Brian J. Winters And Rebecca L. Winters v. Wells Fargo Bank ( 2019 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
BRIAN J. WINTERS and REBECCA L. ) No. 79662-3-I
WINTERS, )
) DIVISION ONE
Respondents,
)
v.
QUALITY LOAN SERVICE )
CORPORATION OF WASHINGTON, )
INC.,
Petitioner, ) PUBLISHED OPINION
WELLS FARGO BANK, NA as Trustee )
on behalf of the registered holders of )
Morgan Stanley ABS Capital I Inc. Trust)
2007-HE4 Mortgage Pass-Through )
Certificates, Series 2007-HE4; SELECT)
PORTFOLIO SERVICING, INC.; and )
DOE DEFENDANTS 1-20, inclusive, )
)
Defendants. ) FILED: December 30, 2019
SCHINDLER, J. — Only the actual holder of a promissory note that is secured by a
deed of trust has the authority to replace the trustee named in the deed of trust and
appoint a successor trustee to proceed with a nonjudicial foreclosure. However, in Bain
v. Metropolitan Mortciaqe Group, Inc., 175 Wash. 2d 83, 106, 285 P.3d 34 (2012), the
Washington Supreme Court makes clear that “Washington law, and the deed of trust act
itself, approves of the use of agents” to act on behalf of the holder to enforce the
No. 79662-3-1/2
promissory note or instrument evidencing the debt in a nonjudicial foreclosure
proceeding. Brian and Rebecca Winters (collectively, Winters) defaulted on the
promissory note secured by a deed of trust on their property. We granted discretionary
review of denial of summary judgment dismissal of the Consumer Protection Act,
chapter 19.86 RCW, claims against the successor trustee alleging the successor trustee
did not have the authority under the deed of trust act (DTA), chapter 61.24 RCW, to
foreclose on the property. The uncontroverted record establishes that the actual holder
of the note, “Wells Fargo Bank, National Association, as Trustee, on behalf of the
registered holders of Morgan Stanley ABS Capital I Inc., Trust 2007-HE4, Mortgage
Pass-Through Certificates, Series 2007-HE4” (Wells Fargo NA.), executed a limited
power of attorney appointing Select Portfolio Servicing Inc. (SPS) as its attorney-in-fact
with authority to execute documents in the nonjudicial foreclosure proceeding. As a
prerequisite to initiating the nonjudicial foreclosure, SPS as the attorney-in-fact for Wells
Fargo N.A. executed a declaration stating under penalty of perjury that Wells Fargo N.A.
was the actual holder of the note and appointed Quality Loan Service Corporation of
Washington (QLS) as the successor trustee. Because SPS had the authority to act as
the authorized agent of Wells Fargo N.A. and the uncontroverted record establishes
QLS complied with the statute that governs qualifications for a successor trustee, we
reverse denial of summary judgment. We remand to dismiss the claims against QLS.
On remand, the court shall also address the propriety of imposition of expenses under
RCW 61 .24.090(1)(b).
Promissory Note and Deed of Trust
In October 2006, Brian and Rebecca Winters (collectively, Winters) borrowed
$1 14,400 from Decision One Mortgage Company LLC to purchase property located at
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No. 79662-3-113
306 South 6th Street, Satsop, Washington. Winters executed an adjustable rate note
on October 20, 2006. Winters promised to make monthly payments until November 1,
2036. The note was indorsed in blank. The note states, “I understand that Lender may
transfer this Note. Lender or anyone who takes this Note by transfer and who is entitled
to receive payments under this Note is called the ‘Note Holder.’ “ The note was secured
by a recorded deed of trust on the property. The deed of trust identifies Winters as the
borrower, Decision One as the lender, First American Title Insurance Company as
“Trustee,” and Mortgage Electronic Registration Systems Inc. (MERS) as the
beneficiary and “nominee for Lender and Lender’s successors and assigns.”
Decision One sold the note to a securitized trust, “Wells Fargo Bank, National
Association, as Trustee, on behalf of the registered holders of Morgan Stanley ABS
Capital I Inc., Trust 2007-HE4, Mortgage Pass-Through Certificates, Series 2007-HE4”
(Wells Fargo N.A.). Select Portfolio Servicing Inc. (SPS) acted as the mortgage
servicer on the note. Winters stopped making payments on January 1, 2012.
