Court Opinion

ID: 6939397
Source: CourtListenerOpinion
Date Created: 2022-07-24 00:56:56.727836+00
Date Added: 2024-06-11T16:07:38.404872
License: Public Domain

WARREN, P. J.,
dissenting.
After divining the “plain, natural and obvious meaning” of ORS 86.770(2), the majority concludes that plaintiff was entitled to bring an action on defendant’s note after recovering the security for that note through foreclosure. Because the majority’s construction of ORS 86.770(2) renders that statute meaningless, I dissent.
In construing a statute, this court “cannot correct clear and unambiguous language * * * so as to better serve what the court feels was, or should have been, the legislature’s intent.” Monaco v. U.S. Fidelity & Guar., 275 Or 183, 188, 550 P2d 422 (1976). However,
“it is the duty of the court in construing a statute to ascertain the intention of the Legislature and to refuse to give literal application to language when to do so would produce ‘an absurd or unreasonable result’ but, rather, ‘to construe the act, if possible, so that it is a reasonable and workable law and not inconsistent with the general policy of the Legislature * * *.’ ” Pacific P. & L. v. Tax Com., 249 Or 103, 110, 437 P2d 473 (1968). (Citations omitted.)
In short, we will apply the “plain, natural and obvious meaning” of a statute only if “the language of the statute * * * provide[s] sufficient insight into the legislative intent.” Mat-tiza v. Foster, 311 Or 1, 4, 803 P2d 723 (1991). The language of ORS 86.770(2) does not provide that insight.
ORS 86.770(2) was first enacted in 1959 as part of the Trust Deed Act. Or Laws 1959, ch 625; ORS 86.705 to ORS 86.795. The purpose of that act was to enhance Oregon’s economy by encouraging lenders to make high ratio loans.1 *279See Minutes, Senate Committee on Financial Affairs (February 12, 1959).
The main attraction of trust deeds, as opposed to standard mortgages, is the elimination of the borrower’s right of redemption. That makes foreclosed properties more marketable. Moreover, in most cases, the lender can proceed, as plaintiff did, by a nonjudicial foreclosure, thereby eliminating many of the costs and delays associated with a judicial foreclosure. See, generally, Nelson & Whitman, Real Estate Finance Law § 8.3 (2d ed 1985).
ORS 86.770(2) precludes a lender from bringing an action on a note secured by a trust deed after the deed is foreclosed. The statute thereby ensures that borrowers who lose the security do not also lose more money. Unfortunately, neither the language of ORS 86.770(2) nor its history discloses why the legislature wanted to preclude deficiency judgments.
Presumably, the legislature enacted ORS 86.770(2) to offset the pro-lender flavor of the Trust Deed Act by eliminating the opportunity to abuse the expedient remedies available under trust deeds. However, regardless of what the legislature’s objective was, the majority’s construction of ORS 86.770(2) defeats that intent. Its construction will permit lenders to avoid that statute’s constraints simply by requiring a borrower to execute two notes and two trust deeds. On default, the lender can foreclose one trust deed, recover the security, preclude the borrower from redeeming the property and then bring an action on the other note.2
The majority’s construction of ORS 86.770(2) produces an absurd and unreasonable result. It vitiates the constraints of the statute. A more reasonable and workable interpretation would be that ORS 86.770(2) precludes an action on any note secured by a trust deed after the security for that note has been eliminated by foreclosure of a trust deed. That the note is independent of the trust deed that was foreclosed is irrelevant to the legislative policy if the foreclosing lender is the party bringing an action on the note. A *280lender should not be permitted to avoid the constraints of ORS 86.770(2) through creative financing.

 In a high ratio loan, the loan represents a greater portion of the value of the security and may even exceed that value.

 In this context, the doctrine of merger would not har the action on the remaining note. See, e.g., Ferry v. Fisk, 54 Cal App 763, 202 P 964 (1921); see also Watson v. Dundee Mortgage & Trust Inv. Co., 12 Or 474, 483, 8 P 548 (1885).