Tanner v. Wells Fargo Bank, N.A. et al

Filing 19

Opinion and Order: The Court GRANTS Wells Fargo Bank N.A.'s Motion 7 for Judgment on the Pleadings and DISMISSES Plaintiff's claims against Wells Fargo with prejudice. See attached Opinion and Order for full text. Signed on 03/11/2016 by Judge Anna J. Brown. (bb)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

JOSEPH J. TANNER,

3:15,-CV-02040-BR

Plaintiff,

OPINION AND ORDER

v.
WELLS FARGO BANK N.A., and
FIDELITY NATIONAL TITLE INS,
CO. I
Defendants.

JOSEPH J. TANNER
2321 S.E. 142nct
Portland, OR 97223
Plaintiff,

Pro Se

MOLLY J. HENRY
Keesal, Young & Logan
1301 Fifth Ave
Suite 3100
Seattle, WA 98101
[phone]
Attorneys for Defendant Wells Fargo Bank N.A.

l

- OPINION AND ORDER

BROWN, Judge.
This matter comes before the Court on Defendant Wells Fargo
Bank N.A.'s Motion (#7)

for Judgment on the Pleadings.

For the

reasons that follow, the Court GRANTS Defendant's Motion and

DISMISSES this matter with prejudice.

BACKGROUND
The following facts are taken from Plaintiff's Complaint and
Defendant Wells Fargo Bank's Motion for Judgment on the
Pleadings.
On October 20, 2012, Plaintiff Joseph Tanner signed a
Promissory Note with Wells Fargo secured by property located at
2321 S.E. 142nct Avenue, Portland, Oregon.

On October 20, 2012,

Plaintiff also entered into a Trust Deed as the to that property
as borrowers with Defendant Fidelity National Title as Trustee
and Wells Fargo as lender.

The Trust Deed was recorded in

Multnomah County, Oregon, on October 23, 2012.
On July 9, 2014, Fidelity National Title executed an
Appointment of Successor Trustee in which it appointed Clear
Recon Corporation 1 as successor Trustee of the Plaintiff's Trust
Deed.

On July 11, 2014, the Assignment of Successor Trustee was

recorded in Multnomah County.
At some point Plaintiff defaulted on his loan.
1

Clear Recon Corporation is not a party to this action.

2 - OPINION AND ORDER

On April 10, 2015, Clear Recon Corporation recorded in
Multnomah County a Notice of Default and Election to Sell
Plaintiff's property.

Clear Recon Corporation alleged Plaintiff

had defaulted on his Note and set a date of August 25, 2015, for
a trustee sale of Plaintiff's property.
On August 24, 2015, Plaintiff filed a complaint in Multnomah
County Circuit Court against Wells Fargo and Fidelity National
Title in which he alleged claims for wrongful foreclosure,
slander of title, breach of contract, and unlawful trade
practices.

Plaintiff did not serve Defendants.

Instead

Plaintiff filed an ex parte motion for an order restraining the
sale of the property, which the Multnomah County Circuit Court
denied on September 10, 2015.
On September 10, 2015, Clear Recon Corporation sold
Plaintiffs' property to Wells Fargo, who took title to the
property via a Trustee's Deed recorded in Multnomah County on
September 16, 2015.
On October 16, 2015, Wells Fargo received a copy of the
state-court complaint by certified mail.
On October 29, 2015, Wells Fargo removed the matter to this
Court on the basis of diversity jurisdiction.
On December 22, 2015, Wells Fargo filed a Motion for
Judgment on the Pleadings.

The Court took Plaintiff's Motion

under advisement on January 11, 2016.

3 - OPINION AND ORDER

On February 2, 2016, the Court issued an Order to Show Cause
in which it ordered Plaintiff to show cause in writing no later
than February 17, 2016, why Fidelity National Title Insurance
Company should not be dismissed from this matter for failure to
prosecute.

Plaintiff failed to show cause in writing.

On March 4, 2016, the Court entered a Judgment dismissing
Defendant Fidelity National Title Insurance Company without
prejudice.

