1 – OPINION AND ORDER 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF OREGON 

PORTLAND DIVISION 

JAY LANCE, 

No. 3:15-cv-00387-MO

Plaintiff, 

OPINION AND ORDER

v.

GREEN TREE SERVICING, LLC, 

 Defendant. 

MOSMAN, J., 

Plaintiff Jay Lance brought four claims against Defendant Green Tree Servicing, LLC, including 

claims for breach of contract, violations for Oregon’s Unfair Trade Practices Act (“UTPA”), violations 

of the Garn-St. Germain Depository Institutions Act of 1982, and violations of the Real Estate 

Settlement Procedures Act (“RESPA”). Each party moved for partial summary judgment [13, 15]. On 

May 16, 2016, I held oral argument and issued a ruling from the bench, denying Plaintiff Lance’s 

Motion for Partial Summary Judgment [15] in its entirety and granting in part Defendant Green Tree 

Servicing’s Motion for Partial Summary Judgment [13]. I granted summary judgment in favor of Green 

Tree with respect to Lance’s Garn-St. Germain Act claim, dismissing it in its entirety.1 I also granted 

 

1

 I determined at oral argument that the Garn-St. Germain Act did not expressly provide for a private cause of action upon 

which Lance could base his claim. See Touche Ross & Co. v. Redington, 442 U.S. 560, 568 (1979) (quoting Cannon v. Univ. 

of Chicago, 441 U.S. 667, 688 (1979)) (“[T]he fact that a federal statute has been violated and some person harmed does not 

automatically give rise to a private cause of action in favor of that person.”); In re Digimarc Corp. Derivative Litig., 549 F.3d 

1223, 1230 (9th Cir. 2008) (holding that a statute must “either explicitly create a private right of action or implicitly contain 

one”). 

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Green Tree’s motion with respect to Lance’s UTPA claim, limiting Lance’s UTPA claim to be based on 

actions or events that occurred after March 10, 2014.2

At oral argument, Lance produced for my consideration a newly published law review article 

from the Pepperdine Law Review, Sarah Bolling Mancini and Alys Cohen, Surviving the Borrower: 

Assumption, Modification, and Access to Mortgage Information After a Death or Divorce, 43 

Pepperdine Law Review 345 (2016) (“the article”). Lance claims this article provides the argument and 

authority to defeat Green Tree’s summary judgment motion with regard to the remaining breach of 

contract and RESPA claims. I agreed to review the article and its cited authority and to take under 

advisement Green Tree’s motion as it pertains to Lance’s breach of contract and RESPA claims. I 

requested the parties to submit supplemental briefing regarding the relevance of and weight I should 

afford the article. 

I have reviewed the article and the parties’ supplemental briefing. While the article presents a 

coherent policy argument to invalidate some deed of trust clauses, neither the state nor federal 

legislature has prohibited the specific written lender approval clause present in this case. Therefore, I 

find the written lender approval clause is valid and enforceable. Accordingly, I GRANT Green Tree’s 

Motion for partial Summary Judgment [13] with regards to Lance’s breach of contract and RESPA 

claims. 

I. BACKGROUND 

In September 2008, Cleo Lance, Plaintiff Jay Lance’s mother, obtained a loan from Plaza Home 

Mortgage, Inc. for approximately $154,000 secured by a trust deed on the property. The deed of trust 

 

2

 At oral argument, I found that Lance cannot base his UTPA claim on actions or events that occurred more than one year 

after Lance filed his claim. See OR. REV. STAT. 646.638(6) (“Actions brought under this section must be commenced within 

one year after the discovery of the unlawful method, act or practice.”); McCullock v. Price Waterhouse LLP, 157 Or. App. 

237, 247-48, 971 P.2d 414 (1998) (citations omitted) (“The period of limitation begins to run when the plaintiff knows or 

should have known of the alleged misrepresentations.”). Lance filed his claim on March 10, 2015. 

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included a requirement that in order for a third party to assume the loan, the lender must approve of the 

assumption in writing. 

