Alice Lopez v. JPMorgan Chase & Co
34968-3
| Wash. Ct. App. | Apr 18, 2017Background
- In 2004 Lopez borrowed $264,000 from Washington Mutual (WaMu), secured by a deed of trust on her Vancouver home. She defaulted on the loan.
- WaMu failed in 2008; the FDIC, as receiver, later assigned the deed of trust in July 2012 to Deutsche Bank National Trust Co. as trustee for a 2005 REMIC (recorded Aug. 7, 2012).
- Deutsche appointed Northwest Trustee Services successor trustee and issued a notice of default stating Lopez owed ~$291,927.37; foreclosure attempts were delayed by Lopez's multiple bankruptcies and the property sold Nov. 13, 2015.
- Lopez sued in Oct. 2015 challenging the validity of the FDIC assignment into the REMIC, the beneficiary/holder status asserted by Deutsche, and sought relief under the CPA; defendants moved for summary judgment and the trial court granted it.
- On appeal Lopez argued (1) Brown v. Dep’t of Commerce conflicts with statute, (2 & 4) the FDIC assignment into the REMIC was void (not merely voidable) for violating the PSA, REMIC rules, and conveyance-by-deed requirements, and (3) Deutsche lacked proof/authority to enforce the deed of trust. The Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a court decision conflicting with statute must yield | Lopez: a court decision (Brown) cannot override a constitutionally enacted statute | Defs: judicial construction governs until legislature changes law; courts interpret statutes | Court: Judicial construction stands; Brown controls statutory meaning |
| Whether a post-closing assignment to a REMIC is void (standing) | Lopez: FDIC assignment to the 2005 REMIC was void ab initio (untimely under PSA) so she can challenge beneficiary status | Defs: Lopez lacks record/authority showing assignment was void; more likely merely voidable; no standing to assert voidable defects | Court: No evidence assignment was void; plaintiff cannot convert alleged contract violation into a collateral-nullity; claim fails |
| Whether REMIC-related federal tax statutes make the assignment invalid | Lopez: federal REMIC rules/prohibited-transaction tax render the assignment unlawful and void | Defs: Those statutes impose tax on prohibited transactions but do not render assignments void | Court: REMIC tax provisions show tax consequences, not invalidity; do not relieve Lopez of debt |
| Whether Deutsche (as beneficiary) had proof/authority to foreclose | Lopez: Brown's proof-of-beneficiary standard doesn't apply or is distinguishable; Deutsche's declaration was disputed | Defs: Brown holds the note holder is beneficiary; Deutsche produced the original promissory note at summary judgment | Court: Brown applies; Deutsche (holder) satisfied proof requirement and produced the original note—entitled to enforce deed of trust |
Key Cases Cited
- Brown v. Dep't of Commerce, 184 Wn.2d 509 (Wash. 2015) (holder of note is beneficiary for DTA/Deed of Trust Act purposes and an affidavit/declaration by holder suffices as proof)
- Bain v. Metropolitan Mortgage Group, Inc., 175 Wn.2d 83 (Wash. 2012) (deed of trust is an equitable mortgage; transfer of the debt operates as an equitable assignment of the security)
- Murray v. Briggs, 29 Wash. 245 (Wash. 1902) (distinguishing void and voidable transactions; void conveys no title and is subject to collateral attack)
- Reinagel v. Deutsche Bank Nat'l Tr. Co., 735 F.3d 220 (5th Cir. 2013) (discussion of standing and borrower challenges to assignments)
- Yvanova v. New Century Mortg. Corp., 62 Cal.4th 919 (Cal. 2016) (analyzing borrowers' ability to challenge post-closing assignments; treated in related authority discussing void vs. voidable)