## Facts

- In 2004, Bernard D. and Jean Marie Blunier sold a house to Richard Staggs in exchange for a promissory note secured by a trust deed naming the Bluniers as beneficiaries.
- The trust deed required the trustor to preserve and maintain the property and to not commit waste.
- The trust deed also required the trustor to pay attorney fees incurred in enforcing the trust deed.
- In 2006, Staggs assigned his interest in the property to Walter Scott Zwingli, who took possession and began renovations intended to increase the property’s value.
- During the renovation period, construction debris and garbage accumulated outside the home.
- After observing the condition, the Bluniers sent letters to Staggs and Zwingli directing them to clean up the property; the defendants declined to accept at least one letter.
- The Bluniers retained an attorney, who warned Staggs and Zwingli that foreclosure proceedings would be started if the property was not cleaned up.
- Staggs and Zwingli cleaned up the property after the attorney’s notice.
- The Bluniers’ attorney then demanded $460 in attorney fees under the trust deed; Staggs and Zwingli refused to pay.
- Continued demands increased the claimed attorney-fee amount to more than $2,000.
- By 2009, the promissory note had been paid off, but the attorney fees remained unpaid.
- The Bluniers filed an Oregon state court action seeking judicial foreclosure (lien enforcement) based on alleged waste and failure to pay attorney fees owed under the trust deed.
- After a bench trial, the trial court entered judgment for the Bluniers, and Staggs and Zwingli appealed.

## Issues

1. Whether the evidence permitted a finding that the debris-and-garbage condition during renovations breached the trust deed’s maintenance/no-waste covenants (i.e., constituted waste).
2. Whether, after the promissory note was paid in full, the Bluniers could still enforce the trust deed as a lien to recover attorney fees incurred in enforcing the deed’s covenants.

## Decision

- The Oregon Court of Appeals affirmed.
- The court upheld the trial court’s determination that the condition of the property during the renovation period could be found to constitute waste (or a breach of the maintenance and no-waste covenants), supporting the Bluniers’ enforcement efforts.
- The court held that the trust deed’s attorney-fee provision created an obligation secured by the trust deed, and that this secured fee obligation was not extinguished merely because the promissory note was later paid off.
- Because the attorney fees were secured by the trust deed, the Bluniers could enforce the lien through foreclosure-type relief to collect those unpaid fees.

## Legal Principles

- “Waste” in the trust-deed context focuses on conduct amounting to abuse or destruction, or conditions that unreasonably impair the beneficiary’s security; a renovation effort meant to increase value does not automatically prevent a finding of waste.
- When the trial court resolves disputed facts about property condition and the character of the conduct, the appellate court will uphold the judgment if evidence supports the trial court’s findings.
- A trust deed may secure obligations beyond principal and interest, including contractually specified enforcement expenses such as attorney fees.
- If a trust deed secures attorney fees incurred to enforce its covenants, the lien may remain enforceable for those accrued, unpaid fees even after the underlying note has been satisfied.
- Nonpayment of deed-secured enforcement attorney fees, once incurred and properly sought under the instrument, can support lien enforcement consistent with the deed’s remedies.

## Conclusion

The Court of Appeals affirmed a judgment for the Bluniers because the trial court could find that the renovation-related accumulation of debris and garbage breached the deed’s no-waste and maintenance duties, and because the trust deed made enforcement-related attorney fees a secured obligation that remained collectible through lien enforcement even after the promissory note was paid in full.


Blunier v. Staggs, 279 P.3d 826 (2012)