Spencer Alpert v. Cal-western Reconveyance Corporation Of Wa

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
SPENCER ALPERT, a single man, )
) No. 79747-6-I
Appellant, )
) DIVISION ONE
v. )
) UNPUBLISHED OPINION
CAL-WESTERN RECONVEYANCE )
CORPORATION OF WASHINGTON; )
RESIDENTIAL FUNDING COMPANY; )
CHICAGO TITLE; CHASE HOME )
FINANCE, LLC; HOMECOMINGS )
FINANCIAL NETWORK, INC., )
)
Defendants, )
)
and )
)
AURORA LOAN SERVICES, LLC; )
U.S. BANK NATIONAL ASSOCIATION )
as Trustee for Lehman XS Trust )
Mortgage Pass-Through Certificates, )
Series 2006-18N; MORTGAGE )
ELECTRONIC REGISTRATION )
SYSTEMS, INC. “MERS”; MORTGAGE )
ELECTRONIC REGISTRATION )
SYSTEM as Nominee for )
HOMECOMINGS FINANCIAL )
NETWORK, INC.; and ALICE L. )
ALPERT, )
)
Respondents. )
)
SMITH, J. — In 2010, Spencer Alpert filed suit against various defendants
to forestall an impending foreclosure sale initiated by Aurora Loan Services LLC
Citations and pin cites are based on the Westlaw online version of the cited material.
No. 79747-6-I/2
(Aurora), the purported beneficiary of the subject deed of trust. In 2011, the trial
court entered orders dismissing Alpert’s claims against Aurora, Mortgage
Electronic Registration Systems Inc. (MERS), and U.S. Bank National
Association as Trustee for Lehman XS Trust Mortgage Pass-Through
Certificates, Series 2006-18N (U.S. Bank). Alpert appealed those orders in
2012, but we dismissed Alpert’s appeal as premature.
In 2019, the trial court entered a stipulated order dismissing the only
remaining defendant in Alpert’s lawsuit. Now Alpert again appeals the 2011
orders dismissing Aurora, MERS, and U.S. Bank.
We hold that Alpert’s appeal of the 2011 orders is timely. We also hold
that because genuine issues of material fact remain as to whether Aurora had
standing to initiate a foreclosure sale, the trial court erred by dismissing Alpert’s
claim for declaratory relief as to Aurora’s standing to foreclose. We remand to
the trial court for further proceedings with regard to that claim. Otherwise, we
affirm.
FACTS
In August 2006, Alpert obtained a loan from Homecomings Financial
Network Inc. (Homecomings) to purchase a home located at 10218 Richwood
Avenue NW in Seattle (Property). In connection with the loan, Alpert signed an
adjustable rate note, dated August 28, 2006 (Note), documenting his “promise to
pay U.S. $723,750.00 . . . , plus interest,” to the order of Homecomings. Alpert’s
payment obligation was secured by a deed of trust on the Property. The original
beneficiary under the deed of trust was MERS, and the original trustee was
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No. 79747-6-I/3
Chicago Title.
In July 2010, Alpert received a notice of default identifying Aurora as the
owner of the Note and the beneficiary under the deed of trust. The notice
declared Alpert in default for “[f]ailure to pay the monthly payment due February
1, 2010 . . . and subsequent installments due thereafter.” The notice of default
was followed by a notice of trustee’s sale, dated August 5, 2010, stating that Cal-
Western Reconveyance Corporation of Washington (Cal-Western), as trustee,
would sell the Property on November 19, 2010.
Before the scheduled trustee’s sale, on October 19, 2010, Alpert filed a
complaint against Cal-Western, as well as a motion to enjoin the foreclosure
sale. In his complaint, Alpert alleged that he had “repeatedly requested proof of
[Cal-Western]’s standing to foreclose on [his] residence” and that Cal-Western
had “failed to provide such information . . . despite these repeated requests.”
Alpert prayed for “declaratory relief in regard to [Cal-Western]’s standing in the
matter of the scheduled Trustee’s Sale in the form of a preliminary injunction
prohibiting the Trustee’s Sale scheduled for November 19, 2010.”
