IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

KEITH L. HA YES, 

Plaintiff, 

v. 

WELLS FARGO BANK, N.A., 

Defendant. 

PAPAK, Magistrate Judge: 

3:15-CV-00651-PK 

FINDINGS AND 

RECOMMENDATION 

On April l, 2015, Plaintiff Keith L. Hayes filed an action for declaratory judgment and 

damages against Defendant Wells Fargo Bank N.A. ("Wells Fargo") based on a nonjudicial 

foreclosure sale of property in 2010. Hayes argues that Wells Fargo: (1) unlawfully disregarded 

his homeowner's assistance application in violation of ORS 86.750;l (2) willfully, maliciously, 

negligently, and in bad faith breached its contract with Hayes; and (3) failed to meet the 

requirements of ORS 86.750 prior to the sale. This court has jurisdiction over this claim pursuant 

to 28 U.S.C. § 1332 and 28 U.S.C. § 1441. 

Now before the court is Wells Fargo's motion for judgment on the pleadings (#5). For the 

1 ORS 86.750 was amended and renumbered as ORS 86.752 in 2013. 

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reasons set forth below, Wells Fargo's motion should be granted and Hayes' claims should be 

dismissed with prejudice. 

FACTUAL BACKGROUND 

On October 26, 2006, Hayes signed a promissory note to obtain a $231,200 loan ("Note") 

from Wells Fargo in order to purchase real prope1ty at 1535 SW Clay Street #240, Portland, 

Oregon 97201 ("Prope1ty"). Hayes granted Wells Faigo a deed oftrnst ("DOT") on the property 

to secure his obligations under the loan. 

Hayes defaulted on the Note after failing to make a payment due on March 1, 2010, and 

similarly failing to make all payments due thereafter. On June 30, 2010, the trustee of the DOT, 

Fidelity National Title Insurance Company, recorded a Notice of Default and Election to Sell 

("Notice of Default"). The property was sold on November 8, 2010, to Federal National 

Mortgage Association for $225,275.83. 

On April 1, 2015, Hayes filed his complaint (#1) in the Circuit Court for the State of 

Oregon in Multnomah County. Wells Fargo filed its notice of removal (#4) on April 17, 2015. 

On June 11, 2015, Wells Fargo filed its motion for judgment on the pleadings (#5). 2 

LEGAL STANDARD 

Federal Rule of Civil Procedure ("Rule") 12( c) govems a party's motion for judgment on 

the pleadings. Rule 12(c) provides that "[a]fter the pleadings are closed-but early enough not to 

delay trial-a pmty may move for judgment on the pleadings." Fed. R. Civ. P. 12(c). "Judgment 

on the pleadings is proper when the moving pmty clearly establishes on the face of the pleadings 

2 Hayes did not file a brief in response to or otherwise resist Wells Fargo's motion, and was unreachable by opposing 

counsel as of June 11, 2015. Def. Mot. for J. on the Pleadings, #5, at 1-2. 

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that no material issue of fact remains to be resolved and that it is entitled to a judgment as a matter 

oflaw." Hal Roach Studios, Inc., v. Richard Feiner & Co., 896 F.2d 1542, 1550 (9th Cir. 1989) 

(citations omitted). In evaluating a motion for judgment on the pleadings, the allegations of the 

non-moving party are credited as true, whereas those allegations of the moving party which have 

been denied are deemed false for the purposes of the motion. See id. 

As a general rule, 'judgment on the pleadings is improper when the district court goes 

beyond the pleadings to resolve an issue." Hal Roach Studios, Inc., 896 F.2d at 1550. The court 

may, however, consider documents whose contents are alleged in a complaint, and whose 

authenticity no party questions, even if the documents are not physically attached to the pleadings. 

Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). Consideration of documents incorporated 

into the complaint does not convert the motion for judgment on the pleadings to one for summary 

judgment. See id. 

ANALYSIS 

Hayes challenge Wells Fargo's foreclosure sale on three grounds. He alleges that Wells 

Fargo: ( 1) unlawfully disregarded his homeowner's assistance application in violation of ORS 

86.750; (2) willfully, maliciously, negligently, and in bad faith breached its contract with Hayes; 

and (3) failed to meet the requirements of ORS 86. 750 prior to the foreclosure sale. In its answer, 

Wells Fargo made four affomative defenses: (1) Hayes failed to state a claim; (2) Hayes' claims 

are ba1Ted by the statute of limitations; (3) Hayes' claims are batTed by his own material breach; 

and ( 4) Hayes' conduct was the cause of the alleged damages. After considering all of the parties' 

pleadings and the relevant documents in the record, I find that Wells Fargo's motion should be 

granted for the reasons set forth below. 

