IN THE COURT OFAPPEALS FOR THE STATE OF WASHINGTON

LORINA DEL FIERRO, Appellant,

BSI FINANCIAL SERVICES; DELTORO LOAN SERVICING, INC.; MARINERS INVESTMENT FUND, LLC; MARINERS INVESTMENT FUND II REO, LLC; SECOND MARINERS RES FUND II, LLC; AMERICAN DEFAULT MANAGEMENT; PENSCO TRUST COMPANY CUSTODIAN FBO, JEFFERY D. HERMANN, IRA ACCOUNT NUMBER 20005343; APRIL SMITH in her individual and official capacity; JEFFERY D. HERMAN in his individual and official capacity, JENNIFER TAIT in her individual and official capacity; and STEVE OLSON in his individual and official capacity. Respondents. No. 73016-9-1 DIVISION ONE

UNPUBLISHED OPINION

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FILED: November 16, 2015 Spearman, C.J.

— This appeal is from a trial court's findings offact and conclusions of law regarding a borrower's claims against a series ofentities involved in the transfer of her loan. We find no error and affirm. FACTS In2006, Lorina Del Fierro purchased property real property located at Lot 

### 83, Twin Lakes No. 4, Vol. 91, pgs. 44-46, tax parcel No. 873196-0830-00, commonly known as 4009 SW 323rd Street, Federal Way, Washington (the Property). She refinanced the property in2007 with EquiFirst Corporation 

### (EquiFirst), taking out a loan of$572,850.00 to be repaid according to the termsNo. 73016-9-1/2 ofan Adjustable Rate Note (Note). EquiFirst endorsed the Note in blank. The Note was secured by a deed oftrust (Deed ofTrust) on the Property that listed First American Title Insurance Company (FirstAmerican) as trustee and Mortgage Electronic Registration Systems (MERS) as the beneficiary. The loan itselfwas serviced by Specialized Loan Servicing, Inc., (Specialized). In 2008, Del Fierro ceased making payments on the loan. The Note and the Deed ofTrust were transferred multiple times before arriving inthe hands of respondent Pensco Trust Company (Pensco). Equifirst 

### sold the loan to Sutton Funding LLC (Sutton). On September 12, 2008, Sutton sold its interest inthe loan to a third party known as FCDB FF1, LLC. On January 5, 2009, MERS recorded an Appointment of SuccessorTrustee, appointing Fidelity National Title Insurance Company (Fidelity) as trustee. On April 14, 2009, FCDB FF1, LLC, as part of a group ofentities known collectively as Fortress 

### Investment Group (Fortress)1, sold their interests innumberofresidential first lien mortgage loans, including Del Fierro's loan, to Second Mariners Investment Fund II REO, LLC, and Mariners Investment Fund II, LLC (individually, Mariners 4 and 

### Mariners 5; collectively, "Mariners"). As part of this sale, Fortress provided Mariners with the original Note. 

### Specialized, on behalfof MERS, began foreclosure proceedings inearly 2009. Fidelity issued a Notice ofTrustees Sale on February 9, 2009, setting the

1During trial, there was some confusion overwhether FCDB FF1, LLC, the entity that purchased the loan from Sutton, was the same as any of the entities that sold the series of loans to Mariners. Steve Olson testified that Mariners purchased the Del Fierro loan from Fortress, which "had multiple sellers, different entities internally when [Mariners] purchased from them," and that Fortress had purchased the loan from Sutton. Verbatim Report ofProceedings (Nov. 3, 2014) at48-49.No. 73016-9-1/3 

### sale date for May 15, 2009. Del Fierro began working with a loan modification representative, Michael Colwell, who contacted Fidelity on her behalf. On May 7, 2009, the sale was placed "on hold." Somewhere around the 7th or the 8th, Fidelity informed Colwell that the sale was on hold, and that itwould not take 

### place on the 15th as originally set. On May 12, 2009, however, the sale was taken off "on hold" status and the servicing rights were transferred to BSI Financial Services (BSI). Del Fierro and Colwell were both told thatthe sale was 

### on hold and would not proceed, even aftereach made separate inquiries up to the scheduled date ofsale. On May 15, 2009, Fidelityproceeded to sell the Property at auction. Mariners 4 purchased the Property for $370,000 and initiated

an unlawful detainer action on June 4, 2009. The King County Superior Court dismissed the unlawful detainer action, 

### finding that Fidelity had made material misrepresentations and breached its duty to act in good faith and impartially to both parties. The trial court voided the trustee's sale and reinstated the Deed ofTrust to its original lien position. 

