Michael J. Beverick, Apps v. Landmark Building & Dev. Inc., Res. ( 2017 )

FILF0
COURT OF APPEALS mv 1
STATE OF WASHINGTON
2017 JUL -3 h 8:10
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
MICHAEL J. BEVERICK and CINDY )
M. BEVERICK, husband and wife, ) No. 74210-8-1
)
Appellants, ) DIVISION ONE
)
v. ) UNPUBLISHED OPINION
)
LANDMARK BUILDING & )
DEVELOPMENT INC., and LAND )
TITLE & ESCROW COMPANY, and )
WMC MORTGAGE CORP., and )
AURORA BANK FSB, and U.S. BANK )
NATIONAL ASSOCIATION AS )
TRUSTEE for STRUCTURED ASSET )
CORPORATION MORTGAGE PASS )
CERTIFICATES, SERIES 2007-GEL1 )
60 Acct. No. 0122944200, and BISHOP)
AND LYNCH OF KING COUNTY, and )
MORTGAGE ELECTRONIC )
REGISTRATION SYSTEMS, INC., and )
NATIONSTAR MORTGAGE LLC, )
)
Respondents. ) FILED: July 3, 2017
TRICKEY, A.C.J. — Cindy and Michael Beverick appeal the trial court's grant of
summary judgment in favor of Nationstar Mortgage LLC and other parties (collectively,
Nationstar)1 and the trial court's grant of summary judgment in favor of WMC Mortgage
Corp. They argue that summary judgment was inappropriate because genuine issues of
'For clarity, Nationstar Mortgage LLC and other parties will be collectively referred to as
"Nationstar." When referring to individual actions, the parties' separate names will be used.
No. 74210-8-1 / 2
material fact remained and that the trial court relied on improper testimony and erred in
dismissing certain defendants.
No genuine issues of material fact existed because the Bevericks admitted to the
authenticity of the purported original promissory note offered at summary judgment, did
not offer sufficient evidence to challenge Nationstar Mortgage's status as holder of the
promissory note, and did not offer sufficient evidence in support of their Consumer
Protection Act, chapter 19.86 RCW,claims. The testimony challenged by the Bevericks
contained facts that would have been admissible at trial as business records and the
declarants offered sufficient foundation supporting their personal knowledge. The
Bevericks waived their claims against Mortgage Electronic Registration Systems, Inc.,
Bishop & Lynch of King County, and U.S. Bank National Association. We affirm.
FACTS
In May 2006, the Bevericks executed an adjustable rate note in the amount of
$409,600 in favor of WMC Mortgage Corp.(WMC). The note was secured by a deed of
trust, which identified WMC as "Lender," Bishop & Lynch of King County(Bishop & Lynch)
as "Trustee," and Mortgage Electronic Registration Systems, Inc. (MERS) as
"[Bjeneficiary" as the nominee for WMC.2 The deed of trust encumbered real property
owned by the Bevericks. The deed of trust was recorded in May 2006.
The Bevericks did not communicate or interact with WMC during the loan
application process or during the life of the loan. The Bevericks made payments on the
loan to Aurora Bank, FSB (Aurora), the servicer of the loan,from closing until September
2011.
2 Clerk's Papers(CP) at 64-65(boldface omitted).
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In September and October 2011, Aurora acted as the servicer of the loan and U.S.
Bank National Association (U.S. Bank) as trustee for Structured Asset Securities
Corporation Mortgage Pass-Through Certificates, Series 2007-GEL1, Account No.
0122944200(SASCO 2007-GEL1) owned the obligation.
In December 2011, WMC transferred physical possession of the note, which was
indorsed in blank, to Aurora.
In January 2012, MERS assigned its interest in the deed of trust to Aurora, which
was recorded in March 2012.
