Washington Federal Savings and Loan Association v. Miller et al
Filing
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Findings of Fact and Conclusions of Law. Approved by U.S. District Judge Michael R. Hogan. (jw)
DISTRICT OF OREGON
Case 11-06058-fra
Doc 107
F I LED
Filed 11/03/11
November 03, 2011
Clerk, U.S. Bankruptcy Court
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The Bankruptcy Court's Findings of Fact and Conclusions of
Law are hereby approved.
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,~/t.
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Below are the Bankruptcy Court's Proposed Findings of
Fact and Conclusions of Law which are recommended for
approval.
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FRA. ALLEY
U.s. Bankruptcy Judge
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UNITED STATES BANKRUPTCY COURT
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FOR THE DISTRICT OF OREGON
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In re:
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Minerva B. Miller;
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Debtor(s).
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Adv. Pro. No. 11-06058-fra
Washington Federal Savings and Loan
Association,
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FINDINGS OF FACT AND
CONCLUSIONS OF LAW
Plaintiff,
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Case No. 10-63800-fra7
v.
Minerva B. Miller; Stephen P. Arnot, Trustee
of the Bankruptcy Estate of Minerva B.
Miller; Northwest Trustee Services, Inc., a
Washington corporation; JP Morgan Chase
Bank, National Association; Gene T. Flory,
Trustee of the Jacqueline M. Flory and Gene
T. Flory Living Trust; Joseph 1. Perrino;
Amber M. Perrino; First Tennessee Bank
National Association; Vera Silva; Response
Mortgage Services, Inc. a Washington
corporation; RBS Citizens, National
Association; Alan Lee Lynn; Andre B.
Feliciano; Elaina T. Feliciano; Alysha Ann
Jones; Mortgage Electronic Registration
Page I of5 - FINDINGS OF FACT AND
CONCLUSIONS OF LAW
HERSHNER HUNTER
c"
A rrORNE:YS
PO Box 1415. Eugene. Oregon 91440
541'686'8511
fax 541-344'2025
Case 11-06058-fra
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Doc 107
Filed 11/03/11
Systems, Inc., a Delaware corporation;
GMAC Mortgage, LLC, a Delaware Limited
Liability Company, successor by merger to
GMAC Mortgage Corporation; EverHome
Mortgage Company, a Florida corporation;
HSBC Mortgage Corporation (USA), a
Delaware corporation; and PremierWest
Bank, an Oregon Chartered Commercial
Bank,
Defendants.
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It appearing that orders of default have been entered against Defendants Minerva B.
Miller, Gene T. Flory, Joseph L. Perrino, Amber M. Perrino, Vera Silva, Response Mortgage
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Services, Inc., Alan Lee Lynn, Andre B. Feliciano, Elaina T. Feliciano, Alysha Ann Jones, First
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Tennessee Bank National Association, GMAC Mortgage, LLC and PremierWest Bank, and the
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remaining parties having stipulated to these findings of fact, conclusions of law, and
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recommendation to the District Court; the court makes the following findings of fact and
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conclusions of law and recommends entry of final judgment in the form attached hereto as
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Exhibit I.
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Findings of fact:
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1.
On or about April 23, 1996, the Debtor Minerva Miller and Debtor's late husband
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granted Washington Federal Savings and Loan Association ("WFS") a trust deed on "Lot 6 of
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the Victoria Court Subdivision, Shady Cove, Oregon, according to the official plat thereof, now
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of record," and such trust deed was recorded in the Jackson County, Oregon real property
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records, Instrument Number 96-15241 on May 10, 1996 ("WFS Trust Deed"). That trust deed
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was given to secure a promissory note of even date in the original principal amount of
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$204,000.00. WFS is the owner and holder of that note and of the beneficial interest in the WFS
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Trust Deed.
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Page 2 of 5 - FINDINGS OF FACT AND
CONCLUSIONS OF LAW
HERSHNER HUNTER
lLP
A!TORNEYS
PO Box 1415. Eugene. OreQOll9144ll
541-686-8511
fax 541-344-20Z5
Case 11-06058-fra
2.
Doc 107
Filed 11/03/11
On or about January 25,2000, the Debtor and Debtor's late husband granted
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Washington Mutual Bank two trust deeds one each on Lot 2 and Lot 5 of the Victoria Court
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Subdivision, Shady Cove, Jackson County, Oregon, and such trust deeds were recorded in the
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Jackson County, Oregon real property records, Instrument Numbers 00-03481 and 00-03482 (the
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"JP Trust Deeds") on January 28, 2000. Those trust deeds were given to secure promissory notes
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of even date in the original principal amounts of$188,000.00 each.
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3.
JP Morgan Chase Bank, N.A., as acquirer of certain assets and liabilities of
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Washington Mutual Bank from the Federal Deposit Insurance Corporation as Receiver for
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Washington Mutual Bank, named herein as JPMorgan Chase Bank National Association
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("JPMorgan") is the holder of those notes and the successor beneficiary of the JP Trust Deeds.
