IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON UNION BANK, N.A., successor-ininterest to the Federal Deposit Insurance Corporation, as receiver of Frontier Bank, Respondent,

v. JOHN T. BLANCHARD and JANE DOE BLANCHARD, husband and wife; RANDY S. PREVIS and KATIE L. PREVIS, husband and wife, Appellants. DIVISION ONE
No. 72805-9-1

PUBLISHED OPINION

FILED: June 6, 2016 c=> WO

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Dwyer, J. —When Wellington Hills Park, LLC defaulted on a debt owed to Union Bank, Union commenced this action on commercial guaranties executed by John Blanchard, Randy Previs, and Katie Previs (the guarantors) securing that debt. The guarantors asserted numerous affirmative defenses and counterclaims in response, but the trial court concluded that Union was entitled to judgment as a matter of law on its claims and dismissed the guarantors' counterclaims. Because the trial court was correct to enforce the absolute and unconditional guaranties and the guarantors do not establish a genuine issue of material fact with regard to their claims and defenses, we affirm.No. 72805-9-1/2

A. Blanchardand the Previses give guaranties ofborrower's indebtedness to Frontier Bank Wellington Hills Park (borrower) is a limited liability company that owned 

### theWellington Hills Business Campus in Woodinville (the property). Its members
are Randy and Katie Previs (85 percentowners), who are long-time real estate investors and developers, and John Blanchard (15 percent owner), "an 

### experienced business and real estate attorney," who also served as borrower's general counsel. In 2005, borrower obtained a construction loan to develop the property from Frontier. Borrower executed a promissory noteevidencing the debtowed to 

### Frontier.1 The note was secured by a construction deed oftrustthatencumbered 

### the property and an assignment ofrents. It was also secured by individual 

### guaranties executed by Blanchard and each ofthe Previses (the guaranties). As part ofthe loan transaction, Blanchard and the Previses each signed three documents. Specifically, they each signed thenote as a member of 

### borrower, signed an individual commercial guaranty, and signed thefinal loan 

### agreementtwice—first as amemberofborrower, then as aguarantor.2 Borrower defaulted on the note when it came due on January 5, 2010. 6. Frontierfails andUnion buysFrontier's assets from the Federal 

### Deposit Insurance Corporation (FDIC), including the note and guaranties On April 30, 2010, theWashington StateDepartment ofFinancial
1The original debt principal was $19,500,000 but this amount was increased to $36,700,000 pursuant to a "change in terms" agreement. 2Blanchard and thePrevises signed similarfinal loan agreements (called "Notice[s] of Final Agreement") each time the terms ofthe note changed, aswell aswhen they signed the construction loan commitment letter.

-2-No. 72805-9-1/3 Institutions closed Frontier. The FDIC was appointed as the receiver to liquidate Frontier and wind up its affairs. The same day, Union purchased certain of Frontier's assets from the FDIC, including the note and the guaranties. With respect to the assets it purchased, Union succeeded to the FDIC's rights as Frontier's receiver. The FDIC also authorized Union to avail itself of statutory protections available to the FDIC and its assignees. Thefinal day tofile claims against Frontierwith the FDIC was August 4, 2010; neitherBlanchard nor the Previses filed claims by that deadline. C. The Snohomish County Superior Court appoints a receiverfor 

### borrowerand the property; Appellants actively oppose the actsofthe receiver On November 19, 2010, Union filed an application for the appointment of a custodial receiverfor borrower and the property in Snohomish County Superior 

### Court (the receivership court).3 On December 21, 2010, the receivership court entered its orderappointing Turnaround Inc. as custodial receiver. 

### On July 27, 2011, Union moved to convert the custodial receivership to a 

### general receivership. Blanchard and Randy Previs opposed the motion. The receivership court entered an order converting the caseto ageneral receivership and appointing Turnaround as general receiver, which became effective on November 17, 2011. On December 19, 2011, the receiver gave notice of the deadline tofile 

### proofs ofclaim in the receivership. Blanchard, the Previses, and Randy Previs,
as assignee ofVeritas Development, Inc. (Veritas),4 filed claims. 

### On April 27, 2012, thereceiver moved for anorder approving a settlement

3 Cause No. 10-2-09992-0. 4Veritas isa company formally owned by thePrevises' daughter, Ashley Previs.No. 72805-9-1/4 agreement and release ofclaims in connection with a soft cost insurance claim previously asserted byborrower. Blanchard and Randy Previs opposed the settlement. On June 1, 2012, the receivership court entered an order approving the settlement agreement and release ofclaims. In support of its order, the court found "that the [agreement isfair and equitable, and in the best interests ofthe estate and its creditors, and that the responses or objections should be over
ruled." 

