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Amy Edwards, OSB No. 012492

amy.edwards@stoel.com

Crystal S. Chase, OSB No. 093104

crystal.chase@stoel.com

Kennon Scott, OSB No. 144280

kennon.scott@stoel.com

STOEL RIVES LLP

760 SW Ninth Ave., Ste. 3000

Portland, OR 97205

Telephone: (503) 224-3380

Facsimile: (503) 220-2480

Attorneys for Defendant Select Portfolio Servicing, Inc.

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

EUGENE DIVISION

TERRI KWAKE, an individual and citizen 

of the State of Oregon,

Plaintiff,

v.

SELECT PORTFOLIO SERVICING, INC.; 

a Utah Corporation,

Defendant.

Case No.: 6:15-CV-01713-MC

DEFENDANT SELECT PORTFOLIO 

SERVICING, INC.’S MOTION FOR 

SUMMARY JUDGMENT AND 

SUPPORTING MEMORANDUM

(Telephonic Oral Argument Requested)

LOCAL RULE 7-1(a) COMPLIANCE

Pursuant to Local Rule 7-1(a), counsel for Defendant Select Portfolio Servicing, Inc. 

(“SPS”) certifies and states that she conferred in good faith on the telephone with Terry Scannell, 

counsel for Plaintiff Terri Kwake (“Plaintiff” or “Borrower”) on September 29, 2016 and that the 

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parties were unable to resolve their dispute regarding the subject of this motion. Counsel for 

Plaintiff indicated that Plaintiff may be willing to dismiss the Second Claim for Relief (RESPA). 

MOTION

Pursuant to Federal Rule of Civil Procedure 56, SPS moves the Court for an order of 

summary judgment as to each of Plaintiff’s three claims for relief. In support of this motion for 

summary judgment, SPS relies on the Declaration of L.C. Birkinshaw (“SPS Decl.”), the 

Declaration of Crystal S. Chase (“Chase Decl.”), the accompanying memorandum, and the 

pleadings and paper already on file in this case. 

MEMORANDUM

I. BACKGROUND

A. The Loan. 

This action arises out of a dispute relating to Plaintiff’s residential loan. On or about 

January 12, 2007, Plaintiff executed a Note in the amount of $292,000.00 (“Note”). (SPS Decl. 

¶ 3.) As security for the Note, Plaintiff also executed a Deed of Trust (“Trust Deed”) for 

residential property legally commonly known as 25951 Highway 36, Cheshire, Oregon 97419 

(“Property”). (Id. ¶ 3 & Ex. 2.) The Trust Deed was duly recorded in the official records of 

Lane County, Oregon as Instrument No. 2007-005047 (“Trust Deed”). (Id.) Collectively, the 

Note and the Trust Deed are referred to as the Loan. The Note and Trust Deed have been 

assigned to U.S. Bank National Association, as Trustee, in trust for the registered holders of 

Citigroup Mortgage Loan Trust, Asset-Backed Pass-Through Certificates, Series 2007-AHL3 

(the “Trust”). (Id. ¶ 3.) SPS has been the mortgage loan servicer for the Loan since August 16, 

2013, when servicing transferred from Bank of America, N.A. (“BANA”), the master servicer, to 

SPS as subservicer. (Id. ¶ 2 & Ex. 1.) 

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B. Plaintiff’s Prior Lawsuit Against BANA. 

Plaintiff previously sued non-party Bank of America, N.A. (“BANA”) as part of a 

putative class action captioned Maria Campusano, et al v. BAC Home Loan Servicing LP, et al, 

Central District of California Case No. 2:11-cv-04609 (“California Action”). In the California 

Action, Plaintiff alleged that BANA was the servicer on a residential mortgage she obtained for 

her home at 25951 Highway 36, Cheshire, Oregon 97419. (Chase Decl. Ex. 1 (California 

Action, Dkt. #33 (Second Am. Compl. ¶ 21)).) Plaintiff further alleged that she defaulted on her 

residential loan on or around August 2009 and that she subsequently attempted to enter into a 

loan modification agreement with BANA in 2010. (Id. (Second Am. Compl. ¶¶ 295 - 310).) In 

the California Action, Plaintiff brought claims for breach of contract and violation of state 

consumer protection statutes arising out of BANA’s handling of her loan modification. (Id.; see 

also Plaintiff’s First Amended Complaint [Dkt. No. 10] (“Complaint” or “Compl.”) ¶¶ 6-7.) 

