Page 1 WESTLAKE FLOORING COMPANY LLC, DBA WESTLAKE FLOORING 

SERVICES’ RESPONSE TO MOTION REGARDING RESOLUTION OF 

CLAIMS AND FINAL DISBURSEMENT OF FUNDS

WHIPPLE & DUYCK, P.C. 

ATTORNEYS AT LAW 

1500 SW FIRST AVE., SUITE 1170 

PORTLAND, OR 97201 

503.222.6004 

503.222.6191 

Daniel L. Duyck, OSB #972529 

E-mail: dduyck@whippleduyck.com 

Whipple & Duyck, P.C. 

1500 SW First Ave., Suite 1170 

Portland, OR 97201 

Telephone (503) 222-6191 

Facsimile (503) 222-6029 

Attorneys for Defendant Westlake Flooring Company, LLC dba 

Westlake Financial Services. 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

PORTLAND DIVISION 

TOWER INSURANCE COMPANY OF 

NEW YORK, a New York corporation,

Plaintiff, 

v. 

ROSE CITY AUTO GROUP, LLC, an 

Oregon limited liability company; 

LEONARD M. SHILEY, an individual; 

THERESA BYLE, an individual; 

LOGAN DRIEDRIC, an individual; 

JOANNA STONER, an individual; 

STEPHEN STONER, an individual; 

LOVE MARTINO, an individual; ANAN 

SRIVILAI, an individual; CAMERON 

JOHNSON, an individual; JONATHAN 

GILLBERT, an individual; TINA 

HARRAL, an individual; ROY 

WIEGAND, an individual; NATHAN 

LANGER, an individual; KAREN 

BERSINE, an individual; MELISSA 

STEVENS, an individual; TONY 

EDWARDS, an individual; DEBBIE 

RECKTANGLE, an individual; 

RODNEY JENKINS, an individual; 

STEPHEN SCHANTIN, an individual; 

BRITTANY LAWRENCE, an individual; 

MATT REED, an individual; SHERIAL 

Case No.: 3:14-cv-00975-MO 

WESTLAKE FLOORING COMPANY 

LLC, DBA WESTLAKE FLOORING 

SERVICES’ RESPONSE TO MOTION 

REGARDING RESOLUTION OF 

CLAIMS AND FINAL DISBURSEMENT 

OF FUNDS 

Case 3:14-cv-00975-MO Document 56 Filed 03/11/15 Page 1 of 6
Page 2 WESTLAKE FLOORING COMPANY LLC, DBA WESTLAKE FLOORING 

SERVICES’ RESPONSE TO MOTION REGARDING RESOLUTION OF 

CLAIMS AND FINAL DISBURSEMENT OF FUNDS

WHIPPLE & DUYCK, P.C. 

ATTORNEYS AT LAW 

1500 SW FIRST AVE., SUITE 1170 

PORTLAND, OR 97201 

503.222.6004 

503.222.6191 

REED, an individual; RACHEL 

SCHANTIN, an individual; EZEKIAL 

HUNT, an individual; BOBBY HEAGLE, an individual; LANEY BLANKENSHIP, an individual; LONNEY FRANCIS, an 

individual; OREGON COMMUNITY 

CREDIT UNION, an Oregon non-profit 

entity; TWINSTAR CREDIT UNION, a 

Washington nonprofit corporation; 

LOBEL FINANCIAL CORPORATION, a California corporation; THE 

EQUITABLE FINANCE COMPANY, an Oregon corporation; UNITUS 

COMMUNITY CREDIT UNION, an 

Oregon non-profit entity; WESTLAKE 

FLOORING COMPANY LLC, DBA 

WESTLAKE FLOORING SERVICES, a California limited liability company; and 

DOES 1-30, 

Defendants. 

Defendant and Crossclaimant Westlake Flooring Company LLC, dba Westlake 

Flooring Services (“Westlake”), hereby responds to Plaintiff’s Motion Regarding 

Resolution of Claims and Final Disbursement of Funds (“Motion”) as follows: 

1) Westlake is statutorily entitled to its pro rata share of the remaining 

deposited funds capped at $20,000; 

2) Claimants Joanna and Stephen Stoner (collectively, the “Stoners”) are 

entitled to their full claim of $964.50; 

3) The claims of the remaining Claimants are invalid; and 

4) Plaintiff is entitled to the return of $6,865.08. 