### On July 26, 2012, the receiver moved the receivership courtfor an order 

### toapprove bid procedures for the saleoftheproperty. On August 31, 2012, the court granted the motion and entered its bid proceduresorder. 

### On January 23, 2013, the receiver gave notice ofthe successful bidder underthe bid procedures orderand set a hearing to approve the sale. 

### Blanchard, Randy Previs, and Veritas opposed theproposed sale. On January 31, 2013, thereceivership court approved the saleoftheproperty by a purchase 

### and sale agreement between the receiver and OIBP Wellington Hills, LLC (OIBP) for a purchase price of$10,850,000. 

### On February 8, 2013, Randy Previs and Veritas sought revision ofthe sale order, but their revision motion was denied. On March 25, 2013, they filed a notice ofappeal ofthe sale orderwith this court.5 Blanchard and the Previses did not post the $7,102,611 bond required to 

### supersede thejudgment and stop thesale. Instead, they had borrower declare bankruptcy.

5 No. 70106-1-1.

-4-No. 72805-9-1/5 D. Borrowerdeclares bankruptcy; the bankruptcycourt rejects Appellants' opposition and directs the sale ofthe property On August 20, 2013, borrower filed a Chapter 7 bankruptcy case in the United States Bankruptcy Court for the Western District ofWashington (the bankruptcy court).6 The Chapter 7 voluntary petition was signed by Randy Previs, as borrower's managing member. On September 13, 2013, the Chapter 7 trustee (the trustee) filed a motion requesting that the bankruptcy courtapprove the sale ofthe property to OIBP and stating that "assurance and speed ofclosing" were critical and that "the Trustee cannotignore the history ofthe dispute and the decisions made by the Receiver, the tenant, the Bank, the County, the SuperiorCourt and the Court of Appeals." The trustee also filed his own declaration in support ofthe sale, stating: Ihave concluded, based on the facts and circumstances of this case, that Ishould seek Bankruptcy Court approval to sell the Property to OIPB Wellington Hills, LLC, pursuant to essentially the same terms as those agreed to in the state court receivership case. ... I have determined it is not in the best interest of the estate and its creditors to accept the offer ofVeritas and put it before the Court for approval, or to open up this matter to an auction or to a new marketing process. Veritas and Blanchardfiled objections to the trustee's motion. Randy Previs, under the letterhead of Seavestco, Inc., filed an objection both to the trustee's motion and to the receiver's continued control ofthe property pending its sale. On October 16, 2013, the bankruptcy court granted the trustee's motion, made findings, and entered its order approving the sale of the property. On October 30, 2013, Veritas filed a notice ofappeal from the bankruptcy

6 Case No. 13-17546-KAO.

-5-No. 72805-9-1/6

sale order. On November 26, 2013, the sale ofthe property closed and, from the sale proceeds, the closing agent disbursed $9,696,411.88 to Union pursuant to its
construction deed of trust. E. Thebankruptcy court enforces the guaranties and subordinates Appellants'proofs of claim to Union's claim Blanchard, the Previses, and Veritas, by Randy Previs as its assignee, filed proofs of claims in the bankruptcy case. On March 31, 2014, Union moved for summaryjudgment against Blanchard and the Previses on the ground that the subordination provision in the 

### guaranties subordinated their proofs ofclaim to Union's claims. In their 

### opposition tothe motion, Blanchard and thePrevises argued that "Union Bank's conductin conducting the receivership ofWellington Hills Business Park was 

### substantively unconscionable, rendering thepersonal guaranties—including the subordination clause—unenforceable." 

### On May 27, 2014, the bankruptcy court entered summaryjudgment in favor ofUnion, upholding the guaranties, enforcing the subordination provisions 

### in theguaranties, and holding that"all distributions on [Appellants'] claims must be paid to Union Bank." F. The receivership andbankruptcy case appeals are voluntarily dismissed with prejudice; the cases are closed On December 23, 2013, Veritas, borrower, and the trustee agreed to 

### dismiss with prejudice the appeal from the bankruptcy sale order. Theappeal
was dismissed with prejudice on December 31, 2013. On January 30, 2015, theNo. 72805-9-1/7 bankruptcy court entered its order discharging the trustee and closing the case. On January 7, 2014, Randy Previs and Veritas moved this court to withdraw its appeal of the sale order of the receivership court. The appeal was dismissed on January 23, 2014. On December 18, 2014, the receivership court entered an order approving the receiver's final report and discharging the
receiver. G. This action is commenced; Appellants assert affirmative defenses and counterclaims On March 29, 2013, while the receivership case was pending and before 

