Collier v. Wilmington Sav. Fund Soc'y, FSB

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ROY COLLIER and CONSTANCE COLLIER, Plaintiffs, v. WILMINGTON SAVINGS FUND SOCIETY, FSB, as Trustee of Stanwich Mortgage Loan Trust A, Defendant.

No. 2:20-cv-00681-HL

United States District Court, D. Oregon, Pendleton Division

November 2, 2022

FINDINGS AND RECOMMENDATION

NDREW HALLMAN, United States Magistrate Judge.

This matter comes before the Court on Defendant Wilmington Savings Fund Society, FSB's Request for Judicial Notice and Motion for Attorney's Fees and Bill of Costs. ECF 69, 71. Having considered the submissions of the parties, this Court recommends that Defendant's Request for Judicial Notice ECF 71, should be GRANTED, Defendant's Motion for Attorney's Fees and Bill of Costs, ECF 69, should be GRANTED in part and Defendant should be awarded $67,475.70 in attorney's fees and $3,194.15 in costs.

BACKGROUND

Plaintiffs initially filed this action in Oregon state court, and Defendant removed it to the District of Oregon in April 2020. See Notice of Removal of Action, ECF 1. Plaintiffs assert one claim for relief for quiet title against Defendant, seeking to enjoin Defendant from claiming any interest in Plaintiffs' real property in Wallowa County Oregon. Id. Ex. A (“Compl.”), ¶ 1. They seek a judgment “[q]uieting title” on their property and “[e]njoining [D]efendant and those claiming under [D]efendant from asserting any estate, title, claim, lien, or interest in the premises or any portion thereof including, but not limited to, any interest arising under the Deed of Trust now or in the future.” Id. at 5-6. In response, Defendant denied that Plaintiffs were entitled to relief and filed a counterclaim, seeking broad declaratory relief concerning the Deed of Trust, its lien position, and the effect of prior litigation between the parties. Ans. & Countercl. for Declaratory Relief 7-10, ECF 4.

In August 2020, Plaintiffs filed their original Motion for Summary Judgment. ECF 11. Defendant filed a Response to Plaintiffs' Motion for Summary Judgment and a Cross Motion for Summary Judgment on Defendant's counterclaim. ECF 16. On January 7, 2021, the Court granted the parties' Joint Motion for Extension of Discovery and Pre-Trial Order (“PTO”) Deadlines, which reopened discovery and allowed the parties to “file any amended or supplemental briefs in support of summary judgment[.]” ECF 24. Plaintiffs then filed a Supplemental Motion for Summary Judgment, ECF 36, and Defendant filed a Supplemental Response, ECF 43. Defendant also filed a Request for Judicial Notice of the Deed of Trust assignments, complaints filed in state court, and a disclaimer of interest from Bank of America. ECF 19.

Both parties asserted that they were entitled to summary judgment on their respective claim and counterclaims for a multiple reasons. The parties' motions for summary judgment addressed several issues, including: (1) whether Plaintiffs could proceed with their claim for quiet title under Oregon law given that there was no genuine issue of material fact as to whether they had satisfied the underlying loan; (2) whether the Lost Note Affidavit provided by Defendant was an adequate substitute for the lost original note; (3) whether the Note was properly transferred through a chain of assignments so that Defendant may enforce the Note; (4) whether a statute of limitations prevents Defendant from enforcing the Deed of Trust; (5) the Oregon Trust Deed Act; (6) whether Defendant's allonge affixed to the Lost Note Affidavit; and (7) prior litigation in state court between the parties.

Ultimately, the Court granted summary judgment to Defendant on Plaintiffs' quiet title claim, but only on the grounds that there was no genuine issue of material fact as to whether Plaintiffs had satisfied the underlying loan. Op. & Order 2-4, ECF 67. The Court declined to exercise jurisdiction over Defendant's counterclaim for declaratory relief, largely because Defendant did not object to the dismissal based on the disposition of the cross motions for summary judgment. Id. at 4-5. The Court dismissed Defendant's counterclaim without prejudice. Judgment, ECF 68.

Following the Judgment, Defendant submitted this Motion for Attorney's Fees and Bill of Costs. ECF 69. Defendant also submitted a second Request for Judicial Notice. ECF 71. Plaintiffs oppose both motions in their entirety.

REQUEST FOR JUDICIAL NOTICE

Defendant requests that this Court take judicial notice of the Deed of Trust dated December 15, 2006, and recorded in the Official Records of Wallowa County on December 19, 2006, as Instrument No. 056856. Req. for Judicial Notice 2, ECF 71. This Court agrees that the Deed of Trust is a public record concerning real property that is subject to judicial notice under Federal Rule of Evidence 803(14).

