Steel Capital Steel, LLC v. Williams

• Citation: 344 P.3d 95
• Decision Date: 11 February 2015
• Docket Number: 120019216E; A152566.
• Parties: STEEL CAPITAL STEEL, LLC, Plaintiff–Respondent, v. Patricia L. WILLIAMS, Defendant–Appellant.
• Court: Court of Appeals of Oregon

344 P.3d 95

STEEL CAPITAL STEEL, LLC, Plaintiff–Respondent,
v.
Patricia L. WILLIAMS, Defendant–Appellant.

120019216E; A152566.

Court of Appeals of Oregon.

Argued and Submitted May 7, 2014.
Decided Feb. 11, 2015.

Affirmed.

[344 P.3d 96]

Geordie Duckler, Portland, argued the cause and filed the brief for appellant.

C. Thomas Davis, Beaverton, argued the cause for respondent. With him on the brief were Paul Galm, Brett Callahan, and Davis Galm Law Firm.

Before DUNCAN, Presiding Judge, and HADLOCK, Judge, and LAGESEN, Judge.^* HADLOCK, J.

This action for forcible entry and detainer (FED) was initiated by TD Service Company (TD Service), which sought to evict defendant from premises that she continued to occupy after her interest in the property was foreclosed and the property was sold. After defendant objected that TD Service was not the real party in interest, TD Service moved to amend the complaint by substituting Steel Capital Steel, LLC, as the plaintiff. The trial court granted that motion and, after trial, entered judgment for plaintiff. Defendant appeals. For the reasons that follow, we affirm.

The facts pertinent to our resolution of the case are mainly procedural and, except as noted below, are undisputed. We describe the proceedings in some detail because the nature of defendant's arguments, as they evolved over time, is important to our resolution of the appeal.

Defendant apparently has occupied the residence at issue for several years. In early 2012, defendant's interest in the property was foreclosed; Steel Capital Steel asserts that it purchased the property at the trustee's sale. In August 2012, TD Service filed a residential eviction complaint against defendant and all other persons occupying the property. Defendant filed an answer in which she asserted that TD Service was “not the real party in interest and [could not] show any legally cognizable interest in the property sufficient to prove ownership of the property.” ¹

A trial was held on August 30, 2012. The trial judge observed at the start of trial that she had met with the parties' attorneys in chambers, where they had given her “a helpful clarification of the nature of the dispute.” The judge characterized the focus of the dispute, as explained by the parties, as “whether or not plaintiff is the real party in interest in this foreclosure matter, and has a right to bring this action seeking to take possession of the premises from the defendant, Ms. Williams.” Neither lawyer objected to that characterization of the issue.

In its opening statement, TD Service described itself as “the manager for the current owner of the property, Steel Capital Steel, LLC.” With respect to the “real party in interest” question, TD Service asserted that it was “very common * * * that the property managers, themselves, have or bring such actions” and stated that it had a witness who would testify that TD Service

[344 P.3d 97]

had “the authority of the deeded owner to bring this action.”

In her opening statement, defendant acknowledged that she was not challenging the foreclosure itself, as “that time has passed.” Defendant did not dispute that TD Service managed the real property for Steel Capital Steel, but argued that the relationship between the two entities did not give TD Service a legal interest in the property that was sufficient to make it the real party in interest. Defendant acknowledged that her “sole challenge” to the eviction was her argument, under ORCP 26 A, that TD Service was not the real party in interest; she sought dismissal of the FED action on that basis.

Plaintiff's only witness was Brandon Thornburg, an agent of Steel Capital Steel, which, he testified, owns the property at issue in this case. Thornburg testified that Steel Capital Steel is not “a physical entity in this area,” so it hires TD Service to provide “local services” for it, “including trustee services for foreclosure, including eviction services as well.” Steel Capital Steel hired TD Service to handle the foreclosure and file the FED action in this case.

Because defendant had questioned whether TD Service was the real party in interest, TD Service moved, “if the Court felt it necessary, to amend the caption to reflect ownership of the property with Steel Capital Steel, with TD Service Company as its agent.” TD Service later clarified that it was asking to “either simply substitute Steel Capital Steel for TD Service Company, or * * * TD Service Company as agent for Steel Capital Steel, either way.” The court did not immediately rule on the motion. Instead, it discussed the part of ORCP 26 A that provides that an action will not be dismissed “on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by * * * the real party in interest.” ² The court asked defendant to address “whether or not we didn't just have a ratification for purposes of the rule.”

Defendant objected to the motion to amend on the ground “that this could have been done earlier,” with avoidance of time and expense. Defendant expressed hope that “she not have to pay that price” associated with making the “real party in interest” challenge just “to learn at trial that, in fact, there was this correction that could have solved everything earlier.” ³ Defendant acknowledged that, if the court allowed the substitution under ORCP 26 A, she would not “have much of a real party in interest argument.”

The court determined, for two reasons, that it did not need to rule on whether TD Service Company was a real party in interest. First, the court noted, “there's * * * been a ratification” by Steel Capital Steel. Second, the court explained, it was granting the motion to amend “to substitute as the plaintiff Steel Capital Steel, LLC.”

The court and parties then discussed how the trial would proceed. Defendant asserted that she would examine Thornburg to determine whether, in fact, Steel Capital Steel was “in existence as the holder of the mortgage.” Defendant asserted that she “might have some indication that [Steel Capital Steel's] interest has been assigned away or transferred.” In other words, defendant explained that she was seeking to establish whether Steel Capital Steel itself was the real party in interest. Defendant then cross-examined Thornburg on that point. He testified about how Steel Capital Steel had acquired the note on the property; he also alluded to Steel Capital Steel's subsequent purchase of the property at the foreclosure

[344 P.3d 98]

sale. He asserted that Steel Capital Steel had “never released its interest” in the property after it acquired that interest.

The parties then...