### the bankruptcy case was commenced, Union filed this action forjudgment on the guaranties in the King County Superior Court. In response, the guarantors asserted numerous affirmative defenses and counterclaims. On October 10, 

### 2014, the superior court granted summaryjudgment in favor ofUnion and 

### againsttheguarantors, determining that Union was entitled tojudgment as a matter oflaw and dismissing the guarantors' claims with prejudice. On December 9, 2014, aftertheir motion for reconsideration was denied, the guarantorsfiled the underlying notice ofappeal.
II 

### Theguarantors argue that the trial court erredby granting summary 

### judgmentto enforce the guaranties. This is so, they assert, because amaterial dispute offact exists as towhethertheguaranties arevoid orvoidable. They are
incorrect. 

### Wereview the grant ofsummaryjudgment de novo, undertaking the same 

### inquiry asthe trial court. Jones v. Allstate Ins. Co., 146 Wn.2d 291, 300, 45 P.3dNo. 72805-9-1/8 1068 (2002). Summary judgment is appropriate onlyifthe supporting materials, viewed in the light most favorable to the nonmoving party, demonstrate "that there is no genuine issue as to any material fact and that the moving party is entitled to ajudgment as a matteroflaw." CR56(c); Hartley v. State, 103Wn.2d 768, 774, 698 P.2d 77 (1985). A "'complete failure of proof concerning an essential element of the nonmoving party's case necessarily renders all other facts immaterial.'" Young v. Key Pharm.. Inc., 112 Wn.2d 216, 225, 770 P.2d 

### 182 (1989) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S. Ct. 2548,91 L. Ed. 2d 265 (1986)). Union contends that each of the guarantors' claims and defenses is 

### foreclosed by enforcement oftheguaranties, together with application ofthe state statute of frauds and the federal D'Oench7 doctrine, as codified at 12 

### U.S.C. § 1823(e). Thus, before addressing the specific assertions made by the 

### guarantors herein, we begin by examining these proposed bases for rejecting the guarantors' claims and defenses.
A 

### Union asserts that the guaranties are absolute and unconditional promises 

### to pay borrower's debt and that the guarantors waived nearly all claims and defenses to making such payment. We agree. 

### We recently summarized general principles relevant to theenforceability of absolute and unconditional guaranties. 

### "A 'guaranty' 'is a promise toanswer for the debt, default, or miscarriage ofanotherperson.' 'A contract ofguaranty, being a 7D'Oench. Duhme &Co. v. Fed. Deposit Ins. Corp., 315 U.S. 447, 62 S. Ct. 676, 86 L Ed. 956(1942).

-8-No. 72805-9-1/9 collateral engagement for the performance of an undertaking of another, imports the existence of two different obligations, one being that of the principal debtor and the other that of the guarantor.'" fSauterv. Houston Cas. Co., 168 Wn. App. 348, 356, 276 P.3d 358 (2012) (citation omitted) (internal quotation marks omitted) (quoting Wilson Court Ltd. P'ship v. Tony Maroni's. Inc., 134Wn.2d 692, 707, 952 P.2d 590 (1998)).] A guaranty'"is independent'" of the debt, "'and the responsibilities which are imposed bythe

.. . guarantydiffer from those .

.. created bythe contract to which the guaranty is collateral.'" rWilson Court Ltd. P'ship, 134 Wn.2d at 707 (quoting Robev v. Walton Lumber Co., 17 Wn.2d 242, 255, 135 P.2d 95 (1943)); accord Freestone Capital Partners, LP v. MKA Real Estate Opportunity Fund I. LLC, 155 Wn. App. 643, 661, 230 P.3d625 (2010).] "A written guarantee of payment ofthe principal's indebtedness . . . [is] governed by its own terms." rMcAllister v. Pier 67. Inc., 1 Wn. App. 978, 983, 465 P.2d 678(1970).] "[W]here a guarantorfreely and voluntarily guarantees the 

### payment ofanother, and a creditor relies toits detriment onthis 

### guaranty, thelaw generally requires theguaranty to beenforced." fin re Spokane Concrete Prods.. Inc., 126 Wn.2d 269, 278, 892 

### P.2d 98 (1995).] "'An absolute guaranty is an unconditional 

### undertaking on the part ofthe guarantorthat the person primarily obligated will make payment orwill perform, and such a guarantor is liable immediately upon default ofthe principal without notice.'" rCenturv 21 Prods.. Inc. v. Glacier Sales, 129 Wn.2d 406, 414, 918 

