United States Court of Appeals

For the Eighth Circuit

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No. 13-2334

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Plymouth County, Iowa, Darin J. Raymond, by and through agent of

lllllllllllllllllllll Plaintiff - Appellant

v.

Merscorp, Inc.; Mortgage Electronic Registration Systems, Inc.; Bank of America

N.A.;BACHomeLoansServicing,LP;CitiMortgage,Inc.;EverHomeMortgageCompany

lllllllllllllllllllll Defendants - Appellees

GMAC-Residential Funding Corporation

lllllllllllllllllllll Defendant

HSBC Bank USA, N.A.; JPMorgan Chase Bank; Chase Home Finance LLC; EMC

Mortgage Corporation; SunTrust Mortgage, Inc.; Wells Fargo Bank, N.A.; Wells

FargoHome Mortgage,Inc.;WMCMortgageCorporation;JohnDoe,Defendants 1-100

lllllllllllllllllllll Defendants - Appellees

Corinthian Mortgage Corporation

lllllllllllllllllllll Defendant

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 Appeal from United States District Court 

for the Northern District of Iowa - Sioux City

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Submitted: September 8, 2014

 Filed: December 19, 2014

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Before RILEY, Chief Judge, COLLOTON and SHEPHERD, Circuit Judges.

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SHEPHERD, Circuit Judge.

Plymouth County, on its own behalf and on behalf of all similarly situated

counties in Iowa, brought suit in state court alleging that Appellees, various loan

originators and servicers (Lenders), deprived the County of revenue by using the

Mortgage Electronic Registration System (MERS) to avoid paying recording fees on

mortgage assignments. The Lenders removed the action to federal court and filed a

motion to dismiss, which the district court granted. Plymouth County appeals, 1

asserting that the district court erred in dismissing the complaint on the merits and in

denying its motion to alter or amend the judgment and for leave to file an amended

complaint. We affirm.

I.

Generally, under Iowa law, mortgages on real property and any subsequent

assignments are recorded with the county recorder in the county where the real

property is located. A fee is paid to the county when mortgages or assignments are

recorded. The introduction of MERS significantly altered the recording process by

establishing a national electronic registry to track mortgages and subsequent

assignments. MERS does not originate, assign, orservice anymortgages, but instead

charges a fee when members record or transfer a mortgage on the registry. Upon

The Honorable Mark W. Bennett, United States District Judge for the

1

Northern District of Iowa. 

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initial recording, mortgages are recorded with the county recorder and MERS

becomes the mortgagee of record. With subsequent transfers, MERS remains the

mortgagee of record in the county property records, but tracks the transfers for

priority purposes on its registry. These transfers are not recorded with the county

recorder in the county where the real property is located. The Lenders in this suit are

alleged to be members of MERS who register and track changes on the mortgages

they maintain in the MERS database or shareholders of MERSCORP. 

Plymouth County initiated this class action in state court against the Lenders

alleging that the Lenders intentionally failed to record mortgage assignments in the

county recorder’s office and failed to pay the accompanying recording fees in

violation of Iowa law. The County brought claims for unjust enrichment and civil

conspiracy and sought declaratory judgment, injunctive relief, and to pierce the

corporate veil. After removing to federal court, the Lendersfiled a motion to dismiss

under Federal Rule of Civil Procedure 12(b)(6). The Lenders also challenged

Plymouth County’s standing to bring the suit.

The district court granted the Lenders’ motion to dismiss, finding that a

determination of whether Iowa’s Recording Act imposed a mandatory recording

requirement resolved all of the claims. Although the County asserted that its

complaint did not allege a mandatory recording requirement, the district court found

this to be “blatantly contrary” to the allegations contained in the complaint. The

district court found that the Iowa Recording Act does not impose a duty to record

mortgages and assignments in the county where the property is located. Because the

district court determined that Iowa law did not impose a mandatory recording

requirement, the court dismissed all of the County’s claims on the basis that they

could not survive in the absence of mandatory recording.

After the district court granted the motion to dismiss, Plymouth County filed

a motion to alter or amend the judgment and for leave to file an amended complaint. 

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Plymouth County argued that reconsideration was necessary because its brief in

opposition to the motion to dismiss requested leave to amend the complaint, and the

district court made no ruling on this request. The district court acknowledged the

oversight and reconsidered the County’s request to amend the complaint. Finding

that allowing the County leave to amend the complaint would be futile because the

otherwise meritless claims could not be saved by amendment, the district court denied

the motion. This appeal followed. 

II.

We first consider whether Plymouth County has standing to bring this suit. 

