U.S. Bank Nat'l Ass'n v. Vettrus

Citation397 P.3d 68,285 Or.App. 629
Decision Date17 May 2017
Docket NumberA161432
Parties U.S. BANK NATIONAL ASSOCIATION, as Successor Trustee to Bank of America, N.A., as Successor to LaSalle Bank, N.A. as Trustee for the Holders of Merrill Lynch Mortgage Investors Trust, Mortgage Loan Asset-Backed Certificates, Series 2006-FF1, Plaintiff-Respondent, v. John S. VETTRUS, Defendant-Appellant, and First Franklin Financial Corp., et al., Defendants.
CourtCourt of Appeals of Oregon

Jeffrey A. Long, Portland, argued the cause and filed the briefs for appellant.

Adam G. Hughes argued the cause for respondent. With him on the brief was Anglin Flewelling Rassmussen Campbell & Trytten LLP.

Before Armstrong, Presiding Judge, and Tookey, Judge, and Shorr, Judge.

SHORR, J.

In this appeal from a general judgment of judicial foreclosure, defendant Vettrus assigns error to the trial court's grant of summary judgment in favor of plaintiff, U.S. Bank. Defendant argues that plaintiff was not entitled to summary judgment because it had not shown that it had complied with all conditions precedent to foreclosure. Specifically, defendant contends that, to meet its burden for summary judgment, plaintiff was required to present evidence that it had sent defendant a written notice of foreclosure and acceleration of his debt that complied with the terms of the deed of trust. Defendant argues that plaintiff did not submit sufficient evidence on that point and plaintiff was therefore not entitled to summary judgment. Plaintiff counters that the evidence it submitted was sufficient and, even if it were not, any error was harmless. We agree with defendant and reverse the trial court's grant of summary judgment.

On review of a grant of a motion for summary judgment, the appellate court must "view the evidence and all reasonable inferences that may be drawn from the evidence" in favor of the adverse party. Jones v. General Motors Corp. , 325 Or. 404, 408, 939 P.2d 608 (1997). We state the facts relevant to the legal issues presented in this case, which are few and largely undisputed, in accordance with that standard.

In 2004, defendant borrowed $168,000 and executed a promissory note and trust deed securing the loan with the property at issue in this case. In October 2010, the loan servicer, Nationstar Mortgage, determined that defendant was in default on his loan. Plaintiff, which held the promissory note, initiated this action to foreclose on the encumbered property and moved for summary judgment. In its motion for summary judgment, plaintiff asserted that the loan was in default, that "the terms of the contract ha[d] been materially breached," that defendant had been "advised of the default under the Note and Deed of Trust and provided the opportunity to cure the default," and that defendant had been "informed that failure to cure the default within the time provided may result in the exercising of the option to accelerate the entire balance." Plaintiff attached to the motion for summary judgment a declaration from Tina Braune, an employee of Nationstar Mortgage. In her declaration, Braune asserted, inter alia , that she was familiar with the servicing of defendant's loan and the servicing files, that defendant's payments were in default under the terms of the note and trust deed as of October 1, 2010, and that, as a result, Nationstar Mortgage had "exercised its option to accelerate all amounts due under the loan."

Defendant opposed plaintiff's motion, advancing several arguments as to why the trial court should not grant summary judgment in favor of plaintiff. As relevant to this appeal, defendant argued that "[s]ummary judgment should be denied because [plaintiff] has not established that it has performed all conditions precedent to enforcement of the security instrument." Specifically, defendant argued that the trust deed required plaintiff to provide defendant with a written notice of default and acceleration, and that such notice was "a condition precedent to commencement of an action for foreclosure." Defendant quoted two sections from the trust deed, Section 20 and Section 22, which describe the notice requirements. Because those sections are central to the issues in this case, we review them in detail.

Section 20 states, in part, that neither party to the agreement "may commence, join, or be joined to any judicial action" that "alleges that the other party has breached any provision" of that agreement until the party has notified the other of the alleged breach and "afforded the other party hereto a reasonable period after the giving of such notice to take corrective action."1 Section 20 further states that notice provided in accordance with the requirements described later, in Section 22, "shall be deemed to satisfy the notice and opportunity to take corrective action provisions of this Section 20."

Section 22 states, in part:

"22. Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument * * *. The notice shall specify (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale."

