Commonwealth Prop. Advocates v. Mortgage Elec. Reg. Sys., No. 10-4182 (10th Cir. 2011)
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Plaintiff Commonwealth Property Advocates, LLC, acquired title to three pieces of real property in Utah from three defaulting borrowers. Plaintiff then filed three suits in diversity against various Defendants which held interests in the property, seeking to prevent foreclosure. Plaintiff argued Defendants had no authority to foreclose because the notes in each case had been securitized and sold on the open market. Because the security followed the debt, Plaintiff argued once Defendants sold the security they could not foreclose absent authorization from every investor who had purchased an interest in the securitized note. Defendants in all three cases filed motions to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), and the district court granted those motions. Upon review, the Tenth Circuit found that Plaintiff's diversity jurisdiction claims had no legal basis under Utah law, and as such, the district court properly dismissed all three complaints.
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