Jackson v. Quality Loan Serv. Corp. of Wash.

Decision Date06 April 2015
Docket NumberNo. 72016–3–I.,72016–3–I.
Citation347 P.3d 487,186 Wash.App. 838
CourtWashington Court of Appeals
PartiesSandra Shelley JACKSON, a single woman, Appellant, v. QUALITY LOAN SERVICE CORPORATION of Washington, a Washington Corporation, Mortgage Electronic Registration System Inc., McCarthy & Holthus, LLP, a Washington Limited Liability Partnership, U.S. Bank, National Association as trustee for WAMU Mortgage Pass Through Certificate for WMALT 2006–AR4 Trust Investors in WMALT 2006–AR4 Trust c/o J.P. Morgan Bank, NA, Respondents.

186 Wash.App. 838
347 P.3d 487

Sandra Shelley JACKSON, a single woman, Appellant
v.
QUALITY LOAN SERVICE CORPORATION of Washington, a Washington Corporation, Mortgage Electronic Registration System Inc., McCarthy & Holthus, LLP, a Washington Limited Liability Partnership, U.S. Bank, National Association as trustee for WAMU Mortgage Pass Through Certificate for WMALT 2006–AR4 Trust Investors in WMALT 2006–AR4 Trust c/o J.P. Morgan Bank, NA, Respondents.

No. 72016–3–I.

Court of Appeals of Washington, Division 1.

April 6, 2015.


347 P.3d 489

Scott Erik Stafne, Joshua Bruce Trumbull, Emily Anne Harris, Stafne Trumbull, LLC, Arlington, WA, for Appellant.

Robert Joseph Bocko, Attorney at Law, Daniel J. Park, Legros Buchanan & Paul, Fred B. Burnside, Zana Zahra Bugaighis, Davis Wright Tremaine LLP, Seattle, WA, Kathryn P. Salyer, Eleanor A. Dubay, Tomasi Salyer Baroway, Portland, OR, for Respondents.

Opinion

TRICKEY, J.

186 Wash.App. 841

¶ 1 Notification to the state attorney general is a mandatory prerequisite to challenge a statute's constitutionality. Here, the plaintiff sought to have Washington's deeds of trust act (DTA), chapter 61.24 RCW, declared unconstitutional but failed to notify the attorney general as required by statute. Even if the plaintiff in this case were able to pass the procedural bar to her action, we conclude that the DTA is constitutional.

¶ 2 Any remaining claims that the plaintiff might have under the DTA, have been addressed and disposed of by recent Supreme Court decisions. Accordingly, we affirm the trial court's CR 12(b)(6) dismissal.

FACTS

¶ 3 In March 2006, Sandra Shelley Jackson refinanced her home with a $715,000 loan from Cameron Financial Group, Inc., dba 1st Choice Mortgage. The loan was evidenced by a promissory note and secured by a deed of trust encumbering Jackson's home located in Seattle. In the deed of trust, 1st Choice Mortgage was identified as “lender,” Fidelity National Title as “trustee,” and Mortgage

347 P.3d 490

Electronic Registration Systems, Inc. (MERS) as a “nominee for Lender and Lender's successors and assigns,” where MERS is the “beneficiary under this Security Instrument.”1 The deed of trust is recorded under King County Recorder's No. 20060331001860. The note and deed of trust provide for a nonjudicial foreclosure of the property in the event of default, pursuant to the DTA.

186 Wash.App. 842

¶ 4 The loan was subsequently sold to a securitized trust known as the “WAMU Mortgage Pass Through Certificate For WMALT 2006–AR4.”2 In her complaint, Jackson recognizes that under the terms of the note WMALT 2006–AR4 trust is a “note holder.” U.S. Bank, National Association is the trustee for WMALT 2006–AR4 trust and possesses the note.

¶ 5 In January 2011, Jackson defaulted on her loan payments. On September 20, 2012, MERS, acting as the nominee for U.S. Bank as trustee for WMALT 2006–AR4 trust, terminated its agency interest when it assigned its nominee interest in the deed of trust back to its principal, U.S. Bank as trustee.

¶ 6 In November 2012, Jackson received a notice advising her that her loan was in default. The notice disclosed that her loan had been sold to U.S. Bank as trustee for the WMALT 2006–AR4 trust, J.P. Morgan Chase Bank, N.A. was her loan servicer, and her arrears were approximately $127,000. The notice also informed her that a foreclosure sale might be scheduled if she did not cure her default, but “ha[d] recourse to the courts pursuant to RCW 61.24.130 to contest the alleged default on any proper ground.”3

¶ 7 On November 13, 2012, U.S. Bank, the note holder, recorded an appointment of successor trustee appointing Quality Loan Service Corporation of Washington as the new trustee under the deed of trust. On December 21, 2012, when Jackson failed to cure her default, Quality Loan Service recorded a notice of trustee's sale, scheduling the sale for April 26, 2013. The notice of trustee's sale referenced the notice of default, identifying the original parties to the deed of trust, in order to permit the recorder's office to link to the deed of trust. The notice identified U.S. Bank as successor in interest to Jackson's loan.

