### NOTICE: SLIP OPINION (not the court’s final written decision) The opinion that begins on the next page is a slip opinion. Slip opinions are the written opinions that are originally filed by the court. A slip opinion is not necessarily the court’s final written decision. Slip opinions can be changed by subsequent court orders. For example, a court may issue an order making substantive changes to a slip opinion or publishing for precedential purposes a previously “unpublished” opinion. Additionally, nonsubstantive edits (for style, grammar, citation, format, punctuation, etc.) are made before the opinions that have precedential value are published in the official reports of court decisions: the Washington Reports 2d and the Washington Appellate Reports. An opinion in the official reports replaces the slip opinion as the official opinion of the court. The slip opinion that begins on the next page is for a published opinion, and it has since been revised for publication in the printed official reports. The official text of the court’s opinion is found in the advance sheets and the bound volumes of the official reports. Also, an electronic version (intended to mirror the language found in the official reports) of the revised opinion can be found, free of charge, at this website: https://www.lexisnexis.com/clients/wareports
. For more information about precedential (published) opinions, nonprecedential (unpublished) opinions, slip opinions, and the official reports, see https://www.courts.wa.gov/opinions and the information that is linked there.IN THE SUPREME COURT OF THE STATE OF WASHINGTON CERTIFICATION FROM THE UNITED ) STATES DISTRICT COURT FORTHE ) EASTERN DISTRICT OF WASHINGTON ) IN ) LAURA ZAMORA JORDAN, as her separate estate, and onbehalfofothers similarly situated, Plaintiff,
v. NATIONSTARMORTGAGE, LLC, a Delaware limited liability company, Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) 

## ________________________) No. 92081-8
EnBanc 

### JUL 0 

## 7**2®~®** Filed
______ _

OWENS, J.

- After defaulting on herhome mortgage payment, plaintiff LauraJordan returned home from work one evening to discover she could not enter her own house: the locks hadbeen changed without warning. A notice informed her that in orderto gain access to her home, she must call defendantNationstarMortgage LLC to obtain the lockbox code and retrieve the newkey inside. Although sheJordan v. Nationstar Mortgage, LLC No. 92081-8 eventually reentered her home, she removed herbelongings the next day and has not returned since. Jordan's home loan was securedby a deed oftrust, a commonly used security instrument that was created as an alternative to traditional mortgages to provide for a simpler method offoreclosure. The deed oftrust containedprovisions that allowed Nationstar to enterherhome upon default withoutproviding any notice to the homeowner. Today, we are asked to decide whether those provisions conflict with Washington law. Jordanrepresents a class action proceeding in federal court, which has certified two questions to us. The first question asks whether the deed oftrust provisions conflict with a Washington law that prohibits a lender from taking possession of property prior to foreclosure. We hold that it does because the provisions allow Nationstar to take possession ofthe property after default, which conflicts with the statute. The second question asks whether Washington's statutory receivership scheme--providing for a third party to possess and manage property in lieu ofeither the lender orhomeowner-is the exclusive remedy by which a lender may gain access to the property. As explained below, we hold nothing in our law establishes the receivership statutes as an exclusive remedy. FACTS In2007, Jordan bought a home in Wenatchee, Washington, with a home loan of $172,000 from Homecomings Financial. She secured the loanby signing a deed of

2Jordan v. Nationstar Mortgage, LLC No. 92081-8
trust. The original lender assigned the loan to the Federal National Mortgage Association (Fannie Mae), one ofthe nation's largest mortgagees that primarily participates in the secondary mortgage market, which hiredNationstar to service the loan. Jordan went into default on her mortgage payments in January 20 11. InMarch 2011, one ofNationstar's vendors came to Jordan's home and changed the locks on her front door. Jordan returned home to find a notice on the front door informing her that the propertywas found to be "unsecure or vacant" and that to protect her and the mortgagee's interest in the property, it was "secured against entry by unauthorized persons to preventpossible damage." Order Certifying Questions to Wash. Supreme Ct., Jordan v. Nationstar Mortg., LLC, No. 2:14-CV-0175-TOR at 6 (E.D. Wash. Aug. 10, 2015). While the above-noted facts are undisputed, the parties dispute whether the home was vacant. Jordan contends she was living there, left for work that morning as usual, and returned to find the lockbox and notice. Onthe otherhand, Nationstar contends that its vendor performed an inspection ofthe property and determined it was vacant. Upon finding the notice when she returned home, Jordan called the phone number provided and gotthe key from the lockbox to reenter her home. She took all ofher belongings and vacated the house the next day. Since then, Nationstar's vendor has maintained the property's exterior and winterized the interior. Nationstar does not

