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JEFFREY A. SILVESTRI, ESQ. Nevada Bar I.D. No. 5779 RYAN J. WORKS, ESQ. Nevada Bar I.D. No. 9224 MCDONALD CARANO WILSON LLP 2300 West Sahara Avenue Suite 1000 Las Vegas, NV 89102 Tel: 702-873-4100 jsiIvestri(d,rncdonaIdcarano.com rworks(drncdonadcarano.com
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K. ISSAC DEVYVER, ESQ. (pro hac vice pending) REED SMITH LLP 225 Fifth Avenue Pittsburgh, PA 15222 Tel: (412) 288.3131 kdevyverQre.cdsniith.corn Attorneyfor Creditor/Appellant Mortgage Electronic Registration Systems, Inc.
UNITED STATES DISTRICT COURT DISTRICT OF NEVADA In re: LISA MARIE CHONG, Debtor. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Case No. 2:09-cv-0661-KJD-LRL Appellant,
V.

Bankruptcy Case No. BK-S-07-16645-LBR Appellate Ref. No.: 09-000 10

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16 17 18 19 20 21 22 23 24 25 26 27 28 v.

LISA MARIE CHONG, Appellee. In re: JOSHUA SCOTT MITCHELL and STEPHANIE JUDITH MITCHELL a/kla STEPHANIE JUDITH CABRAL, Debtors. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, 1NC., Case No. 2:09-cv-0668-JCM-RJJ Appellant, Bankruptcy Case No. BK-S-07-16226-LBR Appellate Ref. No.: 09-00018

JOSHUA SCOTT MITCHELL and STEPHANIE JUDITH MITCHELL a/k/a STEPHANIE JUDITH CABRAL, Appellees.

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In re: BARRY ALLEN TRAYNOR and LARALEE M. TRAYNOR, Debtors.

Bankruptcy Case No. BK-S-07-18851-LBR Appellate Ref. No.: 09-000 16

3 4
5 MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Appellant, v. BARRY ALLEN TRAYNOR and LARALEE M. TRAYNOR, Appellees. Case No.2: 09-cv-0669-LDG-PAL

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7 8

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In re: SHEILA MEDINA a/k/a SHEILA GOGGIN, Debtor. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Appellant,
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Bankruptcy Case No. BK-S-08-12206-BAM Appellate Ref. No.: 09-000 17 Case No. 2:09-cv-0670-KJD-GWF

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SHEILA MEDINA a/k/a SHEILA GOGGIN, Appellee

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In re:ROBERT THOMAS ATKERSON and DAWN NICOLE ATKERSON, Debtor. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Appellant,
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Bankruptcy Case No. BK-S-08-1 1608-BAM Appellate Ref. No.: 09-000 1 1 Case No. 2:09-cv-0673-RCJ-GWF

ROBERT THOMAS ATKERSON and DAWN NICOLE ATKERSON, Appellee. In re: WILLIAM JAY ZEIGLER and DAWN M. ZEIGLER, Debtor. Bankruptcy Case No. BK-S-08-10718-MKN Appellate Ref. No.: 09-000 12

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MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Appellant,

Case No. 2:09-cv-0676-RLH-PAL

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WILLIAM JAY ZEIGLER and DAWN M. ZEIGLER, Appellee. In re: PETER C. ALTMANN, JR., Debtor. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Appellant, Bankruptcy Case No. BK-S-08-10108-LBR Appellate Ref. No.: 09-00013 Case No. 2:09-cv-0677-JCM-LRL

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PETER C. ALTMANN, JR., Appellee.

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In re: SURJIT SAMRA, Debtor. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Appellant,

Bankruptcy Case No. BK-S-08-17506-MKN Appellate Ref. No.: 09-000 19 Case No. 2:09-cv-0683-RLH-RJJ

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v. SURJIT SAMRA, Appellee. In re: JOSE ANG AND DIVINA ANG, Debtor. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Appellant, v. JOSE ANG AND DIVINA ANG, Appellee.

Bankruptcy Case No. BK-S-08-1 1860-LBR Appellate Ref. No.: 09-0002 1 Case No. 2:09-cv-0684-LDG-GWF

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1 2 3 4

In re: GUILLERMINA CORTES, Debtor. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, flC., Appellant,

Bankruptcy Case No. BK-S-08-17344-MKN Appellate Ref. No.: 09-00022 Case No. 2:09-cv-0685-KJD-RJJ

5
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6 GUILLERMTNA CORTES, 7 Appellee. 8 In re: ELDRIDGE JOSEPH DUFAUCHARD, 9 Debtor. 10

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Bankruptcy Case No. BK-S-07-16519-MKN Appellate Ref. No.: 09-00007 Case No. 2:09-cv-0691-JCM-LRL

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MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, TNC., Appellant,

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ELDRIDGE JOSEPH DUFAUCHARD, Appellee. In re: MICHELE DART, Debtor. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Appellant,
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Bankruptcy Case No. BK-S-08-017344-MKN Appellate Ref. No.: 09-0006 Case No. 2:09-cv-00873-KJD-GWF

MICHELE DART, Appellee. In re: ADAM J. BREEDEN, Debtor. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Appellant,
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Bankruptcy Case No. BK-S-07-17577-LBR Appellate Ref. No.: 09-0008 Case No. 2:09-cv-00874-LDG-LRL

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ADAM J. BREEDEN, Appellee. In re: JEFFREY PILATICH, Debtor. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Appellant,
V.

