Karen S. Pooley, App. v. Quality Loan Service Corp. Of Wa, Et Ano., Resps.
73705-8
| Wash. Ct. App. | Aug 14, 2017Background
- Karen Pooley sued Quality Loan Service Corp. (Quality), JPMorgan Chase (Chase), and McCarthy & Holthus (M&H) over a foreclosure-related dispute; the superior court granted summary judgment to defendants and awarded fees to M&H.
- Central factual point: the original promissory note was lost; Chase held a copy and executed a lost-note affidavit and claimed the right to enforce the note.
- Pooley challenged enforceability of the note (arguing unknown note holder and that a contractual alternative remedy barred a lost-note affidavit), asserted breaches of the Deeds of Trust Act (DTA) and Consumer Protection Act (CPA) by Quality for foreclosure-related conduct, and alleged civil conspiracy and joint venture against M&H.
- Quality relied on a beneficiary declaration and other materials to establish the beneficiary and Chase’s authority; Pooley claimed the declaration was ambiguous and that preforeclosure requirements under the Foreclosure Fairness Act (FFA) were not satisfied.
- The trial court dismissed Pooley’s claims on summary judgment, found Pooley’s pleadings against M&H frivolous, and awarded M&H attorney fees and costs; the Court of Appeals affirmed and awarded appellate fees to M&H.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of lost original note / identity of holder | Pooley: note unenforceable because holder identity is unknown and lost-note affidavit insufficient (contract provides alternative remedy) | Chase: Chase possessed the note-copy and executed a lost-note affidavit which replaces the original under applicable UCC principles | Held: Lost-note affidavit plus copy sufficed; Chase was holder entitled to enforce the note; contractual alternative did not preclude other legal remedies |
| Quality’s duty of good faith under the DTA (beneficiary declaration) | Pooley: Quality relied on a facially ambiguous beneficiary declaration and breached duty of good faith | Quality: Declaration (and other documents) clearly identified beneficiary; Quality adequately investigated | Held: Declaration was not ambiguous; Quality adequately informed itself and did not breach the DTA or duty of good faith |
| CPA claim premised on DTA/FFA violations | Pooley: Quality’s failures (e.g., FFA contact/due diligence, misidentification, procedural defects) were per se CPA violations and caused injury | Quality: FFA duties fall on beneficiary or authorized agent (Quality was neither); Pooley failed to prove CPA elements or damages causation | Held: Pooley failed to establish CPA elements; no per se CPA violation by Quality; claims failed on summary judgment |
| Sanctions and attorney fees against Pooley re: M&H (RCW 4.84.185 and CR 11) | Pooley: (implicit) her claims against M&H had merit | M&H: Pooley’s claims (civil conspiracy/joint venture) were unsupported, frivolous, and based on inadmissible assertions | Held: Trial court did not abuse discretion; pleadings against M&H frivolous; fees/costs and appellate fees awarded to M&H |
Key Cases Cited
- MacMeekin v. Low Income Hous. Inst., Inc., 111 Wn. App. 188 (summary judgment review standard)
- Howell v. Spokane & Inland Empire Blood Bank, 117 Wn.2d 619 (burden on movant showing absence of evidence)
- Lyons v. U.S. Bank Nat'l Ass'n, 181 Wn.2d 775 (trustee duty of good faith; must adequately inform itself)
- Frias v. Asset Foreclosure Servs., Inc., 181 Wn.2d 412 (DTA violations analyzed in CPA context)
- Rhinehart v. Seattle Times, Inc., 59 Wn. App. 332 (standards for awarding fees under RCW 4.84.185 and CR 11)