### P.2d 168 (1996) (quoting Joe Heaston Tractor &Implement Co. v. Sec. Acceptance Corp., 243 F.2d 196 (10th Cir. 1957)); see also Gravson v. Platis. 95 Wn. App. 824, 826, 978 P.2d 1105 (1999).] "An absolute and unconditionalguaranty should be and is enforceable according to its terms. The courts are to enforce it as 

### theparties meant itto beenforced, with full effect given toits contents, and without reading into it terms and conditions on which 

### it iscompletely silent." fNat'l Bank ofWash, v. Equity Inv'rs, 81 Wn.2d 886, 919, 506 P.2d 20 (1973).] Frontier Bankv. Binao Invs.. LLC. 191 Wn. App. 43, 53-54, 361 P.3d 230 (2015) (some alterations in original). 

### Just as guaranties may be absolute and unconditional, so may they waive claims and defenses. Waiver provisions in guaranties are uniformly upheld and 

### enforced byWashington courts, including on summaryjudgment. Old Nat'l Bank

-9-No. 72805-9-1/10 ofWash, v. Seattle Smashers Corp.. 36 Wn. App. 688, 691, 676 P.2d 1034 

### (1984) (upholding waiver ofconsent ofguarantor to grantborrower extension of timebecause "the language of the guaranty is determinative"); Fruehau Trailer Co. of Canada Ltd. v. Chandler, 67 Wn.2d 704, 709, 409 P.2d 651 (1966) 

### (upholding waiver ofdefense of release ordischarge ofprincipal obligation because "the [relevant] provision ofthe agreement constituted a full and 

### complete waiver by theguarantors"); Gravson v. Platis, 95Wn. App. 824, 834, 978 P.2d 1105 (1999) (upholding waivers ofright ofrecourse against lender and ofdefense based on lender's acceptance of deed in lieu); Columbia Bank. N.A. v. New Cascadia Corp., 37Wn. App. 737, 739-40, 682 P.2d 966 (1984) (upholding 

### waivers ofconsentofguarantortogrant borrower extension oftime and to release co-guarantor). 

### There isno dispute as to the language oftheguaranties herein at issue. 

### They clearly statethat they are absolute and unconditional. AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited. CONTINUING UNLIMITED GUARANTY. Forgood and valuable consideration, [Guarantor] absolutely andunconditionally 

### guarantees andpromises to payto [Lender] or its order, in legal tender of the United States of America, the Indebtedness

... of 

### [Borrower] toLender on the terms and conditions setforth in this Guaranty. Under theGuaranty, the liability ofGuarantor is unlimited and the obligations of Guarantor are continuing. (Emphasis added.) 

### The guaranties also contain clearwaiver provisions, which state thatthe 

### guarantor "waives any and all rights or defenses

. . . given to guarantors atlaw or

•10-No. 72805-9-1/11 

### in equity other than actual payment and performance ofindebtedness."8 They also state that the guarantor "waives and agrees not to assert or claim

.. . any deductions to the amount guaranteed under this Guaranty for any claim ofsetoff, counterclaim, counter demand, recoupment or similarright." The guaranties further state that the guarantor"warrants and agrees that each ofthe waivers set forth above is made with Guarantor's full knowledge of its significance and 

### consequences and that... the waivers arereasonable and not contrary to public policy or law." There can be no serious disputethat the express terms ofthe guaranties make them unconditional guaranties ofpayment and waive nearly all counterclaims and defenses, exceptpayment. Accord Frontier Bank, 191 Wn. 

### App. at54 (so construing a substantially similarguaranty); In re Cronev, 2011 WL 1656371 (Bankr. W.D. Wash. May 2, 2011) (same). Accordingly, ifthe 

### guaranties herein are enforceable, the only defense remaining to the guarantors would beactual payment (which they do not assert). Furthermore, because the 

### promissory notes thatthese guaranties support are delinquent, the obligations of the guarantors would also be delinquent.
B Union also asserts that the state statute of frauds operates to foreclose some of the guarantors' claims and defenses. We agree. 

### Washington's statute offrauds bars the enforcement ofcredit agreements that are not in writing:
8This specifically includes: "any right to claim discharge ofthe Indebtedness on the basis ofunjustified impairment ofany collateral for the Indebtedness."