Limited Power of Attorney
On August 31, 2012, Wells Fargo N.A. Vice President Barry Silvermetz executed
a notarized “Limited Power of Attorney.” Wells Fargo N.A. appointed SPS “as its true
and lawful attorney-in-fact, acting by and through its authorized officers, with full
authority and power to execute and deliver on behalf of” Wells Fargo N.A.:
(ii) [~]II documents and instruments necessary to conduct any (a)
foreclosure, or (b) the taking of any deed in lieu of foreclosure, or (c) ~y
judicial or non-judicial foreclosure or termination, cancellation, or
rescission of any such foreclosure, or (d) any similar procedure
(collectively, as applicable, a “Foreclosure”);
(iv) ‘instruments appointing one or more substitute trustees or
special purpose entities (“SPE5”) to act in place of the corresponding
entity named in any deed of trust;
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No. 79662-3-1/4
(v) affidavits of debt, notice of default, declaration of default,
notices of foreclosure, and all such contracts, agreements, deeds, and
instruments as are appropriate to (a) maintain any real property acquired
through Foreclosure, or (b) effect any sale, transfer, or disposition of real
property acquired through Foreclosure;
(vi) all documents and instruments necessary to effect any
assignment of mortgage or assignment of deed of trust; and
(vii) all other comparable instruments.~1~
SPS recorded the Limited Power of Attorney on October 8, 2012.
A~ointment of Successor Trustee
On December 5, 2013, SPS as the attorney-in-fact for Wells Fargo N.A. executed
a notarized “Appointment of Successor Trustee.” SPS appointed Quality Loan Service
Corporation of Washington (QLS) as the successor to the trustee named in the October
20, 2006 deed of trust that secured the Winters’ note. The Appointment of Successor
Trustee states, in pertinent part:
[W]hereas, Wells Fargo Bank, National Association, as Trustee, in trust for
the registered holders of Morgan Stanley ABS Capital I Trust 2007-HE4,
Mortgage Pass-Through Certificates, Series 2007- HE4 is the present
Beneficiary under said Deed of Trust, and desires to appoint and hereby
does appoint QUALITY LOAN SERVICE CORPORATION OF
WASHINGTON as the new Trustee in place and stead of the present
Trustee thereunder.
NOW THEREFORE, the undersigned, Wells Fargo Bank, National
Association, as Trustee, in trust for the registered holders of Morgan
Stanley ABS Capital I Trust 2007-HE4, Mortgage Pass-Through
Certificates, Series 2007- HE4, hereby substitutes QUALITY LOAN
SERVICE CORPORATION OF WASHINGTON as Trustee under said
Deed of Trust.
The Appointment of Successor Trustee was recorded on December 17, 2013.
1 Emphasis added.
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No. 79662-3-1/5
Beneficiary Declaration
As a prerequisite to issuing a notice of trustee’s sale, the trustee must have proof
under penalty of perjury that the beneficiary is the actual holder of the note. RCW
61.24.030(7)(a). On November 25, 2013, SPS as the attorney-in-fact for Wells Fargo
N.A. executed a declaration under penalty of perjury stating that Wells Fargo N.A. is the
beneficiary and actual holder of the Winters’ note. The “Declaration of Ownership”
states:
Re: Loan Number.. .; BRIAN WINTERS
Under penalty of perjury, the undersigned hereby represents and declares
as follows:
I am employed as Document Control Officer for Select Portfolio Servicing,
Inc. I am duly authorized to make this declaration on behalf of:
1) Wells Fargo Bank, National Association, as Trustee, on behalf
of the registered holders of Morgan Stanley ABS Capital I Trust
2007-HE4, Mortgage Pass-Through Certificates, Series 2007-
H E4
Hereby known as beneficiary.
2) Wells Fargo Bank, National Association, as Trustee, on behalf
of the registered holders of Morgan Stanley ABS Capital I Trust
2007-HE4, Mortgage Pass-Through Certificates, Series 2007-
H E4
is the actual holder of the Promissory Note evidencing the
above-referenced loan.
3) The Note has not been assigned or transferred to any other
person or entity.
4) Beneficiary understands that the trustee foreclosing the deed of
trust securing the above-referenced loan will rely upon this
Declaration before issuing the notice of trustee’s sale.
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No. 79662-3-116
Notice of Default
In March 2014, Winters filed for chapter 7 bankruptcy. Winters was discharged
from bankruptcy in August 2014.