Case 3:14-cv-00975-MO Document 56 Filed 03/11/15 Page 2 of 6
Page 3 WESTLAKE FLOORING COMPANY LLC, DBA WESTLAKE FLOORING 

SERVICES’ RESPONSE TO MOTION REGARDING RESOLUTION OF 

CLAIMS AND FINAL DISBURSEMENT OF FUNDS

WHIPPLE & DUYCK, P.C. 

ATTORNEYS AT LAW 

1500 SW FIRST AVE., SUITE 1170 

PORTLAND, OR 97201 

503.222.6004 

503.222.6191 

MEMORANDUM IN SUPPORT 

1. A Valid Bond Claim Must Be Based On Fraud, Fraudulent 

Representation, Or Enumerated Violations Of The Vehicle Code. 

ORS 822.030 outlines the requirements for making a claim against a bond. 

Subsection (2) provides: 

(2) Any person shall have a right of action against a vehicle 

dealer, against the surety on the vehicle dealer’s bond and against 

the letter of credit in the person’s own name if the person suffers 

any loss or damage by reason of the vehicle dealer’s fraud, 

fraudulent representations or violations of provisions of the vehicle 

code relating to:

 (a) Vehicle registration;

 (b) Vehicle permits;

 (c) The transfer or alteration of vehicles; or

 (d) The regulation of vehicle dealers.

 

Therefore, a claimant cannot recover on a dealer bond, unless the claimed loss is the 

result of: (1) fraud; (2) fraudulent representation; or (3) enumerated violations of the 

vehicle code. 

2. Westlake’s Bond Claim Is Based On Fraud. 

Westlake’s bond claim is based on the fraudulent activity of Rose City Auto 

Group (“Rose”) and its principal, Leonard M. Shiley (“Shiley”).1

 None of the parties 

have disputed this fact, including Plaintiff. As such, Westlake is statutorily entitled to 

recover on the dealer bond. 

 Plaintiff’s Motion cites ORS 822.045 and Brasher’s Cascade Auto Auction, Inc. v. 

Leon, 247 Or App 535 (2011) to suggest that a bond claim cannot be based on a dealer’s 

failure to pay off a loan or to clear title. 

 

1 See Memorandum of Patrick Amato in Ex.2, pp. 9-13 of Westlake’s Answer, 

Counterclaim, and Crossclaims (detailing discovery of various fraudulent activity as part 

of Westlake’s audit of Rose). 

Case 3:14-cv-00975-MO Document 56 Filed 03/11/15 Page 3 of 6
Page 4 WESTLAKE FLOORING COMPANY LLC, DBA WESTLAKE FLOORING 

SERVICES’ RESPONSE TO MOTION REGARDING RESOLUTION OF 

CLAIMS AND FINAL DISBURSEMENT OF FUNDS

WHIPPLE & DUYCK, P.C. 

ATTORNEYS AT LAW 

1500 SW FIRST AVE., SUITE 1170 

PORTLAND, OR 97201 

503.222.6004 

503.222.6191 

However, Westlake’s claim is not based on the dealer’s failure to pay off a loan or 

to clear title. Instead, Westlake’s claim is based on the dealer’s fraud. 

Moreover, nothing in ORS 822.045 says that a violation under that section 

disqualifies it from being the basis of a bond claim under ORS 822.030(2). Plaintiff is 

imposing requirements for a valid bond claim that are not found in ORS 822.030(2). 

Finally, Brasher’s is about claims based on violations of the Vehicle Code. 

Westlake’s claim is based on fraud. Therefore, Brasher’s is irrelevant to the validity of 

Westlake’s claim. 

3. None Of The Non-Consumer Claimants Have A Valid Bond Claim. 

The following parties have filed a claim against the bond: (1) Unitus Community 

Credit Union; (2) Oregon Community Credit Union; (3) Tidewater Credit Union. 

The basis of Unitus Community Credit Union’s claim is that the dealer “made 

only 2 payments . . . has not returned calls or responded to letters . . . [and as a result, 

Unitus] are unable to perfect this title.” See Affidavit of Claim to Unitus Community 

Credit Union’s Answer to Plaintiff’s Complaint and Counterclaim. This cannot support a 

bond claim under ORS 822.030. 

The basis of Oregon Community Credit Union’s claim is that “Rose City Auto 

Group failed to pay the premiums for the Service Contract and the GAP Insurance 

policy.” See Page 2 of Affidavit of Claim to Oregon Community Credit Union’s Filing 

of Claim. This cannot support a bond claim under ORS 822.030. 