Bankruptcy Case No. BK-S-07-17182-MKN Appellate Ref. No.: 09-00023 Case No. 2:09-cv-00888-KJD-GWF

8 JEFFREY PILATICH, 9 10 Appellee. In re: KATHLEEN ODELL, Debtor. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, [NC., Appellant,
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Bankruptcy Case No. BK-S-08- 1691 3-MKN Appellate Ref. No.: 09-0020 Case No. 2:09-cv-00889-KJD-PAL

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KATHLEEN ODELL, Appellee. In re: ROBERT A. BEALER and CASSANDRA N. BEALER, Debtor. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, [NC., Appellant, Bankruptcy Case No. BK-S-08-10052-MKN Appellate Ref. No.: 09-000 15 Case No. 2:09-cv-0890-PMP-PAL

ROBERT A. BEALER and CASSANDRA N. BEALER, Appellee. In re: DEAN MAURER Debtor. Bankruptcy Case No. BK-S-06-12287-BAM Appellate Ref. No.: 09-000 14

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MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Appellant,

Case No. 2:09-cv-00891-JCM-GWF

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4 DEAN MAURER, 5 Appellee. 6 7 8 9 10

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In re: LONNIE EARL HAWKINS AND LISA WILLETT HAWKINS, Debtors. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., Appellant,
V.

Bankruptcy Case No. BK-S-07- 1 3593-LBR Appellate Ref. No.: 09-0009 Case No. 2:09-cv-00892-KJD-GWF

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LONNIE EARL HAWKINS AND LISA WILLETT HAWKINS, Appellees. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.S OPPOSITION BRIEF TO BRIEF OF AMICI CURIAE

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1 2 3 SUMMARY OF ARGUMENT ARGUMENT A. 6

TABLE OF CONTENTS PAGE 1 2 The Amicis Arguments For Affirmance Should Be Rejected 1. The Amici Have Pointed To No Authority To Support Their Argument That MERS Lacked Standing To Seek Relief From Stay And Was Not A Real Party In Interest In Dart And Zeigler, When It Was The Note Holder And Beneficiary The Amici Have Cited No Authority To Support A Finding That MERS Was Not The Beneficiary Of The Deeds Of Trust, And In Fact Ignore Substantial Authority From This Court That MERS Is The Beneficiary MERS Need Not Establish An Agency Relationship To File A Motion For Relief From Stay When It Is The Note Holder And Beneficiary Ms. Mechs And Ms. Kranzs Affidavits Should Have Been Considered By The Bankruptcy Court 2

8 9 10 11 12 13 4. B. 3 2.

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The Court Should Disregard The Remainder Of The Amicus Brief, Which Is Composed Of Nothing More Than Unfounded Attacks On MERS

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CONCLUSION

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TABLE OF AUTHORITIES 2 3 4 5 6 7 8 9 10 Elias v. HomeEq Servicing, No. 08-1836, 2009 WL481270 (D.Nev. Feb. 25, 2009) InreFitch, No. 04-16905, 2009 Bankr. LEXIS 1375 (Bankr. N.D. Ohio May 28, 2009) In re Hayes (Shapiro v. Matouk),, 322 B.R. 644 (Bankr. E.D. Mich. 2005) InreHill, No. 08-16161, 2009 WL 1956174 (Bankr. D. Ariz. July 6,2009) In re Huggins, 357B.R. 180(Bankr.D.Mass.2006) InreSina, No. A06-200, 2006 WL 2729544 (Minn. Ct. App. Sept. 26, 2006) In re Vargas, 396 B.R. 511 (Bankr. C.D. Cal. 2008) Jackson v. Mortgage Elec. Registration Sys., Inc., 770 N.W.2d 487 (Minn. 2009) Johnson v. MERS,, 252 Fed. Appx. 293 (11th Cir. 2007) Landmark Nat. Bank v. Kesler, 40 Kan. App. 2d 325, 192 P.3d 177 (Kan. Ct. App. 2008), affd, No. 98,489, 2009 WL 2633640 (Kan. Aug. 28, 2009) Landmark Nat. Bank v. Kesler, No. 98,489, 2009 WL 2633640 (Kan. Aug. 28, 2009) Mansour v. Cal- Western Reconveyance Corp., No. 09-37, slip op. (D. Ariz. April 20, 2009) MERS v. Revoredo, 955 So.2d 33 (Fla. Dist. Ct. App. 2007) 7 7 5 3,9 7 7 9,10 11, 12 7 Croce v. Trinity Mortgage Assurance Corp., No. 08-016 12, slip op. (D. Nev. Sept. 28, 2009) Dunlap v. Mortgage. Elec. Registration Sys., No. 08-009 18, slip. op. (D. Nev. Jan. 6, 2009) (Jones, J.) 8 7 CASES Beltran v. MERS, No. 08-1101, slip op. (D. Nev. Jan. 5, 2009) (Jones, J.) PAGE(S) 7

