In this appeal from a general judgment of judicial foreclosure, defendant Vettrus assigns error to the trial court’s grant of summary judgment in favor of plaintiff, U.S. Bank. Defendant argues that plaintiff was not entitled to summary judgment because it had not shown that it had complied with all conditions precedent to foreclosure. Specifically, defendant contends that, to meet its burden for summary judgment, plaintiff was required to present evidence that it had sent defendant a written notice of foreclosure and acceleration of his debt that complied with the terms of the deed of trust. Defendant argues that plaintiff did not submit sufficient evidence on that point and plaintiff was therefore not entitled to summary judgment. Plaintiff counters that the evidence it submitted was sufficient and, even if it were not, any error was harmless. We agree with defendant and reverse the trial court’s grant of summary judgment.
On review of a grant of a motion for summary judgment, the appellate court must “view the evidence and all reasonable inferences that may bе drawn from the evidence” in favor of the adverse party. Jones v. General Motors Corp.,
In 2004, defendant borrowed $168,000 and executed a promissory note and trust deed securing the loan with the property at issue in this casе. In October 2010, the loan ser-vicer, Nationstar Mortgage, determined that defendant was in default on his loan. Plaintiff, which held the promissory note, initiated this action to foreclose on the encumbered property and moved for summary judgment. In its motion for summary judgment, plaintiff asserted that the loan was in default, that “the terms of the contract ha[d] been materially breached,” that defendant had been “advised of the default under the Note and Deed of Trust and provided the opportunity to
Defendant opposed plaintiffs motion, advancing several arguments as to why the trial court should not grant summary judgment in favor of plaintiff. As relevant to this appeal, defendant argued that “[sjummаry judgment should be denied because [plaintiff] has not established that it has performed all conditions precedent to enforcement of the security instrument.” Specifically, defendant argued that the trust deed required plaintiff to provide defendant with a written notice of default and acceleration, and that such notice was “а condition precedent to commencement of an action for foreclosure.” Defendant quoted two sections from the trust deed, Section 20 and Section 22, which describe the notice requirements. Because those sections are central to the issues in this case, we review them in detail.
Section 20 states, in part, that neither party to the agreement “may commence, join, or be joined to any judicial action” that “alleges that the other party has breached any provision” of that agreement until the party has notified the other of the alleged breach and “afforded the other party hereto a reasonable period after the giving of such notice to take corrective action.”
Section 22 states, in part:
“22. Acceleratiоn; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower’s breach of any covenant or agreement in this Security Instrument * * *. The notice shall specify (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrowеr, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale.”
(Boldface omitted.) Defendant argued that the requirements of sections 20 and 22 were conditions precedent to any suit to foreclose, and that plaintiff had “not offered evidence that any Lеnder ever sent the borrower a notice of default that complies with the specific language of [Section] 22 of the trust deed.” Therefore, defendant argued, plaintiffs motion for summary judgment should be dismissed.
In a reply brief, plaintiff argued that the trial court should disregard defendant’s notice argument because defendant had not actually denied that plaintiff had sent him the proper notice. Plaintiff asserted further that “Nationstar has sent [defendant] multiple letters complying with the requirements of [Section] 22 of the Deed of Trust, one of which is provided herewith to address any concern over the issue.” Attached to the reply brief, plaintiff included a supplemental declaration from Braune which stated, “Nationstar sent multiple demand letters to [defendant] as contemplated by the Deed of Trust prior to commencing this litigation. A true and accurate copy of one such letter dated September 12, 2013, is attached hereto [.] ” The attached letter, in its first paragraph, told defendant, “[Y]our mortgagе loan payment is past due, and your property may be referred to foreclosure fourteen (14) days after the date of this letter.” The letter went
At a hearing on plaintiffs motion, defendant argued to the trial court that plaintiff had not submitted sufficient evidence entitling it to summary judgment, asserting that “there’s at least a question of fact as to whether [proper notice was sent] in this case.” Defendant pointed out that the letter attached to Braune’s supplemental declaration gave defendant 14 days notice, while “under the trust deed, they’re required to give them 30 days,” and that “there’s other language required which isn’t in there.” While reviewing the letter, the trial cоurt asked, “Were there more notices than that sent out? But you only attached one though, right?” Plaintiff replied, “That’s right, Your Honor. There were several other notices sent out, as indicated in the declaration by [Braune].” The trial court concluded, “Okay. That’s sufficient for me.” The trial court subsequently granted plaintiffs motion for summary judgment, declaring thаt plaintiff was “entitled to a judgment for the recovery of certain sums due under the Note, and that plaintiff [was] entitled to a judgment of foreclosure of its first priority Deed of Trust as against Defendant.”