On August 4, 2014, QLS sent Winters a “Notice of Default.” The Notice of
Default was signed by QLS assistant secretary Gladys Limon. The Notice of Default
states Wells Fargo NA. is the “current owner of the Note secured by the Deed of Trust.”
The attached “Foreclosure Loss Mitigation” form is executed by SPS “as authorized
agent of Beneficiary.” The Foreclosure Loss Mitigation form states that the “authorized
agent for the beneficiary hereby represents and declares under the penalty of perjury”
that the “beneficiary’s authorized agent has contacted the borrower under, and has
complied with; RCW 61 .24.03 1 and the borrower did not request a meeting.”
Winters did not cure the default.
Notice of Trustee’s Sale
On September 5, 2014, QLS issued a “Notice of Trustee’s Sale” of the property
for January 9, 2015. The Notice of Trustee’s Sale was signed by QLS assistant
secretary Maria Montana. On April 9, 2015, QLS issued a “Notice of Discontinuance of
Trustee’s Sale.”
On August 27, 2015, QLS issued a second “Notice of Trustee’s Sale” of the
property for January 8,2016. The Notice of Trustee’s Sale is signed by QLS assistant
secretary Lauren Esquivel and was recorded in Grays Harbor County.
Winters did not cure the default before the trustee’s sale on January 8. QLS sold
the property to Wells Fargo N.A. as the highest bidder. On January 20, 2016, QLS
assistant secretary Janice Stavee recorded the “Trustee’s Deed upon Sale” issued to
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No. 79662-3-1/7
Wells Fargo N.A.
The GRANTOR, QUALITY LOAN SERVICE CORPORATION OF
WASHINGTON, as current Trustee, (whereas so designated in the Deed
of Trust hereunder more particularly described or as duly appointed
Successor Trustee) under that Deed of Trust in consideration of the
premises and payment recited below, hereby grants and conveys, without
representation or warranty, expressed or implied, all right title and interest
to Wells Fargo Bank, National Association.
Lawsuit
In September 2016, Winters filed a lawsuit against Wells Fargo N.A., SPS, and
QLS alleging violation of the Consumer Protection Act (CPA), chapter 19.86 RCW,
based on the failure to comply with the requirements of the deed of trust act (DTA),
chapter 61.24 RCW. Winters alleged SPS was not “lawfully authorized” to appoint QLS
as the successor trustee to initiate the nonjudicial foreclosure under the DTA “because it
was neither the note holder nor the loan owner.” Winters alleged Wells Fargo NA. was
liable for the actions of SPS and QLS “since they were apparently acting as its ‘agent.’
Winters alleged QLS violated the CPA by “initiating and completing a nonjudicial
foreclosure when it did not have the legal authority to do so.” Winters also alleged QLS
“did not have the legal authority to act as a foreclosing trustee under Washington law
because it did not have an officer that resides in the State of Washington.”
QLS Motion for Summary Judgment Dismissal
QLS filed a motion for summary judgment dismissal of the claims. QLS asserted
the nonjudicial foreclosure complied with the requirements of the DTA. QLS argued the
undisputed evidence established Wells Fargo NA. was the beneficiary and holder of the
Winters’ note and as a matter of law, Wells Fargo N.A. had the authority to authorize
SPS to act on its behalf to execute documents in the nonjudicial foreclosure proceeding,
including the appointment of QLS as the successor trustee and the Declaration of
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No. 79662-3-1/8
Ownership. QLS asserted it met the statutory qualifications to act as the successor
trustee.
QLS Vice President Sierra Herbert-West submitted a declaration in support of the
summary judgment motion. Herbert-West attached to her declaration “true and
accurate” copies of the Winters’ note and the deed of trust “contained within [QLS]’s
file,” the Limited Power of Attorney, the assignment of deed of trust, the Declaration of
Ownership, the Appointment of Successor Trustee, the Notices of Trustee’s Sale, and
the Trustee’s Deed upon Sale. Herbert-West states:
In my capacity as a Trustee Sales Officer and corporate Vice President, I
have custody and control of the files and records of the non-judicial
foreclosure sales performed by [QLS]. These records are made in the
ordinary course of business by people who have a business duty to make
such records, and/or are received by [QLS] in the ordinary course of its
business, which includes acting as a trustee in non-judicial foreclosures.
[QLS]’s records are made at or near the time of the occurrence of the
event or events that they record.