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4.
On December 29, 2004, after approval by the Oregon Real Estate Agency, a
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Declaration of Condominium Ownership for Victoria Court Condominiums (the "Declaration l ,,)
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was recorded in the official records of Jackson County, Oregon, as Instrument Number 2004-
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075174, by Dion H. Miller, Minerva B. Miller, Alan L. Lynn, Andre B. Feliciano and Elaina T.
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Feliciano as Dec1arants.
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5.
Thereafter, the real property formerly known as Lots 1,2,4,5, and 6 of Victoria
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Court Subdivision became subject to the condominium form of ownership and became known as
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the Victoria Court Condominiums ("Condominium").
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6.
The portions of Lots 1,2,4,5, and 6 of Victoria Court Subdivision other than the
buildings became the common areas of the Condominium.
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7.
Pursuant to the Declaration, owners of each Condominium unit in each building
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became the owners of: (I) their respective unit; and (2) an undivided fractional ownership of the
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1 The
defined term "Declaration" includes any amendments to the Declaration.
Page 3 of 5 - FINDINGS OF FACT AND
CONCLUSIONS OF LAW
HERSHNER HUNTER Le'
ATTORtU:V$.
PO Box 1415, EUljefle, Oregon 97440
541-686-8511
fax 541'344'2025
Case 11-06058-fra
Doc 107
Filed 11/03/11
general common elements of the condominium and of those limited common elements
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appurtenant to the specific unit, as set forth in the Declaration and any subsequent amendments
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thereto.
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8.
WFS and Washington Mutual Bank consented to the Declaration and the
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formation of the Condominium and such consent was recorded in the Jackson County real
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property records, Instrument Numbers 2004-018232, 2004-033493 and 2004-033494
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(collectively, the "Consent").
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9.
After the Declaration was recorded, several subsequent purchasers and secured
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parties acquired interests in Condominium units and those common elements located on Lots 2, 5
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and 6 of the prior subdivision.
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10.
The subsequently recorded deeds describe each respective interest in terms of
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units in a condominium, not lots in a subdivision.
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II.
On April 13,2010, Defendant Northwest Trustee Services, Inc., as trustee of the
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JP Trust Deeds, recorded notices of default and elections to sell Lots 2 and 5 of the Victoria
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Court Subdivision, initiating the non-judicial foreclosure of the JP Trust Deeds.
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12.
Because the property descriptions provided in the JP Trust Deeds describe the
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scope of the encumbrances in terms of lots, instead of individual units with associated interests in
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the common elements, the other parties with an interest in those common elements located on
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former Lots 2 and 5 will be foreclosed and the Condominium will effectively be terminated if JP
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Morgan concludes its pending non-judicial foreclosures.
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Conclusions of law:
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1.
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This court has subject matter jurisdiction over this matter pursuant to 28 U.S.C.
§§ 157, 1334, United States District Court Local Rule 2 I 00.0, and FRBP 7001. Venue is proper
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CONCLUSIONS OF LAW
HERSHNER HUNTER '"
A TTORN£YS
PO 80, 1415. Eugen •• Oregon 91440
541-686-8511
lax 541-344-2025
Case 11-06058-fra
Doc 107
Filed 11/03/11
pursuant to 28 U.S.C. § 1409.
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2.
Under the recently announced decision in Stern v. Marshall 564 U.S. _ . 131
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S.Ct. 2594. 2011 WL 2472792,180 L.Ed.2d 475 (2011), this bankruptcy court may not enter a
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final judgment in this matter because it is a matter of state law that has not been resolved in the
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process of ruling on federal bankruptcy issues.
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3.
Declaratory relief is appropriate because the parties are in an actual controversy
regarding the effect of the Consent on the WFS and lP Trust Deeds.
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Where a condominium agreement is recorded and a pre-existing mortgage exists,
the effect ofthe consent by a pre-existing mortgage holder is to subordinate its interest to the
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condominium agreement, thereby changing the pre-existing mortgage holder's property interest
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to reflect the condominium form of ownership. Therefore, the effect of the Consent is to
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subordinate the WFS and lP Trust Deeds to the Declaration. Such subordination shall change
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the property interests secured by the WFS and lP Trust Deeds to reflect the condominium form
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of ownership, as described in the Declaration and as more specifically described in the proposed
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form of judgment.
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Scheduling Order:
These findings and recommendations will be referred to a district judge. Objections, if
any, are due 17 days after entry of these Findings of Fact and Conclusions of Law. Ifno
objections are filed, then the findings and recommendations will go under advisement on that
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date. If objections are filed, then responses are due 14 days after being served with a copy of the
objections. When the responses are due or filed, whichever date is earlier, the finding and
recommendations will go under advisement.
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HERSHNER HUNTER '"
ATrORtiEY$
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