Stolz et al v. Onewest Bank et al
Filing
35
ORDER: The Court ADOPTS the Magistrate Judge's Findings and Recommendation 27 in their entirety and DISMISSES all claims except the claim of Plaintiff Katherine Stolz for violation of RESPA. Signed on 03/30/2012 by Judge Anna J. Brown. See attached 11 page Opinion and Order. (bb)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION
KATHERINE STOLZ, an individual,
EDWARD STOLZ, an individual, and
TERREA STOLZ, an individual,
Plaintiffs,
v.
ONEWEST BANK, FSB, a California
Corporation; MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC., a
Delaware Corporation; REGIONAL
TRUSTEE SERVICES CORPORATION,
a Washington Corporation; and
FEDERAL NATIONAL MORTGAGE
ASSOCIATION, a government
sponsored Enterprise,
Defendants.
MICHAEL D. O'BRIEN
Oliveros & O'Brien
9200 S.E. Sunnybrook Blvd.
Suite 150
Clackamas, OR 97015
(503) 786-3800
Attorneys for Plaintiff
1
- OPINION AND ORDER
3:11-CV-00762-HU
OPINION AND ORDER
WILLIAM L. LARKINS, JR.
CODY HOESLY
Larkins Vacura LLP
621 S.W. Morrison
Suite 1450
Portland, OR 97205
(503) 222-4424
Attorneys for Defendants
BROWN, Judge.
Magistrate Judge Dennis James Rubel issued Findings and
Recommendation (#27) on January 13, 2012, recommending the Court
grant in part and deny in part Defendants' Motion (#10) to
Dismiss Plaintiffs' Complaint under Federal Rule of Civil
Procedure 12 (b) (6) .
Plaintiffs filed timely Objections to the Findings and
Recommendation.
28 U.S.C.
§
The matter is now before this Court pursuant to
636(b) (1) and Federal Rule of Civil Procedure 72(b).
When any party objects to any portion of the Magistrate
Judge's Findings and Recommendation, the district court must make
a de novo determination of that portion of the Magistrate Judge's
report.
28 U.S.C.
§
636(b) (1).
See also Dawson v. Marshall, 561
F.3d 930, 932 (9 th Cir. 2009); United States v. Reyna-Tapia, 328
F.3d 1114, 1121 (9 th Cir. 2003) (en banc).
The court is relieved
of its obligation to review the factual record de novo as to any
portion of the Findings and Recommendation to which the parties
do not object, Reyna-Tapia, 328 F.3d at 1121, and reviews only
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- OPINION AND ORDER
the Magistrate Judge's conclusions of law de novo.
Barilla v.
Ervin, 886 F.2d 1514, 1518 (9 th Cir. 1989).
BACKGROUND
The background to this case is set forth in Magistrate Judge
Hubel's Findings and Recommendation and need not be repeated
here.
The overarching issue is whether Defendants violated the
Oregon Trust Deed Act (OTDA), Or. Rev. Stat
§
86.705, et seq.,
and the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C.
§
2605, in conducting a foreclosure sale of Plaintiffs' property
after Plaintiffs defaulted in making payments on a promissory
note executed by Plaintiff Katherine Stolz and secured by the
grant of a trust deed against the property to the lender, Premier
Mortgage Group, Inc.
DEFENDANTS' MOTION TO DISMISS
1.
Defendants' Reguest for Judicial Notice.
In connection with their Motion to Dismiss, Defendants ask
the Court to take judicial notice of documents reflecting the
transactions between the parties, including the Promissory Note,
the Assignment of Deed of Trust, the Appointment of Successor
Trustee, a second Assignment of Deed of Trust, and a Notice of
Default and Election to Sell.
The Magistrate Judge took judicial
notice of those documents in making his Findings and
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Recommendations and recommends this Court grant Defendants'
Request.
Neither Plaintiffs nor Defendants objected to the
Magistrate Judge's recommendation that the Court take judicial
notice of those documents and the Court does not find the
Magistrate Judge erred in doing so.
The Court, therefore, ADOPTS
the Magistrate Judge's recommendation and also takes judicial
notice of each of those documents.
2.
Defendant OneWest's Motion against Plaintiffs' RESPA claim.
In their Fourth Claim for Relief, all Plaintiffs allege
OneWest violated RESPA by failing either to acknowledge receipt
of or to contact Plaintiffs in response to a "Qualified Written
Request" they made to OneWest seeking information about the
servicing of their loan in light of the pending foreclosure sale
of their property.
As an initial matter, the Magistrate Judge concludes only
Plaintiff Katherine Stolz, who is the named borrower under the
Promissory Note, has standing to assert a RESPA claim.
The
Magistrate Judge also concludes, however, that Plaintiff
Katherine Stolz alleged facts sufficient to state a plausible
claim against OneWest under RESPA.
Accordingly, the Magistrate
Judge recommends this Court deny OneWest's Motion as to Plaintiff
Katherine Stolz but grant the Motion as to the remaining
Plaintiffs.
