DWT 29147446v8 0036234-000408

DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

DAVIS WRIGHT TREMAINE LLP

1300 S W Fifth Avenue, Suite 2400

Portland, Oregon 97201-5610

(503) 241-2300 main  (503) 778-5299 fax

KEVIN H. KONO, OSB #023528 

kevinkono@dwt.com 

KALEY L. FENDALL, OSB # 093509 

kaleyfendall@dwt.com 

DAVIS WRIGHT TREMAINE LLP

1300 S.W. Fifth Avenue, Suite 2400 

Portland, Oregon 97201-5610 

Telephone: (503) 241-2300 

Facsimile: (503) 778-5299 

FREDERICK B. BURNSIDE, OSB #096617 

fredburnside@dwt.com 

DAVIS WRIGHT TREMAINE LLP

1201 Third Avenue, Suite 2200 

Seattle, WA 98101 

Telephone: (206) 757-8016 

Facsimile: (206) 757-7016 

Attorneys for JPMorgan Chase Bank, NA

IN THE UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

AT EUGENE

WILLIAM J. PAATALO,

PLAINTIFF, 

v. 

WASHINGTON MUTUAL BANK, F.A.

JPMORGAN CHASE BANK NA, 

DEFENDANTS. 

Case No. 15-cv-01420-AA

DEFENDANT JPMORGAN CHASE 

BANK NA’S MOTION FOR 

SUMMARY JUDGMENT

Oral Argument Requested

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Page 1 – DEFENDANT’S MOTION FOR SUMMARY JUDGMENT

DAVIS WRIGHT TREMAINE LLP

1300 S W Fifth Avenue, Suite 2400

Portland, Oregon 97201-5610

(503) 241-2300 main  (503) 778-5299 fax

LR 7.1 CERTIFICATE OF CONFERRAL

Defendant JPMorgan Chase Bank, N.A. (“Chase”) conferred with counsel for Plaintiff 

William J. Paatalo (“Paatalo”) regarding the subject of this motion via telephone on April 25, 

2016, as required by LR 7-1(a), but the parties were unable to resolve the issues presented by 

Chase’s motion. 

MOTION

Chase moves for summary judgment under Fed. R. Civ. P. 56(a), against Paatalo’s 

declaratory-judgment claim, because Chase’s affirmative defenses of release (Third Affirmative 

Defense) and waiver (Fourth Affirmative Defense) bar Paatalo’s claim. In support of this 

motion, Chase submits the following Memorandum of Law, as well as the accompanying 

Declaration of Kaley L. Fendall with attached exhibits, and further relies on the records and files 

of this case. 

MEMORANDUM OF LAW

I. INTRODUCTION

Paatalo’s declaratory judgment action arises out of a series of disputes between Paatalo 

and Chase concerning loans involving Washington Mutual Bank f/k/a Washington Mutual Bank, 

FA (“WaMu”) and secured by Paatalo’s property. Those disputes include WaMu’s alleged 

misapplication of payments, Paatalo’s alleged notice of rescission of the loans, Paatalo’s default 

on the loans, and Chase’s subsequent foreclosure on the property.1

 This, however, is not 

Paatalo’s first attempt at bringing claims against Chase relating to his loans and property. In 

fact, Paatalo brought numerous claims against Chase in 2010, all relating to Paatalo’s same 

loans, property and related claims, and Chase’s foreclosure on the property. 

 

1 As Paatalo alleges in his Complaint, Chase acquired certain of WaMu’s assets in September 

2008 through a “Purchase and Assumption Agreement” with the FDIC. Compl., ¶28; 

https://www.fdic.gov/about/freedom/Washington_Mutual_P_and_A.pdf. 

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DAVIS WRIGHT TREMAINE LLP

1300 S W Fifth Avenue, Suite 2400

Portland, Oregon 97201-5610

(503) 241-2300 main  (503) 778-5299 fax

 

 

 Paatalo now seeks a 

declaration from this Court that Chase’s foreclosure of his property was null and void based on 

his alleged rescission of his loans in 2008. Even if Paatalo were able to show he provided to 

WaMu a timely and valid notice of rescission of his loans—and, for the reasons set forth in 

Chase’s Opposition to Plaintiff’s Motion for Summary Judgment (Dkt. No. 23), Paatalo cannot 

do so—his rescission would not affect the validity of the prior settlement agreement 

between Paatalo and Chase. 

 the Court should enter judgment for Chase. 

