Jametsky v. Olsen

• Decision Date: 29 October 2012
• Docket Number: NO. 67176-6-I,67176-6-I
• Court: Court of Appeals of Washington
• Parties: LAWRENCE JAMETSKY, a single man, Appellant, v. RODNEY A. and JANE DOE OLSEN; MATHEW and JANE DOE FLYNN, Respondents, MICHAEL and JANE DOE HABER, Defendants.

LAWRENCE JAMETSKY, a single man, Appellant, v. RODNEY A. and JANE DOE OLSEN; MATHEW and JANE DOE FLYNN, Respondents MICHAEL and JANE DOE HABER, Defendants.

NO. 67176-6-I

COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION ONE

FILED: October 29, 2012

UNPUBLISHED OPINION

Leach, C.J. — Larry Jametsky appeals a trial court's summary dismissal of his distressed property conveyances act (DPCA)¹ and Consumer Protection Act (CPA)² claims against Rodney Olsen, who purchased Jametsky's house in 2008. Jametsky, however, failed to raise a genuine issue of material fact regarding whether his house was a "distressed property" at the time it was sold—a necessary element of a DPCA claim. And because Jametsky's CPA claim entirely depended on him proving his DPCA claim, the trial court did not err by granting Olsen summary judgment. We affirm.

FACTS

In 2008, Jametsky approached a family friend, Roger Hager, for help to "save [his] house." At the time, several debts encumbered Jametsky's property. Hager introduced Jametsky to Michael Haber, a mortgage consultant who owned a company called Pine Mortgage. Haber contacted mortgage broker Matthew Flynn in October to ask whether Jametsky qualified for a home loan. Flynn met with Haber and Jametsky to assess Jametsky's financial situation and determined that Jametsky did not qualify. Haber then told Flynn that Jametsky would consider selling his house. Flynn asked his acquaintance Rodney Olsen if he wanted to buy Jametsky's house with a leaseback and option to purchase.³ Olsen agreed to buy Jametsky's property for $100,000.⁴

Olsen and Jametsky signed a real estate purchase and sale agreement on November 4.⁵ The next day, they entered into a lease-option agreement that allowed Jametsky to stay in the house for $835 in monthly rent and gave him an 18-month option to repurchase the house for $110,000. Olsen used the sales proceeds to pay off the liens on the property, including a $58,221 mortgage loan, $10,666 in unpaid property taxes (for the period from January 1, 2006, to January 1, 2009), $1,819 in sewer charges, and two judgments totaling $9,394.After the debts were paid, Jametsky received $4,697 from the sale.⁶

Jametsky stopped paying rent after 15 months. On July 2, 2010, he filed a lawsuit against Olsen to quiet title under the theory that the property transfer violated the DPCA and the CPA.⁷ Jametsky named Olsen, Flynn, and Haber as defendants and asked the court to "[q]uiet title in favor of Plaintiff" and to "[a]ward damages, punitive damages, and penalties . . . jointly and severally against all Defendants."⁸ Olsen sued Jametsky for unlawful detainer. The trial court consolidated the cases upon the parties' stipulation and stayed Olsen's unlawful detainer action as required by RCW 59.18.363.⁹

On March 24, 2011, Jametsky moved for partial summary judgment, arguing that his property was a "distressed home" under the DPCA because he was three years behind on his property taxes and feared King County would foreclose. Olsen moved to dismiss Jametsky's complaint in its entirety on the basis that as a matter of law, Jametsky's house was not a "distressed home." Olsen argued that King County had not yet issued a certificate of delinquencyand that no foreclosure action had been commenced against Jametsky's property due to the nonpayment of taxes. The trial court granted Olsen's motion and quieted title to the property in his name. Olsen moved for an award of attorney fees and costs based on a provision in the real estate purchase and sale agreement. The trial court awarded Olsen attorney fees and costs in the amount of $14,453.67.¹⁰

Jametsky appeals.

