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8/10/2019 Case Wa Appct-i Jackson v Qls, Etal_2014!10!28__appellants Supplemental Brief--re Dta Must Be Interpreted to Co
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No.72016-3-1
COURTOF APPEALS DIVISION ONEOFTHE STATE OF WASHINGTON
SandraShelleyJackson,
Appellant,
vs.
QualityLoanServiceCorporation ofWashington,et al.,
Respondents.
APPELLANTS SUPPLEMENTAL BRIEF
ScottE.Stafne,WSBA No.6964
JoshuaB. Trumbull, WSBA No.40992
Brian J.Fisher,WSBA No.46495
EmilyA. Harris, WSBA No.46571
MatthewK Link,WSBA No.46659
MitchelF. Wilson,LicensedLegal Intern No.9217581
STAFNETRUMBULL, PLLC239North OlympicAvenue
Arlington,WA98223
Phone:(360)403-8700
Fax:(360)386-4005
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Tableof Contents
1
CashmereSupports ConstruingAL L oftheBeneficiaryDefinition
Criteriain RCW 61.24.005(2) 1
2. Rucker, Walker, andBavand Advance that Trustee Reliance on a
BeneficiaryDeclaration is Irrelevant where there is no Proper
Beneficiary 2
3. Trujillo s
Applicationo fRCW61.24.030(7)May Result in
Interpretations InconsistentwithSeparation of Powers Principles
Prohibitingthe Legislature to Mandate Legal Conclusions 4
4. Frizzell andFrias Suggestthat Superior Courts Exercise Appellate
JurisdictionoverNonjudicialForeclosure Proceedings 5
5. Frias grants Jackson a remedy under the CPA for Defendants' pre-
foreclosuresaleDTAviolations 7
i
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TableofAuthorities
Washington Constitution
Art I , 7 4
Wash, Const.Art. I , 12 7
Wash. Const.Art . 4 6 6
WashingtonCases
Albice v.Premier Mortg. Servs. of Wash., Inc., 174 Wn.2d 560, 567-68,
276P.3d 1277 (2012) 3
Bain v. Metro. Mortg. Grp., Inc., 175 Wn.2d 83, 110,285 P.3d 34 (2012).
: 2,4
Bavandv. OneWestBank, FSB, 176 Wn. App. 475, 484, 488, 309 P.3d
636(Div. I , 2013) 1,2
Blanchard v. Golden Age Brewing Co., 188Wash.396, 417-1863 P.2d
397(1936) 5,6,7
Cashmere Valley Bank v. Dept of Revenue, Wn.2d , P.3d ,
SlipOp. 89367-5,2014 Wash. LEXIS 769, *16 (2014) 1,2
Cox v.Helenius, 103Wn.2d 383, 387, 693 P.2d 683 (1985) 4
Frias v. Asset Foreclosure Servs., Inc., Wn.2d P.3d , Slip
Op.89343-8,2014 Wash.LEXIS 763 (2014) passim
Frizzell v Murry, 179 Wn.2d at303-304, 313-321 1, 5, 6
In re Marriage ofBuecking, 179 Wn.2d 438, 449, 316P.3d 999 (2013)...7
Klem, 176 Wn.2d at 790 4
Lunsfordv. Saberhagen Holdings, Inc., 166 Wn.2d 264, 279-80,208 P.3d
1092(2009) 7
l
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Ruckerv. NovaStar Mortg., Inc., 177Wn.App.1,14, 311P.3d31(Div. I,
2013) 1,2
Schroeder v. Excelsior Mgmt. Grp., LLC, 111Wn.2d 94,108,297 P.3d
677(2013) 3
Schroeder v. Weighall, 179 Wn.2d 566,316P.3d 482 (2014) 7
Sofie v.Fibreboard Corp., 112Wn.2d636, 654, 771P.2d711(1989) ....5
Trujillo v. Nw. Tr.Servs., Inc.,181Wn. App. 484, 326P.3d 768(Div. I ,
2014) 1,3,4,5
Walker v. Quality Loan Serv. Corp. ofWash., 176Wn.App. 294, 309,308
P.3d716(Div. I ,2013) 1,2
ZDI Gaming, Inc.v.Wash. State Gambling Comm n, 173Wn.2d 608,616-
617,268 P.3d929, 933 (2012) 6
WashingtonStatutes
RCW
61.24.005(2)
passim
RCW 61.24.010(2) 1,2,3,4
RCW
61.24.010(4)
3
RCW61.24.030 3
RCW
61.24.030(7)
1,3,4,5
RCW61.24.030(7)(b) 3
RC W
61.24.040(6)
3
RCW61.24.127 6
RCW 61.24.130(1) 6
iii
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FederalCases
Frazer v. Deutsche Bank Nat I Tr. Co., 2014 U.S. App. LEXIS20112 (9thCir.2014) 5
iv
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Thissupplemental briefdiscussesthe impacto frecentprecedent
onissuesbefore this Court. Section (1)addressesthedefinitiono f
"beneficiary" under RCW61.24.005(2)inlightof Cashmere. Section (2)
discussesthe impactofRucker, Walker, and,Bavand in construing RCW
61.24.010(2)and RCW 61.24.030(7). Section (3)discusseshow this
Court'sinterpretation ofRCW 61.24.030(7) inTrujillo should be
interpreted to be constitutional. Section (4)suggestsFrizzell and Frias
causedifficultiesin construing theDTAbecausetheypresumethe DTA
confersappellate subject matterjurisdiction upon superior courts. Finally,
Section(5) examines the impactofFrias onJackson'srightto pre-
foreclosuresalereliefunder the CPA.
