Order to show cause why invalid claim of encumbrance should not be stricken
- release of invalid claim
- procedure unavailable against certain persons
(1)A person whose property is subject to an invalid claim of encumbrance may petition the circuit court of the county in which the person resides or in which the property is located for an order, which may be granted ex parte, directing the encumbrance claimant to appear at a hearing before the court and show cause why the claim of encumbrance should not be stricken and other relief provided by this section should not be granted. The court shall schedule the hearing no earlier than seven days after the date of the order. The scheduled date of the hearing shall allow adequate time for notice of the hearing under subsection (4) of this section.
(2)A petition under this section shall state the grounds upon which relief is requested, and shall be supported by the affidavit of the petitioner or the petitioner’s attorney setting forth a concise statement of the facts upon which the motion is based.
(3)The petition and affidavit described in subsection (2) of this section shall be in substantially the following form:
(4)A copy of the petition and the order directing the encumbrance claimant to appear under this section shall be served upon the encumbrance claimant:
(a)By service in the manner provided for personal service of summons under ORCP 7; or
(b)By mailing a true copy of the petition, affidavit and order to the encumbrance claimant at the encumbrance claimant’s last-known address, both by first class mail and by certified or registered mail, return receipt requested. A notice mailed under this paragraph is effective on the date that the notice is deposited with the United States Postal Service, properly addressed and postage prepaid.
(5)The order to show cause shall be in substantially the following form and shall clearly state that if the encumbrance claimant fails to appear at the time and place noted, the claim of encumbrance shall be stricken and released and that the encumbrance claimant shall be ordered to pay the costs and reasonable attorney fees incurred by the petitioner at trial and on appeal:
(6)If the court determines that the claim of encumbrance is invalid, the court shall issue an order striking and releasing the claim of encumbrance and may award costs and reasonable attorney fees at trial and on appeal to the petitioner to be paid by the encumbrance claimant. If the court determines that the claim of encumbrance is valid, the court shall issue an order so stating and may award costs and reasonable attorney fees at trial and on appeal to the encumbrance claimant to be paid by the petitioner.
(7)The procedure set forth in this section is not available against a person lawfully conducting business as:
(a)An institution, a national bank, an out-of-state bank or an extranational institution, as those terms are defined in ORS 706.008 (Additional definitions for Bank Act), a savings bank, a federal savings bank or a subsidiary of an entity described in this paragraph;
(b)A financial holding company, a bank holding company, a savings and loan holding company or a subsidiary of a financial holding company, a bank holding company or a savings and loan holding company;
(c)A credit union, as defined in ORS 723.006 (“Credit union” defined), or a federal credit union;
(d)A consumer finance company subject to the provisions of ORS chapter 725;
(e)A mortgage banker or a mortgage broker, as those terms are defined in ORS 86A.100 (Definitions), a mortgage servicing company or any other mortgage company; or
(f)An insurer as defined in ORS 731.106 (“Insurer.”).
(8)The procedure set forth in this section is not available against:
(a)An officer, agency, department or instrumentality of the federal government;
(b)An officer, agency, department or instrumentality of this state; or
(c)An officer, agency, department or instrumentality of a political subdivision or public corporation in this state. [1997 c.290 §3; 1999 c.59 §57; 2001 c.377 §42; 2009 c.541 §9; 2015 c.244 §89a]
Section 205.460 — Order to show cause why invalid claim of encumbrance should not be stricken; petition; hearing; release of invalid claim; procedure unavailable against certain persons,