### On March 11, 2010, MERS assigned the Deed ofTrustto Mariners 4.2 On December 8, 2010, Mariners 4 assigned the Deed ofTrustto Mariners 5. Ex. 11. 

### On May 19, 2011, Mariners 5 executed a Residential Mortgage Loan Sale

2In Bain v. Metropolitan Mortg. Group. Inc.. 175 Wn.2d 83, 110, 285 P.3d 34 (2012), our Supreme Court held that if MERS never held the promissory note or otherdebt instrument, itwas not a lawful beneficiary and could not appoint a successortrustee. MERS therefore did not have independent authority to assign the Deed of Trustto Mariners. The Bain court declined to decide the legal effectofMERS acting as an unlawful beneficiary, but that "the equities ofthe situation would likely (though not necessarily in every case) require the court to deem thatthe real beneficiary is the lenderwhose interests were secured by the deed oftrust or that lender's successors." Ja\ at 111. Based on this notion, Mariners would likely have been deemed the beneficiary anyway, having succeeded to EquiFirst's interest (via transfers involving Sutton and Fortress) in the Note. Mariners was also the holder of the Note at that time and MERS's involvementwould not have affected the validity ofthe Deed ofTrust or Mariners' interest.No. 73016-9-1/4 

### Agreement, selling itsinterest in Del Fierro's loan, including the Note and the Deed of Trust, to Pensco. 

### In 2010, Mariners initiatedforeclosure proceedings on the Deed of Trust. 

### Del Fierrofiled forChapter 13 bankruptcy onApril 5, 2010. In July 2010, Del Fierrofiled an Adversary Proceeding inbankruptcy court to determine the amount ofthe lien. The bankruptcy court reduced the secured debtfrom 

### $572,291.63 to $325,000.00. Mariners appealed and lost. On October 18, 2010, Del Fierro stipulated to an orderrequiring her to make monthlypayments to the court. Mariners transferred its claim on June 6, 2011 to Pensco and listed Del 

### Toro Loan Servicing, Inc. ("Del Toro") as the loan's servicer. Del Fierro did not objectto this transfer. She continued making payments as perthe stipulation until August of2011, when she converted her bankruptcy action to a Chapter 11. Her bankruptcy action was dismissed on November 13, 2012. 

### The original Note remained in Mariners' possession until itwas requested by Mariners' counsel, Robinson Tait P.S. (Robinson Tait), incase itwas needed inthe bankruptcy litigation. The original Note was shipped to Robinson Tait on March 24, 2011, along with a bailee letter. On March 25, 2011, Robinson Tait 

### acknowledged receipt ofthe Note. Because Robinson Tait had the original Note, Mariners did not forward it to Pensco when the sale closed in May 2011. Pensco then retained Robinson Tait and asked them to continue holding the Note. Even though they were holding the original Note for Pensco, Robinson Tait sent itback to Mariners on April 3, 2012, underthe terms ofthe bailee letter executed with Mariners. The intent was for Mariners to send the original Note toNo. 73016-9-1/5 Pensco. Mariners received the original Note, but was unable to find itafter a diligent search. Pensco never received the original Note. In 2012, Del Fierro filed a lawsuit in King County Superior Court regarding 

### the transfer ofthe loan, alleging claims such as fraud, conversion, slanderof title, unjust enrichment, quiettitle, and violations ofchapter 19.86 RCW, the Consumer Protection Act; RCW 19.86.010, the Uniform Deceptive Trade 

### Practices Act, and chapter 19.182 RCW, the FairCredit Reporting Act. She 

### named multiple defendants including BFI, Del Toro, Mariners,3 Equifirst, MERS, American DefaultManagement, Pensco's custodian, Jeffrey Hermann,4 and other named individuals who were involved in notarizing the transfer documents. 