3Jordan v. Nationstar Mortgage, LLC No. 92081-8 claim to have attempted to provide Jordan any notice ofits intention to inspect the property and rekey it. Nationstar contends that its usual practice is to change the locks
on only one door, such that it can access the home in the future, but also so that the
owner can still enter the home through another door. Here, Jordan's home had only a front door and a sliding glass door in the rear ofthe home. Therefore, when Nationstar's vendor rekeyed the front door, she had no means ofentry. Jordan represents a certified class of3,600 Washington homeowners who were locked out oftheir homes pursuantto similar provisions in their deeds oftrust with Nationstar. This casepresents an important issue for these homeowners and the thousands ofothers subjectto similar provisions, as well as the many mortgage companies that have a concern with preserving and protecting the properties in which they have an interest. Three amicus briefs were filed in this case: Federal Home Loan Mortgage Corporation (Freddie Mac) and the city ofSpokane supporting defendant Nationstar, and the Northwest ConsumerLaw Center supportingplaintiffJordan. Freddie Mac tells us that the provisions such as the ones at issue here are important to the foreclosure process because they allow lenders to enter the propertyto maintain and secure it. It contends that suchprovisions help meet Freddie Mac'srequirements it imposes on companies like Nationstar to preserveproperties. InApril2012, Jordan filed a complaint againstNationstar in Chelan County Superior Court, alleging state law claims that include trespass, breach ofcontract, and

4Jordan v. NationstarMortgage, LLC No. 92081-8 violations ofthe Washington Consumer Protection Act and the FairDebt Collection Practices Act. Ch. 19.86 RCW; 15 U.S.C. 

### §§ 1692-1692p. Chelan County Superior Court certified the class action, with Jordan as the representative for the 3,600 similarly situatedhomeowners. Nationstar removed the action to the United States District Court for the Eastern District ofWashington (District Court). The parties each filed motions for partial summaryjudgment. Nationstar asked the District Court to find the provisions at issue enforceable under Washington law. Jordanasked the District Court to find that before the lender can enter a borrower'sproperty, the lender must obtain either the borrower's postdefault consent orpermission from a court. Furthermore, Jordan contends that receivership is the onlyremedybywhich a lender may gain access to the borrower'sproperty. Finding that the case raised unresolved questions ofWashington state law, the District Court certified two questions to us. We accepted the following certified questions. CERTIFIED QUESTIONS 1. UnderWashington's lien theory ofmortgages and RCW 7.28.230(1), can
aborrower and lender enterinto a contractual agreementpriorto defaultthat allows the lender to enter, maintain, and secure the encumberedpropertyprior to foreclosure? 2. Does chapter 7.60 RCW, Washington's statutory receivership scheme, provide the exclusiveremedy, absent postdefault consentbythe borrower, for a lender to gain access to an encumberedpropertyprior to foreclosure?

5Jordan v. Nationstar Mortgage, LLC No. 92081-8 ANALYSIS Certified questions present questions oflaw and we review them de novo. See, e.g., ParentsInvolved in Cmty. Sch. v. Seattle Sch. Dist., No. 1, 149 Wn.2d 660, 670, 

### 72P.3d 151 

### (2003). 1. Washington's Lien Theory andRCW 7.28.230(1) Preventa Borrower anda Lender from Contracting To Allow the Lender To Take Possession Basedon BorrowerDefault The District Court asks us to determine whether a predefault clause in a deed of trust that allows a lender to enter, maintain, and secure the property before foreclosure is enforceable. We must determine whether these provisions contravene Washington law. As described below, the deed oftrustprovisions authorize a lender to enter the borrower's property after default. The parties agree that a Washington statute prohibits a lender from taking possession ofa borrower's propertyprior to foreclosure. The controversial issue here is whether the deed oftrust provisions allowing the lender to enter constitute taking possession prior to foreclosure, such that they conflict with state law. Based on Nationstar's practices, we find that the provisions do allow the lender to take possession and thus they are in conflict with state law. As such, we answer the first certified question in the negative.
a. The Deedof Trust ProvisionsAllow a Lender To Enter the Borrower's Property upon Default orAbandonment "[I]t is the general rule that a contract which is contraryto the terms and policy ofan express legislative enactment is illegal and unenforcible [sic]." State v. Nw.

