Bayview Loan Servicing, LLC v. Chandler & Newville, Inc.
Decision Date | 05 July 2018 |
Docket Number | A160176 |
Citation | 426 P.3d 153,292 Or.App. 562 |
Parties | BAYVIEW LOAN SERVICING, LLC, Plaintiff-Appellant, v. CHANDLER & NEWVILLE, INC., Defendant-Respondent. |
Court | Oregon Court of Appeals |
Erick J. Haynie, Portland, argued the cause for appellant. Also on the briefs were Jeffrey M. Peterson and Perkins Coie LLP.
Terrance J. Slominski, Tigard, argued the cause for respondent. Also on the brief were David W. Venables and Slominski & Associates.
Before DeVore, Presiding Judge, and Lagesen, Judge, and James, Judge.*
This case involves conflicting claims to property that resulted from a prior judicial foreclosure of a senior trust deed and an intervening nonjudicial foreclosure of a junior trust deed. Plaintiff’s complaint in the prior judicial foreclosure named as defendants the junior lender and borrowers, but failed to name as a defendant the successor to the purchaser at the intervening trustee’s sale conducted for the junior lender. Plaintiff’s prior foreclosure complaint also contained confusion in the description of the property, which was reflected in the initial judgments, but which was remedied in a corrected judgment.
Thereafter, plaintiff Bayview Loan Servicing, LLC (Bayview) filed this action for strict foreclosure naming as a defendant Chandler & Newville, Inc. (C & N), the successor to the purchaser at the junior lender’s trustee’s sale. Bayview’s complaint in this action alleged that Bayview was the purchaser at the sheriff’s sale conducted after its corrected judgment of foreclosure. Bayview’s complaint acknowledged the omission of C & N from the prior foreclosure and assumed both the priority of Bayview’s senior lien and the validity of the prior judicial foreclosure as to others. Bayview sought a subsequent judgment to require C & N to redeem the property or be foreclosed from any further interest in the property.
C & N answered with affirmative defenses, denying that Bayview had foreclosed against the same property and denying that Bayview retained any remaining lien interest. C & N counterclaimed for a declaratory judgment declaring that C & N is the owner of the property free and clear of any interest of Bayview. After cross-motions for summary judgment, the trial court granted summary judgment for defendant and dismissed plaintiff’s claim. The court entered a judgment declaring that C & N is the owner of the property and that Bayview has no interest in the property at all. Bayview appeals, assigning error to the declaratory rulings and the dismissal of its complaint.
This appeal presents a number of issues that we describe later more fully. To summarize our decision, we conclude that C & N purchased an interest in the property at the trustee’s sale that was subject to Bayview’s senior lien right; that Bayview’s judicial foreclosure was effective as to the named parties and as to the property identified in the corrected judgment; that, when Bayview purchased the property at its foreclosure sale, Bayview’s senior lien right, with respect to C & N, survived without being exhausted or merged; and that, in those circumstances, strict foreclosure of C & N’s surviving interest is permissible, subject to C & N’s right of redemption.
In July 2005, Catherine and Tho Pham borrowed $200,000 from Silver Hill Financial, LLC (Silver Hill), executed a promissory note, and secured it with a trust deed for the benefit of Silver Hill. The trust deed correctly identified the property with a street address as 3552-3556 NE Sandy Blvd, Portland, Oregon, and with a legal description as "Lot 6, Block 32, Laurelhurst, in the City of Portland, County of Multnomah and State of Oregon." The trust deed was duly recorded. Silver Hill assigned its beneficial interest as the lender to Bayview, and that assignment was duly recorded in February 2006.
In September 2007, the Phams borrowed money from JPMorgan, Chase Bank, N.A (Chase Bank) and secured their note with a second trust deed to the same property. The trust deed was duly recorded.
