Hiefield, III v. Westlund

CourtUnited States Bankruptcy Court, D. Oregon
DecidedMay 20, 2025
Docket24-03050
StatusUnknown

This text of Hiefield, III v. Westlund (Hiefield, III v. Westlund) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hiefield, III v. Westlund, (Or. 2025).

Opinion

Way 2

Below is an opinion of the court.

Daw) We Horch _ DAVID W. HERCHER U.S. Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF OREGON In re Case No. 11-30493-dwh7 Preston C. Hiefield ITI, Debtor. Preston C. Hiefield ITI, Adversary Proceeding No. 24-03050-dwh Plaintiff, and MEMORANDUM DECISION DENYING DEFENDANT’S Gillian Stratton, individually and AMENDED MOTION TO as trustee of The Gillian M. DISMISS! Stratton Living Trust, Plaintiff-intervenor, V. Morris Westlund and The Morris Westlund Trust, Defendant.

1 This disposition is specific to this action. It may be cited for whatever persuasive value it may have. Page 1 - MEMORANDUM DECISION DENYING DEFENDANTS ete.

I. Introduction Defendant, Morris Westlund, has moved to dismiss this action.2 I previously dismissed the amended complaint filed by plaintiff Preston Hiefield, and he did not further amend. The motion to dismiss is thus moot as to Hiefield. Because this court has jurisdiction over this action, I will deny the

motion as to the complaint in intervention by plaintiff-intervenor Gillian Stratton. II. Facts The following facts are based on the allegations of Stratton’s complaint, as augmented by events in the record of Hiefield’s 2011 chapter 7 case that are consistent with Westlund’s arguments for dismissal.

A. Westlund’s 2009 judgment lien On November 30, 2009, Westlund, as trustee of a trust, obtained a money judgment against Hiefield in the Multnomah County, Oregon, Circuit Court. The judgment amount of $225,000 bears interest from July 2, 2009, at the rate of 37.5 percent per year, compounded monthly.3 On December 17, 2009, Westlund caused to be recorded in the real- estate records of Washington County, Oregon, a lien record abstract of the

Multnomah County judgment.4

2 ECF No. 40. 3 Case No. 11-30493 ECF No. 87 Ex. 2; Case No. 11-30493 ECF No. 88 Ex. 2. 4 Case No. 11-30493 ECF No. 81 Ex. A at 3–4, ECF No. 87 Ex. 3. B. Hiefield’s 2011 chapter 7 bankruptcy case Hiefield initiated a chapter 7 bankruptcy case in 2011.5 His scheduled assets include a one-half interest in a residence in Tualatin,6 in Washington

County.7 Hiefield moved under 11 U.S.C. § 522(f) to avoid the lien of the judgment as impairing his Oregon homestead exemption.8 He then owned the property with Stratton, his spouse, as tenants by the entirety.9 The approximate balance due under the judgment was then $402,577.55.10 In ruling on the motion, the bankruptcy judge ordered that the judgment be

“partially avoided with said judicial lien attaching only to the extent of $6,000.00.”11 After the chapter 7 case was fully administered, it was initially closed on May 21, 2015.12 It has since been opened and reclosed several times, but it is now closed.13 Westlund claims that the amount secured by the lien is now more than $700,000 “based upon the 37.5% compounded interest rate.”14

5 ECF No. 38 at 2 ¶ 2. 6 Case No. 11-30493 ECF No. 12 Sched. A; ECF No. 11-1 at 5: 8–10. 7 Case No. 11-30493 ECF No. 37 att. at 1 ¶ 2. 8 Case No. 11-30439 ECF No. 37. 9 ECF No. 38 at 2 ¶ 7. 10 Case No. 11-30493 ECF No. 37 att. at 1 ¶ 2. 11 Case No. 11-30493 ECF No. 47 at 2:1–2; ECF No. 38 at 2 ¶¶ 3–4. 12 ECF No. 11-30493 ECF No. 70. 13 Case No. 11-30493 ECF Nos. 72–73, 75, 99,–100, 102. 14 ECF No. 38 at 2 ¶ 6. C. Property conveyances In 2020, Hiefield conveyed his interest in the property to Stratton,15 and in 2021, she conveyed it to herself as trustee of a trust.16