ii 12 13 14 15

16 17 18 19 20 21 22 23 24 25 26 27 28

5, 6, 7 7 7 12-13

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2

MERSCORP, Inc. v. Romaine, 861 N.E.2d 81(2006) Mortgage Elec. Registration Sys., Inc. v. Coakley, 838 N.Y.S.2d 622 (N.Y. App. Div. 2007) Mortgage Elec. Regisfration Sys., Inc. v. Korolizky, 862 N.Y.S.2d 917 (N.Y. App. Div. 2008) Mortgage Elec. Registration 5 Inc. v. Sw. Homes ofArkansas, ys., No. 08-1271, 2009 WL 723182 (Ark. Mar. 19, 2009) Mortgage Elec. Registration Sys., Inc. v. Ventura, No. 054003168, 2006 WL 1230265 (Conn. Super. Ct. Apr. 20, 2006) Neely v. United States, 775 F.2d 1092 (9th Cir. 1985) Orzoffv. Mortgage. Elec. Registration Sys., No. 08-015 12, slip. op. (D. Nev. Mar. 26, 2009) (Jones, J.) Ostad v. Or. Health Scis. Univ., 327 F.3d 876 (9th Cir. 2003) Pfannenstiel v. MERS, No. 08-2609, 2009 WL 347716 (E.D. Cal. Feb. 11,2009) Ramos v. Mortgage Elec. Registration Sys., No. 08-1089, slip. op. (D.Nev. Mar. 5,2009) Smith v. Bank ofNew York, 366 B.R. 149 (Bankr. D. Cob. 2007) Trent v. Mortgage Elec. Registration Sys., Inc., 288 Fed. Appx. 571 (11th Cir. 2008) United States v. Endicott, 803 F.2d 506 (9th Cir. 1986) United States v. Gementera, 379 F.3d 596 (9th Cir. 2004) Vazquez v. Aurora Loan Sens., No. 08-01800, slip op. (D. Nev. April 21, 2009) Vera-Jaramillo v. Mortgage Elec. Registration Sys., No. 08-0 1734 (D. Nev. Mar. 2, 2009) Zango, Inc. v. Kaspersky Lab inc., 563 F.3d 1169 (9th Cir. 2009) STATUTES

11, 12 7 7 5,6, 7 7 5 7 10 7 7 7 7 10 3 7 7 3

14 15 16 17 18 19 20 21 22 23 24 25 26 27 Nev. Rev. Stat. 28

104.3301

3, 10

111

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Nev. Rev. Stat. Nev. Rev. Stat. RULES

107.030(6). 3 107.080(1), (2)

3

Fed. R. Evid. 602

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SUMMARY OF ARGUMENT

Setting aside all of the derogatory and invective language, Amici The Center for Responsible Lending and the National Association of Consumer Bankruptcy Attorneys (the

Amici) make only four arguments that are pertinent to this appeal. None has any merit.
5

First, the Amici contend that the Bankruptcy Court correctly denied MERS motions for relief from stay in In re Dart and In re Zeigler because MERS lacked standing and was not a

8 9

real party in interest. The basis for their argument is that MERS did not have a financial interest in the loans. The Amid do not cite any authority to support their argument, and indeed cannot, because that is not the law. A party who holds the promissory note and is the beneficiary of the deed of trust may seek relief from stay because that is the party entitled to enforce the note obligation and foreclose upon the property. In Dart and Zeigler, MERS

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provided the Bankruptcy Court with uncontroverted evidence that it was the note holder and beneficiary. Thus, contrary to the Amicis argument, MERS was the proper party to seek relief from stay. It would be error to hold otherwise. Second, the Amici cite authority which they contend supports the Bankruptcy Court s
... .

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conclusion that MERS was not the beneficiary of the deeds of trust at issue. However, the Amicis authority, which is from two state courts and is based on state law, is not on point and does not address the issue of MERS right to serve as beneficiary. Moreover, the Amici ignore substantial authority from this Court, including a decision directly on point issued barely a week ago, holding that MERS may be the beneficiary of a deed of trust. Third, the Amici contend that the Bankruptcy Court properly denied MERS motions for relief from stay in Dart and Zeigler because MERS failed to demonstrate an agency relationship with the current owner of the note. Since MERS was the note holder and beneficiary in Dart and Zeigler, it did not need to establish an agency relationship.

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Finally, the Amici urge this Court to affirm the Bankruptcy Courts exclusion of the affidavit testimony of Cynthia Mech and Stacy Kranz, the two MERS corporate officers who testified that MERS was the note holder at the time it filed the motions for relief from stay in

Dart and Zeigler. The Amici contend that the affidavits constitute shoddy evidence because
5

they fail to provide each and every factual detail regarding the basis of Ms. Mechs and Ms. Kranzs testimony. The affidavits themselves undermine the Amids argument because they

specifically state that MERS was in physical possession of the notes at the time the motions were filed, and state the factual basis for Ms. Mechs and Ms. Kranzs personal knowledge regarding that testimony. Nothing more is needed under the law.

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For these reasons, which are set forth in detail below, the Court should reject the Amicis arguments and reverse the Bankruptcy Court.

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15 A.

ARGUMENT The Amids Arguments For Affirmance Should Be Rejected.