6Jordan v. Nationstar Mortgage, LLC No. 92081-8 Magnesite Co., 28 Wn.2d 1, 26, 182 P.2d 643 (1947). While we recognize an overarching freedom to contract, provisions are unenforceable where they are prohibited by statute. State Farm Gen. Ins. Co. v. Emerson, 102 Wn.2d 477,481, 687 P.2d 1139 (1984). The provisions at issue are made up oftwo sections in the deed oftrust. The first provision, in pertinentpart, is as follows: 

### 9. Protection ofLender's Interest in the Property and Rights Under this Security Instrument. If(a) Borrower fails to perform the covenants and agreements contained in this Security Instrument,
... or (c) Borrower has abandoned the Property, then Lender may do and pay for whatever is reasonable or appropriate to protect Lender's interest in the Property and rights under this Security Instrument, including protecting and/or assessing the value ofthe Property, and securing and/or repairing the Property
.... Securing the Property includes, but is not limited to, entering the Property to make repairs, change locks, replace orboardup doors and windows, drain water from pipes, eliminate building or other code violations or dangerous conditions, and have utilities turned on or off. Although Lendermay take action under this Section 9, Lender does nothave to do so and is not under any duty or obligation to do so. Ex. 19, at 8. The provisions also allows the lender to "make reasonable entries upon and inspections ofthe Property" where the lender has reasonable cause and gives the borrower notice. 

### !d. at 7. It also requires the borrower to maintain and protect the property. 

### !d. Together, these sections are the so-called "entry provisions" that are at issue in this case, which allow the lender to enter, maintain, and secure the property after the borrower's default or abandonment. Nationstarhinges its argument onthe need to
7Jordan v. Nationstar Mortgage, LLC No. 92081-8

secure abandoned property, stating it does not enter occupiedproperty. However, the provisionplainly states that the lender may "secure" the property after the borrower defaults or abandons the property. The provision specifically lists changing the locks
as a method ofsecuring the property. Thus, the provisions authorize the lender to enter and rekey the property solely upon default, regardless ofwhether the borrower has abandoned the property. As explained below, it is well settled that Washington lawprohibits lenders from taking possession ofborrowers' property before foreclosure. This question turns
on whether the above provisions authorize lenders to "take possession" and if, in fact, the lender's actions here constituted taking possession. b. Washington's Lien Theory DoesNotPermit a Lender To Take Possession of PropertyPrior to Foreclosure Our case law is clear that Washington law prohibits a lender from taking possession ofproperty before foreclosure ofthe borrower's home. Importantly, the parties agree onthis point; under state law, a secured lender cannot gainpossession of the encumbered property before foreclosure. RCW 7.28.230 provides that (I) A mortgage ofany interest in real property shall notbe deemed a conveyance so as to enable the owner ofthe mortgage to recover possession of the realproperty, without a foreclosure and sale according to law.Pl

1Before 1969, this section ofthe statute ended after "without a foreclosure and sale according to law." CODE OF 1881, § 546. It was amended in 1969 to make clear that the statute should notbe

8Jordan v. Nationstar Mortgage, LLC No. 92081-8 This statute essentially codified Washington's lien theory ofmortgages. The mortgage lien theory prevails in Washington, meaning thatthe mortgage is seen as "nothing more than a lien uponthe property to secure payment ofthe mortgage debt, and in no sense a conveyance entitling the mortgagee to possession or enjoyment of theproperty as owner." 

### W. Loan & Bldg. Co. v. Mifflin, 162 Wash. 33, 39,297 P. 743 (1931). We have interpreted RCW 7.28.230(1) to meanthat a mortgagor's default does not disrupt the mortgagor's right to possession ofreal property, and that the mortgagor retains the right to possessionuntil there has been foreclosure and sale of the property. Howard

### v. Edgren, 62 Wn.2d 884, 885, 385 P.2d 41 (1963). TheRestatement (Third) of Property takes the approach thatmortgagee possession agreements conflict with lien theory statutes. See RESTATEMENT (THIRD) OF PROP.: MORTGAGES § 4.1 cmt. b (AM. LAW INST. 1997). Several lien theory jurisdictions hold that provisions that allow the lender to takepossession ofthe property contravenes public policythat is inherent to the lien theory; indeed, some states have even codified statutes that specifically invalidate such agreements. See, e.g., COLO. REV. STAT. ANN.§ 38-35-117; IDAHO CODE ANN.§ 6-104; NEV. REV. STAT.§ 40.050; OKLA. STAT. ANN. tit. 42, § 10; UTAH CODE ANN.§ 78B-6-1310.

