Barry M. & Mary Beth Gardner v. Wells Fargo Bank, N.a.
50242-9
| Wash. Ct. App. | Sep 11, 2018Background
- In 2005 the Gardners took a $900,000 loan secured by a deed of trust; they defaulted and servicing passed through AHMSI to Ocwen; Wells Fargo held the note and deed of trust.
- The Gardners sought a reverse mortgage to pay off Wells Fargo and participated in mediation under former RCW 61.24.163; the mediator certified AHMSI failed to mediate in good faith for untimely document provision.
- Wells Fargo later filed a judicial foreclosure in 2014; the Gardners pleaded an affirmative defense based on the mediator’s bad-faith finding and a Consumer Protection Act (CPA) counterclaim.
- The superior court struck the affirmative defense (CR 12(f)) and later granted summary judgment to Wells Fargo on foreclosure and dismissed the CPA counterclaim.
- The Gardners appealed the strike/summary judgment and dismissal; the Court of Appeals held the appeal timely, affirmed the striking of the affirmative defense and the dismissal of the CPA claim, and awarded Wells Fargo fees on appeal under the deed of trust.
Issues
| Issue | Plaintiff's Argument (Gardners) | Defendant's Argument (Wells Fargo) | Held |
|---|---|---|---|
| Timeliness of appeal | Notice of appeal filed within 30 days of final March 23 order; appeal is timely | Earlier rulings (striking affirmative defense, March 10 partial SJ) were final and not timely appealed | Appeal timely because earlier rulings were interlocutory until March 23 final judgment |
| Whether mediator certification of bad-faith mediation provides an affirmative defense in judicial foreclosure under former RCW 61.24.163(14) | The disjunctive language should allow the defense for judicial foreclosures when no loan modification and subsequent default occurred | Statute’s plain text limits the affirmative defense to nonjudicial foreclosures; subsection (a) does not reference judicial foreclosures | Court interprets the statute’s plain language to deny the affirmative defense in judicial foreclosures; superior court did not abuse discretion in striking it |
| Whether AHMSI/Wells Fargo’s failure to mediate in good faith supports a CPA counterclaim (elements: unfair/deceptive act; trade or commerce; public interest; injury to business/property; causation) | Mediator’s certification shows per se unfair practice; failure to mediate affects public interest and led to foreclosure (injury) and attorney fees; causation exists | Even if per se violation, Gardners failed to show (a) cognizable injury from the mediation failure other than foreclosure timing and (b) causation linking the mediation misconduct to the injury | Court: per se statutory violation satisfies unfairness and public-interest elements, but Gardners failed to raise material facts on injury (attorney fees unsupported) and causation; summary judgment for Wells Fargo affirmed |
| Entitlement to attorney fees on appeal | Gardners seek fees under CPA and RAP 14.2 | Wells Fargo seeks fees under deed of trust (RCW 4.84.330) and costs under RAP 14 | Gardners not prevailing; Wells Fargo entitled to reasonable fees on appeal pursuant to deed of trust and to costs under RAP 14 (amount to be determined) |
Key Cases Cited
- Keck v. Collins, 184 Wn.2d 358 (summary judgment standard for appellate review)
- Campbell & Gwinn, L.L.C. v. Department of Ecology, 146 Wn.2d 1 (use statute text and related provisions to discern legislative intent)
- Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778 (five-element test for CPA claims)
- Panag v. Farmers Ins. Co. of Wash., 166 Wn.2d 27 (what constitutes injury under the CPA and recoverable investigation/legal costs)
- Indoor Billboard/Wash., Inc. v. Integra Telecom of Wash., Inc., 162 Wn.2d 59 (proximate-cause standard for CPA causation)
- State v. Bunker, 169 Wn.2d 571 (last-antecedent rule and comma usage in statutory interpretation)