. .

16 17
18 1.

The Amici Have Pointed To No Authority To Support Their Argument That MERS Lacked Standing To Seek Relief From Stay And Was Not A Real Party In Interest In Dart And Zeigler, When It Was The Note Holder And Beneficiary.

19 In their Brief, the Amici challenge MERS right to seek relief from stay in In re Dart and 20 21 22 23 24
25 In re Zeigler, those cases in which MERS was the note holder and beneficiary of the deed of

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1 trust. The Amicis argument that MERS does not have standing and is not a real party in interest is based solely on the fact that MERS is the beneficiary as nominee for the lender (and its successors and assigns) and not the lender itself. Amicus Brief at pp. 6-11. According to the

4 Amici, MERS did not have a financial interest in the loans and, accordingly, was not the
5

proper party to bring a motion for relief from stay. Id. The law is clear: A party who holds the promissory note and is the beneficiary of the

deed of trust has standing to file a motion for relief from stay and is a real party in interest. In re Hill, No. 08-16161, 2009 WL 1956174, at *34 (Bankr. D. Ariz. July 6, 2009) (finding that the note holder and beneficiary had standing to bring motion for relief from stay and was a real

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party in interest).

The reason is that the note holder, as the party entitled to enforce the

instrument, is the party under Nevada law entitled to enforce the right being asserted. Id. See N.R.S.

104.3301 (the holder of an instrument is entitled to enforce it). Further, Nevada

foreclosure statutes grant the beneficiary of a deed of trust the power to foreclose. N.R.S. 107.080(1), (2) (conferring power of sale upon beneficiary of deed of trust); see also N.R.S.

16 17

107.030(6) (uniform covenant granting beneficiary the power of sale). The Amici do not cite a single case in which a court found that a party who was the note holder and beneficiary did not

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have standing to bring a motion for relief from stay. It would be error for the Court to make such a finding here. As the Court is well aware, MERS has not raised any issues in this appeal concerning the Bankruptcy Courts denial of the motions for relief from stay in the remaining consolidated cases on standing or real party in interest grounds. While MERS argued to the Bankruptcy Court that it could properly seek relief from stay in those cases in which it was not the note holder because it was acting as the agent of the note holder, MERS has chosen not to pursue that argument on this appeal because it is not consistent with MERS own procedures when filing such motions. To the extent that the Amici are arguing that MERS lacked standing and was not a real party in interest in those sixteen cases, the Court cannot and should not consider those arguments because MERS has not raised them as issues in this appeal. Zango, Inc. v. Kaspersky Lab, Inc., 568 F.3d 1169, 1177 n.8 (9th Cir. 2009) (An amicus curiae generally cannot raise new arguments on appeal.) (citing United States v. Gementera, 379 F.3d 596, 60708 (9th Cir. 2004)). -31

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Presumably in recognition of the fact that there is no legal authority to support their standing argument, the Amici go on to argue that MERS was not the note holder because it was not in physical possession of the note. Amicus Brief at pp. 10-11. The Amicis argument,

4 however, is nothing more than a red herring, which has no legal basis or factual support in the 5 6 record. As set forth in MERS Consolidated Brief, MERS passes corporate resolutions 8 designating one or more employees of each MERS Member as corporate officers of MERS, known as Certifying Officers. August 5, 2008 Declaration of William Hultman (Huitman Decl. (8/5/08)) at 6 (Appx. 426); Rules of Membership, Rule 3, Section 3(a) (Appx. 458-59). C

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That corporate resolution makes the Members employee a MERS corporate officer with the right to act for MERS in certain designated capacities. Pertinent here, the Certifying Officer has the authority to take possession of the promissory note as a MERS corporate officer on MERS behalf. Hultman Decl. (8/5/08) at 6 (Appx. 426-27); Rules of Membership, Rule 3,

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Section 3(a) (Appx. 45 8-59). That is exactly what happened here, as the record evidence shows. MERS passed

specific corporate resolutions making Ms. Mech and Ms. Kranz Certifying Officers. June 2, 2008 Affidavit of Cynthia Mech (Mech Aff. (6/2/08)), 2 (Appx. 262); June 2, 2008 Affidavit

20 21 22 23 24 25 26 27 28 -4of Stacy Kranz (Kranz Aff. (6/2/08)), 2 (Appx. 283). And Ms. Mech and Ms. Kranz

testified by affidavit that they were in physical possession of the Dart and Zeigler notes, as MERS Certifying Officers, prior to MERS filing the motions for relief from stay in Dart and Zeigler. Mech Affidavit (6/2/08), 7 (Appx. 263); August 5, 2008 Affidavit of Cynthia Mech (Mech Aff. (8/5/08)), 4 (Appx. 631); Kranz Affidavit (6/2/08), 7 (Appx. 284); August 18, 2008 Affidavit of Stacy Kranz (Kranz Aff. (8/18/08)), 4 (Appx. 647).

