Case of First Impression
Under the Quiet Title Act
Michigan Compiled Laws §565.451a permits the recording of “an affidavit stating facts relating to… [k]nowledge of the happening of any condition or event which may terminate an estate or interest in real property….” Pursuant to that section, the U.S.A. recorded an affidavit with the Register of Deeds reciting "that the United States of America is aware of certain fact(s), condition(s), and event(s), proscribed by 18 U.S.C. § 1343; 18 U.S.C. §§ 1956 and 1957 which may terminate an estate or interest in the real property[.]" The affidavits also indicate that the described real estate may be subject to forfeiture to the U.S.A.
MPV, the fee owner of the property, brought suit in Federal District Court to remove the cloud on title cast by the affidavit. The suit was dismissed due to lack of subject matter jurisdiction caused by the Government’s invocation of sovereign immunity. Michigan Property Ventures, Inc. v. United States of America, No. 14-10215 (U.S.D.C. E.D. Michigan, June 26, 2014).
MPV had argued that the Quiet Title Act, 28 U.S.C. §2409a, waived sovereign immunity. The Court avoided the thorny issue of whether the affidavit clouding title is “an interest” claimed by the United States by assuming it was for purposes of the motion. Concerning the other requirement for QTA jurisdiction, the Court held that there was no “disputed title to real property” since the affidavit explicitly recognized MPV as the present-day owner of the property.
Under the MPV Court’s reasoning, MPV would be able to maintain its action once the Government initiates forfeiture proceedings. The Government's mere assertion it is aware of facts that might someday give rise to a forfeiture is, however, insufficient to create a “disputed title to real property.” This result leaves an un-indicted land owner with no expedient means by which to remove a substantial burden on marketability. Unlike a notice of pendency, which eventually expires, an order of attachment, which is subject to court discretion or a criminal forfeiture seizure requiring a warrant, the §565.451a affidavit never expires and can be recorded without judicial intervention or oversight.