## Facts

- Land Associates, Inc. sold real property to Becker under a land sale contract.
- After Becker defaulted, Land Associates filed a foreclosure action seeking a judicial sale and joined as defendants the junior lienholders of record at the time of filing.
- While the foreclosure action was pending, three additional junior liens were recorded against Becker’s interest; these lienholders were not joined in the foreclosure action.
- The court entered a foreclosure judgment, ordered a sheriff’s sale, and Land Associates purchased the property at the sale and later obtained a sheriff’s deed.
- The three pendente lite lienholders assigned their lien interests to Launa H. Bautista.
- Bautista attempted to redeem the property under Oregon’s redemption statutes, but the sheriff refused absent a court order.
- Bautista filed a complaint in intervention against Land Associates and its assignee, E & B Investors, Inc., seeking an order compelling the sheriff to permit redemption.
- The trial court dismissed the intervention complaint; the Court of Appeals affirmed; the Oregon Supreme Court granted review.

## Issues

1. Whether junior lienholders whose liens arise pendente lite, and who are not joined as parties to the foreclosure action, are bound by the foreclosure judgment and sale.
2. Whether such unjoined pendente lite junior lienholders, and an assignee of their liens, have a statutory right to redeem the property after the foreclosure sale.

## Decision

- The Oregon Supreme Court reversed the dismissal of Bautista’s complaint in intervention and remanded.
- The Court held that unjoined pendente lite junior lienholders were not bound by the foreclosure judgment and sale.
- Because their liens were not cut off, Bautista, as assignee of those lienholders, could assert a statutory right of redemption.

## Legal Principles

- A foreclosure judgment and sale terminate interests of parties (and those in privity with them) who are properly joined; persons not made parties are not concluded by the judgment.
- Junior liens acquired pendente lite are not extinguished merely because they arise during the litigation; if the lienholders are not joined, their interests may survive the foreclosure.
- Oregon’s statutory redemption scheme permits redemption by qualifying lien creditors and successors in interest; a redemption right may be asserted by an assignee standing in the lienholders’ place when the lien survives the foreclosure.

## Conclusion

Unjoined junior lienholders who acquire liens while a foreclosure action is pending are not automatically cut off by the resulting judgment and sheriff’s sale; their assignee may seek statutory redemption because the foreclosure does not bind nonparties whose interests were never adjudicated.


Land Associates, Inc. v. Becker, 656 P.2d 927 (Or. 1982)