Bangs et al v. Quality Loan Service Corporation et al
Filing
25
ORDER: Granting Defendant's Motion to Dismiss Case for Lack of Jurisdiction 17 ; Granting Defendant's Request for Judicial Notice 19 . This case is dismissed. Signed on 3/8/2013 by Chief Judge Ann L. Aiken. (lg)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
WILLIAM BANGS AND MARLENE BANGS,
·)
Plaintiffs,
No. 6:12-cv-1543-AA
OPINION and ORDER
v.
QUALITY LOAN SERVICES CORPORATION,
OF WASHINGTON, a Washington
corporation, BAYVIEW LOAN
SERVICING, LLC, a Washington
corporation,
Defendants.
AIKEN, Chief Judge:
Plaintiffs bring this suit alleging that defendant Quality
Loan Servicing 1 has not complied with foreclosure laws.
Defendant
moves to dismiss.
Plaintiffs allege that they obtained a loan from New Freedom
Mortgage Corporation and signed a
mortgage
loan.
The
Registration Systems
trust
deed
deed of trust
listed
to
secure the
Mortgage
Electronic
(MERS) as the beneficiary under the deed.
Plaintiffs defaulted on the loan.
Plaintiffs attempted to
modify the loan, but were aver that they were unsure who serviced
1
Defendant Bayview Loan Servicing has been dismissed from this
case.
1 - OPINION AND ORDER
the loan.
Plaintiffs allege that after several attempts to get a
response to a qualified written request, the loan was transferred
to
defendant
Quality
Loan
who
issued
documents
setting
a
foreclosure sale on September 5, 2012.
Plaintiffs allege that MERS is not a proper beneficiary under
the deed of trust and that its purported assignment in July of 2011
to
BAC
Home Loan Servicing was
improper.
Plaintiff's
further
allege that the original lender never recorded an assignment of its
interest in the deed.
Consequently, plaintiffs assert that a non-
judicial foreclosure cannot occur without proper recording of all
assignments of an interest in the deed of trust.
Plaintiffs seek
a declaration that defendant has not complied with the Oregon Trust
Deed Act and an injunction prohibiting non-judicial foreclosure
proceedings.
Defendant
pursue
a
'
asserts
non-judicial
that
sale.
it
has
voluntarily
Accordingly,
elected not
defendant
moves
to
to
dismiss contending that plaintiffs' complaint is now moot.
Defendant points to public records 2 demonstrating that it has
rescinded the non-judicial foreclosure proceeding that plaintiffs
challenge.
In light of the rescission of the notice of default and
election to sell, defendant cannot proceed with the proposed non-
2
Defendant asks the court to take judicial notice of the
notice of default and election to sell and the rescission of that
notice in the official records of Benton County.
These documents
are properly subject .to judicial notice and defendant's request is
granted.
2 - OPINION AND ORDER
judicial foreclosure.
Defendant asserts that it will now proceed
with a judicial foreclosure.
Moreover, even if defendant decided
to restart a non-judicial foreclosure,
it would have to record a
new notice of default and provide a new notice of sale under the
Oregon Trust
Deed Act,
before the court.
which is
Nonetheless,
a
theoretical
possibility not
the beneficiary of the deed of
trust has stated on the record its intention not to restart a nonjudicial foreclosure and is therefore estopped from pursuing a nonjudicial foreclosure.
Federal
courts
Jurisdiction is
are
of
jurisdiction.
limited
limited to actual cases or controversies.
Pitts v. Terrible Herbst,
2011).
courts
Inc.,
653 F.3d 1081, 1086-87
A case or controversy requires
"that an actual,
See
(9th Cir.
ongoing
controversy exist at all stages of federal court proceedings." Id.
at 1086.
(internal citation omitted).
"[A] defendant claiming that its voluntary compliance moots
a case bears the formidable burden of showing that it is absolutely
clear
the
expected
allegedly
to
recur."
Environmental
wrongful
Friends
Services,
behavior
of
Inc.,
could not
the
Earth,
528
U.S.
reasonably be
Inc. ,
Laidlaw
190
167,
v.
(2000).
Defendant's voluntary action may result in a moot claim when:
(1)
there is no reasonable expectation that the alleged violation will
recur;
and
irrevocably
( 2)
"interim relief
eradicated
the
3 - OPINION AND ORDER
or
effects
events
of
the
have
completely
alleged
and
violation."
Smith v. Univ. of Washington, 233 F.3d 1188, 1194 (9th Cir. 2000)
(internal citation omitted).