In 2011, the Phams defaulted on their payments to Bayview. Bayview filed an action in July 2012 for judicial foreclosure against the Phams, Chase Bank, judgment creditors, and unknown occupants. Bayview alleged that the Phams were the owners of the subject property with a street address as 3552-3556 NE Sandy Blvd, Portland, Oregon 97232, with an assessor’s parcel number R202971, and with a legal description as "Lot 16 , Block 32, Laurelhurst, in the City of Portland, County of Multnomah and State of Oregon." Although the street address and assessor’s parcel number were correct, the complaint identified the lot number incorrectly as Lot 16 rather than as Lot 6. The complaint attached and incorporated by reference the terms of the deed of trust, which gave the property’s legal description correctly as Lot 6. The complaint recited that the deed of trust had been recorded on July 13, 2005, under Recorder’s File No. 2005-128832.1
After an order of default, the trial court entered a limited judgment against Chase Bank on November 5, 2012. The limited judgment, like the complaint, referred to the subject property with the correct street address and assessor’s parcel number but with the incorrect legal description of "Lot 16," rather than Lot 6. Resolving the priority of Bayview’s interest, the limited judgment stated, in pertinent part:
No appeal was filed, nor any motion to set aside that limited judgment.
Eight days later, on November 13, 2012, the trustee for Chase Bank conducted a trustee’s sale to nonjudicially foreclose the junior trust deed of Chase Bank on the property. For $60,383, the trustee conveyed to Chandler + Newville, Inc. (C+N) the interest in the property of the debtors, the Phams.2 At that time, the Phams' interest in the property had not yet been foreclosed in Bayview’s judicial proceedings. On November 20, 2012, C+N conveyed to defendant C & N its interest in the property with a bargain and sale deed, and the deed was duly recorded.
On September 12, 2013, the court, in Bayview’s proceedings, entered a general judgment that foreclosed the Phams' interest. Like Bayview’s complaint and the limited judgment against Chase Bank, the general judgment referred to the property with the correct street address (3552-3556 NE Sandy Boulevard) and assessor’s parcel number (R202971) but incorrect lot number (Lot 16, rather than Lot 6), while foreclosing Bayview’s trust deed, which contained the correct lot number (Lot 6), and which was recited as could be found under Recorder’s File No. 2005-128832.
On March 13, 2014, Bayview bid $267,000 at the sheriff’s sale to acquire the property subject to a right of redemption.3
On April 14, 2014, Bayview filed a motion for relief from the judgment, seeking to correct a clerical or scrivener’s error in the judgment’s reference to "Lot 16." Bayview relied upon ORCP 71 A and other authorities.4 In her declaration, Bayview’s attorney noted that the street address and assessor’s parcel number were correctly listed in all documents, that a copy of the trust deed, containing the correct legal description, street address, and parcel number, was attached to the complaint and incorporated by reference, and that the parties to the foreclosure had been served with the complaint and the trust deed with the correct lot reference. On the same date, the trial court entered a corrected general judgment of foreclosure, which eliminated the internally inconsistent references to the lot number.
On October 28, 2014, the trial court entered an order to require that a sheriff’s deed should conform to the corrected judgment. On November 18, 2014, the sheriff issued a sheriff’s deed to Bayview for "Lot 6." The sheriff’s deed acknowledged that the time for the named defendants to have redeemed had then expired and that Bayview was the owner of "Lot 6."
On June 3, 2014, after the corrected foreclosure judgment, but before receiving the sheriff’s deed, Bayview filed this action against C & N. Bayview alleged that it had judicially foreclosed its senior trust deed and all subordinate interests required under the law, excepting the interest of C & N. Bayview alleged that C & N, which had acquired its interest during the prior foreclosure proceedings, had been omitted as a party to that proceeding. Bayview alleged that C & N had a statutory right to redeem the property. To force a choice, Bayview asked the court to require C & N to redeem or be foreclosed of any interest in the property.
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...for summary judgment, we review the record to determine if there are genuine issues of material fact. Bayview Loan Servicing v. Chandler & Newville , 292 Or. App. 562, 569, 426 P.3d 153, rev. den. , 364 Or. 209, 432 P.3d 1101 (2018) (citing ORCP 47 C); Jones v. General Motors Corp. , 325 Or......
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