Eventually, the loan was assigned to Bank of America. In September 2010, Cleo Lance died. In 

November 2010, Jay Lance’s brother informed Bank of America their mother had passed away and the 

family would be assuming the loan. In April 2011, Jay Lance’s attorney recorded a warranty deed signed 

by Jay Lance and his siblings as joint trustees, naming Jay as grantee owner of the property. 

In June 2013, Green Tree began servicing the loan and sent a letter to Cleo Lance in an effort to 

notify her that Green Tree was the new loan servicer. Jay Lance contacted Green Tree to inform Green 

Tree of his mother’s death and to inquire about assuming loan obligations. A Green Tree representative 

told Lance that he needed a power of attorney to discuss his mother’s account. Lance responded that he 

could not get a power of attorney because his mother was deceased. Over the coming months, Lance 

continued unsuccessfully to try to assume the loan obligations. Green Tree began to send loan 

statements addressed to Cleo Lance showing her account was delinquent. 

In November 2013 and in response to the notices of delinquency, Lance sent a cashier’s check to 

Green Tree for $2,573.19 for past due payments. Green Tree returned the check and responded that the 

funds were insufficient to bring the account current. Lance mailed another cashier’s check for $5,234.43 

which, Green Tree once again returned stating that the funds were not sufficient to cover the past-due 

amount. In December 2013, after receiving the second returned payment, Lance called Green Tree and 

spoke with a supervisor about the account. Lance alleges the supervisor told Lance that in order to 

assume the loan, he must submit a copy of Cleo Lance’s death certificate, the last property tax statement 

on the house, the trust Certificate of Incumbency, and the Warranty Deed demonstrating Lance is 

grantee owner of the property. Lance submitted these requested documents to Green Tree. 

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Lance eventually spoke with another Green Tree supervisor, Charles Spence, to confirm receipt 

of the requested documents. Spence instructed Lance to wire transfer $6,284.63 as full payment to Green 

Tree so that Green Tree could reinstate the loan in good standing. On December 23, 2013, Lance 

transferred the $6,284.63 to Green Tree. Lance was unable to contact Spence to follow up and confirm 

receipt of payment. At the time the motions for summary judgment were filed, Lance was delinquent for 

payments dating from January 2014 through April 2016. 

In February 2014, Lance contacted a Green Tree representative once again to take the steps 

necessary to assume the loan. In March 2014, Lance received a letter from Green Tree requesting the 

same documentation that he had previously sent to Green Tree as well as an authorization for a 

“surviving spouse.” Because he was not a surviving spouse, Lance called Green Tree about the 

paperwork and was again told he must send in a power of attorney for Cleo Lance before Green Tree 

could discuss the account. 

In October 2014, Lance received a letter from Quality Loan Service Corporation warning that 

Green Tree had referred the loan to Quality for foreclosure. In December 2014, Lance received a notice 

of foreclosure by Trustee’s Sale from Quality Loan Service Corporation. Lance filed this suit to prevent 

that sale. 

II. LEGAL STANDARD 

The court shall grant summary judgment 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). A 

dispute is genuine “if the evidence is such that a reasonable jury could return a verdict for the 

nonmoving party.” Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). The substantive law governing 

a claim determines whether a fact is material. T.W. Elec. Serv. V. Pacific Elec. Contractors Ass'n, 809 

F.2d 626, 630 (9th Cir. 1987). Evidence must be viewed in the light most favorable to the non-moving 

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party, and all justifiable inferences must be drawn in the non-movant’s favor. Johnson v. Poway Unified 

School Dist., 658 F.3d 954, 960 (9th Cir. 2011). 

“The movant has the burden of showing that there is no genuine issue of fact.” Anderson, 477 

U.S. at 256. “When the non-moving party has the burden at trial,” as is the case here, “the moving party 

need not produce evidence negating or disproving every essential element of the non-moving party’s 

case.” Stanley v. Novartis Pharmaceuticals Corp., 11 F. Supp. 3d 987, 994 (C.D. Cal. 2014) (citing 

Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986)). “Instead, the moving party’s burden is met by 

pointing out there is an absence of evidence supporting the non-moving party’s case.” Id.