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The Amici have not disputed any of these facts and, indeed, they concede them. Amicus Brief at p. 10. They argue instead that the Court should ignore all of these record facts because, in their words, the use of Certifying Officers is a sham. Id. at p. 11. However, the

Amici once again have no evidence or authority to support their argument. They cite no record
5

evidence to undermine Ms. Mechs and Ms. Kranzs testimony that they were MERS corporate officers. Moreover, the Amicis legal authority is not on point. The first case, Neely v. United

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States, 775 F.2d 1092, 1094-95 (9th Cir. 1985), concerned the plaintiffs attempts to transfer

assets into a family trust to avoid tax consequences and the court setting aside those transfers as sham transactions. In the second case, Shapiro v. Matouk (In re Hayes), 322 B.R. 644, 647-48 (Bankr. E.D. Mich. 2005), the court found that a debtor made fraudulent conveyances of property intended to avoid liquidation of that property in bankruptcy. Neither of these cases, nor any other authority, prevents MERS from lawfully designating a corporate officer to take physical possession of a promissory note so that MERS may seek relief from stay. For these reasons, the Court should reject the Amicis argument that MERS lacked standing to file the motions for relief from stay and was not a real party in interest in Dart and
Zeigler, and should reverse the Bankruptcy Court. 2. The Amid Have Cited No Authority To Support A Finding That MERS Was Not The Beneficiary Of The Deeds Of Trust, And In Fact Ignore Substantial Authority From This Court That MERS Is The Beneficiary.

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The Amici do not specifically argue that the Bankruptcy Court correctly found that MERS could not be the beneficiary of the deeds of trust in the consolidated cases. However, the Amici do accuse MERS of ignoring two cases, Mortgage Elec. Regisfration Sys., Inc. v. Sw.
Homes ofArk., No. 08-1271, 2009 WL 723182 (Ark. Mar. 19, 2009) and LandmarkNatl Bank v. Kesler, 192 P.3d 177 (Kan. App. Ct. 2008), affd, No. 98,489, 2009 WL 2633640 (Kan. Aug.

28, 2009), which they characterize as contradicting MERS argument that it was the beneficiary. 28 -5-

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Amicus Brief at pp. 8-9. These cases, which have almost identical facts to one another, did not address any of the issues that are before this Court. To the extent that the Amici are urging affirmance of the Bankruptcy Court on this issue based on those cases, that argument should be

4 rejected.
5

In both Homes of Ark. and Landmark, a judgment was entered on a property in which MERS had an interest as the beneficiary of the deed of trust (as nominee for the lender and its

successors and assigns). Homes ofArk., 2009 WL 723182, at *1; Landmark, 192 P.3d at 17879. Despite its interest, MERS did not receive notice of a lawsuit that led to an entry of judgment on the property until after the judgment was entered. Homes of Ark., 2009 WL

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723182, at *1; Landmark, 192 P.3d at 179. The issue in the cases was whether MERS was entitled under applicable state law to have the judgment set aside and to intervene as a necessary party based on its beneficiary status. The courts in both cases wrongly concluded that MERS was not a necessary party to the action because it was only the lenders agent. 2
Homes ofArk., 2009 WL 723182, at *2..3; LandmarkNatl Bank, 192 P.3d at 180-82.

These cases do not undermine MERS position that it is the beneficiary of the deeds of trust at issue in this appeal. Neither the Arkansas Supreme Court nor the Kansas Court of Appeal was addressing the issue of whether MERS was the beneficiary. Rather, in both cases, the courts were analyzing whether MERS was a necessary party to the action. To the extent that the courts made any statements about MERS status as beneficiary, it was in that context and was not a finding that MERS cannot be a beneficiary. Indeed, the court in Landmark specifically noted that it was only ruling on whether the trial court erred and not attempt[ing]
. . . .

to determine all of the rights or duties of MERS as a nominee mortgagee. Landmark, 192

These cases were wrongly decided. MERS correctly argued in both cases that it was entitled to set aside the judgment and intervene in the case because it held legal title to the property and, therefore was a necessary and interested party. Homes ofArk., 2009 WL 723182, at *2 (discussing MERS argument); Landmark, 192 P.3d at 179-82 (same). -6-

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P.3d at 18l. These cases provide this Court with no guidance on the issue of whether MERS is the beneficiary of the deeds of trust at issue. Even if Homes ofArk. and Landmark were on point, those decisions, which were based