In opposing judicial notice, Plaintiffs assert under Rule 201, “a court may not take judicial notice of a fact that is ‘subject to reasonable dispute[.]'” Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001). Plaintiffs argue there are multiple disputes concerning the contents of the Deed of Trust. Pls.' Obj. to Req. for Judicial Notice 3-4, ECF 74-2. But Plaintiffs' purported disputes pertain to “the interpretation and application” of the Deed of Trust and also address events occurring after the execution of the Deed of Trust. Id. This Court does not take judicial notice of “interpretations or applications” of the Deed of Trust or events after its execution. Rather, the Court only takes judicial notice of the fact that Plaintiffs executed a Deed of Trust concerning the property on December 15, 2006, and that Defendant has provided a true and accurate copy of that document. Accordingly, Defendant's Request for Judicial Notice should be granted.^[1]

MOTION FOR ATTORNEY'S FEES

A motion for attorney's fees must specify the judgment statute rule, or other grounds entitling the party to relief and state the amount sought. Fed.R.Civ.P. 54(d)(2). When the action is based on diversity, state law governs a party's entitlement to fees. Alaska Rent-A-Car, Inc. v. Avis Budget Grp., Inc., 738 F.3d 960, 973 (9th Cir. 2013) (“[S]tate law on attorney's fees is substantive, so state law applies in diversity cases.”). Under Oregon law, “the trial court looks, first, to whether the party is entitled to attorney fees and, second, to the reasonableness of the requested fees.” Bennett v. Baugh, 164 Or.App. 243, 246 (1999).

I. Defendant is entitled to reasonable attorney's fees.

A. Plaintiffs' quiet title action was based on contract.

In Oregon, “a court awards attorney fees to a litigant only if a statute or contract authorizes such an award.” Swett v. Bradbury, 335 Or. 378, 381 (2003). Here, Defendant seeks attorney's fees under Or. Rev. Stat. (“ORS”) 20.096, which states:

(1) In any action or suit in which a claim is made based on a contract that specifically provides that attorney fees and costs incurred to enforce the provisions of the contract shall be awarded to one of the parties, the party that prevails on the claim shall be entitled to reasonable attorney fees in addition to costs and disbursements....

(3) As used in this section . . ., “contract” includes any instrument or document evidencing a debt.

ORS 20.096 (emphasis added).

The statute “applies only when a claim is ‘based on a contract.'” Ass'n of Unit Owners of Bridgeview Condominiums v. Dunning, 187 Or.App. 595, 630 (2003) (quoting ORS 20.096). “When a claim is brought in tort, not to enforce the provisions of a contract, the contractual attorney fees provision is inapplicable.” Baldin v. Wells Fargo Bank, N.A., No. 3:12-648-AC, 2016 WL 3021726, at *4 (D. Or. Apr. 12, 2016) (quoting Cascade Steel Fabricators, Inc. v. Citizens Bank of Or., 46 Or.App. 573 (1980)), aff'd, 704 Fed.Appx. 715 (9th Cir. 2017). “By contrast, when the substance of the complaint, even if styled as a tort, is the contract, the fee provision will apply.” Id. (citing Copeland-Turner v. Wells Fargo Bank, N.A., No. CV-11-37-HZ, 2011 WL 5117877, at *6 (D. Or. Oct. 25, 2011).

Plaintiffs assert that their quiet title action is an equitable remedy not based on contract, so ORS 20.096(1) does not apply. This Court disagrees. The fact that quiet title is an equitable remedy is not dispositive, as equitable remedies can be based on contract. This Court must instead look to the substance of the Complaint, which demonstrates that the quiet title action was based on contract. Plaintiffs sought to quiet the title of “an interest in a deed of trust securing a promissory note encumbering the property.” Compl. ¶ 18. They further alleged that Defendant “has no legal right to enforce the Note or to foreclose the Trust Deed.” Id. ¶ 14. Thus, Plaintiffs' allegations demonstrate that their quiet title claims were based on the Promissory Note and Deed of Trust-two contracts between the parties. Therefore, ORS 20.096(1) applies.

B. Plaintiffs' evidentiary objections are irrelevant to the fee determination.

Plaintiffs next argue that Defendant cannot recover attorney's fees because Defendant has not presented admissible evidence that it is a Note holder, lender, or beneficiary under the Deed of Trust. Pls.' Resp. to Def.'s Mot. Att'y Fees and Bill of Costs, (“Pls.' Resp.”) 3-5, ECF 74. According to Plaintiffs, because there remains a dispute over whether Defendant is a beneficiary of that contract, this cannot be a dispute “based on a contract.” Id. (citing ORS 20.096(1)).

Plaintiffs' evidentiary arguments miss the mark. At issue is whether this quiet title action was based on a contract that provides for attorney's fees, which in this case are the Deed of Trust and Promissory Note. Plaintiffs initiated this action to quiet title to the real property and determine the parties' rights and obligations under the Deed of Trust and Promissory...