The Lenders argue that Plymouth County lacks standing because it has suffered no

injury in fact from mortgagees’ use of MERS over the county recorder system. We

review a determination that a party has standing de novo. St. Paul Area Chamber of

Commerce v. Gaertner, 439 F.3d 481, 484 (8th Cir. 2006). A plaintiff has standing

when he suffers a concrete injury, or an “injury in fact.” Urban Contractors Alliance

of St. Louis v. Bi-State Dev. Agency, 531 F.2d 877, 881 (8th Cir. 1976) (internal

quotation marks omitted). “The test of constitutional standing has been variously

expressed as ‘real and immediate injury’ to the plaintiff, ‘a distinct and palpable

injury to himself,’ or ‘injury in fact’. . . . [I]t is fundamental that the plaintiff himself

must have suffered the injury he seeks to redress.” Id. (citations omitted).

The injury Plymouth County has identified is sufficient to support standing. 

The County alleged that the use of MERS to bypass recordation with the county

recorder has deprived the County of fees associated with recordation and interfered

with the County’s duty as the recorder of property records. We believe this is a

sufficient injury in fact to allow the County to maintain an action against the Lenders. 

Further, other courts considering the standing of counties bringing similar claims

have determined that the parties had standing. See Christian Cnty. Clerk v. Mortg.

Elec. Registration Sys., Inc., 515 F. App’x. 451, 454 (6th Cir. 2013) (finding county

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had standing to bring suit against MERS in case interpreting Kentucky law); Fuller

v. Mortg. Elec. Registration Sys., Inc., 888 F.Supp. 2d 1257, 1269-70 (M.D. Fla.

2012) (“Plaintiff has alleged an injury in fact–that the MERS recording system both

usurps his lawful authority to maintain public land records and reduces the amount

of revenue his office receives. In addition, Plaintiff alleges that this ‘non-public

recording’ interferes with the integrity of the public records by misstating that MERS

is the true mortgage holder and rendering the public unable to identify who has the

true mortgage interest in the property. With these allegations, Plaintiff has satisfied

Article III’s standing requirements.”). Because Plymouth County’s loss of fees and

the interference with the recording system are sufficient injuries, we conclude that

Plymouth County has standing to pursue these claims.

III.

We next consider whether the district court erred in dismissing Plymouth

County’s unjust enrichment and civil conspiracy claims and in denying its requests

to pierce the veil and for injunctive and declaratory relief. We review the dismissal

of a complaint for failure to state a claim under Federal Rule of Civil Procedure

12(b)(6) de novo. Botten v. Shorma, 440 F.3d 979, 980 (8th Cir. 2006). Plymouth

County first argues that the Lenders have been unjustly enriched because MERS

allows the Lenders to realize the benefits of the recording system by maintaining

priority without paying the accompanying fee to the County. Plymouth County

asserts that the district court’s dismissal of this claim was in error, claiming not that

there is a duty to record a mortgage under Iowa law, but instead that MERS enjoys

protection afforded by recording mortgage assignments at the expense of the County. 

Our own court has recently held that when state law imposes no duty to record

a mortgage or subsequent assignment, a county cannot successfully state a claim for

unjust enrichment. See Brown v. Mortg. Elec. Registration Sys., Inc., 738 F.3d 926,

934-35 (8th Cir. 2013) (“Because Arkansas law does not impose a duty on assignees

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of real estate mortgages to record those assignments, Brown’s state law unjust

enrichment and ADTPA claims do not state a claim.”). Other courts considering the

issue have also reached the same conclusion. See, e.g., Macon Cnty., Ill. v.

MERSCORP, Inc., 742 F.3d 711, 714 (7th Cir. 2014) (“[Defendants] are not deriving

any benefit from the County’s method, the recording system, beyond the recording

of the mortgage assignments to MERSCORP–for which MERSCORP pays the

County’s fee. Rather, the defendants are bypassing the County’s recording system,

as they are entitled to do because there is no requirement that either the initial

granting of a mortgage or its assignment be recorded, let alone that the assignment

of a promissory note be recorded.”).

