JP Morgan Chase Bank, NA v. Unknown Heirs

481 P.3d 1114

JP MORGAN CHASE BANK, NA, Plaintiff,

v.The UNKNOWN HEIRS and Devisees OF John M. PORTER ; Clyde W. Porter ; Occupants of the Property, Defendants,Madrona Lisa LLC, successor in interest, Appellant,Vera Semenyuk, purchaser of foreclosed property.

No. 80775-7-I

Court of Appeals of Washington, Division 1.

FILED March 1, 2021

Guy William Beckett, Berry & Beckett, PLLP, 1708 Bellevue Ave., Seattle, WA, 98122-2017, for Appellant.

Matthew G. Stamper, Pody & McDonald, PLLC, 1200 5th Ave. Ste. 1410, Seattle, WA, 98101-3106, for Plaintiff.

Jimmy Garg, Jimmy Garg PLLC, 300 Lenora Street # 1063, Seattle, WA, 98121, for Defendants.

PUBLISHED OPINION

Appelwick, J.

¶ 1 The right of redemption of foreclosed real property was quit claimed by parents, as heirs of a decedent debtor, to Madrona Lisa. Madrona Lisa as a successor in interest to the debtor attempted to redeem the foreclosed real property. The trial court denied the right of redemption on the basis that the deceased debtor's estate had not been subject to probate administration. Absent administration of the decedent's estate, the quit claim deeds executed by the parents conveyed whatever vested interest they possessed in the redemption rights. That interest was subject to potential claims of other heirs and of creditors, both in their hands and in Madrona Lisa's. However, the fact that these potential claims remained did not disqualify Madrona Lisa as a successor in interest. We reverse and remand to allow Madrona Lisa to redeem the property.

FACTS

¶ 2 John M. Porter died on April 30, 2017. He was survived by his parents, Clyde H. Porter and Sally Berg, and his brother, Clyde W. Porter. His parents indicated he left no will, was unmarried, and had no children. At the time of his death, he was the owner of property at 11332 1st Place West in Everett, Washington (the property). The property was encumbered by a deed of trust held by JP Morgan Chase Bank NA. No administration of his estate was filed.

¶ 3 On January 31, 2018, JP Morgan filed a complaint in Snohomish County Superior Court seeking to foreclose on the property. JP Morgan personally served Porter's brother and served the unknown heirs, including the parents, by publication. No defendants appeared to defend the action. The court entered an in rem default judgment and decree of foreclosure on the property on August 10, 2018.

¶ 4 The Snohomish County Sheriff held a foreclosure sale on February 15, 2019. Vera Semenyuk purchased the property for $218,531.00. The court entered an order confirming the sale on April 17, 2019.

¶ 5 In May 2019, John Porter's parents conveyed their interest in the property to Madrona Lisa LLC, via quitclaim deeds. Both deeds were duly recorded.

¶ 6 On August 21, 2019, Madrona Lisa submitted its intent to redeem the property as the successor in interest to the unknown heirs of Porter to the Snohomish County Sheriff's Office. On August 27, 2019, Semenyuk submitted a letter to the sheriff's office objecting to Madrona Lisa redeeming the property. She argued that Madrona Lisa could not redeem the property because Porter's estate had not been probated. She nevertheless indicated that, if it was determined that Madrona Lisa could redeem the property, it would need to pay $283,472.85 in order to redeem the property.¹

¶ 7 On August 30, 2019, prior to being informed of Semenyuk's objection or redemption calculation, Madrona Lisa delivered a cashier's check for $222,355.29 to the sheriff's office. Madrona Lisa later tendered the additional $61,117.56 difference between its calculation and Semenyuk's to the sheriff. Because of the dispute over Madrona Lisa's right to redeem, the sheriff's office declined to take any action without a court order.

¶ 8 Madrona Lisa filed a motion to direct the sheriff to issue a certificate of redemption in Snohomish County Superior Court. The court denied the motion. Madrona Lisa moved for reconsideration. The court denied the motion.

¶ 9 Madrona Lisa appeals.

DISCUSSION

¶ 10 Madrona Lisa argues that it should be permitted to exercise the right of redemption as a successor in interest to Porter. It argues that the trial court erred in denying its motion to compel the sheriff to issue a certificate of redemption and its subsequent motion for reconsideration. Madrona Lisa also argues that its original calculation for the amount necessary to redeem the property was correct. Semenyuk requests she be compensated for her attorney fees and other expenses.