II. BACKGROUND

A. Paatalo’s allegations and present litigation with Chase. 

1. Paatalo’s purchase of the Property.

Paatalo alleges that, on June 23, 2004 he purchased real property located at 400 East 3rd 

Street, Yachats, Oregon 97498 (the “Property”) for $449,500.00. Compl., ¶ 1.2

 Paatalo further 

alleges he refinanced the Property with WaMu on August 10, 2006. Compl., ¶ 2. Paatalo

obtained an “Option Arm” loan in the amount of $880,000.00, which was secured by a Deed of 

Trust, dated August 10, 2006. Compl., ¶ 2, Ex. E, p. 2. Paatalo alleges he also obtained a home 

 

2 Although the allegations of Paatalo’s Complaint are not material to the determination of 

Chase’s motion, Chase cites to the allegations contained in Paatalo’s Complaint in this Section 

II(A) solely for the purpose of providing background to the Court. By so doing, Chase does not 

agree or concede that any of Paatalo’s allegations are true or undisputed, or that the Court needs 

to determine whether any issue of fact exists as to Paatalo’s allegations. 

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DAVIS WRIGHT TREMAINE LLP

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equity line of credit (“HELOC”) from WaMu for $109,494.00, which was secured by a second 

Deed of Trust. Compl., ¶ 2. On September 14, 2007, Paatalo entered into a Modification 

Agreement with WaMu, which increased the credit limit on his HELOC account by $45,000.00, 

or from $109,494.00 to $154,889.00. Compl., ¶ 3, Ex. E, p. 19. 

2. Paatalo’s alleged notice of rescission of the loans.

Paatalo alleges that, shortly after he entered into a Modification Agreement with WaMu 

on September 14, 2007, Paatalo got into a dispute with WaMu regarding alleged misapplication 

of payments to his account. Compl., ¶ 5. Around the time of Paatalo’s dispute with WaMu, 

Paatalo claims he learned of alleged violations of TILA by WaMu, including “failure to provide 

proper ‘Notices of Rescission’” on Paatalo’s August 10, 2006 loans, a “hyper-inflated 260% 

increase on the appraised valuation of Paatalo’s [P]roperty, and the falsifying of Paatalo’s 

income on his ‘Residential Loan Application.’” Compl., ¶ 6. According to Paatalo, he sent a 

written “Notice of Rescission” by certified mail to WaMu on or about March 29, 2008, notifying 

WaMu that he was exercising his right to rescind both loans. Compl., ¶ 6. Paatalo has never 

produced any proof of mailing this purported letter, and Paatalo’s loan files do not contain any 

such letter. Declaration of Jessica Dunn, ¶ 7 (Dkt. No. 24).

3. WaMu’s failure.

On September 25, 2008, WaMu was placed in receivership with the Federal Deposit 

Insurance Corporation (“FDIC”). Compl., ¶ 8, 28. Under a Purchase and Assumption 

Agreement (“P&A Agreement”) between the FDIC and Chase, the FDIC sold many of WaMu’s 

assets to Chase. Compl., ¶ 28. After WaMu was placed into receivership with the FDIC, 

Paatalo’s pending claims against WaMu “outside of the TILA violations went to the FDIC” 

under the Federal Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”), 12 

U.S.C. §§ 1811, et seq. Compl., ¶ 8. Paatalo did not assert any TILA rescission claim in court 

or through the FDIC. Compl., ¶ 9. 

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DAVIS WRIGHT TREMAINE LLP

1300 S W Fifth Avenue, Suite 2400

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4. Paatalo’s default and sale of the Property.

Paatalo alleges that on April 2, 2009 a “Notice of Default and Election To Sell” was 

recorded on the Property. Compl., ¶ 10, Ex. A, p. 1. Thereafter, on July 31, 2009, Paatalo

alleges that a “Notice of Foreclosure,” “Trustee’s Notice of Sale,” and related pre-sale affidavits 

were recorded on the subject property. Compl., ¶ 11, Ex. B, pp. 3-17. On August 18, 2009, the 

Property was sold to Chase for $410,000.00. Compl., ¶ 13. A Trustee’s Deed for the sale of the 

Property was issued on August 20, 2009, which was then recorded on August 24, 2009. Compl., 

¶ 13, Ex. C. Paatalo alleges Chase sold the Property to a third-party purchaser for $285,000 on 

July 12, 2011. Compl., ¶ 16. 

