United States District Court, D. Oregon
RALPH D. MITCHELL, Plaintiff,
HOMESALES, INC., CHASE BANK USA, N.A., and NORTHWEST TRUSTEE SERVICES, INC., Defendants.
John Bowles and Jeffrey A. Myers, BOWLES FERNNDEZ LAW LLC, Of Attorneys for Plaintiff.
Michael J. Farrell and Michael A. Yoshida, MARTIN BISCHOFF TEMPLETON LANGSLET & HOFFMAN LLP, S.W. Tenth Avenue, Suite 400, Portland, OR 97205. Of Attorneys for Defendants.
OPINION AND ORDER
MICHAEL H. SIMON, District Judge.
Plaintiff, Ralph D. Mitchell ("Mitchell"), filed suit in state court against Defendants Homesales Inc. ("Homesales"), Chase Bank USA, N.A. ("Chase"), and Northwest Trustee Services, Inc. ("NWTS") (collectively "Defendants") seeking: (1) declaratory relief invalidating the non-judicial foreclosure sale of his property; and (2) damages for Defendants' alleged breach of contract. Defendants timely removed this case to federal court. On July 29, 2013, Mitchell filed his Amended Complaint. Defendants now move for summary judgment against both of Mitchell's claims alleged in the Amended Complaint. For the following reasons, Defendants' motion is granted.
A party is entitled to summary judgment if the "movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The moving party has the burden of establishing the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The court must view the evidence in the light most favorable to the non-movant and draw all reasonable inferences in the non-movant's favor. Clicks Billiards Inc. v. Sixshooters Inc., 251 F.3d 1252, 1257 (9th Cir. 2001). Although "[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge... ruling on a motion for summary judgment, " the "mere existence of a scintilla of evidence in support of the plaintiff's position [is] insufficient...." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 255 (1986). "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (citation and quotation marks omitted).
In September 2006, Mitchell obtained a loan ("the Loan") originated by Chase and signed a promissory note ("the Note") secured by a trust deed ("the Deed of Trust") to purchase his home in Clackamas County, Oregon ("the Property"). The Deed of Trust was signed on September 11, 2006 and recorded on September 15, 2006. It identified Chase as both the lender and beneficiary. In September 2007, Mitchell defaulted on his loan by failing to make his required monthly mortgage payments. The parties dispute the cause of Mitchell's default. Mitchell alleges in his Amended Complaint and stated in his deposition that at some point between September 1, 2006 and February 15, 2008, Mitchell was told both in writing and orally by Chase representative Andrew North that Mitchell's monthly payment was increasing from $3, 679.33 to more than $8, 000. Mitchell argues that this increase drove him into default. In contrast, Defendants argue that Mitchell's default was caused by his dispute with the Oregon Board of Naturopathic Medicine between 2006 and 2007, which caused Mitchell to lose his primary source of income and pay significant legal fees.
As a result of Mitchell's default, NWTS filed a Notice of Default and Election to Sell on February 15, 2008, setting a foreclosure sale date of June 20, 2008. Also on February 15, 2008, Chase assigned its interest in the Property to Chase Home Finance, LLP ("CHF") and filed an Assignment of Deed of Trust in Clackamas County, Oregon. After Mitchell filed for bankruptcy in June 2008, the United States Bankruptcy Court for the District of Oregon stayed the foreclosure sale. Defendants were granted relief from the stay on August 31, 2008. On September 19, 2008, NWTS filed an Amended Trustee's Notice of Sale with the new sale scheduled for October 1, 2008. The Amended Trustee's Notice recited the following default: "failure to pay when due the following sums: monthly payments of $3, 639.73 beginning 09/01/07; plus late charges of $0.00 each month beginning 06/16/07; plus prior accrued late charges of $0.00; plus advances of $0.00; together with title expenses, costs, trustee's fees and attorney's fees incurred herein by reasons of said default." Defs.' Ex. 7, ECF 23-7 at 4.
On October 1, 2008, the Property was sold at a Trustee's Sale to Homesales. NWTS and Homesales executed a Trustee's Deed on October 3, 2008, which was recorded on October 7, 2008 in Clackamas County, Oregon. Even after this sale, Mitchell remains in the Property and has not made any further payments.
A. Mitchell's Claim for Wrongful Foreclosure
The Oregon Trust Deed Act ("OTDA"), Or. Laws 1959, ch. 625, codified at Or. Rev. Stat. (hereinafter "O.R.S.") § 86.705 to O.R.S. § 86.815, provides an alternative to the judicial foreclosure process. Where a trust deed is used to secure a loan, the trust deed "conveys an interest in real property to a trustee in trust to secure the performance of an obligation the grantor or other person named in the deed owes to a beneficiary." O.R.S. § 86.705(8) (formerly O.R.S. § 86.705(7)). Under the OTDA, a trustee may conduct a non-judicial foreclosure of a trust deed by advertisement and sale when certain conditions are met. See O.R.S. § 86.752 (formerly O.R.S. § 86.735, setting out conditions). In addition to these requirements, the OTDA prescribes notice requirements that "protect trust deed grantors from unauthorized nonjudicial foreclosures and sales of property." Brandrup v. ReconTrust Co., N.A., 353 Or. 668, 677 (2013); O.R.S. § 86.764 (formerly O.R.S. § 86.740); O.R.S. § 86.782 (formerly O.R.S. § 86.755). Judicial involvement is not needed to complete a foreclosure by advertisement and sale, but "the 120-day advance notice period gives a grantor time to seek judicial intervention in certain circumstances." Brandrup, 353 Or. at 677. After the trustee has complied with the statutory notice requirements, and assuming default is not cured, the property may be sold at a public auction to the highest bidder without judicial oversight. O.R.S. § 86.782. After such a sale, the trustee may execute and deliver the deed to the purchaser. O.R.S. § 86.800 (formerly O.R.S. § 86.775). The trust deed must contain, among other information, "a recital of the facts concerning the default, the notice given, the conduct of the sale and the receipt of the purchase money from the purchase." Id. After a trust deed is properly recorded, the deed's recitals are prima facie evidence in any court of the truth of the matters set forth therein and are conclusive in favor of a purchaser for value who relies on them in good faith. O.R.S. § 86.803 (formerly O.R.S. § 86.780).
Mitchell's Amended Complaint alleges that Defendants have not met the first of the four prerequisites for a non-judicial foreclosure sale set out in the OTDA, O.R.S. § 86.752(1), which requires that "any assignments of the trust deed by the trustee or the beneficiary and any appointment of a successor trustee are recorded in the mortgage records in the counties in which the property described in the deed is situated." Am. Compl. ¶ 38, ECF 10. Mitchell further alleges that pursuant to O.R.S. § 86.771(1) (formerly O.R.S. § 86.745), the notice of sale for the property must "[l]ist the names of the grantor, trustee and beneficiary in the trust deed, and the mailing address of the trustee." Am. Compl. ¶ 31. Mitchell alleges that his loan had in fact been ...