In March 2012, a law firm sent the Bevericks a notice of default on behalf of the
beneficiary of the loan obligation. The notice stated that the beneficiary of the obligation
had declared a default based on the Bevericks' failure to pay monthly payments from
October 2011 to March 2012. The notice named SASCO 2007-GEL1 as the owner of the
note, and Aurora as the servicer of the obligation. A notice of trustee's sale was not
issued.
In May 2012, Aurora sent a letter to the Bevericks notifying them that Aurora was
the servicer of the loan and providing its address. The letter also stated that U.S. Bank
was the owner of the loan, and provided U.S. Bank's address. Aurora attached a certified
copy of the original note to the letter.
In June 2012, Aurora notified the Bevericks that Nationstar Mortgage was the new
servicer of their loan. In July 2012, Aurora transferred the note to Nationstar Mortgage.
In August 2012, the Bevericks filed a complaint against WMC, U.S. Bank, Aurora,
Nationstar Mortgage, MERS, and Bishop & Lynch, among others, seeking to quiet title,
requesting cancellation of the debt, and alleging a violation of the CPA. All the defendants
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moved for summary judgment, and which the court denied on September 30, 2013.
On the day of the summary judgment hearing, Michael Beverick and the Bevericks'
attorney met with Adam Hughes, the attorney for the defendants, to inspect a document
Huges claimed was the original note. Beverick later declared that he noticed there were
several differences in appearance between the document produced and the original, and
believed that the offered document was a copy printed from a color copier.
In October 2013, the defendants moved for partial reconsideration of the trial
court's September 30 order. In their response, the Bevericks acknowledged that they did
not have a cause of action against U.S. Bank, MERS, or Bishop & Lynch.
The trial court granted the motion in November 2013. The trial court dismissed all
claims asserted against Bishop & Lynch, U.S. Bank, and MERS. The trial court held that
issues of material facts remained over the authenticity of the indorsement of the note, the
identity of the proper holder of the note, whether the deed of trust was authentic, and who
had the authority to enforce the note.
On December 3, 2013, Nationstar Mortgage sent the Bevericks requests for
admission (RFAs) asking that they admit that their original signatures were on the note
produced at the September 30, 2013 summary judgment hearing and on the note shown
to them by Hughes, and to admit that the blank indorsement executed by WMC on the
note was authentic. The Bevericks' response was due 30 days after being served with
the RFAs. The Bevericks did not respond to the RFAs until January 5, 2015, when they
filed a motion to extend time to answer requests for admissions. The trial court did not
grant the extension.
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In May 2014, Aurora assigned its interest in the deed of trust to U.S. Bank. The
assignment was recorded on May 27, 2014.
In August 2014, Nationstar Mortgage filed an amended answer, affirmative
defenses, counter claim, and third party complaint for judicial foreclosure. Nationstar
Mortgage claimed that it was the current holder of the note.
In March 2015, Nationstar Mortgage moved for summary judgment and a decree
of foreclosure. Nationstar Mortgage offered the affidavit of A.J. Loll, Vice President of
Nationstar Mortgage, and the declarations of Adam Hughes, attorney for Nationstar, and
Laura McCann, Vice President of Aurora Commercial Corp., the successor entity to
Aurora, in support of its motion for summary judgment and decree of foreclosure.
In May 2015, the trial court granted Nationstar Mortgage's motion for summary
judgment and issued a decree of foreclosure. The trial court determined that the deed of
trust was a valid, subsisting, first, prior, and paramount lien on the Bevericks' real property
in favor of Nationstar Mortgage. The trial court foreclosed the real property, ordered a
sheriffs sale, and awarded judgment in the principal sum of $401,323.83, prejudgment
interest of $123,072.73,fees totaling $6,626.07, litigation costs of $1,997.88, and attorney
fees of $2,500.
Following the trial court's grant of summary judgment to Nationstar Mortgage, the
Bevericks' only remaining claim was against WMC for violation of the CPA. WMC moved
for summary judgment in June 2015. The trial court granted the motion in August 2015.
The trial court entered final judgment and dismissed the Bevericks' claim against WMC
on October 16, 2015.