After class certification in the California Action was denied, Plaintiff settled her claims against 

BANA. (Compl. ¶¶ 10, 31.) Plaintiff’s claims against BANA in the California Action were 

dismissed with prejudice by stipulation of the parties. (Chase Decl. Exs. 2-3 (California Action, 

Dkt. #248, 249).) Plaintiff has not named BANA as a defendant in this action. 

C. Plaintiff Does Not Qualify For A National Mortgage Settlement Loan Modification. 

After SPS had started servicing the Loan, SPS sent an October 9, 2013 letter to Plaintiff 

relating to a loan modification program that resulted from a national mortgage settlement 

(“NMS”) between the United States and state attorney generals and, inter alia, BANA (“October 

9 Letter”). (SPS Decl. ¶ 5 & Ex. 4.) The October 9 Letter provided, in part: 

We are pleased to let you know that you meet the criteria required 

to apply for a new modification program recently announced as a 

result of the U.S. Department of Justice and State Attorneys 

general national settlement. 

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If you qualify for this modification, any past due late fees will be 

waived, interest and advances that we paid on your behalf will be 

added to your principal balance, principal reduction will be applied 

and your loan will be brought up to date. . . . . 

(Id. Ex. 4 at 1.) The letter offered no modification terms (such as monthly payment, interest rate, 

etc.), rather is explained that “you must apply for this modification to see if you qualify.” (Id.) 

It instructed Plaintiff to submit certain information by a deadline, and explained that “[w]ithin 30 

days of receiving all of your documents, we will send you an approval or decline letter 

explaining next steps.” (Id. Ex. 4 at 2.) 

SPS then sent a follow up letter dated October 15, 2013 (“October 15 Letter”). That 

letter identified three possible responses that Plaintiff could receive to the information that she 

submitted: 

Once we have received all documents requested, we will complete 

the evaluation. This will take approximately 30 days. Upon 

completion of the evaluation, you will receive one of these three 

responses: 

• Your loan has been approved to begin a Trial Period. This 

notification will come in the form of a Trial Period Plan 

letter, and will provide you details of your Trial Period Plan 

and instructions on how to proceed. You will have at least 

14 days to accept the offer (the actual number of days will 

be in the offer letter)

• Your loan is not eligible for this program, but may be 

eligible for other foreclosure prevention alternatives. This 

notification will come in the form of a letter describing 

other options such as a different modification program, 

short sale or deed-in-lieu of foreclosure. 

• SPS needs more information from you to make a 

determination as to eligibility. SPS will either call you or 

send you a letter with this request.

(Id. Ex. 5 at 1 (emphasis added).) 

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After Plaintiff submitted the requested information, SPS sent Plaintiff a letter dated 

December 4, 2013 explaining that Plaintiff’s Loan was not eligible for an NMS loan 

modification (“December 4 Letter”). (Id. Ex. 6 at 1.) That letter explained that the Loan “is not 

eligible for a modification because the loan-to-value (LTV) ratio on your property (calculated as 

the total amount you owe on the loan divided by our estimate of the current market value of your

home) must be greater than 100.” (Id.) However, Plaintiff subsequently received a modification 

of her Loan in October 2014. (Id. Ex. 3.) At the time that this litigation was initiated in 

September 2015, Plaintiff was current on her Loan. (Id. ¶ 4 & Ex. 3.) 

II. DISCUSSION

A. Summary Judgment Standard.

Summary judgment is appropriate “if the movant shows that there is no genuine dispute 

as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 

56(a). No dispute exists “‘where the record taken as a whole could not lead a rational trier of 

fact to find for the nonmoving party.’” Hanon v. Dataproducts Corp., 976 F.2d 497, 500 (9th 

Cir. 1992) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 

(1986)). To defeat a motion for summary judgment, the non-moving party must “‘set forth 

specific facts’ that show a genuine issue for trial.” Leisek v. Brightwood Corp., 278 F.3d 895, 

898 (9th Cir. 2002) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986)). If the 

evidence favoring the non-moving party “is merely colorable, or is not significantly probative, 

summary judgment may be granted.” Anderson v. Liberty Lobby, 477 U.S. 242, 249-50 (1986) 

(citations omitted). 