Herbert-West also attached the QLS bylaws and the QLS “Action of Directors”-
designating assistant secretaries as QLS corporate officers with the authority to act on
behalf of QLS. Herbert-West states that throughout the foreclosure proceedings, QLS
“had at least one corporate officer who was a state resident”:
When the Notice of Default was issued in August of 2014, [QLS] had at
least three resident officers —(1) the President, Philip Martin, (2) a Vice
President, Robert McDonald, and (3) myself. Mr. McDonald and I have
continued to be resident officers through present day. The Winters never
raised any issues with [QLS] about the beneficiary’s compliance with the
pre-foreclosure contact requirements.
Attached hereto. is a true and correct copy of the first Notice of
. .
Sale issued by [QLS]. In September of 2014 when the first Notice of Sale
was issued, and continuing to present day, [QLS] has had a physical office
in Seattle. The Seattle office has at all times had telephone service and at
least one employee. As of the date of this declaration, there are
approximately seventeen employees working in the Seattle office.
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No. 79662-3-1/9
In opposition, Winters argued that as a matter of law, SPS did not have the
authority to appoint QLS as the foreclosing trustee. Winters asserted the DTA allows
only a “beneficiary,” not an agent, to replace the trustee named in the deed of trust.
Winters also argued QLS was not authorized to act as the successor trustee because
no officer of QLS was a resident of Washington when SPS appointed QLS as the
successor trustee. The only evidence Winters submitted in opposition to summary
judgment was a copy of the findings of fact and conclusions of law a court entered in
another case, Hookerv. Bank of America, N.A., King County Superior Court No. 14-2-
11009-0 SEA.
In Hooker, the court found that QLS did not present any evidence that an
assistant secretary was authorized to act as a corporate officer in 2013 and 2014:
18. During 2013 and into 2014, no corporate officer of [QLS]
resided in the State of Washington. Sierra Herbert-West had the title of an
“assistant secretary” in [QLS]’s Washington office. Ms. Herbert-West was
not a corporate officer of [QLSJ.
19. In 2013, [QLS} reported to the Washington Secretary of
State that Ms. Herbert-West was an “assistant secretary” with an address
in Washington state.
20. [QLS] presented no evidence that, during any time relevant
to this case, its corporate bylaws authorized its board of directors to
appoint any person to serve as an “assistant secretary” of the corporation.
The court in Hooker concluded QLS “violated RCW61.24.010(1)(a)” because QLS “was
not legally qualified under Washington law to act as the successor trustee of the
Plaintiff’s Deed of Trust.”
The court in Hooker also found there was no evidence of “a power of attorney or
any other documentation” that supported QLS’ “contention that Wells Fargo had the
authority to act as ‘attorney in fact’ or otherwise as an agent for Bank of America with
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No. 79662-3-1/10
respect to a nonjudicial deed-of-trust foreclosure of the Plaintiff’s deed of trust.” The
findings state:
12. No power of attorney was introduced into evidence at trial to
support [QLSJ’s contention that Wells Fargo had the authority to act as
“attorney in fact” or otherwise as an agent for Bank of America with
respect to a nonjudicial deed-of-trust foreclosure of the Plaintiff’s deed of
trust.
13. Bank of America did not execute a power of attorney
appointing Wells Fargo to act as its attorney in fact to initiate and carry out
a nonjudicial deed-of-trust foreclosure proceeding against the Plaintiff’s
residence.
14. Bank of America lacked the control over Wells Fargo that is
necessary in order to establish a principal-agent relationship.
15. Wells Fargo did not act as Bank of America’s attorney in fact
or otherwise as Bank of America’s agent when Wells Fargo executed the
Appointment of Successor Trustee purporting to appoint [QLSJ to serve as
successor trustee of the Plaintiff’s deed of trust.
16. [QLS] did not reasonably rely on the Beneficiary Declaration
that Wells Fargo signed as proof that Wells Fargo was acting as Bank of
America’s attorney in fact or otherwise as Bank of America’s agent with
respect to the nonjudicial foreclosure of the Plaintiff’s Deed of Trust.
The conclusions of law in Hooker state, in pertinent part:
8. The relationship between Wells Fargo and Bank of America
was an independent-contractor relationship, not a principal-agent
relationship.
9. Wells Fargo was not the holder of the Note when it initiated
the nonjudicial foreclosure proceeding with respect to the Plaintiff’s Deed
of Trust.
