Daniel J. Wagner & Alice Wagner v. Emc Mortgage, Llc
47484-1
| Wash. Ct. App. | Oct 11, 2016Background
- In 2005 the Wagners executed a promissory note to Wells Fargo secured by a deed of trust; Wells Fargo indorsed the note to EMC and recorded an assignment of the deed of trust to EMC.
- The Wagners defaulted; EMC initiated nonjudicial foreclosure proceedings in 2008 and again in 2009 after a failed repayment plan; EMC later resumed foreclosure efforts in 2012–2013.
- EMC mistakenly prepared an assignment to Chase and an unattached allonge in 2009; that assignment was unrecorded and Chase disclaimed any interest.
- During bankruptcy and FFA mediation, EMC (through servicer Acqura) produced a declaration under penalty of perjury stating EMC was the owner and/or actual holder of the March 14, 2005 note; EMC produced the original specially indorsed note in court and admissions confirming possession.
- The Wagners sued for violations of the Consumer Protection Act (CPA) and for intentional/negligent misrepresentation, alleging EMC misrepresented note ownership and its authority to foreclose; the superior court granted summary judgment for EMC, finding EMC the actual noteholder.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was EMC the lawful noteholder/beneficiary authorized to initiate nonjudicial foreclosure? | Wagners: EMC was not the credible noteholder; conflicting documents (unattached allonge, unrecorded assignment) cast doubt. | EMC: Produced the specially indorsed original note, sworn declaration, and admissions showing possession and status as holder. | EMC was the actual holder; declaration and documentary evidence satisfied RCW 61.24.030(7); summary judgment for EMC. |
| Did EMC violate the CPA by misrepresenting ownership/beneficiary status? | Wagners: Misrepresentations about note ownership and beneficiary identity were unfair/deceptive and caused injury. | EMC: No unfair or deceptive act — it was the holder; ownership not required to initiate foreclosure under DTA; no causal injury shown. | CPA claim failed because EMC was the noteholder and there was no evidence of unfair/deceptive conduct; summary judgment affirmed. |
| Do the Wagners have viable fraud or negligent misrepresentation claims based on foreclosure and mediation communications? | Wagners: Numerous misrepresentations in foreclosure process and mediation about party identities and authority. | EMC: No specific record evidence of false statements to plaintiffs; plaintiff must show falsity and reliance by clear, cogent, convincing evidence. | Court declined to find genuine issues — Wagners offered unsupported assertions and failed to cite record; summary judgment proper. |
| Do doctrines of res judicata or judicial estoppel preclude Wagners’ claims? | Wagners: Argued these doctrines do not bar their claims. | EMC: Argued prior bankruptcy and statements preclude relitigation. | Court did not reach the issue because EMC’s status as holder was dispositive. |
Key Cases Cited
- Bain v. Metropolitan Mortgage Group, 175 Wn.2d 83 (2012) (only actual holder may be beneficiary with power to appoint trustee and foreclose)
- Lyons v. U.S. Bank Nat’l Ass’n, 181 Wn.2d 775 (2014) (beneficiary declaration language must be unambiguous to establish holder status without other proof)
- Trujillo v. Northwest Trustee Servs. Inc., 183 Wn.2d 820 (2015) (similar caution about ambiguous beneficiary declarations)
- Brown v. Washington State Dept. of Commerce, 184 Wn.2d 509 (2015) (undisputed holder declaration satisfies DTA proof requirement; holder may enforce note)
- Failla v. FixtureOne Corp., 181 Wn.2d 642 (2014) (standard of review for summary judgment explained)