D. Hiefield’s 2023 chapter 13 case In 2023, Hiefield filed a chapter 13 petition. He obtained confirmation of a plan,17 and that case is open. E. This action Hiefield commenced this action by filing a complaint, and then an amended complaint, against Westlund.18 The caption identifies the defendant as “Morris Westlund and the Morris Westlund Trust.”19 Hiefield sought a

declaration that the lien is limited to $6,00020 and bears no interest.21 Westlund moved to dismiss the amended complaint, arguing that Hiefield lacked standing, this court lacked jurisdiction, and claim-preclusion barred this action.22 In Hiefield’s opposition, he said his wife intended to refinance debt on the property to help him pay his chapter 13 plan obligations.23 He also said that the lien-avoidance order “could have easily

15 ECF No. 38 at 2 ¶ 8. 16 ECF No. 38 at 2 ¶ 9. 17 Case No. 23-31146 ECF Nos. 28, 84. 18 ECF Nos. 1–2. 19 ECF No. 1 at 1. 20 ECF No. 2 at 2 ¶ 7. 21 ECF No. 2 at 2 ¶ 8. 22 ECF No. 11. 23 ECF No. 14 at 4. stated that interest continues to accrue at the judgment rate, but it does not.”24 Then, Stratton moved to intervene as a plaintiff.25

On January 18, I granted Westlund’s motion to dismiss Hiefield’s complaint and Stratton’s motion to intervene. I ordered that any amended complaint by Hiefield and any complaint in intervention by Stratton be filed within 14 days. I also said that if Hiefield amended or Stratton pleaded timely, I would then consider Westlund’s subject-matter jurisdiction argument. Hiefield did not amend.26

But Stratton did file her complaint, and it largely tracks Hiefield’s amended complaint.27 The caption of her complaint identifies the plaintiff- intervenor as her, both individually and as trustee.28 She alleges that “the $6,000 judgment lien is over $700,000 based upon the 37.5% compounded interest rate,”29 and since 2021 title to the property has been held by her as trustee.30 She asks for a declaration “that based upon 11 U.S.C. § 522(f)(2)” Westlund’s lien on the former interest of Hiefield is limited to $6,000 and

includes no interest.31

24 ECF No. 14 at 5. 25 ECF No. 16. 26 ECF No. 35. 27 ECF No. 38. 28 ECF No. 38 at 1. 29 ECF No. 38 at 2 ¶ 6. 30 ECF No. 38 at 2 ¶ 9. 31 ECF No. 38 at 3 ¶¶ 11, 13, 1–3. III. Analysis A. Stratton did not violate a court order. In dismissing Hiefield’s amended complaint for lack of constitutional

standing, I said that the injury-in-fact and redressability requirements might have been satisfied had either he or Stratton asserted that she would, in fact, sell the property and donate the proceeds for use in the plan—but their declarations and her draft complaint conspicuously lacked that assertion. The bare possibility that she might sell and donate was not enough to give Hiefield standing. Although I did say that Stratton’s failure to include in her proposed

complaint the allegation that she would sell the property and contribute the proceeds to the plan deprived Hiefield of standing, I did not order her to include that allegation in her complaint. I reject Westlund’s argument that she violated a court order, requiring dismissal. B. Stratton has constitutional standing. As part of the Article III requirement that a claim in federal court be a

“case or controversy,”32 the plaintiff must show standing. The plaintiff has standing if the plaintiff has suffered an injury in fact that is fairly traceable to conduct by the defendant and that the plaintiff’s injury is likely to be redressed by a judgment in the plaintiff’s favor.33 Standing is a threshold

32 U.S. Const., Art. III, § 2, cl. 1. 33 Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016). requirement that must be met even though substantive law confers a right of action on the plaintiff.34 Stratton, as trustee, now owns the property. If she is correct on her

merits claim that Westlund is claiming more than is due under his lien, she has suffered an injury in fact that is traceable to him and could be redressed by a judgment in her favor in her trustee capacity.

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