(Boldface omitted.) Defendant argued that the requirements of sections 20 and 22 were conditions precedent to any suit to foreclose, and that plaintiff had "not offered evidence that any Lender ever sent the borrower a notice of default that complies with the specific language of [Section] 22 of the trust deed." Therefore, defendant argued, plaintiff's motion for summary judgment should be dismissed.

In a reply brief, plaintiff argued that the trial court should disregard defendant's notice argument because defendant had not actually denied that plaintiff had sent him the proper notice. Plaintiff asserted further that "Nationstar has sent [defendant] multiple letters complying with the requirements of [Section] 22 of the Deed of Trust, one of which is provided herewith to address any concern over the issue." Attached to the reply brief, plaintiff included a supplemental declaration from Braune which stated, "Nationstar sent multiple demand letters to [defendant] as contemplated by the Deed of Trust prior to commencing this litigation. A true and accurate copy of one such letter dated September 12, 2013, is attached hereto[.]" The attached letter, in its first paragraph, told defendant, "[Y]our mortgage loan payment is past due, and your property may be referred to foreclosure fourteen (14) days after the date of this letter." The letter went on to detail the amount defendant owed, various options and rights available to defendant, and other information, but did not inform defendant of his "right to reinstate after acceleration" or his "right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale."

At a hearing on plaintiff's motion, defendant argued to the trial court that plaintiff had not submitted sufficient evidence entitling it to summary judgment, asserting that "there's at least a question of fact as to whether [proper notice was sent] in this case." Defendant pointed out that the letter attached to Braune's supplemental declaration gave defendant 14 days notice, while "under the trust deed, they're required to give them 30 days," and that "there's other language required which isn't in there." While reviewing the letter, the trial court asked, "Were there more notices than that sent out? But you only attached one though, right?" Plaintiff replied, "That's right, Your Honor. There were several other notices sent out, as indicated in the declaration by [Braune]." The trial court concluded, "Okay. That's sufficient for me." The trial court subsequently granted plaintiff's motion for summary judgment, declaring that plaintiff was "entitled to a judgment for the recovery of certain sums due under the Note, and that plaintiff [was] entitled to a judgment of foreclosure of its first priority Deed of Trust as against Defendant."

On appeal, defendant reiterates the argument that he made before the trial court. He contends that a written notice that complies with sections 20 and 22 of the trust deed is a condition precedent to acceleration and foreclosure and that by failing to submit evidence that it had complied with those notice requirements, plaintiff did not meet its burden of showing that it was entitled to summary judgment. Defendant argues that Braune's supplemental declaration and the attached letter were insufficient to meet that burden:

"[T]he letter offered by plaintiff fails to satisfy its contractual obligations because it gave defendant only 14 days to respond and lacked the additional required language that was to advise the homeowner of his right to reinstate the loan after acceleration and the right to assert his defenses to any court action."

In response, plaintiff does not dispute that it had to provide proper written notice under sections 20 and 22 of the trust deed before it could initiate any action for foreclosure and acceleration of defendant's debt. Plaintiff also concedes that the demand letter attached to Braune's supplemental declaration did not include all of the notice information required by Section 22. However, plaintiff insists that its pleadings and the more general evidence it submitted adequately asserted and supported its right to foreclosure in broad terms. Specifically, plaintiff argues that Braune's statement in the supplemental declaration...

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3 cases
  • Grandmontagne v. Hogan
    • United States
    • Court of Appeals of Oregon
    • September 21, 2022
    ......See U.S. Bank National Association v. Vettrus, 285 Or.App. 629,. 637-38, ......
  • Gosha v. Bank of N.Y. Mellon Corp.
    • United States
    • U.S. District Court — District of Oregon
    • March 10, 2021
    ...under section 22 of the Deed of Trust after they rescinded the Notice of Default in 2018, Defendants rely on U.S. Bank Nat'l Ass'n v. Vettrus, 285 Or. App. 629 (2017). In Vettrus, the Oregon Court of Appeals analyzed whether a declaration and attached notice which did not meet the requireme......
  • Bank of Am. v. Carlson, A162895
    • United States
    • Court of Appeals of Oregon
    • July 17, 2019
    ...burden of producing evidence to establish [its claim] as a matter of law at the summary judgment stage." U.S. Bank National Assn. v. Vettrus , 285 Or. App. 629, 636, 397 P.3d 68 (2017) (internal quotation marks omitted). In determining whether there is a material factual dispute, we—like th......

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