John Phillip Hall v. J P Morgan Chase Bank
74602-2
| Wash. Ct. App. | Oct 24, 2016Background
- In 2005 Diane Hough took a mortgage on an Edmonds condominium; she defaulted in 2008. Washington Mutual serviced the loan; Chase later acquired servicing rights and Wells Fargo acted as trustee for the securitized trust.
- In Jan 2014 Quality Loan Service (Quality Loan) issued a notice of default; Hall acquired the property from Hough in a 2014 dissolution and was required to refinance or sell by July 2014.
- Hall submitted a mortgage-assistance request and participated in an FFA (Foreclosure Fairness Act) mediation on April 14, 2014; Wells Fargo declined to consider a modification for Hall without participation or consent of the original borrower, Hough. Mediator certified the parties mediated in good faith.
- Hall sued Chase, Quality Loan, and Wells Fargo in June 2015 alleging violations of the FFA and Washington’s Consumer Protection Act (CPA); defendants moved for summary judgment.
- The trial court granted summary judgment for defendants, denied Hall’s motion to amend the complaint, and denied a CR 56(f) continuance; Hall appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether defendants violated FFA by refusing to treat Hall (who acquired title via dissolution) as a borrower in mediation | Hall: RCW 61.24.165(6) requires a person awarded title by dissolution be treated as a borrower; refusal to proceed without the ex-spouse shows bad faith | Defendants: The statutory amendment Hall cites was not effective until June 12, 2014; the mediation occurred April 14, 2014, so it did not apply | Court: Summary judgment affirmed — amendment was not in effect at mediation; no retroactivity shown, so no question of fact on bad faith |
| Whether alleged misrepresentations about loan-assumption availability violate CPA and create triable issues | Hall: Chase misrepresented Freddie Mac’s position on loan assumptions; that plus FFA violation shows deceptive practice and caused injury | Chase: Even if misrepresentation occurred, Hall cannot show causation because any meaningful relief required original borrower’s participation | Court: Summary judgment affirmed — Hall failed to prove the causation element of CPA and cannot show he would have obtained relief but for defendants’ acts |
| Whether Quality Loan breached trustee’s duty of good faith by improperly favoring lender or through counsel overlaps | Hall: dual representation and relationships created partiality and breached trustee’s independent duty | Defendants: No evidence trustee deferred to lender or that dual roles impacted mediation or foreclosure | Court: Summary judgment affirmed — Hall produced no evidence of trustee bad faith or prejudice |
| Whether trial court abused discretion in denying leave to amend and denying CR 56(f) continuance | Hall: Newly discovered Freddie Mac bulletins warranted amendment and discovery; needed more time to complete discovery | Defendants: Hall delayed, failed to attach proposed amended pleading per local rules, and the proposed amendment would be futile; discovery requests lacked justification and would not create a triable issue | Court: Affirmed — denial of leave to amend not an abuse (amendment futile/delayed); denial of continuance proper (no adequate reason or showing of what discovery would prove) |
Key Cases Cited
- Beaupre v. Pierce County, 161 Wn.2d 568 (review of summary judgment de novo)
- Lowman v. Wilbur, 178 Wn.2d 165 (summary judgment standards)
- Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778 (CPA elements and per se unfair practice discussion)
- Lyons v. U.S. Bank Nat'l Ass'n, 181 Wn.2d 775 (trustee duty of good faith under RCW 61.24.010(4))
- Klem v. Washington Mut. Bank, 176 Wn.2d 771 (trustee must exercise independent discretion and not simply defer to lender)
- Trujillo v. Nw. Tr. Servs., Inc., 183 Wn.2d 820 (question of law for whether act is unfair or deceptive)