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Stuart v. Mortgage Electronic Registration Services, Inc.

United States District Court, D. Maine

August 24, 2017

CLARK D. STUART and ANITA M. STUART, Plaintiffs
v.
MORTGAGE ELECTRONIC REGISTRATION SERVICES, INC.; NATIONSTAR MORTGAGE LLC; and CITIMORTGAGE, INC., Defendants

          DECISION AND ORDER ON MOTION TO DISMISS

          D. BROCK HORNBY UNITED STATES DISTRICT JUDGE.

         The issue in this case is whether Mortgage Electronic Registration Systems Inc. (MERS) should remain as a defendant in a lawsuit by Maine property owners/mortgagors seeking to quiet title to their property and recover various damages. I conclude that the plaintiffs have failed to state a claim against MERS and Grant its motion to dismiss.

         Procedural History

         According to the Amended Complaint, the plaintiffs, Clark and Anita Stuart, are Maine property owners/mortgagors (their real estate is both residential and business). Am. Compl. (ECF No. 23) ¶¶ 10, 11. In 2008, they obtained mortgage financing on their property. Id. ¶¶ 12, 13. Mortgage Network, Inc. was the lender, but the mortgage stated in all caps: “FOR PURPOSES OF RECORDING THIS MORTGAGE, MERS IS THE MORTGAGEE OF RECORD” and, in regular type, that the defendant Mortgage Electronic Registration Systems Inc. (MERS) “is acting solely as a nominee for” Mortgage Network, Inc. Id. & Ex. B. As a result of certain assignments, in 2010 the defendant Nationstar Mortgage, LLC, pursued a judicial foreclosure action in Maine Superior Court against the Stuarts. (Nationstar was substituted in the case for the defendant CitiMortgage, Inc. after CitiMortgage initially started the foreclosure.) Id. ¶¶ 18, 21-22. Ultimately the Maine Superior Court dismissed the lawsuit with prejudice for failure to prosecute, id. ¶ 29, and Maine's Law Court dismissed Nationstar's attempted appeal. Id. ¶ 31. Now the Stuarts have brought a lawsuit against MERS, Nationstar and CitiMortgage that seeks to quiet their title to the real estate and to recover various damages. The defendants removed the lawsuit from Cumberland County Superior Court to this federal court based upon diversity of citizenship. The defendant MERS then moved to dismiss under Fed.R.Civ.P. 12(b)(6) for failure to state a claim against it.

         The Amended Complaint's Claims

         The Stuarts assert nine counts:

1. To quiet their title to the real estate, and seeking attorney fees;
2. Damages for slander of title to their real estate, and attorney fees, on the basis that the existence of the mortgage constitutes a slanderous statement;
3. Declaratory judgment that the Note and Mortgage are extinguished;
4. Statutory declaration of their rights, with statutory and exemplary damages and attorney fees;
5. Damages for tortious interference, including attorney fees, because one or more of the defendants has carried fire and casualty insurance on the property;
6. Intentional infliction of emotional distress for dunning notices and credit information given to third parties;
7. Negligent infliction of emotional distress for the same conduct; 8. Violation of the Maine Fair Debt ...

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