Welk, et al. v. Ally Financial,Inc., et al., No. 12-3141 (8th Cir. 2013)
Annotate this CasePlaintiffs, Minnesota homeowners represented by the same counsel, brought thirteen separate claims against defendants, nearly all of which rested on a "show me the note" theory. The district court granted defendants' motion to dismiss nearly all of the claims and sua sponte sanctioned counsel, awarding attorney fees to defendants. The court affirmed, concluding that the district court had diversity jurisdiction as the claims against the sole nondiverse defendant lacked a reasonable basis in fact and law; plaintiffs failed to state a plausible claim for relief sufficient to survive a motion to dismiss; the "show me the note" theory had been repeatedly rejected by the Minnesota Supreme Court and this court applying Minnesota law; and the district court did not abuse its discretion in imposing sanctions against counsel under Rule 11 where, at the very least, counsel had lacked a frivolous basis for appeal.
Court Description: Civil case - Mortgages. District court did not err in dismissing plaintiffs' "show me the note" claims as they have been repeatedly rejected by the Minnesota Supreme Court and federal courts applying Minnesota law; nor did the district court abuse its discretion in imposing Rule 11 sanctions against plaintiffs' counsel on the grounds that the claims were not warranted by existing law or non-frivolous arguments for modifying or reversing existing law and had been brought for an improper purpose.
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