Larson v. Snohomish Cnty.
| Decision Date | 06 December 2021 |
| Docket Number | No. 81874-1-I,No. 80968-7-I,80968-7-I |
| Citation | 499 P.3d 957 |
| Parties | Christopher LARSON and Angela Larson, Appellants, v. SNOHOMISH COUNTY, a Washington State Municipal Corporation; Carolyn Weikel, individually and as the Snohomish County Auditor and Registrar; Sonja Kraski, individually and as the Snohomish County Clerk ; Jane Doe, individually and as Snohomish County Examiner of Titles and Legal Advisor To the Registrar; Snohomish County Superior Court Judges George F. Appel, George N. Bowden, Marybeth Dingledy, Janice E. Ellis, Ellen J. Fair, Anita L. Farris, Millie M. Judge, Linda C. Krese, David A. Kurtz, Jennifer R. Langbehn, Cindy A. Larsen, Eric Z. Lucas, Richard T. Okrent, Bruce J. Weiss, and Joseph P. Wilson ; the State of Washington ; Washington State Governor Jay Inslee in his official capacity; Washington State Attorney General Robert Ferguson in his official capacity as Washington Attorney General; John Does, Successors in interest and assigns to New Century Mortgage Company and Mortgage Electronic Registration Systems, Inc.; Deutsche Bank National Trust Company; Deutsche Bank National Trust Company as trustee for Morgan Stanley ABS Capital I Inc. Trust 2007-HE2 Mortgage Pass Through Certificates, Series 2007; Morgan Stanley ABS Capital I Inc. TRUST 2007-HE2; Quality Loan Service Corporation of Washington, a Washington Corporation; Select Portfolio Servicing, Inc., a Utah corporation; and Mortgage Electronic Recording System, Inc., a Delaware Corporation, Respondents. Christopher Larson and Angela Larson, Appellants, v. New Century Mortgage ; Jane Doe; All Other Persons or Parties Unknown Claiming Any Right, Title, Estate, Lien or Interest Into, or Upon the Real Property Described Herein, Respondents. |
| Court | Washington Court of Appeals |
Scott Erik Stafne, Stafne Law Advocacy & Consulting, 239 N Olympic Ave., Arlington, WA, 98223-1336, for Appellants.
Robert William McDonald, Quality Loan Service Corp. of Washington, 108 1st Ave. S Ste. 202, Seattle, WA, 98104-2538, Joseph Ward McIntosh, McCarthy & Holthus, LLP, 108 1st Ave. S Ste. 300, Seattle, WA, 98104-2104, Donald Jeffrey Courser, Stoel Rives LLP, 760 Sw 9th Ave. Ste. 3000, Portland, OR, 97205-2587, Lyndsey Marie Downs, Civil Div Snohomish County Prosecutor's, 3000 Rockefeller Ave. # Ms504, Geoffrey Alan Enns, Snohomish County Prosecutor's Office, George Bradley Marsh, Civil Div. Snohomish County Prosecutor's, 3000 Rockefeller Ave., Everett, WA, 98201-4046, R July Simpson, Washington Atty. General, Rene David Tomisser, Office of the Attorney General, 7141 Cleanwater Dr. Sw, Tumwater, WA, 98501-6503, Robert A. Bailey, Anglin Flewelling & Rasmussen, LLP, 301 N Lake Ave. Ste. 1100, Pasadena, CA, 91101-4158, for Respondents.
PUBLISHED OPINION
Andrus, A.C.J. ¶1 Christopher and Angela Larson appeal adverse rulings in two separate lawsuits related to the nonjudicial foreclosure of their home. They challenge the dismissal of a Torrens Act1 application they filed in Snohomish County Superior Court2 and the dismissal of a lawsuit they filed in Skagit County Superior Court against the State of Washington, Snohomish County, its superior court judges, the successor lender, foreclosure trustee, and loan servicer.3
¶2 In both proceedings, the Larsons sought a judicial determination that the 2006 deed of trust they granted to their initial lender, New Century Mortgage Company, was invalid. In the Skagit County lawsuit, the Larsons sought declaratory relief against the Public Defendants,4 seeking to compel them to comply with the Torrens Act. They also sought monetary damages and injunctive relief against the successor lender, the trustee, and loan servicer5 for alleged violations of the Deed of Trust Act (DTA)6 and the Consumer Protection Act (CPA).7
¶3 Although the Larsons sought injunctive relief, they never actually moved to enjoin the nonjudicial foreclosure sale. The trustee proceeded with the sale after which the trial court dismissed the Larsons’ claims against the Public Defendants under CR 12(b)(6) and transferred venue for the remaining claims against the Private Defendants to Snohomish County Superior Court. The court subsequently dismissed all remaining claims on summary judgment. The court also dismissed the Larsons’ Torrens Act application because they were no longer title owners of the property.