interpreted to prohibit a mortgagee from collecting rents before foreclosure. See LAws OF 1969, 1st Ex. Sess., ch. 122, §I; andsee Kezner v. Landover Corp., 87 Wn. App. 458,464,942 P.2d I003 (1997). However, the bedrockprinciple that borrowers have a rightto possessionprior to foreclosure was not altered by the amendment. 9Jordan v. Nationstar Mortgage, LLC No. 92081-8 Washington's legislature, however, did not specifically invalidate such contrary agreements in its codification oflien theory prohibiting the lender from taking possession ofproperty before foreclosure. Thatthe legislature did not specifically invalidate such contractprovisions, as did other states, does not meanthe provisions do not conflict with our laws. Thus, we must determine whether its statute is in conflict with such an agreement. Nationstar concedes that the borrower's right to possession cannot be overcome by a contraryprovision in the mortgage or deed oftrust because such a provision would be nnenforceable as it would contravene Washington law. Def.'s Answering Br. at 11. However, Nationstar argues thatthe entry provisions do not authorize the lender to take "possession" and that its specific conduct at Jordan's residence did not constitute possession. Therefore, the determinative issue in answering this first certified question is whether the entry provisions cause the lender to gain "possession." As explained below, the entry provisions do authorize conductthat constitutes "possession."
c. These EntryProvisionsAllow a Lender To Take Possession Prior to Foreclosure and Therefore Conflict with State Law We must determine ifthe entry provisions authorize the lender to take "possession" ofthe property. Ifthey do, the provisions are in conflict with Washington law. Here, we look to the actions that Nationstar tookpursuant to the entry provisions to see ifthey constituted "possession." Possessionhas slightly

10Jordan v. Nationstar Mortgage, LLC No. 92081-8 different meanings in different areas ofthe law. The parties supplied defmitions from real property law, tort law, and landlord-tenant law because it is unclear which definition is applicable to RCW 7.28.230(1). Under any definition, the conduct allowed under the entry provisions constitutes possession becauseNationstar's actions satisfY the key element of possession: control. Inproperty law, "possession" is defined as "aphysical relationto the land ofa kind which gives a certain degree ofphysical control over the land, and
an intent so to exercise such control as to exclude other members ofsociety in general from any present occupation ofthe land." RESTATEMENT (FIRST) OF PROP.: DEFINITION OF CERTAIN GENERAL TERMS§ 7(a) (AM. LAW INST. 1936). The key elementto the property defmition of"possession" is the "certain degree ofphysical control." Tort law similarly requires control. Intort law, which is concernedprimarily with liability, a "possessor ofland" is defined as "apersonwho occupies the land and controls it." RESTATEMENT (THIRD) OF TORTS: LIABILITY FOR PHYSICAL AND EMOTIONAL HARM§ 49 (AM. LAW INST. 2012). The Court ofAppeals applied the tort definition ofpossession when it considered the phrase "mortgagees in possession" for purposes ofpremises liability. Coleman v. Hoffman, 115 Wn. App. 853, 858-59, 64 P.3d 65 (2003). There, the lenderused RCW 7.28.230(1) as a defense to its putative possessionto avoid liability, arguing that it could not have been "inpossession" because the statute forbids it. 

### !d.

11Jordan v. Nationstar Mortgage, LLC No. 92081-8
at 863. The court relied onthe above tort definition of"possession" and another prominent source that stated for a lenderto be liable, it must '"exercise dominion and control overthe property."' 

### !d. at 859 (quoting 62 AM. JUR. 2D Premises Liability § 8, at 356 (1990)). In finding that the plaintiffshowed enough facts oflender's possession, the courtpointed to the lender's repairs andpayments ofutility bills. 

### !d. at 862-63. We also find that landlord-tenant law's treatment of"possession" helpfulparticularly its analysis ofthe impact ofchanging locks. InAldrich v. Olson, the Court ofAppeals found that when the landlord changed the locks ofher tenant's home, it was an unlawful eviction. 12 Wn. App. 665, 672, 531 P.2d 825 (1975). The court reasoned, "It is difficult to visualize an act ofa landlord more specifically intended as a reassumption ofpossession by the landlord and a permanent deprivation ofthe tenant's possession than a 'lockout' without the tenant's knowledge or permission." 