-11-No. 72805-9-1/12
A credit agreement is not enforceable against the creditor unless the agreement is in writing and signed by the creditor. The rights and obligations ofthe parties to a credit agreement shall be determined solely from the written agreement, and any prior or contemporaneous oral agreements between the parties are superseded by, merged into, and may not vary the credit agreement. Partial performance of a credit agreement does not remove the agreement from the operation of this section. RCW 19.36.110 (emphasis added). A "credit agreement" is defined as: an agreement, promise, orcommitment to lend money, to otherwise extend credit, to forbear with respect to the repayment ofany debt or the exercise of any remedy, to modify or amend the terms under which the creditor has lent money or otherwise extended credit, to release any guarantor. . . , or to make any other financial accommodation pertaining to a debt or other extension of credit.
RCW 19.36.100. Herein, the guarantors assert that Frontier made themvarious promises to 

### extend them further credit, including by giving them a "mini-perm" loan9 in 2009, when it appeared as ifborrower would be unable to continue making payments 

### due on the loan. In support ofthis assertion, the guarantors pointto multiple "risk assessment report[s]" by Frontier, some ofwhich acknowledge the possibility that borrower will need additional credit in order to stay current on loan payments, and a "loan memorandum," which appears to be an application for the mini-perm 

### loan in question. As an initial matter, none ofthese documents actually includes
a promise toextend credit. More to the point, none is signed by a Frontier

9Amini-perm loan is a temporary loan issuedby banksas bridge funding for a development loan from construction to tenancy.

-12-No. 72805-9-1/13 representative.10 Therefore, the guarantors' reliance on these documents is barred as proof of the purported promises by the statute of frauds. There is no documentary evidence of the existence of any credit 

### agreement between Frontier orUnion and the guarantors, asidefrom the 

### undisputed loan agreements, promissory note, and guaranties at theheart ofthe controversy, whose existence and terms are undisputed.
C Union also asserts that application of the federal D'Oench doctrine further limits the claims and defenses available to the guarantors. We agree. "The federal D'Oench doctrine prohibits a partyfrom asserting a cause ofaction against the FDIC orits assignees based upon 

### unwritten agreements orother schemes alleged to beentered into 

### by afailed bank. Lanalev v. Fed. Deposit Ins. Corp.], 484 U.S. 86, 92-93 108 S. Ct. 396, 98 L. Ed. 2d 340 (1987). In D'Oench M Duhme & Co. v. FDIC, 315 U.S. 447, 62 S. Ct. 676, 86 L. Ed. 956 

### (1942), the United States Supreme Court enunciated this doctrine, which is intended to protectthe FDIC andits assignees from 

### fraudulent schemes by borrowers offailed institutions. Thedoctrine 

### also protects the FDIC by allowing bank representatives to rely 

### solely on the records ofthe bank in evaluating the bank's financial condition, rather than leaving it exposed to suits founded on undisclosed conditions ordeceptive documents. [Fed. Deposit Ins. Corp.1 v. Zook Bros. Constr. Co., 973 F.2d 1448, 1450-51 (9th Cir. 1992)." 

### Frontier Bank, 191 Wn. App. at63-64 (emphasis added) (alterations in original) 

### (quoting Kananv v. Union Bank. N.A., No. C11-6062 RJB, 2012 WL 5258847, at *5 (W.D. Wash. Oct. 24, 2012)): accord Nw. Land &Inv.. Inc. v. NewW. Fed. Sav. &LoanAss'n. 64Wn. App. 938, 943, 827 P.2d 334 (1992) (The D'Oench doctrine "bars a borrower from asserting

... any claim or defense based on any 

### 10 The guarantors assertthatone ofthese reports was signed by three representatives of Frontier. In fact, the worksheet to which they refer is separate from any reportthat mentions the "mini-perm" in any way.
-13-No. 72805-9-1/14 unrecorded agreement which alters the terms of a seemingly unqualified obligation to pay"). The D'Oench doctrine was codified at 12 U.S.C. § 1823(e), as part ofthe Federal Deposit Insurance Act. That provision provides, in pertinent part: No agreement which tends to diminish or defeat the interest of the [FDIC] in any asset acquired by it under this section or section 1821 of this title, either as security for a loan or by purchase or as receiver of any insured depositoryinstitution, shall be valid against the [FDIC] unless such agreement— (A) is in writing, (B) was executed by the depository institution andany 

### person claiming an adverse interest thereunder, including the 

### obligor, contemporaneously with the acquisition ofthe asset by the depository institution, 

### (C) was approved bythe board ofdirectors ofthe depository institution or its loan committee, which approval shall be reflected in the minutes of said board or committee, and 

### (D) has been, continuously, from thetime ofits execution, an official record ofthe depository institution. 12 U.S.C. § 1823(e)(1) (emphasis added). Contracts that do not meet these requirements "cannot be enforced even 

### when a bank fraudulently induces a customer with oral misrepresentations, or 

### when a customer is completely innocent." Nw. Land, 64Wn. App. at943; accord Lanqlev, 484 U.S. at 93 ("We conclude . . . thatneither fraud in the inducement


### nor knowledge by theFDIC is relevant tothe section's application. No conceivable reading ofthe word 'agreement' in § 1823(e) could cause it tocover 

### a representation orwarranty that is bona fide but toexclude onethat is fraudulent."); Frontier Bank. 191 Wn. App. at 66-67 (applying Lanqley). 