On appeal, defendant reiterates the argument that he made before the trial court. He contends that a written notice that complies with sections 20 and 22 of the trust deed is a condition precedent to acceleration and foreclosure and that by failing to submit evidence that it had complied with those notice requirements, plaintiff did not meet its burden of showing that it was entitled to summary judgment. Defendant argues that Braune’s supplemental declaration and the attаched letter were insufficient to meet that burden:
“[T]he letter offered by plaintiff fails to satisfy its contractual obligations because it gave defendant only 14 days to respond and lacked the additional required language that was to advise the homeowner of his right to reinstate the loan after acceleration and the right to assert his defenses to any court action.”
In response, plaintiff does not dispute that it had to provide proper written notice under sections 20 and 22 of the trust deed before it could initiate any action for foreclosure and acceleration of defendant’s debt. Plaintiff also concedes that the demand letter attаched to Braune’s supplemental declaration did not include all of the notice information required by Section 22. However, plaintiff insists that its pleadings and the more general evidence it submitted adequately asserted and supported its right to foreclosure in broad terms. Specifically, plaintiff argues that Braune’s statement in the suрplemental declaration that “Nationstar sent multiple demand letters to [defendant] as contemplated by the Deed of Trust” was sufficient.
“While it is true that the letter that was attached to Ms. Braune’s declaration is not the 30 day notice of acceleration letter specifically required by [Section] 22 of the trust deed, the lettеr that was provided was not provided in an attempt to show all notices sent. Rather, it was one clear example of the many notices of payment default and potential referral to foreclosure that were provided to [defendant] showing that he was fully informed and provided with the opportunity to cure (in compliance with Section 20 of the Deed of Trust ***).”
Claiming that it had established that it was entitled to foreclose, plaintiff contends that the burden at the trial court then shifted to defendant to submit evidence contesting some element of plaintiffs case. Because defendant did not submit any evidence or otherwise deny that he had received the required notices, plaintiff argues, defendant did not create a fact issue and summary judgment was therefore properly granted.
Plaintiff is mistaken that it met its initial burden to present facts supporting a prima facie case. As noted, plaintiff acknowledges that it was required to give defendant the notice required by sections 20 and 22 before acceleration and foreclosure were authorized under the trust deed and that the letter
A рarty moving for summary judgment must show that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. ORCP 47 C; Jones,
Whether plaintiff complied with the notice requirements of sections 20 and 22 of the trust deed is a question of material fact, as it is a fact that, “under applicable law, might affect the outcome of a case.” Zygar,
In determining whether a party moving for summary judgment has met that initial burden, the trial court views the record “in а manner most favorable to the adverse party.” ORCP 47 C. Under that standard of review, the trial court, and this court on appeal, draws all reasonable inferences in favor of the nonmoving party. Jones,
Applying that standard of review here, the evidence plaintiff submitted was insufficient. Before the trial court, defendant pointed plaintiff to the specific notice provisions unaddressed by plaintiffs initial submission. Those notice provisions required that plaintiff provide defеndant, in writing, with “a date, not less than 30 days from the date the notice is given,” by which defendant must cure default, and inform defendant that he had “the right to reinstate after acceleration” and “the right to bring a court action” contesting default and asserting other defenses.
Although Braune’s supplemental declaration, filed with plaintiffs reply brief, broadly аsserted that Nationstar had sent multiple unspecified demand letters “as contemplated by the Deed of Trust,” that declaration stated further that the attached letter—which, in fact, did not comply with the Section 22 notice requirements—was a “true and accurate copy of one such letter.” Plaintiff also argued in its reply brief that it had sent “multiple letters complying with the requirements of [Section] 22 of the Deed of Trust” and then cited to the same letter attached to Braune’s supplemental declaration as an example of such a letter. Even assuming that Braune’s broad assertion in her declaration, standing alone, could have been enough to establish thаt the notice required by Section 22 of the trust deed had been sent to defendant, a conclusion we do not reach, the addition of the noncompliant letter as an example
Plaintiff additionally argues that, should we conclude that it failed to meet its burden at summary judgment by failing to submit evidence that it provided defendant with proper notice, that error was harmless. Plaintiff argues that, “if this case were to be remanded to the trial court, all that would be required to remedy the issue addressed by [defendant’s] appeal would be to submit the 30 day acceleration notice * * * to the trial court in order to re-confirm that summary judgment was proper.” In support of that argument, plaintiff then attempts to present new evidence directly to us that is not in the trial court record. Plaintiff’s argument is not a proper harmless error argument, but an attempt to have us consider new potential evidence for the first time on appeal and in advance of any remand to the trial court. Of course, we cannot do that. See ORCP 47 C (the summary judgment record consists of the “pleadings, depositions, affidavits, declarations and admissions on file”); ORAP 3.05(1) (“In any appeal from a trial court, the trial court record on appeal shall consist of the trial court file, exhibits, and as much of the record of oral proceedings as has been designated in the notice or notices of appeal filed by the parties.”); Hampton Tree Farms, Inc. v. Jewett,
Reversed and remanded.
Notes
The deed of trust provided that any required notices had to he provided in writing.