STANDARDS

Federal Rule of Civil Procedure 12(c) provides:
After the pleadings are closed but within such
time as not to delay the trial, any party may move
for judgment on the pleadings.
If, on a motion
for judgment on the pleadings, matters outside the
pleadings are presented to and not excluded by the
court, the motion shall be treated as one for
summary judgment and disposed of as provided in
Rule 56, and all parties shall be given reasonable
opportunity to present all material made pertinent
to such a motion by Rule 56.
For purposes of a motion pursuant to Rule 12(c), the court
must accept the nonmoving party's allegations as true and view
all inferences in a light most favorable to the nonmoving party.
Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009).

A

judgment on the pleadings is properly granted when, taking all
allegations in the nonmoving party's pleadings as true, the
moving party is entitled to judgment as a matter of law.

Compton

Unified Sch. Dist. v. Addison, 598 F.3d 1181, 1185 (9th Cir.
4 - OPINION AND ORDER

2010) .

"To survive a Rule 12(c) motion, the complaint must

contain sufficient factual matter, accepted as true, to state a
claim to relief that is plausible on its face."

Davis v. Astrue,

Nos. C-06-6108 EMC, C-09-0980 EMC, 2011 WL 3651064, at *1 (N.D.
Cal. Aug. 18, 2011) (citation omitted).
Dynamics C4 Sys., Inc.,

See also Cafasso v. Gen.

637 F. 3d 1047, 1055 n. 4 (9'h Cir. 2011) (A

Rule 12 (c) motion is "functionally identical to a Rule 12 (b) (6)
motion to dismiss for failure to state a claim, and therefore the
same legal standard applies.") .

DISCUSSION

Wells Fargo moves for judgment on the pleadings as to all of
Plaintiff's claims on the grounds that Plaintiff has not
satisfied the contractual notice-and-cure requirement,
Plaintiff's claims are barred by Oregon Revised Statute§ 86.797,
and/or Plaintiff fails to state a claim for relief.
I.

Plaintiff has not satisfied the contractual notice-and-cure
requirement.

All of Plaintiff's claims in his Complaint arise from
Plaintiff's assertion that Defendants wrongfully foreclosed on
the Deed of Trust.

The Deed of Trust, however, contains the

following provision:
Neither Borrower nor Lender may commence .
. any
judicial action .
. that arises from the other
party's actions pursuant to this Security
Instrument or that alleges that the other party
has breached any provision of, or any duty owed by
5 - OPINION AND ORDER

reason of, this Security Instrument, until such
Borrower or Lender has notified the other party
. of such alleged breach and afforded the other
party hereto a reasonable period after the giving
of such notice to take correction action.
Def.'s Mot. for Judgment on the Pleadings, Ex. A at 12.
Plaintiff does not plead, and Wells Fargo asserts Plaintiff
cannot plead, that he gave notice to Defendants or gave
Defendants the opportunity to cure before Plaintiff filed his
complaint.
Courts in this District have found plaintiffs' claims for
breach of contract and breach of the Oregon Trust Deed Act,
Oregon Revised Statute§ 86.705-86.795, are barred when a
plaintiff fails to allege compliance with similar notice-and-cure
provisions in trust deeds.

See, e.g., Hayes v. Wells Fargo Bank,

N.A., No. 3:15-CV-00651-PK, 2015 WL 5707054, at *5 (D. Or.
Sept. 28, 2015) (dismissing breach-of-contract claim with
prejudice due to the plaintiff's failure to allege compliance
with identical notice-and-cure provision); Roisland v. Flagstar
Bank, FSB,

989 F. Supp. 2d 1095, 1107 (D. Or. Nov. 15, 2013)

(same); Higley v. Flagstar Bank, FSB,

910 F. Supp. 2d 1249, 1253

(D. Or. Dec. 21, 2012) (the plaintiff's claim that the defendant
violated Oregon Revised Statute§ 86.705 was barred by the
plaintiff's failure to allege facts showing compliance with
identical notice-and-cure provision) .

