Trujillo v. Northwest Trustee Services, Inc.
183 Wash. 2d 820
| Wash. | 2015Background
- In 2006 Trujillo obtained a mortgage evidenced by a promissory note secured by a deed of trust; the loan was eventually owned by Fannie Mae while Wells Fargo retained servicing rights.
- Wells Fargo executed a beneficiary declaration (Mar. 14, 2012) stating under penalty of perjury that it “is the actual holder of the promissory note or other obligation … or has requisite authority under RCW 62A.3-301 to enforce said obligation.”
- Northwest Trustee Services (NWTS), relying on that declaration as beneficiary proof, recorded a notice of default and scheduled a trustee’s sale; no sale occurred before litigation.
- Trujillo (pro se) sued NWTS and Wells Fargo alleging violations of the Deeds of Trust Act (DTA), the Washington Consumer Protection Act (CPA), the Criminal Profiteering Act, and intentional infliction of emotional distress.
- The trial court and Court of Appeals dismissed Trujillo’s claims against NWTS; the Washington Supreme Court granted review, considered Lyons v. U.S. Bank, and addressed whether the ambiguous “or” language in the beneficiary declaration sufficed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a beneficiary declaration with “or” language satisfies RCW 61.24.030(7)(a) proof requirement | Trujillo: declaration is ambiguous and does not prove beneficiary owns the note; DTA was violated | NWTS/Wells Fargo: the declaration suffices under RCW 61.24.030(7) and trustee may rely on it | The declaration is ambiguous under Lyons and fails to satisfy RCW 61.24.030(7)(a); Trujillo adequately alleged a DTA violation |
| Whether NWTS could rely on that declaration consistent with trustee’s duty of good faith (RCW 61.24.010(4)) | Trujillo: NWTS unreasonably deferred to ambiguous declaration and thus breached duty | NWTS: entitled to rely on beneficiary declaration absent bad faith | Under Lyons, reliance on the ambiguous declaration could be unlawful; Trujillo alleged facts sufficient to challenge NWTS’s reliance and good-faith compliance |
| Whether alleged DTA violation supports a CPA claim | Trujillo: ambiguous/deceptive foreclosure conduct had capacity to deceive and caused property-related injury and costs | NWTS: plaintiff wasn’t injured in business/property; foreclosure would occur regardless | Court: DTA-based conduct can support a CPA claim; Trujillo plausibly alleged public interest, injury (expenses/uncertainty), and causation |
| Whether alleged facts support criminal profiteering or intentional infliction of emotional distress | Trujillo: actions amounted to theft/organized wrongdoing and caused severe distress | NWTS: allegations are insufficiently specific; no enterprise or requisite pattern; conduct not extreme | Court: profiteering claim fails for lack of enterprise/pattern and factual specificity; IIED claim fails as conduct not extreme/outrageous under Lyons |
Key Cases Cited
- Lyons v. U.S. Bank Nat’l Ass’n, 181 Wn.2d 775 (Wash. 2014) (beneficiary declaration containing “or” language is ambiguous and may not satisfy RCW 61.24.030(7)(a))
- Bain v. Metro. Mortg. Grp., Inc., 175 Wn.2d 83 (Wash. 2012) (DTA requires proof beneficiary owns note before nonjudicial foreclosure)
- Frias v. Asset Foreclosure Servs., Inc., 181 Wn.2d 412 (Wash. 2014) (limitations on damages under DTA; CPA claims allowed for wrongful foreclosure conduct prior to sale)
- Klem v. Wash. Mut. Bank, 176 Wn.2d 771 (Wash. 2013) (elements for CPA claim)
- Panag v. Farmers Ins. Co. of Wash., 166 Wn.2d 27 (Wash. 2009) (capacity-to-deceive standard for CPA; emotional distress not compensable under CPA)
- Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778 (Wash. 1986) (public interest factors for private CPA actions)