1. Cashmere Supports Construing ALLof the Beneficiary
DefinitionCriteria
inR CW
61.24.005(2)
TheDTA defines"Beneficiary"as, "[1]the holder of the
instrumentor document evidencing the obligations [2]securedby thedeed
oftrust, [3] excludingpersonsholdingthesameas security for adifferent
obligation."RCW 61.24.005(2) (numbered brackets added). Washington's
SupremeCourt has not construed the meaning of the second and third
1
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criteria;i nBain, the Courtonly construedthemeaningo f the firstcriteria:
apartymusthold the promissorynote.
1
InCashmere Valley Bank, ourSupremeCourtheldthe statutory
language"primarily securedby aresidentialmortgage"was legally
significantfurthermore, the Courtdeterminedwhetheran investment
was "secured"isbasedon the natureof thesecurity trustagreement and
theremediesprovidedtherein.2Thus,the words"secured"and "security,"
aswell as "differentobligation" in the second and third criteriaof RCW
61.24.005(2)
are legally significant,notmerelysuperfluous.
2. Rucker, Walker, andBavand AdvancethatTrustee Reliance on
aBeneficiaryDeclarationis Irrelevantwherethereis no Proper
Beneficiary
Onlyaftera"properbeneficiary"3appointsan entityas trustee
pursuantto RCW 61.24.010(2),can thatentity act as trusteeand perform
certainnonjudicial foreclosureproceedings.4Additionally, aproperly
appointedtrusteemuststrictly complywith theprocedures set forthunder
See Bain v. Metro. Mortg. Grp., Inc., 175 Wn.2d 83, 110,
285 P.3d 34 (2012).2
Cashmere Valley Bank v.Dept of Revenue, Wn.2d , P.3d , Slip
Op.89367-5,2014 Wash. LEXIS 769, *16 (2014).3
AproperbeneficiarymeetsallthreecriteriaofRCW 61.24.005(2).See supra Section14
See e.g., Bavand v. OneWest Bank, FSB, 176 Wn. App. 475, 484,488,309 P.3d 636
(Div. I , 2013);Rucker v. NovaStar Mortg., Inc., Ill Wn . App. 1, 14,311P.3d 31 (Div. I ,
2013); Walker v. Quality Loan Serv. Corp. of Wash., 176 Wn. App. 294, 309, 308 P.3d
716(Div. I , 2013)overruled on other grounds by Frias v. Asset Foreclosure Servs., Inc.,
Wn.2d , P.3d , Slip Op. 89343-8,2014 Wash. LEXIS 763 (2014).
2
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theDTA 5 includingrequisite provisions in RCW 61.24.030.6
Aproperly appointedtrusteemust strictlycomplywithRCW
61.24.030(7)as aconditionprecedent to recording],transmitting],or
serv[ing]"a noticeoftrustee'ssale.7Only avalidtrusteepursuant to RCW
61.24.010(2),whichhas never violated its duty of good faithunder RCW
61.24.010(4), may rely on a declaration,"madeunder the penalty of
perjurystating that the beneficiary is the actual holder of the promissory
noteor otherobligationsecuredby thedeedo ftrust...
[as]sufficient
proof to initiatenonjudicialproceedings.9 RegardlessofstrictDTA
compliance,a purportedtrustee'snonjudicialforeclosuresalesare void i f
itwas not appointed by a proper beneficiary.
Itis important to distinguish the requirements ofRCW
61.24.005(2)(which establishesthe statutory criteriaforbeing a proper
beneficiary)fromRCW61.24.010(2)(whichrequires proofo faproper
beneficiary before anyvalidappointment of asuccessortrusteecan occur)
fromRCW 61.24.030(7) (whichsetsforththeproofatrusteewith
authorityto act under theDT Amusthavein order to record a notice of
See RCW61.24.040(6);
see also Albice v.Premier Mortg. Servs. of Wash., Inc.,174
Wn.2d560, 567-68, 276 P.3d 1277 (2012).6 SeeSchroeder v. Excelsior
Mgmt.
