Justices make ruling about trust deeds

By Kyla Asbury | Feb 26, 2015

CHARLESTON – The West Virginia Supreme Court of Appeals has ruled that state law does not require that the assignment of a trust deed be recorded in the office of the clerk of the county commission.

The circuit court exceeded its jurisdiction in allowing the Wyoming County action to go forward, and the trustees are entitled to relief in prohibition, according to an opinion filed Feb. 5 by the court.

Justice Menis Ketchum authored the opinion.

"Upon review of the law in this area, the inexorable conclusion is that the most important factor to be considered is the specific wording of the public recording statutes of the jurisdiction under consideration," the opinion states. "In this proceeding, we have determined that the recording statutes in West Virginia do not require that the assignment of a trust deed be recorded in the office of the clerk of the county commission. Any amendments or additions to this state's recording statutes are to be considered by the West Virginia Legislature."

On March 27, 2012, a class action lawsuit was filed in Wyoming Circuit Court by Wyoming County "on behalf of itself and all other similarly situated West Virginia counties" and named U.S. Bank National Association, Bank of New York Mellon, Bank of America NA, Deutsche Bank, JPMorgan Chase and 20 unknown individuals as defendants.

Circuit Judge Warren R. McGraw and Wyoming County claimed the recording of trust deed assignments in county record books is required by state law.

Rather than recording trust deed assignments in county record books, the banks have been registering the assignments, also described as a transfer of rights under the trust deeds, with a private corporation known as Mortgage Electronic Registration Systems Inc.

The banks argued the trust deed assignments did not need to be recorded in county record books under state law and moved to dismiss the complaint.

On July 22, the circuit court entered an order denying the banks' motion to dismiss and ruled that trust deed assignments are required to be publically recorded. The court also ruled that Wyoming County was entitled to show that the trustees have been unjustly enriched by using MERS, rather than recording the assignments in the county record books and paying the recording fees.

The banks appealed and asked the state Supreme Court to prohibit the enforcement of the order and to dismiss the class action.

"The Circuit Court of Wyoming County exceeded its jurisdiction in entering the July 22, 2014, order which denied the trustees’ motion to dismiss," the opinion states. "The trustees are granted relief prohibiting the enforcement of the order, and the circuit court is directed to dismiss the Wyoming County action with prejudice."

Wyoming County was represented by Michael W. Carey and David R. Pogue of Carey, Scott, Douglas & Kessler PLLC; Joseph T. Cramer of Shuman, McCuskey & Slicer PLLC; Thomas M. Hefferon of Goodwin Procter; Harry F. Bell Jr. and Jonathan W. Price of the Bell Law Firm; and Charles Clinton Hunter of Reich & Binstock LLP.

The banks were represented by Jared M. Tulley of Frost Brown Todd LLC; and Thomas V. Flaherty of Flaherty, Sensabaugh & Bonasso PLLC.

W.Va. Supreme Court of Appeals case number: 14-0776

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