ELESH v MERS, DEUTSCHE BANK | ILL. Dist. Ct. - Borrower can attack the assignment if the assignment is clouding his title (Deutsche Bank couldn't prove it had an interest in the property)

HERBERT ELESH, Plaintiff,

MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. and DEUTSCHE BANK NATIONAL TRUST CO., Defendants.

Case No. 12 C 10355.

United States District Court, N.D. Illinois, Eastern Division.

August 16, 2013.

MEMORANDUM OPINION AND ORDER

MATTHEW F. KENNELLY, District Judge.

Herbert Elesh sued Mortgage Electronic Registration Systems, Inc. (MERS) in state court, seeking to remove a purported cloud on his title to certain property in Arlington Heights, Illinois. MERS removed the case to federal court based on diversity of citizenship. It then moved to dismiss Elesh’s suit on certain grounds. The Court previously ruled on one of MERS’s arguments, concluding that Elesh had failed to join a necessary party, namely Deutsche Bank National Trust Co. See Elesh v. Mortg. Elec. Registration Sys., Inc., No. 12 C 10355, 2013 WL 1687738 (N.D. Ill. Apr. 18, 2013). Elesh then filed an amended complaint naming Deutsche Bank. Deutsche Bank has adopted the remaining arguments in MERS’s motion to dismiss. The Court therefore proceeds to rule on the remainder of MERS’s motion.

EXCERPT:

The Court is also inclined to believe that the right to bring a quiet title action — a right that Elesh, as title holder to the property, clearly enjoys — implies the ability to challenge the validity of instruments that constitute clouds on title.

An action to quiet title in property is an equitable proceeding in which a party seeks to remove a cloud on his title to the property. A cloud on title is the semblance of title, either legal or equitable, appearing in some legal form but which is, in fact, unfounded or which it would be inequitable to enforce. Various forms of documents which appeared valid on their face have been held to constitute clouds on title [including subsequent deeds, recorded mortgages, and forged deeds].

[…]