Kreidler v. Taylor
| Decision Date | 18 January 2007 |
| Docket Number | No. 05-CV-1262-BR.,05-CV-1262-BR. |
| Citation | 473 F.Supp.2d 1090 |
| Parties | Anne Marie KREIDLER and Michael S. Reed, Plaintiff, v. Melody Dawn TAYLOR, individually, and Melody Dawn Taylor as Trustee of the Melody D. Taylor's Children Trust, Defendants. |
| Court | U.S. District Court — District of Oregon |
Joseph A. Grube, Ricci Grube Aita, PLLC, Seattle, WA, for Plaintiffs.
Jonathan M. Racmacher, McEwen Gisvold LLP, Portland, OR, for Defendants.
This matter comes before the Court on Plaintiffs' Motion for Partial Summary Judgment (# 40) as to certain counterclaims and affirmative defenses raised by Defendants.
For the reasons that follow, the Court GRANTS Plaintiffs' Motion for Partial Summary Judgment as to Defendants' affirmative defenses of duress, mistake, unconscionability, constructive fraud, and fraud and DENIESPlaintiffs' Motion as to Defendants' affirmative defenses of unfair trade practices and equitable mortgage. The Court also GRANTS Plaintiffs' Motion for Partial Summary Judgment as to Defendants' counterclaims of constructive fraud, fraud, and quiet title and DENIES Plaintiffs' Motion for Partial Summary Judgment to the extent Plaintiff seeks summary judgment as to Defendants' counterclaim of unfair trade practices.
The following facts are undisputed unless otherwise noted.
On February 24, 1993, Defendant Melody Dawn Taylor (Taylor) purchased property in Gresham, Oregon, as part of her separate estate. The property was only partially developed. Taylor mortgaged the property in June 1997.
On September 10, 1999, Taylor executed a quitclaim deed granting her "right, title and interest" in the Gresham property to the "Melody Dawn Taylor's Children Trust at Snohomish County Washington." Taylor did not identify a trustee on the quitclaim deed.
Sometime in the summer of 2004, creditors threatened to foreclose on the Gresham property based on Taylor's failure to make payments on the 1997 mortgage. The collection agency sent Taylor a Demand Letter informing her that she had until August 11, 2004, to pay $96,116.55 in mortgage and escrow costs as well as back property taxes to avoid foreclosure. At that time, the unpaid property taxes totaled $22,694.00.
In the spring of 2004, Taylor called Plaintiff Ann Marie Kreidler's real-estate office "about a listing in the Seattle area." According to Taylor, she and Kreidler met "several times," "became friendly," and "even discuss[ed] the possibility of [Taylor] coming to work for [Kreidler]." "At some point during [their] relationship," Taylor mentioned to Kreidler that "[her] property located in Gresham . . . was facing foreclosure." According to Taylor, she told Kreidler that the property, if developed, would be worth an estimated $1.5 million. Taylor contends she "approached" Kreidler about a partnership to develop the Gresham property, and Kreidler "agreed to help [Taylor]." Taylor asserts she sought Kreidler's assistance due to Taylor's poor credit.
Plaintiffs contend Taylor represented to them that she owned the Gresham property and agreed she and Plaintiffs would be "partners on a 50/50 basis . . . to develop the property for commercial benefit."
On July 23, 2004, Plaintiffs viewed the Gresham property. On the same day, Plaintiffs went to First American Title Company to review the title on the property. Although Plaintiffs did not purchase title insurance, the parties received a preliminary title report, which noted title to the Gresham property
vested in:
Melody Dawn Taylor
Subject to . . . the following:
* * * * *
9. Effect, if any, of Quitclaim Deed from Melody Dawn Taylor, as her separate estate to The Melody pawn Taylor's Children Trust at Snohomish County Washington.
10. The right, title or interest of The Melody Dawn Taylor's Children Trust at Snohomish County Washington, as disclosed by an instrument entitled Quitclaim Deed which recorded September 13, 1999.
On August 10, 2004, the parties executed two written agreements relating to the Gresham property. The first agreement provides in pertinent part:
Melody Taylor agrees to alienate and transfer an individual 50% undivided interest in the property in question to Kreidler and Reed. Taylor agrees to cooperate in every respect with efforts by Kreidler and Reed to sell/refinance the property given its highest and best use, as soon as possible—in no case beyond 3 years from the date of this Agreement, without compromising its full value.
Proceeds of a sale or refinance of the property in question must be distributed as follows: firstly to satisfy all liens of record; secondly to repay Kreidler for funds advanced for reinstatement; thirdly, balance of funds shall be distributed to owners of record.
* * * *
It is the intent of the signatories below to realize a profit from ownership of the property in question in the shortest practical time. The parties may amend this agreement at any time in writing.
The second agreement provided in pertinent part:
This Agreement is Made [sic ] on August 10, 2004 Between [sic ] Anne Marie Kreidler, and Michael Reed and Melody D. Taylor regarding the property located at 115 NE 10th Drive, Gresham, OR 97030-5607. . . . Melody D. Taylor agrees to deed Kreidler and Reed 50% ownership in the above mentioned property in exchange for the services and help from Kreidler and Reed to free the property from being. foreclosed on.
