Eslami v. Federal National Mortgage Ass'n
691 F. App'x 379
| 9th Cir. | 2017Background
- Eslami obtained a home loan secured by a deed of trust and later defaulted.
- World Savings (successor: Wells Fargo) or its assignee Fannie Mae conducted a non-judicial trustee’s sale and sold the property after giving notice.
- Sixteen months after the sale, Eslami sued to quiet title, alleging the foreclosure was invalid because no assignment of the deed of trust to Fannie Mae was recorded, relying on Or. Rev. Stat. § 86.735(1).
- Defendants argued the claim was preempted by the federal Home Owners’ Loan Act (HOLA) and alternatively that Oregon’s statute barring post-sale challenges applied.
- The district court dismissed for failure to state a claim on HOLA preemption grounds; the Ninth Circuit affirmed on the independent ground that Or. Rev. Stat. § 86.770(1) bars post-sale challenges based on technical defects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a post-sale challenge based solely on an unrecorded assignment invalidates a trustee’s sale under Oregon law | Eslami: lack of recorded assignment renders the foreclosure and sale void | Defendants: Oregon law bars post-sale challenges unless based on lack of notice or fundamental flaws | Held: Barred — § 86.770(1) precludes post-sale claims based on mere technical defects; Eslami alleged only a technical defect |
| Whether Eslami’s equitable quiet-title claim survives despite § 86.770(1) | Eslami: equitable relief can invalidate the sale independent of statutory limits | Defendants: Quiet-title fails because plaintiff no longer retains an interest after a valid sale and statutory bar applies | Held: Dismissed — Eslami cannot show he retained an interest and pleadings do not plausibly allege superior title |
| Whether HOLA preempts Eslami’s state-law claim | Eslami: state-law claim should proceed (argued implicitly by bringing OTDA claim) | Defendants: HOLA preempts the state-law challenge (argued below) | Held: Court did not decide preemption because it affirmed on § 86.770(1) grounds |
Key Cases Cited
- Woods v. U.S. Bank N.A., 831 F.3d 1159 (9th Cir. 2016) (post-sale challenges barred unless based on lack of notice or fundamental flaw)
- DiGregorio v. Bayview Loan Servicing, LLC, 381 P.3d 961 (Or. Ct. App. 2016) (OTDA does not require strict compliance with every provision for a trustee’s sale to be valid)
- Rohner v. Neville, 365 P.2d 614 (Or. 1961) (plaintiff must retain an interest to succeed in quiet-title action)
- Vestar Dev. II, LLC v. Gen. Dynamics Corp., 249 F.3d 958 (9th Cir. 2001) (appellate court may affirm on any ground supported by the record)