River Stone Holdings NW LLC, V Alice M. Lopez
199 Wash. App. 87
| Wash. Ct. App. | 2017Background
- Alice M. Lopez defaulted on a 2004 mortgage secured by a deed of trust; the note was later assigned to Deutsche Bank as trustee for a mortgage-backed trust. Northwest Trustee Services conducted a trustee’s sale on November 13, 2015; River Stone Holdings NW, LLC purchased the property and received a deed reciting DTA compliance.
- River Stone served Lopez a 20-day notice to vacate and then filed an unlawful detainer action after she did not leave; Lopez answered denying ownership and alleging the foreclosure was unlawful but submitted no evidentiary support.
- Lopez had previously filed a separate lawsuit seeking to restrain the foreclosure sale but was unsuccessful in obtaining an injunction.
- At the unlawful detainer show-cause hearing Lopez argued title and foreclosure defects (improper assignment to the trust, defective trustee appointment, DTA noncompliance, and federal tax restrictions) but introduced no evidence that altered possession rights.
- The superior court found Lopez had no viable defense in the unlawful detainer action, ordered issuance of a writ of restitution, and the sheriff enforced possession; Lopez appealed.
Issues
| Issue | Plaintiff's Argument (Lopez) | Defendant's Argument (River Stone) | Held |
|---|---|---|---|
| Whether alleged defects in the trustee’s sale (chain-of-title, trustee appointment, DTA noncompliance) are cognizable defenses in an unlawful detainer action | Trustee’s sale was invalid so River Stone lacks title and cannot recover possession | Unlawful detainer is a summary proceeding limited to possession; title defects are not litigable in that action | Defective-title/DTA challenges are not proper defenses in unlawful detainer; court may not consider them there |
| Whether a jury trial is required because issues of fact exist about the sale’s validity | Brown was wrongly decided; factual disputes over who could enforce the deed justify a jury trial | Brown controls and unlawful detainer is not the forum for title disputes | No jury; Brown remains binding and does not permit relitigation of title in unlawful detainer |
| Whether the holder/servicer lacked authority to foreclose under Washington law (conflict with UCC provision) | RCW 62A.9A-203 requires ownership to enforce note; Brown conflicts with statute | Brown authorizes enforcement by a holder even if not the owner; Brown controls | Brown upheld; court bound to follow it; Lopez’s statutory argument rejected |
| Whether federal tax law (26 U.S.C. §860F) barred the Trust’s sale and can be raised to resist possession | Transfer into the Trust violated tax rules, making the sale invalid and affecting possession | Tax argument does not bear on Lopez’s present right to possession; irrelevant in unlawful detainer | Federal tax argument not a proper defense to possession in unlawful detainer |
Key Cases Cited
- Brown v. Dep’t of Commerce, 184 Wn.2d 509 (Wash. 2015) (holder of a deed of trust may enforce foreclosure even if not the owner of the note)
- Albice v. Premier Mortg. Servs. of Wash., Inc., 174 Wn.2d 560 (Wash. 2012) (trustee’s failure to strictly comply with DTA can render a sale invalid; DTA recitals are prima facie evidence for bona fide purchasers)
- Frizzell v. Murray, 179 Wn.2d 301 (Wash. 2014) (borrower may waive objections to a trustee’s sale by failing to timely seek injunctive relief)
- Plein v. Lackey, 149 Wn.2d 214 (Wash. 2003) (DTA provides procedures to restrain trustee’s sales; presale remedies exist)
- Ndiaye v. Fed. Nat’l Mortg. Ass’n, 188 Wn. App. 376 (Wash. Ct. App. 2015) (unlawful detainer is not the forum to litigate title defects)
- Puget Sound Inv. Group v. Bridges, 92 Wn. App. 523 (Wash. Ct. App. 1998) (unlawful detainer offers speedy relief but not venue to decide title)