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g
I. All of Hayes' Claims are Barred by ORS 86.797(1) 

Wells Fargo argues that all of Hayes' claims are bmTed by ORS 86.797(1)3, a provision of 

the Oregon Trust Deed Act (OTDA). The statute provides that "[ifj ... a trustee sells prope1ty 

covered by a trnst deed, the trustee's sale forecloses and terminates the interest in the prope1ty that 

belongs to a person to which notice of the sale was given under ORS 86.764 and 86.774 .... " See 

ORS 86.797(1); Baggao v. iV!ascaro, 77 Or. App. 627, 630-31 (1986). The statute "reflect[s] the 

legislature's intent to protect the grantor against the unauthorized loss of its property and to give 

the grantor sufficient opportunity to cure the default." Staffordshire Investments, Inc. v. Cal-W. 

Reconveyance Cmp., 209 Or. App. 528, 542 (2006). A number of courts have held that this 

statute precludes post-sale challenges to foreclosure when the plaintiff was given proper notice. 

See, e.g., Ojfenbacher-Afo/au v. ReconTrust, Multnomah County Circuit Court Case No. 1202-

02429, at 2 (Jan. 16, 2013) ("[P]laintiff is statutorily barred under ORS 86. 770 from challenging a 

completed foreclosure sale of which she had notice. No amendment will cure this jurisdiction 

defect, and, accordingly, the Court finds the dismissal shall be with prejudice."); iVfikityuk v. 

Northwest Tr. Servs., 952 F. Supp. 2d 958 (D. Or. 2013) ("[o]ne who waits until after the trustee's 

sale risks having one's property interest 'foreclosed and terminated"); Hart v. Pac. Trust Bank, 

2013 WL 4829172, at *2 (D. Or. Sept. 9, 2013); Chen v. Bank of Am., NA., 2013 WL 3929854 (D. 

Or. July 25, 2013). 

3 ORS 86.797 was renumbered from ORS 86.770 in 2013. 

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Explaining the legislative intent behind and effect of ORS 86. 797(1 ), the lvfikityuk court 

reasoned: 

[T]he text and context of the OTDA demonstrate that the legislature 

weighed efficiency, certainty, and finality against the threat of wrongful 

foreclosure and, after including notice provisions intended to protect the 

grantor from wrongful foreclosure, came to the conclusion that the need for 

ce1iainty and finality trumped the risks of wrongful foreclosure. 

}.Iikityuk, 952 F. Supp. 2d at 966. I find this reasoning persuasive. The grantor's remedy for 

wrongful foreclosure is to challenge trnstee's power of sale upon receipt of notice, prior to the 

trustee's sale and the recordation of the trustee's deed. Post hoc challenges disturb the ce1iainty 

and finality of property transfers and are ban-ed by ORS 86.797(1) when proper notice is given. 

Here, Hayes admits that he was in default and that he received proper notice of the sale. 

Complaint iii! 6-7. Hayes chose not to challenge the foreclosure before the sale occurred, and 

instead waited five years after the fact to raise his claims. Consequently, his interest in the 

' property was "foreclosed and te1minated" and all of his claims are now barred under ORS 

86.797(1). 

II. Hayes' First and Third Claims That Wells Fargo Violated ORS 86.750 Are Time 

Barred Under ORS 12.110(1) 

Hayes alleges that Wells Fargo violated ORS 86.750 because it "failed and refused" to 

consider: ( 1) his homeowner's assistance application, and (2) his Loan Modification Request 

Form. Complaint, #1, iii! 7-9, 16. Both the application and the form were submitted in 2010. 

Id. Wells Fargo argues that Hayes' complaint is time ba1Ted by ORS 12.110(1) and that his 

pleading is insufficient to state a claim. ORS 12.110(1) provides as follows: 

An action for assault, battery, false imprisonment, or for any injury to the 

person or rights of another, not arising on contract, and not especially 

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enumerated in this chapter, shall be commenced within two years; 

provided, that in an action at law based upon fraud or deceit, the limitation 

shall be deemed to commence only from the discove1y of the fraud or 

deceit. 

ORS 12.110(1) (emphasis added). Here, Hayes sought relief under ORS 86.750 in July 2010 and 

the foreclosure sale occurred in November 2010. Complaint, #1, ~ 7. Therefore, if Wells Fargo 

did violate ORS 86.750, it necessarily did so sometime in 2010 before moving forward with the 

foreclosure sale. Hayes did not file the instant action until April 2015, nearly five years later. 

Accordingly, his claims that Wells Fargo violated ORS 86.750, even if meritorious, are time 

ba11"ed. Because I find that Hayes' claims are precluded by Oregon's statute of limitations, I do not 

reach the merits of his claims with respect to ORS 86.750. 