* * * * * *
All parties agree to cooperate and share the expenses in the refinancing of the subject property and to:
1. Pay off the 1st mortgage in the amount of approximately $235,000.00.
2. Pay off the loan from McDonald financial group in the amount of approximately $118,811.28 + initial loan cost.
3. Pay any loan fees and expenses in the connection with the refinances.
4 Pay all taxes and insurance when due.
5. Pay mechanics lien to plumbing co. of approx $3, 300 principle [sic][.]
Kreidler and Reed's share in the above expenses shall be 50%, Taylor's share shall be 50%.
All parties are aware that the refinanced loan in the amount of approximately $354,500.00 + loan fee and expenses shall be an obligation secured by subject property of which obligation Kreidler and Reed share 50% and Taylor shares 50% responsibility.
On August 10, 2004, Taylor executed a quitclaim deed conveying to Plaintiffs "an undivided 50% interest in [the Gresham property]." The quitclaim deed was recorded on August 14, 2004. Plaintiffs, provided over $118,000 to Taylor's creditors and the tax authorities pursuant to the two agreements.
On September 7, 2004, Taylor recorded a "modified" version of the 1999 quitclaim deed in which Taylor added herself as trustee of the Melody Dawn Taylor's Children Trust.
On October 14, 2004, Plaintiffs faxed Taylor a limited-liability agreement "pertaining to Gresham Partners L.L.C." Taylor alleges she realized that Plaintiffs believed they were entitled to a one-half interest in the Gresham property under the August 10, 2004, quitclaim deed only after she discussed the terms of the proposed limited-liability agreement with Kreidler. Taylor advised Plaintiffs the portion of the property that contained the business was held in trust and asserted the quitclaim deed pertained only to the undeveloped portion of the Gresham property. Shortly thereafter, the parties' relationship deteriorated.
Taylor has not returned the funds that she received from Plaintiffs, and the parties have not developed the property.
On August 13, 2005, Plaintiffs filed a Complaint in this Court on the basis of diversity jurisdiction in which they alleged claims under Oregon law for fraud, unfair trade practices, and breach of contract against Taylor and claims for violation of Oregon's Uniform Fraudulent Transfer Act or unjust enrichment against Taylor and the Trust.
Before Defendants filed a responsive pleading, Plaintiffs filed a First Amended Complaint on August 16, 2005, which contained the same claims and defendants and corrected allegations about Taylor's residency.
On January 23, 2006, Plaintiffs filed a Second Amended Complaint to make their claims more definite and certain. On February 2, 2006, Defendants filed an Answer to the Second Amended Complaint in which they alleged five affirmative defenses (failure to state a claim, estoppel, unclean hands, "not a consumer transaction," and duress) and three counterclaims (rescission, breach of fiduciary duty, and violation of Washington's Consumer Protection Act).
On July 3, 2006, Defendants amended their Answer and asserted seven affirmative defenses (duress, mistake, unconscionability, equitable mortgage, unfair trade practices, constructive fraud, and fraud) and four counterclaims (unfair trade practices, constructive fraud, fraud, and quiet title).1
On October 10, 2006, Plaintiffs filed a Motion for Partial Summary Judgment seeking an order (1) declaring Plaintiffs own a one-half fee interest in the real property; (2) granting summary judgment to Plaintiffs as to Defendants'"affirmative defenses 1 through 8";2 (duress, mistake, unconscionability, equitable mortgage, unfair trade practices, constructive fraud, and fraud); and (3) granting summary judgment to Plaintiffs on three of Defendants' counterclaims (constructive fraud, fraud, and quiet title).
Fed.R.Civ.P. 56(c) authorizes summary judgment if no genuine issue exists regarding any material fact and the moving party is entitled to judgment as a matter of law. The moving party must show the absence of an issue of material fact. Leisek v. Brightwood Corp., 278 F.3d 895, 898 (9th Cir.2002). In response to a properly supported motion for summary judgment, the nonmoving party must go beyond the pleadings and show there is a genuine issue of material fact for trial. Id.
An issue of fact is genuine "`if the evidence is such...
To continue reading
Request your trial
-
M-Tek Kiosk, Inc. v. Clayton
...Carolina law. The Oregon Supreme Court "has expressed some skepticism about the theory [of constructive fraud.]" Kreidler v. Taylor, 473 F. Supp. 2d 1090, 1102 (D. Or. 2007) (quoting Pollock v. D.R. Horton, Inc.-Portland, 77 P.3d 1120 (Or. Ct. App. 2003)). However, the court has acknowledge......
-
Olson v. Mbo Partners, Inc.
..."Duress is an unlawful constraint exercised on a person whereby he is forced to do some act against his will." Kreidler v. Taylor, 473 F. Supp. 2d 1090, 1096 (D. Or. 2007) (quoting Oregon Bank v. Nautilus Crane & Equip. Corp., 68 Or. App. 131, 142, 683 P.2d 95 (1984). "Whether particular fa......
-
Crown Cork & Seal USA, Inc. v. Behurst
...acts or threats, and (3) the absence of any reasonable alternative to the terms presented by the wrongdoer." Kreidler v. Taylor, 473 F. Supp. 2d 1090, 1096 (D. Or. 2007) (quoting Nautilus Crane & Equip. Corp., 68 Or. App. at 142). "Whether particular facts amount to duress is a question of ......
-
MCDANIEL v. SERVICING, CASE NO. 10-6143-HO
...those between a doctor and his patient or a pastor and a church member), which may give rise to this type of claim. Kriedler v. Taylor, 473 F. Supp. 2d 1090, 1103 (2007). Thus, plaintiff's fifth claim for fraudulent misrepresentation is unsustainable. F) Claim 6 for Breach of Fiduciary Duty......