Because the non-judicial foreclosure plaintiffs seek to enjoin
is no longer possible due to defendant's voluntary decis.ion to
rescind the notice of default and election to sell and pursue a
judicial foreclosure, the case has become moot.
Because the case is moot, plaintiffs' claim for attorney fees,
under O.R.S.
§
20.096,
should they prevail,
is
similarly moot.
However, the court, in its discretion, may award just costs.
Whenever any action or suit is dismissed in any district
court, the Court of International Trade, or the Court of
Federal Claims for want of jurisdiction, such court may
order the payment of just costs.
28
u.s.c.
§
1919.
In determining "just costs" under 28 U.S.C. § 1919, a
district court should consider what is most fair and
equitable under the totality of the circumstances. An
emphasis on a "case-by-case approach" based on "the
circumstances and equities of each case" is in keeping
with a court's discretion to award costs, "a practice
long recognized in equity." 10 Charles Alan Wright,
Arthur R. Miller, Mary Kay Kane, & Richard L. Marcus,
Federal Practice and Procedure § 2668, at 230-31 (3d ed.
1998) (discussing discretionary nature of Rule 54(d));
see also Ericsson GE Mobile Commc'ns v. Motorola Commc'ns
& Elecs., 179 F.R.D. 328, 334 (N.D.Ala.1998) (the "broad
discretion" allowed to trial courts in awarding costs
"encourages this court to exercise its discretion as to
what
are
'just
costs'
under
the
totality
of
circumstances"). Although "just costs" is a unitary
standard, it involves a two step analysis-whether an
award of costs is just and equitable and, if so, the
appropriate amount of costs.
Otay Land Co. v. United Enterprises Ltd., 672 F.3d 1152, 1157 (9th
Cir. 2012).
4 - OPINION AND ORDER
The court has already expressed its opinion that plaintiffs'
claims bore a strong likelihood of success via granting preliminary
relief.
of
the
But, the failure to follow the recording requirements of
Oregon
Trust
Deed Act
would
not
plaintiffs are in default on their loan.
demonstrates
why
proper
recording
is
negate
the
Still,
fact
that
the complaint
important
given
that
plaintiffs' attempts to modify the loan were allegedly thwarted by
the confusion created by transferring the underlying loan to other
entities while MERS,
who had no financial interest in the loan,
maintained its role as a nominal beneficiary of the deed of trust.
When the loan and the deed of trust are split in such a manner, it
becomes difficult for the mortgagor to negotiate a modification
that
is
beneficial
to
the
real
parties
who
hold
a
financial
interest in seeing that the mortgage is paid.
However,
the law regarding the requirements of the Oregon
Trust Deed Act has been evolving in this state and the most recent
statement from the Oregon courts came on July 18, 2012.
v.
GMAC Mortg.,
impression
that
promissory
note
LLC,
MERS
251 Or.
is
requires
3
not
App.
a
278
(2102)
beneficiary
recording
decided
See Niday
(Issues of first
and
assignment
July
18,
of
2012) . 3
0n September 27, 2012, the Oregon Supreme Court allowed a
petition for review in Niday. See Niday v. GMAC, S060655.
Thus,
even now, Niday, is not the final statement on Oregon law.
In
addition, the Oregon Supreme Court has accepted the questions
certified by this judge on issues similar to the ones presented by
this case, on July 19, 2012. See Brandrup v. Recontrust Co., N.A.,
(continued ... )
5 - OPINION AND ORDER
Although this predates the filing of the complaint in this case, it
does
not
predate
the
recording
of
the
notice
election to sell which occurred on April 23, 2012.
be
argued
that
plaintiffs
incurred
expenses
of
default
and
While it could
necessitated
by
defendant's failure to rescind the notice until after the filing of
the complaint and after the granting of temporary relief,
the totality of the circumstances,
4
under
the court declines to award
costs and certainly attorney's fees under section 1919.
CONCLUSION
For the reasons stated above, defendant's request for judicial
notice (#19) and motion to dismiss (#17) are granted and this case
is dismissed.
DATED this
United
District Judge
3
( • • • continued)
3:11-cv-1390-HZ (Certification Order dated April 2, 2012); 352 Or.
Therefore, the
320 (2012) (Order Accepting Certified Question).
MERS issue remains unsettled.
4
Defendant voluntarily canceled the sale prior to a hearing on
the preliminary injunction after being properly served with the
complaint and temporary restraining order.
6 - OPINION AND ORDER
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