2011 ORS § 86.742¹
Failure to give notice of sale
  • action by omitted person
  • defense
  • pleading and proving knowledge of sale
  • attorney fees
  • exclusive remedy

(1) If the trustee fails to give notice of the sale to any person entitled to notice under ORS 86.740 (Notice of sale to be given to certain persons) (1)(c), and such person did not have actual notice of the sale at least 25 days prior to the date the trustee conducted the sale, such omitted person shall have the same rights possessed by the holder of a junior lien or interest who was omitted as a party defendant in a judicial foreclosure proceeding, and the purchaser at the trustees sale or the purchasers heirs, assigns or transferees, shall have the same rights possessed by a purchaser at a sheriffs sale following a judicial foreclosure.

(2) The omitted person may also commence an action against the trustee in the circuit court in the county where the real property is located. In an action against the trustee, the omitted person shall be entitled to damages upon proof that:

(a) The trustee did not give notice of the sale to the omitted person in the manner required by ORS 86.740 (Notice of sale to be given to certain persons) (1)(c) and 86.750 (Service and publication of notice);

(b) A search of the record under the name of the grantor as it appears on the trust deed, or the name of the grantors successor in interest, would have revealed the omitted persons interest;

(c) The omitted person could and would have cured the default under ORS 86.753 (Discontinuance of foreclosure proceedings after cure of default); and

(d) The omitted person sustained actual damages as a result of such persons loss of the opportunity to cure the default under ORS 86.753 (Discontinuance of foreclosure proceedings after cure of default) (1).

(3) In an action against the trustee under subsection (2) of this section, any defendant or third party defendant may move for dismissal on the ground that the omitted person would not or could not have cured the default and reinstated the trust deed if the omitted person had received the notice required by ORS 86.740 (Notice of sale to be given to certain persons) (1)(c). The court shall hold a hearing on such motion prior to any hearing on any motion for summary judgment, and prior to trial of the action. The court shall deny the motion only if the omitted person produces affidavits or other evidence sufficient for a reasonable jury to find, applying a standard of clear and convincing evidence, that the omitted person had the financial ability to cure the default under ORS 86.753 (Discontinuance of foreclosure proceedings after cure of default) prior to the date of the trustees sale, and that the omitted person would have done so had the omitted person received the notice required by ORS 86.740 (Notice of sale to be given to certain persons) (1)(c). If the court grants the motion to dismiss it shall award attorney fees pursuant to subsection (5) of this section.

(4) In any action against the trustee or any other party under this section the omitted person shall plead that the omitted person did not have actual knowledge of the sale at least 25 days prior to the date the trustee conducted the sale, but thereafter the defendant shall have the burden of proving that the omitted person did have such notice.

(5) In all suits brought under this section, the applicable court may, upon entering judgment, allow to the prevailing party as a part of the costs a reasonable amount for attorney fees at trial and on appeal.

(6) The remedies described in subsections (1) to (5) of this section shall be the sole remedies available to a person entitled to notice of foreclosure by advertisement and sale under ORS 86.740 (Notice of sale to be given to certain persons) (1)(c), who failed to receive such notice. Such a persons failure to redeem or to commence an action against the trustee within five years of the date of a trustees sale under ORS 86.755 (Sale of property) shall bar any action under this section or any other applicable law. [1985 c.817 §9; 1995 c.618 §51]