Grp., LLC, 177 Wn.2d 94, 108, 297 P.3d 677 (2013).7 Trujillo v. Nw. Tr.Servs., Inc., 181 Wn. App. 484, 326 P.3d 768 (Div. I , 2014).8
SeeRCW61.24.030(7)(b).
9
Trujillo, 181 Wn. App 493-497.
3
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trusteesale). What atrusteemay rely on under RCW 61.24.030(7) is not
equivalentto what satisfies the beneficiary criteria andestablishes
authorityto act under theDTAunder RCW61.24.005(2)and RCW
61.24.010(2)
respectively. Absentthesedistinctions, entities seeking to
nonjudiciallyforeclose mayissuerobo-signed self-serving declarations
falsely announcingthemselvesbeneficiary, withoutaffordinginterested
partiesan opportunity to challenge the authority oftheseentities to
preventwrongful foreclosures.10
ThatD TApolicyis consistent withconstitutional dueprocess
requirements. [N]eitherdueprocessnor equitywi l l countenancea system
thatpermits the theft ofa person'sproperty . . . under the guise ofa
statutorynonjudicialforeclosure."Accordingly,a charlatan beneficiary
and/orits trustee, acting withoutlawfulauthority, cannot foreclose on
people'shomes.11
3. Trujillo s Application ofRCW61.24.030(7)May Result in
InterpretationsInconsistent with Separation of Powers Principles
Prohibiting the Legislature to MandateLegalConclusions
Jacksonargued this Court should not interpret the second sentence
ofRCW 61.24.030(7) to allow a self-serving declaration to control the
judicial inquiryof evidence regarding the existence of a proper
1 0 SeeBain, 175Wn.2d at 94 (quotingCox v.Helenius, 103Wn.2d 383, 387, 693 P.2d
683(1985).
Klem, 176Wn .2d at 790;seealso Art I , 7 (No person shall be disturbed in his private
affairs, or his home invaded,without authority of law.") (emphasis added).
4
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beneficiary.OB, pp. 38-39. Trujillo comesdangerously close to such a
result.
12
Trujillo
s
interpretation ofRCW 61.24.030(7) is questionable
whereother courts could apply it to allow a declaration, submitted to
satisfy RCW61.24.030(7),to dictate the result ofthejudicial inquiryas to
the existence ofaproper beneficiary under RCW61.24.005(2).13
Interpretationso fTrujillo that allow the legislature to substitute the
outcomeofjudicialinquiries regarding the beneficiarycriteria,based
solely on a self-serving declaration, violate the Washington Constitution.
"Anylegislative attempt tomandatelegal conclusions . . .
violate[s]the separation ofpowers."14The legislature cannot make the
declaration conclusive and irrebuttableproofthat an entity satisfies the
threecriteria under RCW 61.24.005(2).
4. Frizzell andFrias Suggestthat Superior Courts Exercise
AppellateJurisdiction over Nonjudicial Foreclosure Proceedings
Jacksonargues superior courts' subject matterjurisdictionover
foreclosuresoflandisconstitutionallytied to their enumerated original
1 2
See Trujillo, 181 Wn . App . at501, 509-10.1 3 See, e.g.,Frazer v. Deutsche BankNat'l Tr.Co.,2014 U.S. App.LEXIS20112(9th
Cir.2014) (citingRCW 61.24.030(7) and Trujillo for proposition that declarationsubmitted under RCW61.24.030(7)was sufficient proof that Deutsche Bank National
Trust was a proper beneficiary).1 4
Sofie v.Fibreboard Corp., 112Wn. 2d 636, 654, 771 P.2d 711(1989).See also
Blanchard v. Golden AgeBrewing Co.,188 Wash. 396,417-1863P.2d397(1936) ("The
legislaturecannot indirectlycontrol the action o f the court by directing whatstepsmust
betaken in theprogresso fajudicial inquiry, for that isajudicialfunction.")
