The recorders of deeds in Pennsylvania’s 67 counties won declaratory judgment from a federal judge who ruled that Merscorp must create and record property transfers with the county offices.
Nancy Becker, the recorder of deeds for Montgomery County, had alleged that Merscorp’s Mortgage Electronic Registration Systems that keeps track of mortgage assignments has circumvented the state law requiring the recording of mortgage assignments with offices like hers across the state, depriving the public record of information and keeping the counties from collecting the associated fees.
Becker brought the suit on behalf of all 67 Pennsylvania counties. She was one of many county officials nationwide to bring similar claims against MERS, according to an opinion that U.S. District Senior Judge J. Curtis Joyner of the Eastern District of Pennsylvania had issued in 2012 allowing the suit to survive.
Joyner ruled almost entirely as the plaintiffs had asked Tuesday, saving some questions for trial.
“We now formally declare that the assignment or transfer of a promissory note secured by a mortgage on real estate is, in Pennsylvania, equivalent to a mortgage assignment,” Joyner said. “We further declare that defendants’ failure to create and record documents evincing the transfers of promissory notes secured by mortgages on real estate in the commonwealth of Pennsylvania is, was and will in the future be, in violation of the Pennsylvania recording law.”
The judge held off on answering the question of damages until trial.
Joyner, however, didn’t grant summary judgment to the recorders of deeds on their unjust enrichment claim, explaining that it would be better decided at trial, too.
“To be sure, while there clearly is evidence that defendants may have been unjustly enriched as a result of the conduct complained of, we do not find the record to have been sufficiently developed on this claim to allow the entry of judgment as a matter of law or to make an award of damages at this time,” Joyner said. “Therefore, we leave this claim to be further and finally thrashed out at trial.”
Becker “has successfully pleaded that the defendants have enjoyed the full benefits of the recording system without paying the full value for these benefits in the form of the fees properly due for each transfer of the beneficial interest of a mortgage,” Joyner said in 2012. “She has further successfully alleged that the defendants did so in violation of a statutory command to record such assignments.”
The only one of Becker’s claims that the judge initially dismissed was her claim of civil conspiracy.
He held, “Although the plaintiff has adequately alleged that the defendants unlawfully elected not to record certain documents, she has not adequately alleged that the defendants, along with their purported co-conspirators, did so with the requisite malice.”
“Our client is very pleased with the result,” said Craig Hillwig of Kohn Swift & Graf, which represented Becker. He declined to comment further.
Robert Brochin of Morgan, Lewis & Bockius represented Merscorp and couldn’t immediately be reached for comment.
(Copies of the 45-page opinion in Montgomery County Recorder of Deeds v. Merscorp, PICS No. 14-1037, are available from The Legal Intelligencer. Please call the Pennsylvania Instant Case Service at 800-276-PICS to order or for information.) •