United States District Court, D. Oregon
EUSEBIO G. HUERTA, an individual and LINDA Z. HUERTA, an individual, Plaintiffs,
WELLS FARGO BANK, NATIONAL ASSOCIATION, a foreign corporation, Defendant.
OPINION AND ORDER
Michael McShane United States District Judge.
Eusebio G. Huerta and Linda Z. Huerta bring this action
against Wells Fargo Bank, National Association (“Wells
Fargo”). The Huertas allege Wells Fargo was unjustly
enriched when it received proceeds of a parcel of land it did
not pay for, and breached the warranty of good faith and fair
dealing in connection with a vague complaint filed in
judicial foreclosure proceedings.
Fargo argues that the Huertas' claims are barred by issue
preclusion, claim preclusion, and Oregon's anti-SLAPP
statute. Because the Huerta's unjust enrichment claim was
neither litigated in state court, nor required to be raised
there as an affirmative defense, it is not barred here.
Because the breach of the implied warranty of good faith and
fair dealing is a contract claim necessarily decided by the
state court, the Huertas are barred from raising it here.
Wells Fargo's Motion to Dismiss, ECF No. 5, is GRANTED in
part and DENIED in part.
1998, the Huertas purchased two adjacent parcels in Salem,
Oregon. Compl. ¶ 3, ECF No. 1 Ex. A. One parcel
contained a house (the “House Parcel”) and the
other parcel was undeveloped (the “Bare Parcel”).
Compl. ¶ 3. The Huertas received bank financing for the
purchase and the bank received a first position trust deed on
both parcels. Compl. ¶ 3. The Huertas refinanced the
loan two times, once in 2006 and again in 2008. Compl. ¶
4. When the Huertas refinanced in 2008, the bank agreed that
the loan was secured by a trust deed with only the House
Parcel as collateral. Compl. ¶ 4. In other words, after
2008, the Bare Parcel did not secure any loan and the Huertas
owned it free and clear. Compl. ¶ 4. In February 2012,
the Huertas defaulted on the loan and the loan was purchased
by and assigned to Wells Fargo. Compl. ¶¶ 7-8.
Fargo began judicial foreclosure proceedings in Marion
County. In September 2012, Wells Fargo filed a complaint for
declaratory relief and deed of trust foreclosure.
Wells Fargo v. Huerta, Case No. 12C21744,
ECF No. 6-1. Wells Fargo also sought declaratory relief
to reform the trust deed to include the Bare Parcel. ECF No.
6-1; Compl. ¶ 10. The Huertas received notice of the
complaint, but failed to appear or respond because they did
not believe the 2012 foreclosure would affect their rights to
the Bare Parcel. As alleged by the Huertas:
The Complaint in the Foreclosure Case was misleading and
confusing and did not clearly convey to lay people such as
the Huertas that it was acting to unilaterally collateralize
the Bare Parcel, which was free and clear.
Compl. ¶ 13.
Marion County Circuit Court entered default judgment against
the Huertas in May 2013. ECF No. 6-2; ECF No. 6-3. Two years
later, in February 2015, the House Parcel and the Bare Parcel
were sold in a sheriff's sale to U.S. Bank Trust,
National Association. Compl. ¶ 15.
3, 2016, the Huertas moved to set aside the Marion County
default judgment. ECF No. 6-4. The Huertas alleged that the
default judgment should be set aside because of lack of
adequate notice, inadvertence, surprise, neglect, fraud,
misrepresentation, and other misconduct by Wells Fargo. ECF
No. 6-4. Specifically, the Huertas alleged that Wells Fargo
obtained the equivalent of an illegal deficiency judgment by
reforming the trust deed to include the Bare Parcel . ECF No.
6-4. In August 2016, after hearing oral arguments, the Marion
County Circuit Court denied the Huertas' motion to set
aside the default. ECF No. 6-5.
than appealing that ruling to the Oregon Court of Appeals,
the Huertas filed the current Complaint. Similar to their
arguments in the motion to set aside the default judgment,
the Huertas allege here that Wells Fargo breached the
covenant of good faith and fair dealing by obtaining the
equivalent of an illegal deficiency judgment because it was
not entitled to the Bare Parcel. As a result, Wells Fargo was
allegedly unjustly enriched. Compl. ¶¶ 5-7.
survive a motion to dismiss under rule 12(b)(6), a complaint
must contain sufficient factual matter that “state[s] a
claim to relief that is plausible on its face.”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570
(2007). A claim is plausible on its face when the factual
allegations allow the court to infer the defendant's
liability based on the alleged conduct. Ashcroft v.
Iqbal, 556 U.S. 662, 663 (2009). The factual allegations
must present more than “the mere possibility of
misconduct.” Id. at 678.
considering a motion to dismiss, the court must accept all
allegations of material fact as true and construe them in the
light most favorable to the non-movant. Burget v.
Lokelani Bernice Pauahi Bishop Trust, 200 F.3d 661, 663
(9th Cir. 2000). But the court is “not bound to accept
as true a legal conclusion couched as a factual
allegation.” Twombly, 550 U.S. at 555. If the
complaint is dismissed, leave to amend should be granted
unless the court “determines that the ...