Chase Bank USA, N.A. v. Comer et al

Filing 32

Opinion and ORDER re: Motion for Summary Judgment 24 signed on 7/25/2014 by Judge Ancer L. Haggerty. Plaintiff's Motion for Summary Judgment 24 is granted. (sp)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
PORTLAND DIVISION

CHASE BAl"\/K USA, N.A.,
Plaintiff,

Case No. 3: 13-cv-01138-HA
OPINION AND ORDER

v.
DIANNE MARIE COMER aka DIANE COMER,
fka DIAl"\/E COMER PETERMAN, a single woman;
OREGON COLLECTION, INC.; STATE OF
OREGON; CROSSINGS AT CLACKAMAS, LLC
Defendant.

HAGGERTY, District Judge:

Plaintiff, Chase Bank USA, N.A., filed this lawsuit seeking declaratory judgment
regarding the validity and enforceability of a deed of trust for the home of defendant Dianne
Comer. Plaintiff filed a Motion for Summary Judgment [24] against Comer' on May 27, 2014.
Oral argument was held on July 21, 2014. For the following reasons, plaintiffs Motion for
Summmy Judgment [24] is granted.

1

Defendants Oregon Collection, Inc., State of Oregon, and Crossings at Clackamas, LLC
have yet to appear in this matter, so the current Motion applies to defendant Comer alone.
1 - OPINION AND ORDER

FACTUAL BACKGROUND
On April 4, 1997, Allen Petennan, Comer's fo1mer husband, purchased the home at
18183 SE ED Anna Comi, Milwaukie, Oregon 97267 (the "Prope1iy"). To fund his purchase,
Peterman borrowed $132,640.00 from Crossland Mortgage Corporation, and in exchange,
Peterman executed a deed of trust for the Prope1iy, naming Crossland Mortgage Corporation as
the beneficiaiy. The bonower of that deed of trust is identified as "ALLEN PETERMAN, AS
AN INDIVIDUAL." Stines Deel. Ex. A.
At the time that Peterman purchased the Property, he was already manied to Comer.
Stines Deel. Ex.Fat 3. The couple decided to purchase the Property in Pete1man's name only,
because they had concerns regai·ding Comer's credit score. Stines Deel. Ex. F at 4. Although her
name was not on the title, Comer and Peterman equally contributed to mortgage payments
throughout their marriage. Stines Deel. Ex. F. at 5.
On April 16, 2001, Peterman b01Towed $131,500.00 from plaintiff to pay off and
refinance his original loan. Pete1man granted a deed of trust to plaintiff, and the deed identifies
the bonower as "ALLEN PETERlV!AN, MARRIED & SOLE OWNER." Stines Deel. Ex. B.
Because Comer wanted to be named on the title to the Property, on June 3, 2003,
Peterman executed a quitclaim deed, which conveyed Peterman's sole interest in the Prope1iy to
both Peterman and Comer. Stines Deel. Ex. G.
Peterman refinanced his loan again on November 14, 2003. He bo1rnwed $130,000.00
from j)laintiff to pay off and refinance his 2001 Chase loan. The 2003 deed of trust identifies the
bonower as "ALLEN PETERMAN, MARRIED." Stines Deel. Ex. C.
Peterman refinanced his loan a final time on January 30, 2007. He borrowed $187,000.00

2 - OPINION AND ORDER

from plaintiff to pay off and refinance his 2003 Chase loan. The 2007 deed of trust identifies the
borrower as "ALLEN PETERMAN." Stines Deel. Ex. D.
In August of 2009, Peterman and Comer divorced and the court entered a General
Judgment of Dissolution of Marriage; and Money Award, which was submitted and signed by
Comer. Stines Deel. Ex. H at 11. In that document, Comer was awarded the Property. Stines
Deel. Ex. Hat 4. The document also distributed the couple's debts. Among other things, Comer
agreed to pay the 2007 debt owed to plaintiff with a balance of$189,000.00. Stines Deel. Ex. H
at 5.
Around the time of the divorce and thereafter, three quitclaim deeds have been recorded
for the Propetiy, conveying interests to Comer and one of her sons, then to both of Comer's sons,
and finally back to Comer, individually. Stines Deel. Exs. J, K, L.
STANDARDS

