UNITED STATES DISTRICT COURT 

DISTRICT OF OREGON 

JAMES K. BEARD and SUNSHINE M. 

BEARD, 

Appellants, 

v. 

OCWEN LOAN SERVING, LLP and 

ALDRIDGE PITE, LLC, 

Appellees. 

AIKEN, Judge: 

Case No. 6:15-cv-01858-AA 

Bankr. Case No. 12-61206-tnu·? 

OPINION AND ORDER 

Appellant James Beard appeals a ruling of the United States Bankruptcy Court. Beard 

argues that the Bankruptcy Court erred by denying his motion for contempt sought against 

Appellees Ocwen Loan Servicing, LLP (Ocwen) and Aldridge Pite, LLC (Aldridge), the law 

firm who represented Ocwen. In denying the motion, the Bankruptcy Court found that Ocwen 

and Aldridge had not violated the discharge injunction by obtaining foreclosure judgments. I find 

no error and affirm the decision of the Bankruptcy Comi. 

1 - OPINION AND ORDER 

Case 6:15-cv-01858-AA Document 26 Filed 05/13/16 Page 1 of 5
STANDARD 

The Bankruptcy Court's findings of fact shall not be set aside unless clearly erroneous. In 

re Rains, 428 F.3d 893, 900 (9th Cir. 2005). Issues of law are reviewed de novo, as are mixed 

questions of law and fact. Jn re Bammer, 131 F.3d 788, 792 (9th Cir. 1997); In re Jodoin, 209 

B.R. 132, 135 (9th Cir. B.A.P. 1997). 

DISCUSSION 

The only issue raised in this appeal is whether foreclosure judgments obtained by Ocwen 

constituted liens on Beard's non-foreclosure property. 

In March 2005, Beard obtained a mortgage loan from GMAC Mortgage Corporation 

(GMAC) for property located at 416 Laurel Street in Medford, Oregon. In November 2007, 

Beard obtained a second loan from GMAC for property located at 1604 W. Main Street in 

Medford. Beard defaulted on both loans in 2011. 

In March 2012, Beard filed a Chapter 7 bankruptcy petition. GMAC obtained relief from 

the automatic bankruptcy stay and was allowed to proceed with foreclosure on both properties. 

In June 2012, plaintiff received a Chapter 7 discharge of debts. 

In November 2012, GMAC initiated foreclosure proceedings on the Main Street property. 

Subsequently, Ocwen assumed servicing of the loan and was substituted as the plaintiff. 

Aldridge served as counsel for GMAC and Ocwen in the lawsuit. 

In March 2013, Ocwen, as the loan servicer, initiated foreclosure proceedings on the 

Laurel Street property. Aldridge again served as Ocwen's counsel. 

In January 2014, judgments were entered and Ocwen was allowed to foreclose on both 

properties. As required by Oregon law at the time, the foreclosure judgments included as money 

2 - OPINION AND ORDER 

Case 6:15-cv-01858-AA Document 26 Filed 05/13/16 Page 2 of 5
awards the amount owed under the promissory notes and secured by the deeds of trust on the 

properties. 

Ocwen purchased the properties at a sheriffs sale held in February 2014. It then filed full 

satisfaction of money awards with respect to both judgments. 

Shortly thereafter, Beard was allowed to reopen his bankruptcy case, and he moved for 

contempt against Ocwen and Aldridge for allegedly violating the bankruptcy discharge 

injunction. After briefing and hearing on the issue, the Bankruptcy Court found no violation of 

the discharge injunction and denied the motion. I find no eirnr. 

Beard does not argue that Appellees violated the discharge injunction by seeking to 

foreclose on the Laurel Street and Main Street properties, nor could he given the relief from stay 

obtained by GMAC. The discharge injunction does not bar enforcement of pre-petition liens 

against property. Johnson v. Home State Bank, 501 U.S. 78, 84 (1991). Rather, Beard argues that 

Appellees violated the injunction simply by obtaining foreclosure judgments that included 

money awards in the amount of indebtedness owed under the promissory notes. Beard argues 

that by including the amount of debt secured by the properties, the foreclosure judgments created 

post-petition liens on other propc11ies owned by Beard, in violation of the discharge injunction. 

The discharge injunction bars recovery or collection of pre-petition debts as personal 

liabilities of the discharged debtor. 11 U.S.C § 524(a). Aside from obtaining the foreclosure 

judgments, Beard cites no action taken by Appellees allegedly in violation of the discharge 

injunction. I agree with the Bankruptcy Court that the foreclosure judgments did not create 

personal liability against Beard as post-petition liens against non-foreclosure properties. 

At the time of the foreclosure, Oregon law provided that state comts "shall enter a 

judgment for the amount of the debt against the lien debtor" if the debtor had "given a 

3 - OPINION AND ORDER 

Case 6:15-cv-01858-AA Document 26 Filed 05/13/16 Page 3 of 5
promissory note or other personal obligation for the payment of the debt." Or. Rev. Stat. § 

88.010(1)(2013); see also id. § 18.862(1) (2013). The amount of the money award dete1mined 

the amount that the judgment creditor could bid at the sale and the amount of proceeds that 

would be paid to the judgment creditor. Id. §§ 18.936(l)(c),(2), 18.950. Regardless of the money 

award in the judgment, the debtor was not responsible for any deficiency between the amount of 

the debt and the sale price of the prope1iy unless the foreclosure judgment expressly provided for 

execution of the deficiency and enforcement of the judgment after sale of the prope1iy. Id. § 

86.797(3) (2013). 

In this case, Beard signed promissory notes for payment of the debt secured by the 

properties. Thus, in order to comply with Oregon law, the foreclosure judgments were required 

to include money awards in the amount of the debt owed by Beard. That fact alone, however, 

does not mean that the judgments created personal liability against Beard. As the Bankruptcy 

Court noted, Oregon law has emphasized that the money award required by§ 88.010(1) does not 

in and of itself create in personam liability but generally denotes the amount owed. See Wright v. 

Nothagel, 163 Or. 156, 161-62, 96 P.2d 228 (1939); Bruckman v. Healy, 126 Or. 129, 133-34, 

268 P. 1001 (1928); Wright v. Wimerly, 94 Or. 1, 16 184 P. 740 (1919). As found by the 

Bankruptcy Court, "the judgments were necessary elements to judicial foreclosure of the interest 

in the subject properties." ER 67. 

In fact, the foreclosure judgments in this case do not permit execution of a deficiency 

amount and instead explicitly state that any money award is to be "satisfied by the sale of the 

Subject Property as directed under this judgment." ER 199-200, 238. Thus, the judgments make 

clear that Appellees could not enforce the money awards beyond the sale of the properties. 

Moreover, Ocwen filed full satisfactions of money award with respect to both judgments. ER 

4 - OPINION AND ORDER 

Case 6:15-cv-01858-AA Document 26 Filed 05/13/16 Page 4 of 5
203, 246. Finally, there is no evidence that liens actually attached to Beard's non-foreclosure 

properties, only that a third-patty title company mistakenly believed liens were created. ER 30, 

39, 47-48, 67. 

As found by the Bankruptcy Court, the judgments did not impose personal liability 

against Beard, and Appellees did not violate the discharge injunction. 

CONCLUSION 

Accordingly, the decision of the Bankruptcy Court is AFFIRMED. 

IT IS SO ORDERED. 

Dated this J.3_~y of May, 2016. 

Ann Aiken 

United States District Judge 

5 - OPINION AND ORDER 

Case 6:15-cv-01858-AA Document 26 Filed 05/13/16 Page 5 of 5