### Del Fierro argued that Pensco had no right to enforce the Note because it did not have the original Note. Mariners, Hermann, and Robinson Tait each filed Lost Note Affidavits indicating thatthe original Note was held by Robinson Tait, counsel for Pensco, atthe time Pensco purchased the loan, and that it had been lost after Robinson Tait sent it back to Mariners. Mariners and other defendants 

### moved forsummaryjudgment. The court granted summaryjudgmentand dismissed Del Fierro's claims for conversion, slander of title, violation of the 

### Uniform DeceptiveTrade Practices Act, violation of the Fair Credit ReportingAct, 

### and portions of the claim for UnjustEnrichment. The remaining claims including Notary Malfeasance, Notary Negligence, Unjustenrichment (pending evidence of

3Del Fierro also named a number of additional Mariners entities in her complaint but only Mariners 4 and Mariners 5 are involved in the transfer and sale of Del Fierro's loan. 4Del Fierro argues that it isimportantto note that "counsel forMariners represented Hermann in hisindividual capacity but[] did notrepresent Pensco the company..., the real player in thislitigation." BriefofAppellantat 40. However Del Fierro did not name Pensco as a defendant in this action.No. 73016-9-1/6 

### the price Pensco paid for the loan), and quiettitle, proceeded to a bench trial on October 28, 2014. The trial court found that the Note had been endorsed in blank and that Pensco had the right to endorse itas the holder at the time itwas lost under 

### RCW 62A.3-309. The courtenteredjudgment in favor ofdefendants and reserved an award offees and costs. Del Fierro appeals. DISCUSSION 

### Del Fierro assigns errorto a number ofthe trial court's findings regarding the transfers ofthe Note and Deed ofTrust. When a trial court has reviewed the evidence, our review is limited to determining whetherthe trial court's findings

are supported by substantial evidence, and ifso, whetherthose findings support the conclusions oflaw. Ridqeview Props, v. Starbuck, 96 Wn.2d 716, 719, 638 P.2d 1231 (1982). Findings offact will be upheld on appeal ifthey are supported by "'a sufficient quantity ofevidence to persuade a fair-minded person of [the order's] truth or correctness." Raven v. Dep't. of Soc. &Health Servs., 177 Wn.2d 

### 804, 817, 306 P.2d 920 (2013) (quoting Port ofSeattle v. Pollution Control Hr'gs BdL, 151 Wn.2d 568, 588, 90 P.3d 659 (2004)). We willnot substitute our 

### judgmentforthat ofthe trial court or weigh evidence or credibility ofwitnesses. Davis v. Dep't of Labor & Indus. 94 Wn.2d 119, 124, 615 P.2d 1279 (1980). Endorsement of the Note 

### Del Fierro first argues that the allonge endorsing the note in blankwas defective and that as a result, Mariners 4 was neverthe holder ofthe Note. She contends that because the endorsementwas on a separate sheet of paper, and 

### there were "no clipmarks, folds, or glue marks," itwas not "firmly affixed" to theNo. 73016-9-1/7 

### Notein order to make itnegotiable. BriefofAppellantat 21. Respondents argue thattestimonyfromwitnesses clearly established thatthe Note included the 

### allonge, whichwas sufficiently affixed to it, and Del Fierrohas notpresented any evidence to the contrary. 

### Under RCW62A.3-204(a), an indorsement is a signature made on an instrumentforthe purposes ofnegotiating the instrument. An indorsement-inblank is an indorsement that is not payable to an identified person. RCW 62A.3- 

### 205(b). Thus an instrument indorsed-in-blank becomes payableto bearer and any person who possess the instrument becomes its holder. RCW 62A.3-204(a) 

### also provides thatforthe purposes ofdetermining whether a signature is made

on an instrument, a paper affixed to the instrument is part ofthe instrument. 

### Comment 1 to RCW62A.3-204. This section requires an allonge to be "so firmly affixed" to the check "as to become a partthereof." Id. A separate paper, or one pinned or clipped to the check, willnot suffice. 7 WASHINGTON PRACTICE, 

### UniformCommercial Code (UCC) Forms § 3-205 Form 2 (2015) (citing Tallahassee Bank &Trust Co. v. Raines. 125 Ga.App. 263, 187 S.E.2d 320, 312 (1972); Duxburv v. Roberts. 388 Mass. 385, 446 N.E.2d 401 (1983) (separate document assigning the note did not constitute an endorsement). Respondents argue that even though the allonge is on a separate page, there is ample testimony in the record showing thatthe allonge in blank was affixed to the original Note. JenniferTait of Robinson Tait testified that the last page ofthe note, titled "'Note Endorsements,'" was part of all one package with the original Note. VRP (Oct. 29, 2014) at 121-22. Steve Olson of Mariners also testified that while Mariners purchased the Note from Fortress, Equifirst was theNo. 73016-9-1/8 