5. Paatalo’s present claim against Chase. 

Paatalo filed the present action against Chase on July 29, 2015. He seeks a declaration 

that, based on his purported notice of rescission allegedly sent to WaMu on March 29, 2008, 

(1) Paatalo is the sole owner of the Property; (2) the foreclosure of Paatalo’s Deeds of Trust is 

null and void; and (3) all documents recorded on or against title to the Property after Paatalo’s 

alleged notice of rescission on March 29, 2008 are null and void. Compl., ¶ 41. 

B. Paatalo’s prior litigation and settlement with Chase.

1. Chase’s claims and Paatalo’s counterclaims.

On October 1, 2010 Chase filed an ejectment action against Paatalo in Lincoln County 

Circuit Court, styled JPMorgan Chase Bank v. William John Paatalo, Lincoln County Case No. 

103837 (the “Lincoln County Action”), to remove Paatalo from the Property that Paatalo now 

makes the subject of the present action. See Declaration of Kaley L. Fendall (“Fendall Decl.”), 

Ex. A. Chase alleged the Property was sold at a Trustee’s Sale on August 18, 2009, and that 

Chase was the “legal owner of the Property and [was] entitled to immediate possession thereof.” 

Fendall Decl., Ex. A, ¶ 5. Chase also alleged Paatalo had “remained in possession of the 

Property and [had] wrongfully refused to surrender possession” to Chase. Fendall Decl., Ex. A, 

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¶ 6. Chase sought a judgment awarding it possession of the Property, and authorizing removal of 

Paatalo. Fendall Decl., Ex. A, p. 2. 

Paatalo alleged several counterclaims in response to Chase’s ejectment action, including 

claims for fraudulent misrepresentation, mail and wire fraud, breach of fiduciary duty, unjust 

enrichment, civil conspiracy, civil RICO, predatory lending, usury, intentional infliction of 

emotional distress, quiet title, and slander of title, as well as claims for violations of the Real 

Estate Settlement Procedures Act (“RESPA”), Unfair Debt Collection Practices Act, and Oregon 

Unlawful Trade Practices Act. Fendall Decl., Ex. B. As a basis of his counterclaims, Paatalo

alleged that Chase was not a “holder in due course of the note when it initiated foreclosure 

proceedings,” and thus lacked authority to “foreclose on the subject [P]roperty.” Fendall Decl.,

Ex. B, ¶¶ 9, 16. Paatalo asked for a declaration that he was “the rightful owner of title to the 

[P]roperty,” that Chase “be declared to have no[ ] estate, right, title or interest in said 

[P]roperty,” and that “the foreclosure be declared illegal and void.” Fendall Decl., Ex. B, pp. 33, 

35. 

On June 2, 2011, the court entered an order in the Lincoln County Action, granting 

Chase’s motion to dismiss Paatalo’s counterclaims, and also granting Chase’s motion to 

voluntarily dismiss its own action for ejection based on “Paatalo’s representation of the vacancy” 

of the Property. Fendall Decl., Ex. C, p. 2. After dismissal of the claims and counterclaims, 

Paatalo filed a Notice of Appeal on June 28, 2011. Fendall Decl., Ex. E. 

2. The parties’ Settlement Agreement.

On November 14, 2012, and during the pendency of Paatalo’s appeal of the dismissal of 

his counterclaims in the Lincoln County Action, Paatalo and Chase entered into a Settlement 

Agreement (“Settlement Agreement”). See Fendall Decl., Exs. FCase 6:15-cv-01420-AA Document 37 Filed 05/11/16 Page 6 of 17
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DAVIS WRIGHT TREMAINE LLP

1300 S W Fifth Avenue, Suite 2400

Portland, Oregon 97201-5610

(503) 241-2300 main  (503) 778-5299 fax

274 Or. App. 457, 475, 362 P.3d 254 (2015) (“A general release is understood...to refer to a 

release of all then-existing claims within the contemplation of the parties in general, as opposed 

to a release of specific claims.”). Thus, where a settlement agreement contains a 

release of “any and all claims,” “[t]here [is] no need 

for the parties to offer a listing of what is included in ‘any and all.’” Ristau, 318 Or. at 389 n. 6. 

 Fendall Decl., Ex. F, Ex. 1, p. 1, 

 Ristau, 318 Or. at 389 n. 6. (emphasis added). 