The basis of Twinstar Credit Union’s claim is that “Rose City Auto Group has 

never provided clear title and has converted the loan funds paid.” Page 3 of Carol 

Nelson’s Delaration of Defendant Twinstar Credit Union’s Filing of Claim. This cannot 

support a bond claim under ORS 822.030. 

Case 3:14-cv-00975-MO Document 56 Filed 03/11/15 Page 4 of 6
Page 5 WESTLAKE FLOORING COMPANY LLC, DBA WESTLAKE FLOORING 

SERVICES’ RESPONSE TO MOTION REGARDING RESOLUTION OF 

CLAIMS AND FINAL DISBURSEMENT OF FUNDS

WHIPPLE & DUYCK, P.C. 

ATTORNEYS AT LAW 

1500 SW FIRST AVE., SUITE 1170 

PORTLAND, OR 97201 

503.222.6004 

503.222.6191 

Westlake is the only “Other than Retail Customer” claimant to allege fraud in its 

counterclaim and to assert separate crossclaims against Rose and Shiley alleging fraud. 

Therefore, Westlake is the only non-consumer who is entitled to the bond proceeds. 

4. Proposed Distribution 

 Based on the foregoing, Westlake respectfully requests that the remaining funds 

should be split pro rata between the Stoners and Westlake. The math is as follows: 

The total amount of claims is: $45,712.83 =$44,748.33 + $964.50 

The Stoners’ pro rata share is: $587.18 = $27,829.58 x ($964.50/$45,712.83) 

Westlake’s pro rata share is: $27,242.40 = $27,829.58 x ($44,748.33/$45,712.83) 

Per ORS 822.030(3), Westlake’s pro rata share is capped at $20,000. After 

applying the cap, more funds are available to the Stoners so that they can recover their 

entire claim of $964.50. 

After the Stoners and Westlake receive their shares, Plaintiff is left with: 

$6,865.08 (=$27,829.58 - $20,000 - $964.50). 

The Court should enter an order disbursing the remaining funds accordingly. 

Dated this 11th day of March, 2015. 

 WHIPPLE & DUYCK, P.C. 

By: /s/ Daniel L. Duyck 

Daniel L. Duyck, OSB #972529 

Of Attorneys for Defendant 

Westlake Flooring Company, LLC dba 

Westlake Financial Services

Case 3:14-cv-00975-MO Document 56 Filed 03/11/15 Page 5 of 6
Page 1 CERTIFICATE OF SERVICE WHIPPLE & DUYCK, P.C.

ATTORNEYS AT LAW 

1500 SW FIRST AVE., SUITE 1170 

PORTLAND, OR 97201 

503.222.6004 

503.222.6191

CERTIFICATE OF SERVICE 

I hereby certify that on the 11th day of March, 2015, I served the foregoing WESTLAKE 

FLOORING COMPANY LLC, DBA WESTLAKE FLOORING SERVICES’ RESPONSE TO 

MOTON REGARDING RESULUTION OF CLAIMS AND FINAL DISBURSEMENT OF 

FUNDS on the following parties: 

Lawrence A. Wagner

Stewart Sokol & Gray LLC 

2300 SW First Ave., Suite 200 

Portland, OR 97201-0699 

Of Attorneys for 

Tower Insurance Company of New York

Michelle M. Bertolino

Farleigh Wada Witt 

121 SW Morrison St., Suite 600 

Portland, OR 97204 

Of Attorneys for 

Unitus Community Credit Union

Thomas M. Orr 

Hutchinson Cox Coons et al 

940 Willamette St., Suite 400 

PO Box 10886 

Eugene, OR 97440 

Of Attorneys for 

Oregon Community Credit Union 

James P. Laurick 

Kilmer, Voorhees & Laurick, P.C. 

732 NW 19th Avenue 

Portland, Oregon 97209 

Of Attorneys for 

Twinstar Credit Union 

 via CM/ECF system 

Joanna Stoner 

PO Box 381 

Onalaska, WA 98570 

Stephen Stoner 

PO Box 381 

Onalaska, WA 

 by mailing a true and correct copy thereof by U.S. Postal Service, ordinary first class 

mail, addressed to each non-CM/ECF party’s last-known address and depositing in the U.S. mail 

at Portland, Oregon, on the date set forth above; 

DATED this 11th day of March, 2015. 

/s/ Daniel L. Duyck Daniel L. Duyck, OSB #972529 

Case 3:14-cv-00975-MO Document 56 Filed 03/11/15 Page 6 of 6