Cedar W. Owners Ass'n v. Nationstar Mortg., LLC
434 P.3d 554
Wash. Ct. App.2019Background
- In 2008 Judith Allen executed a 30‑year installment promissory note and deed of trust on a condominium; monthly payments began and were due through July 1, 2038.
- Allen stopped paying after May 2010 (first missed payment June 1, 2010) and also ceased paying condo assessments; Cedar West foreclosed its association lien and acquired the unit.
- Lender sent a notice of default on October 7, 2015 stating arrears through October 15, 2015; no trustee’s sale was recorded at that time.
- The note and deed were assigned to Nationstar in July 2016; a Notice of Trustee’s Sale was recorded October 18, 2016 setting a sale for February 24, 2017.
- Cedar West sued to quiet title and enjoin the trustee’s sale, arguing the six‑year statute of limitations barred nonjudicial foreclosure; the trial court enjoined the sale but later dismissed Cedar West’s claim against Nationstar and allowed the trustee’s sale.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does the 6‑year statute of limitations accrue on an installment promissory note secured by a deed of trust? | Accrues on the date of the first missed payment (June 1, 2010), so foreclosure is time‑barred. | Accrues separately for each missed installment when that installment becomes due. | Statute accrues separately for each installment when due; Edmundson controlling. |
| Does a nonjudicial foreclosure step toll the 6‑year statute of limitations, and if so, which act tolls it (notice of default or notice of trustee’s sale)? | Nonjudicial foreclosure does not toll under RCW 4.16.170 because no complaint/summons; if it does, tolling should attach to the earliest notice (notice of default). | Nonjudicial foreclosure can toll; whether tolling occurs is factual and depends on diligent pursuit of remedies; a notice of trustee’s sale can toll when notice of default is followed by delay. | Nonjudicial foreclosure can toll; tolling is a factual inquiry. Here, prolonged unexplained delay after notice of default meant the Notice of Trustee’s Sale — not the earlier notice of default — tolled limitations. |
| What installments remains subject to foreclosure? | All payments became time‑barred from the first missed payment. | Foreclosure may proceed on installments that came due within six years of the tolling event. | Nationstar may foreclose on installments due on and after November 1, 2010 (based on the court’s tolling determination). |
Key Cases Cited
- Edmundson v. Bank of Am., N.A., 194 Wash. App. 920 (Wash. Ct. App. 2016) (statute of limitations on installment note accrues separately for each installment when due)
- Herzog v. Herzog, 23 Wash.2d 382 (Wash. 1945) (distinguishes demand vs. installment notes; limitations run on each installment when due)
- Bingham v. Lechner, 111 Wash. App. 118 (Wash. Ct. App. 2002) (recording a notice of trustee’s sale can toll limitations but not indefinitely; sale must be pursued)
- Leahy v. Quality Loan Serv. Corp. of Wash., 190 Wash. App. 1 (Wash. Ct. App. 2015) (describes roles of notice of default and notice of trustee’s sale under Deeds of Trust Act)