Schroeder v. Clackamas Cnty. Bank

419 P.3d 726, 291 Or. App. 16
CourtCourt of Appeals of Oregon
DecidedMarch 28, 2018
DocketA158438
StatusPublished
Cited by4 cases

This text of 419 P.3d 726 (Schroeder v. Clackamas Cnty. Bank) is published on Counsel Stack Legal Research, covering Court of Appeals of Oregon primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schroeder v. Clackamas Cnty. Bank, 419 P.3d 726, 291 Or. App. 16 (Or. Ct. App. 2018).

Opinion

ORTEGA, P.J.

*18Plaintiffs, Donald and Janet Schroeder, brought declaratory judgment action asking that the trial court declare their rights in the property and declare two foreclosure sales of their home invalid. After a summary judgment hearing, the court granted defendants'1 motion for summary judgment concluding that the second foreclosure sale on plaintiffs' home was valid and that their rights in the home were extinguished. The court entered a judgment dismissing plaintiffs' claims, including the declaratory judgment action, and subsequently entered a supplemental judgment awarding attorney fees to Clackamas County Bank (CCB).

On appeal, plaintiffs assert that the trial court erred in granting defendants' motion for summary judgment and awarding attorney fees to CCB under ORS 20.105. We conclude, without written discussion, that the trial court's grant of summary judgment was not error. As explained below, we also conclude that the trial court did not err in awarding attorney fees and costs in favor of CCB. However, because it is error to dismiss a claim for declaratory relief unless there is no justiciable controversy, we remand for the issuance of a judgment that declares the rights of the parties.2

*728Bell v. City of Hood River , 283 Or. App. 13, 20, 388 P.3d 1128 (2016).

ORS 20.105 provides that a court can award reasonable attorney fees only if it determines that the nonprevailing party had "no objectively reasonable basis for asserting the claim." A party's claim is not objectively reasonable if it "is entirely devoid of legal or factual support, either at the time it is made or in light of additional evidence or *19changes in the law as litigation proceeds." Williams v. Salem Women's Clinic , 245 Or. App. 476, 482, 263 P.3d 1072 (2011) (internal citations omitted). "[W]hether a claim lacks objectively reasonable basis is a legal question, and we review the trial court's ruling on that question for legal error." Id . For the reasons expressed below, we agree with the trial court's determination that plaintiffs' claims were entirely devoid of legal or factual support.

We pause to briefly explain that the Oregon Trust Deed Act (OTDA), ORS 86.705 to 86.815, provides an alternative to the traditional judicial foreclosure process and is only available when a home loan is secured by a trust deed. Even then, certain conditions must be satisfied. Brandrup v. ReconTrust Co. , 353 Or. 668, 676, 303 P.3d 301 (2013). Accordingly, the OTDA allows a trustee to "sell property securing an obligation under a trust deed in the event of default, without the necessity for judicial action." Staffordshire Investments, Inc. v. Cal-Western , 209 Or. App. 528, 542, 149 P.3d 150 (2006), rev. den. , 342 Or. 727, 160 P.3d 992 (2007).

Plaintiffs obtained two mortgage loans from CCB and defaulted on both when they failed to pay the loan amounts in full on their maturity date in October 2011. As a result, in November 2011, CCB began the nonjudicial foreclosure process for the first deed of trust. CCB recorded a notice of default in November 2011 and included the amount owed on the notes plus unpaid taxes and fees. For the next two years, while plaintiffs contested the foreclosure proceeding, plaintiffs continued to live in their home while still failing to satisfy their outstanding debts.

In late 2013, CCB scheduled a foreclosure sale date on the first deed of trust, and plaintiffs filed an action for declaratory relief asking the court to declare their rights in the property and to prevent the scheduled foreclosure sale from moving forward. CCB moved to dismiss the action, which was denied by the court. Plaintiffs then amended their complaint to claim that the sale could not occur because of a technical violation in the notice of sale, which CCB amended before the scheduled sale. In January 2014, the foreclosure sale was held. Even though the sale occurred and the property was sold back to CCB, plaintiffs continued to litigate *20this case. CCB decided to foreclose on the second deed of trust and, in May 2014, a sale for the second deed of trust occurred, and the property was sold to a third party. After the second sale, plaintiff contacted the third party's attorney and claimed that the first sale was invalid. However, in that letter, plaintiffs also argued that the second sale was invalid because the first sale extinguished their interest in the property.

In June 2014, defendants moved for summary judgment on several grounds, asserting that either or both of the sales extinguished plaintiffs' interest in the property. At the summary judgment hearing, plaintiffs raised the same arguments that they had in their complaint and the letter to the third party's attorney. The court granted defendants' motion for summary judgment and awarded attorney fees to CCB. In a letter to the parties, the court concluded that plaintiffs' position was entirely devoid of legal or factual support. The court first noted that

"[p]laintiffs asserted challenges to both *** foreclosure proceedings. Logically, if the challenge to the first proceeding were valid, the second proceeding would be free from challenge. And, *** if the challenges to the first proceedings were invalid, that foreclosure would have been unobjectionable."

The court went on to conclude that

"[b]y proceeding in the way [they] did, plaintiffs forced the bank to defend for no reason based on law or fact.

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Cite This Page — Counsel Stack

Bluebook (online)
419 P.3d 726, 291 Or. App. 16, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schroeder-v-clackamas-cnty-bank-orctapp-2018.