I. Madrona Lisa was a Successor in Interest

¶ 11 Chapter 6.23 RCW allows a judgment debtor or their successor in interest to redeem property sold at a foreclosure sale by paying the purchaser the sale price plus interest and taxes. RCW 6.23.010(1)(a), .020(2). The judgment debtor must exercise this right within either one year or eight months after the date of sale. RCW 6.23.020(1). Here, the redemption period was eight months. Madrona Lisa timely initiated redemption.

¶ 12 Madrona Lisa argues that it should be able to redeem the property because it is a successor in interest of the holders of the rights to redeem, Porter's parents. Semenyuk does not dispute that Porter's parents were his heirs. Rather, she argues that John Porter's estate needed to be probated in order for the property to pass to them, and subsequently to Madrona Lisa.

¶ 13 Madrona Lisa disagrees. It relies on RCW 11.04.250, which reads,

When a person dies seized of lands, tenements or hereditaments, or any right thereto or entitled to any interest therein in fee or for the life of another, his or her title shall vest immediately in his or her heirs or devisees, subject to his or her debts, family allowance, expenses of administration, and any other charges for which such real estate is liable under existing laws. No administration of the estate of such decedent, and no decree of distribution or other finding or order of any court shall be necessary in any case to vest such title in heirs or devisees, but the same shall vest in the heirs or devisees instantly upon the death of a decedent: PROVIDED, that no person shall be deemed a devisee until the will has been probated. The title and right to possession of such lands, tenements, or hereditaments so vested in such heirs or devisees, together with rents, issues, and profits thereof, shall be good and valid against all persons claiming adversely to the claims of such heirs, or devisees, excepting only the personal representative when appointed, and persons lawfully claiming under such personal representative; and any one or more of such devisees, or their grantees, jointly or severally, may sue for and recover their respective shares or interests in any such lands, tenements, or hereditaments and the rents, issues, and profits thereof, whether letters testamentary or of administration are granted or not, from any person except the personal representative and those lawfully claiming under such personal representative.

(Emphasis added.) Madrona Lisa argues that this statute clearly and unambiguously states that title to real property passes immediately to the decedent's heirs upon death, in this case, Porter's parents. Porter's parents transferred their immediately-vested right to redemption to it via quitclaim deeds.

¶ 14 This court interprets the meaning of statutes de novo. Wrigley v. State, 195 Wash.2d 65, 71, 455 P.3d 1138 (2020). The ultimate objective is to ascertain and carry out the legislature's intent. Id. Where a statute's meaning is plain on its face, courts must give effect to the plain meaning as an expression of legislative intent. State ex rel. Citizens Against Tolls (CAT) v. Murphy, 151 Wash.2d 226, 242, 88 P.3d 375 (2004). Plain meaning is determined from the language, the statute's context, related provisions, and the statutory scheme as a whole. Wrigley, 195 Wash.2d at 71, 455 P.3d 1138. The court must construe the statute as a whole, giving effect to all of the language used and interpreting provisions in relation to one another. Id. Where the meaning of a statute is ambiguous, courts may resort to statutory construction, legislative history, and relevant case law to discern the drafter's intent. State v. Ervin, 169 Wash.2d 815, 820, 239 P.3d 354 (2010)

¶ 15 While "title" is usually conceived as fee interest, the text of the statute makes clear that the title it confers is something less. See RCW 11.04.250. It indicates that title vests immediately "subject to [the decedent's] debts, family allowance, expenses of administration, and any other charges for which such real estate is liable under existing laws." Id. Several important property rights remain with the estate until these other statutory preferences are satisfied. See 11 Thompson on Real Property, Third Thomas Edition § 91.02 (David A. Thomas ed. 2015); In re Poli's Estate, 27 Wash.2d 670, 676, 179 P.2d 704 (1947) ("The rights of heirs under the statute with reference to vesting of title are subject to other statutory preferences."); Wendler v. Woodward, 93 Wash. 684, 685-86, 161 P. 1043 (1916) ("While it is true that the heirs take title immediately, the administrator has the right of possession and the concomitant right to recover possession for the estate."); In re Peterson's Estate, 12 Wash.2d 686, 734, 123 P.2d 733 (1942) (heirs do not have the right to treat the property as their own until the estate has been closed).

¶ 16 The personal representative may exercise the right of redemption on real property in the estate, and "any person interested" may apply to the court to order the personal representative to do so. RCW 11.56.220. Likewise, RCW 11.56.050 provides that the personal representative retains the right to sell real property in the estate if a court determines it to be necessary.

¶ 17 The "principal reason" for requiring official administration of the estate is the orderly disposition of creditor's claims to the estate. Murphy v. Murphy, 42 Wash. 142, 148, 84 P. 646 (1906). Administration may also be necessary to...