The Bevericks appeal.
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ANALYSIS
Timeliness of Appeal
Nationstar argues that this court may not review the trial court's order granting of
Nationstar Mortgage's motion for summary judgment and decree of foreclosure because
the Bevericks' notice of appeal was untimely. Because the order granting summary
judgment and decree of foreclosure was not a final judgment, we find that the appeal was
timely.
Unless otherwise prohibited by statute or court rule,"a party may appeal from only
...[a]final judgment entered in any action or proceeding. ..[and][a]ny written decision
affecting a substantial right in a civil case that in effect determines the action and prevents
a final judgment or discontinues the action." RAP 2.2(a)(1),(3).
Ordinarily, a notice of appeal must be filed in the trial court within 30 days of the
entry of a final judgment that the party wants reviewed. RAP 5.2(a).
When an action presents more than one claim for relief or involves multiple parties,
the court may enter final judgment as to fewer than all claims or fewer than all parties only
"upon an express determination in the judgment, supported by written findings, that there
is no just reason for delay and upon an express direction for the entry of judgment." CR
54(b). Thus, a final judgment under CR 54(b) requires:
(1) more than one claim for relief or more than one party against whom relief
is sought;(2)an express determination that there is no just reason for delay;
(3) written findings supporting the determination that there is no just reason
for delay; and (4) an express direction for entry of the judgment.
Nelbro Packing Co. v. Baypack Fisheries, LLC, 101 Wn. App. 517,523,6 P.3d 22(2000).
The factors relevant to determining whether there is no just reason for delay include:
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"(1) [T]he relationship between the adjudicated and the unadjudicated
claims,(2) whether questions which would be reviewed on appeal are still
before the trial court for determination in the unadjudicated portion of the
case, (3) whether it is likely that the need for review may be mooted by
future developments in the trial court,(4) whether an immediate appeal will
delay the trial of the unadjudicated matters without gaining any offsetting
advantage in terms of the simplification and facilitation of that trial, and
(5)the practical effects of allowing an immediate appeal."
Nelbro Packing Co., 101 Wash. App. at 525 (alteration in original) (quoting Schiffman v.
Hanson Excavating Co., Inc., 82 Wash. 2d 681, 687, 513 P.2d 29 (1973)). The trial court
must address each factor or explain why it disregarded some factors; failure to do so is
an abuse of discretion. Nelbro Packing Co., 101 Wash. App. at 526.
A judgment is not final unless the court has strictly complied with this rule. Bank
of America, N.A. v. Owens, 177 Wash. App. 181, 192, 311 P.3d 594(2013). An order is not
a final judgement if it adjudicates fewer than all the claims or the rights and liabilities of
fewer than all the parties that does not include written findings, that determination, and
that direction. CR 54(b).
This court has the authority to determine whether a matter is properly before it.
RAP 7.3. This court reviews the trial court's determination that there is no just reason for
delay for abuse of discretion. Nelbro Packing Co., 101 Wash. App. at 524-25.
Here, the trial court granted summary judgment in favor of Nationstar Mortgage
and issued a decree of foreclosure on May 21, 2015. The Bevericks filed their notice of
appeal on November 9, 2015, which included the trial court's order and decree of
foreclosure.3
3 The trial court granted WMC's motion for summary judgment and entered final judgment
dismissing the Bevericks' remaining claim on October 16, 2015. The parties do not dispute that
the Bevericks' appeal of this order and final judgment was timely.
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The order and decree addressed all of the Bevericks' remaining claims against
Nationstar. But the order and decree of foreclosure did not address the Bevericks' claim
against WMC for violation of the CPA. Because more than one claim for relief was
presented and multiple parties were involved, the trial court's order and decree had to
satisfy CR 54(b) in order to constitute a final judgment.
