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South Valley Bank & Trust v. Colorado Dutch, LLC

Court of Appeals of Oregon

April 4, 2018

SOUTH VALLEY BANK & TRUST, an Oregon chartered commercial bank, Plaintiff,
v.
COLORADO DUTCH, LLC, a Colorado limited liability company; John E. Batzer; and James H. Armstrong, Defendants. SOUTH VALLEY BANK & TRUST, an Oregon chartered commercial bank, Judgment Creditor-Respondent,
v.
NORTH PACIFIC TRUST, Writ Challenger-Appellant.

          Argued and submitted April 4, 2017.

          Josephine County Circuit Court 13CV0031; Thomas M. Hull, Judge.

          Michael W. Peterkin argued the cause for appellant. With him on the briefs was Peterkin & Associates.

          Sarah E. Harlos argued the cause for respondent. On the brief were Martin E. Hansen and Francis Hansen & Martin LLP.

          Before DeHoog, Presiding Judge, and Hadlock, Judge, and Schuman, Senior Judge.

         Case Summary: South Valley Bank & Trust obtained a money judgment against an individual, John Batzer, in Josephine County. In anticipation of seeking a writ of execution against real property located in Deschutes County, [291 Or.App. 176] South Valley recorded its judgment in Deschutes County. Two days before South Valley recorded the judgment, however, Batzer deeded the property at issue to himself as trustee of North Pacific Trust (NPT). NPT recorded the deed 10 days after South Valley recorded the judgment. Several months later, South Valley obtained a writ of execution and an order authorizing sale of the property based on an assertion that Batzer owned the property. In the proceedings at issue on appeal, the trial court denied NPT's ORCP 71 B motion to vacate the writ of execution and denied on the merits NPT's challenge to the writ of execution. The court also granted South Valley's motion to strike the writ challenge as untimely. Held: As a matter of law, on the undisputed facts, Batzer's transfer of the property to NPT was void under ORS 18.185. Thus, Batzer, not NPT, is the owner of the property. Accordingly, the trial court did not err in denying NPT's writ challenge on the merits. That conclusion also answers or obviates the need to address all of NPT's remaining contentions.

         [291 Or.App. 177] DEHOOG, P. J.

         South Valley Bank & Trust obtained a money judgment against an individual, John Batzer, in Josephine County. This appeal arises from a dispute regarding a writ of execution that South Valley obtained against real property located in Deschutes County in an effort to execute on that judgment. In anticipation of seeking the writ, South Valley recorded its judgment in Deschutes County. Two days before South Valley recorded the judgment, however, Batzer deeded the property to himself as trustee of North Pacific Trust (NPT). NPT recorded the deed 10 days after South Valley recorded the judgment. Several months later, South Valley obtained a writ of execution and an order authorizing sale of the property based on an assertion that Batzer owned the property. In the proceedings at issue in this appeal, NPT challenged the writ of execution and the order authorizing sale.

         In an order, the trial court denied NPT's ORCP 71 B motion to vacate the writ of execution and the order authorizing sale. In the same order, the court struck as untimely and, alternatively, denied on the merits NPT's challenge to the writ of execution brought under ORS 18.892(3).[1] NPT appeals that order pursuant to ORS 19.205(3) and, in four assignments of error, raises essentially three challenges to the court's rulings, contending that (1) the court erred in denying the writ challenge on the merits without holding an evidentiary hearing to allow NPT to prove that it had purchased the real property from Batzer in good faith and for consideration; (2) under ORCP 71 B, the trial court was required to vacate the writ and the order authorizing sale because they were issued based on the mistaken assertion that Batzer owned the property; and (3) the trial court erred in striking NPT's challenge to the writ as untimely.

         We begin by addressing the trial court's denial of the writ challenge on the merits. We conclude, as the trial court did, that, as a matter of law, Batzer's transfer of the [291 Or.App. 178] property to NPT was void under ORS 18.165.[2] Thus, Batzer, and not NPT, is the owner of the property. As further explained below, that conclusion answers or obviates the need for us to address all of NPT's remaining contentions. That is, the trial court was not required to hold an evidentiary hearing on the writ challenge because there was no dispute as to any material fact; the court did not abuse its discretion in denying the ORCP 71 B motion because Batzer, not NPT, owned the property; and the court's correct conclusion on the merits obviates the need for us to address its alternative ruling striking the writ challenge as untimely. Accordingly, we affirm.

         We review a trial court's construction and application of a statute for legal error, State v. Branam, 220 Or.App. 255, 258, 185 P.3d 557, rev den, 345 Or. 301 (2008), applying the analytical framework set out in State v. Gaines, 346 Or. 160, 171-72, 206 P.3d 1042 (2009). The following facts are undisputed for purposes of this appeal. In 2010, Batzer, as an individual, obtained title to the real property at issue, which is located in Deschutes County. For the next three years, NPT, for which Batzer served as trustee, rented out the property and reported the rental income on NPT's tax returns. However, Batzer did not, during that time, record any conveyance from himself as an individual to himself as trustee of NPT.

         In March 2013, South Valley obtained a judgment against Batzer in Josephine County Circuit Court. When the judgment was entered, Batzer was the trustee of NPT and owned a one percent beneficial interest in the trust.

         On November 20, 2013, Batzer, acting in his individual capacity, tendered a deed to himself as trustee of NPT. The deed stated, "This deed is being recorded to memorialize the transfer of ownership created June 14, 2010." (Capitalization modified.) The deed also stated, "The true and actual consideration paid for this transfer, stated in terms of dollars, is $ n/a."

         Two days later, on November 22, 2013, South Valley recorded its judgment against Batzer in Deschutes County. [291 Or.App. 179] On December 2, 2013, the deed from Batzer to NPT was recorded in the Deschutes County deed records.

         In May 2014, South Valley moved in Josephine County Circuit Court for an order authorizing sale of the Deschutes County property. In an affidavit supporting the motion, South Valley's counsel asserted that "Defendant John E. Batzer is the owner" of the property. South Valley served the motion on Batzer as an individual, but did not serve NPT. In August 2014, the court entered an order authorizing the levy and sale of the property, and, in September 2014, the Josephine County trial court administrator issued a writ of execution for the property.

         Later in September, the Deschutes County sheriff filed a notice of levy with the Deschutes County Circuit Court. In January 2015, the sheriff filed an amended notice of levy, this time in Josephine County Circuit Court. NPT filed its challenge to the writ of execution the same day. Shortly thereafter, South Valley moved to strike the challenge ...


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