### Responding to the perceived unfairness ofthis result, the Supreme Court stated: The short ofthe matter is that Congress opted for the 

### certainty ofthe requirements setforth in § 1823(e). An agreement

-14-No. 72805-9-1/15 that meets them prevails even ifthe FDIC did not know ofit; and an agreement that does not meet themfails even ifthe FDIC knew. It would be rewriting the statute to hold otherwise. Lanqlev, 484 U.S. at 95. The FDIC authorized Union to avail itself ofthe protections provided pursuant to this statute,11 and Union does so herein. 

### The application ofthis statute to the guarantors' affirmative defenses is 

### similar toour application ofthe statecredit agreements statute offrauds. That is, the federal statute, for largely the same reasons, bars consideration of the 

### documents upon which theguarantors primarily rely.12 However, thefederal statute is independently relevant. For one, thecircumstances herein are the 

### precise target ofthe law, which was meant to protect purchasers ofFDIC assets 

### acquired from failing financial institutions. Moreover, prior applications ofthis law to analogous circumstances make clearthat not even fraud on the part ofthe failed financial institution—coupled with knowledge on the partofthe acquiring 

### institution—removes an alleged credit agreementfrom the statute'stechnical requirements. 

### Thus, theguarantors' argument regarding separatefinancial 

### arrangements made with Frontier are foreclosed by state and federal laws that

11 While the guarantors attempt to castdoubt upon this fact (Blanchard stated, for example, "Randy Previs and Iwere leftcompletely out ofth[e] process [ofobtaining the FDIC's 

### permission] and to this day Ihave no idea how the Union Bankconsentrequestwas worded or what information it contained.

... Iamin thedark aboutthat."), the only relevant record evidence indicates that Union obtained the required permission from the FDIC. 12 As for the signed worksheet upon which the guarantors seektorely, because it was 

### signed by only Frontier, even if—contrary to ourconclusion—itwere to pass muster underthe state statute, itwould nevertheless fall short under the federal statute. Indeed, Blanchard acknowledged asmuch in adeclaration submitted to the trial court, which stated, in pertinent part, "our arrangements with Frontier Bank may not meet all ofthe strict (unrealistic and unfair) standards of D'Oench."

-15-No. 72805-9-1/16 require such agreements to comply with certain technical requirements. We turn now to the propriety of the trial court's order on summary judgment.
D The guarantors raise a number of claims and defenses to Union's action on the guaranties. These can be generalized into three categories: fraudulent inducement to enter into the guaranties, fraudulent inducement to contribute additional funds to the property development project, and misconduct by Union afteracquiring the guaranties, particularly in the course ofthe receivership and bankruptcy proceedings.
i Fraud in the inducement byFrontier- the guaranties: The guarantors first contend that they werefraudulently induced to sign the guaranties by 

### representations madeby Frontierthat, if necessary, it would extend borrower further credittofund theproject through tenancy. This contention fails for several

reasons. 

### Initially, the guarantors' claim relies on alleged unwritten credit 

### agreements. Accordingly, it is barred by the state statute offrauds and the
federal D'Oench doctrine. Furthermore, even were we to consider the guarantors' allegations, their claim would nevertheless fail because they did not properly plead it or offer sufficientevidence in support thereofto withstand summaryjudgment. Fraud must be pleaded with particularity. CR 9(b). Particularity requires that the pleading apprise the defendant ofthe facts that

-16-No. 72805-9-1/17 give rise to the allegation of fraud. See Pedersen v. Bibioff. 64 Wn. App. 710, 721, 828 P.2d 1113(1992); Harstad v. Frol, 41 Wn. App. 294, 301-02, 704 P.2d 638 (1985).
. . . The elements of fraud include (1) representation of an existing fact; (2) materiality; (3) falsity; (4) the speaker's knowledge of its falsity; (5) intent ofthe speaker that it should be acted upon by the plaintiff; (6) plaintiff's ignorance of itsfalsity; (7) plaintiff's reliance on the truth of the representation; (8) plaintiffs right to rely upon it; and (9) damages suffered by the plaintiff. Stilev v. Block, 130 Wn.2d 486, 505, 925 P.2d 194 (1996). Adams v. King County, 164 Wn.2d 640, 662, 192 P.3d 891 (2008). 

