UNITED STATES DISTRICT COURT 

DISTRICT OF OREGON 

LUJEAN YOAKAM, A.K.A. LOU JEAN 

YOAKAM, 

Plaintiff, 

v. 

STATE FARM FIRE AND CASUALTY 

COMPANY and WELLS FARGO HOME 

MORTGAGE, INC., A DIVISION OF 

WELLS FARGO BANK, N.A., 

Defendants. 

AIKEN, Judge: 

Case No. 6:15-cv-00478-AA 

OPINION AND ORDER 

Plaintiff filed suit alleging claims for breach of contract, reformation of contract and 

declaratory judgment. Plaintiff alleges that defendant State Farm Fire and Casualty Company 

(State Farm) breached the te1ms of insurance contract by failing to provide adequate coverage for 

storm damage that rendered plaintiffs residence uninhabitable. Plaintiff also alleges claims for 

refmmation of contract against State Farm and defendant Wells Fargo Home Mortgage, Inc. 

(Wells Fargo), claiming that the relevant insurance and mortgage contacts should be reformed to 

convey the intent of the parties and to provide a replacement for plaintiffs residence. 

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State Farm and Wells Fargo now move for dismissal of plaintiffs First and Second 

Claims for Relief alleging reformation of contract. The motions are granted. 

BACKGROUND 

On or about January 17, 2002, plaintiff obtained a reverse mortgage loan (the Loan) from 

Wells Fargo related to real property located at 1895 N. Fir Street, Coquille, Coos County, 

Oregon. Pl.' s Com pl. if if 1, 5. In exchange for the Loan, plaintiff voluntarily executed an 

Adjustable Rate Note and an Adjustable Rate Second Note. Tran-Caffee Deel. Exs. 2-3. The 

Loan is secured by an Adjustable Rate Home Equity Conversion Line of Credit Deed of Trust. 

Id. Ex. 1. 

On or about June 9, 2013, a wind and hail storm occurred, causing structural damage to 

plaintiffs residence and rendering it uninhabitable. Pl.' s Compl. if 3. Plaintiff had to move out of 

the home pending repairs. Id. if 6. For a period of time, plaintiff was living in alternate housing, 

an "old camp trailer," provided by State Farm. Id. if 8. 

Plaintiff has a homeowner's insurance policy issued by State Farm (the Policy), and the 

Policy includes replacement coverage for structural damage. Id. if 3. According to plaintiff, the 

sums offered by State Farm under the Policy are insufficient to repair the storm damage to her 

residence. Pl.' s Compl. if 7. Plaintiff further alleges that repairs to her residence have ceased due 

to State Farm's refusal to provide sufficient coverage to complete the required work. Id. if 8. As 

an alternative to repairing the home, plaintiff has proposed that her residence be burned down by 

the local fire department and replaced with a "modest manufactured home dwelling," and that 

the cost be covered by State Farm under the Policy. Id. ifif 14, 23. Plaintiff alleges breach of 

contract against State Farm and also seeks reformation of the insurance contract to provide for 

sufficient replacement coverage. Id. ifif 14, 27-30. 

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Case 6:15-cv-00478-AA Document 37 Filed 05/26/16 Page 2 of 4
Plaintiff further alleges that Wells Fargo has notified plaintiff that it intends to foreclose 

the Loan because she has not lived in the residence for over a year, and it is no longer plaintiffs 

principal residence. Pl.'s Compl. if 17, 19. Plaintiff also asserts that Wells Fargo will not allow 

her to pursue her alternative proposal of replacing the home. Id. if 18. Plaintiff thus seeks 

reformation of the Loan agreement to avoid foreclosure. Id. if 19. 

DISCUSSION 

State Farm and Wells Fargo move for dismissal of plaintiffs contract reformation claims 

alleged in her First and Second Claims for Relief. Defendants argue that plaintiff fails to plead 

the requisite elements of reformation. I agree. 

To state a claim for contract reformation under Oregon law, plaintiff must plead that: 1) 

there was an antecedent agreement to which the contract can be reformed; 2) there was a mutual 

mistake or a unilateral mistake on the part of the party seeking reformation and inequitable 

conduct on the part of the other party; and 3) the party seeking reformation was not guilty of 

gross negligence. 5 Star, Inc. v. At!. Cas. Ins. Co., 269 Or. App. 51, 60, 344 P.3d 467, rev. den. 

357 Or. 743, 361 P.3d 608 (2015); Munson v. Valley Energy Inv. Fund, US., LP, 264 Or. App. 

679, 696, 333 P.3d 1102 (2014). 

As noted by defendants, plaintiffs Complaint fails to allege an antecedent agreement 

with either State Farm or Wells Fargo, aside from the Policy and the relevant Loan agreements. 

In response to defendants' motions, plaintiff agrees that she cannot establish the existence of an 

antecedent agreement with either defendant and that dismissal of the reformation claims are 

wananted. Pl.'s Response to State Farm at 2; Pl.'s Response to Wells Fargo at 2. However, 

plaintiff argues that she should be allowed the opportunity to amend her complaint to allege a 

claim of unconscionability against State Farm and an unspecific contract claim for specific 

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performance against Wells Fargo, presumably based on its alleged refusal to endorse checks 

issued jointly to plaintiff and Wells Fargo. Plaintiff also maintains that Wells Fargo is a 

necessary party to this action, and she cannot obtain complete relief in its absence. 

I am not persuaded that Wells Fargo is a necessary and indispensable party to this action. 

See Fed. R. Civ. P. 19(a)(l). Nonetheless, at this juncture, it is unclear whether plaintiffs 

attempts to amend her complaint would be futile. Accordingly, I will allow plaintiff the 

opportunity to amend her complaint. Fmiher, in light of plaintiffs allegations, I find settlement 

proceedings appropriate. 

CONCLUSION 

State Farm's and Wells Fargo's Motions to Dismiss (docs. 24, 32) are GRANTED. 

Within 30 days after the date of this order, plaintiff may move for amendment of her complaint, 

after the required conferral with defendants. In the meantime, the parties shall contact Paul 

Bruch, Courtroom Deputy for Magistrate Judge Thomas Coffin, at 541-431-4111 to schedule 

judicial settlement proceedings. 

IT IS SO ORDERED. 

Dated this JY:day of May, 2016. 

Ann Aiken 

United States District Judge 

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