Beyer v. Bank of America
800 F. Supp. 2d 1157
D. Or.2011Background
- In June 2006, Beyers obtained a $196,000 loan to buy a home in St. Helens, Oregon, executing a promissory note and a trust deed naming MERS as beneficiary and Fidelity as trustee, with the deed properly recorded.
- On December 15, 2009, MERS conveyed all beneficial interest under the deed to Deutsche Bank, and the transfer was properly recorded.
- Beyers filed a complaint alleging four claims: (1) defendants must present the promissory note to foreclose; (2) the trust deed is void if separated from the note; (3) fraud by naming MERS as beneficiary; (4) fraud by authorizing a non-employee to sign transfer documents.
- Beyers moved for a temporary restraining order to prevent foreclosure; defendants moved to dismiss for failure to state a claim.
- The court denied Beyers' TRO, granted the defendants' motion to dismiss, and held Beyers' complaint failed to state a claim on which relief could be granted.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Must foreclosing parties present the promissory note? | Beyer argues note presentation is required. | Banks contend Oregon statute does not require note presentment beyond the deed. | Not required; claim dismissed. |
| Does separation of note from deed void the trust deed? | Deed void if separated from note; Deutsche Bank lacks interest. | Separation does not void the deed; foreclosure can proceed. | Separation does not void the trust deed; foreclosure supported. |
| Is MERS a proper beneficiary under Oregon law? | If not, transfers of the trust deed by MERS would be invalid. | MERS is properly named and designated to receive the benefit; lenders are the beneficiaries in practice. | MERS is a proper beneficiary; foreclosures valid. |
| Was notarization fraudulent due to signatories being non-employees? | Signatures by non-employees render notarization fraudulent. | Authority to sign as agents is sufficient; mere non-employee status is not fraud. | Not fraudulent; claim fails. |
Key Cases Cited
- United States National Bank of Portland v. Holton, 99 Or. 419, 195 P. 823 (1921) (Or. 1921) (foreclosure may proceed even if note and deed were separated and later rejoined)
- West v. White, 307 Or. 296, 766 P.2d 383 (1988) (Or. 1988) (assignment of note carries with it a security interest; practical enforceability depends on note)