III. DISCUSSION 

Currently before me is Green Tree’s motion for partial summary judgment with respect to 

Lance’s breach of contract and RESPA claims. Lance provides the Pepperdine Law Review article 

entitled “Surviving the Borrower” to support his argument that his breach of contract and RESPA claims 

should survive summary judgment. With respect to Lance’s breach of contract claim, Lance concedes he 

has not received written approval of assumption by the lender as required by the terms of the property’s 

deed of trust. However, Lance argues, in light of the arguments and authority set forth in the article, such 

a provision in the deed of trust requiring written lender approval before he can assume his deceased 

mother’s mortgage is against public policy and is unenforceable. Therefore, Lance argues, he should be 

allowed to assume the position of a party to the contract without actually having been a party to the 

contract. 

With respect to Lance’s RESPA claim, Green Tree argues that Lance is not a “borrower” under 

RESPA and therefore lacks standing to assert a claim under RESPA. See, e.g., Stolz v. OneWest Bank, 

2012 WL 135424, at *4-5 (D. Or. Jan. 13, 2012). However, Lance argues that even if he is not a 

borrower, the arguments set forth in the article establish he has assumed the position of the borrower and 

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6 – OPINION AND ORDER 

it is contrary to public policy to require lender approval for an heir to assume his deceased mother’s 

mortgage. The issue, therefore, is whether a provision in a deed of trust requiring lender approval in 

writing before a successor in interest to a deceased borrower can assume the loan is forbidden and void. 

For the reasons explained in more detail below, I find that without an express prohibition from 

the state or federal legislature, deed of trust clauses requiring written lender approval before an heir can 

assume a deceased family member’s mortgage are valid and enforceable. Accordingly, I find the clause 

requiring Lance to receive written approval from Green Tree before assuming his mother’s mortgage is 

enforceable. Since the clause is enforceable against Lance and since he has not received written approval 

from Green Tree, he has not assumed the position of a party to the contract nor has he assumed the 

position of a “borrower” under RESPA. I therefore grant the remaining portions of Green Tree’s Partial 

Motion for Summary Judgement and dismiss Lance’s breach of contract and RESPA claims. 

A. Equitable Estoppel 

As a threshold matter, Lance contends in his supplemental briefing that his breach of contract 

claim should survive because Green Tree should be equitably estopped from arguing that no contract 

exists between Lance and Green Tree. At oral argument, I noted equitable estoppel was a potential 

argument Lance could have made to defeat summary judgment on his breach of contract claim but it was 

not an argument he had ever made. I once again find Lance did not make this equitable estoppel 

argument and decline to entertain it at this late stage of the litigation. 

In his supplemental brief, Lance contends he did raise an equitable estoppel argument in his 

Response to Green Tree’s Motion for Partial Summary Judgment, even though he never actually used 

the term “estoppel” anywhere in his brief. On pages 5 and 6 of his Response to Green Tree’s Motion for 

Partial Summary Judgment, Lance argued, 

Green Tree cannot claim that there was no assumption by plaintiff. The 

evidence submitted by plaintiff shows that defendant’s representatives 

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7 – OPINION AND ORDER 

instructed plaintiff to send certain legal documents and a reinstatement 

payment of $6,284.63 to Mr. Charles Spence, and that thereby, Green Tree 

would recognize plaintiff as having assumed the original loan agreement 

with Cleo Lance. Plaintiff submitted his documents multiple times, and 

defendant accepted plaintiff’s payment of $6,284.63 to reinstate the loan 

in December of 2013. (Ex. 1, Decl. of Jay Lance at para. 13-19, 23) 

Pl. Resp. [21] at 5–6. Consistent with my statements at oral argument, I find that while the facts of 

equitable estoppel may be present, Lance failed to raise the argument in a timely manner. When taken 

out of context, the portion of Lance’s Response quoted above could conceivably be construed as an 

argument for equitable estoppel; however, within the context of Lance’s Response, Lance appears to 

have been advancing an implied-in-fact contract theory, not an equitable estoppel theory. Id. at 6 (“Both 

