Mikityuk v. Northwest Trustee Services, Inc.
2013 U.S. Dist. LEXIS 96935
| D. Or. | 2013Background
- In 2003 Aleksander and Olititsa Mikityuk executed a deed of trust naming MERS as beneficiary and received loan proceeds; they later defaulted.
- MMI (named lender) dissolved in 2005; MERS assigned the deed of trust to Wells Fargo in 2009; Northwest Trustee recorded a Notice of Default in Dec. 2009 and conducted a trustee’s sale in Sept. 2010; a trustee’s deed was recorded.
- Plaintiffs filed suit in June 2012 (19 months after the trustee’s sale) seeking declaratory relief and alleging wrongful foreclosure, OTDA and UTPA violations, and various defects tied to MERS and securitization.
- Plaintiffs admit signing the note and deed, receiving loan funds and the NOD, and that they were in default at the time of sale.
- Defendants moved to dismiss and asked the court to take judicial notice of public records; the court granted judicial notice and concluded plaintiffs’ claims fail as a matter of law.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether UTPA claims are viable | UTPA claims based on deceptive foreclosure practices and MERS conduct | UTPA inapplicable to loans in 2003 and claims are time-barred | UTPA claims dismissed with prejudice (UTPA didn’t apply to extensions of credit in 2003; statute of limitations) |
| Whether post-sale challenges to nonjudicial foreclosure are allowed when grantor received notice | MERS was not a valid beneficiary, so the sale is void and voidable defects can be raised post-sale | ORS 86.770(1) and OTDA require pre-sale challenges except for notice defects; recording trustee’s deed creates finality | Post-sale challenge barred; plaintiffs’ challenge dismissed because trustee’s deed recorded and ORS 86.770(1)/86.780 bars collateral attacks after sale |
| Effect of alleged OTDA violations (assignments, MERS role) on validity of sale | OTDA violations (e.g., improper assignment by MERS) render sale void ab initio | Such defects cannot be used to undo a completed sale where notice was given and trustee’s deed recorded; finality and certainty prevail | Even assuming violations, granting relief would undermine OTDA’s objectives; plaintiffs’ requested relief denied |
| Whether equitable or other remedies could set aside the sale | Plaintiffs imply fraud/robo-signing and due process violations justify relief | Defendants: no equitable basis shown; statutory scheme provides protections and limits | Court declines to set aside sale on equitable grounds here; recognizes courts may set aside sales in certain bad-faith scenarios, but none shown |
Key Cases Cited
- Scheuer v. Rhodes, 416 U.S. 232 (U.S. 1974) (pleading sufficiency standard on motion to dismiss)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (plausibility standard for complaints)
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (distinguishing factual allegations from legal conclusions)
- Western Radio Servs. Co. v. Qwest Corp., 530 F.3d 1186 (9th Cir. 2008) (judicial notice of public records on Rule 12 motion)
- Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152 (9th Cir. 2012) (taking judicial notice of land records without converting to summary judgment)
- Staffordshire Investments, Inc. v. Cal-Western Reconveyance Corp., 209 Or. App. 528 (Or. Ct. App. 2008) (discussing OTDA’s objectives and when a sale may be void for lack of authority)
- Niday v. GMAC Mortgage, LLC, 353 Or. 648 (Or. 2013) (Oregon Supreme Court decision addressing MERS under OTDA)
- Brandrup v. ReconTrust Co., 353 Or. 668 (Or. 2013) (Oregon Supreme Court decision concerning MERS and trust deed issues)
- In re Marriage of Polacek, 349 Or. 278 (Or. 2010) (statutory interpretation principles and context)