Carter v. PNC Bank, 81698-5-I
| Decision Date | 20 December 2021 |
| Docket Number | 81698-5-I |
| Court | Washington Court of Appeals |
| Parties | MARK and DAINA CARTER, husband and wife, Appellants, v. PNC BANK, NATIONAL ASSOCIATION, Respondent. |
UNPUBLISHED OPINION
The Carters sued to quiet title to their home. They sought to extinguish the deed of trust lien held by PNC Bank on the basis that the statute of limitations had run and that the deed of trust was no longer enforceable. The trial court granted summary judgment for PNC Bank. The Carters sold the house and paid off the lien. The Carters seek reversal of the summary judgment quieting title in their favor, and remand to recoup the amount they paid to obtain a release of the lien in order to close the sale. We affirm.
Mark and Daina Carter owned their residence on 170th Avenue Southeast in Bellevue, Washington. Using this property as collateral, they took out a second mortgage of $350, 000 with National City Bank. They signed both a promissory note on August 24, 2006 and a deed of trust on August 29, 2006 to secure payment on the note. The recorded deed of trust was a lien on the property. The promissory note stated a draw period of 10 years, with monthly billings. The deed of trust included a maturity date of August 24 2036. PNC Bank National Association (PNC Bank) acquired this loan around October 2008.
The Carters filed for Chapter 7 bankruptcy on April 27, 2012 in the United States Bankruptcy Court for the Western District of Washington. The bankruptcy petition included the deed of trust. PNC Bank had not commenced either a judicial or a nonjudicial foreclosure of the property.
The Carters' bankruptcy proceedings closed without discharge on August 14, 2012. They petitioned to reopen the bankruptcy was granted on August 20, 2012.[1] Also on August 20, 2012, the bankruptcy court discharged the debtors. Following the discharge, additional proceedings occurred.
Years after the discharge, on April 4, 2017, the Carters filed a motion to abandon property of the bankruptcy estate. On June 22, 2017, the bankruptcy court granted the motion, finding the property was abandoned from the bankruptcy estate pursuant to 11 U.S.C. § 554(b).
The Carters filed a quiet title action in superior court on February 5, 2019. In the complaint, the Carters state that they made no payments on the debt secured by the deed of trust after the bankruptcy filing. They claim that PNC Bank had failed to enforce its deed of trust within the six year statute of limitations following the August 20, 2012 bankruptcy discharge. The Carters and PNC Bank filed competing motions for summary judgment. The Carters also moved to strike a declaration by the bankruptcy trustee's lawyer, Kathryn Ellis, which PNC Bank used for support to show that the property remained part of the bankruptcy estate.[2]The Carters argued that Ellis's declaration was inadmissible because it contained legal conclusions.
In its motion for summary judgment, PNC Bank argued that the statute of limitations had not run.[3] It argued that the statute of limitations was tolled by the bankruptcy filing, and the property remained part of the bankruptcy estate until it was abandoned in 2017.[4]
The court denied the Carters' motion for summary judgment. It concluded that the Carters' quiet title claim to their property failed, because the home remained part of the bankruptcy estate until abandoned in 2017. The court also determined that the statute of limitations had not yet run thus giving PNC Bank a right to foreclose. The trial court granted PNC Bank's motion for summary judgment on June 22, 2020. The Carters' motion to reconsider was denied on July 20, 2020. The Carters appealed the motion for summary judgment on July 22, 2020.
The Carters then asked PNC Bank to remove its lien so the Carters could close the sale on their house and pursue an appeal. The Carters had listed the property for sale because they were "unable to sustain [their] mortgage payments." Mark[5] stated in his declaration that PNC Bank had not responded to their request to remove the lien as of the closing date of July 23, 2020. The Carters asked the trial court, on July 28, 2020, to authorize the property sale proceeds to be paid into the court registry in lieu of a supersedeas bond to stay enforcement of the summary judgment. The Carters also asked the trial court to order PNC Bank to release the lien. The trial court denied this request on July 31, 2020, stating, The court also directed the parties to meet and confer on a plan where the Carters would be allowed to sell their home on the private market and pay PNC Bank in full for the lien value.
