor of Jackson County, that Jackson County lacks standing because it cannot recover recording fees for assignments it never recorded, that there is no duty under Missouri law to record deed of trust assignments, and that Jackson County’s allegations fail to state claims upon which relief can be granted.
II. DISCUSSION
A. Standing
Defendants seek dismissal because they argue Plaintiff lacks standing. Essentially, Defendants argument is that because Plaintiff has no valid cause of action, Plaintiff lacks standing. However, the absence of a valid cause of action does not implicate subject-matter jurisdiction. Steel Co. v. Citizens for a Better Environment,
Further, the Court disagrees with Defendants’ argument that Plaintiff lacks standing because it has not alleged an injury in fact.
To have standing, a party must show:
(1) ‘an injury in fact,’ meaning ‘the actual or imminent invasion of a concrete and particularized legal interest’; (2) a causal connection between the alleged injury and the challenged action of the defendants’ and (3) a likelihood that the injury will be redressed by a favorable decision of the court.
Strutton v. Meade,
Here, Plaintiff has alleged an injury to its financial interest in the form of lost recording fees caused by the actions of Defendants and seeks redress in this Court. Further, Plaintiff alleges it has suffered an injury in the form of inaccurate county land records. These allegations are sufficient to establish Article III standing.
B. Motion to Dismiss
The liberal pleading standard created by the Federal Rules of Civil Procedure requires “a short and plain statement of the claim showing that the pleader is entitled to relief.” Erickson v. Pardus,
To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. The plausibility standard is not akin to a probability*1069 requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint pleads facts that are merely consistent with a defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to relief.
Ashcroft v. Iqbal,
In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.
Id. at 1950.
1. Private Right of Action
Defendants argues the Amended Complaint should be dismissed because the Missouri General Assembly did not create a private right of action to enforce alleged violations of statutes concerning recording assignments of deeds of trust. In response, Plaintiff correctly points out that it is not suing to enforce any recording statute. Plaintiff merely notes that Missouri’s recording statutes “encourage” recording, AC ¶ 30, but nowhere in the Amended Complaint does Plaintiff contend that there is a duty to record under Missouri law. Regardless of whether Missouri’s recording statutes include private right of action to enforce alleged violations of statutes concerning recording assignments of deeds of trust, Defendants argument fails because Plaintiff is not asserting claims based on conduct that violates any statute. Instead, Plaintiff asserts claims for unjust enrichment and other common law causes of action. Finding that Plaintiff is not suing to enforce any statute, the Court will now consider Defendants’ other arguments. •
2. Count I: Unjust Enrichment
In Count I of the Amended Complaint, Plaintiff alleges Defendants were unjustly enriched because they gained priority through the initial recording of deeds of trust listing MERS as beneficiary, but later transferred deeds of trusts without recording the transfers and without paying the applicable recording fees. Defendant moves to dismiss Count I because: (1) there is nothing “unjust” about recording a deed of trust in land records to put third parties on notice of the existence of that lien; (2) Plaintiff failed to allege that Plaintiff conferred a benefit on Defendants; and (3) Plaintiffs unjust enrichment claim is premised on the notion that Defendants acted improperly by not recording assignments after initial deed of trust were recorded, but no duty to record assignment of deeds of trust exist under Missouri law. In response, Plaintiff argues that the benefit in an unjust enrichment claim does not have to be conferred directly from plaintiff to defendant and that its unjust enrichment claim is not dependent on the existence of a mandatory recording requirement.
The elements of an unjust enrichment claims are: “(1) the plaintiff conferred a benefit on the defendant; (2) the defendant appreciated the benefit; and (3) the defendant accepted or retained the benefit under inequitable or unjust circumstances.” Johnson v. Estate of McFarlin ex rel. Lindstrom, 334 S.W.3d 469, 474 (Mo.Ct.App.2010).
Defendants rely on two cases with similar fact patters as this case, Fuller v. Mortgage Electronic Registration Systems, Inc.,
Similarly, in Plymouth County, the Northern District of Iowa dismissed plaintiffs unjust enrichment claim in plaintiffs first complaint because it failed to allege any conduct that was unjust because there is no duty to record assignments under Iowa law.