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- OPINION AND ORDER
In light of his conclusion that Plaintiff Katherine Stolz
has adequately asserted a federal claim for relief under RESPA,
which, in turn, gives rise to federal-question jurisdiction
pursuant to 28 U.S.C.
1331, the Magistrate Judge concludes it
§
is unnecessary to decide whether the Court also has subjectmatter jurisdiction based on diversity of citizenship under 28
U.S.C.
§
1332.
Because neither Plaintiffs nor Defendants have objected to
this Finding and Recommendation, the Court reviews the Magistrate
Judge's conclusions of law de novo and, in doing so, the Court
does not find any error.
The Court, therefore, ADOPTS the
Magistrate Judge's recommendation and DENIES Defendants' Motion
to Dismiss Plaintiff Katherine Stolz's RESPA claim against
Defendant OneWest Bank.
3.
Defendant OneWest's HOLA Preemption Defense.
OneWest asserts Plaintiffs' state-law claims - First Claim
for Declaratory Judgment, Second Claim for Rescission of Wrongful
Foreclosure, and Third Claim for Temporary Injunction - are
preempted under the Federal Homeowners' Loan Act (HOLA) of 1933,
12 U.S.C.
§§
1461-68. '
The Magistrate Judge agrees and
recommends this Court dismiss each of thOse claims.
Plaintiffs object to the recommendation on the ground that
1 OneWest Bank is the only Defendant to specifically address
the issue as to whether state-law claims are preempted.
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the Trust Deed reflects the parties contemplated compliance with
the Oregon Trust Deed Act when they entered into the Trust Deed
because the Trust Deed includes "federal, state, and local
statutes.
. and final non-appealable judicial opinions" as
"applicable Law."
Compl., Ex. 3 at 2.
Accordingly, Plaintiffs
contend " [allthough HOLA may have preempted the field, the lender
[in this casel has effectively 'opted out' and contractually
obligated itself to comply with state law."
PIs.' Obj. at 2.
Plaintiffs also argue that "nothing in HOLA appears to prevent a
federal savings association from submitting itself to state laws
governing real property."
PIs.' Obj. at 4.
The Magistrate Judge's recommendation is based in large part
on the Court's analysis and ruling in Copeland-Turner v. Wells
Pargo Bank, 800 F. Supp. 2d 1132, 1142 (D. Or., Jul. 6, 2011), in
which Judge Marco Hernandez concluded on similar facts that HOLA
preempted state-law claims against Wells Fargo Bank.
This Court
agrees with the extensive analysis and reasoning set out by Judge
Hernandez in Copeland-Turner and, therefore, also concurs in the
Magistrate Judge's recommendation that this Court find HOLA
preempts Plaintiffs' claims against OneWest.
Accordingly, the Court ADOPTS the Magistrate Judge's
recommendation and grants Defendants' Motion to Dismiss
Plaintiffs' HOLA claim against Defendant OneWest Bank.
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- OPINION AND ORDER
4.
Remaining State Law Issue.
The remaining issues addressed by the Magistrate Judge in
his Findings and Recommendation are addressed in Plaintiffs'
First Claim for Relief in which Plaintiffs seek a Declaratory
Judgment as to whether under Oregon law (a) Defendant MERS is
considered a beneficiary under the Trust Deed with standing to
foreclose,
(b) there was a valid appointment of a successor
trustee, and © Defendants were barred from holding the
foreclosure sale after Plaintiffs were advised the sale was "on
hold until [Plaintiffs'] inquiries have been responded to."
a.
MERS - Beneficiary under Trust Deed.
Plaintiffs argue MERS is not a proper beneficiary under the
Trust Deed under Oregon law, and, therefore, Plaintiffs contend
the Magistrate Judge erred in concluding otherwise.
The Magistrate Judge's conclusion accords with rulings by
this Court in Graham v. Recontrust Co., N.A., et al., 3:11-CV01339-BR; Sovereign v. Deutsche Bank, No. 11-CV-995-BR, 2012 WL
724796, at *7-8 (D. Or. Mar. 5, 2012); and Reeves v. ReconTrust
Co., N.A., No. 11-CV-01278-BR, 2012 WL 652681, at *10-16 (D. Or.
Feb. 28, 2012).2
But see, e.g., Beyer v. Bank of Am., No. 10-CV-
2 The issue whether MERS is a valid beneficiary under the
Trust Deed has been addressed in a number of cases within
the District of Oregon in which judges have reached different
conclusions. The judges in this District, therefore, have agreed
to certify this issue and related issues to the Oregon Supreme
Court in certain pending cases.
The judges, however, have
decided not to stay pending cases addressing MERS issues in the
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- OPINION AND ORDER
523-MO, 2011 WL 3359938 (D. Or. Aug. 2, 2011).
See also James v.
ReContrust Co., 3:11-CV-653871-ST, 2012 WL 653871, at *18 (D. Or.