### Theguarantors' claim falls critically short because theydid not plead or offer evidence that, even if a representation was made regarding future credit 

### agreements, itwas false when made and made with knowledge ofits falsity.13

Fraud in theinducement by Frontier-additional contributions: The 

### guarantors assert that they were induced to make additional financial contributions to the property development project by Frontier's fraudulent 

### promises to extend them further credit in exchange for their payments. Atthe outset, this contention fails for the same reason as did the fraudulent inducement C|aim_that is, because it relies on unsigned credit agreements, it is barred by the state statute of frauds and the federal D'Oench doctrine. In addition, the guarantorsfailed to properly plead oroffer sufficient
13 The guarantors also obliquely contend that they were fraudulently induced to enter into the guaranties because Frontierwas likely already in financial trouble atthe time they agreed to them. Specifically, in their opening brief, the guarantors state, "Appellants believe it is likely that Frontier Bank was 'in trouble' financially and not in compliance with applicable bank regulations at the time the original Wellington Construction Loan (and Appellants signed the Guaranty) was made." Br. ofAppellant at21. This iteration ofthe fraudulent inducement claim also suffers from poor pleading and insufficient proof. The guarantors do not establish, among otherthings, a relevant "representation."

-17-No. 72805-9-1/18 evidence in support of their claim. Specifically, assuming that Frontier did promise to extend further credit, they did not plead (and offered no evidence that) the maker of this promise knew it to be false at the time made. Instead, the guarantors repeatedly assert that Frontier reneged on the promise. This is
insufficient. Finally, this particular fraudulent inducementclaim also fails because it is unrelated to the guarantors' decisions to enter into the guaranties. Even were we to assume the veracity of the guarantor's contentions, they would not cast light 

### on the validity ofthe guaranty. Becauseit does notundermine the validity ofthe 

### guaranties, this claim falls into the setofclaims and defenses that were waived in the guaranties.
iii 

### MisconductbyUnion afterprocuring the guaranties: Theguarantors also assert claims ofmisconduct byUnion. Theirfirst contention is that Union, 

### through actions taken in the receivership and bankruptcy cases, impaired the value ofthe loan collateral (i.e., the property). They also contend that Union did 

### not work in good faith with them to sell the property for the highest price.14 Initially, all oftheguarantors' claims with respect to Union are barred by the terms ofthe guaranties. Having determined that the guaranties are 

### enforceable despite thefraud alleged by theguarantors, itfollows thatthewaiver provisions apply. Pursuant tothese provisions, theguarantors waived claims and defenses to nonpayment, including those asserted herein. 14 See Reply BriefofAppellant at20 ("[T]he ultimate and most egregious bad faith in this matter is Union Bank's repeated refusal toeven look atmultiple opportunities torealize millions of dollars more for [the property].").

-18-No. 72805-9-1/19 The argument regarding Union's alleged misconduct in the receivership and bankruptcy cases suffers from two additionalcritical flaws. First, the guarantors incorrectly attribute decisions that were made by the receiver or the trustee to Union. To the extent that the guarantors mean, literally, that the actions in question were taken by Union, they simply misstate the record. However, their argumentseems to be that, although Union did notliterally make the decisions in question, those decisions are nevertheless attributable to Union. The attribution is based, we assume, on an unspecified principal-agent 

### relationship. This argument isnothing more thanspeculation and, therefore,

fails. 

### The argument also overlooks the role ofthecourt in theallegedly improper actions. Areceiver is "aperson appointed by the court as the court's agent, and 

### subjectto the court's direction, to take possession of, manage, or dispose of property ofaperson." RCW 7.60.005(10). The powerto appoint areceiver is within the trial court's discretion. King CountyDep'tofCmtv. &Human Servs. v. Nw. Defenders Ass'n, 118Wn. App. 117, 122, 75 P.3d 583 (2003). Likewise, a 

### trustee in bankruptcy is anofficer ofthe court. In re Castillo, 297 F.3d 940, 946 

### (9th Cir. 2002): accord Leonard v. Vrooman, 383 F.2d 556, 560 (9th Cir. 1967) (noting that atrustee in bankruptcy is an officer ofthe court and is not subjectto suit without leave ofthe appointing court for acts done in his official capacity and 

### within his authority); Vass v. Conron Bros. Co., 59 F.2d 969, 970 (2d Cir. 1932) 

### (holding that abankruptcy trustee, like a receiver, is an officer ofthe court, and trustee's possession is protected because it is the court's). At the time ofthe