On August 21, 2020, the Carters amended their appeal to appeal both the summary judgment and the order to meet and confer with PNC Bank. The Carters concede that they have already sold their property and paid PNC Bank.
The Carters attempted to quiet title on the Bellevue property on the basis that their deed of trust with PNC Bank was not enforceable. After summary judgment was granted to PNC Bank the Carters received an offer on their house. The evidence shows the offer had a closing date of July 23, 2020. Mark said, "All paperwork is signed, and the escrow company is prepared to close the transaction." PNC Bank's opposition to the Carters' motion to deposit proceeds and release the lien stated, "The Carters have sold their multi-million dollar home and have significant equity in the property." The Carters' say they "have already paid PNC and the property has been sold."
Because the Carters sold the property and they are not title holders, we cannot quiet title in their favor. Therefore, this issue is moot.[6]
The Carters asked the court to authorize the property sale proceeds to be paid into the court registry in lieu of a supersedeas bond to stay enforcement of the summary judgment.[7] In response to this request, the trial court ordered the parties "to meet and confer to develop a plan by which a) [PNC Bank is] paid in full the face value of its lien; and b) [the Carters] are able to sell their home on the private market, which may generate a higher sale price than a sale by foreclosure." The Carters claim that ordering them "to pay the de facto judgment in full" deprived them of an opportunity to "present a defense to this sua sponte judicial foreclosure," and violated their right to due process.[8]
The due process clauses of the Fourteenth Amendment and the Washington State Constitution provide that a state cannot deprive any person of life, liberty or property without due process. U.S. Const. amend. XIV, § 1; Wash. Const. Art. I § 3. "The fundamental requisites of due process are 'the opportunity to be heard,' and 'notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.'" Olympic Forest Prods., Inc. v. Chaussee Corp., 82 Wn.2d 418, 422, 511 P.2d 1002 (1973) (citations omitted) (quoting Grannis v. Ordean, 234 U.S. 385, 394, 34 S.Ct. 779, 58 L.Ed. 1363 (1914); Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 94 L.Ed. 865 (1950)).
In granting summary judgment for PNC Bank, the trial court had to have determined that PNC Bank had a valid and enforceable lien on the property. When the court denied the Carters a motion to deposit proceeds into the court registry, it treated PNC Bank's lien as valid. Without filing a supersedeas bond, the Carters did not stay PNC Bank's right to enforce the deed of trust against their property pending the appeal. See Guest, 195 Wn.App. at 338 ("[W]hen a supersedeas bond is filed, the judgment cannot be enforced."). To pass clear title to a buyer upon sale of the property, the Carters needed to satisfy PNC Bank's lien.[9] See Carpenter v. Folkerts, 29 Wn.App. 73, 77, 627 P.2d 559 (1981) (). Because of the summary judgment, PNC Bank had the right to enforce its lien, and the Carters chose to pay off the lien in order to establish clear title of the property. The bank did not order the Carters to sell their property, or order them to satisfy the lien without selling the property. The order to meet and confer did not take anything away from the Carters or impose any new substantive obligations. The Carters participated fully in the summary judgment proceedings. The trial court's order did not violate due process.
B. Ultra Vires
The Carters argue that the trial court acted ultra vires, [10] or outside of its authority, by ordering them to pay PNC Bank in full.[11] They request "remand to the trial court with directions to enter a judgment against PNC [Bank]." PNC Bank responds by stating that the trial court acted within its authority, as it did not order the Carters to pay PNC Bank, or order a judicial foreclosure. It argues further that the Carters cannot "claw back the amount they paid to satisfy PNC [Bank]'s lien," as this would be barred by the voluntary payment doctrine.
Citing RAP 7.2, the Carters argue that the trial court acted outside of its authority.[12] The Carters argue that the trial court did not have authority to order them to pay PNC Bank its lien in full out of the property sale proceeds.
RAP 7.2(e) contains a list of actions that trial courts are authorized to take after...
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