Arneson v. Gary Nordlund & Aldente, LLC
| Decision Date | 30 March 2015 |
| Docket Number | No. 71148-2-I,71148-2-I |
| Court | Washington Court of Appeals |
| Parties | PENNY ARNESON fka PENNY ARNESON SWEET, on behalf of herself personally and on behalf of The 6708 Tolt Highlands Personal Residence Trust, Appellant, v. GARY NORDLUND and ALDENTE, LLC, Respondents, MFE, LLC; COLUMBIA NORTH WEST MORTGAGE; MARK D. FLYNN; L80 COLLECTIONS, LLC; MCGAVICK GRAVES, P.S.; and DOE DEFENDANTS 1 through 20, inclusive, Defendants. |
RICHARD D. JOHNSON,
Court Administrator/Clerk
Richard Llewelyn Jones
Kovac & Jones, PLLC
1750 112th Ave NE Ste D151
Bellevue, WA, 98004-3768
rlj@kovacandjones.com
Brian Matthew King
Davies Pearson PC
920 Fawcett
PO Box 1657
Tacoma, WA, 98401-1657
bking@dpearson.com
Ingrid Linnea Daun McLeod
Davies Pearson, P.C.
PO Box 1657
Tacoma, WA, 98401-1657
imcleod@dpearson.com
Richard B Sanders
Goodstein Law Group
501 S G St
Tacoma, WA, 98405-4715
rsanders@goodsteinlaw.com
Gary Michael Abolofia
Attorney at Law
3518 142nd PI NE
Bellevue, WA, 98007-3232
gma_law@hotmail.com
King County, Cause No. 12-2-01170-2.SEA
Enclosed is a copy of the opinion filed in the above-referenced appeal which states in part:
"Affirmed in part, reversed in part, and remanded."
Counsel may file a motion for reconsideration within 20 days of filing this opinion pursuant to RAP 12.4(b). If counsel does not wish to file a motion for reconsideration but does wish to seek review by the Supreme Court, RAP 13.4(a) provides that if no motion for reconsideration is made, a petition for review must be filed in this court within 30 days. The Supreme Court has determined that a filing fee of $200 is required.
In accordance with RAP 14.4(a), a claim for costs by the prevailing party must be supported by a cost bill filed and served within ten days after the filing of this opinion, or claim for costs will be deemed waived.
Should counsel desire the opinion to be published by the Reporter of Decisions, a motion to publish should be served and filed within 20 days of the date of filing the opinion, as provided by RAP 12.3 (e).
Sincerely,
/s/
Richard D. Johnson
Court Administrator/Clerk
jh
Enclosure
c: The Honorable Richard Eadie
UNPUBLISHED OPINION
DWYER, J. — The 6708 Tolt Highlands Personal Residence Trust obtained loans from Aldente, LLC and Gary Nordlund in 2009 and 2010, respectively. This lawsuit, brought by Penny Arneson, one of the trustors of the Trust and one of two co-trustees at the time of the loans, is related to these loan transactions. Arneson asserts claims, both in her individual capacity and as co-trustee, pursuant to the Consumer Loan Act and the usury act, alleging that the lenders were not licensed to make the loans and that the loan interest rates exceeded rates allowed by statute. In separate orders, the trial court granted summary judgment in favor of each lender. Arneson appealed from each order. Asconcerns the claims of the Trust, we reverse both of them. As concerns Arneson's individual claims, we affirm each of them.
Arneson and her then-husband, Kenneth Sweet, established the 6708 Tolt Highlands Personal Residence Trust on October 31, 2006.1 From its formation, Arneson and Sweet were both trustors and trustees of the Trust. The sole beneficiary of the Trust was another entity, the Rose Adorer Family Limited Partnership (the Partnership). Additionally, the Trust instrument granted Arneson and Sweet the discretion to designate additional beneficiaries of the Trust, so long as the additional designated beneficiary was one of their children or grandchildren. The trust instrument did not grant Arneson and Sweet the authority to designate themselves as trust beneficiaries.
The trust instrument did grant Arneson and Sweet broad discretionary powers in their capacities as trustees, including borrowing and encumbrance powers.
The Trustees may borrow money upon such terms and conditions as it shall deem advisable . . . .
The Trustees shall have the power to obligate the trust property for the repayment of any sums borrowed where the best interests of the beneficiaries have been taken into consideration.
The Trustees shall have the power to encumber the trust property, in whole or in part, by a mortgage or mortgages, deeds of trust, or by pledge, hypothecation or otherwise, even though such encumbrance may continue to be effective after the term of any trust or trusts created in this agreement.