The district court determined that Iowa law imposes no duty to record

mortgages orsubsequent assignments, and PlymouthCounty concedesthis point. See

Shoemaker v. Ragland, 211 N.W. 564, 566 (Iowa 1926) (“It istrue we have no statute

which, in express terms, requiresthe recording of assignments of mortgages either of

real or personal property . . . .”); Shoemaker v. Minkler, 211 N.W. 563, 564 (Iowa

1926) (“There is no requirement of statute that mortgage assignments be placed of

record . . . .”). Without a duty to record mortgage assignments under Iowa law,

Plymouth County cannot successfully state a claim for unjust enrichment. The

Lenders have withheld no money which in good conscience belongs to the County

because Iowa law does not require that all mortgagees record their instruments with

the county recorder. See In re Stratman’s Estate, 1 N.W.2d 636, 642 (Iowa 1942)

(explaining that to prevail on an unjust enrichment claim a plaintiff must show that

the “defendant has received money which in equity and good conscience belongs to

plaintiff”). A mortgagee’s decision to record a mortgage assignment with MERS and

pay it the corresponding fee does not result in MERS obtaining payment of money

which belongs to Plymouth County. Because Iowa law does not impose a duty on

assignees to record assignments of real estate mortgages, Plymouth County’s unjust

enrichment claim fails to state a claim upon which relief may be granted. 

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Plymouth County’s remaining claims similarly fail in the absence of a

mandatory recording requirement. The civil conspiracy claimcannot survive without

mandatory recording because “[c]ivil conspiracy is not in itself actionable; rather it

is the acts causing injury undertaken in furtherance of the conspiracy [that] give rise

to the action.” Basic Chems., Inc. v. Benson, 251 N.W.2d 220, 233 (Iowa 1977). 

There is no underlying unlawful conduct to support the claim that the Lenders

engaged in a concerted effort to commit unlawful acts. Plymouth County’s request

to pierce the veil fails because it is a remedy rather than a cause of action. See Tamko

Roofing Prods., Inc. v. Smith Eng’g Co., 450 F.3d 822, 826 n.2 (8th Cir. 2006). The

underlying claims fail because there is no duty to record a mortgage assignment under

Iowa law, providing no basis to seek this remedy. Likewise, Plymouth County’s

request for injunctive relief was properly denied on the basis that injunctive relief is

not appropriate when the underlying claims fail. See Patel v. U.S. Bureau of Prisons,

515 F.3d 807, 813 (8th Cir. 2008). We decline to consider Plymouth County’s

request for declaratory relief because it has abandoned this claim. See Appellant’s

Br. 27 n. 18 (The County “will not press its claim for declaratory relief as pled in its

initial Complaint on this appeal.”). In sum, because Plymouth County’s claims are

dependent upon a mandatory recording requirement, we affirm the district court’s

dismissal of the complaint on the merits. 

V.

We finally consider whether the district court erred in denying Plymouth

County’s motion to amend or alter the judgment and for leave to amend the complaint

under Federal Rule of Civil Procedure 59(e). Generally, we review a district court’s

denial of a motion to amend a complaint for abuse of discretion. Ferguson v. Cape

Girardeau Cnty., 88 F.3d 647, 651 (8th Cir. 1996). But we conduct a de novo review

of the underlying legal conclusion as to whether the proposed amendment to the

complaint would be futile. U.S. ex rel Gaudineer & Comito, L.L.P. v. Iowa, 269 F.3d

932, 936 (8th Cir. 2001). Under Federal Rule of Civil Procedure 15(a), leave to

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amend a complaint should be freely given in order to promote justice. Ferguson, 88

F.3d at 650. But a party is not entitled to amend a complaint without making a

showing thatsuch an amendment would be able to save an otherwise meritless claim. 

Wisdom v. First Midwest Bank, 167 F.3d 402, 409 (8th Cir. 1999). A district court

thus may deny a motion to amend a complaint when such an amendment would be

futile. See id. 

The County alleges that its proposed amended complaint would not be futile

because it removes all reference to Iowa’s Recording Act imposing a duty to record

mortgage assignments, and the district court denied the County’s claims on the basis

that it alleged a mandatory recording requirement. We believe, however, that these

alterations to the original complaint do not rescue the underlying meritless claims. 

Although the proposed amended complaint makes no reference to any violation of a

recording statute or other mandatory recording requirement,the underlying claims are

still premised on the duty to record a mortgage assignment. Plymouth County’s

claims cannot survive in the absence of a mandatory recording requirement, and

altering the language of the complaint does not allow the County to evade this barrier

to stating a claim. Because we believe any amendment to the complaint would have

proved futile, we find that the district court acted within its discretion in denying the

motion to alter or amend. 

VI.

For the foregoing reasons, we find that Plymouth County has standing to

pursue its claims. We further hold that the district court properly dismissed Plymouth

County’s claims for failure to state a claim upon which relief may be granted and

acted within its discretion by denying Plymouth County’s motion to alter or amend

its complaint. The judgment of the district court is affirmed.

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