4 on Arkansas and Kansas state law, respectively, would be inconsistent with Nevada law. 5 6 Indeed, this Court has issued decision after decision finding that MERS was the beneficiary of 4 the deed of trust. See, e.g., Vazquez v. Aurora Loan Servs., No. 08-01800, slip. op. at 2-3 (D. 8 9 10 0 Nev. April 21, 2009) (Jones, J.) (Appx. 2004-05); Orzoff v. Mortgage. Elec. Registration Sys., No. 08-015 12, slip. op. at 9-10 (D. Nev. Mar. 26, 2009) (Jones, J.) (Supp. Appx. 11-12); Ramos v. Mortgage Elec. Registration Sys., No. 08-1089, slip. op. (D. Nev. Mar. 5, 2009) (Reed, J.) (Appx. 1992-93); Vera-Jaramillo v. Mortgage Elec. Registration Sys., No. 08-01734 (D. Nev. Mar. 2, 2009) (Hunt, C.J.), slip. op. at 2 (Appx. 2008); Elias v. HomeEq Servicing, No. 0813 14 15 16 17 1836, 2009 WL 481270, at *1 (D. Nev. Feb. 25, 2009) (Mahan, J.); Dunlap v. Mortgage. Elec. Registration Sys., No. 08-00918, slip. op. at 1 (D. Nev. Jan. 6,2009) (Jones, J.) (Supp. Appx. 1); Beltran v. MERS, No. 08-1 101, slip op. (D. Nev. Jan. 5, 2009) (Jones, J.) (Second Supp. Appx. 3 1-32). The Amici have ignored all of these cases. The Kansas Supreme Court likewise limited its holding to whether the trial court abused its direction based on the specific facts of the case. LandmarkNatl Bank v. Kesler, No. 98,489, 2009 WL 2633640, at *11 (Kan. Aug. 28, 2009) (Even if MERS was technically entitled to notice and service in the initial foreclosure action an issue that we do not decide at this time we are not compelled to conclude that the trial court abused its discretion in denying the motions to vacate default judgment and require joinder of MERS[.]) (emphasis added)
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On this point, Nevada law is consistent with the vast majority of courts which have found that MERS may be the beneficiary of the deed of trust or mortgagee of the mortgage. See, e.g., Trent v. Mortgage Elec. Registration Sys., Inc., 288 Fed. Appx. 571, 572 (11th Cir. 2008); Johnson v. MERS, 252 Fed. Appx. 293 (11th Cir. 2007); Mansour v. Cal-Western Reconveyance Corp., No. 09-37, slip. op. at 2-3 (D. Ariz. April 20, 2009) (Appx. 198 1-82); Pfannenstiel v. MERS, No. 08-2609, 2009 WL 347716, at *3.4 (E.D. Cal. Feb. 11, 2009); In re Fitch, No. 04-16905, 2009 Bankr. LEXIS 1375, at *7*8 (Bankr. N.D. Ohio May 28, 2009); Smith v. Bank ofNew York, 366 B.R. 149, 151 (Bankr. D. Cob. 2007); In re Huggins, 357 B.R. 180, 184-85 (Bankr. D. Mass. 2006); In re Sina, No. A06-200, 2006 WL 2729544, at *2 (Minn. Ct. App. Sept. 26, 2006); Mortgage Elec. Registration Sys. v. Coakley, 838 N.Y.S.2d 622, 623 (N.Y. App. Div. 2007); Mortgage Elec. Registration Sys. v. Korolizky, 862 N.Y.S.2d 917, 918 (N.Y. App. Div. 2008); Mortgage Elec. Registration Sys. v. Ventura, No. 054003168, 2006 WL 1230265, at *1 (Conn. Super. Ct. 2006). -7-

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Indeed, barely one week ago, and consistent with the decisions cited above, this Court once again found that MERS was the beneficiary. In Croce v. Trinity Mortgage Assurance Corp., the plaintiffs brought a claim against their lender, Trinity Mortgage, and MERS, as

beneficiary-nominee for Trinity Mortgage and its successors and assigns, arising from a
5

foreclosure action on their property. No. 08-01612, slip op. at 1-2 (D. Nev. Sept. 28, 2009) (Dawson, J.) (Second Supp. Appx. 33-34). Pertinent here, the plaintiffs sought a declaration

from this Court that MERS did not have standing as a beneficiary under the promissory note and deed of trust and, therefore, was not authorized to participate in the foreclosure proceeding.

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Id. at 5 (Second Supp. Appx. 37). The plaintiffs also contended that MERS had engaged in

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fraud by representing to them that it was the beneficiary of the deed of trust when it was not.
Id. at 6 (Second Supp. Appx. 38).

With respect to the plaintiffs claim for declaratory relief this Court found that the plaintiffs have cited no authority that is controlling upon this Court that holds that MERS cannot have standing as nominee beneficiary in connection with a nonjudicial foreclosure proceeding under Nevada law. This Court has previously determined that MERS does have such standing. Id. at 5 (Second Supp. Appx. 37) (emphasis in original) (collecting authorities). As for the fraud claim, this Court found that the plaintiffs had failed to allege a false or
. . . . . .

19 20 21 22 23 24 25 26 27 28 -8misleading statement since MERS was, in fact, the beneficiary under the Deed of Trust. Id. at 6 (Second Supp. Appx. 38). Accordingly, this Court dismissed both claims. Based on Croce and the other cases cited above, there can be no genuine dispute that MERS may be the beneficiary of a deed of trust under Nevada law. As set forth in MERS Brief, the Bankruptcy Court erred when it held otherwise and should be reversed. To the extent the Amici urge a different result, their arguments should be rejected.

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MERS Need Not Establish An Agency Relationship To File A Motion For Relief From Stay When It Is The Note Holder and Beneficiary.

The Amici additionally argue that even if MERS could properly bring a motion for relief from stay (which it is unequivocally permitted to do when it is the note holder and beneficiary), MERS is not entitled to seek relief from stay unless it establishes that it has been appointed the agent for the current owner of the note. Amicus Brief at 12. Like the Amicis other arguments, this one is also not supported by any law.