In an accompanying declaration filed the same day, Alpert attested that
around February 2010, he “attempted to contact the Lender to discuss options in
regard to [his] home, and . . . was informed that in order to have more productive
discussions, [he] needed to stop making loan payments.” He further declared
that after receiving the notice of default in July 2010, he spoke by telephone with
Angela Leyra, Cal-Western’s representative whose name and contact information
appeared on the notice of default. Alpert “indicated to her [he] believed there
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No. 79747-6-I/4
were irregularities concerning [his] loan, and [Leyra] promised to pass along
[Alpert’s] desire to further investigate the matter and to hopefully resolve and
keep [his] home.” According to Alpert, Leyra “specifically represented and
promised that NO ACTION would be taken, and particularly that no foreclosure
action would be filed, until we had further discussion,” but “[t]hat turned out not to
be true.” Alpert declared that since that time, he had called Leyra multiple times
and had written both to Leyra, to another Cal-Western representative whose
name appeared on the notice of trustee’s sale, and to Aurora, but none of them
had responded with the information he requested. He declared that, in particular,
he “asked [Cal-Western] in the form of both a request and a demand, that they
send me proof of ownership of the original Note . . . , and . . . to supply
assignments from Homecomings.” Attached to Alpert’s declaration was a copy of
the Note that Alpert later declared was the version filed with the notice of
trustee’s sale. That copy was indorsed in blank by Homecomings:
A day after filing his complaint, motion to enjoin the foreclosure, and
declaration, Alpert filed an amended complaint in which he added a request for
attorney fees and costs (first amended complaint). He also filed a supplemental
declaration. In that declaration, Alpert stated that after he filed his case, he
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No. 79747-6-I/5
“received a partial response” from Aurora identifying U.S. Bank as the “‘owner’”
of Alpert’s loan. Alpert declared that before receiving this response, he “had
never heard of U.S. Bank” and that although he had “thoroughly scoured and
reviewed all documents relating to this foreclosure,” U.S. Bank’s name “appears
nowhere, nor is there any indication that the Note was ever assigned to anyone
by the original noteholder.” Alpert also declared that included with the
correspondence from Aurora was another copy of the Note containing a different
indorsement than the one filed with the notice of trustee’s sale. Specifically, the
second copy was indorsed to an entity identified as Residential Funding
Corporation:
According to Alpert, “there [was] no indication of who is Residential Funding
Corporation and how they fit in the picture, and what would be their rights were
the endorsement to be deemed valid.” He also asserted that “this is a clear
indication of fraud and conspiracy on the part of [Cal-Western] and Aurora . . . ,
because they have now claimed two different Notes as the original, and have
used each to promote their objective of having the property sold at foreclosure
sale regardless of standing.”
In its response to Alpert’s motion to enjoin the foreclosure sale, Cal-
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No. 79747-6-I/6
Western observed that Alpert’s complaint was subject to dismissal for failure to
join the beneficiary of the deed of trust as an indispensable party. Cal-Western
also argued that Alpert had not met the requirements to obtain a preliminary
injunction and that with regard to Alpert’s arguments regarding standing, Cal-
Western was appointed as successor trustee in June 18, 2010. To that end, Cal-
Western requested that the court take judicial notice of an appointment of
successor trustee in which Aurora had appointed Cal-Western as trustee
effective June 18, 2010. The appointment was recorded on August 10, 2010.
On November 17, 2010, the trial court entered an order granting a
permanent injunction against the foreclosure sale. The court also ordered Alpert
to file an amended complaint within 90 days, “naming all possible parties in
interest.” On February 14, 2011, Alpert filed another amended complaint naming
Cal-Western, Aurora, U.S. Bank, Residential Funding Company,1 MERS, MERS
as nominee for Homecomings, Chicago Title, Chase Home Finance LLC
(Chase), and Homecomings as defendants (2011 complaint). Also named as a
defendant was Alice Alpert, 2 Alpert’s ex-wife, who, according to Alpert, held a
valid lien on the Property. In his 2011 complaint, Alpert incorporated by
reference the allegations and requests for relief in his first amended complaint.
He also requested “[a]n equitable decree quieting title in the subject property in
1 Although “Residential Funding Corporation” was the indorsee on the
second copy of the Note that Alpert received, the entity named in this lawsuit was
“Residential Funding Company.” This discrepancy does not affect any of the
issues in this appeal, and we refer to Residential Funding Corporation or
Residential Funding Company as the context requires.
2 Because Alice and Spencer Alpert share a last name, we refer to Alice
Alpert by her first name for clarity.
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No. 79747-6-I/7
[Alpert], subject to the valid lien of Alice L. Alpert.” Additionally, Alpert requested
an “equitable decree voiding any liens on the subject property held by, for or
through defendants Cal-Western, Aurora, U.S. Bank . . . , Residential Funding,
MERS, MERS as nominee for Homecomings, Chicago Title, Chase and
Homecomings.”
On June 15, 2011, Cal-Western moved for summary judgment. It argued
that it should be dismissed because it was already subject to the permanent
injunction entered in November 2010, it claimed no interest in the Property
except as having been named successor trustee, and it complied with all
applicable statutes.
Around the same time, Homecomings and Residential Funding Company
filed a motion to dismiss. Although that motion is not in the record, a declaration
from Michael Bennett in support of the motion was made a part of the record.
Bennett, an employee of GMAC Mortgage LLC, declared that on August 30,
2006, Homecomings “transferred, assigned or sold any and all interest it had in
the loan secured by [Alpert]’s property.” As evidence of this transfer, Bennett
attached what appears to be the same copy of the Note that was filed with the
notice of trustee’s sale, i.e., the copy with a blank indorsement from
Homecomings. Bennett’s declaration did not identify the entity to which the loan
was transferred, assigned, or sold.