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B. SPS Is Entitled to Summary Judgment on Plaintiff’s First Claim for Relief (Breach 

of Contract) Because No Agreement to Modify Plaintiff’s Loan Was Ever Reached 

Between the Parties.

For a contract to be formed under Oregon law, “there must be a meeting of the minds as 

to all of its terms” and “nothing can be left for future negotiations.” Phillips v. Johnson, 266 Or. 

544, 555, 514 P.2d 1337, 1343 (1973). Further, “[i]f any portion of the contract is not agreed 

upon, or if no method is agreed upon by which such a term or provision can be settled, there is 

no contract.” Id.; see also Barinaga v. JP Morgan Chase & Co., 749 F. Supp. 2d 1164, 1177–78 

(D. Or. 2010) (a meeting of the parties’ minds on the essential terms of an agreement is required 

to prove such an agreement).

Plaintiff’s breach of contract claim is based on the theory that the SPS Letter was an 

“offer” to enter into a loan modification with Plaintiff, and therefore Plaintiff’s submission of the 

requested documents was an acceptance, requiring SPS to provide Plaintiff with a loan 

modification. (Compl. ¶¶ 34-38.) However, the letter offered no modification terms (such as 

monthly payment, interest rate, etc.). (See SPS Decl. Ex. 4; see also id. Ex. 5.) This alone 

means the letter was not sufficient to create a valid and enforceable contract. Compare Barinaga 

v. JP Morgan Chase & Co., 749 F. Supp. 2d 1164, 1177–78 (D. Or. 2010) (no binding 

agreement to modify loan where borrower and lender failed to agree on the interest rate, payment 

term or how the principal and unpaid interest would be paid at the end of the term) with Bixler v. 

First Nat. Bank of Oregon, 49 Or. App. 195, 199, 619 P.2d 895, 898 (1980) (promise to modify 

loan sufficiently definite where bank provided the terms of the proposed loan and the annual 

interest rate); see also Gass v. CitiMortgage, Inc., No. 1:11-CV-3713-RWS-JSA, 2012 WL 

3201400, at *8–9 (N.D. Ga. June 25, 2012), report and recommendation adopted, No. 1:11-CV3713-RWS, 2012 WL 3156770 (N.D. Ga. July 19, 2012) (“no binding contract is formed when a 

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lender offers to permanently modify a loan in the future, pursuant to undefined terms”); see 

generally Klimek v. Perisich, 231 Or. 71, 78–79, 371 P.2d 956, 960 (1962) (“An offer must be 

certain so that upon an unqualified acceptance the nature and extent of the obligations of each 

party are fixed and may be determined with reasonable certainty.”); Sequoia Partners, LLC v. 

Federal Deposit Ins. Corp., Civ. No. 1:11-3057-CL, 2012 WL 1657049, at *3 (Mar. 13, 2012) 

(interest rate and payment terms are “terms essential to form an agreement [to lend money]”).

Moreover, the letter explained that “you must apply for this modification to see if you 

qualify.” (SPS Decl. Ex. 4 at 1.) Therefore, at most, it was an invitation to submit an 

application to be considered for a loan modification. It was not an offer sufficient to create a 

binding contract between the parties. See Schlosser v. Clackamas Water Dist., 60 Or. App. 617, 

622, 655 P.2d 194, 196 (1982) (an “invitation to negotiate does not constitute an offer”); see also

Mizrahi v. Wells Fargo Home Mortgage, No. CASE209-CV-01387-RLH, 2010 WL 2521742, at 

*3 (D. Nev. June 16, 2010) (letter offering to consider loan modification if borrowers submitted 

application and certain financial documentation was not a valid offer); Choe v. Bank of Am., 

N.A., No. 3:13-CV-0120-D, 2013 WL 6159308, at *3 (N.D. Tex. Nov. 25, 2013) (same). For all 

of these reasons, Plaintiff’s First Claim for Relief (Breach of Contract) must be dismissed.