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With respect to Dart and Zeigler, MERS had no need to establi 5 sh an agency relationship because it was seeking relief from stay as note holder and beneficiary. In re Hill, 2009 WL 1956174, at *4 (finding that the note holder and benefic iary has standing to bring motion for relief from stay and was a real party in interest). The only authority cited by the Amici to support their agency argument, In re Vargas, 396 B.R. 511 (Bankr. C.D. Cal. 2008), does not require a different conclusion.
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In In re Vargas, MERS filed a motion for relief from stay as benefic iary of the deed of trust; MERS was not the note holder. The court (incorrectly) denied MERS motion because it found that MERS did not present sufficient evidence to establish an agency relationship with the note holder. Id. at 5 16-17, 520. In re Vargas has no bearing on the issues before the Court here because MERS was the note holder in Dart and Zeigler and did not need to establish an agency relationship to bring the motions for relief from stay.

As set forth supra in note 1, MERS has not raised any issue on this appeal concerning the denial of the motions for relief from stay on standing or real party in interes t grounds in the sixteen cases in which MERS was not the note holder. Nevertheless, the Amici (and the Trustee) seem intent on pressing an agency argument concerning MERS right to seek relief from stay when it is solely the beneficiary of the deed of trust. Because MERS has not raised any such assignment of error, this Court need not and should not address the Amicis (or the Trustees) agency argument. -9-

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Moreover, In re Vargas supports a finding that MERS has standing to seek relief from stay in Dart and Zeigler. The court in In re Vargas held that under California law the note holder is entitled to enforce it and seek relief from stay. Id. at 520. Nevada law likewise

provides the note holder with the right to enforce the instrument. N.R.S.
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104.330 1 (the holder

of an instrument is entitled to enforce it). Thus, where, as here, the party seeking relief from stay is the note holder, In re Vargas supports a finding that the note holder is a real party in

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interest with standing to seek relief from stay.

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4.

Ms. Mechs And Ms. Kranzs Affidavits Should Have Been Considered By The Bankruptcy Court.

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The final argument that the Amici raise with respect to MERS assignments of error is that the Bankruptcy Court was correct to exclude the affidavits of Ms. Mech and Ms. Kranz because the evidence was shoddy. Amicus Brief at pp. 17-18. Specifically, the Amici

contend that the affidavits were insufficient because they failed to state that the notes were present in the files when MERS filed the motions for relief from stay and do not explain exactly how Ms. Mech and Ms. Kranz learned the notes were in the files. Id. at 19. The Amicis arguments, however, are undermined by the affidavits themselves. Ms. Mechs and Ms. Kranzs affidavits specifically state that, based upon personal knowledge and review of the debtors loan files, MERS was in physical possession of the original notes at the time it filed the motions for relief from stay. Mech Aff. (8/5/08), 4 (Appx. 631); Mech Aff. (8/12/08), 4 (Appx. 1580); Kranz Aff. (8/18/08), 4 (Appx. 647); Kranz Aff. (8/5/08), 4 (Appx. 629). That is all that is required. Personal knowledge may be established using the witnesss own testimony. Fed. R. Evid. 602; United States v. Endicott, 803 F.2d 506, 5 11-12 (9th Cir. 1986); Ostad v. Or. Health Scis. Univ., 327 F.3d 876, 885-86 (9th Cir. 2003). The Amici have cited no authority requiring that an affiant must disclose every detail underlying the

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statements made in an affidavit; rather, the statements must based upon personal knowledge, which has been established here.
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B.

The Court Should Disregard The Remainder Of The Amicus Brief, Which Is Composed Of Nothing More Than Unfounded Attacks On MERS.

5 6 The balance of the Amicus Brief is composed of nothing more than attacks on MERS. The Amici argue that MERS improperly hides information from borrowers and blocks 8 9 10 O borrowers attempts to assert legal defenses. Amicus Brief at pp. 13-14, 16-17. The Amici make these unfounded and false accusations without a single citation to any record evidence. The Amici do not point to any evidence showing that these borrowers asked MERS for any information about their loans; that MERS refused to provide information; that MERS improperly hid information; that any of the borrowers were victims of predatory lending or fraud; or that MERS or the MERS System prevented them from asserting any legal defense or right. None of these issues were even raised in the Bankruptcy Court. The Amici try to make up for their lack of evidence of any wrongdoing by MERS by
relying on other cases, including Jackson v. Mortgage Elec. Registration Sys. and MERSCORP, Inc. v. Romaine, and use vague descriptions suggesting that those courts have concluded that
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MERS is harmful to borrowers. 20 21 22 23 24 25 26 27 28

However, neither the Jackson Court nor the Romaine

concurrence made any such finding. The Amici do nothing more than cite dicta from these cases out of context. And, in fact, both Jackson and Romaine support reversal of the

Bankruptcy Court in this case.

Without any evidentiary basis, the Amici attempt to compare this case to other bankruptcy cases involving motions for relief from stay where affiants were found to have made misrepresentations to the court or in which the court imposed sanctions for other misconduct. Amicus Brief at pp. 19-20. There has been no allegation here that Ms. Mech or Ms. Kranz made any false statements or misrepresentations in their affidavits, nor is there any record evidence to support a finding. The Amicis efforts to taint Ms. Mechs and Ms. Kranzs testimony by alleging that the testimony is false or improper, without any evidentiary support, should be rejected by the Court. -11-

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In Jackson, the Minnesota Supreme Court found that MERS has the authority under Minnesota statutory law to foreclose by advertisement as mortgagee of record for a lender (and its successors and assigns) even if the promissory note is transferred among MERS members.

