Dennis Woods v. US Bank
2016 U.S. App. LEXIS 14128
| 9th Cir. | 2016Background
- In 2006 Dennis and Golda Woods executed a promissory note and trust deed with Homefield; MERS was named beneficiary and Fidelity National Title trustee.
- Woods defaulted in 2008; MERS assigned the trust deed to U.S. Bank (USB) in 2010; USB later had BAC service the loan and ReconTrust (Recon) acted as successor trustee.
- Recon recorded a Notice of Default and published a Trustee’s Notice of Sale; a trustee’s sale occurred on February 14, 2012, and a trustee’s deed was recorded to Bank of America/Harborview.
- Plaintiffs sued months later, initially alleging unrecorded pre-2010 assignments made by operation of law; after Brandrup rejected the recording theory, they amended to allege the Notice of Sale misidentified the true beneficiary, rendering the sale void under the Oregon Trust Deed Act (OTDA).
- Defendants moved to dismiss; the district court dismissed under ORS 86.770(1) (trustee’s sale forecloses and terminates the interest of a person to whom notice was given). Plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ORS 86.770(1) requires strict compliance with every OTDA provision so a post-sale notice-content defect voids the sale | Woods: OTDA’s prefatory language means strict compliance required; misidentifying beneficiary in Notice of Sale voids foreclosure | USB/Recon: ORS 86.770(1) gives finality to trustee’s sale; not every post-sale technical defect (e.g., wrong beneficiary named) can void sale | Court: ORS 86.770(1) does not demand strict compliance with every OTDA technical requirement; only lack of notice or fundamental defects (e.g., no default) justify upsetting sale; here misidentification was a non-fundamental, technical defect so claim barred |
Key Cases Cited
- Brandrup v. ReconTrust Co., 353 Or. 668 (Oreg. 2013) (interpreting OTDA and rejecting recording requirement for assignments resulting by operation of law)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (pleading standard: plausibility)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: no naked assertions)
- Pride v. Correa, 719 F.3d 1130 (9th Cir. 2013) (review standard for 12(b)(6) dismissal)
- Mikityuk v. Nw. Tr. Servs., Inc., 952 F. Supp. 2d 958 (D. Or. 2013) (discussing reasonable readings of when a sale is "under ORS 86.705 to 86.795")
- Niday v. GMAC Mortg., LLC, 251 Or. App. 278 (Or. Ct. App. 2012) (history and purpose of OTDA)