A patiy is entitled to summary judgment as a matter of law if "the pleadings, depositions,
answers to interrogatories, and admissions on file, together with affidavits, if any, show there is
no genuine issue as to any material fact." Fed. R. Civ. P. 56(c); Bahn v. N1V!E Hasps., Inc., 929
F.2d 1404, 1409 (9th Cir. 1991). The moving paiiy carries the initial burden of proof and meets
this bmden by identifying potiions of the record on file that demonstrate the absence of any
genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322-24 (1986). Once the
initial burden is satisfied, the burden shifts to the non-moving patiy to demonstrate through the
production of probative evidence that there remains an issue of fact to be tried. Id

'
The court must view the evidence in the light most favorable to the non-moving party.
Fairbankv. Wunderman Cato Johnson, 212 F.3d 528, 531 (9th Cir. 2000) (citations omitted).

3 - OPINION AND ORDER

All reasonable doubt as to the existence of a genuine issue of fact should be resolved against the
moving party. 1YfelroPCS, Inc. v. City & County ofS.F., 400 F.3d 715, 720 (9th Cir. 2005)
(citation omitted). Where different ultimate inferences may be drawn, summary judgment is
inappropriate. Sankovich v. Ins. Co. ofN Am., 638 F.2d 136, 140 (9th Cir. 1981) (citing Fed. R.
Civ. P. 56(c)).
Deference to the non-moving party has limits. The non-moving party "must set forth
specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e). The "mere
existence ofa scintilla of evidence in suppott of the [non-moving party's] position [is]
insufficient." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). Where "the record
taken as a whole could not lead a rational trier of fact to find for the non-moving party, there is
no 'genuine issue for trial."' i\lfatsushita Elec. Indus. Co. v. Zenith Radio Co1p., 475 U.S. 574,
587 (1986) (citation omitted).
DISCUSSION

This case presents two legal questions for the comt to address:
(1)

Is the 2007 deed of trust a valid and subsisting lien, encumbering the
Prope1ty and encumbering any right, title, or interest of Comer?

(2)

If the 2007 deed of trust is not a valid lien, how does the doctrine of
equitable subrogation apply?

The cou1t will first address the validity of the 2007 deed of trust and reach the second question
only if the lien is determined to be invalid.

1.

The Validity of the 2007 Deed of Trust

Plaintiff argues that the Clackamas County Circuit Court Judge who signed the General
Judgment of Dissolution ofManiage; and Money Award (Judgment) had the authority to
4 - OPINION AND ORDER

distribute the debt incuffed during Peterman and Comer's marriage. Therefore, plaintiff argues,
Comer should be bound by the financial responsibility that she expressly undertook in the
Judgment, which she prepared, and the court need not reach the second question of equitable
subrogation.
This court agrees. The courts of the State of Oregon have the authority in a divorce
proceeding to distribute the debts that are incurred by a couple during their marriage.. In re

1\;farriage ofAshlock, 62 P.3d 874, 877 (Or. App. 2003) (citing In re i'vlarriage of1Vlclnnis, 661
P.2d 942 (Or. 1983)). In exercising that authority, the courts must distinguish marital debts from
those debts that benefitted only one of the parties. In re }vfarriage of Christensen, 292 P.3d 568,
572 (Or. App. 2012). In this divorce proceeding, the Circuit Court Judge for the Court of
Clackamas County found that the 2007 home loan was a marital debt. Stines Deel. Ex.Hat 5.
There is no evidence that suggests that Comer disputed whether the 2007 loan was a marital debt
at the time of disolution. In fact, it was Comer herself that prepared the Judgment that explicitly
bound her to the loan amount of$189,000.00. Stines Deel. Ex.Fat 9-10. This court finds no
basis to upset that determination.
Comer, on the other hand, argues that the 2007 deed of trust is not a valid lien. Comer
reasons that, at the time that the deed was executed, she had an undivided one-half interest in the
Property; therefore, it was necessary for plaintiff to obtain her consent before encumbering her
interest. Because her signature does not appear on the 2007 deed of trust, Comer asserts that the
lien is invalid.
Oregon Revised Statute (ORS) 93.710 prescribes the proper means by which property is
conveyed in Oregon:
5 - OPINION AND ORDER

