UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

PORTLAND DIVISION 

ROD ESLAMI, an individual, 

Plaintiff, 

v. 

FEDERAL NATIONAL MORTGAGE 

ASSOCIATION, aka Fannie Mae, and 

WELLS FARGO BANK, N.A., 

Defendants. 

HAGGERTY, District Judge: 

Case No.: 3:13-cv-00837-HA 

OPINION AND ORDER 

Plaintiff, Rod Eslami, brings this quiet title action pursuant to Oregon Revised Statute 

(ORS) 86.735(1) to challenge the non-judicial foreclosure of his home. Defendants have filed a 

Motion to Dismiss [15), a Request for Judicial Notice [17), and a Motion for Summaty Judgment 

[ 46). Defendants contend that plaintiff's claim is preempted by the Home Owners Loan Act 

(HOLA), 12 U.S.C. § 1461 et seq., and that this case must be dismissed. Plaintiff has filed a 

Motion for Leave to File Second Amended Complaint [68) and a Request for Judicial Notice 

[70). For the following reasons, defendants' Motion to Dismiss [15) and Request for Judicial 

Notice [17) are granted and all other motions are denied. 

1 - OPINION AND ORDER 

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FACTUAL BACKGROUND 

In 2005, plaintiff refinanced his home with a loan from World Savings Bank, F.S.B., a 

federal savings bank, in the amount of $387,000.00. As security for the loan, plaintiff executed a 

Deed of Trust, dated May 2, 2005, encumbering the real property located at 18985 SW Gassner 

Road, Beaverton, OR 97007 (Prope1iy). The Deed of Trust was recorded in Washington County, 

Oregon. 

On December 31, 2007, World Savings changed its name to Wachovia Mortgage, F.S.B. 

On November 1, 2007, Wachovia Mmigage, F.S.B. changed its name to Wells Fargo Bank 

Southwest, N.A. Wells Fargo Bank Southwest, N.A. then merged into Wells Fargo Bank, N.A. 

(Wells Fargo). 

In 2009, plaintiff failed to make three payments on his home loan and then was unable to 

make a full payment on his mortgage arrears. From 2009 until 2011, plaintiff tried 

unsuccessfully to seek a loan modification. In total, plaintiff submitted nine applications for a 

loan modification, but Wells Fargo allegedly lost pmiions of his applications and requested 

additional irrelevant documents such that none of plaintiffs applications were approved. 

On Janumy 19, 2012, the Property was sold at a non-judicial trustee's sale in Beave1ion, 

Oregon to Wells Fargo for $336,872.00. On Janumy 23, 2012, the successor trustee executed a 

Trustee's Deed, conveying title to the Prope1iy to Wells Fargo Home Mortgage, a division of 

Wells Fargo Bank, NA. 

On December 5, 2012, Wells Fargo executed a Warranty Deed conveying its interest in 

the Property to the Federal National Mortgage Association (Fannie Mae). The Wananty Deed 

was recorded in Washington County, Oregon. Plaintiff filed this action on May 17, 2013 and 

filed the First Amended Complaint [10] on June 30, 2013. 

2 - OPINION AND ORDER 

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For a significant period of time, plaintiff was actingpro se, however, he obtained counsel 

prior to responding to the pending motions. The sole claim pleaded in both the First Amended 

Complaint and the proposed Second Amended Complaint is under ORS 86.735(1). ORS 

86.735(1) provides that a trustee's sale is only valid if "the trust deed, any assignments of the trust 

deed by the trustee or the beneficiary and any appointment of a successor trustee are recorded in 

the mortgage records in the counties in which the property described in the deed is situated." 

Plaintiff alleges that written assignment of the deed of trust from World Savings Bank, or its 

successor in interest, to Fannie Mae was not recorded and as such, the Trustee's Deed is void. 

The Second Amended Complaint also contains allegations of unfair and deceptive practices and 

requests for equitable relief, but does not include any additional claims. 