### originator and "sign[ed] on the note endorsement on the last page." VRP (Nov. 3, 2014) at 38-39. Olson also testified that he was familiar withthe requirements of endorsements in blank and that Mariners would have checked to make sure that 

### the Note was endorsed insuch a way that it would permitthem to negotiate that note to someone else. Del Fierro has presented no controverting evidence 

### demonstrating thatthe allonge was not included or attached to the Note.5 We find

no error inthe trial court's finding thatthe Note was properly endorsed inblank and the allonge was "firmly affixed" under chapter 63A-309 RCW. Del Fierro assigns errorto a number of the trial court's otherfactual findings, including findings that Mariners purchased its interest inthe loan from FCDB FF1, LLC,that the sale was a good faith, arms-length transaction inwhich Mariners paid value for the beneficial interest inthe loan, and that the sale ofthe loan to Pensco was an arms-length transaction. These challenges all fail, because there is sufficient evidence in the record to persuade a fair-minded person ofthe truth ofthe finding. Enforcement of Lost Instrument 

### Del Fierro argues thatthe trial courterred when itconcluded that Pensco had proved itwas entitled to enforce the Note and Deed ofTrust. She argues that Pensco does not meetthe requirements of RCW 62A.3-309(a) because it

never had possession ofthe Note.

5Del Fierroargues that the testimony should be disregarded becausethe Mariners failed to lay anyfoundation for the allonge attrial. The record shows, however, that the testimony by Taitand Olsen established their personal knowledge of the Note and its contents, including the allonge. 8No. 73016-9-1/9 

### Article 3 ofthe UCC governs who is entitled to enforce a promissory note. RCW 62A.3-301 provides that a "[pjerson entitled to enforce" an instrument"

means (i)the holder ofthe instrument, (ii) a nonholder in possession ofthe instrumentwho has the rights of a holder, or (iii) a person not in possession ofthe instrumentwho is entitled to enforce the instrument pursuant to RCW 62A.3-309 or 62A.3- 418(d). A person may be a person entitled to enforce the instrument even though the person is not the ownerofthe instrument or is in wrongful possession of the instrument. A holder, inthis case, is a "person in possession of a negotiable 

### instrumentthat is payable eitherto bearer or to an identified person that is the person in possession." RCW62A.1-201(21)(A). RCW 62A.3-309 governs the enforcement oflost instruments. The statute requires: 

### (a) Aperson not inpossession of an instrument is entitled to enforce the instrument if (i)the person was in possession ofthe instrument and entitled to enforce itwhen loss of possession 

### occurred, (ii) the loss ofpossession was not the result of a transfer by the person or a lawfulseizure, and (iii) the person cannot reasonably obtain possession ofthe instrumentbecause the instrumentwas destroyed, its whereabouts cannot be determined, or it is inthe wrongful possession ofan unknown person or a 

### person that cannot be found or is not amenable to service of process. The trial courtfound that Robinson Taitwas in possession ofthe original 

### Note on behalfofPensco as the purchaser, even though itsentthe Note backto Mariners in 2012. The record contains testimony from Robinson Tait aboutthe 

### terms of the bailee letter in which they agreed to holdthe original Note incustody for Mariners. Afterthe note was purchased, Pensco retained Robinson Tait and asked them to continue holding the Note. The law firm's policy was to return 

### original documents to the entity that sent itto them and for which they have aNo. 73016-9-1/10 

### bailee letter, unless they receive informationthatthey should send itelsewhere. Even though they were holding the original Note on behalfofPensco, Robinson 

### Taitsent itto back to Mariners as per theirdocumentpolicy. It is undisputed that the intent of the parties was that Mariners would then forward the original Note to Pensco. 