### !d. at 667. From any approach, we find that Nationstar's conduct constitutedpossession. The foregoing possession definitions, as well as Coleman andAldrich, are instructive. Nationstar's vendor's actions constitutedpossessionbecause its actions are representative ofcontrol. The vendor drilled outJordan's existing locks and replaced the lock with its own. Nationstar stated in its briefthat it rekeyed Jordan's property to allow itselfaccess to return to secure the property by winterizing it and to make

12Jordan v. Nationstar Mortgage, LLC No. 92081-8
repmrs. Def.'sAnswering Br. at 33-34. Perhaps that is true; however, rekeying the property also had the effect ofcommunicatingto Jordan that Nationstar now controlled the property. The action leftJordan with no method ofentering her own property. Nationstarrelies on the fact that it did not change the locks to exclude Jordan (because it provided her a lockbox and phone nmnber to call) to provide proof that it did not possess the premises. However, although she was able to obtain a key by calling, the process made Nationstar the "middle man." She could no longer
access her home without going throughNationstar. This action ofchanging the locks and allowing her a key only after contacting Nationstar for the lockbox code is a clear expression ofcontrol. Although Nationstar did not exclude Jordan from the premises (as she was able to gain a key and enter), she left the next day and did not return. In its amicus brief, the Northwest Consumer Law Center advised us anecdotally that many similarly situated Washington homeowners felt that whenthe lender changed the locks to their homes, they no longer had a right to continue to possess the property. See Br. ofAmicus Curiae Nw. ConsumerLaw Ctr. at 6. Nationstar effectively ousted Jordan by changing her locks, exercising its control over the property. Although the mortgagee-mortgagor context is different from the landlord-tenant context,Aldrich provides an apt analogy here because the court there found that changing the tenant's locks was the most striking showing ofa reassmnption ofpossession. 12 Wn. App. at 667. Changingthe locks is akin to

13Jordan v. Nationstar Mortgage, LLC No. 92081-8 exercising control, which is the key element ofpossession. By changing the locks, Nationstar tookpossession ofthe property. Since these actions are authorized by the entry provisions, the entry provisions allow the lender to take possession ofthe property. Because Washington law prohibits lenders from taking possession ofthe borrower's property before foreclosure, the provisions are in conflict with state law. Therefore, we must answer the first certified question in the negative and find that the entryprovisions are unenforceable. 2. Chapter 

### 7.60 RCWDoesNot Provide the ExclusiveRemedy for aLender To GainAccess to anEncumberedProperty Prior to Foreclosure The second certified question asks whether this state's receivership statutes separately prohibitthe entry provisions. Specifically, this second question asks whether chapter 7.60 RCW, which provides for thejudicial appointment ofa third party receiver to manage the property, is the exclusive methodby which lenders can gain access to encumbered property prior to foreclosure. This is an issue offirst impression in this court, and no Washington appellate decision is onpoint. We must answer this question in the negative because nothing indicates that the statutory receivership scheme provides the exclusive remedy for lenders to access a property.
a. BackgroundonReceivership andIts Role in Mortgage Foreclosure Chapter 7.60 RCW governs Washington's receivership scheme. A "receiver" is a third party appointed by a court to take charge ofproperty and manage it as the

14Jordan v. Nationstar Mortgage, LLC No. 92081-8
court directs. 18 WILLIAM B. STOEBUCK & JOHN W. WEAVER, WASHINGTON PRACTICE: REAL ESTATE: TRANSACTIONS,§ 18.6, at 310 (2d ed. 2004). The statutes enumerate some 40 circumstances under which a receiver may be appointed. Only a few concern mortgagedreal property. See RCW 7.60.025(1)(b), (g), (cc), (dd). Although authorized by statute, lenders are not entitledto a receiver, even where a clause in the mortgage provides for the appointment ofa receiver. STOEBUCK & WEAVER, supra, § 18.6, at 312. While statutory grounds exist for a court-appointed receiver priorto foreclosure, it is rarely sought. Id. at 314. Inthe context ofmortgaged real property, a receiver might be appointed as a "custodialreceiver," who wouldtake possession oftheproperty andpreserve it. RCW 7.60.015; 7.60.025(1)(g). Commonly, receivers are appointed to collectrent from income-producing property. STOEBUCK & WEAVER, supra, § 18.6, at 310-11;
see RCW 7.28.230(1) (providing grounds for appointing a receiverto collectrent for application to mortgage). Importantly, nothing inthe text ofRCW 7.28.230(1) or chapter 7.60 RCW requires the appointment ofa receiver in this context. Jordan argues that the entry provisions are Nationstar's attemptto contract around chapter 7.60 RCW's requirements and that the legislature intended for the statutes to provide lenders an exclusive remedy. However, as explained below, Jordan's arguments fail to establishthat chapter 7.60 RCW does so.