Any instrument creating a license, easement, profit a prendre, or a leasehold
interest or oil, gas or other mineral interest or estate in real propetiy or an interest
in real propetiy created by a land sale contract, or memorandum of such
instrument or contract, which is executed by the person from whom the interest is
intended to pass, and acknowledged or proved in the mamter provided for the
acknowledgment or proof of other conveyances, may be indexed and recorded in
the records of deeds of real propetiy in the county where such real property is
located.
ORS 93.710 requires that any instrument creating an interest in real propetiy be signed by the
person who holds the interest. ORS 93.640 addresses the status of deeds that are not properly
recorded:
Evety conveyance, deed, land sale contract, assignment of all or any potiion of a
seller's or purchaser's interest in a land sale contract or other agreement or
memorandum thereof affecting the title of real propetiy within this state which is
not recorded as provided by law is void as against any subsequent purchaser in
good faith and for a valuable consideration of the same real property, or any
portion thereof, whose conveyance, deed, land sale contract, assignment of all or
any potiion of a seller's or purchaser's interest in a land sale contract or other
agreement or memorandum thereof is first filed for record, and as against the heirs
and assigns of such subsequent purchaser.
Because the 2007 deed of trust was not signed by Comer, it did not satisfy the recording
requirements of ORS 93.710. Because it was not properly recorded, ORS 93.640 would suggest
that the 2007 deed of trust is void.
However, the 2007 deed of trust is valid if Pete1man had the authority to bind Comer, as
her agent. A principal is liable for the actions of an agent if those actions are within the actual or
apparent authorization of the principal. Jensen v. }vfedley, 82 P.3d 149, 154 (Or. 2003). Actual
authority may be express or implied. Oregon courts have held that an agency between husband
and wife "may be implied from attending circumstances, and the apparent relations and conduct
of the parties." Young v. Neill, 220 P.2d 89, 94 (Or. 1950) (citation omitted) (holding that the

6 - OPINION AND ORDER

husband had implied authority to act on the wife's behalf based on a history of the wife
permitting the husband to conduct joint business in his name only) adhered to on rehearing 225
P.2d 66 (Or. 1950); Hill v. Oland, 655 P.2d 1088 (Or. App. 1982) (Thorton, J., dissenting).
"Where the issue is whether a husband was the agent of his wife, with the authority to act for her,
evidence that he had previously acted for her in the same type of transaction is admissible." Id.
(citations omitted). For example, in In re Conduct a/Carstens, the Oregon Supreme Court held
that a husband had implied authority to sign his wife's name to a cetiificate of title in light of
evidence that established a prior course of similar conduct. 683 P.2d 992, 997 (Or. 1984).
In the present case, the facts establish a prior course of conduct in which Pete1man
handled all finances related to the couple's home loan. During her deposition, Comer testified
that, despite being married since 1997, the couple made a joint decision to purchase the Property
in Peterman's name alone. Stines Deel. Ex.Fat 4. In April 2001, the couple refinanced the
home, and only Pete1man signed the deed of trust. Stines Deel. Ex. B. Comer does not attack
the validity of these deeds of trust, nor does she claim that she did not benefit from these
transactions. Even after Comer's name was placed on the title to the Property in June 2003,
Peterman refinanced the home in November 2003 in his name only. Still, Comer does not attack
the validity of the 2003 deed of trust, nor does she allege that she did not benefit from the
transaction. In fact, Comer demonstrated her agreement to each refinance by contributing to half
of the loan payments throughout the entirety of the maniage, presumably regardless of how the
amount of those payments fluctuated with each refinance. Stines Deel. Ex. F at 5. Comer
continued paying half of the loan payments even after the 2007 refinance, of which she alleges
she had no knowledge. Defs Mem in Opp'n to Mo. for Summ. J. [27] at 3. Accordingly,

7 - OPINION AND ORDER

plaintiff has demonstrated a course of conduct in which Comer allowed Peterman to handle the
Property's financing on the couple's behalf. Defendant has not introduced any evidence that calls
into question this course of conduct. As such, this court finds that Petennan had implied
authority to encumber Comer's interest in the Prope1iy in the 2007 deed of trust. Therefore, the
2007 deed of trust is a valid and subsisting lien, encumbering the Property and encumbering any
right, title, or interest of Comer. Because this comi finds that the 2007 deed of trust encumbers
Comer's interest in the Prope1iy, the court need not reach the second question of equitable
subrogation.
CONCLUSION
For the foregoing reasons, plaintiffs Motion for Summary Judgment [24] is GRANTED.
IT IS SO ORDERED.
DATED this ---2Jiday of July, 2014.

~&· '6~An~erL.~0
United States District Judge

8 - OPINION AND ORDER