-19-No. 72805-9-1/20 alleged misconduct bythe receiver and the trustee, they were subject to the continuing authority of the court, which ratified each of the challenged decisions. The guarantors were clearly dissatisfied by the result ofthose proceedings, but 

### theymay not makethem the subjectofthis action by incorrectly attributing them to the only otherparty appearing in the caption.15 

### Theguarantors also assert thatUnion violated a duty ofgood faith tothem 

### by refusing to consider alternate arrangements for extracting value from the property. 

### "'[A]n implied duty ofgood faith andfair dealing [is] imposed on the parties to a contract.'" Miller v. U.S. BankofWash.. N.A.. 72Wn. App. 416, 425, 865 P.2d 536 (1994) (quoting BetchardClavton. Inc. v. King, 41 Wn. App. 887, 890, 707 P.2d 1361 

### (1985)).] With guaranties, "the creditor's [implied] covenant ofgood faith is to diligently pursue collection ofthe debt, and the guarantor 

### may be relieved ofliability on thedebt where thecreditor does not exercise due diligence in collection ofthat debt." [|dj But this court has "specifically limited claims by guarantors 

### against lenders, including breach ofgood faith claims, to 

### performance ofspecific contract terms." fGravson, 95 Wn. App. at 833]. Absolute guarantors lack "'any recourse againstthelender unless it is alleged andproved thatthelender acted in bad faith.'" [Id at 831 (emphasis added) (quoting Nat'l Bank of Wash., 81 Wn.2d at 920).] As previously stated,this court has held that"'a 

### guarantor cannot rely upon the relationship between a lender and a 15 The guarantors' claims regarding actions taken in the receivership and bankruptcy cases also fail because they actively participated in those proceedings by, among otherthings, filing proofs ofclaim and opposing any sale ofthe property. RCW 7.60.190, entitled, "Participation ofcreditors and parties in interest in receivership 

### proceeding-Effectofcourtorders on nonparties," provides thatcreditors and parties who receive notice, have actual knowledge of, and actively participate in receivership proceedings are bound by the acts ofthe receiverand the orderofthe receivership court, regardless ofwhetherthey are formallyjoined asparties. The same principles apply to acts ofthe bankruptcy trustee and orders ofthe bankruptcy court. Lanoenkamo v. Culp. 498 U.S. 42, 45, 111 S. Ct. 330, 112 L Ed. 2d 343 

### (1990) (by filing aproofofclaim, one submits himselfto thejurisdiction ofthe bankruptcy court); In re Farmland Indus.. Inc.. 376 B.R. 718, 727 (Bankr. W.D. Mo. 2007) (bankruptcy court sales order is binding on entity that participated in bankruptcy casesale motion and that entity cannot, inanother lawsuit, challenge the sale as improper). Because the guarantors filed proofs ofclaim in both the receivership and the bankruptcy casesand because they contested both attempts to obtain authorization to sell the property, they arebound by theactions taken in each case and cannot challenge them here.

-20-No. 72805-9-1/21 borrower to create a fiduciary duty running from the lender to the guarantor.'" [Id,at 833 (quoting Miller. 72 Wn. App. at 426).] Frontier Bank. 191 Wn. App. at 70 (first alteration in original). In sum, the common law duty of good faith does not require Union to refrain from its rights under the guaranties, as it properly does here. See GMAC v. Everett Chevrolet. Inc.. 179 Wn. App. 126, 150, 317 P.3d 1074. review denied. 181 Wn.2d 1008(2014). 

### Because the guarantors' claims and defenses fail as a matter oflaw, the trial court's ordergranting summaryjudgment in Union's favor as to its claims pursuant to the guaranties was proper.
Ill 

### Union requests attorney fees onappeal based on theterms ofthe guaranties. 

### In Washington, attorney fees may beawarded for costs oflitigation only when authorized by contract, statute, orrecognized ground ofequity. Durland v. San Juan County, 182 Wn.2d 55, 76, 340 P.3d 191 (2014). 

### Herein, the guaranties state, "Guarantor agrees to pay upon demand all of Lender's costs and expenses, including Lender's attorneys' fees and Lender's 

### legal expenses, incurred in connection with the enforcement ofthis Guaranty Costs and expenses include Lender's attorneys' fees and legal expenses ... for 

### appeals." Because Union has established a right to the enforcement ofthe 

### guaranties, it is entitled to an award ofreasonable attorney fees on appeal. Accordingly, upon compliance with RAP 18.1, a commissioner ofthis court will enter an appropriate order.

-21-No. 72805-9-1/22

Affirmed.

We concur: 

# gLQ.rf-jV-rfQg^

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