 

Fendall Decl., Ex. F, Ex. 1, pp. 1-3. As set forth in Section II(A)(5) above, Paatalo specifically 

seeks a declaration that, based on his alleged rescission of his loans on March 29, 2008, (1) 

Paatalo is the sole owner of title to the Property; (2) that Chase’s foreclosure of the Property is 

null and void; and (3) that all other actions taken against title to the Property are null and void. 

Compl., ¶ 41. Because Paatalo’s requested relief relates entirely to his claimed interest in or title 

to the “Property,” which arises out of Paatalo’s alleged rescission of the “Account,” his claim for 

declaratory relief 

 Fendall Decl., Ex. F, Ex. 1, p. 1. 

Further, Paatalo’s present claim for declaratory relief was also “within the contemplation 

of the parties” at the time of the Settlement Agreement. Wieck, 274 Or. App. at 475. 

 In the Lincoln County Action, Paatalo sought a declaration that he 

was “the rightful owner of title to the [P]roperty,” and that the “foreclosure be declared illegal 

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DAVIS WRIGHT TREMAINE LLP

1300 S W Fifth Avenue, Suite 2400

Portland, Oregon 97201-5610

(503) 241-2300 main  (503) 778-5299 fax

and void.” Fendall Decl., Ex. B, pp. 33, 35. In the present action, Paatalo again seeks a 

declaration that he “be put back in title to the subject [P]roperty as sole owner,” and that the 

“foreclosure of [Paatalo’s] void Deeds of Trust be deemed null and void.” Compl., ¶ 41. 

 and thus no material issue of fact 

regarding the effect of on Paatalo’s claim in this case. Fendall Decl., Ex. F, Ex. 1, 

p. 1. 

 Fendall Decl., Ex. F, Ex. 1, pp. 1-2. At the time he entered into the Settlement 

Agreement with Chase on November 14, 2012, Paatalo had to be aware of any notice of 

rescission he had allegedly sent to WaMu. 

 Fendall Decl.,

Ex. F, Ex. 1, pp. 1-2. 

 Fendall 

Decl., Ex. F, Ex. 1, pp. 1-2. 

 

2. Paatalo is unable to set forth any valid reasons for why the Settlement 

Agreement should not be enforced. 

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DAVIS WRIGHT TREMAINE LLP

1300 S W Fifth Avenue, Suite 2400

Portland, Oregon 97201-5610

(503) 241-2300 main  (503) 778-5299 fax

 Fendall Decl., Ex. F, Ex. 1, p. 1. Paatalo will be unable to establish the 

existence of any of the limited exceptions under which an unambiguous settlement 

agreement is not enforced. Accordingly, this Court should enforce the parties’ Settlement 

Agreement and grant summary judgment in Chase’s favor.

As Oregon courts recognize, “[r]elease agreements are favored under the law because 

‘certainty and judicial economy are served when parties can negotiate settlement of their disputes 

with confidence that their settlement agreements will be upheld and enforced by the courts.’” 

Graves v. Tulleners, 205 Or. App. 267, 278, 134 P.3d 990 (2006) (citing Lindgren, 307 Or. at 

278). Accordingly, under Oregon law, a release must be enforced unless “the release was the 

product of a misrepresentation or unconscionable conduct.” Davidson v. Deschutes Cnty., Case 

No. 6:15-CV-52-TC, 2015 WL 4464145, at *4 (D. Or. July 21, 2015). Oregon courts identify 

three limited circumstances under which a court may refuse to enforce a release agreement: 

“(1) the release agreement was unilaterally coerced or imposed and 

was not the result of an arm’s-length negotiations between the 

parties; (2) the party seeking to avoid the release did not have 

independent representation; or (3) the party seeking to enforce the 

release misrepresented the nature, effect, or scope of the release 

agreement, or misled the other party about the value or merit of an 

asserted legal claim.” 

Pioneer Resources, LLC, 187 Or. App. at 357. None of these limited circumstances exists here. 