The trial court stated that no just reason existed for delay in the entry of judgment
in favor of Nationstar Mortgage and expressly directed that judgment was to be entered
in favor of Nationstar Mortgage. But the trial court did not provide a written explanation
showing it had considered the required factors for determining whether there is no just
reason for delay. Rather, the trial court stated that it was relying on the oral argument of
counsel and numerous documents, the affidavit, declarations, and exhibits to reach its
decision.
The trial court's failure to provide written findings means that its order and decree
of foreclosure was not a final judgment under CR 54(b). Therefore, the Bevericks did not
need to file their notice of appeal within 30 days of its entry.
Dismissal of MERS, Bishop & Lynch, and U.S. Bank
The Bevericks argue that the trial court erred by dismissing several of their deeds
of trust act, chapter 61.24 RCW,claims against "Aurora Bank, Bishop and Lynch of King
County and MERS."4 Because the Bevericks agreed to the dismissal of those parties
below and thus waived their claims against them, the trial court did not err.
The doctrine of waiver may apply to bar a party's assignment of error on appeal
through that party's acquiescence to a ruling or other act of the trial judge. See, e.g.,
Appellant's Br. at 25.
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State ex. rel. LaMon v. Town of Westport, 73 Wash. 2d 255, 261, 438 P.2d 200 (1968);
Spokane County v. Farmer, 5 Wash. App. 25, 27, 486 P.2d 296(1971).
In their response to the October 2013 motion for partial reconsideration, the
Bevericks agreed that the facts in their complaint did not assert a cause of action against
MERS, Bishop & Lynch, and U.S. Bank. The Bevericks did not object to the trial court's
subsequent order, which included dismissal of those defendants. The Bevericks waived
their claims against these parties, and we decline to address them on appeal.
Deeds of Trust Act Claims
The Bevericks raise several claims under the deeds of trust act against Nationstar
and WMC for the first time on appeal. The Bevericks did not raise these arguments below,
either in their complaint or in their oppositions to summary judgment. We decline to reach
these arguments. RAP 2.5(a).
Summary Judgment
The Bevericks argue that the trial court erred in granting the summary judgment
motions of Nationstar Mortgage and WMC, which together dismissed all of their claims
against Nationstar and WMC and issued a decree of foreclosure in favor of Nationstar
Mortgage. They argue that the grant of summary judgment and issuance of a decree of
foreclosure was improper because genuine issues of material fact remained whether the
note offered by Nationstar Mortgage at the summary judgment hearing was the original
note, whether U.S. Bank had the status and standing to judicially foreclose on the note,
and whether Nationstar and WMC violated the CPA. We examine each claim in turn.
Summary judgment is appropriate if "the pleadings, depositions, answers to
interrogatories, and admissions on file, together with [any] affidavits. . . show that there
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No. 74210-8-1 / 10
is no genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law." CR 56(c). A fact is material if the outcome of the litigation
depends on it in whole or in part. Swinehart v. City of Spokane, 145 Wash. App. 836, 844,
187 P.3d 345(2008).
If the moving party carries its burden, the nonmoving party must present evidence
that demonstrates that material facts are in dispute. Baldwin v. Sisters of Providence in
Wash. Inc., 112 Wash. 2d 127, 132, 769 P.2d 298(1989). The nonmoving party must offer
more than conclusory statements and establish specific and material facts with evidence
to survive summary judgment. Hiatt v. Walker Chevrolet, 120 Wash. 2d 57, 66-67, 837 P.2d
618(1992).
Summary judgment orders are reviewed de novo, and the appellate court performs
the same inquiry as the trial court. Hisle v. Todd Pac. Shipyards Corp., 151 Wash. 2d 853,
860, 93 P.3d 108 (2004). The reviewing court examines the pleadings, affidavits, and
depositions before the trial court and assumes all reasonable inferences in favor of the
nonmoving party. Ruff v. King County, 125 Wash. 2d 697, 703, 887 P.2d 886 (1995).