STANDARDS 

To survive a motion to dismiss under Federal Rule of Civil Procedure (FRCP) 12(b)(6), a 

complaint must allege sufficient facts to state a claim for relief that is plausible on its face. 

Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949 (2009). When considering a motion to 

dismiss, the court must determine whether the plaintiff has made factual allegations that are 

"enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. T>vombly, 550 

U.S. 544, 545 (2007). Dismissal under FRCP 12(b)(6) is proper only where there is no 

cognizable legal theory, or an absence of sufficient facts alleged to support a cognizable legal 

theory. Shroyer v. New Cingular Wireless Servs., Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). 

The reviewing court must treat all facts alleged in the complaint as true and resolve all 

doubts in favor of the nonmoving party. Barnes v. Yahoo!, Inc., 570 F.3d 1096, 1098 n.l (9th 

Cir. 2009) (citation omitted). The court need not accept any legal conclusions set foiih in a 

plaintiff's pleading. Ashcroft, 129 S. Ct. at 1949-50. 

3 - OPINION AND ORDER 

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DISCUSSION 

In considering defendants' Motion to Dismiss, defendants request that this court take 

judicial notice of the Deed ofTrust; a letter dated November 19, 2007, on the letterhead of the 

Office of Thrift Supervision, Department of the Treasury (OTS) authorizing a name change from 

World Savings Bank, FSB to Wachovia Mortgage, FSB; the Official Certification of the 

Comptroller of the Ctmency stating that effective November 1, 2009, Wachovia Mortgage, 

F.S.B. converted to Wells Fargo Bank Southwest, N.A., which then merged with and into Wells 

Fargo Bank, N.A.; and the historical profile of World Savings Bank, F.S.B. (FDIC Certificate# 

27076) from the "BankFind" feature of the Federal Deposit Insurance Corporation website. As 

there are no objections to the requests for judicial notice and as judicial notice is appropriate for 

each of the above exhibits, defendants' Request for Judicial Notice [17] is granted. 

Congress enacted ROLA in 1933 "at a time when record numbers of home loans were in 

default and a staggering number of state-chartered savings associations were insolvent. HOLA 

was designed to restore public confidence by creating a nationwide system of federal savings and 

loan associations to be centrally regulated according to nationwide 'best practices."' Silvas v. 

E*Trade }vfortg. Corp., 514 F.3d 1001, 1004 (9th Cir. 2008)(quoting Fid Fed. Sav. & Loan Ass'n 

v. de la Cuesta, 458 U.S. 141, 160-61 (1982)). Through ROLA, Congress created a system "so 

pervasive as to leave no room for state regulatory control." Conference of Fed. Sav. & Loan 

Ass'ns v. Stein, 604 F.2d 1256, 1257, 1260 (9th Cir.1979), affd, 445 U.S. 921. OTS has broad 

authority to issue regulations governing federal savings associations. 12 U.S.C. § 1464. OTS 

promulgated a preemption regulation in 12 C.F.R. § 560.2. 

The first question is whether HOLA applies in this case because Wells Fargo is a national 

bank, rather than a federal savings bank. The great weight of authority on this issue concludes 

4 - OPINION AND ORDER 

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that HOLA preemption applies to Wells Fargo with respect to loans originating with World 

Savings Bank. See, e.g., Copeland-Turner v. Wells Fargo Bank, 800 F. Supp. 2d 1132, 1143 

(D.Or. 2011); Guerrero v. Wells Fargo Bank, NA., No. CV 10-5095-VBF, 2010 WL 8971769, 

*3 (C.D.Cal. Sept. 14, 2010) ("[w]here a national association, such as [Wells Fargo], acquires the 

loan of a federal savings bank, it is proper to apply preemption under HOLA"). The court finds 

no basis to conclude that HOLA is inapplicable to Wells Fargo as the successor to World Savings 

Bank. 