### We find that there is sufficientevidence in the record to supportthe trial court's findings of fact, which in turn, supportthe conclusion that Pensco was entitled to enforce the Note under RCW 62A.3-309. The trial court did not err in 

### concluding that Pensco was inpossession ofthe original Note, endorsed in 

### blank, when its loss occurred; the loss was not a result of a transfer by Pensco or a lawfulseizure; and Pensco could not reasonably obtain possession ofthe original Note because its whereabouts could not be determined. Evidentiary Rulings and Discovery Sanctions We review a trial court's decision to admit or exclude evidence for an abuse ofdiscretion. Salas v. Hi-Tech Erectors. 168 Wn.2d 664, 669, 230 P.3d 583 (2010). A trial court abuses its discretion when its decision "is manifestly unreasonable or based on untenable grounds or reasons." Id., (quoting State v. 

### Stenson. 132 Wn.2d 668, 701, 940 P.2d 1239 (1997)). A "'manifestly unreasonable decision is one that adopts a view that no reasonable person would take.'" jd, (quoting In re Personal Restraint of Duncan. 167 Wn.2d 398, 402-03, 219 P.3d 666 (2009)). A decision is based on untenable grounds or untenable reasons ifthe trial court applies the wrong legal standard or relies on unsupported facts. Id. We also review a trial court's sanctions for a party's

10No. 73016-9-1/11 

### noncompliance with discovery orders for an abuse ofdiscretion. Rivers v. Wash. 

### State Conf. of Mason Contractors. 145 Wn.2d 674, 684, 41 P.3d 1175 (2002). Del Fierro claims that a number ofdocuments relating to the loan transfer 

### should have been excluded because they were incomplete or unsigned, including the Residential Mortgage Loan Sale Agreement and MasterAsset Sale and 

### Interim Servicing Agreement. Br. ofAppellant at 24. According to Del Fierro, the documents were "not fullyexecuted,... replete with blanks and didn't include 

### cited attachments." jd. She also argues thatthe purchase and sale agreements should have been excluded because respondents failed to provide them until afterthe discovery cutoff, and because they lacked foundation, were not authenticated, and were submitted afterthe parties had rested. Along with the documents, Del Fierro objects to the trial court's admission oftestimony ofMariners and Robinson Tait, because respondents did not ask the courtto admit the witnesses' Lost Note affidavits. Del Fierro also argues that because Mariners did not mention Fortress or any of its sub-entities indiscovery, the court should not have allowed testimony aboutthem. A trial court necessarily has broad discretion in ruling on evidentiary matters and imposing sanctions for discovery violations; we will not overturn a trial court's ruling absent manifest abuse ofdiscretion. Sintra, Inc. v. City of Seattle. 131 Wn.2d 640, 662-23, 935 P.2d 555 (1997). Courts may sanction parties under CR 37(b)(2) for two reasons: (1) failure of a party to comply with an orderto provide or permit discovery and (3) failure of a party to respond to a requestfor discovery under CR 33 or CR 34, or to appear after proper notice for

a deposition. Pamelin Industries. Inc. v. Sheen-U.S.A.. Inc.. 95 Wn.2d 398, 401,

11No. 73016-9-1/12 

### 622 P.2d 1270(1981). Atrial court should not exclude testimony forabuse of discovery without showing intentional or tactical nondisclosure, willful violation of

a court order, or otherwise unconscionable conduct. Barci v. Intalco Aluminum. 

### Corp.. 11 Wn. App. 342, 351, 522 P.2d 1159 (1974). 

### Del Fierro has not shown that respondents have engaged in any such unconscionable conduct. The record shows that respondents produced discovery inresponse to Del Fierro's request. Del Fierro did not move to compel more complete answers nor did she move for sanctions otherthan exclusion ofthe contested documents. We find that it was within the trial court's discretion to 

### refrain from excluding the testimony and documents as a discovery sanction. Finally, Del Fierro argues that the trial courterred when itdismissed Del 

### Toro from the case withprejudice. She also assigns errorto the court's dismissal of the CPA claim on summaryjudgment and the quiettitle claim. Butshe does not provide factual or legal arguments insupport ofthese assignments. Thus, we do not considerthem. RAP 10.3(a)(5); Cowiche Canyon Conservancy v. Boslev. 118 Wn.2d 801, 809, 828 P.2d 549 (1992). Del Fierro asks for an award ofattorney's fees on appeal based on the 

### provisions ofthe Note and the Deed ofTrust and presumably RCW4.84.330 and RAP 18.1. Because we affirmthe trial court in all respects, we deny her request. Affirm.

WE CONCUR:

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