15Jordan v. NationstarMortgage, LLC No. 92081-8 b. The ContractProvisionsDoNot Conflictwith Chapter 

### 7.60RCW We haveheld that the deed oftrust act in chapter 61.24 RCW cannotbe contracted around in two recent cases where parties attempted to modify the deed of trust act's requirements byprivate contract. SeeBain v. Metro. Mortg. Grp., Inc., 175 Wn.2d 83, 107,285 P.3d 34 (2012) (holding thatparties cannot contractto fit a statutory definition to fulfill the act's requirements); Schroeder v. ExcelsiorMgmt. Grp., LLC, 177 Wn.2d 94, 107,297 P.3d 677 (2013) (holding thatparties cannot contractuallywaive a requirementunder the act that agricultural properties may only be foreclosedjudicially). Jordan argues that like inB ain and Schroeder, the entryprovisions attempt to "bypass" statutes that dictate a lender's only entry method. Pl.'s Opening Br. at 25. However, Jordan misconstrues thereceivership statutes as providing a "list of requisites to a lender gaining access to a borrower's property." Id. at 28. While the statutes enumeratereceivership requirements, they are not concerned with a lender's
access to borrower's propertybutrather merely set forth requirements should a receiverbenecessary. Thus, the entryprovisions do not attempt to circumvent the receivership statutes andthus do not conflict with chapter 7.60 RCW. Similarly, Jordan's other arguments do not supporther contention that the receivership statutes provide lenders an exclusive remedyto access property. In fact, as explained below,

16Jordan v. Nationstar Mortgage, LLC No. 92081-8
the text ofthe statute andpolicy considerations support a finding that chapter 7.60 RCW does notprovide lenders the exclusive remedy.


### c. The Statute's Text Supports Finding ThatItDoes NotProvide an Exclusive Remedy The text ofthe statute supports a finding that it does notprovide the exclusive remedy. First, the plain language ofthe statute must be examined to determine exclusivity. We have held that when engaging in statutory interpretation, our "fundamental objective is to ascertain and carry outthe Legislature's intent, and ifthe statute's meaning is plain on its face, then the court must give effect to thatplain meaning as an expression oflegislative intent." 

### Dep 't of Ecology v. Campbell & 

### Gwinn, LLC, 146 Wn.2d 1, 9-10,43 P.3d 4 (2002). Ofcourse, an exclusivity clause would be the clearest indication ofthe legislature's intentthat the statute be exclusive, but as Jordan concedes, this statute does not have one. However, Jordan argues that because the statutory scheme is "comprehensive," the legislature intended for the statute to providethe exclusive remedy for lenders suchthat they cannot contract for entry otherwise. 

### See generally Pl. Opening Br. at 24-37; 

### andsee LAWS OF 2004, ch. 165, § 1. Itis truethatthe receivership statutory scheme is comprehensive, butthe plain language ofthe statute does not suggestthat chapter 7.60 RCW was intendedto be an exclusive remedy. Ifa court were to appoint a receiver in this context, it would likely be pursuant to RCW 7.60.025(1). Thus, we analyze the question ofwhetherthe receivership

17Jordan v. Nationstar Mortgage, LLC No. 92081-8 provides lenders the exclusive remedy under that portion ofthe provision. The statute provides, in part: A receiver maybe appointed by the superior court ofthis state inthe following instances, but except in any case ... in which a receiver's appointment with respect to real property is sought under (b)(ii) ofthis subsection, a receiver shallbe appointed only 

## if the court additionally determines thatthe appointment ofa receiver is reasonably necessary and that other available remedies either are not available or are inadequate. RCW 7.60.025(1) (emphasis added). Subsection (b)(ii) provides that a receiver may be appointed after the commencement ofa foreclosure proceeding on a lien against real property where the appointment is provided for by agreement or is necessary to collect rent orprofits from the property. In analyzing this text, we look to its plain language. In general, the court's discretion is illustrated by the word "may." Under subsection (b)(ii), a receiver shall be appointed, but only 

## if the court makes additional fmdings. Firstthe court must find
a receiver is "reasonably necessary." RCW 7.60.025(l)(b)(ii). Second, and more importantly, the court determines that "other available remedies either are not available or are inadequate." RCW 7.60.025(1) (emphasis added). Courts consider all ofthe facts and circumstances to determine whether to appoint a receiver. Union Boom Co. v. Samish Boom Co., 33 Wash. 144, 152, 74 P. 53 (1903). "It is well established that a receiver should not be appointed ifthere is any other adequate remedy." King CountyDep 't of Cmty. & Human Servs. v. Nw. Dejs. Ass 'n, 118 Wn. App. 117, 126, 75 P.3d 583 (2003) (citing Bergman Clay Mfg.