III. Hayes' Second Claim for Breach of Contract Claim is Barred by the Contractual 

"Notice and Cure" Requirement and His Own Material Breach 

A. The "Notice and Cure" Requirement Bars Hayes' Claim 

Hayes argues that Wells Fargo's actions were "willful, malicious, negligent, and in breach 

of contract" because it failed to act on his assistance application.4 Complaint, #1, ~ 13. Wells 

Fargo contends that Hayes' action for breach of contract is bwed because of his failure to comply 

with a "notice and cure" provision of the DOT. The DOT provides, in relevant part: 

Neither Borrower nor Lender may commence ... any judicial action ... that . 

arises from the other party's actions pursuant to this Security Instrument or 

that alleges that the other party has breached any provision of, or any duty 

owed by reason of, this Security Instrument, until such Borrower or Lender 

has notified the other pmiy ... of such alleged breach and afforded the other 

pmiy hereto a reasonable period after the giving of such notice to take 

cmTection action .... 

' Though Hayes does not identify what specific contract or terms were violated, all of Hayes' claims arise from his 

contention that Wells Fargo wrongfully foreclosed on the DOT. Complaint, #I,~~ 5-16. 

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Def. Ex. B., #5, if 20. Wells Fargo argues that Hayes "failed to (and cannot) allege compliance 

with the notice and cure provision." Def. Mot. for J. on the Pleadings, #5, 7. 

Numerous cotnis in this district and elsewhere have found that identical notice and cure 

provisions in trust deeds bar claims when the homeowner fails to provide notice prior to 

commencing an action. See Higley v. Flagstar Bank, FSB, 910 F. Supp. 2d 1249, 1253 (D. Or. 

2012) (failure to follow notice and cure provision bars claim alleging violation of ORS 86.735); 

Gerber v. First Horizon Home Loans Corp., 2006 WL 581082 at *2 (W.D. Wash. Mar. 8, 2006) 

(failure to follow notice and cure provision bars breach of contract claim). Similar contractual 

agreements are also generally recognized by Oregon law. See Rueda v. Union Pac. R. Co., 180 

Or. 133, 141, 175 P.2d 778 (1946) ("Limited arbitration or submission agreements when stated as 

conditions precedent to liability are not illegal and, when a plaintiff has brought suit without first 

pursuing the agreed procedure, they may be set up as a stay or a bar to the action."); Lincoln 

Const., Inc. v. Thomas J. Parker & Associates, Inc., 289 Or. 687, 692, 617 P.2d 606 (1980) 

("When a contract clearly expresses that a third person is to make final decisions respecting 

specified matters, such agreement is enforceable."). 

Hayes' complaint does not allege compliance with--0r even make mention of-the notice 

and cure provision. Notice and cure provisions are "intended to give the allegedly breaching 

party an oppmiunity to cure its breach." Higley, 910 F. Supp. at 1253. Had Hayes timely 

notified Wells Fargo of the alleged breach, Wells Fargo would have had an opp011unity to correct 

its breach and prior to the allegedly-wrongful foreclosure sale. Because he failed to do so, this 

claim should be dismissed. 

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B. Hayes' Own Material Breach Bars His Claim 

Wells Fargo argues that Hayes' material breach of the DOT bars his claims for breach of 

contract. "It is well established ... that a plaintiff who seeks to recover under the terms of an 

express contract for defendant's failure to perform its tenns must plead and prove his own 

substantial perfo1mance or a valid excuse for his failure to perform." Wasserburger v. Amer. Sci. 

Chem., 267 Or. 77, 82 (1973); see also Su Yong Kim v. Chon SikPark, 192 Or. App. 365, 369 

(2004) ("[A] party who seeks to recover damages on a contract must plead and prove its own 

perfo1mance or a valid excuse for its failure to perfo1m. ") 

Hayes, again, does not dispute that he defaulted on the DOT and Note. This constitutes 

material breach because it "goes to the very substance of the contract and defeats the object of the 

parties entering into the contract." Bisio v. lvfadenwald, 33 Or.App. 325, 331 (1978), rev. den. 

283 Or. 1 (1978). Therefore, Hayes' failure to meet his obligations under the DOT and note bars 

his claims for breach of contract against Wells Fargo. 

CONCLUSION 

For the reasons set f01ih above, Wells Fargo's motion for judgment on the pleadings (#5) 

should be granted and Hayes' claims should be dismissed with prejudice. A final judgment 

should be prepared. 

Ill 

Ill 

Ill 

Ill 

Ill 

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SCHEDULING ORDER 

The Findings and Recommendation will be referred to a district judge. Objections, if any, 

are due fourteen (14) days from service of the Findings and Recommendation. Ifno objections 

are filed, then the Findings and Recommendation will go under advisement on that date. 

If objections are filed, then a response is due fomieen (14) days after being served with a 

copy of the objections. When the response is due or filed, whichever date is earlier, the Findings 

and Recommendation will go under advisement. 

Dated this 26th day of August, 2015. 

. onorable Paul Pap 

United States Magistrate Judge 

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