Bank of New York Mellon Trust Co. v. Sulejmanagic

Under ORS 100.450(7)(c), a foreclosure action that has been filed and dismissed is treated as if it had never been filed.

A condominium association, Tanglewood, appealed lower court decisions which held its lien for unpaid assessments did not have priority over Bank’s deed of trust in litigation over a condominium unit.  Bank had begun a foreclosure action, but it had been dismissed before Tanglewood notified Bank of Tanglewood’s lien on the condo.  Tanglewood argued that because Bank failed to reinstate the foreclosure action within the 90-day notice period identified in ORS 100.450(7)(c), Tanglewood’s lien gained priority.  In response, Bank argued that ORS 100.450(7)(c) does not set a start date; since its foreclosure action had already been initiated, Bank was not required to take any action.  Alternatively, Bank asserted that the subsequent reinstatement of its foreclosure action placed its lien back in priority position.  Under ORS 100.450(7)(c), a foreclosure action that has been filed and dismissed is treated as if it had never been filed.  The Court examined the legislative history of ORS 100.450(7)(c) and found that the legislature’s intent was to encourage the first lienholder to “put the property into the hands” of a party “who would begin paying condominium assessments.”  Thus the Court held that, due to Bank’s inaction during the 90-day notice period, Tanglewood’s lien had gained priority.  The Court also rejected Bank’s assertion that the reinstatement placed it back in position, “as if the action had never been dismissed.”  Reversed and remanded.