The Court adopts the

reasoning of Hayes, Roisland, and Highley and concludes

6 - OPINION AND ORDER

Plaintiff's claims are barred by his failure to allege facts that
establish he complied with the notice-and-cure provision of the
Trust Deed.
II.

Plaintiff's claims are barred by Oregon Revised Statute
§ 86.797.

Even if Plaintiff's claims were not barred by his failure to
comply with the notice-and-cure provision of the Trust Deed,
Wells Fargo asserts Plaintiff's claims are barred by Oregon
Revised Statute§ 86.797(1) (formerly§ 86.770) because Plaintiff
received notice of the foreclosure sale as required by Oregon
Revised Statute§ 86.764, the foreclosure sale was completed, and
the property was sold to a bona fide purchaser.
Oregon Revised Statute§ 86.797(1) provides:
If, under ORS 86.705 to 86.815, a trustee sells
property covered by a trust deed, the trustee's
sale forecloses and terminates the interest in the
property that belongs to a person to which notice
of the sale was given under ORS 86.764 and 86.774
or to a person that claims an interest by, through
or under the person to which notice was given. A
person whose interest the trustee's sale
foreclosed and terminated may not redeem the
property from the purchaser at the trustee's sale.
A failure to give notice to a person entitled to
notice does not affect the validity of the sale as
to persons that were notified.
This Court, other judges in this District, and Oregon state
courts have held§ 86.797 and its predecessor§ 86.770 bar
rescission of a foreclosure sale when a borrower has received the
notice required under§ 86.764 and the property is sold to a bona
fide purchaser.

7 - OPINION AND ORDER

For example, in Mikityuk v. Northwest Trustee Services,
Inc., the court addressed whether the plaintiffs who admitted

they were in default and had received notice of a trustee's sale
could challenge the validity of the sale after the trustee's sale
was conducted and the purchase of the property by a bona fide
purchaser was recorded.

No. 3:12-CV-1518-PA, 2013 WL 3388536, at

*3 (D. Or. June 26, 2013).

In Mikityuk the plaintiffs defaulted

on the promissory note and trust deed securing their property.
The defendants sold the plaintiffs' property to a bona fide
purchaser at a trustee sale after the defendants provided the
plaintiffs with notice of the sale.

The plaintiffs filed an

action to have the sale set aside after the sale was completed
and the transfer of the trust deed was recorded.

The defendants

moved to dismiss on the ground that "ORS 86.770(1) requires any
challenges to a non-judicial foreclosure
before the trustee's sale."

Id., at *3.

[to] be made
The court analyzed the

terms of§ 86.770(1) and concluded the statute was "ambiguous as
to when a trustee's sale 'forecloses and terminates' another's
property interest."

Id., at *4.

The court also concluded the

statute was ambiguous as to "whether one whose interest was
foreclosed by the trustee's deed may raise post-sale challenges
to the proceedings."

Id.

After reviewing§ 86.770 in the

context of the Oregon Trust Deed Act (OTDA) as a whole, the
legislative history, and Oregon cases involving the issue of
8 - OPINION AND ORDER

post-sale challenges to foreclosures, the court concluded
§

86.770(1) bars challenges to the validity of a trustee's sale

after the sale is completed and the purchase of the property by a
bona fide purchaser is recorded.

Id.,

at *10.

The court noted

[t]he legislature provided notice and
reinstatement provisions to protect grantors
against the threat of wrongful foreclosure.
Voiding the sale here would encourage grantors who
receive notice of a sale to sit on their rights,
rather than compelling grantors to bring pre-sale
challenges to a trustee's sale.
Grantors are wise
to raise any challenges to non-judicial
foreclosure proceedings, including challenges
based on ORS 86.735, before the statutory
presumption of finality contained in ORS 86.780.
Post-sale challenges run the risk of being barred,
as is the case here, because the grantors'
interest in the property was "foreclosed and
terminatedn pursuant to ORS 86.770(1).
Id.,

at *10.