The paiiies agree that 12 C.F.R. § 560.2 controls whether plaintiff's claim under ORS 

86.735(1) is preempted. Section 560.2 (a) provides that: 

OTS hereby occupies the entire field of lending regulation for federal savings 

associations. OTS intends to give federal savings associations maximum 

flexibility to exercise their lending powers in accordance with a uniform federal 

scheme of regulation. Accordingly, federal savings associations may extend credit 

as authorized under federal law, including this paii, without regard to state laws 

purporting to regulate or otherwise affect their credit activities, except to the 

extent provided in paragraph ( c) of this section ... 

Section 560.2(b) goes on to list specific types of state laws preempted by HOLA and§ 

560.2( c) carves out specific exceptions to HOLA preemption. In Silvas, the Ninth Circuit set 

forth the framework for determining whether a state law claim is preempted by HOLA: 

When analyzing the status of state laws under § 560 .2, the first step will be to 

dete1mine whether the type of law in question is listed in paragraph (b ). If so, the 

analysis will end there; the law is preempted. If the law is not covered by 

paragraph (b ), the next question is whether the law affects lending. If it does, then, 

in accordance with paragraph (a), the presumption arises that the law is 

preempted. This presumption can be reversed only if the law can clearly be shown 

to fit within the confines of paragraph (c). For these purposes, paragraph (c) is 

intended to be interpreted nanowly. Any doubt should be resolved in favor of 

preemption. 

5 - OPINION AND ORDER 

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Silvas, 514 F.3d at 1005 (quoting OTS, Final Rule, 61 Fed.Reg. 50951, 50966-67 (Sept. 30, 

1996)). The question in this case is whether ORS 86.735(1), which purp01is to regulate 

foreclosure, is preempted by § 560.2 because the loan at issue originated with a federal savings 

bank. 

In Copeland-Turner, Judge Hernandez conducted an exhaustive collection and analysis of 

cases arising in the Ninth Circuit to determine whether foreclosure was the type of activity for 

which preemption applies. 800 F. Supp. 2d at 1138-1142. In a well-reasoned opinion, Judge 

Hernandez concluded that § 560.2 (b )(! O)'s inclusion of "processing, origination, servicing, sale 

or purchase of, or investment or participation in, m01igages" should be read to include state laws 

concerning foreclosure, and that even if it did not, § 560.2 ( c )'s preemption oflaws having more 

than an incidental affect on lending would certainly apply. Copeland-Turner, 800 F. Supp. 2d at 

1142. As it is clear ORS 86.735(1) would have more than an incidental effect on lending, this 

court adopts the reasoning in Copeland-Turner and concludes that plaintiffs sole claim is 

preempted by HOLA. 

Because plaintiff does not seek to add any new claims through his Second Amended 

Complaint, but only adds additional info1mation relating to his claim under ORS 86.735(1), the 

court must conclude that such amendment would be futile. Similarly, the comi is powerless to 

grant plaintiff equitable relief on a claim that fails as a matter of law. Accordingly, the court 

concludes that plaintiffs First Amended Complaint must be dismissed. Given that plaintiff has 

not sought to add any additional claims, the procedural posture of this case, and the lengthy delay 

already passed, that dismissal must be with prejudice. Moreover, because the documents for 

which plaintiff requests judicial notice do not alter this comi's analysis, plaintiffs Request for 

6 - OPINION AND ORDER 

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Judicial Notice [70] is denied as moot. The court does not reach defendants' Motion for 

Summary Judgment and it too is denied as moot. 

CONCLUSION 

For the foregoing reasons, defendants' Motion to Dismiss [15] and Request for Judicial 

Notice [17] are GRANTED. All other pending motions are denied and this case is DISMISSED 

WITH PREJUDICE. 

IT IS SO ORDERED. 

DATED this __l!i day of July, 2014. 

7 - OPINION AND ORDER 

Ancer L. Haggerty 

United States District Judge 

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