C. SPS Is Entitled to Summary Judgment on Plaintiffs Second Claim for Relief 

(RESPA) Because that Claim Fails as a Matter of Law.

In her Second Claim for Relief, Plaintiff alleges that SPS violated the Real Estate 

Settlement Procedures Act (“RESPA”). Plaintiff’s RESPA claim is based on the allegation that 

SPS failed to comply with 12 C.F.R. § 1024.41, one of the federal regulations implementing 

RESPA (“Section 1024.41”). Section 1024.41 took effect on January 10, 2014. Mortgage 

Servicing Rules Under the Real Estate Settlement Procedures Act (“Regulation X”), 2013 WL 

52534778, FR 10696-01 (February 14, 2013). Although Section 1024.41 sets out certain 

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procedures a servicer should follow in reviewing loss mitigation applications, it does not compel 

a specific substantive result. Rather, it specifically provides: 

“. . . Nothing in § 1024.41 imposes any duty on a servicer to 

provide a borrower with any specific loss mitigation option. 

Nothing in § 1024.41 should be construed to create a right for a 

borrower to enforce the terms of any agreement between a servicer 

and the owner or assignee of a mortgage loan, including with 

respect to the evaluation for, or offer of, any loss mitigation option 

or to eliminate any such right that may exist pursuant to applicable 

law.” 

12 C.F.R. § 1024.41(a). 

As relevant to this action, Section 1024.41 requires that a servicer who receives a loss 

mitigation application submission “45 days or more before a foreclosure sale” shall promptly 

acknowledge receipt of the application, notify the borrower if that application is complete or 

incomplete, and, if incomplete, identify the additional documents necessary to make the loss 

mitigation application complete. Id. § 1024.41(b)(2). A servicer who receives a loss mitigation 

application submission “more than 37 days before a foreclosure sale” shall evaluate a borrower 

for all loss mitigation options within 30 days of receiving a complete loss mitigation application 

and provide borrower with a written notice identifying “the servicer’s determination of which 

loss mitigation options, if any, it will offer to the borrower.” Id. § 1024.41(c). If a complete loss 

mitigation application is deemed complete, “a servicer shall not move for foreclosure judgment 

or order of sale, or conduct a foreclosure sale” unless certain exceptions are met. 

Id. § 1024.41(g). 

Plaintiff’s RESPA claim is first based on the theory that, although “Plaintiff’s loss 

mitigation application was submitted more than 45 days before the scheduled sale,” SPS “failed 

to comply with” the above-identified obligations in Section 1024.41(b) or (c). (Compl. 

¶¶ 40, 41.) Plaintiff further alleges that, because Plaintiff’s loss mitigation application was 

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deemed complete by SPS’s failure to respond, SPS was “prohibited from pursuing a foreclosure 

sale,” yet SPS violated this obligation by “failing to take any action to cancel the foreclosure 

sale.” (Id. ¶¶ 42, 43.) The fatal flaw with this theory is that no judicial or nonjudicial 

foreclosure proceedings were pending while SPS serviced the Loan (either before or after 

Section 1024.41 took effect), so no foreclosure sale was ever scheduled. (SPS Decl. ¶¶ 8-10 & 

Exs. 6-7.)1 Additionally, to the extent that Plaintiff’s claim seeks relief for any actions taken by 

SPS in 2013, those actions cannot form a basis for a violation of Section 1024.41, because that 

regulation had not yet taken effect. “Regulation X,” 2013 WL 52534778, FR 10696-01 

(February 14, 2013 (noting that final rule is effective on January 10, 2014). 2

 

For all of the reasons identified above, SPS is entitled to summary judgment on 

Plaintiff’s Second Claim for Relief (RESPA). 

D. SPS Is Entitled to Summary Judgment on Plaintiff’s Third Claim for Relief 

(OUTPA) Because It Is Unsupported by Law or Fact.

In her Third Claim for Relief, Plaintiff alleges that SPS violated the Oregon Unfair Trade 

Practices Act (“OUTPA”). 