Bennett also declared that “[i]n November 2006, Residential Funding
Company transferred, assigned or sold any and all interest it had in the loan
secured by [the P]roperty.” As evidence of this sale, Bennett cited an allonge
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No. 79747-6-I/8
attached to his declaration. The allonge references the Note by its date, loan
amount, Alpert’s name, and the Property’s address. The allonge contains a
blank indorsement by Residential Funding Corporation. Bennett declared that
“Residential Funding Company is not involved in the foreclosure of [Alpert]’s
property and no longer has, nor does it claim, any interest in [Alpert]’s property.”
Finally, Bennett declared that at one point in time, Homecomings was the
servicer of Alpert’s loan, but in April 2008, Homecomings sold the servicing of
Alpert’s loan to Aurora.
On June 20, 2011, the trial court dismissed Alpert’s claims against
Homecomings and Residential Funding Company. Later, the trial court also
dismissed Alpert’s claims against Chicago Title and Chase. These dismissals
are not at issue in this appeal.
Meanwhile, on July 19, 2011, while Cal-Western’s summary judgment
motion was still pending, Aurora and MERS moved to dismiss Alpert’s 2011
complaint for failure to state a claim. They argued that because there were no
competing claims of ownership or right to possession between Alpert, Aurora,
and MERS, Alpert had failed to state a claim for quiet title. They also asserted
that in May 2010, MERS assigned the deed of trust to Aurora and cited to a
corporate assignment of deed of trust attached as an exhibit to their motion.
They argued, relying on the same allonge that was attached to Bennett’s
declaration, that the Note was indorsed in blank and that as the holder of the
Note, Aurora was “entitled to enforce all of the contractual rights referenced in
the Note, such as collecting payments, and initiating foreclosure upon borrower’s
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No. 79747-6-I/9
default.” They further argued that Alpert was not entitled to declaratory relief and
that because they had demonstrated Aurora’s “current and prior authority to
enforce the Note,” the trial court should dissolve the injunction entered in
November 2010.
On August 26, 2011, the trial court entered an order dismissing Alpert’s
claims against Aurora and MERS with prejudice. That order did not dissolve the
injunction. The same day, the court also entered an order granting Cal-
Western’s motion for summary judgment and dismissing Cal-Western. In that
order, the court stated that among the documents it considered in connection
with Cal-Western’s motion was the “[o]riginal Note produced in Court by
Defendant Aurora.”
Entry of the orders dismissing Alpert’s claims against Aurora, MERS, and
Cal-Western left U.S. Bank and Alice as the only remaining defendants. On
November 7, 2011, U.S. Bank filed a motion for judgment on the pleadings and
dissolution of the November 2010 injunction. In its motion, U.S. Bank argued
that because there was no competing claim of ownership or right to possession
between Alpert and U.S. Bank, Alpert had failed to state a claim for quiet title.
U.S. Bank also argued that Alpert was not entitled to declaratory relief because
Aurora had already demonstrated, by presenting the original Note to the court,
that it was entitled to foreclose. Additionally, U.S. Bank contended that there was
no remaining basis for the injunction because as the beneficiary in possession of
the Note, Aurora was authorized to foreclose if Alpert defaulted, and Alpert did
not deny that he had defaulted.
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No. 79747-6-I/10
On December 16, 2011, the trial court granted U.S. Bank’s motion and
dismissed Alpert’s claims against U.S. Bank, leaving Alice as the sole remaining
defendant. The court also dissolved the November 2010 injunction and
scheduled a foreclosure sale for February 17, 2012.
On January 10, 2012, Alpert filed a notice of appeal to this court. In his
notice of appeal, Alpert designated (1) the August 26, 2011, order dismissing
Alpert’s claims against Aurora and MERS, (2) the August 26, 2011, order
granting Cal-Western’s motion for summary judgment, and (3) the December 16,
2011, order granting U.S. Bank’s motion for judgment on the pleadings and
dissolution of the injunction. On April 16, 2012, the following notation ruling was
entered “regarding appellant’s failure to file amended notice of appeal from a final
judgment or file CR 54(b) findings signed by the trial court by April 9, 2012:
Review is dismissed as premature.” A certificate of finality was entered on May
25, 2012.
Almost seven years later, on March, 21, 2019, the trial court entered a
stipulated order dismissing Alice without prejudice (March 2019 stipulated
order).3 The order states that it “shall serve as the final judgment concluding all
3 The record does not reflect what, if anything, occurred in this case after
this court dismissed Alpert’s 2012 appeal and before the trial court entered the
March 2019 stipulated order. U.S. Bank and MERS represent that during that
time, Alpert filed additional actions that have forestalled foreclosure attempts and
request that we take judicial notice of those actions. Because U.S. Bank and
MERS do not brief the requirements of RAP 9.11, we decline to do so. See King
County v. Cent. Puget Sound Growth Mgmt. Hr’gs Bd., 142 Wash. 2d 543, 549 n.6,
14 P.3d 133 (2000) (“Even though ER 201 states that certain facts may be
judicially noticed at any stage of a proceeding, RAP 9.11 restricts appellate
consideration of additional evidence on review.”).