18Jordan v. Nationstar Mortgage, LLC No. 92081-8 Co. v. Bergman, 73 Wash. 144, 147, 131 P. 485 (1913)). The Court ofAppeals reasoned that allowing a currentboard ofdirectors to oversee a corporation "was not
an adequate remedy" and, thus, found that appointment ofa receiver was appropriate. 

### !d. at 126. Thus, in general, otherremedies exist outside ofappointing a receiver. Itis not before us to determine whatparticularremedies are available. To answer this question, it is sufficient that the plain language ofthe provision does not indicate that chapter 7.60 RCWwas meant to provide an exclusive remedy to lenders. Finally, public policy also supports the finding thatthe statute is not the exclusive remedy, which we discuss below. d. Public Policy Supports Finding That Chapter 7.60 RCWDoesNotProvide anExclusive Remedy To the extent that chapter 7.60 RCW's language is not explicit, it is worth noting a relevantpolicy consideration. One ofthe advantages ofa deed oftrust is that it offers '"efficient and inexpensive"' nonjudicial foreclosure. Schroeder, 177 Wn.2d at 104 (quoting Cox v. Helenius, 103 Wn.2d 383,387,693 P.2d 683 (1985)). Thus, requiring lenders to wade through thejudicial receivership process in all casesregardless ofthe facts and circumstances-is illogical. Overall, both policy and the plain text ofthe statute support finding that it does notprovide an exclusive remedy to lenders. Thus, we must answer this question in the negative.

19Jordan v. Nationstar Mortgage, LLC No. 92081-8 CONCLUSION We answer the first certified question in the negative. Washington law prohibits lenders from taking possession ofproperty prior to foreclosure. These entry provisions enable the lender to take possession after default, and the lender's action here constitutes taking possession. Therefore, the entry provisions are in direct conflict with state law and are unenforceable. As to the second question, we also answer it in the negative. The text ofthe receivership statutes, the legislative intent behind them, and public policy considerations compel us to find that chapter 7.60 RCW is not the exclusive remedy for lenders to gain access to a borrower's property.

20Jordan v. Nationstar Mortgage, LLC No. 92081-8



### WE CONCUR:

21

### Jordan v. NationstarMortgage, LLC



### No. 92081-8

STEPHENS, J. (dissenting}-! respectfully dissent because the majority erroneously equates the entry provisions at issue with actual possession. Months after Laura Jordan defaulted on her loan, Nationstar Mortgage LLC inspected Jordan's property and determined that it was vacant. Pursuantto the deed oftrust's entryprovisions, Nationstar securedthe home bychangingthe lockto the front door and posted instructions on how Jordan could enter the home if she returned. This practice is not inconsistent with Washington's lien theory ofmortgages and RCW 7.28.230(1). Accordingly, the first certified question should be answered in the affirmative. "Washington courts have hesitatedto 'invoke public policy to limit or avoid express contract terms absent legislative action."' Brown v. Snohomish County Physicians Corp., 

### 120 Wn.2d 747, 753, 845 P.2d 334 (1993) (quoting State Farm

### Jordan v. NationstarMortgage, LLC, 

### 92081-8 (Stephens, J. 

### Dissenting)

Gen. Ins. Co. v. Emerson, 102 Wn.2d 477, 481, 687 P.2d 1139 (1984)). 

### It is undisputedthatthe deed oftrust's entryprovisions were contractually agreed to and authorized Nationstar to change the locks on Jordan's home after default. And as the majority correctly notes, Washington's legislature has not "specifically invalidate[d] such contrary agreements in its codification oflien theoryprohibiting the lender from takingpossession ofpropertybefore foreclosure." Majority at 10. Themajorityneverthelessfinds theentryprovisionscontraveneWashington's rule against lenders taking preforeclosure possession ofborrowers' property. The majoritydoes so bydescribingthe entryprovisions as authorizing the lenderto take "possession." Id. at 8, 12. But the certified question asks not whether lenders can take "possession" ofpropertybefore foreclosure. Instead, it asks whetherthelender
can "enter, maintain, and secure the encumbered property" before foreclosure. Order Certifying Questions to Wash. Supreme Court, Jordan v. NationstarMortg., LLC, 

### No. 2:14-CV-0175-TOR at 9 (E. Wash. Aug. 10, 2015). Absent legislation stating otherwise, the entry provisions at issue are not inconsistent with Washington's lien theory ofmortgages and RCW 7.28.230(1). The majority cites inapposite authority to equate the entry provisions with actual possession. At the outset, the majority's reliance on the Restatement is misplaced. RESTATEMENT (THIRD) OF PROP: MORTGAGES§ 4.1 (AM. LAW. INST.

