Nationstar Mortgage, LLC v. Hinkle

“In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party.” ORCP 34 E.

During judicial foreclosure proceedings, Plaintiff transferred its promissory note and deed of trust to a third party. On appeal, Plaintiff assigned error to the lower court’s refusal to grant leave to amend its complaint and subsequent grant of summary judgment to Defendant. Defendant argued transfer of the pendente litenote extinguished Plaintiff’s claim as “real party in interest,” and the new note holder must file a new claim to obtain foreclosure. “In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party.” ORCP 34 E. The Court stated that because Plaintiff was the interest holder at the commencement of the suit, the transfer did not abate its cause of action. The “transferee” maintained the right of control and would be bound by the final judgment. The Court reasoned whether to substitute Plaintiff after the transfer was a matter of judicial discretion. The Court concluded the lower court erred in basing its legal premise for denial of leave on ORCP 23 A, which permits leave to be denied for “futile amendments.” The amendment sought by Plaintiff was not futile, but it was “legally immaterial;” therefore, the court erred in granting summary judgment for Defendant. Reversed and remanded.