Here, Plaintiff has failed to state a claim for unjust enrichment. First, there is no duty to record assignments under Missouri law. Mo.Rev.Stat. § 443.035 (“Security instruments may be assigned ..., and may be recorded in the office of the recorder of deeds in the county or counties in which the security instrument being assigned was recorded.”) (emphasis added); see also Sando v. Phillips,
Next, Plaintiff has not alleged that it conferred a benefit onto defendant either directly or indirectly, and has not alleged that Defendant appreciated the benefit and retained it under inequitable circumstances. The ability to name MERS as mortgagee and/or grantee of record on mortgages, and “exploiting MERS” status to transfer mortgages among MERS Members without recordation and payment of recording fees” is the benefit that is alleged to have been conferred onto Defendants. AC, ¶ 151. Further, the MERS Members benefited from the priority conferred by the Missouri recording statutes, which enabled them to represent in agreements that they had good title and were transferring good title. AC, ¶ 152. These benefits are the protections derived from recording the initial mortgage. However, Plaintiff does not allege that Defendants fail to pay the applicable recording fees for the initial deeds of trust that were recorded.
In its Suggestions in Opposition to Defendants’ Motion to Dismiss, Plaintiff relies on Montgomery County v. MERSCORP,
Plaintiff has failed to state a claim for unjust enrichment. Accordingly, the Court dismisses Count I.
3. Count II: Civil Conspiracy
Plaintiffs civil conspiracy claim is based on its claims of unjust enrichment.
“A civil conspiracy is an agreement or understanding between two or more persons to do an unlawful act or use unlawful means to do an otherwise lawful act.” Trimble v. Pracna,
As previously discussed, Plaintiffs unjust enrichment fails to state a claim. Plaintiffs civil conspiracy also fails because it is based on the same “scheme” that is alleged in Plaintiffs unjust enrichment claim — that Defendants were “benefited” by an initial recorded mortgage and represented that they were transferring good title without recording assignments and paying the recording fees. “In Missouri, if tortious acts alleges as elements of a civil conspiracy claim fail to state a cause of action, then the conspiracy claim fails as well.” Rice v. Hodapp,
4. Count III: Prima Facie Tort
Count III of Plaintiffs Amended Complaint raises a cause of action for prima facie tort.
“A claim alleging a prima facie tort ‘is disfavored under Missouri law, particularly when a party has another remedy or another potentially submissible tort claims available.’ ” Tamko Roofing Products, Inc. v. Smith Engineering Co.,
Here, Plaintiffs Amended Complaint merely asserts that Defendants “intended that their conduct would injure” Plaintiffs. AC, ¶ 163. Nowhere does the Amended Complaint allege that Defendants acted maliciously. Under Missouri law, the mere awareness that one’s conduct would harm the Plaintiff is not enough to establish an actual intent to injure; Plaintiff must prove that Defendant acted with “specific, clear-cut, express malicious intent to injure.” Tamko Roofing Products, Inc.,
5. Counts IV and V: Declaratory Judgment and Injunctive Relief
Defendants move to dismiss Counts IV and V because declaratory judgment and injunctive relief are remedies and not independent causes of action. In the alternative, Defendant argues that because Plaintiffs primary claims fail, there is no cognizable claim for declaratory or injunctive relief.
A declaratory judgment is strictly remedial in nature. First Federal Sav. And Loan Ass’n of Harrison, Ark. v. Anderson,
The Court agrees that there is no “injunctive” cause of action under Missouri or federal law. “Instead, Plaintiffs must allege some wrongful conduct on the part of Defendant for which their requested injunction is an appropriate remedy.”
III. CONCLUSION
If Plaintiff seeks redress, it must go to the Legislature to get the statute changed. Until there is a legal duty to record assignments, Plaintiff cannot recover for the failure to record. Plaintiff cannot enforce a nonexistent obligation. Defendants’ Motion to Dismiss is granted, and Plaintiffs Amended Complaint is dismissed in its entirety for failure to state claims upon which relief can be granted.
IT IS SO ORDERED.
Notes
. Count II is brought against the Member Defendants, Shareholder Defendants and John Doe Defendants 1-100.
. Count III is brought against MERS, Member Defendants, Shareholder Defendants, and John Doe Defendants 1-100.
. The same analysis may show that there was sufficient justification for Defendants’ actions. In light of the Court’s analysis, there is no need to reach this issue.