-2-Jordan v. NationstarMortgage, LLC, 

### 92081-8 (Stephens, J. 

### Dissenting)
1997). TheRestatement

### does notcontemplateentryprovisions, likethose considered here, but rather a lender taking possession. The Restatement 

### merely reiterates the generalrule againstacceleratedpreforeclosurepossession ofproperty. Inillustrative applications ofthis rule, the Restatement 

### examines instances where the mortgagee has "file[d] an action to obtain possession of [the property]." REsTATEMENT§ 

### 4.1 cmt. b, illus. 1-3. Here, however, Nationstar has not filed an action to obtain possession of Jordan's property. Instead, after Jordan defaulted on her loan, Nationstar took contractually authorized steps to secure the abandoned propertyand it posted instructions onhow Jordan could access the property, consistent with her continued right ofpossession. Neither ofthe two Court ofAppeals decisions cited bythe majority support equating the entryprovisionsto possession. Aldrich v. Olson 

### does not eveninterpret "possession" in RCW 7.28.230(1). 12 Wn. App. 665, 531 P.2d 825 (1975). And Coleman v. Hoffman 

### merely clarifies the difference between the right to possession (applicable to foreclosure actions) and actual possession (applicable to premises liabilitymatters): "AlthoughRCW 7.28.230 effectivelyprecludes amortgagee from obtaining possession ofproperty to the mortgagor's exclusion, the statute does nof bear on the question ofwhether a mortgagee actuallypossess the property. Actual possession, not a right to possession, is the critical inquiry in premises liability

-3-Jordan v. NationstarMortgage, LLC, 

### 92081-8 (Stephens, J. 

### Dissenting)

cases." 115 Wn. App. 853, 863-64, 64 P.2d 65 (2003). But unlike the landlords in Aldrich 

### and Coleman, 

### Nationstarneverpossessedthepropertyto Jordan'sexclusion. Rather, NationstarprovidedJordanwithinstructions onhowto enterherhome ifshe returned. At no point did Nationstar ever object to Jordan's continued right to possessionbefore foreclosure. Finally, even ifwe regarded the entry provisions as interfering with Jordan's right to possession, Nationstar was nevertheless justified in securing Jordan's abandoned property. The Restatement 

### recognizes three exceptions to the general rule that mortgagees cannot obtain possession ofthe mortgagor's property before foreclosure: (1) mortgagor consent, (2) mortgagee's possession as the result of peaceful entry in good faith after purchasing the property at a void or voidable foreclosure sale, and (3) mortgagorabandonment. RESTATEMENT§

### 4.1 cmt. c. Here, the evidence supported Nationstar securing Jordan's home under the mortgagor abandonment exception. Months after Jordan defaulted on her loan, Nationstar inspected Jordan's property and determined that it was vacant. Nationstar then changedthelocks, which it was allowed to do underthe entryprovisions in orderto
securethe property. CfPNCBank, NA v. Van Hoornaar, 

### 44 F. Supp. 3d 846, 856- 57 (E.D. Wis. 2014) (dismissing trespass claim against lender for changing a homeowner's locks upon default because the mortgage agreement authorizing the

-4-Jordan v. NationstarMortgage, LLC, 92081-8 (Stephens, J. Dissenting)



### lender to secure the premises upon default or abandonment created an implied consent to entry); see also Tennant v. Chase Home Fin., LLC, 187 So. 3d 1172, 1181-82 (Ala. Civ. App. 2015). Moreover, public policy considerations support Nationstar securingJordan's abandonedproperty: "Notonlyis itimportantto protect the [property] against the elements and vandalism, but society is benefited by [the property's] productiveuse." RESTATEMENT§ 

### 4.1 cmt. c. Pursuant to entry agreements like the one mutually agreed on by Nationstar and Jordan, a lender may "enter, maintain, and secure" seemingly abandoned property before foreclosure without taking "possession" of it. Because the first certified question shouldbe answered inthe affirmative, I dissent.

-5-Jordan v. NationstarMortgage, LLC, 92081-8 (Stephens, J. Dissenting)

-6-