Competence of Evidence
The Bevericks argue that the trial court erred when it relied on the testimony of
Loll, Hughes, and McCann, offered by Nationstar Mortgage in support of its motion for
summary judgment to show that it was the holder of the note and had authority to
foreclose. Because the declarants testified to facts that would have been admissible at
trial and that were based on their personal knowledge, we find no error.
"Affidavits submitted in support of or in response to a motion for summary judgment
must set forth such facts as would be admissible in evidence, must be made on personal
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knowledge, and must affirmatively show that the affiant is competent to testify as to his
or her averments." Snohomish County v. Rugg, 115 Wash. App. 218, 224, 61 P.3d 1184
(2003)(citing CR 56(e); Grimwood v. Univ. of Puqet Sound, Inc., 110 Wash. 2d 355, 753
P.2d 517 (1988)). Sworn or certified copies of any documents referred to in an affidavit
must be attached to the affidavit. CR 56(e).
Personal knowledge may be established by the affiant's declaration under penalty
of perjury that his or her testimony is based on personal knowledge and review of relevant
records. Barkley v. Greenpoint Mortg. Fundinq, Inc., 190 Wash. App. 58, 66-67, 358 P.3d
1204 (2015)(quoting CR 56(e); RCW 5.45.020), review denied, 184 Wash. 2d 1036, 379
P.3d 953(2016).
A business record may be competent evidence if "the custodian or other qualified
witness testifies to its identity and the mode of its preparation," if it was made in the regular
course of business at or near the time of the event at issue, and if the court determines
that the sources of information, method, and time of preparation justify admission. RCW
5.45.020.
"Reviewing courts broadly interpret the statutory terms 'custodian' and 'other
qualified witness." State v. Quincy, 122 Wash. App. 395, 399, 95 P.3d 353(2004)(citing
State v. Ben-Neth, 34 Wash. App. 600, 603, 663 P.2d 156 (1983)). A person who has
custody of the record as a regular part of his or her work or has supervision of its creation
is qualified to testify as a custodian. Quincy, 122 Wash. App. at 399. Computerized records
that meet the statutory requirements are treated as any other business records. Ben-
Neth, 34 Wash. App. at 603 (citing Seattle v. Heath, 10 Wash. App. 949, 520 P.2d 1392
(1974)).
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When a motion for summary judgment is made and supported pursuant to CR
56(e), the adverse party must respond with specific facts showing there is a genuine issue
for trial. CR 56(e). The party opposing an affidavit cannot argue simply that the affiant's
statements of personal knowledge are "conclusory'"; it must submit facts that create a
genuine issue of material fact as to the qualifications of the affiant, his or her statements,
or the authenticity of the attached documents. Barkley, 190 Wash. App. at 67-68.
This court reviews a summary judgment order de novo. Camicia v. Howard S.
Wright Constr. Co., 179 Wash. 2d 684, 693, 317 P.3d 987 (2014). The de novo standard
applies to evidentiary rulings on admissibility. Folsom v. Burger King, 135 Wash. 2d 658,
663, 958 P.2d 301 (1998).
The Bevericks argue that the affidavit of Loll and the declaration of McCann did
not contain facts that would have been admissible at trial. But the facts contained in the
affidavit and the declaration qualify as business records under RCW 5.45.020. Both Loll
and McCann stated that (1) they were officers of Nationstar Mortgage and Aurora's
successor entity, respectively; (2) they had personal knowledge of their company's
practice of maintaining business records; (3) they had personal knowledge of the
Bevericks' loan documents from their personal review of the documents or through
another qualified person's review of the documents; and (4) attached true and correct
copies of the documents they relied upon to their affidavit and declaration. The affidavit
of Loll and the declaration of McCann contained facts that would have been admissible
at trial under RCW 5.45.020.
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The Bevericks also challenge the trial court's reliance on the affidavit of Loll and
the declarations of McCann and Hughes under CR 56(e) as failing to demonstrate
personal knowledge and competency.
