Federal Evidence Review

The deed was “not subject to reasonable dispute” under FRE 201(b) after the plaintiff controverted the legitimacy of the deed, in Doss v. ClearwaterTitle Co., 551 F.3d 634 (7th Cir. Dec. 24, 2008) (No. 07-2400)

A recent case from the Seventh Circuit indicates the limits to considering judicial notice on a motion to dismiss a complaint and where the matter has been controverted by the opposing party.

In the case, after refinancing his home mortgage, plaintiff Doss learned that he was charged more for the required title insurance. He also did not know that the title company he used was affiliated with the company arranging his loan. He filed a complaint alleging violations of the Truth in Lending Act and the Illinois Consumer Fraud and Deceptive Business Practices Act. Defendant JPMorgan Chase Bank N.A, which held the note and mortgage, and defendant Saxon Mortgage Services, Inc., providing services on the mortgage, moved to dismiss the complaint for failure to state a claim, under FED. R. CIV. P. 12(b)(6).

The defendants alleged that the plaintiff had sold the property by quitclaim deed and attached a copy of the deed. Based on the deed, they claimed that the plaintiff no longer held any right to rescind the transaction. In reply, the plaintiff claimed he had not transferred his property and the deed was forged. He attached copies of a state quiet title claim and lis pendens notice. The district court took judicial notice of the deed of sale and granted the motion to dismiss without prejudice. The plaintiff appealed the dismissal of his complaint.

The circuit reversed, and noted the district court should not have considered the deed on the motion to dismiss the complaint since it was a “matter outside the pleadings” under FED. R. CIV. P. 12(d). When a district court considers matters outside the pleadings, the motion may be converted to one for summary judgment. However the deed was not proper for judicial notice, since the deed was “not subject to reasonable dispute” under FRE 201(b) in light of the plaintiff controverting the legitimacy of the deed. While FRE 803(15) provides a hearsay exception concerning statement made in documents affecting an interest in property, “[i]t takes more than an exception to the hearsay rule, in other words, to justify judicial notice.” Doss, 551 F.3d at 640.

Normally, review of a motion to dismiss a civil complaint is restricted to the four corners of the complaint. However, under limited circumstances, judicial notice may be taken on a motion to dismiss. Nonetheless, judicial notice was inappropriate in Doss where the matter was “not subject to reasonable dispute.”