STANDARD OF REVIEW

We review summary judgment orders de novo, engaging in the same inquiry as the trial court.¹¹ Summary judgment is proper if, viewing the facts and reasonable inferences in the light most favorable to the nonmoving party, no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law.¹² "A genuine issue of material fact exists where reasonable minds could differ regarding the facts controlling the outcome of the litigation."¹³

This appeal also involves issues of statutory interpretation. "The meaning of a statute is a question of law we review de novo."¹⁴ When interpretingstatutory language, we aim to carry out the legislature's intent.¹⁵ "We determine the plain meaning of a statutory provision based on the statutory language and, if necessary, in the context of related statutes that disclose legislative intent about the provision in question."¹⁶ If a statute's meaning is plain on its face, we give effect to that plain meaning.¹⁷ Only if statutory language is ambiguous do we resort to aids of construction, including legislative history.¹⁸

ANALYSIS

Distressed Property Conveyances Act

The Statutory Scheme: The DPCA took effect on June 12, 2008. Its purpose is to protect financially strapped homeowners from "equity skimming" and foreclosure rescue scams.¹⁹ In its findings, the legislature states,

[P]ersons are engaging in patterns of conduct which defraud innocent homeowners of their equity interest or other value in residential dwellings under the guise of a purchase of the owner's residence but which is in fact a device to convert the owner's equity interest or other value in the residence to an equity skimmer, who fails to make payments, diverts the equity or other value to the skimmer's benefit, and leaves the innocent homeowner with a resulting financial loss or debt.

The legislature further finds this activity of equity skimming to be contrary to the public policy of this state and therefore establishes the crime of equity skimming to address this form of real estate fraud and abuse.²⁰

In response to the legislature's findings, the DPCA establishes requirements for the sale of "distressed homes." RCW 61.34.020(2) defines a "distressed home" as either (1) "a dwelling that is in danger of foreclosure or at risk of loss due to nonpayment of taxes" or (2) "a dwelling that is in danger of foreclosure or that is in the process of being foreclosed due to a default under the terms of a mortgage." While the legislature did not define "at risk of loss due to nonpayment of taxes," "in danger of foreclosure" means any of the following:

(a) The homeowner has defaulted on the mortgage and, under the terms of the mortgage, the mortgagee has the right to accelerate full payment of the mortgage and repossess, sell, or cause to be sold, the property;

(b) The homeowner is at least thirty days delinquent on any loan that is secured by the property; or

(c) The homeowner has a good faith belief that he or she is likely to default on the mortgage within the upcoming four months due to a lack of funds, and the homeowner has reported this belief to:

(i) The mortgagee;

(ii) A person licensed or required to be licensed under chapter 19.134 RCW;

(iii) A person licensed or required to be licensed under chapter 19.146 RCW;(iv) A person licensed or required to be licensed under chapter 18.85 RCW;

(v) An attorney-at-law;

(vi) A mortgage counselor or other credit counselor licensed or certified by any federal, state, or local agency; or

(vii) Any other party to a distressed home consulting transaction.²¹

To protect owners of distressed homes, contracts between distressed homeowners and distressed home consultants must adhere to the DPCA's requirements. A "distressed home consultant" is a person who "solicits or contacts a distressed homeowner in writing, in person, or through any electronic or telecommunications medium and makes a representation or offer to perform any service that the person represents" will financially assist the distressed homeowner to save his or her home.²² Additionally, an individual may be a"distressed home consultant" if he or she "[s]ystematically contacts owners of property that court records, newspaper advertisements, or any other source demonstrate are in foreclosure or are in danger of foreclosure."²³ Among other requirements, a contract between a distressed home consultant and a distressed homeowner must include a form notice that the contract could result in the lossof the homeowner's property.²⁴ The statute also establishes fiduciary obligations owed by distressed home consultants to a distressed homeowner.²⁵

Contracts between the purchaser of a distressed home and distressed homeowners must also conform to the DPCA's requirements.²⁶ In addition,distressed home purchasers must avoid specific activities that violate the DPCA.²⁷ For example, the statute requires a distressed home purchaser to verify the distressed homeowner's ability to pay the terms of any lease-option agreement and ensure that the distressed homeowner receives at least 82 percent of the distressed property's fair market value.²⁸ A distressed homeowner may cancel any contract with a distressed home purchaser within five days and must be given written notice of this right.²⁹ Until the right to cancel has expired, neither the distressed home purchaser nor his or her agent may ask the distressed homeowner to sign a deed.³⁰

Failure to adhere to the DPCA can result in both civil and criminal penalties.³¹ "Any person who willfully engages in a pattern of equity skimming is guilty of a class B felony."³² Additionally, a violation of the DPCA constitutes "an unfair method of competition" under the CPA.³³ In a personal action brought by a distressed homeowner, the court may award up to three times the amount of actual damages, not to exceed $100,000.³⁴

Jametsky's DPCA Claim: Jametsky's appeal turns on whether his property was a "distressed home." The parties dispute the meaning of "at risk of loss due to nonpayment of taxes," which the DPCA does not define. Jametsky argues that his property was at risk of loss because he was behind in his property tax payments and feared he would lose his house as a result. Olsen responds that a property is not at risk of loss until the county treasurer issues a certificate of delinquency,...