Loll stated under oath that he or she is over 18 years of age and competent to be
a witness in any trial on this matter, and that he or she reviewed Nationstar Mortgage's
business records, was familiar with Nationstar Mortgage's recordkeeping system, and
incorporated by reference the note, deed of trust, and assignment of deed of trust at issue.
Hughes declared under oath that he is over the age of 18 and competent to testify, and
that Nationstar Mortgage gave him the original note and deed of trust on June 14, 2013.
He attached true and correct copies of both to his declaration, and planned to make the
originals available to the court at the summary judgment hearing. McCann declared
under oath that she was Vice President of Aurora Commercial Corp. and had reviewed
Aurora's records showing its possession of the note and when Aurora transferred the
note.
The Bevericks offer only conclusory challenges to each declarant's personal
knowledge and competency. They argue that Loll failed to provide third-party verification
of the documents, Hughes failed to show how he knew the documents provided by
Nationstar Mortgage were the original note and deed of trust, and, generally, that McCann
has not sufficiently established personal knowledge. Such arguments are insufficient to
create a genuine issue of material fact.
In sum, the Bevericks have failed to carry their burden of showing that the trial
court erred by considering the affidavit of Loll and the declarations of Hughes and McCann
under RCW 5.45.020 or CR 56(e). The affidavit of Loll and the declaration of McCann
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No. 74210-8-1 / 14
contained facts admissible under RCW 5.45.020. All three declarants established their
personal knowledge and competence to testify under CR 56(e). The trial court did not err
by considering the affidavit, the declarations, and the attached documents.
Authenticity of Offered Original Note
The Bevericks argue that the trial court erred in granting summary judgment and
a decree of foreclosure in favor of Nationstar Mortgage as the holder of the original note
because there was a genuine issue of material fact whether the document offered at
summary judgment was the original note or a counterfeit. Because the Bevericks failed
to timely respond to Nationstar Mortgage's RFAs to deny the authenticity or validity of the
offered note, we disagree.
A party may serve any other party a written RFA for purposes of the pending action,
"including the genuineness of any documents described in the request." CR 36(a). The
party to whom the RFA is directed must serve a written answer or objection within 30
days after service of the RFA. CR 36(a). Failure to do so results in the matter being
admitted. CR 36(a).
Nationstar Mortgage sent the Bevericks RFAs in December 2013, which asked in
part that they "[a]dmit that Your original signatures were on the note produced in Court at
the September 30, 2013, summary judgment hearing in this matter," and "[a]dmit that
Your original signatures were on the Note produced for Your and Your counsel's review
at the offices of[Hughes] in Seattle, Washington, on September 30, 2013."5
The Bevericks did not reply to the RFAs within 30 days of service. They waited to
respond until January 5, 2015, when they filed a motion to extend time to answer the
5 CP at 413-14)(boldface omitted).
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No. 74210-8-1 / 15
RFAs. The trial court denied the extension. Under CR 36(a), the Bevericks are deemed
to have admitted to the authenticity of the note produced at the September 30 summary
judgment hearing. Thus, they``cannot challenge it via Michael Beverick's affidavit.
Status and Standing to Judicially Foreclose on the Note
The Bevericks argue that there was a genuine issue of material fact whether U.S.
Bank was the owner of the note and had standing to judicially foreclose as a mortgagee
of the obligation. Specifically, they argue that, although Nationstar Mortgage identified
itself as the current holder of the obligation, Nationstar Mortgage failed to establish that it
was the mortgagee or his or her assigns under RCW 61.12.040 or that U.S. Bank had
standing as owner and holder of the subject obligation. We disagree. Nationstar
Mortgage is a proper party to foreclose because it is the holder of the note.
Only certain parties are entitled to foreclose on a mortgage in default. "When
default is made in the performance of any condition contained in a mortgage, the
mortgagee or his or her assigns may proceed in the superior court of the county where
the land, or some part thereof, lies, to foreclose the equity of redemption contained in the
mortgage." RCW 61.12.040. Under Washington law, a "[p]erson entitled to enforce" an
instrument includes:
(i) the holder of the instrument, [or] (ii) a nonholder in possession of the
instrument who has the rights of a holder. .. . 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.
