Lyons v. U.S. Bank Nat'l Ass'n
| Decision Date | 30 October 2014 |
| Docket Number | No. 89132–0.,89132–0. |
| Citation | 181 Wash.2d 775,336 P.3d 1142 |
| Court | Washington Supreme Court |
| Parties | Winnie LYONS, a single person, Appellant, v. U.S. BANK NATIONAL ASSOCIATION, as trustee for Stanwich Mortgage Loan Trust Series 2012–3, by Carrington Mortgage Services, LLC; Wells Fargo Bank, N.A., a chartered national bank; Wells Fargo Bank, N.A., as servicer, Defendants, and Northwest Trustee Services, Inc., as trustee, Respondent. |
Mary Conception Anderson, Guidance To Justice Law Firm, Inc, Bellevue, WA, Melissa Ann Huelsman, Law Offices of Melissa A. Huelsman, Seattle, WA, for Appellant.
Joshua Saul Schaer, Routh Crabtree Olsen, P.S., Bellevue, WA, for Respondent.
Ann T. Marshall, Bishop Marshall & Weibel PS, Katie A. Axtell, Bishop White Marshall & Weibel, P.S. Seattle, WA, Amicus Curiae on behalf of United Trustees Association.
Sheila M. O'Sullivan, Northwest Consumer Law Center, Audrey L. Udashen, Northwest Consumer Law Center, Seattle, WA, Amicus Curiae on behalf of Northwest Consumer Law Center.
Eulalia Sotelo, Thomas William McKay, Attorney at Law, Seattle, WA, Lisa Marie Von Biela, Lisa M. Von Biela, Issaquah, WA, Amicus Curiae on behalf of Northwest Justice Project.
John Matthew Geyman, Columbia Legal Services, Seattle, WA, Amicus Curiae on behalf of Columbia Legal Services.
Kimberlee L. Gunning, Shannon E. Smith, Office of the Attorney General, Seattle, WA, Amicus Curiae on behalf of Attorney General.
¶ 1 Winnie Lyons brought suit against Northwest Trustee Services Inc. (NWTS) based on its conduct as the trustee during foreclosure. Lyons alleged violations of the deed of trust act (DTA), chapter 61.24 RCW; violations of the Consumer Protection Act (CPA), chapter 19.86 RCW; and the intentional infliction of emotional distress. First, this case asks whether a plaintiff can even bring a cause of action for damages under the DTA or the CPA in the absence of an actual sale of the property. It then asks whether the trial court erred by granting summary judgment in favor of NWTS on all three claims. We affirm the trial court's grant of summary judgment on the DTA and the intentional infliction of emotional distress claims, but we reverse and remand the CPA claim to the trial court.
¶ 2 In August 2007, Winnie Lyons signed a promissory note secured by a deed of trust encumbering real property in Burien, Washington. The Burien property is Lyons' primary residence and also the location from which she operates an adult family home (AFH),1 her sole source of income. Wells Fargo Bank NA was identified on the deed of trust as the lender and beneficiary. Northwest Trustee Services LLC was identified as the trustee. The deed of trust was recorded on August 31, 2007 in King County. In early 2009, Northwest Trustee Services LLC became NWTS and Wells Fargo recorded an appointment of successor trustee naming NWTS as the successor trustee.
¶ 3 In October 2009, an employee of Wells Fargo executed a beneficiary declaration identifying Wells Fargo as trustee for Soundview Home Loan Trust 2006. This beneficiary declaration asserted, “Wells Fargo Bank, NA, as Trustee for Soundview Home Loan Trust 2006–WFI is the actual holder of the promissory note or other obligation evidencing the above-referenced loan or has requisite authority under RCW 62A.3–301 to enforce said obligation.” Clerk's Papers (CP) at 120. In June 2010, another beneficiary declaration was executed by an employee of Wells Fargo. It read, “Wells Fargo Bank, NA, is the actual holder of the promissory note or other obligation evidencing the above-referenced loan or has requisite authority under RCW 62A.3–301 to enforce said obligation.” CP at 118.
¶ 4 In October 2011, Lyons filed bankruptcy, and in January 2012 she applied for a loan modification with Wells Fargo. On March 30, 2012, while Lyons was waiting for a response regarding her application for a modification, she received a notice of trustee's sale from NWTS informing her that her property was scheduled to be sold on July 6, 2012. On April 5, 2012, Wells Fargo told Lyons' attorney that the in-house modification had been approved. On April 19, 2012, Lyons received the letter confirming the modification. The terms required her to pay $10,000 by May 1, 2012. Wells Fargo informed Lyons they would discontinue the sale upon receipt of this payment. She paid this amount to Wells Fargo as required.
