Selene RMOF II Reo Acquisitions II, LLC v. Ward
92967-0
| Wash. | Aug 3, 2017Background
- Vanessa Ward purchased a Seattle residence in 1999 and later (she says) received an unrecorded, partially notarized quitclaim deed back from a third party in 2004; public records show later recorded conveyances and a 2009 nonjudicial foreclosure sale by which LaSalle Bank acquired the property.
- LaSalle attempted unlawful detainer proceedings against Ward twice but did not persist; LaSalle later sold the property to Selene RMOF II REO Acquisitions II LLC by special warranty deed in 2012.
- In 2014 Selene sued Ward in unlawful detainer alleging it acquired the property by foreclosure and sought a writ of restitution; the trial court granted the writ, which was later vacated for service issues and then reinstated.
- Ward defended by asserting she owned title (via the 2004 quitclaim deed) and alleged mortgage fraud; she admitted she had notice of the foreclosure and did not pursue a timely enjoinment after filing a suit that was dismissed.
- The Court of Appeals (unpublished) reversed, holding Selene could not use the RCW 61.24.060(1) unlawful detainer remedy because it was not the original purchaser at the trustee’s sale and that Ward’s quitclaim deed supplied color of title; the Washington Supreme Court granted review.
Issues
| Issue | Plaintiff's Argument (Selene) | Defendant's Argument (Ward) | Held |
|---|---|---|---|
| Whether a subsequent purchaser (Selene) may use unlawful detainer under RCW 61.24.060(1) after acquiring from the foreclosure-sale purchaser | Statutory remedy follows the foreclosure purchaser’s interest and transfers with a conveyance of that interest; denying subsequent purchasers the remedy undermines the statute’s purpose of expeditious possession | RCW 61.24.060(1) grants the remedy only to the purchaser at the trustee’s sale; right does not survive transfer and therefore Selene lacks it | Court held subsequent purchaser may pursue unlawful detainer under RCW 61.24.060(1) when it acquires the foreclosure purchaser’s interest by conveyance |
| Whether Ward could raise title challenges or color-of-title defense in the unlawful detainer proceeding | Title disputes were waived by Ward’s failure to timely enjoin the trustee’s sale; unlawful detainer is limited to possession and not a forum for litigating title | Ward argued her quitclaim deed gave her color of title, which blocks summary unlawful detainer and requires quiet title first | Court held Ward’s title challenge was not cognizable in unlawful detainer because she had notice and failed to pursue presale remedies; her unrecorded/defective deed did not supply color of title |
| Whether Ward’s 2004 quitclaim deed gave her color of title sufficient to defeat summary unlawful detainer under RCW 59.12.030(6) | Selene contended the deed was unrecorded and facially defective (improper notarization), so it did not create color of title or put subsequent purchasers on inquiry notice | Ward contended the earlier (2004) deed, even if unrecorded, made subsequent transfers void for fraud and provided color of title | Court held the quitclaim deed was facially deficient (not properly acknowledged), unrecorded, and insufficient to constitute color of title against subsequent bona fide purchasers; recording statute defeated her claim |
| Remedy and procedural posture on remand | Selene sought reinstatement of the trial court writ of restitution and denial of Ward’s fee requests | Ward sought reversal and fees | Court reversed Court of Appeals, reinstated writ of restitution, denied Ward’s attorney-fee request |
Key Cases Cited
- Berrocal v. Fernandez, 155 Wn.2d 585 (statutory interpretation reviewed de novo)
- Fed. Nat'l Mortg. Ass'n v. Ndiaye, 188 Wn. App. 376 (unlawful detainer after trustee's sale is limited to possession; title defenses must be raised pre-sale)
- Savings Bank of Puget Sound v. Mink, 49 Wn. App. 204 (legislative intent to preserve summary nature of possession remedies after trustee's sale)
- Puget Sound Inv. Grp., Inc. v. Bridges, 92 Wn. App. 523 (distinguishable tax-sale/quitclaim context on color of title)
- Peoples Nat'l Bank of Wash. v. Ostrander, 6 Wn. App. 28 (statutory scheme gives purchaser at trustee's sale right to summary possession)
- Udall v. T.D. Escrow Servs., Inc., 159 Wn.2d 903 (effect of foreclosure-sale conveyance; trustee's deed conveys grantor's interest)
- Munden v. Hazelrigg, 105 Wn.2d 39 (unlawful detainer is a narrow summary proceeding limited to possession)