NW Property Wholesalers v. Spitz

Pursuant to ORS 86.750, notice of sale to be served on an occupant of property, in order to terminate that person's interest in the property, must be done in the manner in which a summons is served under ORCP 7 D.

Spitz and Whyle-Spitz Irrevocable Trust (the trust) appealed a judgment that concluded that their ownership interest in residential property had been terminated by a trust deed foreclosure sale. They contended that the trial court erred in concluding that they were subject to service under ORS 86.740 as the grantor of the trust deed and had been properly served by first class and certified mail, and thereby all of their interests in the property had been terminated by the foreclosure sale. Spitz granted a trust deed in the property, which he occupied, to secure repayment of a promissory note. After defaulting on the promissory note, the successor trustee for the deed issued a notice of default and election to sell the property. However, the trustee failed to effect personal service of the notice on Spitz and proceeded to execute a nonjudicial trust deed foreclosure and sold the property. The Court of Appeals agreed with Spitz and the trust in that ORS 86.740 is not effective to foreclose the interest of those who are occupants. A grantor who was an occupant has to be served pursuant to ORS 86.750 in order for a foreclosure sale to terminate the grantor's interest in the property, and service on a grantor pursuant to ORS 86.740 is ineffective to do that. General and supplemental judgments reversed and remanded.