¶ 5 However, on March 29, 2012, Wells Fargo had sold Lyons' loan to U.S. Bank National Association as trustee for Stanwich Mortgage Loan Trust Series 2012–3 with Carrington Mortgage Services LLC as the new servicer of the loan. This was to become effective on May 1, 2012. NWTS received notice of the sale and service release on April 12, 2012. Lyons received notice of this sale on April 26, 2012.
¶ 6 On April 26, 2012, Lyons' attorney spoke with a representative of NWTS to inform it that Wells Fargo no longer had any beneficial interest in the loan after the sale, that Carrington was the new servicer of the loan, and that Lyons had received a loan modification so she was no longer in default. On June 11, 2012, Lyons' attorney again called NWTS to inform them of the loan modification and the sale of the loan. A NWTS employee informed her that Carrington had directed NWTS to continue with the foreclosure sale as scheduled. On June 14, 2012, Lyons' attorney called Carrington and an employee indicated that Carrington did not show the property in foreclosure status. Another employee further indicated that Carrington had not told NWTS to go forward with the sale. Lyons' attorney then sent a cease and desist letter to NWTS and Carrington.
¶ 7 On June 18, 2012, Lyons' attorney followed up with NWTS. NWTS acknowledged receipt and informed her the sale was still on but that the matter had been referred to an attorney for NWTS. On June 19, 2012, the attorney for NWTS informed Lyons' attorney that he needed to do his due diligence. Lyons' attorney again spoke with NWTS' attorney on June 21, 2012. NWTS' attorney refused to discontinue the sale, and Lyons' attorney filed the complaint. At the end of the day on June 21, 2012, NWTS executed and recorded a notice of discontinuance of the trustee's sale.2
¶ 8 Lyons alleges that this situation has had serious emotional and economic impacts on her. In March 2012, Lyons arrived home to be handed the notice of trustee's sale by a family member of one of her full pay AFH clients. In addition to the sense of humiliation Lyons felt, this client moved out approximately two weeks later because of concern that Lyons was going to lose her business and her home. Before leaving, this client shared her belief that the home was going to be foreclosed on with other AFH clients, some of whom also moved shortly thereafter. The AFH business is her primary source of income, and the loss of clients directly impacted her financially. In her declaration, Lyons asserts that thereafter she struggled with day-to-day tasks and felt hopeless. She began counseling with the pastor of her church. Her pastor said that previously Lyons was a very positive woman with a drive to succeed, but since the pending foreclosure she was fearful and depressed. Lyons asserts that she experienced constant nausea from the stress and continuously worried about losing her business and the subsequent homelessness of herself, her son, and the elderly clients she cared for.
¶ 9 NWTS moved for summary judgment. After argument, the court granted the motion for summary judgment as to all claims against NWTS. Subsequently, Lyons and the remaining defendants (Stanwich, Carrington, and Wells Fargo) entered a stipulated order of dismissal. Lyons' motion for reconsideration of the order of summary judgment was denied. We granted Lyons' petition for direct review.
¶ 10 1. If a nonjudicial foreclosure sale does not happen, can a plaintiff bring a claim for damages under the DTA or the CPA?
¶ 11 2. Was the grant of summary judgment against Lyons on her CPA claim improper?
¶ 12 3. Was the grant of summary judgment against Lyons on her intentional infliction of emotional distress claim improper?
¶ 13 Lyons alleges a range of errors by the trial court that resulted from it granting summary judgment in favor of NWTS. We review questions of law and summary judgment rulings de novo. Dreiling v. Jain, 151 Wash.2d 900, 908, 93 P.3d 861 (2004) ; Reid v. Pierce County, 136 Wash.2d 195, 201, 961 P.2d 333 (1998). “In reviewing an order of summary judgment, we engage in the same inquiry as a trial court.” Reid, 136 Wash.2d at 201, 961 P.2d 333. We interpret all the facts and inferences therefrom in favor of Lyons, the nonmoving party. Id. Summary judgment is appropriate only if the record demonstrates there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Id.
¶ 14 Lyons alleges three causes of action against NWTS—one under the DTA, one under the CPA, and one for intentional infliction of emotional distress. All of these claims are supported by the same underlying conduct that Lyons alleges involves a violation of RCW 61.24.030(7) in relation to the beneficiary declaration and a breach of the duty of good faith under RCW 61.24.010(4). The trial court focused on the issue of whether Lyons could bring a claim for damages under the DTA in the absence of a trustee's sale, and there was almost no discussion of the CPA or the intentional infliction of emotional distress claims during argument on the summary judgment motion. Yet, the court granted NWTS' motion on all of these claims. We begin by addressing the causes of action under the DTA and the CPA, including Lyons' particular contentions regarding the beneficiary declaration and breach of the duty of good faith. We then address the cause of action for intentional infliction of emotional distress.
A. Without a nonjudicial foreclosure sale, a party may not bring a claim for damages under the DTA,...
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