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No. 79747-6-I/11
proceedings in this case.” Alpert now appeals. In addition to the March 2019
stipulated order, Alpert again designates the August 26, 2011, order dismissing
his claims against Aurora and MERS, as well as the December 16, 2011, order
granting U.S. Bank’s motion for judgment on the pleadings and dissolution of the
injunction (the 2011 orders).
ANALYSIS
Appealability of 2011 Orders
As an initial matter, we must decide which of the orders designated in
Alpert’s notice of appeal are properly before this court. U.S. Bank and MERS4
contend that because Alpert stipulated to the order dismissing Alice, he does not
have standing to appeal that order. They also contend that Alpert’s appeal of the
2011 orders is untimely because it was not filed within 30 days after entry of
those orders.
Because Alpert stipulated to the March 2019 stipulated order and thus
was not aggrieved by that order, he cannot—and does not—seek review of that
order. See RAP 3.1 (“Only an aggrieved party may seek review by the appellate
court.”); Fite v. Lee, 11 Wash. App. 21, 25-26, 521 P.2d 964 (1974) (“The order of
dismissal . . . was in the nature of a judgment by consent, which, in the absence
of fraud or mistake or want of jurisdiction, will not be reviewed on appeal.”).
Nevertheless, the March 2019 stipulated order had the effect of a final
judgment that made the 2011 orders appealable. Specifically, under CR 54(b),
when there are multiple parties involved in a case, the trial court may direct entry
4 Neither Aurora nor Alice filed a respondent’s brief.
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No. 79747-6-I/12
of final judgment as to fewer than all of the parties, but “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) certification). And under RAP 2.2(d), “an appeal may be taken from a
final judgment that does not dispose of all the claims . . . as to all the parties” only
if a CR 54(b) certification has been made. In the absence of a CR 54(b)
certification, an order dismissing fewer than all of the parties to a case “is subject
only to discretionary review until the entry of a final judgment adjudicating all the
claims, counts, rights, and liabilities of all the parties.” RAP 2.2(d).
Here, there were multiple parties involved in the case. And the 2011
orders dismissed fewer than all of the parties because after they were entered,
Alice remained a defendant in the case. Furthermore, the trial court did not make
a CR 54(b) certification with regard to either of the 2011 orders. Therefore, as
confirmed by this court’s 2012 dismissal of Alpert’s first appeal as premature, the
2011 orders were not appealable until entry of a final judgment adjudicating the
liabilities of all of the parties.
To that end, the March 2019 stipulated order states that “[t]his order shall
serve as a final judgment concluding all proceedings in this case.” In other
words, the effect of the order was to discontinue litigation in this case. Therefore,
we conclude that the March 2019 stipulated order had the effect of a final
judgment with regard to the appealability of the 2011 orders. And because Alpert
filed his notice of appeal within 30 days after entry of the March 2019 stipulated
order, his appeal of the 2011 orders is timely. See Fox v. Sunmaster Prods.,
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No. 79747-6-I/13
Inc., 115 Wash. 2d 498, 502, 798 P.2d 808 (1990) (order dismissing one of multiple
defendants without a proper CR 54(b) certification “was not . . . appealable until
the remaining claims were dismissed,” and thus, appeal was timely where
plaintiff filed notice of appeal some months later but within 30 days after trial
court dismissed the remaining claims).
U.S. Bank and MERS point out that under RAP 5.2(a), and subject to
enumerated exceptions in that rule that do not apply here, “a notice of appeal
must be filed in the trial court within . . . 30 days.” They then argue that because
Alpert did not appeal the 2011 orders within 30 days after each was entered, his
appeal of those orders “is beyond this Court’s jurisdiction.” But the 30-day clock
for filing a notice of appeal under RAP 5.2(a) did not begin running with regard to
the 2011 orders until the trial court entered the 2019 stipulated order resolving all
remaining claims. See Fox, 115 Wash. 2d at 502; see also Harley H. Hoppe &
Assocs., Inc. v. King County, 162 Wash. App. 40, 50, 255 P.3d 819 (2011) (holding
that stipulated order dismissing defendant’s counterclaim triggered the 30-day
clock to appeal an earlier order granting the defendant’s motion for summary
judgment). Therefore, U.S. Bank and MERS’ argument fails.