10. Wells Fargo did not act as Bank of America’s attorney in fact
or otherwise as Bank of America’s agent when Wells Fargo executed the
Appointment of Successor Trustee with respect to the nonjudicial
foreclosure of the Plaintiff’s deed of trust.
12. [QLS] violated RCW 61.24.010(2) because it was not a duly
appointed Successor Trustee when it commenced the foreclosure sale of
the Plaintiff’s Deed of Trust.
In reply, QLS asserted that as a matter of law, the beneficiary and holder of the
promissory note has the power to act through an agent. QLS argued the superior court
findings of fact and conclusions of law in Hooker were not binding. QLS also pointed
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No. 79662-3-I/I I
out that unlike in Hooker, the unrebutted evidence established that Wells Fargo NA., as
the beneficiary and actual holder of the Winters’ note, executed a Limited Power of
Attorney authorizing SPS to execute documents on its behalf in the nonjudicial
foreclosure proceeding and appoint QLS as the successor trustee. QLS noted that
unlike in Hooker, it submitted the QLS bylaws and corporate documents that
established assistant secretaries are corporate officers and presented unrebutted
testimony that QLS had at least one resident corporate officer in the state of
Washington throughout the nonjudicial foreclosure on the Winters’ property.
The trial court denied summary judgment dismissal of the claims against QLS.
QLS filed a motion for discretionary review. The commissioner granted discretionary
review under RAP 2.3(b)(l) (obvious error which would render further proceedings
useless).
Use of an Agent under the DTA
QLS contends the court erred in denying the motion for summary judgment
dismissal of the claims against it. QLS asserts the uncontroverted record established
the nonjudicial foreclosure of the Winters’ property complied with the requirements of
the DTA.
We review summary judgment de novo. Citizens All, for Pro~i Rigths Legal Fund
v. San Juan County, 184 Wash. 2d 428, 435, 359 P.3d 753 (2015). Summary judgment is
appropriate when there is no genuine issue of material fact and the moving party is
entitled to judgment as a matter of law. CR 56(c). The moving party bears the initial
burden to submit evidence and establish entitlement to judgment as a matter of law.
Ranger Ins. Co. v. Pierce County, 164 Wash. 2d 545, 552, 192 P.3d 886 (2008). The
nonmoving party must then present “‘specific facts which sufficiently rebut the moving
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No. 79662-3-1/12
party’s contentions’ “and create a genuine issue of material fact. Ranger, 164 Wash. 2d at
552 (quoting Meyerv. Univ. of Wash., 105 Wash. 2d 847, 852, 719 P.2d 98(1986)).
The nonmoving party cannot rely either on argumentative assertions that
unresolved factual issues remain or on speculation. Ranger, 164 Wash. 2d at 552. Mere
allegations, denials, opinions, “or conclusory statements of facts unsupported by
evidence are not sufficient to establish a genuine issue” of material fact. Rucker v.
NovaStarMortg., Inc., 177Wn. App. 1,6,311 P.3d 31(2013).
If the borrower defaults on an underlying obligation secured by a deed of trust
that grants the trustee the power of sale, the trustee may foreclose on “the deed of trust
and sell the property without judicial supervision.” Bain v. Metro. Mortg. Grp., Inc., 175
Wash. 2d 83, 93, 285 P.3d 34(2012) (citing RCW 61 .24.020; RCW6I.12.090; RCW
7.28.230(1)). Accordingly, the DTA provisions must be strictly complied with and
“‘construed in favor of borrowers.’” Bain, 175 Wash. 2d at 93 (quoting Udall v. T.D.
Escrow Servs., Inc., 159 Wash. 2d 903, 915-16, 154 P.3d 882 (2007)). Violation of the
requirements of the DTA constitutes an actionable claim for damages under the CPA.
Lyons v. U.S. Bank Nat’l Ass’n, as Tr. for Stanwich Mortg. Loan Tr. Series 2012-3, by
Carrington Mortg. Servs., LLC, 181 Wash. 2d 775, 789, 336 P.3d 1142 (2014).
QLS contends Washington law allows the beneficiary and holder of the note to
use an authorized agent to execute documents in a nonjudicial foreclosure proceeding,
including the appointment of a successor trustee and the beneficiary declaration.