RCW 62A.3-301 (emphasis added).
"'The holder of a negotiable instrument may sue thereon in his own name, and
payment to him in due course discharges the instrument." Deutsche Bank Nat'l Trust
Co. v. Slotke, 192 Wash. App. 166, 172, 367 P.3d 600(2016)(quoting John Davis & Co. v.
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Cedar Glen No. Four, Inc., 75 Wash. 2d 214, 222-23, 450 P.2d 166 (1969), review denied,
185 Wash. 2d 1037, 377 P.3d 746(2016). "It is not necessary for the ho/derto first establish
that he has some beneficial interest in the proceeds." Slotke, 192 Wash. App. at 172
(quoting John Davis & Co, 75 Wash. 2d at 222-23). "Under the [Uniform Commercial Code
(UCC)], the 'holder' of the note entitled to commence a judicial foreclosure is 'the person
in possession of a negotiable instrument that is payable either to bearer or to an identified
person that is the person in possession." Slotke, 192 Wash. App. at 175(citing RCW 62A.1-
201(b)(21)(A)).6
A party may establish its status as a holder through possession of a promissory
note indorsed by the original payee and maintenance of possession throughout a judicial
foreclosure action. Slotke, 192 Wash. App. at 175. Presentation of the original note for
inspection by the court at a summary judgment hearing can be sufficient to prove a party's
status as holder through possession. Slotke, 192 Wash. App. at 175.
Here, the record shows that WMC transferred physical possession of the note,
indorsed in blank, to Aurora in December 2011. In July 2012, Aurora transferred the note
to Nationstar Mortgage. Nationstar Mortgage presented the original note at the
September 30, 2013 summary judgment hearing for inspection by the trial court. The
record does not show that Nationstar Mortgage has transferred the note during the
foreclosure proceedings. Therefore, Nationstar Mortgage is the current holder of the note
and is a proper party to foreclose.
The Bevericks raise several arguments against Nationstar Mortgage's ability to
foreclose. First, they argue that Nationstar Mortgage could not foreclose on the note
6 The UCC was adopted in Washington as chapter 62A RCW.
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because it did not establish its ownership interest in the deed of trust or note. This ignores
that a party need only be the holder of the instrument, not the owner of the obligation, to
be entitled to foreclose. They next argue that there were genuine issues of material fact
whether Nationstar Mortgage had a proper power of attorney to act on behalf of U.S. Bank
and whether Nationstar Mortgage was acting as U.S. Bank's agent. Similarly, this ignores
that a party's status as holder is dispositive to the issue of whether it can foreclose on the
obligation. Nationstar Mortgage's relationship with U.S. Bank is irrelevant.
In sum,the Bevericks have not raised sufficient evidence to create a genuine issue
of material fact regarding Nationstar Mortgage's status of holder of the note. The trial
court did not err in determining that Nationstar Mortgage was a proper party to foreclose
on the note.
Violation of the Consumer Protection Act
The Bevericks argue that the trial court erred in granting summary judgment to
Nationstar and WMC on their CPA claim. They argue that there were genuine issues of
material fact whether WMC's designation of MERS as the beneficiary of the deed of trust
and Nationstar Mortgage and Aurora's improper initiation of a non-judicial foreclosure
constituted deceptive and unfair acts or practices.7 We disagree. The Bevericks have
not offered sufficient additional facts to show a genuine issue of material fact that WMC's
designation of MERS was a deceptive or unfair act or practice. They have also failed to
show facts establishing a genuine issue of material fact whether Nationstar Mortgage and
Aurora lacked the authority to non-judicially foreclose on the note.
7 The Bevericks also raise several arguments for violation of the deeds of trust act in support of
their CPA claim for the first time on appeal. We decline to reach these alleged bases. RAP 2.5(a).