These discretionary powers were required to "be exercised by the Trustees solely in a fiduciary capacity and subject always to the Trustees' fiduciary obligations."
Shortly after the Trust's formation, third party sellers conveyed title to real property located at 6708 Highlands Road NE in Carnation, Washington (the Property) directly to the Trust. Although the Trust was officially named the "6708 Tolt Highlands Personal Residence Trust," the Trust instrument makes no other reference to the Property. Moreover, the Trust instrument makes no provision for Arneson or Sweet to occupy the Property. Nonetheless, Arneson, Sweet, and their children apparently did occupy the Property.
In 2009, Sweet was arrested on suspicion of sexually abusing one of Arneson's children.2 Arneson filed for divorce immediately after Sweet's arrest.3 This turmoil was the backdrop for the loans at the center of this case.
In May of 2009, Sweet arranged for a loan through Aldente, LLC (Aldente) in the amount of $200,000.00. The loan was approved by the superior court and was to be secured by a deed of trust against the subject Property. The proceeds of the loan were to be used to pay living expenses, spousal maintenance, child support, taxes, divorce and criminal lawyers, and other family expenses.
On May 19, 2009, the loan with Aldente closed. According to the loan agreement, "The purpose of the loan is for a cash-out refinance of the real property owned by Borrower." The loan documents included a promissory note, which obligated the Trust, with Arneson and Sweet as guarantors, to repay thesum of $200,000.00 at the rate of 10 percent per annum and to be paid in full on or before November 1, 2010. The closing of the Aldente loan is evidenced by a HUD-I settlement statement. According to entries on this form, in addition to the 10 percent interest rate called for in the promissory note, Aldente received an additional "loan fee" of 3 percent, thus making the effective interest rate 13 percent. Arneson alleges that additional "loan payments" were withheld as well.
In January of 2010, Sweet arranged for a second loan, this from Nordlund, in the amount of $375,000.00. Sweet arranged for this loan with the assistance of mortgage broker Mark Flynn, who was an acquaintance of Nordlund and who approached Nordlund regarding loaning funds to the Trust. This loan was also approved by the superior court, in orders dated October 15, 2009, November 17, 2009, and January 13, 2010. Repayment of this loan was to be secured by a deed of trust against the subject Property. The proceeds of the loan were to be used to satisfy the Aldente loan and fund various of Sweet's personal expenses.
On January 15, 2010, the Nordlund loan closed. The loan documents included a promissory note, whereby the Trust was obligated to repay the sum of $375,000.00 at the rate of 12 percent per annum and to be paid in full on or before January 15, 2011. The promissory note states that the "sums represented by [the] Note are being used for business, investment or commercial proposes, and not for personal, family or household purposes." Arneson and Sweet separately initialed this provision. The closing of the Nordlund loan is evidenced by a HUD-I settlement statement. According to entries on this form, in addition to the 12 percent interest rate called for in the promissory note, charges for makingthe loan added an additional "loan fee" of 16 percent. Also according to entries on this form, Sweet's divorce lawyer and his criminal defense lawyer were paid directly from escrow, as was a parenting evaluator. The balance of the funds, to the "borrower," was paid directly to Sweet. Nordlund would have had to approve these disbursements through escrow instructions.
On January 19, 2011, the superior court in the Arneson and Sweet dissolution action entered a decree of dissolution that provided
All principal and interest accrued were due in full on the Nordlund loan on January 15, 2011. After the Trust failed to fulfill its obligation on the loan, Nordlund made a demand on Arneson for payment of the Trust's loan. When the Trust still had not fulfilled its loan obligations to Nordlund by August 2011—nearly eight months after all principal and interest were due in full—Nordlund issued a notice of default to the Trust. Nordlund issued an amended notice of default for the Trust's debt, plus attorney fees and costs, in September 2011 and, eventually, a successor trustee to the deed of trust provided the Trust with notice of foreclosure under chapter RCW 61.24 and recorded a notice of trustee's sale.
The trustee's sale of the Property was scheduled to occur on February 3, 2012. Shortly before the sale, Arneson filed this lawsuit seeking to enjoin the trustee's sale of the Property and recover damages. In her amended complaint,Arneson alleged violations of the Consumer Loan Act, the usury act, the Consumer Protection Act, the deeds of trust act, and asserted common law claims for intentional or negligent misrepresentation. The trial court granted Arneson's request for a preliminary injunction and, thus, the trustee's sale of the Property scheduled for February 3, 2012 was cancelled. Instead, the Trust was ordered to proceed with marketing and selling the Property and to deposit the sale proceeds into the court registry.
In support of her claims for recovery, Arneson argued that she and...
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