Big Blue Capital Partners Of Wa,llc, App. V Regional Trustee Services Corp
46116-1
| Wash. Ct. App. | Jan 9, 2018Background
- In 2004 Dawne Delay took a mortgage loan evidenced by a promissory note and deed of trust naming “Apreva, Inc., a Washington Corporation” as lender; payments were made for years, then Delay defaulted in 2012 and later conveyed the property via trustee’s deed to Big Blue (subject to existing encumbrances).
- The note was later indorsed in blank to U.S. Bank and serviced by Specialized Loan Servicing (SLS); Regional Trustee Services (RTS) was appointed successor trustee and scheduled a nonjudicial foreclosure sale.
- Big Blue sued RTS (later SLS and U.S. Bank intervened) alleging the note and deed were invalid because Apreva, Inc. was not a Washington corporation and asserting violations of the Deeds of Trust Act and Consumer Protection Act; sought declaratory, injunctive relief and damages.
- Big Blue obtained a preliminary injunction but failed to post a required bond, the injunction dissolved, and the property was sold at trustee’s sale.
- SLS and U.S. Bank moved for summary judgment; two days before the hearing Big Blue filed a first amended complaint adding claims against them but the superior court rejected consideration of the amendment, granted summary judgment, and dismissed all claims with prejudice, reasoning (in part) that claims were waived under Frizzell v. Murray.
- The Court of Appeals reversed: it held the trial court abused discretion by refusing the amended complaint under CR 15(a), found genuine issues of material fact about the lender’s identity/capacity to contract (possible misnomer/nonexistent payee), and held Big Blue’s damages claims were not waived by failure to enjoin the sale.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether trial court erred in refusing to consider Big Blue's amended complaint under CR 15(a) | Big Blue: amendment was permitted as a matter of course because no responsive pleading had been filed | SLS/U.S. Bank: amendment just before summary judgment was improper tactic; court required leave | Reversed — CR 15(a) allowed one amendment as of course where no responsive pleading was filed; trial court abused discretion |
| Whether Apreva, Inc. had capacity to contract / whether note/deed contain a fatal misnomer | Big Blue: documents show Apreva, Inc. did not exist as WA corp; lender identity is doubtful so note/deed may be invalid | Defendants: any naming error is a nonprejudicial misnomer; Apreva, Inc. was registered as foreign in Utah so not nonexistent | Reversed — genuine issue of material fact exists whether Apreva, Inc. (or Apreva Financial Corp.) was the contracting entity; cannot decide on summary judgment |
| Whether Big Blue waived claims (declaratory/injunctive/damages) by failing to enjoin the trustee’s sale | Big Blue: sought injunction but failed to post bond; damages claims under DOTA/CPA survive per RCW 61.24.127 | Defendants: under Frizzell, failure to pursue presale remedies waives objections to the sale and related relief | Mixed: waiver applies to right to enjoin sale (Big Blue waived objection to trustee's sale), but damages claims for statutory DOTA and CPA violations were not waived; trial court erred dismissing damages claims |
| Whether summary judgment was appropriate on the whole record | Big Blue: factual disputes (lender identity/authority) preclude summary judgment; amended complaint not considered | Defendants: documentary evidence shows proper chain/registrations; summary judgment appropriate | Reversed — summary judgment improper because amended complaint should have been considered and material factual disputes exist |
Key Cases Cited
- Lyons v. U.S. Bank Nat’l Ass’n, 181 Wn.2d 775 (review standard for summary judgment) (court reviews de novo and views facts in favor of nonmoving party)
- Frizzell v. Murray, 179 Wn.2d 301 (waiver of presale challenges when borrower fails to enjoin sale; limits on what claims are waived)
- Bain v. Metro. Mortg. Grp., Inc., 175 Wn.2d 83 (holder/ownership requirements to enforce note and deed)
- Plein v. Lackey, 149 Wn.2d 214 (elements for waiver by failure to enjoin sale)
- Berg v. Hudesman, 115 Wn.2d 657 (contract interpretation principles to ascertain parties’ intent)
- Marston Enters., Inc. v. Seattle-First Nat’l Bank, 57 Wn. App. 662 (unauthorized indorsement by nonexistent payee is inoperative)
- TT Props. v. City of Tacoma, 192 Wn. App. 238 (definition of material fact in civil litigation)