Winters argues the court did not err in denying summary judgment dismissal of the CPA
claims because SPS did not have the authority to appoint QLS as the successor trustee
or execute the beneficiary declaration. Winters claims only the beneficiary of the
promissory note has the authority to appoint a successor trustee and execute a
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No. 79662-3-1/13
beneficiary declaration. If a beneficiary does not have the authority to appoint a
successor trustee, “‘the putative trustee lacks the legal authority to record and serve a
notice of trustee’s sale.’ “ Rucker, 177 Wash. App. at 14 (quoting Walker v. Quality Loan
Serv. Corp., 176 Wash. App. 294, 306, 308 P.3d 716 (2013)).
‘Traditionally, the ‘beneficiary’ of a deed of trust is the lender who has loaned
money to the homeowner.” Bain, 175 Wash. 2d at 88. The DTA “gives subsequent
holders of the debt the benefit of the act by defining ‘beneficiary’ broadly as ‘the holder
of the instrument or document evidencing the obligations secured by the deed of trust.’
Bain, 175 Wash. 2d at 88 (quoting RCW 61 .24.005(2)). The deed of trust that secures the
promissory note protects the lender by giving the lender the power to nominate a trustee
to sell the home if the debt is not paid. Bain, 175 Wash. 2d at 88. The court in Bain
explains:
Lenders, of course, have long been free to sell that secured debt, typically
by selling the promissory note signed by the homeowner. Our deed of
trust act, chapter 61 .24 RCW, recognizes that the beneficiary of a deed of
trust at any one time might not be the original lender.
Bain, 175 Wash. 2d at 88.
The note in this case is a negotiable instrument governed by the Uniform
Commercial Code (U CC), Title 62A RCW. Brown v. Dep’t of Commerce, 184 Wash. 2d
509, 524, 359 P.3d 771 (2015). The UCC defines a “negotiable instrument” as “an
unconditional promise or order to pay a fixed amount of money” if three requirements
are met. RCW 62A.3-104(a). The instrument must (1) be “payable to bearer or to order
at the time it is issued or first comes into possession of a holder,” (2) be “payable on
demand or at a definite time,” and (3) concern only a promise to pay money rather than
“any other” performance (except for certain limited exceptions that allow nonmonetary
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No. 79662-3-1/14
performance, including that the instrument mayinclude “an undertaking or power to
give, maintain, or protect collateral to secure payment”). RCW 62A.3-1 04(a). Here, the
note is indorsed in blank and is therefore payable to the bearer. See RCW 62A.3-
205(b). The note is payable at a definite time every month until November 1, 2036 and
concerns only Winters’ obligation to pay. ~ RCW 62A.3-1 08(b).
The UCC recognizes that “a holder of a note is entitled to enforce the note.”
Brown, 184 Wash. 2d at 540. RCW 62A.3-301 provides:
“Person entitled to enforce” an instrument means (i) the holder of the
instrument, (ii) a nonholder in possession of the instrument who has the
rights of a holder, or (iii) a person not in possession of the instrument who
is entitled to enforce the instrument pursuant to RCW 62A.3-309 or 62A.3-
4 18(d). A person may be a person entitled to enforce the instrument even
though the person is not the owner of the instrument or is in wrongful
possession of the instrument.
The holder of the promissory note has the authority to enforce the deed of trust
because the deed of trust follows the note by operation of law. Bain, 175 Wash. 2d at 104
(The DTA “contemplates that the security instrument will follow the note, not the other
way around.”). In Brown, the court held the beneficiary must be the holder but not the
“owner” of the note. Brown, 184 Wash. 2d at 540.
The DTA states the beneficiary “shall appoint a trustee or a successor trustee” to
replace the trustee named in the deed of trust. RCW 61.24.010(2). In Sam, the court
held that “only the actual holder of the promissory note or other instrument evidencing
the obligation may be a beneficiary with the power to appoint a trustee to proceed with a
nonjudicial foreclosure on real property.” Bain, 175 Wash. 2d at 89; see RCW
61 .24.010(2). However, the court expressly states, “[N]othing in this opinion should be
construed to suggest an agent cannot represent the holder of a note. Washinciton law,
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No. 79662-3-1/15
and the deed of trust act itself, approves of the use of agents.” Bain, 175 Wash. 2d at 1062
(citing RCW 61 .24.031(1)(a) (‘A trustee, beneficiary, or authorized agent may not issue
a notice of default. . . until . . . .“)~); see also RCW 61 .24.040(8)~ (a nonjudicial
foreclosure sale of property shall be conducted by “the trustee or its authorized agent”).5
The court states that” ‘an agency relationship results from the manifestation of consent
by one person that another shall act on his behalf and subject to his control, with a
correlative manifestation of consent by the other party to act on his behalf and subject to
his control.’” Bain, 175 Wash. 2d at 106 (quoting Moss v. Vadman, 77 Wash. 2d 396, 402-
03, 463 P.2d 159 (1969)). “[A]gency requires a specific principal that is accountable for
the acts of its agent.” Bain, 175 Wash. 2d at 107.