U.S. Bank and MERS next contend that “[c]learly, Alpert obtained the
[March 2019 stipulated order] so he could use it . . . to ‘appeal’ the 2011 Orders
he failed to timely appeal . . . [, and s]uch gamesmanship should not be
countenanced.” But as discussed, under RAP 2.2(d) and CR 54(b), the 2011
orders were not appealable when they were entered. Cf. Norquest/RCA-W Bitter
Lake P’ship v. City of Seattle, 72 Wash. App. 467, 472-75, 865 P.2d 18 (1994)
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No. 79747-6-I/14
(absent CR 54(b) certification, 1989 order addressing only liability and not
damages was not final and appealable until after damages were adjudicated two
years later). Furthermore, despite having received notice of this court’s 2012
ruling, which expressly referenced CR 54(b) and stated that Alpert’s appeal was
being dismissed as premature, U.S. Bank and MERS do not cite—much less
discuss—RAP 2.2(d) and CR 54(b) in their brief. Instead, they rely solely on
RAP 5.2(a) and cases applying it to support their contention that Alpert’s appeal
is untimely. Consequently, they have pointed us to no authority that persuades
us that Alpert’s appeal of the 2011 orders is untimely or that Alpert engaged in
gamesmanship not permitted by CR 54(b) and RAP 2.2(d).5 We thus reach the
5 The March 2019 stipulated order dismissed Alpert’s claims against Alice
without prejudice. We acknowledge that although an order of dismissal without
prejudice may have the effect of preventing a final judgment, it is not itself a final
judgment. See Munden v. Hazelrigg, 105 Wash. 2d 39, 44, 711 P.2d 295 (1985)
(“Where a dismissal without prejudice has the effect of determining the action
and preventing a final judgment or discontinuing the action, the dismissal is
appealable” under RAP 2.2(a)(3).). Nevertheless, U.S. Bank and MERS, who
rely solely on RAP 5.2(a) and do not address CR 54(b) or RAP 2.2(d), point us to
no authority supporting the proposition that a dismissal without prejudice of
claims against the sole remaining defendant cannot have the effect of a final
judgment with regard to earlier orders dismissing claims against other
defendants.
Furthermore, we find persuasive the reasoning employed by the Eighth
Circuit Court of Appeals in State ex rel. Nixon v. Coeur D’Alene Tribe, 164 F.3d
1102 (8th Cir. 1999). In Nixon, the State of Missouri sued two defendants, the
Coeur D’Alene Tribe and its contractor, UniStar Entertainment Inc. for conducting
internet gambling. Nixon, 164 F.3d at 1104. The trial court dismissed all of
Missouri’s claims against the Tribe as barred by tribal immunity, and there was
no certification of that dismissal for immediate appeal under the federal version of
CR 54(b). Nixon, 164 F.3d at 1105. Later, Missouri voluntarily dismissed its
claims against UniStar without prejudice and then appealed the court’s earlier
order dismissing the Tribe. Nixon, 164 F.3d 1105. The Tribe argued on appeal
that “a voluntary dismissal without prejudice of a remaining defendant . . . does
not render a previous order finally dismissing other defendants immediately
appealable.” Nixon, 164 F.3d 1105. The Eighth Circuit disagreed, observing that
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No. 79747-6-I/15
merits of the 2011 orders.
Standard of Review
Alpert contends that the trial court erred by dismissing his claims against
Aurora, MERS, and U.S. Bank.6 Alpert’s claims against Aurora and MERS were
dismissed pursuant to CR 12(b)(6), and his claims against U.S. Bank were
dismissed pursuant to CR 12(c). Under either rule, “[a] court may dismiss a
complaint . . . only if ‘it appears beyond doubt that the plaintiff cannot prove any
set of facts which would justify recovery.’” Didlake v. State, 186 Wash. App. 417,
422, 345 P.3d 43 (2015) (quoting Tenore v. AT&T Wireless Servs., 136 Wash. 2d
322, 329-30, 962 P.2d 104 (1998)). “The court must assume the truth of facts
alleged in the complaint, as well as hypothetical facts, viewing both in the light
most favorable to the nonmoving party.” Didlake, 186 Wash. App. at 422. But “[i]f
the trial court considered matters outside the pleadings, the reviewing court
treats a CR 12 motion as a motion for summary judgment under CR 56(c).”
Didlake, 186 Wash. App. at 422.
“the Tribe offers no suggestion as to when the order dismissing it would be
appealable. In other words, the Tribe seeks the windfall of complete freedom
from appellate review because [Missouri] failed to dismiss UniStar with prejudice.
A less equitable position is hard to imagine.” Nixon, 164 F.3d at 1105-06. Here,
as in Nixon, if we declined to treat the March 2019 stipulated order as a final
judgment rendering the 2011 orders appealable, it would be unclear when those
orders would be appealable, and U.S. Bank and MERS would receive “the
windfall of complete freedom from appellate review.” Nixon, 164 F.3d at 1106.
We will not sanction that result.
6 Alpert does not assign error to, or provide authority or argument with
regard to, the trial court’s decision to dissolve the permanent injunction.
Accordingly, we do not review that decision. We note, however, that when the
trial court initially granted the injunction, it did not order Alpert to make monthly
payments as required by RCW 61.24.130(1)(a). We direct the trial court’s
attention to that statute should Alpert seek another injunction on remand.
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No. 79747-6-I/16
Here, the trial court considered matters outside the pleadings when
considering both Aurora and MERS’ CR 12(b)(6) motion and U.S. Bank’s
CR 12(c) motion. Specifically, according to its order granting Aurora and MERS’
motion, the court considered “the files and pleadings herein.” (Emphasis added.)