Bank of America and defendant’s actions evidence an implied contract which benefitted defendant 

financially, and which defendant breached by failing to recognize plaintiff after he had performed the 

duties he was asked to fulfil by defendant.”) (emphasis added). Raising an equitable estoppel argument 

now for what appears to be the first time is simply too late. See Soto v. Castlerock Farming and 

Transport, Inc., 2013 WL 1222055 at *4 (E.D. Cal. March 25, 2013) (“Even if the court were inclined to 

find that equitable estoppel applied . . . . [t]his argument should have been raised in the briefing for the 

underlying summary judgment motion.”) (citations omitted). Accordingly I find Lance did not make an 

equitable estoppel argument in his Response to Green Tree’s Motion for Partial Summary Judgment and 

decline Lance’s invitation to consider it now. 

B. Validity of the Written Lender Approval Requirements 

Lance argues deed of trust clauses requiring written lender approval before an heir of a deceased 

borrower can assume the loan are invalid as against public policy. This argument relies entirely on the 

Pepperdine Law Review article and the authorities the article cites. The authors of the article contend 

lenders must allow assumptions when the party who is trying to assume the mortgage is the immediate 

family member of the deceased mortgagor. While the authors’ argument is well-reasoned and makes a 

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8 – OPINION AND ORDER 

strong case of what the law should be, I decline to rule in this instance that the position articulated by the 

authors and adopted by Lance is what the law actually is. 

The article extensively explores the common law history of mortgages and the legislative history 

of the Garn-St. Germain Act. See Mancini & Cohen, Surviving the Borrower, supra, at 370–81. Because 

understanding those histories is helpful to understanding the basis of the argument the authors make and 

Lance adopts, I will briefly summarize them here. Under the common law, contracts are generally freely 

assignable. Id. at 371 (citing United States v. Doe, 940 F.2d 199, 2014 (7th Cir. 1991)). Historically, 

contracts to pay mortgage obligations generally fell under this rule. Id. at 372 (citing Solomon v. 

Copping, 112 So. 2d 749, 751 (La. Ct. App. 1959)). Often in times of rising interest rates, existing 

homeowners would assign their mortgage contracts to the new homeowner and require the new 

homeowner to assume the mortgage obligations. Id. at 372–73. For a variety of reasons, lenders became 

wary of allowing new homeowners with whom they had no previous relationship assume mortgage 

contracts. Id. at 374-75. Eventually, in an effort to restrict a third party assuming the borrower’s rights

and responsibilities, lenders began to include due-on-sale clauses in mortgage contracts. These clauses 

provided that if the homeowner assigned the mortgage or transferred the property without the lender’s 

consent, the mortgage came due. Id. at 375 (citing Brush v. Wells Fargo Bank, N.A., 911 F. Supp. 2d 

445, 460 (S.D. Tex. 2012)). Due on sale clauses give the lender the right to accelerate the mortgage loan 

and foreclose upon transfer of the rights and responsibilities of the borrower. Id. 

State courts and legislatures across the country viewed due-on-sale clauses with suspicion and 

largely rejected the exercise of such clauses. Id. at 376 (citing Wellenkamp v. Bank of Am., 582 P.2d 

970, 974–77) (Cal. 1978). In 1982, however, Congress enacted the Garn-St. Germain Act, which 

preempted state laws forbidding the enforcement of due-on-sale clauses. Id. at 377; see also 12 U.S.C. § 

1701j-3(b)(1) (2012). After the enactment of the Garn-St. Germain Act, as a general rule, a borrower 

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9 – OPINION AND ORDER 

could not transfer a property subject to a mortgage without the lender’s consent if that mortgage 

contained a due-on-sale clause. Mancini & Cohen, Surviving the Borrower, supra, at 378 (citing 12 

U.S.C. § 1701j-3(a)(1)). Congress did, however, create several exceptions to this general rule. Relevant 

to this case is the exception involving transfers resulting from death, divorce, or shifting ownership 

within a family on residential property with fewer than five units. Id. at 378-79 (citing 12 U.S.C. § 

1701j-3(d)(3); 1701j-3(d)(5); 1701j-3(d)(6)). 