Here, the undisputed record shows SPS had the authority to act as an agent on
behalf of Wells Fargo N.A. in the nonjudicial foreclosure. On August 31, 2012, Wells
Fargo N.A. as the actual holder of the Winters’ note executed a Limited Power of
Attorney appointing SPS “as its true and lawful attorney-in-fact” with the “full authority
and power” to execute “all documents and instruments necessary” to conduct a
nonjudicial foreclosure and to appoint “one or more substitute trustees” to replace the
trustee named in the deed of trust. On November 25, 2013, SPS as the attorney-in-fact
for Wells Fargo N.A. executed a Declaration of Ownership on behalf of Wells Fargo
N.A. verifying under penalty of perjury that Wells Fargo N.A. “is the actual holder of the
Promissory Note” for the Winters’ loan and that the “Beneficiary understands that the
2 Emphasis added.
~ Emphasis added.
~ We note the legislature amended RCW 61.24.040 in 2012 and renumbered the subsections.
LAWS OF 2012, ch. 185, § 10. Because the language of RCW 61.24.040(8) did not change, we cite the
current statute.
~ Emphasis added.
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No. 79662-3-1/16
trustee foreclosing the deed of trust securing the [Winters’] loan will rely upon this
Declaration before issuing the notice of trustee’s sale.” On December 5, 2013, SPS
executed the Appointment of Successor Trustee as the authorized attorney-in-fact for
Wells Fargo N.A. The unambiguous Appointment of Successor Trustee states that
Wells Fargo NA. is the “present Beneficiary” under the deed of trust and that Wells
Fargo N.A. “hereby does appoint QUALITY LOAN SERVICE CORPORATION OF
WASHINGTON as the new Trustee.”
The DTA expressly allowed QLS as the successor trustee to rely on the
Declaration of Ownership executed by SPS on behalf of Wells Fargo N.A. RCW
61.24.030(7)(b) states the trustee “is entitled to rely on the beneficiary’s declaration as
evidence of proof required under this subsection” that the beneficiary is the actual
holder of the note. Former RCW6I.24.030(7)(a) (2012)6 provides:
That, for residential real property, before the notice of trustee’s sale is
recorded, transmitted, or served, the trustee shall have proof that the
beneficiary is the owner of any promissory note or other obligation
secured by the deed of trust. A declaration by the beneficiary made under
the penalty of perjury stating that the beneficiary is the actual holder of the
promissory note or other obligation secured by the deed of trust shall be
sufficient proof as required under this subsection.
Because SPS had the authority to execute the beneficiary declaration under penalty of
perjury attesting that Wells Fargo N.A. is the holder of the note, QLS could rely on that
declaration. An unrebutted declaration satisfies the requirement under RCW
61.24.030(7) to provide proof of a beneficiary. Brown, 184 Wash. 2d at 544; Bain, 175
Wash. 2d at 88.
6 We note the legislature amended RCW 61 .24.030(7)(a) in 2018 to replace the word “owner”
with “holder” and delete the word “actual.” LAWS OF 2018, ch. 306, § 1.
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No. 79662-3-1/17
For the first time on appeal, Winters claims the beneficiary declaration is invalid
because there is no evidence that the SPS employee had personal knowledge about
the location of the note. Winters also claims there is no evidence about when QLS
received the Limited Power of Attorney. We only consider evidence and issues called
to the attention of the trial court on summary judgment. RAP 9.12; Kofmehl v. Baseline
Lake, LLC, 177 Wash. 2d 584, 594, 305 P.3d 230 (2013). Nonetheless, we note RCW
61.24.030(7) does not require proof of the location of the note and QLS presented
unrebutted evidence that it had the Limited Power of Attorney before initiating the
nonjudicial foreclosure.
