Known v. Ing Bank, FSB, Corp.

JANICE GEARY (Formerly Known as Valli), Appellant, v. ING BANK, FSB, a Delaware corporation; AURORA LOAN SERVICES LLC,

a Washington Limited. Liability Company; QUALITY LOAN SERVICE CORPORATION

OF WASHINGTON, a Washington Corporation;

ONE OR MORE INDIVIDUALS OR ENTITIES YET UNKNOWN, Respondents.

ING BANK, FSB, a Delaware corporation, Respondent, v. JANICE VALLI; All Occupants and Persons in Possession, Appellant.

No. 43712-1-II

C/w No. 44619-7-II

COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION II

FILED: July 22, 2014

UNPUBLISHED OPINION

WORSWICK, J. — In this consolidated case, Janice Geary appeals from orders entered in two separate matters following non-judicial foreclosure on her property. In the first matter, Geary sued ING Bank FSB, Aurora Loan Services LLC, Quality Loan Service Corp., and unknown defendants. Geary argues that the trial court erred by denying her motion for partial summary judgment and granting the defendants' cross-motions for summary judgmentdismissing her claims of (1) quiet title, (2) violations of the Deed of Trust Act,¹ (3) fraud in the inducement, and (4) violations of the Consumer Protection Act.² Geary further claims that the trial court erred by (5) dismissing her claims in light of Geary's allegation that ING and Aurora fraudulently evaded the excise tax. In the second matter, ING brought an unlawful detainer action to evict Geary. Geary argues (6) the trial court erred by entering summary judgment for ING in the unlawful detainer action. We disagree with each of Geary's arguments and affirm the trial court in both matters. We further grant ING's request for attorney fees on appeal, but we deny Aurora's request.

FACTS

A. Substantive Facts

Under a promissory note executed in February 2005, Janice Geary borrowed $620,000 from Pierce Commercial Bank to finance the purchase of residential property in Buckley, Washington.³ The adjustable-rate note obligated Geary to pay only interest for 10 years, followed by 20 years of payments of interest and principal.

The parties recorded a deed of trust listing Geary as borrower, Pierce as lender and beneficiary, and Transnation Title Insurance Co. as trustee holding title to the property. In theevent of Geary's default on the note, the deed of trust provided for a trustee's sale of the property to effect a non-judicial foreclosure.

Both the deed of trust and the note authorized Pierce and its successors to assign the note together with the deed of trust to another party. Pierce recorded an assignment of the note and the beneficial interest in the deed of trust to Lehman Brothers Bank, FSB. In turn, Lehman recorded an assignment of the note and the beneficial interest in the deed of trust to Mortgage Electronic Registration Systems, Inc. (MERS).

The deed of trust authorized the lender to designate the loan servicer. Pierce designated Aurora Loan Services, Inc. as the loan servicer.

Geary was current on her payments in November 2008, when she called Aurora to tell them she could not keep up with the payments and to inquire about a loan modification. According to Geary's affidavit, an Aurora representative advised that Aurora had authority to modify the loan, but it would do so only if she were 60 to 90 days late on her payments. At a deposition Geary testified that, based on this advice, she stopped making payments in December 2008. She has never resumed payments.

Aurora repeatedly denied Geary's requests to modify her loan in three separate letters, each dated in December 2008. First, Aurora wrote Geary that it would deny her loan modification request because it lacked proof of Geary's income. Geary then submitted proof of her income from rent and child support. Second, Aurora denied Geary's request because she was "[f]inancially unable to afford monthly payments" even on modified terms. Clerk's Papers (CP) (No. 43712-1) at 721. Aurora then denied a third request because it lacked Geary's most recent pay stubs.

Nonetheless, Geary averred that Aurora denied her request by telephone in March 2009 because 'she did not meet the loan holder's standards for modifications, and that this reason contradicted Aurora's earlier representation that Aurora had authority to modify the loan. Geary also submitted a declaration from a former Aurora loan officer. The loan officer averred that Aurora's loan officers were instructed to tell all customers that Aurora had no authority to alter a loan's interest rate. But the loan officer's declaration was dated May 2006, well before Geary attempted to modify her loan.

In March 2009, a notice of default was issued by Quality Loan Service Corp., acting as the agent of the beneficiary, MERS. Days later, MERS appointed Quality as trustee of the deed of trust, succeeding Transnation.⁴ Then in April 2009, MERS recorded" an assignment of the note and the beneficial interest in the deed of trust to Aurora.

