MERSCORP Holdings announced Tuesday the Seventh Circuit of Appeals rendered a favorable decision in a Macon County, Illinois, recording fee case. The court affirmed the dismissal of the lawsuit by the district court, providing another legal win for MERSCORP.
Macon County presented a case claiming that recording fees should have been paid when promissory notes were transferred using the MERS System. The county claimed that MERSCORP was therefore "unjustly enriched" and responsible for paying recording fees on all transferred promissory notes.
Judge Richard A. Posner disagreed.
The court recognized that MERSCORP holds the property interest that secures the promissory note and that when those notes are transferred, they “are not recorded in the county land registries because they are not assignments of mortgages or other property interests."
Judge Posner continued: "[C]ompetition is not a tort at common law."
The Macon County case was different from a previous case as outlined by Union County v. MERSCORP, Inc., where a judge ruled favorably for MERSCORP, citing Illinois Law does not require mortgages to be recorded.
In the Macon County case, however, a different strategy was employed, claiming MERSCORP’s business deprives the county of revenues it would have otherwise received.
Judge Posner ruled against Macon County, saying, "No more are MERSCORP and the banking industry required to adopt a system of mortgage protection that generates revenues for a state or local government—as the Eighth Circuit held last month in a case almost identical to this one."
Janis Smith, VP for corporate communications at MERSCORP, reiterated the judge’s comments. "We have consistently held that the MERS business model complies with the requirements of the recording statues in individual states.
"Judge Posner’s opinion confirms that MERS behavior was not illegal or inappropriate, and it did not (and could not) result in MERS being unjustly enriched."