The recent dismissal of several Mortgage Electronic Registration Systems lawsuits in Washington state proves legal precedent from the bench will ultimately shape which cases are filed against the electronic mortgage registry in the future.

A few years after MERS lawsuits began popping up at courthouses across the nation, judges are now establishing legal standards in jurisdictions, giving attorneys and borrowers more clarity on how far some MERS suits will go.

One of the major cases to move through the system is the Bain v. Metropolitan Mortgage Group case.

In Bain, the Washington State Supreme Court held that MERS cannot be a lawful beneficiary of a deed of trust if the registry lacks real possession of a promissory note.

The case was considered a boon for plaintiffs suing MERS early on.

Yet, the decision contains many nuances—one of which aided MERS in obtaining dismissal of the Peterson v. Citibank MERS suit this week.

In the Peterson case, the first division of the Washington Court of Appeals upheld a lower court's decision to dismiss a consumer protection act claim against MERS. 

The court relied on language from Bain to support the dismissal. In Bain, the Supreme Court in Washington established that in order to pursue a consumer protection violation claim against MERS, a plaintiff must prove all the elements of a CPA claim under Washington state code.

One of those elements is proof that MERS' practices actually caused the plaintiff's injuries.

"[I]n order to plead a valid CPA claim, a plaintiff must also allege facts demonstrating that his or her injuries were caused by the deceptive practice," the appellate court said. The court also cited the state Supreme Court's decision in Bain. The Washington Supreme Court said in Bain that causation in each case depends on facts presented to the court.

 The lower court's dismissal of the Peterson consumer protection complaint was accepted by the appellate court on the grounds that no facts proved MERS actually caused the plaintiff's foreclosure injury.

"It is important to note that the recent Washington Supreme Court's Bain opinion provided very specific criteria that must be met to prove violations of the state’s Consumer Protection Act," MERSCORP vice president of corporate communications Janis Smith said in response to the decision.

"Both the lower court and the appeals court ruled that these benchmarks were not met by the borrowers."

Then, in Jimenez v. Fannie Mae, a King County Superior Court in Washington state sided with MERS and Fannie Mae against another borrower who accused MERS of violating the Washington Consumer Protection Act and of wrongfully foreclosing on the party. 

The court held that Fannie Mae, which was holder of the promissory note, had the authority to enforce the note and the deed of trust. The case also was distinguished from the Bain case since the foreclosure was not carried out in MERS name, but by a party tied to Fannie, which was promissory note holder.

The Jimenez decision also reiterated the conclusion in Peterson, finding that the plaintiff failed to plead all of the elements needed  for a consumer protection action to survive. One element not met was proof that the plaintiff's injury was caused by MERS. On that point, the court held "the injury suffered by the plaintiff was brought on by his own default."