The authors of the article suggest that in prohibiting the enforcement of due-on-sale clauses in 

this excepted circumstance, Congress left intact the protected successor’s common law right to assume 

mortgage rights and obligations. Id. at 379. The authors’ central thesis and the thrust of Lance’s 

argument is the following: 

Because the due-on-sale clause is the only mechanism a servicer has to 

block the assumption of the mortgage by the new homeowner, lenders 

must allow assumptions that fall within one of these exceptions, even if 

there is an otherwise valid due-on-sale clause in the mortgage. Any 

provision requiring the lender’s approval of an assumption is subject to 

these same restrictions in the Garn-St. Germain Act. 

Id. at 380 (emphasis added and citations omitted). In other words, the authors and Lance argue that since 

the Garn-St. Germain Act plainly prohibits lenders from exercising due-on-sale clauses affecting wouldbe assumers of mortgages in protected positions similar to that of Lance, any other clause that restricts 

assumption—like the written lender approval clause at issue in this case—is subject to the same 

restrictions. Since Lance, a transferee that received the property as a result of his mother’s death, would 

qualify under the Garn-St. Germain exception prohibiting due-on-sale clauses, he should similarly be 

excepted from any other clauses attempting to restrain him from assuming the loan. Lance argues that if 

he wishes to assume the mortgage, the lender cannot prevent him from doing so and must honor the 

assumption following the policy considerations supposedly embodied by the Garn-St. Germain Act’s 

prohibition on due-on-sale clauses. See id. at 381. Lance argues any provision restraining him from 

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10 – OPINION AND ORDER 

assuming his mother’s mortgage should be void as against public policy. If the written lender approval 

clause is voided, Lance argues, he can assume the mortgage and defeat Green Tree’s Motion for 

Summary Judgment with regard to his breach of contract and RESPA claims. 

 While it is undoubtedly frustrating for people in Lance’s position to be subject to a written lender 

approval provision, the Garn-St. Germain Act only prohibits lenders from exercising due-on-sale clauses 

on heirs like Lance—the language of the Garn-St. Germain Act says nothing about written lender 

approval requirements. Lance is asking me to conclude that Congress’s supposed motivation in passing 

the Garn-St. Germain Act was not only to prohibit due-on-sale clauses from being exercised on 

protected parties in Lance’s position, but also to prohibit all other clauses that impede an heir like Lance 

from assuming a deceased relatives loan. The problem here is that the text of the Garn-St. Germain Act 

only addresses due-on-sale clauses—it says nothing of written lender approval clauses like the one at 

issue in this case. Lance wants me to expand the Garn-St. Germain Act to void contractual provisions 

that are not contemplated by the text of the Act. 

This Court does not have the power to expand statutes—that power belongs to the legislative 

branches of state and federal government. If Congress sees fit to prohibit the exercise of written lender 

approval clauses against heirs like Lance, Congress need only amend the Garn-St. Germain Act or pass 

other legislation that makes that expression of public policy clear. Alternatively, it is presumably within 

the authority of the Oregon state legislature to pass legislation forbidding clauses that restrain heirs from 

assuming their deceased family member’s mortgage. Until the legislative branches of the state or federal 

government take these steps, then lenders like Green Tree will continue to be able to take advantage of 

people in Lance’s position. 

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11 – OPINION AND ORDER 

IV. CONCLUSION 

I find the written lender approval clause is valid and enforceable. Accordingly, I GRANT Green 

Tree’s Motion for partial Summary Judgment [13] with regards to Lance’s breach of contract and 

RESPA claims. 

DATED this 6th day of July, 2016. 

/s/ Michael W. Mosman_________ 

MICHAEL W. MOSMAN 

Chief United States District Judge 

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