In the alternative, Winters argues that even if Wells Fargo N.A. had the authority
to use an agent, there is an issue of material fact as to whether a principal-agent
relationship existed between Wells Fargo N.A. and SPS. We disagree.
A power of attorney is a written instrument by which one person as principal
appoints another as agent and confers on the agent’s authority to act in the place and
stead of the principal for the purposes set forth in the instrument. Bryant v. Bryant, 125
Wash. 2d 113, 118, 882 P.2d 169 (1994). The Uniform Power of Attorney Act, chapter
11.125 RCW, defines an “agent” as follows:
[A] person granted authority to act for a principal under a power of
attorney, whether denominated an agent, attorney-in-fact, or otherwise.
The term includes an original agent, coagent, successor agent, and a
person to which an agent’s authority is delegated.
ROW 11.125.020(1).
The Limited Power of Attorney is a clear and unambiguous manifestation of
Wells Fargo N.A.’s consent and authorization for SPS to act on its behalf in executing
all required documentation to complete a nonjudicial foreclosure sale. The Limited
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Power of Attorney authorizes SPS to act on behalf of Wells Fargo N.A. to execute
documentation for a nonjudicial foreclosure on property, including the power to appoint
a successor trustee and execute a beneficiary declaration.
Winters cites Rucker to argue there is an issue of material fact as to whether a
principal-agent relationship existed between Wells Fargo N.A. and SPS. Rucker does
not support their argument. In Rucker, the court held that “where an entity fails to
identify a lawful principal who controls its actions, it has not established that it is an
agent for purposes of the DTA.” Rucker, 177 Wash. App. at 15. In Rucker, the agreement
explicitly stated that the relationship of the alleged agent NovaStar Mortgage Inc. to the
beneficiary of the deed of trust JPMorgan Chase Bank and J.P. Morgan Trust Company
was intended “‘to be that of an independent contractor and not that of a ioint venture,
partner or agent.’” Rucker, 177 Wash. App. at 15-16.~ Here, unlike In Rucker, the
unrebutted record shows Wells Fargo N.A. was the principal who expressly delegated
authority to SPS to act as its attorney-in-fact and authorized agent.
RCW 61 .24.010
QLS also contends the unrebutted record shows that assistant secretaries are
corporate officers and that it met the qualifications for a successor trustee. RCW
61.24.O10(1)(a) states that the trustee shall be “[amy domestic corporation or domestic
limited liability corporation incorporated under Title 23B, 25, *30 31, 32, or 33 RCW of
which at least one officer is a Washington resident.”8
~ Some emphasis in original.
8 ~*Reviser~s note: (1) Title 30 RCW was recodified and/or repealed pursuant to” LAWS OF 2014,
ch. 37.
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The undisputed record establishes QLS had at least one resident corporate
officer in the state of Washington throughout the nonjudicial foreclosure. Herbert-West
stated in her declaration in support of the motion for summary judgment dismissal that
she has ‘been a resident of Washington since 1989” and that she and QLS Vice
President Robert McDonald “have continued to be resident officers through present
day.”
The undisputed record establishes that the “Bylaws of Quality Loan Service
Corporation of Washington” designate assistant secretaries as corporate officers with
the authority to execute documents in a nonjudicial foreclosure for QLS. Article IX,
section 1 states, in pertinent part:
OFFICERS
The officers of the corporation shall be chosen by the board of
directors and shall be a president, a vice-president, a secretary and a
treasurer. The board of directors may also choose additional vice-
presidents, and one or more assistant secretaries and assistant
treasurers.
The unrebutted corporate records show QLS elected assistant secretaries as corporate
officers. The bylaws also state an assistant secretary “shall have authority to affix” the
seal of the corporation “to any instrument requiring it” and the corporate seal “may be
attested by [the secretary’s] signature or by the signature of such assistant secretary.”
Because the uncontroverted record establishes that SPS had the authority to act
as the authorized agent for the actual holder of the note in the nonjudicial foreclosure, to
appoint QLS as the successor trustee, and to execute the beneficiary declaration, we
reverse denial of the motion for summary judgment and remand to dismiss the claims
against QLS. On remand, the court shall also address the propriety of imposition of
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No. 79662-3-1/20
expenses incurred by QLS as the successor trustee in the nonjudicial foreclosure under
RCW 61.24.090(1)(b).
WE CONCUR:
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