Because the sole basis for declining to enforce a release agreement is that the release was 

the “product of a misrepresentation or unconscionable conduct,” Paatalo is unable to argue that 

the U.S. Supreme Court’s decision in Jesinoski v. Countrywide Home Loans, 135 S. Ct. 790 

(2015) is grounds to either unwind or refuse to enforce the parties’ negotiated and final 

Settlement Agreement and release. Indeed, courts consistently hold that a “change in law,” or 

later clarification of law that was “uncertain,” is an insufficient ground on which to invalidate or 

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DAVIS WRIGHT TREMAINE LLP

1300 S W Fifth Avenue, Suite 2400

Portland, Oregon 97201-5610

(503) 241-2300 main  (503) 778-5299 fax

refuse to enforce a settlement agreement.4 See Anita Foundations, Inc. v. ILGWU Nat’l 

Retirement Fund, 902 F.2d 185, 189 (2d Cir. 1990) (“[A] settlement payment, made when the 

law was uncertain, cannot be successfully attacked on the basis of any subsequent resolution of 

the uncertainty.”); Holland v. Virginia Lee Co., Inc,188 F.R.D.241 (W.D. Va. 1999) (“[A] 

supervening change in law will not alone suffice as a ground for invalidating a settlement 

agreement.”). Accordingly, whether the U.S. Supreme Court’s decision in Jesinoski is construed 

as an “intervening change in the law” or clarification of “what the law has always meant,” the 

Jesinoski decision is not one of the “limited circumstances” under which the Court may refuse to 

enforce the parties’ Settlement Agreement under Oregon law. Op. & Order, Dkt. No. 12 (Nov. 

12, 2015), p. 13; Op. & Order, Dkt. No. 21 (Feb. 24, 2016), p. 5. 

B. Chase is entitled to summary judgment on its affirmative defense of waiver 

because Paatalo intentionally relinquished his claims against Chase by 

entering into the Settlement Agreement.

Under Oregon law, “[w]aiver is an intentional relinquishment of a known right.” Oracle 

America, Inc. v. Oregon Health Ins. Exchange Corp., ---- F. Supp. 3d ----, 2015 WL 7296233 , at 

*21 (D. Or. Nov. 18, 2015) (citing Wood Park Terrace Apartments Ltd. P’ship v. Tri-Vest, LLC, 

254 Or. App. 690, 695, 297 P.3d 494 (2013). Additionally, “waiver must be manifested in an 

unequivocal manner.” Duncan v. Office Depot, 973 F. Supp. 1171, 1177 (D. Or. 1997). 

As set forth in Section IV(A) above, 

by entering into the Settlement Agreement. 

 

4 Chase respectfully disagrees that Jesinoski represents a “change in the law.” When the U.S. 

Supreme Court construes a statute, it is not “changing” the law, even if the applicable circuit 

authority previously construed the statute differently. Instead, when the U.S. Supreme Court 

“construes a statute, it is explaining its understanding of what the statute has meant continuously 

since the date when it became law,” and is thus announcing a final determination as to what the 

statute “had always meant.” Rivers v. Roadway Exp., Inc., 511 U.S. 298, 312-13 n. 12 (1994). 

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DAVIS WRIGHT TREMAINE LLP

1300 S W Fifth Avenue, Suite 2400

Portland, Oregon 97201-5610

(503) 241-2300 main  (503) 778-5299 fax

 Fendall Decl., Ex. F, Ex. 1, pp. 1-2. Further, and as also 

discussed in Section IV(A)(1)(c) above, 

Oracle America, Inc., ---- F. Supp. 3d ----, 2015 WL 7296233 at *21. Indeed, at the time Paatalo 

entered into the Settlement Agreement with Chase, he not only was aware of his purported 

March 29, 2008 rescission of his loans—and thus any potential claim against Chase arising from 

his alleged prior rescission of his loans—

 Fendall Decl., Ex. B, p. 35. 

Paatalo 

cannot establish a triable issue of material fact on Chase’s affirmative defense of waiver, thus 

entitling Chase to judgment as a matter of law. 

V. CONCLUSION

Chase respectfully requests that this Court grant its motion for summary judgment on 

Paatalo’s claim for declaratory relief based on 

 the November 14, 2012 Settlement Agreement between Paatalo and Chase. 

DATED this 11th day of May, 2016. 

DAVIS WRIGHT TREMAINE LLP

By s/ Kaley L. Fendall

Kevin H. Kono, OSB #023528 

Kaley L. Fendall, OSB # 093509 

Telephone: (503) 241-2300 

Facsimile: (503) 778-5299 

kevinkono@dwt.com 

kaleyfendall@dwt.com 

Frederick B. Burnside, OSB #096617 

Telephone: (206) 757-8016 

Facsimile: (206) 757-7016 

fredburnside@dwt.com 

Attorneys for JPMorgan Chase Bank, NA

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