Ko v. Mortgage Electronic Registration Services, Inc. et al

Filing 13

ORDER denying 3 Motion for TRO (Written Opinion). Signed by Judge John R. Tunheim on April 4, 2013. (DML)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
OCIN KO,

Civil No. 13-596 (JRT/AJB)
Plaintiff,

v.
MORTGAGE ELECTRONIC
REGISTRATION SYSTEM; MERSCORP,
INC.; EVERBANK FINANCIAL
CORPORATION; SHAPIRO & ZIELKE;
and ALL OTHER PERSONS, UNKNOWN
CLAIMING ANY RIGHT, TITLE, ESTATE,
INTEREST, OR LIEN IN THE REAL
ESTATE DESCRIBED IN THE
COMPLAINT HEREIN,

ORDER DENYING MOTION
FOR A TEMPORARY
RESTRAINING ORDER

Defendants.

William B. Butler, BUTLER LIBERTY LAW, LLC, 33 South Sixth
Street, Suite 4100, Minneapolis, MN 55402, for plaintiff.
Wendy Oien Sanchez and Kalli L. Ostlie, SHAPIRO & ZIELKE, LLP,
12550 West Frontage Road, Suite 200, Burnsville, MN 55337, for
defendants.
Plaintiff Ocin Ko brings this quiet title action against defendants Mortgage
Electronic Registration System and MERSCORP, Inc. (collectively, “MERS”), EverBank
Financial Corporation (“EverBank”), the law firm Shapiro & Zielke, and “all other
person[s], unknown claiming any right, title, estate, interest, or lien in the real estate
described in the complaint herein.” Ko’s central allegation is that the foreclosure sale of
his property, which occurred on June 28, 2012, was void because Ann Johnson, an

26

EverBank employee, executed an assignment of the mortgage from MERS to EverBank
and lacked authority to do so. (See Notice of Removal, Ex. 1 (“Compl.”) ¶¶ 9-10, 13, 19,
Mar. 14, 2013, Docket No. 1.)
Following the foreclosure sale and the expiration of the redemption period,
EverBank commenced an eviction action in Anoka County District Court. (Decl. of
Kalli L. Ostlie, Ex. F, Apr. 3, 2013, Docket No. 11.) The state court granted EverBank’s
motion for summary judgment and issued a writ of recovery on March 14, 2013. (Id.)
Ko did not appeal within the ten day period to appeal. See Minn. Stat. § 504B.371, subd.
2. Ko did, however, file this separate quiet title action in Anoka County District Court
prior to the summary judgment order in the eviction proceedings. (Ostlie Decl., Ex. G.)
Defendants removed the action to this Court. (See Notice of Removal.) Currently before
the Court is Ko’s motion for a temporary restraining order to enjoin the completion of his
eviction proceedings, which is scheduled to occur today, April 4, 2013. (Defs.’ Mem. in
Opp. at 1-2, Apr. 3, 2013, Docket No. 10.)
The Court generally considers four factors in determining whether to grant a
temporary restraining order: (1) the probability that the moving party will succeed on the
merits; (2) the threat of irreparable harm to the moving party; (3) the balance of harms as
between the parties; and (4) the public interest. See CDI Energy Servs. v. W. River
Pumps, Inc., 567 F.3d 398, 401-02 (8th Cir. 2009) (citing Dataphase Sys., Inc. v. CL Sys.,
Inc., 640 F.2d 109, 114 (8th Cir. 1981) (en banc)). However, if a party “fail[s] to show
any likelihood of success on the merits,” the Court need not consider the remaining
factors. See Oglala Sioux Tribe v. C & W Enters., Inc., 542 F.3d 224, 233 (8th Cir. 2008).
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The Court finds in the present case, at this preliminary stage, that Ko has failed to
demonstrate any likelihood of success on the merits. Ko’s central allegation in support of
his motion is that “Ann Johnson lacked authority to execute the February 7, 2012
assignment from MERS to EverBank [because] Ms. Johnson was actually an employee of
EverBank and a private investigator found nothing to show Ms. Johnson was an
employee-agent of MERS.”

(Mem. in Supp. at 9, Apr. 2, 2013, Docket No. 4.)

However, along with their response to Ko’s motion, defendants provided a MERS
corporate resolution appointing several EverBank employees, including Johnson, as
MERS Signing Officers and authorizing those employees to assign mortgages as
“assistant secretary and vice president of MERS.” (Ostlie Decl., Ex. H.) Defendants
seem to have carefully followed MERS’ “very specific rules about who is given authority
to execute assignments of mortgage on its behalf.” (See Mem. in Supp. at 9; Aff. of
William Butler, Ex. 2 at 26, Apr. 2, 2013, Docket No. 5.) The Court therefore finds,
based on the evidence currently presented, that Ko’s allegations are entirely unsupported
and Johnson did have authority to execute the assignment1 See Kebasso v. BAC Home

1

Ko’s attorney submitted a letter to the Court at approximately 11:00 a.m. raising the
entirely new argument that even if Johnson had authority from MERS to execute the assignment,
the assignment is still invalid unless Johnson proves she had “authority to sign for MERS as
nominee for Countrywide.” (Letter, Apr. 4, 2013, Docket No. 12 (emphasis added).) First, the
shifting nature of Ko’s arguments is problematic. The argument was not raised until after the
Court held a phone conference and defendants filed their response to Ko’s motion. Ko’s
attorney’s tactics are troubling and have the potential to undermine the fair administration of
justice. Second, the new argument appears to be a variation of the “show me the note” theory
that has been repeatedly rejected. See Butler v. Bank of Am., N.A., 690 F.3d 959, 962 (8th Cir.
2012) (holding that the theory is foreclosed by the plain language of Minnesota's foreclosure-byadvertisement statute.”). Countrywide was the original lender to Ko, but MERS was the
(Footnote continued on next page.)

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Loans Servicing, LP, 813 F. Supp. 2d 1104, 1109-10 (D. Minn. 2011) (relying on a
MERS resolution like the one provided in the present case to find that an attorney had
authority to execute an assignment of a mortgage).
Thus, although being wrongfully evicted likely would amount to irreparable harm,
the Court will deny Ko’s motion for a temporary restraining order because Ko has not
demonstrated any likelihood of prevailing on the merits of his quiet title action.2

ORDER
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
HEREBY ORDERED that Plaintiff’s motion for a temporary restraining order [Docket
No. 3] is DENIED.

DATED: April 4, 2013
at Minneapolis, Minnesota.

____s/
____
JOHN R. TUNHEIM
United States District Judge

____________________________________
(Footnote continued.)

mortgagee. (Ostlie Decl., Ex. A at 1.) As mortgagee, MERS had authority to transfer the
mortgage directly to EverBank, and Johnson had authority to execute the assignment on behalf
of MERS, as the Court will discuss. See Stein v. Chase Home Fin., LLC, 662 F.3d 976, 980
(8th Cir. 2011) (“[T]he right to enforce a mortgage through foreclosure by advertisement lies with
the legal, rather than equitable, holder of the mortgage. The assignment of the promissory note
to another operates as an equitable assignment of the underlying mortgage, but the right to
enforce the mortgage remains with the legal holder of the mortgage.” (internal quotation marks
omitted)).
2

Because the Court finds that Ko is not entitled to a temporary restraining order, it need
not determine whether such injunctive relief would run afoul of the Anti-Injunction Act, 28
U.S.C. § 2283.

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