Court Opinion

ID: 6942055
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:08:29.189582+00
Date Added: 2024-06-11T16:07:44.515967
License: Public Domain

DEITS, P. J.
The Department of Veteran’s Affairs (plaintiff was the mortgagee of certain real property belonging to the Wrights. After the mortgage was executed and recorded, the Wrights entered into an agreement, variously described as a lease or lease-option, with Thomas Martin (defendant) as the tenant. The Wrights defaulted on their debt to plaintiff. Plaintiff brought a foreclosure action, to which defendant was not named a party, and plaintiff ultimately purchased the property at a sheriffs sale. After the redemption period passed without a redemption taking place, plaintiff brought this ejectment action against defendant, who refused to surrender possession. On cross-motions for summary judgment, the trial court ruled in defendant’s favor, and entered a judgment giving him the right to possession conditioned upon the payment of rent to plaintiff.
Plaintiff appeals, and assigns error to the granting of defendant’s motion and the denial of its own. Plaintiff first contends that, contrary to the trial court’s decision, a foreclosing lienholder is entitled to possession after the redemption period has passed, as against a tenant whose leasehold interest was created after the lienholder’s secured position was created. See ORS 23.590. Plaintiffs argument is dispositively supported by Foley v. Bouvy, 158 Or 327, 335, 75 P2d 14 (1938).
The parties also dispute the effect of plaintiffs failure to name defendant as a party to the foreclosure action. A person with a leasehold interest in property is not a necessary party to a foreclosure action. ORS 88.030. Even in the case of necessary parties, however, a foreclosing lienholder’s failure to join them does not affect the respective ultimate rights of the parties in the property. If the omitted party is a junior lienholder, the plaintiff may simply bring a second action, and “a resale of the premises affords defendants every right which they would have had if they had been properly joined.” Monese v. Struve, 155 Or 68, 76, 62 P2d 822 (1936). Here, this action itself provides a sufficient occasion for the parties to vindicate every right that they have in the property: Plaintiff has the right to possession, and defendant’s right to possession was extinguished before the action began. He never had redemption or other rights in the property that could have *420been protected in the foreclosure proceedings. The trial court erred by granting defendant’s motion and by entering the judgment in his favor.
Plaintiff also argues that the court erred by denying its summary judgment motion. Insofar as the two motions deal with the right to possession, plaintiffs positions are correct for the same reasons that defendant’s are wrong. However, in its motion, plaintiff also sought damages pursuant to ORS 105.030 for defendant’s withholding of possession. It maintains that the amount is undisputed. Be that as it may, this court does not award damages in the first instance. We remand to the trial court to resolve the damages issue and to enter a judgment giving plaintiff possession and any other appropriate relief.
Reversed and remanded.