Opinion ID: 856648
Heading Depth: 2
Heading Rank: 3

Heading: Action to Quiet Title

Text: The Jacksons’ third and final claim is an action to quiet title. This claim is one that the Jacksons’ counsel forthrightly described during oral argument as an attempt to “cut new turf” in Indiana quiet title law. The Jacksons’ arguments are indeed novel, but we are unconvinced that they constitute a valid quiet title action under Indiana law. In Indiana, “[i]n a suit to quiet title, the plaintiff is bound to prove that he was the owner of the land in controversy at the commencement of the action.” Ritz v. Ind. & Ohio R.R., Inc., 632 N.E.2d 769, 772 (Ind. Ct. App. 1994). “The evidence must show title in the plaintiff; it is not sufficient that it shows that the adverse claimant is without title.” Kozanjieff v. Petroff, 19 N.E.2d 563, 565 (Ind. 1939). If the plaintiff is successful, “an action to quiet title . . . cuts off all claims of the unsuccessful party.” Cent. Fed. Sav. & Loan Ass’n v. Cummings, 25 N.E.2d 638, 639 (Ind. 1940). Although there is no pending foreclosure, the Jacksons attempt to construct a quiet title action out of two legal theories that have been used with limited success in other jurisdictions to forestall immediate foreclosure No. 12-3338 11 (but have not yet been raised, so far as we can tell, in Indiana under these precise circumstances): (1) that the bifurcation of the mortgage and the note (in order to package the latter into larger securities) prevents any party from claiming strong enough title to foreclose, see Horvath v. Bank of N.Y., N.A., 641 F.3d 617, 622 (4th Cir. 2011); Cervantes v. Countrywide Home Loans, Inc., 656 F.3d 1034, 1044 (9th Cir. 2011); and (2) that no party could produce the original note, which should be required to properly foreclose, see e.g., In re Marron, 485 B.R. 485, 491 (D. Mass. 2012). To the extent that these theories have legs (a question very much in dispute), they might protect a debtor from foreclosure by a particular party at a particular time. See Cervantes, 656 F.3d at 1044 (describing plaintiffs’ theory of wrongful foreclosure). They do not, however, ”prove that [the plaintiff] was the owner of the land in controversy.” Ritz, 632 N.E.2d at 772. As such, these theories are not sufficient to support a quiet title action in Indiana. See Weathersby v. JPMorgan Chase Bank, N.A., 906 N.E.2d 904, 908-09 (Ind. Ct. App. 2009); Otterman v. Hollingsworth, 214 N.E.2d 189, 192 (Ind. Ct. App. 1966); see also Ind. Code § 32-30-2-15. The Jacksons have not alleged facts that “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. They have referred to a relevant Indiana statute: Ind. Code § 32-30-2-20. They have recited what they describe as factual allegations that are pertinent to a quiet title action in Indiana: that they possess the property, and that they own the property in fee simple. (R. 27-2 at 122-23.) However, “a plaintiff’s obligation to 12 No. 12-3338 provide the grounds of his entitlement to relief requires more than labels and conclusions.” Twombly, 550 U.S. at 555 (internal brackets and quotation marks omitted). “[C]ourts are not bound to accept as true a legal conclusion couched as a factual allegation.” Id. (internal quotation marks omitted). Therefore, we need not credit the Jacksons’ conclusory assertions for purposes of a motion to dismiss. Iqbal, 556 U.S. at 678-79. Moreover, we do not think it is the place of the federal courts to “cut new turf” for Indiana with regard to such a venerable cause of action. Dismissal of this claim by the district court was appropriate.