Feb. 29, 2012) (Judge Simon rejected Magistrate Judge Stewart's
Findings and Recommendation that MERS was a beneficiary of the
trust deed and concluded MERS was solely the agent of the
promissory note holder) .
This Court adheres to its prior rulings in Graham,
Sovereign, and Reeves as to this issue and, therefore, concludes
the Magistrate Judge correctly found MERS is a proper beneficiary
of the trust deed at issue under Oregon law.
b.
Defendants' Appointment of Successor Trustee.
On February 10, 2009, IndyMac Federal appointed Defendant
Regional Trustees Services Corporation (Regional) as successor
trustee.
Plaintiffs contend Endemic Federal, however, did not have
the authority to appoint any successor trustee on that date
because MERS did not assign the Trust Deed to IndyMac Federal
until February 11, 2009, the day after Endemic purported to
assign the Trust Deed to Regional.
The assignment was recorded
on February 12, 2011.
The Magistrate Judge concluded "the legally relevant date
for determining the validity of Endemic Federal's appointment of
meantime.
See Graham v. Recontrust Co., N.A., et al., 3:11-CV01339-BR at 10 n.1 (Mar. 27, 2012).
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- OPINION AND ORDER
a successor trustee is the date on which the appointment was
recorded[]."
See Or. Rev. Stat.
§
86.790(3) ("If the appointment
of the successor trustee is recorded in the mortgage records of
the county or counties in which the trust deed is recorded, the
successor trustee shall be vested with all the powers of the
original trustee."
In reaching this conclusion, the Magistrate
Judge noted the Oregon statute contained the same language as
Idaho Code
§
45.1504(2) covering the same subject matter.
In
Russell v. OneWest Bank, FSB, the Idaho court construed the Idaho
statute and concluded "the legally relevant date for determining
the validity of Endemic Federal's appointment of a successor
trustee is the date on which the appointment was recorded."
1:11-CV-00222, 2011 WL 5025236, at *6 (D. Id., Oct. 20, 2011),
Accordingly, the Magistrate Judge recommended "this portion
of [Plaintiffs'] Complaint should be dismissed" for failure to
state a claim "under the Twombly-Iqbal standard."
Neither Plaintiffs nor Defendants have objected to this
Finding and Recommendation.
The Court, therefore, has reviewed
the Magistrate Judge's conclusions of law de novo and does not
find any error.
Accordingly, the Court ADOPTS the Magistrate
Judge's recommendation and GRANTS Defendants' Motion to Dismiss
to the extent that it is based on Endemic's purported lack of
authority to assign the Trust Deed to successor trustee Regional.
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- OPINION AND ORDER
c.
The June 14, 2011, Foreclosure Sale.
Plaintiffs allege OneWest misrepresented to them that
a foreclosure sale scheduled for May 13, 2011, was "on hold"
until Plaintiffs' "inquiries have been responded to."
The sale
actually occurred June 14, 2011.
The Magistrate Judge concluded the foreclosure sale was
properly conducted under April 13, 2011, in accordance with Or.
Rev. Stat.
§
86.755(2).
Plaintiffs do not argue the sale
violated the statute nor could they because Oregon law allows the
trustee to postpone a sale "for one or more periods totaling not
more than 180 days, giving notice of each adjournment by public
proclamation made at the time and place set for sale."
added).
(Emphasis
See Sawyer v. ReContrust Co., N.A., 11-CV-292-ST, 2011
WL 2619517, at *3 (D. Or. May 27, 2011).
Nevertheless,
Plaintiffs now argue for the first time that they should be
permitted to amend their Complaint to assert a claim based on
promissory estoppel.
In Sawyer plaintiffs also urged the court to allow them to
amend their complaint to assert a claim of equitable estoppel.
In her Findings and Recommendation, Magistrate Judge Stewart
concluded on similar facts that the plaintiff "may be able to
plead an equitable estoppel claim if given an opportunity to do
so."
Sawyer, 2011 WL 2619517, at *7.
Neither party in that case
filed any objection, and Judge Hernandez adopted the Magistrate
10 - OPINION AND ORDER
Judge's Findings and Recommendation without further discussion.
In Copeland-Turner, however, Judge Hernandez addressed
the issue specifically and held plaintiff's state-law claim that
Wells Fargo breached an oral agreement to set over a foreclosure
sale was preempted by HOLA.
800 F. Supp. 2d at 1142.
This Court
concurs in the Copeland-Turner analysis.
Accordingly, the Court ADOPTS the Magistrate Judge's Finding
and Recommendation that Defendants did not violate Oregon law in
the conduct of the foreclosure sale.
CONCLUSION
For all of these reasons, the Court ADOPTS the Magistrate
Judge's Findings and Recommendation in their entirety and
DISMISSES all claims except the claim of Plaintiff Katherine
Stolz for violation of RESPA.
IT IS SO ORDERED.
DATED this 30th
day of March, 2012.
United States District Judge
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