Quality gave Geary notice of a trustee's sale scheduled for July 2009. In two letters, Geary denied Quality's authority to act as trustee. But Geary did not seek an injunction restraining the trustee's sale. After four continuances, the trustee's sale occurred in November 2009.⁵

At the trustee's sale ING Bank, FSB purchased the property for $668,991, the amount Geary then owed on the note. Accordingly, Aurora directed Quality to take title in the name ofING. But in December 2009, Quality recorded a trustee's deed upon sale that named Aurora as the grantee of the property.

Five months later, in May 2010, Quality recorded a "corrective trustee's deed upon sale" naming ING as the grantee of the property. CP (No. 43712-1) at 185. Also in May 2010, Aurora assigned the deed of trust and the note to ING in a recorded "corporate assignment of deed of trust." CP (No. 43712-1) at 180 (emphasis omitted).

By her own admission, Geary continued to live on the property for at least three years and four months without paying rent or mortgage.

B. Geary's Suit Against ING, Aurora, Quality, and Unknown Defendants

In May 2011, Geary commenced a suit against ING, Aurora, Quality, and unknown individuals or entities. Geary's suit sought to set aside the corrective trustee's deed upon sale, quiet title to the property, recover money damages, and restrain the defendants from taking further foreclosure action. Geary alleged violations of the Deed of Trust Act and Consumer Protection Act; that Aurora fraudulently induced Geary into defaulting on her obligations under the note; and that Quality's execution of the corrective deed of trust sale was a "fraudulent attempt to avoid payment of [excise] taxes." CP (No. 43712-1) at 11. ING, Aurora, and Quality each answered Geary's claims and sought an award of reasonable attorney fees and costs.

Geary moved for partial summary judgment, requesting a declaration that ING, Aurora, and Quality "have no interest in the property" and an order quieting title in Geary. CP (No. 43712-1) at 62. On cross-motions for summary judgment, ING, Aurora, and Quality sought the dismissal of all Geary's claims.

In July 2012, the trial court denied Geary's motion and granted the defendants' motions. Accordingly, the trial court dismissed each of Geary's claims against ING, Aurora, and Quality.⁶

Geary appeals.

C. ING's Unlawful Detainer Action

In March 2011, ING sent Geary a notice to vacate the property. The following month, ING commenced an unlawful detainer action to obtain a writ of restitution and to evict Geary. In her answer, Geary alleged, inter alia, that she remained the owner of the property "because of the defects in the foreclosure process and the misconduct of the successive lien holders." CP (No. 44619-7) at 28.

In February 2013, after the trial court dismissed Geary's suit, ING moved for summary judgment on its unlawful detainer claim arguing that ING was entitled to immediate possession of the property. In its motion, ING argued that dismissal of Geary's suit precluded her from relitigating the issue of whether she remained the owner of the property. The trial court granted ING's motion and issued the writ of restitution.

Geary appeals.

D. Consolidation of Geary's Appeals

Geary moved to consolidate her two appeals. Our court's commissioner granted Geary's motion and also accepted ING's recommendation to accelerate perfection of Geary's unlawful detainer appeal.⁷

ANALYSIS

In the first action, Geary assigns error to the trial court's orders denying her motion for partial summary judgment and granting the defendants' cross-motions for summary judgment dismissing her claims.⁸ Geary argues that the trial court erred by dismissing her claims for (1) quiet title, (2) Deed of Trust Act violations, (3) fraud in the inducement, (4) Consumer Protection Act violations, and (5) fraudulent evasion of the excise tax.⁹ Geary further claims that the trialcourt erred in the second action by (6) granting summary judgment in favor of ING on its unlawful detainer claim. We disagree.

We review a trial court's decision on a motion for summary judgment de novo, engaging in the same inquiry as the trial court. Schmitt v. Langenour, 162 Wn. App. 397, 404, 256 P.3d 1235 (2011). Summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c). A material fact is one affecting the outcome of the litigation. Owen v. Burlington N. & Santa Fe R.R., 153 Wn.2d 780, 789, 108 P.3d 1220 (2005).

To determine whether a genuine issue exists, the court must consider the record and all reasonable inferences in the light most favorable to the nonmoving party. Clements v. Travelers Indem. Co., 121 Wn.2d 243, 249, 850 P.2d 1298 (1993). There is no genuine issue when reasonable minds could reach but one conclusion. See Swanson v. Liquid Air Corp., 118 Wn.2d 512, 518, 826 P.2d 664 (1992). Further, a naked assertion that factual issues remain unresolved is insufficient to defeat a motion for summary judgment. Jacobsen v. State, 89 Wn.2d 104, 111-12, 569 P.2d 1152 (1977).

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