Hinderlie v. Bank of America N.A. et al

Filing 41

ORDER: Defendants' motions to dismiss 28 and 34 are GRANTED in part and DENIED in part. Defendants' motion to dismiss Plaintiffs' OUDCPA claim is GRANTED. Defendants' motion to dismiss Plaintiffs' FDCPA claim is GRANTED. Defendants' motion to dismiss all other claims is DENIED. Signed on 1/9/2014 by Judge Owen M. Panner. (dkj)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
MEDFORD DIVISION
KARA HINDERLIE,

No. 3:12-cv-01839-PA

ORDER

Plaintiff,

v.
BANK OF AMERICA, NA, a
national association;
RECONTRUST COMPANY, NA,
a national association;
U.S. BANK, NA, as
fiduciary trustee for the
holders of the MLMI Trust,
Mortgage Asset-Backed
Certificates, Series
2006-HE2; MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC., a foreign
corporation; NATIONSTAR
MORTGAGE, LLC, a foreign
company,
Defendants.
PANNER,

J.

Plaintiff brings this action for wrongful foreclosure,
violations of the Unlawful Trade Practices Act, declaratory
relief, breach of contract, violations of the Fair Debt
Collection Practices Act

1 -·ORDER

(FDCPA) and Oregon Unlawful Debt

Collection Practices Act

(OUDCPA), and quiet title.

Defendants

Bank of America (BOA), Mortgage Electronic Registration Systems,
Inc.

(MERS) , ReconTrust Company, and U.S. Bank filed a motion to

dismiss

[#28]

12 (b) ( 6)

f6r failure to state a claim under Fed. R. Civ. P.

Defendant Nationstar filed a separate motion to

dismiss [#34].

For the reasons set forth below, Defendants'

motions are GRANTED in part and DENIED in part.
Background

In 2005,

Plaintiff obtained a loan of $179,600 to

refinance real property.

To secure the loan,

a note and deed of trust which

authori~ed

foreclosure in the event of default.

Plaintiff executed

non-judicial

At some point Plaintiff

defaulted on her obligations and ReconTrust executed a notice of
default and election to sell.
the foreclosure,
modifications.

During the period leading up to

Plaintiff and BOA unsuccessfully attempted loan
The property was sold to U.S. Bank at a non-

judicial foreclosure sale in August 2012.

Shortly thereafter,

Plaintiff brought this action in the Multnomah County Circuit
Court.

The case was removed to this Court in October 2012.
Standard

Where the plaintiff "fail[s] to state a claim upon which
relief can be granted," the court must dismiss the action.
R. Civ. P. 12 (b) (6).

Fed.

To survive a motion to dismiss, the

complaint must allege "enough facts to state a claim to relief
that is plausible on its face."
550 U.S. 544, 570

Bell Atlantic Corp. v. Twombly,

(2007). For the purpose of the motion to

dismiss, the complaint is liberally construed in favor of the

2 - ORDER

plaintiff and its allegations are taken as true.
Walters, 719 F.2d 1422, 1424

(9th Cir. 1983).

Rosen v.

However, bare

assertions that amount to nothing more than a "formulaic
recitation of the elements" of a claim "are conclusory and not
entitled to be assumed true."
680-81 (2009).

Ashcroft v. Iqbal, 556 U.S. 662,

Rather, to state a plausible claim for relief,

the complaint "must contain sufficient allegations of underlying
facts" to support its legal conclusions.
1202, 1216, reh'g en bane denied,

Starr v. Baca,

652 F.3d

659 F. 3d 850 (9th Cir. 2011).

Discussion

Defendants move to dismiss Plaintiff's complaint in its
entirety.

With the exception of Plaintiff's claims under the

FDCPA and OUDCPA, discussed below, I conclude that Plaintiff has
pled sufficient facts to survive a motion to dismiss under Fed.
R. Civ. P. 12 (b) (6)
In particular, I note that there are apparent factual issues
regarding the accounting of payments on Plaintiff's mortgage.
While I decline to disturb my previous ruling in Mikityuk v.
Northwest Trustee Serv. Inc., 3:12-cv-1518, 2013 WL 3388536 (D.
Or. June 26, 2013), I believe these factual issues justify
further discovery in this case.
I.

Plaintiff's Fair Debt Collection Practices Act claim.

Plaintiff's seventh claim alleges that Defendants violated
.15 U.S.C. § 1692 by taking or threatening to take action to
dispossess Plaintiff of her property when there was no present
right to possession and by using false or misleading
representations or means in collecting a debt.
Courts in this District have held that "the activity of
3 - ORDER

foreclosing on the property pursuant to a deed of trust is not
the collection of a debt within the meaning of the FDCPA."
v. Ocwen Fed. Bank, 195 F. Supp. 2d 1188, 1204

Hulse

(D. Or. 2002); see

also Lampshire v. Bank of America, NA, 6:12-cv-1574-AA, 2013 WL
1750479, at *3 (D. Or. Apr. 20, 2013).
In this case, Plaintiff bases her FDCPA claim on allegations
of misconduct in the foreclosure of her property.

As

foreclosures are not debt collections within the meaning of the
FDCPA, I conclude that Plaintiff cannot invoke the protections of
that act.
II. Plaintiff's Oregon Unlawful Debt Collection Practices Act
claim.

Plaintiff's sixth claim alleges that Defendants violated ORS
646.639 by 1) initiating a non-judicial foreclosure sale when
they knew or should have known that such a sale was precluded by
the Oregon Trust Deed Act; 2) by misrepresenting material
information to Plaintiff or by providing her with conflicting
information; and 3) by misleading Plaintiff about the possibility'
of a modification or workout.

Defendants move to dismiss

Plaintiffs' sixth claim on the basis that foreclosures are not
debt

collect~ons

within the meaning of the OUDCPA.

In the foreclosure context, courts in this District have
interpreted the OUDCPA concurrently with the FDCPA.

Lampshire,

2013 WL 1750479, at *3; Hulse, 195 F. Supp. 2d at 1206.

In such

cases, they have held that "foreclosing on a trust deed is not
the collection of a debt under the OUDCPA."
2d at 1206.

Hulse, 195 F. Supp.

"As with the FDCPA, foreclosing on a trust deed is

not the enforcement of an obligation because it is not an attempt
4 - ORDER

to force the debtors to pay the money owed."

Id.

Rather, such

actions are "akin to debt servicing rather than debt collection
on behalf of another, and [a foreclosing entity] cannot be
considered a 'debt collector' based on such actions."

Lampshire,

2013 WL 1750479 *3.
In this case, Plaintiff haw. asserted that the foreclosure of
'

her property was unlawful based on Defendants' alleged violation
of the OUDCPA. As in Lampshire, foreclosure of a trust deed
cannot be considered an action to collect a debt and Plaintiff
therefore cannot invoke the protections of the OUDCPA.
Conclusion

Defendants' motions to dismiss [#28, #34] are GRANTED in
part and DENIED in part. Defendants' motion to dismiss
Plaintiffs' OUDCPA claim is GRANTED.

Defendants' motion to

dismiss Plaintiffs' FDCPA.claim is GRANTED.

Defendants' motion

to dismiss all other claims is DENIED.
IT IS SO ORDERED.
DATED

this~

day of January, 2014.

Owen M. Panner
United States District Judge

5 ..:. ORDER.