Additionally, the court specifically listed, among the files it considered, the
exhibits attached to Aurora and MERS’ motion. These exhibits included the
allonge to the Note, the assignment of the deed of trust by which MERS assigned
the deed to Aurora, and the appointment of successor trustee by which Aurora
appointed Cal-Western as trustee. These documents were not referenced in
Alpert’s complaint.
Similarly, with regard to U.S. Bank’s motion, the court, according to its
own order, considered “the files and pleadings herein.” (Emphasis added.) And
the court specifically listed, among the files it considered, “Plaintiff’s Response
and additional documents filed by Plaintiff,” a clear reference to a declaration that
Alpert filed with his response to U.S. Bank’s motion. (Emphasis added.) For
these reasons, we treat Alpert’s appeal from the CR 12(b)(6) and CR 12(c)
dismissals of his claims as an appeal from summary judgment orders.
We review summary judgment orders de novo, and “[w]e may affirm on
any basis supported by the record.” Bavand v. OneWest Bank, 196 Wash. App.
813, 825, 385 P.3d 233 (2016). “[S]ummary judgment is appropriate where there
is ‘no genuine issue as to any material fact and . . . the moving party is entitled to
a judgment as a matter of law.’” Elcon Constr., Inc. v. E. Wash. Univ., 174
Wash. 2d 157, 164, 273 P.3d 965 (2012) (second alteration in original) (quoting CR
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56(c)).
Here, Alpert’s claims against each of the defendants consisted of a claim
for quiet title, an “equitable decree voiding any liens on the subject property,” and
declaratory relief as to the defendants’ standing to foreclose. As further
discussed below, we conclude that the trial court did not err by dismissing
Alpert’s claims for quiet title and equitable voiding of liens with regard to Aurora,
U.S. Bank, and MERS. The trial court also did not err by dismissing Alpert’s
claim for declaratory relief with regard to U.S. Bank and MERS. But because a
genuine issue of material fact remains as to whether Aurora is the holder of the
Note, we conclude that the trial court erred by dismissing Alpert’s claim for
declaratory relief with regard to Aurora.
Quiet Title
Quiet title actions are designed to resolve competing claims of ownership
or the right to possess property. Kobza v. Tripp, 105 Wash. App. 90, 95, 18 P.3d
621 (2001). But here, MERS, which assigned the deed of trust to Aurora, and
U.S. Bank, which never contended that it had an interest in the Property, did not
assert competing claims of ownership to the Property or a right to possess it.
And although Aurora asserted that it was the beneficiary of the deed of trust,
Alpert has cited no authority that such an interest alone is sufficient to sustain a
quiet title claim. Cf. RCW 7.28.230(1) (providing that mortgage of interest in real
property is not deemed a conveyance as to enable the owner of the mortgage to
recover possession without a foreclosure sale); RCW 7.28.300 (“The record
owner of real estate may maintain an action to quiet title against the lien of a . . .
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No. 79747-6-I/18
deed of trust . . . where an action to foreclose such . . . deed of trust would be
barred by the statute of limitations.” (emphasis added)). For these reasons, the
trial court did not err by dismissing Alpert’s claim for quiet title with regard to
Aurora, MERS, and U.S. Bank.
Equitable Voiding of Liens
Alpert asserted in his 2011 complaint that he was entitled to “[a]n
equitable decree voiding any liens on the subject property” held by Aurora,
MERS, and U.S. Bank. But he provides no argument or authority to support the
proposition that he is entitled to a remedy consisting of lien avoidance—or even
that there exists a genuine issue of material fact in this regard. Therefore, we
conclude that the trial court did not err by dismissing Alpert’s claim for an
equitable decree voiding any liens held by Aurora, MERS, and U.S. Bank.
Declaratory Relief
Alpert contends that the trial court erred by dismissing his claim for
declaratory relief with regard to the defendants’ standing to foreclose. As further
discussed below, there remains a genuine issue of material fact as to whether
Aurora was the holder of the Note. Therefore, the trial court erred by dismissing
Alpert’s claim for declaratory relief with regard to Aurora. The trial court did not
err, however, by dismissing Alpert’s claim for declaratory relief with regard to
U.S. Bank and MERS.
Under Washington’s deed of trust act (DTA), chapter 61.24 RCW, only a
lawful beneficiary may appoint a trustee to proceed with a nonjudicial foreclosure
of real property. Villegas v. Nationstar Mortg., LLC, 8 Wash. App. 2d 878, 889, 444
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P.3d 14, review denied, 194 Wash. 2d 1006 (2019). A “beneficiary” means “the
holder of the instrument or document evidencing the obligations secured by the
deed of trust.” RCW 61.24.005(2). The “holder” of a promissory note is, as
relevant here, “[t]he person in possession of a [note] that is payable . . . to
bearer.” RCW 62A.1-201(b)(21)(A); see also Bain v. Metro. Mortg. Grp., Inc.,
175 Wash. 2d 83, 104, 285 P.3d 34 (2012) (referring to Uniform Commercial Code
(UCC) to interpret the term “holder” as used in DTA). A note becomes payable to
bearer when it is indorsed in blank. RCW 62A.3-205(b). An “indorsement” is “a
signature . . . made on an instrument for the purpose of . . . negotiating the
instrument[ or] . . . restricting payment of the instrument.” RCW 62A.3-204(a).