5
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jurisdiction involvingthetitleandpossessionofrealproperty.15
InFrizzell, ourSupremeCourt held superior courts must strictly
followRCW 61.24.130(1),whichconditions granting aninjunctionto stop
animpendingsaleofthe home upon the applicant's payment of a bond, in
anamount determined by the foreclosingparty.16Similarly,in Frias, our
SupremeCourtappearedtoacceptthe legislative instructions in RCW
61.24.127,whichfavors and limitswaiveranequitable doctrineof
specificcausesofactionandremedies.17
A court's subject matterjurisdiction, ("equitable," "enumerated or
generaloriginal,"and "appellate," etc.) determines the extent of its
18
review. Read together,Frias andFrizzell suggest that superior courts
effectivelyexerciseappellate jurisdictionunder theDTAtheCourt
appearstoacceptlegislative restrictions on itsoriginal jurisdictionin
equity and waiver without determining whether the restrictions are
5 Wash. Const. Art.4 6; OB, pp. 9-26; Consolidated Reply, pp. 6-15.1 6 Frizzell v
Muny,
179Wn.2d at 303-304, 313-321;but seeBlanchard, 188
Wash,at415-416("The granting orwithholdingof an interlocutoryinjunctionis
addressedto the sound discretion of the court, to be exercised according to the
circumstancesofthe particularcase. . . it is the duty of the court to exercise itsequitypower and grant thenecessaryrelief. )1 7
Frias, Wn.2d , Slip Op. 89343-8, Wash.LEXIS763 * l -2 , 12-13, 25-
33.1 8
SeeZDI Gaming, Inc. v. Wash. State Gambling Comm n, 173 Wn.2d 608, 616-617,
268P.3d 929, 933 (2012) (reciting thatSupremeand Superior courtshaveirreducible
jur isd iction) .
6
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appropriate.19Accordingly,it is absolutely essential this Court announce
thenature of the superior courts'jurisdictionto resolvecasesarising
pursuantto theDTA.
5. Frias grants Jackson a remedy under theCPA for Defendants'
pre foreclosuresaleDTA violations
Wherethe Supreme Court has ruledauthoritativelyon anissue,its
rulingapplies retroactivelyunlessthe Courtsaysotherwise.20Frias did
notexplicitlystateitsrulingon CPAcausesofactionrelated to the DTA
wasprospective.
21Thus, underFrias, the CPA provides Jackson abasis
forrelief fromDefendants' DT Aviolationswhichwere previously alleged
asdeclaratory judgmentcausesofaction.22
1 9
See e.g. In reMarriage ofBuecking, 179 Wn.2d438,449, 316P.3d 999
(2013)("legislation . .. divesting a constitutional court ofitspowers isvoid . . .
thelegislature may prescribereasonableregulations that do not divest the court
of itsjurisdiction." (CitingBlanchard, 188Wash,at414,418));Schroeder v.
Weighall, 179Wn.2d 566,316P.3d 482(2014)(suspending statuteof
limitationsfor minorsbringingmedical malpractice claimsabsentlegislative
justi ficationviolated Wash, Const. Art. I , 12, and court'soriginal general
jur isd ict ion);Blanchard, 188Wash,at418(The legislature cannot restrict the
court'sequityjurisdiction withregard to the superior court's discretion toissuean injunctionbecause the constitution has specificallygranted the superior court
jurisdic tionin equity).20
Lunsford v
Saberhagen Holdings, Inc., 166Wn.2d 264, 279-80, 208 P.3d 1092
(2009).2 1
Seegenerally Frias, SlipOp. 89343-8, 2014 Wash.LEXIS763 (2014).2 2
Id.
7
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DATEDthis 28th day of October, 2014 atArlington,Washington.
Respectfully Submitted,
ScottE.Stafne,WSBA# 6964
JoshuaB.Trumbull,WSBA# 40992
BrianJ. Fisher, WSBA#46495
EmilyA.Harris, WSB A# 46571
Matthew K.Link,WSBA# 46659
MitchelF.Wilson,Licensed Legal Intern#9217581
StafneTrumbull,PLLC
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CERT IF ICATE OF SERVICE
I ,Ashley Burns,certifyunder penalty ofperjuryunder the laws of
theStateofWashingtonthat theforegoingis true and correct:
1. At all times hereinafter mentioned I am a citizen of the United
Stateso fAmerica,a resident of theStateo fWashington,over the age of
eighteen years, not a party to the above-entitled action, and competent to
bea witness herein.
2. That on the 28th day of October,2014,1
causedto be served a true
and correct copy of the Appellants Supplemental Brief in the above title
matterby causing it to be delivered to:
DavisWrightTremaine LLPFredBurnside & Zana Bugaighis12013r aAve Ste 2200Seattle,
W A
98101-3045
zanabugaighis@dwt. com
Tomasi
SalyerBaroway
EleanorA.Dubay &KathrynSalyer121SWMorrisonSt Ste 1850Portland,OR 97204edubay@tsbnwlaw.
comksalyer@tsbnwlaw. com
Keesal,Young,& LoganRobert J. Bocko & Daniel Park1301
5
m
A v e
Ste3300Seattle,
W A 98101
[email protected]@kyl.com
FacsimileExpressMail
S U.S. FirstClassMailHandDeliveryLegal Messenger Service
S Electronic Service
FacsimileExpressMail
S
U.S. FirstClassMailHandDeliveryLegal Messenger Service
S
Electronic Service
FacsimileExpressMail
S U.S. FirstClassMailHand Delivery
Legal Messenger ServiceS
Electronic ServiceDATED28th day of October, 2014 atArlington,Washington.
AshleyBurns
I