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BofA, MERS Win Bid to Dismiss Most of Dallas County Suit

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Nov. 4 (Bloomberg) -- Bank of America Corp. and Mortgage Electronic Registration Systems Inc. persuaded a federal judge to dismiss most of a lawsuit claiming they shortchanged Texas counties out of uncollected mortgage filing fees.

U.S. District Judge Reed O’Connor in Dallas threw out claims of fraudulent misrepresentation, unjust enrichment and conspiracy in a lawsuit brought by Dallas County. O’Connor didn’t rule on a final claim, whether mortgage assignments must be recorded.

The judge had previously rejected other claims and the county’s request to pursue a class action, or group suit, against MERS and the bank. O’Connor said he would set a separate briefing schedule for the final claim.

“Plaintiff has failed to raise a genuine issue of material fact that Dallas County acted in reliance on the alleged misrepresentation or Dallas County was injured or damaged,” O’Connor said in dismissing the misrepresentation claim.

Dallas County filed the initial complaint in 2011, alleging that Vienna, Virginia-based Merscorp Inc.’s MERS was established by lenders including Charlotte, North Carolina-based Bank of America to avoid paying filing fees, as well as to ease transfers of mortgages.

Dallas later revised the lawsuit, seeking to represent all other Texas counties in which a deed of trust has been filed identifying MERS as a beneficiary.

O’Connor denied the class-action request in December.

Stephen Malouf, attorney for Dallas County, didn’t immediately return a call for comment on the ruling.

“The scope of this case has been narrowed significantly,” Janis Smith, a MERS spokeswoman, said in a phone interview. MERS “will continue to litigate on the remaining claim and we anticipate a ruling in our favor,” she said.

The lawsuit is Dallas County v. Merscorp Inc., 11-cv-02733, U.S. District Court, Northern District of Texas (Dallas).

To contact the reporters on this story: Margaret Cronin Fisk in Detroit at  mcfisk@bloomberg.net; Tom Korosec in Dallas at tkorosec@texaswordworks.com.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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