Tanner v. Wells Fargo Bank N.A.

JOSEPH J. TANNER, Plaintiff, v. WELLS FARGO BANK N.A., and FIDELITY NATIONAL TITLE INS, CO., Defendants.

3:15-CV-02040-BR

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF OREGON

March 11, 2016

OPINION AND ORDER

JOSEPH J. TANNER

2321 S.E. 142^nd

Portland, OR 97223

Plaintiff, Pro Se

MOLLY J. HENRY

Keesal, Young & Logan

1301 Fifth Ave

Suite 3100

Seattle, WA 98101

(206) 622-3790

Attorneys for Defendant Wells Fargo Bank N.A.

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. 142^nd 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 Corporation¹ 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.

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.

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 (9^th 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 (9^th Cir.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). See also Cafasso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 n.4 (9^th 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 byreason 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 concludesPlaintiff'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 § 8 6.764, 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.

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 . . . [to] be made before the trustee's sale." Id., at *3. 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...