 1 A non-judicial foreclosure had been initiated in April, 2012, while BANA was 

servicing the Loan, but that was rescinded on June 13, 2012—before SPS began servicing the 

Loan. (SPS Decl., Ex. 8.)

2 To the extent that Plaintiff’s RESPA claim attempts to advance a second theory of 

relief relating to a failure to respond to a qualified written request/notice of error, Plaintiff fails to 

plead facts showing that any communications with SPS identifying Plaintiff’s disagreement with 

broker price opinions satisfy the specific definition of “qualified written requests” under RESPA. 

That is a basis for dismissal of her claim. See Lettenmaier v. Federal Home Loan Mortg. Co., 

CV-11-156-HZ, 2011 WL 3476648, at *12 (D. Or. Aug. 8, 2011) (holding that a plaintiff fails to 

allege a RESPA violation when a plaintiff “fail[s] to attach a copy of their correspondence to the 

Complaint or to allege facts showing that the communication concerned servicing of the loan as 

defined by the statute”). 

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Plaintiffs’ OUTPA claim is based on O.R.S. § 646.608(1)(u),3 which provides that a 

defendant violates the OUTPA if it “[e]ngages in any other unfair or deceptive conduct in trade 

or commerce.” This provision is not a catch-all provision for purportedly deceptive trade 

practices not covered in another subsection of O.R.S. § 646.608(1). Rather, “[i]n order to bring a 

claim under ORS 646.608(1)(u), the Oregon Attorney General must first establish a rule 

declaring the conduct to be unfair or deceptive.” Moore v. Wells Fargo Bank, NA, No. 3:13-CV00170-PA, 2013 WL 3965313, at *4 (D. Or. Aug. 1, 2013) (citing O.R.S. § 646.608(4)); see also

O.R.S. § 646.608(4) (“An action or suit may not be brought under subsection (1)(u) of this 

section unless the Attorney General has first established a rule in accordance with the provisions 

of ORS chapter 183 declaring the conduct to be unfair or deceptive in trade or commerce.”).

Plaintiffs point to a single administrative rule in support of their claims that SPS violated 

O.R.S. § 646.608(1)(u): OAR 137-020-0805. According to Plaintiff, SPS violated subsections 

(3) and (6) of this rule – which provide that a mortgage loan servicer engages in unfair or 

deceptive conduct if it either “[m]isrepresents to a borrower any material information regarding a 

loan modification” or “[f]ails to deal with a borrower in good faith” – in two ways. First, 

Plaintiff alleges that SPS represented to Plaintiff and the public that SPS had a “financial 

incentive to modify the loans of homeowners.” (Compl. ¶ 54.) However, Plaintiff’s complaint is 

entirely devoid of any specifics about how, when, where or why SPS made this alleged 

representation to either Plaintiff or the public, and there is no evidence that SPS ever did so. 

Second, Plaintiff alleges that SPS, “for the purpose of increasing fees and other consideration 

owed by Plaintiff,” induced Plaintiff “to believe that there was no workable loan modification 

 3 Plaintiff also claims that SPS violated ORS 646.608(4), but that subsection does not set 

out any prohibition against any unfair trade practice. Therefore, to the extent Plaintiff’s OUTPA 

claim relies on ORS 646.608(4), it fails as a matter of law.

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programs available to [her].” (Compl. ¶ 55.) However, the evidence is undisputed that Plaintiff 

applied for and received a loan modification in October 2014. (SPS Decl. ¶ 4 & Ex. 3.) 

Therefore, there is no question of fact as to whether Plaintiff was induced to believe she would 

not receive a loan modification. 

For all of these reasons, SPS is entitled to summary judgment on Plaintiff’s OUTPA 

claim.

III. CONCLUSION

For the foregoing reasons and pursuant to Federal Rule of Civil Procedure 56, SPS 

respectfully requests that the Court grant summary judgment on Plaintiff’s claims for relief. 

DATED: September 29, 2016.

STOEL RIVES LLP

s/ Crystal S. Chase

AMY EDWARDS, OSB No. 012492

CRYSTAL S. CHASE, OSB No. 093104

KENNON SCOTT, OSB No. 144280

Telephone: (503) 224-3380

Attorneys for Defendant

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