James v. ReconTrust Co.
845 F. Supp. 2d 1145
D. Or.2012Background
- Plaintiffs James signed a promissory note secured by a trust deed in 2007; default occurred in 2010.
- Trust deed identified MERS as beneficiary and nominee for Lender and successors, with NWMG named as Lender.
- Note and deed of trust were transferred through multiple entities; assignments were not all recorded in county land records.
- MERS assigned the trust deed to BACHLS, RTC appointed as successor trustee; a robo-signer allegedly signed related documents.
- Plaintiffs alleged wrongful non-judicial foreclosure and sought declaratory relief and damages; Defendants removed to federal court and moved to dismiss.
- Judge Stewart's F&R concluded MERS could be a beneficiary and that not every note transfer requires recording of the trust deed, but recognized OTDA’s recording requirements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is MERS a OTDA beneficiary? | MERS is not the true beneficiary; must be noteholder. | MERS is the beneficiary as nominee for lender and successors under OTDA. | MERS is not the OTDA beneficiary; it is an agent for the noteholder. |
| Must all trust-deed assignments be recorded for non-judicial foreclosure? | All transfers must be recorded; otherwise foreclosure invalid. | Recording of note transfers suffices; trust-deed assignments need not be recorded each time. | ORS 86.735(1) requires recording of assignments of the trust deed (beneficial title) and successor-trustee; note transfers do not automatically satisfy this. |
| Are robo-signer allegations sufficient to state a claim? | Unsigned or unauthorized signatures undermine authority to foreclose. | One signatory can wear two hats; allegations are conclusory. | Plaintiffs failed to state a robo-signer claim; insufficient facts to show lack of authority. |
Key Cases Cited
- West v. White, 92 Or.App. 401 (1988) (trust deed as lien on land; security for debt)
- Lantz v. Safeco Title Insurance Co. of Oregon, 93 Or.App. 664 (1988) (beneficiary is owner of the note)
- Jackson v. Mortgage Elec. Registration Sys., Inc., 770 N.W.2d 487 (Minn. 2009) (mortgage vs trust deed distinction; recording of equitable title)
- Kerr v. Miller, 159 Or.App. 613 (1999) (non-judicial vs judicial foreclosure path; OTDA framework)
- Burgett v. Mortgage Electronic Registration Systems, Inc., 2010 WL 4282105 (D. Or. 2010) (MERS as beneficiary in some contexts; recording issues raised)