The court, therefore, granted the defendants'

motion to dismiss.
In Chen v. Bank of America, N.A., the plaintiff filed an
action to set aside a completed nonjudicial foreclosure sale on
the ground that, among other things, the Notice of Default and
Election to Sell was not signed or dated by a "notarial officer"
in violation of the provisions of the Oregon Trust Deed Act.
No. 3:12-CV-194-PA, 2013 WL 3929854, at *l (D. Or. July 25,
2013).

The plaintiff admitted he received notice of the

defendants' intention to sell the plaintiff's property, that his
property had been sold, and that the transfer of the Trust Deed
had been recorded before he filed his action to set aside the

9 - OPINION AND ORDER

Id.

sale.

The court concluded:
Like the plaintiffs in Mikityuk, plaintiff's
challenges to the non-judicial foreclosure sale
here are barred. As plaintiff received advance
notice of the sale, his interest in the property
was "foreclosed and terminated." ORS 86.770(1).
Plaintiff's argument that notice here was
ineffective because it was not signed and dated by
a notarial officer is meritless.
The time to make
such a challenge is long passed. As discussed in
Mikityuk, the notice provisions of the Oregon
Trust Deed Act reflect the legislature's intent to
provide those whose property interests could be
affected by a trustee's sale sufficient time to
act to protect those interests before the sale.
2013 WL 3388536 at *6 (citing Staffordshire
Investments, Inc. v. Cal-Western Reconveyance
Corp., 209 Or. App. 528, 542 (2006); NW Property
Wholesalers, LLC v. Spitz, 252 Or. App. 29, 34
(2012)).
Although plaintiff here had sufficient time to
raise any of the current challenges before the
sale, he chose instead to raise such challenges
after the trustee's sale and recording of the
trustee's deed.
Plaintiff's challenges to the
trustee's sale are barred, as plaintiff's interest
in the property was foreclosed and terminated.

Id., at *2 (quotation omitted).

The Court adopts the reasoning of Mikityuk,

Chen, and other

similar cases in this District and in Oregon courts.
Hayes,

See, e.g.,

2015 WL 5707054, at *3; Liu v. Northwest Trustee Svs.,

Inc., No. 3:12-CV-00484-BR, 2014 WL 657000, at *4

(D. Or.

Feb. 19, 2014); Nelson v. Am. Home Mortg. Svc., Inc., No. 3:13CV-00306-BR, 2013 WL 3834656, at *4 (D. Or. July 24, 2013); Hart
v. Pacific Trust Bank, No. 1:12-CV-705-PA, 2013 WL 4829172, at *2

(D. Or. Sept. 9, 2013); Offenbacher-Afolau v. ReconTrust,
10 - OPINION AND ORDER

Multnomah County Circuit Court Case No. 1202-02429, at 2
("[P]laintiff is statutorily barred under ORS 86.770 from
challenging a completed foreclosure sale of which she had notice.
No amendment will cure this jurisdiction defect, and,
accordingly, the Court finds the dismissal shall be with
prejudice.").
Here Plaintiff received notice of the foreclosure sale
within the time required under the OTDA, the property was sold to
a bona fide purchaser, and the sale of the property was recorded.
The Court concludes on this record that Plaintiff's claim is
barred under§ 86.797(1) and, therefore, grants Defendant's
Motion for Judgment on the Pleadings.
Based on the reasoning in Chen, the Court also concludes
Plaintiff cannot amend his Complaint to cure the bar on his
claims under§ 86.797.

Accordingly, the Court dismisses

Plaintiff's claims against Wells Fargo with prejudice.

CONCLUSION

For these reasons, the Court GRANTS Wells Fargo Bank N.A.'s
Motion (#7) for Judgment on the Pleadings and DISMISSES

11 - OPINION AND ORDER

Plaintiff's claims against Wells Fargo with prejudice.
IT IS SO ORDERED.
DATED this 11th day of March, 2016.

ANN~

United States District Judge

12 - OPINION AND ORDER