186 Wash.App. 843

¶ 8 Shortly before the scheduled foreclosure, Jackson filed a complaint asserting claims against U.S. Bank, Chase Bank, MERS, Quality Loan Services, and its legal counsel, McCarthy & Holthus, LLP. Jackson amended her complaint to include claims asserting that the deed of trust is unenforceable, violates the DTA, violates the Washington Constitution, violates the Consumer Protection Act (CPA),4 and for breach of contract, unconscionability, negligence, and quiet title. The trial court dismissed the complaint under CR 12(b)(6). Jackson appeals.

ANALYSIS

Standard of Review

¶ 9 This court reviews de novo an order granting a motion to dismiss under CR 12(b)(6). FutureSelect Portfolio Mgmt., Inc. v. Tremont Grp. Holdings, Inc., 180 Wash.2d 954, 962, 331 P.3d 29 (2014) ; Kinney v. Cook, 159 Wash.2d 837, 842, 154 P.3d 206 (2007). Dismissal under CR 12(b)(6) is appropriate in those cases where the plaintiff cannot prove any set of facts consistent with the complaint that would entitled the plaintiff to relief. Bravo v. Dolsen Cos., 125 Wash.2d 745, 750, 888 P.2d 147 (1995). “[A]ny hypothetical situation conceivably raised by the complaint defeats a CR 12(b)(6) motion if it is legally sufficient to support the plaintiff's claim.” Bravo, 125 Wash.2d at 756, 888 P.2d 147 (alteration in original) (quoting Halvorson v. Dahl, 89 Wash.2d 673, 674, 574 P.2d 1190 (1978) ). All facts alleged in the plaintiff's complaint are presumed true. Tenore v. AT & T Wireless Servs., 136 Wash.2d 322, 330, 962 P.2d 104 (1998). However, the complaint's legal conclusions are not required to be accepted on appeal. Haberman v. Washington Pub. Power Supply Sys., 109 Wash.2d 107, 120, 744 P.2d 1032 (1987). “If a plaintiff's

347 P.3d 491

claim remains legally insufficient even under his or her proffered hypothetical facts, dismissal pursuant to CR 12(b)(6) is

186 Wash.App. 844

appropriate.” Gorman v. Garlock, Inc., 155 Wash.2d 198, 215, 118 P.3d 311 (2005).

¶ 10 Issues of statutory constitutionality are reviewed de novo. HomeStreet, Inc. v. Dep't of Revenue, 166 Wash.2d 444, 451, 210 P.3d 297 (2009).

Judicial Notice

¶ 11 Jackson argues that the trial court improperly took judicial notice of documents attached to defendants U.S. Bank, MERS, and Chase Bank's motion to dismiss. In general, when ruling on a CR 12(b)(6) motion to dismiss, the trial court may only consider the allegations contained in the complaint and may not go beyond the face of the pleadings. Brown v. MacPherson's, Inc., 86 Wash.2d 293, 297, 545 P.2d 13 (1975). But the trial court may take judicial notice of public documents if the authenticity of those documents cannot be reasonably disputed. Berge v. Gorton, 88 Wash.2d 756, 763, 567 P.2d 187 (1977). ER 201(b)(2) authorizes the court to take judicial notice of a fact that is “not subject to reasonable dispute in that it is ... capable of accurate and ready determination by resort to sources whose accuracy cannot reasonably be questioned.”

¶ 12 Additionally, where a plaintiff asserts allegations in a complaint on specific documents, but does not physically attach those documents, the documents may be considered in ruling on a CR 12(b)(6) motion for judgment on the pleadings. Rodriguez v. Loudeye Corp., 144 Wash.App. 709, 189 P.3d 168 (2008) ; see, e.g., In re Stac Elecs. Sec. Litig., 89 F.3d 1399, 1405 n. 4 (9th Cir.1996) (appropriate for trial court to consider other portions of document referenced in complaint in a motion to dismiss and doing so does not convert the motion into one for summary judgment).

¶ 13 U.S. Bank sought to have the trial court take judicial notice of the adjustable rate note, prepayment penalty addendum, and an allonge to the note for the loan, which were repeatedly referenced in Jackson's complaint.

186 Wash.App. 845

The other two documents that U.S. Bank sought to introduce were publicly recorded property records easily accessed through the King County Recorder's Office—a recorded corporate assignment of the deed of trust and a recorded appointment of successor trustee, Quality Loan Service Corporation.

¶ 14 Although the record does not indicate whether the trial court did in fact take judicial notice of these documents, the court's consideration of the documents was appropriate in this CR 12(b)(6) motion. Jackson's complaint was based on the alleged breach of the DTA, which was based in part on the documents...

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