¶4 On appeal, the Larsons raise a number of statutory and constitutional arguments, none of which have merit. We therefore affirm the dismissal of both lawsuits.
FACTUAL BACKGROUND
¶5 In October 2006, Christopher Larson8 purchased a house in Snohomish County and borrowed $218,000 from New Century Mortgage Corp. (New Century) to do so. Christopher signed the promissory note in which he agreed to make monthly loan payments beginning December 1, 2006. Christopher and his wife, Angela, executed a deed of trust securing the loan. The deed of trust identified Christopher as the borrower, New Century as the lender, First American Title as the trustee, and Mortgage Electronic Registration Systems, Inc. (MERS) as the beneficiary. The sellers, Tyson and Alisia Bushnell, executed a statutory warranty deed, conveying the property to Christopher, on October 9, 2006.
¶6 The Larsons allege that New Century declared bankruptcy in April 2007 and declined to accept their mortgage payment in August 2007. Angela testified that she contacted New Century and was informed that the lender no longer "had [their] mortgage" and could not tell her to whom they should pay their mortgage payment. In October 2007, the Larsons received a notice of default on behalf of Countrywide Home Loans through its servicer, Recontrust. The Larsons, believing their home was in foreclosure, moved to Idaho, where they lived for eight years.
¶7 The Larsons do not dispute that they made no regular mortgage payments after July 2007. In 2009, they received another notice of default from BAC Home Loans and in 2010, they received both a notice of default and a notice of trustee sale from Recontrust on behalf of Bank of America. The Larsons did not respond to any of these notices and made no loan payments in response to them.
¶8 In July 2010, MERS assigned its interest in the Larson deed of trust to Deutsche Bank, the note holder at the time. That same month, Recontrust issued a notice of trustee sale, identifying Deutsche Bank as the assignee under the deed of trust, but it apparently did not proceed with the sale.
¶9 In August 2012, the Larsons received a letter from Select Portfolio Servicing, Inc. (SPS), identifying itself as the new loan servicer. In May 2014, SPS referred the account to a new trustee, Northwest Trustee Services, Inc., to commence foreclosure. At that point, the Larsons retained counsel who began corresponding with Northwest Trustee Services and SPS, challenging the validity of the debt and the right of any lender to conduct a nonjudicial foreclosure sale. The Larsons made no payments on the note until May 2017, when they made one partial mortgage payment.
¶10 On December 22, 2017, North Cascade Trustee Services, Inc., the successor trustee, issued a notice of default on behalf of the note holder, Deutsche Bank. North Cascade recorded a notice of trustee's sale in February 2018 and set a sale date of June 29, 2018.
¶11 On May 17, 2018, SPS appointed Quality Loan Service Corporation of Washington (QLS) as successor trustee under the deed of trust.
¶12 On June 5, 2018, the Larsons filed an "Application for ‘Torrens’ Registration of Title to Land" in Snohomish County Superior Court. In this application, the Larsons alleged that "[t]here a[re] no known valid liens or encumbrances on the listed property," and sought a court order declaring that they held sole title to their land. The Larsons attached to their application a copy of a Ticor Title Company commitment for title insurance, with an effective date of June 9, 2017. This commitment, by its terms, was no longer in effect, as it had expired six months after its effective date. The commitment also identified as an encumbrance, and excluded from any title insurance coverage, the recorded Deutsche Bank deed of trust.
¶13 The next day, on June 6, 2018, QLS executed a notice of discontinuance of the trustee sale scheduled for June 28, 2018, and issued a new notice of trustee's sale, rescheduling the foreclosure sale for October 12, 2018. The notice was recorded on June 8, 2018. There is no evidence in the record that Deutsche Bank, QLS, or SPS was aware of the Larsons’ Torrens Act application before issuing this notice of trustee sale. At some point, QLS continued the foreclosure sale to November 16, 2018.
¶14 The Larsons did not move to enjoin the foreclosure sale. Nor did they file a motion in the Torrens Act proceeding to obtain any relief under that statute. Instead, on October 18, 2018, they initiated a lawsuit in Skagit County Superior Court against the Public and Private Defendants, alleging several causes of action. The Larsons sought declaratory and injunctive relief against the Public Defendants, seeking an order compelling the County Defendants to create a Torrens Act system, compelling the superior court judges to comply with their duties under the Torrens Act, compelling the State Attorney General to "provide guidance to the court" on how to comply with the Torrens Act, and compelling the Governor to fulfill his duty to "see that the laws are faithfully executed."
¶15 The Larsons alleged that they wanted to register their interest in the land under the Torrens Act, but if they could not do so, they alternatively sought to quiet title, alleging that the original promissory note had been forged, that the original loan had never been funded, that Deutsche Bank had no interest in the property under the deed of trust, and that foreclosure was barred by the statute of limitations.
¶16 They also sought damages and injunctive relief against Deutsche Bank, MERS, SPS, and QLS under the CPA. They claimed that these Private Defendants violated the CPA...
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