January 23, 2013
Court Dismissed Claim of Violation of the Nevada False Claims Act
In State of Nevada, ex rel. Barrett Bates, et al. v. Mortgage Electronic Registration System, Inc., et al., No. 11-16310 (9th Cir. 2012) (unpublished), the Court of Appeals for the federal court of Nevada affirmed the lower court’s decision to dismiss the plaintiff’s claim.
The plaintiff alleged the defendants violated Nevada’s False Claims Act, which was filed on behalf of the state of Nevada and its counties. To show a violation of the False Claim Act, the plaintiff must prove that the defendant “[k]nowingly makes or uses … a false record or statement to conceal, avoid or decrease an obligation to pay or transmit money or property to the State or a political subdivision.” Nev. Rev. Stat. § 357.040(1)(g). To support his claim, the plaintiff alleged that the lenders made false representations in naming MERS as a beneficiary to the recorded deeds of trust and the notes in order to avoid paying the recording fees in the various counties of Nevada.
However, the court found that the plaintiff failed to successfully state a claim of liability under the statute because he failed to allege that the lenders had an obligation to the Counties to record the assignments and pay the relevant recording fees. Furthermore, the court found that there was no obligation to do so under Nevada law. As a result, the court affirmed the decision to dismiss the claim.