Yoakam v. State Farm Fire & Casualty Company et al
Filing
37
OPINION AND ORDER: State Farm's and Wells Fargo's Motions to Dismiss ( 24 , 32 ) are GRANTED. Within 30 days after the date of this order, plaintiff may move for amendment of her complaint, after the required conferral with defen dants. In the meantime, the parties shall contact Paul Bruch, Courtroom Deputy for Magistrate Judge Thomas Coffin, at 541-431-4111 to schedule judicial settlement proceedings. See formal OPINION AND ORDER. Signed on 5/26/2016 by Judge Ann L. Aiken. (rh)
UNITED STATES DISTRICT COURT
DISTRICT OF OREGON
LUJEAN YOAKAM, A.K.A. LOU JEAN
YOAKAM,
Case No. 6:15-cv-00478-AA
OPINION AND ORDER
Plaintiff,
v.
STATE FARM FIRE AND CASUALTY
COMPANY and WELLS FARGO HOME
MORTGAGE, INC., A DIVISION OF
WELLS FARGO BANK, N.A.,
Defendants.
AIKEN, Judge:
Plaintiff filed suit alleging claims for breach of contract, reformation of contract and
declaratory judgment. Plaintiff alleges that defendant State Farm Fire and Casualty Company
(State Farm) breached the te1ms of insurance contract by failing to provide adequate coverage for
storm damage that rendered plaintiffs residence uninhabitable. Plaintiff also alleges claims for
refmmation of contract against State Farm and defendant Wells Fargo Home Mortgage, Inc.
(Wells Fargo), claiming that the relevant insurance and mortgage contacts should be reformed to
convey the intent of the parties and to provide a replacement for plaintiffs residence.
1
- OPINION AND ORDER
State Farm and Wells Fargo now move for dismissal of plaintiffs First and Second
Claims for Relief alleging reformation of contract. The motions are granted.
BACKGROUND
On or about January 17, 2002, plaintiff obtained a reverse mortgage loan (the Loan) from
Wells Fargo related to real property located at 1895 N. Fir Street, Coquille, Coos County,
Oregon. Pl.' s Compl.
ifif 1, 5. In exchange for the Loan, plaintiff voluntarily executed an
Adjustable Rate Note and an Adjustable Rate Second Note. Tran-Caffee Deel. Exs. 2-3. The
Loan is secured by an Adjustable Rate Home Equity Conversion Line of Credit Deed of Trust.
Id. Ex. 1.
On or about June 9, 2013, a wind and hail storm occurred, causing structural damage to
plaintiffs residence and rendering it uninhabitable. Pl.' s Compl.
the home pending repairs. Id.
if 3. Plaintiff had to move out of
if 6. For a period of time, plaintiff was living in alternate housing,
an "old camp trailer," provided by State Farm. Id.
if 8.
Plaintiff has a homeowner's insurance policy issued by State Farm (the Policy), and the
Policy includes replacement coverage for structural damage. Id.
if 3. According to plaintiff, the
sums offered by State Farm under the Policy are insufficient to repair the storm damage to her
residence. Pl.' s Compl.
if 7. Plaintiff further alleges that repairs to her residence have ceased due
to State Farm's refusal to provide sufficient coverage to complete the required work. Id.
if 8. As
an alternative to repairing the home, plaintiff has proposed that her residence be burned down by
the local fire department and replaced with a "modest manufactured home dwelling," and that
the cost be covered by State Farm under the Policy. Id.
ifif 14, 23. Plaintiff alleges breach of
contract against State Farm and also seeks reformation of the insurance contract to provide for
sufficient replacement coverage. Id.
2
- OPINION AND ORDER
ifif 14, 27-30.
Plaintiff further alleges that Wells Fargo has notified plaintiff that it intends to foreclose
the Loan because she has not lived in the residence for over a year, and it is no longer plaintiffs
principal residence. Pl.'s Compl.
if 17, 19. Plaintiff also asserts that Wells Fargo will not allow
her to pursue her alternative proposal of replacing the home. Id.
reformation of the Loan agreement to avoid foreclosure. Id.
if 18. Plaintiff thus seeks
if 19.
DISCUSSION
State Farm and Wells Fargo move for dismissal of plaintiffs contract reformation claims
alleged in her First and Second Claims for Relief. Defendants argue that plaintiff fails to plead
the requisite elements of reformation. I agree.
To state a claim for contract reformation under Oregon law, plaintiff must plead that: 1)
there was an antecedent agreement to which the contract can be reformed; 2) there was a mutual
mistake or a unilateral mistake on the part of the party seeking reformation and inequitable
conduct on the part of the other party; and 3) the party seeking reformation was not guilty of
gross negligence. 5 Star, Inc. v. At!. Cas. Ins. Co., 269 Or. App. 51, 60, 344 P.3d 467, rev. den.
357 Or. 743, 361 P.3d 608 (2015); Munson v. Valley Energy Inv. Fund, US., LP, 264 Or. App.
679, 696, 333 P.3d 1102 (2014).
As noted by defendants, plaintiffs Complaint fails to allege an antecedent agreement
with either State Farm or Wells Fargo, aside from the Policy and the relevant Loan agreements.
In response to defendants' motions, plaintiff agrees that she cannot establish the existence of an
antecedent agreement with either defendant and that dismissal of the reformation claims are
wananted. Pl.'s Response to State Farm at 2; Pl.'s Response to Wells Fargo at 2. However,
plaintiff argues that she should be allowed the opportunity to amend her complaint to allege a
claim of unconscionability against State Farm and an unspecific contract claim for specific
3
- OPINION AND ORDER
performance against Wells Fargo, presumably based on its alleged refusal to endorse checks
issued jointly to plaintiff and Wells Fargo. Plaintiff also maintains that Wells Fargo is a
necessary party to this action, and she cannot obtain complete relief in its absence.
I am not persuaded that Wells Fargo is a necessary and indispensable party to this action.
See Fed. R. Civ. P. 19(a)(l). Nonetheless, at this juncture, it is unclear whether plaintiffs
attempts to amend her complaint would be futile. Accordingly, I will allow plaintiff the
opportunity to amend her complaint. Fmiher, in light of plaintiffs allegations, I find settlement
proceedings appropriate.
CONCLUSION
State Farm's and Wells Fargo's Motions to Dismiss (docs. 24, 32) are GRANTED.
Within 30 days after the date of this order, plaintiff may move for amendment of her complaint,
after the required conferral with defendants. In the meantime, the parties shall contact Paul
Bruch, Courtroom Deputy for Magistrate Judge Thomas Coffin, at 541-431-4111 to schedule
judicial settlement proceedings.
IT IS SO ORDERED.
Dated this JY:day of May, 2016.
Ann Aiken
United States District Judge
4
- OPINION AND ORDER
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?