State v. Kaiser
161 Wash. App. 705
Wash. Ct. App.2011Background
- Kaiser and partners (Fiscal Dynamics entities) engaged in ~400 transactions with property owners facing tax foreclosure from 1998–2008.
- Solicitations advertised to help owners avoid foreclosure and keep their property, despite false assurances of success.
- Two main schemes: overage plays (conveying title to Kaiser to collect overages) and partial interest deals (trusts with Kaiser as trustee and cobeneficiary).
- Overage plays involve powers of attorney, attorney involvement, and sometimes no pre-disclosure of potential overages; funds were diverted to Kaiser rather than record owners.
- Partial interest deals place property in trusts controlled by Kaiser, giving him decisive sale control and potentially forfeiting owners’ rights; documents were complex, inconsistent, and misleading.
- State filed CPA enforcement aimed at declaratory judgment, injunction, restitution, and penalties; trial court granted partial summary judgment finding multiple CPA violations and injunctive relief.]
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Kaiser commit unlawful intercepting of overage funds? | Kaiser intercepted funds owed to record owners under RCW 84.64.080. | Stephenson distinguishes; statute not violated by overage schemes. | Yes; held to violate RCW 84.64.080 and CPA by intercepting overage funds. |
| Was Kaiser’s use of power of attorney and attorneys deceptive under the CPA? | Power of attorney and lawyers concealed overage funds and facilitated their extraction. | Not contested; argue no CPA violation proven. | Yes; use of power of attorney and attorneys to conceal and obtain overages violated the CPA. |
| Were the overage and partial interest agreements unfair or unconscionable per the CPA? | Agreements misrepresented terms and buried material facts; unconscionable. | Contracts not inherently unlawful if parties consent. | Yes; found the agreements unfair and unconscionable under the CPA. |
| Did Kaiser’s role as trustee and cobeneficiary in land trusts breach fiduciary duties and violate the CPA? | Kaiser controlled sales and profits to his benefit without disclosure. | Not disputed; claim of fiduciary breach but disputed CPA violations. | Yes; acted as trustee and cobeneficiary in violation of the CPA. |
Key Cases Cited
- Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778 (Wash. 1986) (unfair or deceptive acts may be shown without proof of intent or deception)
- Ralph Williams’ Nw. Chrysler Plymouth, Inc. v. Williams, 87 Wn.2d 298 (Wash. 1976) (misrepresentation or concealment of material terms violates CPA)
- Equity Investors, National Bank of Washington v. Equity Investors, 81 Wn.2d 886 (Wash. 1973) (testimony contradicting contract terms allowed where fraud or coercion alleged)
- Leingang v. Pierce County Med. Bureau, 131 Wn.2d 133 (Wash. 1997) (de novo review of legal questions in CPA analysis)
- Robinson v. Avis Rent A Car Sys., Inc., 106 Wn. App. 104 (Wash. Ct. App. 2001) (requires showing unfair or deceptive act or practice in public interest context)
- Hiner v. Bridgestone/Firestone, Inc., 91 Wn. App. 722 (Wash. Ct. App. 1998) (definitional standard for deception under CPA)