Subject: VICTORY IN MONTANA: SUPREME COURT CONCLUDES MERS IS NOT THE
BENEFICIARY UNDER MONTANA'S NON-JUDICIAL FORECLOSURE STATUTE....;
REVERSES SUMMARY JUDGMENT
In
a 21-page opinion issued today, the Supreme Court of Montana held that MERS is
not the “beneficiary” under Montana’s Small Tract Financing Act (Montana’s
non-judicial foreclosure statute). Jeff Barnes, Esq. represented the homeowners
in the appeal, assisted by local Montana counsel Eric Hummel, Esq. Mr. Barnes
wrote the Briefs and argued the matter before the full panel of Justices on
September 25, 2013. The decision is now the law in the State of Montana.
The
Court relied upon the Brandrup decision from Oregon (the companion case to the
Niday decision from the Supreme Court of Oregon which also held that MERS is
not the “beneficiary” under Oregon’s non-judicial foreclosure statute), and
other cases cited by Mr. Barnes (who successfully argued the Niday decision in
Oregon as well at both the Court of Appeals and Supreme Court levels).
In
concluding that MERS is not the beneficiary under the statute, the Court quoted
the homeowners’ argument that “MERS was not the lender, did not extend
any credit, and is nothing more than an electronic tracking entity”. Thus, the
DOT was not and could not have been executed “for the benefit” of MERS. The
Montana statute, which is practically identical to Oregon’s, requires that the
“beneficiary” under the statute be the person “for whose benefit a trust
indenture is given”.
The
Court also rejected MERS’ argument that it is a “special agent” of the lender,
finding no evidence to support this argument which the Court found that MERS
wrongfully attempted for the first time on appeal. The Court held that there
are no extenuating circumstances or new developments in the law to justify MERS’
not asserting an agency theory at the trial level. The Court further held that
even if it had decided the agency issue using the language in the DOT, that
evidence is reasonably susceptible to more than one inference and thus the
legal relationship between MERS and the lender is not purely a question of law,
with the term “nominee” being subject to more than one interpretation based
on the context of its use.
The Court stated: “MERS relies on the same
vague and confusing claim of authority as dispositive for the agency issue in
this case”, referring to the Supreme Court of Oregon’s finding in Brandrup that
the DOT only obfuscates MERS’ status by first granting the narrow designation
of “nominee” holding “only legal title”, but then grants MERS the right to
exercise “any and all” interests of the lender “as necessary”. The Court
concluded that the facts of the case are susceptible to a determination that
MERS was the kind of nominee that is not an agent.
The summary judgment entered by the trial court
was thus also reversed.
Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com
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