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To maintain a claim under the CPA, a plaintiff must show "(1) unfair or deceptive
act or practice;(2) occurring in trade or commerce;(3) public interest impact;(4) injury to
plaintiff in his or her business or property;[and](5) causation." Hangman Ridge Training
Stables, Inc. v. Safeco Title Ins. Co., 105 Wash. 2d 778, 780, 719 P.2d 531 (1986). The
CPA is liberally construed in light of its beneficial purposes. RCW 19.86.920.
The Bevericks argue that there is a genuine issue of material fact whether WMC
engaged in unfair or deceptive acts or practices through its designation of MERS as a
beneficiary in the deed of trust.
Designation of MERS as the beneficiary may be deceptive, and presumptively
satisfies the first element of a CPA claim when MERS acts as a beneficiary. Bain v.
Metro. Mortg. Grp., 175 Wash. 2d 83, 115-17,285 P.3d 34(2012). But designation of MERS
as a beneficiary alone is insufficient to show an unfair or deceptive business practice.
Bain, 175 Wash. 2d at 120; see also McAfee v. Select Portfolio Servicing, Inc., 193 Wash. App.
220, 224, 229-232, 370 P.3d 25 (2016)(although MERS was named as beneficiary in
deed, plaintiff did not allege sufficient other facts to establish a claim of violation of the
deeds of trust act or CPA).8
The Bevericks did not have any interaction or contact with WMC following the
signing of the note. The Bevericks have stated that WMC did not make any
misrepresentations to them. The Bevericks argue that MERS took actions that
8WMC also cites Zalac v. CTX Mortp. Corp., 2013 WL 1990728(W.D. Wash. May 13, 2013). In
Zalac, the court stated that "Bain only held that characterizing MERS as the beneficiary on a deed
of trust has the capacity to deceive . . . but does not by itself constitute a per se violation of the
CPA. Unlike the 'concealment' by MERS at issue in Bain, here, Plaintiff does not allege any
specific unfair deceptive act by MERS.... Instead, Plaintiff routinely received written notification
regarding which entity was servicing his loan and had no communication with MERS." Zalac,
2013 WL 1990728, at *3(citations omitted).
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No. 74210-8-1 / 19
constituted unfair or deceptive business practices. But they do not show how these acts
are attributable to WMC. Further, they have not alleged any action of WMC that
constituted an unfair or deceptive business practice beyond naming MERS as the
beneficiary of the deed of trust. Under Washington law, the Bevericks have not alleged
sufficient facts to show that WMC engaged in unfair or deceptive business practices.
The Bevericks next argue that Nationstar Mortgage and Aurora engaged in unfair
and deceptive business practices when they improperly initiated a non-judicial foreclosure
without proper authority.
The Bevericks argue that Nationstar improperly relied on the affidavit of Loll and
the declarations of McCann and Hughes to contend that they were the servicers and
proper beneficiaries of the deed of trust. As discussed above, the affidavit of Loll and the
declarations of McCann and Hughes met the requirements of CR 56(e), ER 801, and ER
802. Therefore, the Bevericks do not allege other facts showing that Nationstar Mortgage
and Aurora were not the servicers or proper beneficiaries of the deed of trust.
The Bevericks further argue that Nationstar did not establish that it was an agent
of U.S. Bank, the purported owner of the obligation, entitled to foreclose on the note. As
discussed above, Nationstar Mortgage was the holder of the note and therefore was
entitled to foreclose on it. Ownership of the obligation and the relationship between the
owner and holder is irrelevant.
In sum, the Bevericks have not offered sufficient facts to show that Nationstar or
WMC engaged in unfair or deceptive business practices. Because they have not satisfied
this element, we need not examine the other elements of their CPA violation claim. The
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No. 74210-8-1/20
trial court did not err in dismissing the Bevericks' CPA violation claim against Nationstar
or WMC.
Affirmed.
..----.
1 rt, cik e y i ArcT
WE CONCUR:
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