United States District Court, D. Oregon
Michael McShane, United States District Judge.
action stems from a loan Plaintiffs David and Debra Taylor
secured with a deed of trust on their home. I previously
granted Defendants' motions to dismiss Plaintiffs'
claims centered on fraud and violations of the Real Estate
Settlement Procedures Act. Plaintiffs further concede that
their claim brought under federal law is not applicable.
Defendants John Helmick and Gorilla Capital, Inc. now move
for summary judgment on the Taylors' single remaining
state law claim. Helmick and Gorilla Capital, Inc. also
seek summary judgment on their counterclaim for an award of
attorney fees and costs. Because the Taylors fail to present
evidence demonstrating the existence of a genuine issue of
material fact on their remaining claim under Oregon's
Mortgage Lending Law (OMLL), summary judgment is GRANTED on
that claim. Because Helmick and Gorilla Capital, Inc. have
proven that statutory and contractual provisions allow for
the recovery of attorney fees, they are entitled to a
reasonable award of attorney fees and costs. Defendants'
motion for summary judgment, ECF No. 35, is GRANTED.
2015, Jeremy Cruz contacted John Helmick about securing a
loan for the auto business that he operated with the
Plaintiffs' son, Garrett Taylor. Cruz Decl. ¶ 8, ECF
No. 38; Helmick Decl. ¶¶ 1, 3, ECF No. 37. Cruz was
previously employed by Gorilla Capital, Inc.
(“Gorilla”), a company run by John Helmick.
Courtney Decl. ¶ 2, ECF No. 39. However, no defendant
employed Cruz at the time of the loan at issue. Courtney
Decl. ¶ 3; Helmick Decl. ¶ 15. Helmick made an
agreement with Cruz and Garrett Taylor to finance a loan
secured by a lien on the house of Garrett Taylor's
parents, David and Debra Taylor. Cruz Decl. ¶¶
9-10; Helmick Decl. ¶¶ 4-6. All parties agree that
Cruz negotiated the terms of the loan. Cruz Decl. ¶ 8;
David Taylor Decl. ¶ 2, ECF No. 48. The loan for $90,
000 was funded from Helmick's personal funds, and it was
initially made payable to Helmick. Helmick Decl. ¶¶
13-14. At no point did Gorilla offer a loan to the Taylors
nor did it receive any funds from any party in connection
with the loan. Courtney Decl. ¶¶ 4-5. Cruz
personally received $39, 800.35 of the loan proceeds. Cruz
Decl. ¶ 17. The parties dispute the agreed upon use of
these funds allocated to Cruz. The Taylors claim the funds
were for “recapitalization” of the business by
Cruz. Garrett Taylor Decl. 2, ECF No. 47; David Taylor Decl.
¶ 6. Helmick claims the funds were intended for a buyout
of Cruz from the business. Cruz Decl. ¶ 18; Helmick
Decl. ¶ 7.
Taylors allege that Helmick and Gorilla are liable under
Oregon state law for their employment of an unlicensed loan
originator to negotiate the terms of the loan. As noted,
Helmick and Gorilla move for summary judgment on this claim
and their counterclaim for an award of attorney fees.
court must grant summary judgment if there is no genuine
issue of material fact and the moving party is entitled to
judgment as a matter of law. Fed.R.Civ.P. 56(a). An issue is
“genuine” if a reasonable jury could return a
verdict in favor of the non-moving party. Rivera v.
Phillip Morris, Inc., 395 F.3d 1142, 1146 (9th Cir.
2005) (citing Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1986)). A fact is “material” if it
could affect the outcome of the case. Id. The court
reviews evidence and draws inferences in the light most
favorable to the non-moving party. Miller v. Glenn Miller
Prods., Inc., 454 F.3d 975, 988 (9th Cir. 2006) (quoting
Hunt v. Cromartie, 526 U.S. 541, 552 (1999)). When
the moving party has met its burden, the non-moving party
must present “specific facts showing that there is a
genuine issue for trial.” Matsushita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (quoting
Taylors remaining claim arises under the Oregon Mortgage
Lender Law, ORS § 86A.095.198 (OMLL). Helmick and
Gorilla counterclaim for an award of attorney fees and costs.
I address each argument in turn.
order to succeed on an OMLL claim, a plaintiff must first
demonstrate that the defendant is liable as “a person
that employs . . . or should employ a mortgage loan
originator.” ORS § 86A.151(1). If a person
employs, or should have employed, a mortgage loan originator,
then that person is liable for any damages caused by 1) a
violation of any other provision of OMLL; or 2) by any untrue
statement of fact or omission of a material fact that is
relied upon by the plaintiff. Id. OMLL does not
explicitly define what parties should employ a mortgage loan
originator, but statutory history and other provisions within
OMLL demonstrate that “mortgage bankers” and
“mortgage brokers” are required to employ
licensed mortgage loan originators. ORS §
86A.151(2)(amended 2009), ORS § 86A.106, .115, .178.
Mortgage bankers and brokers include individuals that
“for compensation, or in the expectation of
compensation, . . . negotiate or offer to negotiate a
mortgage banking loan or a mortgage loan.” ORS §
86A.100(3)(a), (5)(a)(C). Exempt from this definition of
mortgage bankers and brokers, however, are individuals that
make a loan secured by their own personal funds who are not
engaged in the business of making real estate interest loans.
Id. at (3)(b)(C), (5)(b)(F).
these definitions, Gorilla cannot be held liable under OMLL
because it was not a party to the loan. The loan was
initially made payable to Helmick, not Gorilla, and it was
funded from Helmick's personal funds, not Gorilla's.
Helmick Decl. ¶¶ 13-14. The Taylors have not
provided any evidence of Gorilla's involvement.
Plaintiffs argument that Hemlick is liable also fails,
because he does not fall under the class of persons who
should have employed a mortgage loan originator under the
OMLL. He is exempted from the definition of a mortgage banker
or broker as he funded the loan with his personal funds and
is not in the business of making real estate interest loans.
The loan in question is the only loan secured by real estate
Helmick has ever made. Helmick Decl. ¶ 10. Therefore,
Helmick was not required to employ a mortgage loan originator
and thus, he is not liable under OMLL unless he actually
to establish liability for Helmick under OMLL, the Taylors
turn to an interpretation of the statute based on its
legislative history. They argue that because the legislature
amended ORS § 86A.151 to read “a person”
instead of “mortgage bankers or mortgage brokers,
” the Oregon legislature intended to broaden liability
under OMLL to all lenders, not just mortgage bankers or
brokers. Under this argument, Helmick would face liability,
even as an exempted private lender, because he was “a
person” who allegedly employed a mortgage loan
originator, Cruz. The Taylors' argument relies on this
broader interpretation of OMLL and a finding that Cruz was a
mortgage loan originator. However, this Court does not need
to resolve this statutory interpretation issue. Even assuming
the Taylors' statutory interpretation argument is
correct, their claim fails because there is no evidence
demonstrating that Cruz was employed as a mortgage loan
mortgage loan originator is defined as “an individual,
who for compensation or gain . . . offers or negotiates terms
for a residential mortgage loan.” ORS §
86A.200(4). It is undisputed that Cruz negotiated the terms
of the loan at issue. Cruz Decl. ¶ 8; David Taylor Decl.
¶ 2. It is also undisputed that close to $40, 000 of the
loan proceeds went to Cruz personally. Cruz Decl. ¶ 17.
The Taylors argue that these funds received by Cruz are
compensation or ...