819 F. Supp. 2d 1162
W.D. Wash.2011Background
- In 2007, Gossens refinanced their home loan with WaMu, signing a Note and Deed of Trust securing a $304,000 loan.
- FDIC placed WaMu in receivership on Sept. 25, 2008 and Chase acquired WaMu's assets, including the loan.
- NWTS served a Notice of Default on Apr. 10, 2009 as Chase's agent, referencing the Deed of Trust and Note.
- Chase recorded an Appointment of Successor Trustee on Apr. 22, 2009, naming NWTS as successor trustee.
- NWTS issued a Notice of Trustee's Sale for Aug. 21, 2009; sale did not occur; later notices shifted sale to July 2, 2010.
- Property ultimately sold to Fannie Mae on Sept. 24, 2010, with Trustee's Deed recorded Oct. 10, 2010; plaintiffs did not seek injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Liability for WaMu origination conduct versus Chase/NWTS | WaMu’s origination conduct supports claims against Chase/NWTS. | Chase/NWTS are not liable for WaMu origination actions due to successor limitations. | Claims arising from WaMu origination are dismissed. |
| Holder in due course status and defenses | Chase lacks rights to enforce due to WaMu origin defects. | FDIC (as holder) and assignees enjoy holder in due course status; defenses barred. | Chase/NWTS entitled to holder in due course; WaMu defenses barred. |
| TILA/RESPA timeliness and rescission | TILA/RESPA violations and rescission alleged timely and viable. | One-year TILA damages window elapsed; rescission unavailable post-foreclosure sale. | TILA damages time-barred; rescission claim moot post-sale; RESPA claims deficient. |
| Waiver under Washington Deed of Trust Act | Pre-sale remedies could avoid foreclosure; void sale. | Waiver and pre-sale remedies bar challenges after notice of sale; sale valid. | Waiver and mootness doctrines apply; several claims dismissed as waived or moot. |
| Fiduciary duty, covenant, fraud, conspiracy viability | Defendants breached duties, committed fraud/conspiracy during foreclosure. | No concrete facts show breach, fraud elements, or conspiratorial agreement. | Claims for fiduciary breach, good faith covenant, fraud, and conspiracy dismissed. |
Key Cases Cited
- McCann v. Quality Loan Serv. Corp., 729 F.Supp.2d 1238 (W.D.Wash.2010) (Chase not liable for WaMu origination liabilities)
- Fed. Sav. & Loan Ins. Corp. v. Cribbs, 918 F.2d 557 (5th Cir.1990) (holder in due course status shields against defenses)
- Wesche v. Martin, 64 Wash.App. 1 (Wash. Ct. App. 1992) (holder in due course; defenses do not run to holder)
- Diessner v. Mortgage Electronic Registration Systems, 618 F.Supp.2d 1184 (D.Ariz.2009) (no requirement to produce original note for fiduciary duties)
- Rosal v. First Fed. Bank of Cal, 671 F.Supp.2d 1111 (N.D.Cal.2009) (injunctive relief moot after trustee's sale)