An indorsement is made in blank when it does not identify a person to whom it
makes the note payable. RCW 62A.3-205(a)-(b). An indorsement that does
identify a person to whom it makes the note payable is a “special indorsement.”
RCW 62A.3-205(a). When a note is specially indorsed, it “becomes payable to
the identified person and may be negotiated only by the indorsement of that
person.” RCW 62A.3-205(a). By contrast, “[w]hen indorsed in blank, a[ note] . . .
may be negotiated by transfer of possession alone until specially indorsed.”
RCW 62A.3-205(b).
Here, Aurora asserted below that it was the holder of the Note because
(1) it was in possession of the Note and (2) the Note was indorsed in blank.
Specifically, Aurora asserted that the Note was negotiated as follows: “[T]he
subject Note was first made payable to Homecomings . . . . The Note was then
endorsed payable to Residential Funding Corporation. Subsequently Residential
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Funding Corporation executed an Allonge, endorsing the Note in blank.”
(Citations omitted.) In other words, Aurora relied on the allonge to contend that
the Note was indorsed in blank.
But as Alpert correctly points out, to constitute a valid indorsement, an
allonge must be “affixed” to the note. See RCW 62A.3-204(a) (“‘Indorsement’
means a signature . . . made on an instrument . . . . For the purpose of
determining whether a signature is made on an instrument, a paper affixed to the
instrument is a part of the instrument.” (emphasis added)). The UCC does not
define “affix,” but the dictionary definition of “affix” is “to attach physically (as by
nails or glue).” WEBSTER’S THIRD NEW INTERNATIONAL DICTIONARY 36 (2002); see
also Nissen v. Pierce County, 183 Wash. 2d 863, 881, 357 P.3d 45 (2015) (court
may use dictionary to discern plain meaning of undefined statutory terms).7
Here, Aurora presented no evidence—not even a declaration—to establish that
the allonge was physically attached to the Note.8 Furthermore, the evidence in
the record, when viewed in the light most favorable to Alpert, indicates otherwise:
7 There appear to be no reported Washington cases interpreting the term
“affix” as used in RCW 62A.3-204(a). However, we observed in an unpublished
decision that “[a] separate paper, or one pinned or clipped to the [instrument], will
not suffice.” Fierro v. BSI Fin. Servs., No. 73016-9-I, slip op. at 7 (Wash. Ct. App.
Nov. 16, 2015) (unpublished), http://www.courts.wa.gov/opinions/pdf/730169.pdf
(citing 7 W ARREN L. SHATTUCK & RICHARD COSWAY, W ASHINGTON PRACTICE,
UNIFORM COMMERCIAL CODE FORMS § 3-205 form 2, at 702 (Supp. 2019)).
Because the parties do not adequately brief the issue and because its
resolution is not necessary to resolve this appeal, we express no opinion as to
the degree of physical attachment required to satisfy the affixation requirement
set forth in RCW 62A.3-204(a).
8 Aurora pointed out below that the allonge itself states, “‘For purposes of
further endorsement of the following described Note, this allonge is affixed and
becomes a permanent part of said Note.’” But this statement does not establish
that the allonge was in fact physically attached to the Note.
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For example, Alpert declared that the first time he became aware of the allonge
was when it was produced in litigation and that it was not included with either
version of the Note previously supplied to him by Cal-Western and Aurora.
Therefore, a genuine issue of material fact remains as to whether the allonge
constitutes a valid indorsement. If it does, then the Note is indorsed in blank and
Aurora can establish its standing to foreclose solely based on its possession of
the Note. But if it does not, the Note remains indorsed to Residential Funding
Corporation and Aurora’s mere possession of the Note does not establish its
standing to foreclose. For these reasons, a genuine issue of material fact
remains as to whether Aurora has standing to foreclose.
U.S. Bank and MERS disagree and contend that the trial court correctly
determined that Aurora demonstrated standing. In support of their contention,
they point out that Aurora presented the original Note to the trial court, as
memorialized by the trial court’s notation on its order granting Cal-Western’s
motion for summary judgment. But that notation does not indicate whether the
trial court also considered the allonge—much less resolve the issue of whether
the allonge was affixed to the Note. Therefore, U.S. Bank and MERS’ contention
fails. And because U.S. Bank and MERS do not present any theory other than
Aurora’s possession of the Note to support Aurora’s standing, we conclude that
the trial court erred by dismissing Alpert’s declaratory relief claim against Aurora.
We turn next to the trial court’s dismissal of Alpert’s declaratory relief
claims against MERS and U.S. Bank. “In order to decide an action for
declaratory relief, a justiciable controversy must be present.” Benton County v.