4 Jackson, 770 N.W.2d 487, 500-0 1 (Minn. 2009). The Minnesota Supreme Court specifically 5 6 found that MERS may be the mortgagee and may bring a foreclosure action even when it is not the note holder: Our case law establishes that a party can hold legal title to the security 8 instrument without holding an interest in the promissory note. Id. Thus, Jackson supports a reversal of the Bankruptcy Court on the issue of whether MERS may be a beneficiary under a deed of trust. 0

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CI)

The same is true of Romaine. In that case, the issue before the court was whether the county clerk was required to record and index mortgages and mortgage assignments and discharges in the name of MERS as mortgagee as nominee for the lender and its successors and assigns. Romaine, 861 N.E.2d 81, 82 (N.Y. Ct. App. 2006). In finding that the county clerk was required to record mortgage documents in MERS name, the Romaine Court specifically rejected the argument advanced by the Amici here: that MERS cannot be a mortgagee (or beneficiary) because lender. Id. at 83. Moreover, other courts have specifically found that MERS is not an impairment to borrowers. In MERS v. Revoredo, after holding that MERS had standing to bring a foreclosure action as mortgagee, the Florida Court of Appeals reached the opposite conclusion that the Amici are pressing here: To the extent that courts have encountered difficulties with the question [of where MERS has standing to bring a foreclosure action], and have even ruled to the contrary of our conclusion, the problem arises from the difficulty of attempting to shoehorn a modern innovative instrument of commerce into nomenclature and legal categories which stem essentially from the medieval English land law. Because, however, it is apparent and we so hold that no
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it

has no interest in the property or loan when

it

is acting nominee for the

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substantive rights, obligations or defenses are affected by the use of the MERS device, there is no reason why mere form should overcome the salutary substance of permitting the use of this commercially effective means of business. 955 So. 2d 33, 34 (Fla. Dist. Ct. App. 2007) (emphasis added) (citations omitted). There is no evidence that MERS or the use of the MERS System harmed the borrowers in this case in any way or impaired their rights. The Court should reject the Amicis attacks on MERS and should instead focus on the legal arguments at issue here. arguments favor a reversal of the Bankruptcy Court. Those

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CONCLUSION

The Bankruptcy Court erred as a matter of law when it found that MERS was not the beneficiary of the deeds of trust in the consolidated cases and when it denied MERS motions

4 for relief from stay in Dart and Zeigler. The Amici have cited no legal authority or record 5 6 evidence that should lead the Court to a different conclusion. Accordingly, this Court should reverse the Bankruptcy Court. 8 9 10 Z ii 12 13 14 15 16 iE 17 18 19 20 21 22 23 24 25 26 27 28
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RESPECTFULLY SUBMITTED this

th 6

day of October, 2009.

MCDONALD CARANO WILSON LLP

s/ Jeffrey A. Silvestri JEFFREY A. SILVESTRI, ESQ. (NV # 5779) RYAN J. WORKS, ESQ. (NV #9224) 2300 West Sahara Avenue Suite 1000 Las Vegas, NV 89102

K. ISSAC DEVYVER, ESQ. (pro hac vice admission pending) REED SMITH LLP 225 FifthAvenue Pittsburgh, PA 15222 Attorneyfor Creditor/Appellant Mortgage Electronic Registration Systems, Inc.

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CERTIFICATE OF SERVICE I hereby certify that I am an employee of McDonald Carano Wilson LLP and that on the 6th day of October, 2009, a true and correct copy of the foregoing MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.S OPPOSITION BRIEF TO BRIEF OF AMICI CURIAE was served on the parties to this appeal through electronic transmission of the Notice of Electronic Filing, which constitutes service of a document on Filing Users under the Courts Electronic Filing Procedures to all parties to this appeal who are Filing Users of the Electronic Filing System of the United States District Court for the District of Nevada. On October 6, 2009, copies were also served via U.S. Mail, postage prepaid, upon the following parties: U. S. Trustee 300 5. Las Vegas Blvd, Ste. 4300 Las Vegas, NV 89101 Steven A. Alpert Price Law Group 1350 E. Flamingo, Ste. 15A Las Vegas, NV 89119 Lenard E. Schwartzer 2850 S. Jones Blvd., #1 Las Vegas, NV 89146 Stephanie H. Clement 9960 W. Cheyenne Aye, Ste 190 Las Vegas, NV 89129 Narrah F. Newark Weiss Weiss Newark & Newark 2300 W. Sahara Ave., Ste. 500 Las Vegas, NV 89102 Anthony J. DeLuca 5830 W. Flamingo Road, Ste. 233 Las Vegas, NV 89103 David Kimball th 520 S. 6 Street Las Vegas, NV 89103 Philip K. Goldstein th 609 S. 7 Street Las Vegas,NV 89101

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CD CI)
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Is! Della SamDson An employee of McDonald Carano Wilson LLP

DATED: October 6, 2009

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