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Zink, 191 Wash. App. 269, 277, 361 P.3d 801 (2015). A justiciable controversy
requires
“(1) . . . an actual, present and existing dispute, or the mature
seeds of one, as distinguished from a possible, dormant,
hypothetical, speculative, or moot disagreement, (2) between
parties having genuine and opposing interests, (3) which involves
interests that must be direct and substantial, rather than potential,
theoretical, abstract or academic, and (4) a judicial determination of
which will be final and conclusive.”
To-Ro Trade Shows v. Collins, 144 Wash. 2d 403, 411, 27 P.3d 1149 (2001)
(alteration in original) (quoting Diversified Indus. Dev. Corp. v. Ripley, 82 Wash. 2d
811, 815, 514 P.2d 137 (1973)).
Here, neither MERS nor U.S. Bank asserted any standing to foreclose.
Accordingly, there was no justiciable controversy supporting a claim for
declaratory relief, and thus, the trial court did not err by dismissing Alpert’s
declaratory relief claim against MERS and U.S. Bank.
Alpert contends that dismissal of U.S. Bank was inappropriate for two
reasons: first, because “it relies on the proposition that the Aurora ruling is
correct” and second, because “the court . . . failed to consider the ever-shifting
representations made by [U.S. Bank], and on its behalf by Aurora, its appointed
representative, identifying it first as ‘owner’ of [the Note] . . . , and subsequently
eschewing any claim of ownership whatsoever.” But as discussed, because U.S.
Bank did not assert any standing to foreclose, there was no justiciable
controversy supporting declaratory relief as to U.S. Bank, regardless of the trial
court’s ruling as to Aurora. For the same reason, U.S. Bank’s allegedly “ever-
shifting representations” regarding ownership of the Note are irrelevant. Cf.
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Villegas, 8 Wash. App. 2d at 890 (“The holder of the note is not necessarily the
owner, and a holder does not need to own a note to enforce the note.”).
Alpert also argues that dismissal of U.S. Bank was inappropriate because
CR 12(c) motions are made after the pleadings are closed, but Alice had not yet
filed an answer when U.S. Bank filed its CR 12(c) motion to dismiss. But U.S.
Bank had filed its answer, and Alpert cites no authority for the proposition that a
CR 12(c) motion cannot be entertained until all defendants have answered.
Therefore, Alpert’s argument is unpersuasive.
As a final matter, Alpert argues, as an alternate basis for reversal, that he
presented evidence of fraud on the part of the defendants. Specifically, he points
out that although the copy of the Note filed with the notice of trustee’s sale was
indorsed in blank, the copy he later received from Aurora was indorsed to
Residential Funding Corporation. He asserts that the Note was initially indorsed
to Residential Funding Corporation and that Aurora later “whited out” the text
“Residential Funding Corporation” to make it appear that the Note was indorsed
in blank. To support this assertion, Alpert points to a declaration in which he
stated, “I held both copies of the signature page of the two notes up to the light,
and it looked like the name ‘Residential Funding Corporation’ had been whited
out on the first version. That is because the residue of previous writing is clearly
evident on the first version.”
But according to the Bennett declaration, Homecomings transferred the
Note on August 30, 2006, just two days after the date of the Note. As evidence
of this transfer, Bennett attached a copy of the Note with a blank indorsement by
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Homecomings. The existence of another copy of the Note showing a stamped
indorsement to Residential Funding Corporation and the existence of the allonge
(whether valid or not) merely indicate that Residential Funding Corporation later
negotiated the Note. See RCW 62A.3-205(c) (“The holder may convert a blank
indorsement that consists only of a signature into a special indorsement by
writing, above the signature of the indorser, words identifying the person to whom
the instrument is made payable.”). Alpert’s assertion that Aurora “whited out” the
Residential Funding Corporation stamp is entirely speculative. So, too, is his
assertion about the “residue of previous writing,” particularly where Alpert was
not inspecting the original Note, but merely comparing copies thereof. These
assertions do not create a genuine issue of material fact and thus do not support
reversal. See Seven Gables Corp. v. MGM/UA Entm’t Co., 106 Wash. 2d 1, 13, 721
P.2d 1 (1986) (Speculation and “argumentative assertions that unresolved factual
issues remain” are insufficient to create a genuine issue of material fact.).
Fees on Appeal
U.S. Bank and MERS contend that they are entitled to attorney fees under
RAP 18.9 because Alpert’s appeal is frivolous. But their argument regarding the
frivolity of Alpert’s appeal rests almost entirely on their assertion that Alpert’s
appeal is untimely. That assertion is not, as evidenced by our discussion above,
devoid of merit. Therefore, we deny the request for fees on appeal. Cf. Streater
v. White, 26 Wash. App. 430, 434, 613 P.2d 187 (1980) (appeal is frivolous where it
“presents no debatable issues and is so devoid of merit that there is no
reasonable possibility of reversal”).
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We reverse the trial court’s dismissal of Alpert’s declaratory relief claim as
to Aurora’s standing to foreclose and remand for further proceedings with regard
to that claim. Otherwise, we affirm.
WE CONCUR:
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