IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON

CHICAGO TITLE INSURANCE CO.,

a Washington corporation,

Plaintiff,

RICHARD CAMPBELL and REBECCA

LEE MARCY, husband and wife, and

their marital community,

Appellants,

and

ROSALIND M. GREENBERG, an

individual,

Respondent.

No. 69927-0-

DIVISION ONE

UNPUBLISHED

FILED: June 9. 2014

COX, J. - Chicago Title Insurance Co. commenced this interpleader

action and placed into the registry of the court an earnest money deposit held in

escrow for a failed real estate transaction. On cross motions for summary

judgment, the court awarded the deposit to the prospective buyer, Rosalind

Greenberg. Because there were no genuine issues of material fact for trial, and

the buyer was entitled to judgment as a matter of law, we affirm.

In April 2011, Greenberg and her terminally ill husband resided in Green

Bay, Wisconsin. They decided to purchase a home for their daughter, Madeline,

in the Puget Sound area. While Madeline and real estate agent Donna Cowles

looked at properties, Greenberg remained in Wisconsin to be with her husband

during his hospice care.
No. 69927-0-1/2

On April 26, 2011, Greenberg submitted a preapproval loan application to

a Green Bay branch of Merrill Lynch. The Greenbergs had several investment

and savings accounts at the branch. The loan application did not initially identify

a specific property for purchase.

In late April, the Greenbergs made an offer to purchase a property in

Redmond. That offer was not accepted. Shortly thereafter, the Greenbergs

made a full price offer to buy for $370,000 the Kirkland residence of Richard

Campbell and Rebecca Marcy ("Campbell").1 That offerwas accepted.

On May 1, 2011, the parties executed a purchase and sale agreement

(PSA). The PSA provided for a closing date ofJune 8, 2011. A financing

addendum stated in part:

1. DOWN PAYMENT / LOAN APPLICATION.

a. Loan Application. This Agreement is contingent on buyer obtaining the

following loan or loans to purchase the Property. ..:... Conventional

First.... Buyer agrees to pay . . . $170,000 down, in addition to the

Loans and to make written application for the Loans to pay the balance of

the Purchase Price and pay the application fee, if required, for the subject

Property within 5 days . . . after mutual acceptance of this Agreement. . . .

4. EARNEST MONEY. If Buyer... is unable to obtain financing after a

good faith effort, then on Buyer's notice, this Agreement shall terminate.

The Earnest Money shall be refunded to the Buyer after Buyer delivers to

Seller written confirmation from Buyer's lender confirming (a) the date

Buyer's loan application for the subject property was made; (b) that Buyer

possessed sufficient funds to close; and (c) the reasons Buyer's

application was denied.[2]

1We adopt the parties' naming conventions and refer to appellants as

"Campbell" and respondent as "Greenberg."

2Clerk's Papers at 13.

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No. 69927-0-1/3

Greenberg subsequently deposited $7,000 into escrow as earnest money.

In a declaration submitted below, Greenberg alleged she phoned Scott

Mainard at Merrill Lynch on May 4, 2011, and informed him of the PSA.

On May 6, 2011, she exchanged e-mails with Mainard and requested a

pre-approval letter. Mainard responded that the mortgage landscape had

changed dramatically, that loan processing took longer than before, and that he

would likely not have anything for her until the next week.

On May 17, 2011, Merrill Lynch issued a pre-approval letter stating that

Greenberg was pre-approved for a mortgage loan of $148,000. An attached

document entitled "Your Next Steps in the Financing Process" provided a

checklist of steps Greenberg needed to take to complete the financing process.

When asked about the checklist at her deposition, Greenberg said she received it

when her husband's health "took a tremendous turn for the worse" and she "was

giving up control of everything" to her agent and her financial advisor at Merrill

Lynch. She added that she "didn't know there was anything else I needed to do

other than wait for papers to come to me." Campbell points to nothing in the

record showing that Merrill Lynch did not obtain whatever was required to

approve the loan.

On May 23, 2011, following an inspection of Campbell's home, Greenberg

negotiated a reduction in the purchase price to $341,000.

On June 1, 2011, Greenberg's agent requested an extension of the

closing date by e-mail, stating that Merrill Lynch needed it to sell stock for the
No. 69927-0-1/4

down payment. Greenberg corroborated this in her declaration, alleging that

Scott Mainard at Merrill Lynch asked for the extension of time.

On Friday, June 3, 2011, Greenberg's agent informed Campbell by e-mail

that Merrill Lynch needed the extension "partly because of the way real estate is

handled in [Wisconsin]. The bank was expecting to have 45 days after the

inspection contingency was removed. They are working diligently on this and will

keep us apprised of any changes in the closing date." Greenberg echoed the email in her declaration, stating that Scott Mainard told her "it is standard practice

in Wisconsin to have 45 days to close after the inspection contingency has been

removed."

On June 3, 2011, Merrill Lynch employees stated in an internal e-mail that

itwas time "to turn this preapproval [of Greenberg's loan] into live registration."

According to Campbell, this refers to the process of converting a general preapproval into a property-specific loan application. There is nothing in this record

showing that any delay in initiating live registration was due to acts or omissions

of Greenberg.

On June 4, 2011, Greenberg's agent stated in an e-mail that Campbell

had not signed an extension of the closing date and wanted "information about

the progress of the loan which hasn't been started yet." Although Campbell

suggests this shows that the loan process had not yet been started by

Greenberg, this is mere speculation by him. The record plainly shows that

Greenberg had started the loan application process.
No. 69927-0-1/5

On June 5, 2011, Campbell informed Greenberg's agent that he would not

grant an extension without "a thorough understanding of the issues at hand and

the resolutions going forward."

Internal Merrill Lynch documents show that itwas actively processing the

loan application during the final week before closing. Nothing in the documents

indicates that Merrill Lynch's efforts were slowed by any omissions on

Greenberg's part. Greenberg alleged below that she "worked furiously" to find

another financing option, that she spoke with Ken Harding at Windemere

Mortgage, and that she was unable to find any entity that could fund the loan by

the closing date. She further alleged that "at all times our cash stores were

adequate to fund the down payment on the property."

On June 8, 2011, Campbell offered to extend the closing date for an

additional $10,000. Greenberg declined the offer and the sale did not close.

On June 9, 2011, Campbell informed Greenberg she was in default under

the agreement and demanded that she forfeit the earnest money. Greenberg

disagreed and declined to authorize release ofthe earnest money by Chicago

Title.

On June 25, 2011, Greenberg's husband passed away.

On October 14, 2011, Chicago Title filed this interpleader action. The

court subsequently granted Chicago Title's motion for discharge and the matter

proceeded with Greenberg and Campbell asserting their respective claims to the

fund.

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No. 69927-0-1/6

Greenberg filed a cross claim against Campbell, alleging that "Campbell

has refused to release the Earnest Money and is in breach of the Purchase and

Sale Contract." Campbell also filed a cross claim. He alleged that Greenberg

breached several terms of the real estate contract, including requirements for a

loan application on the subject property within five days and an implied duty of

good faith and fair dealing. Both parties moved for summary judgment.

In her motion, Greenberg argued that she was entitled to summary

judgmentbecause "Campbell does not have evidence that [she] defaulted under

the [PSA]," she pursued financing in good faith, and the financing contingency in

the agreement excused her from closing. In his response and counter-motion for

summary judgment, Campbell argued that Greenberg's motion ignored her

failure to obtain funds for a down payment, her failure to make a written

application for a loan on the subject propertywithin five days of mutual

acceptance, alleged alterations to her loan application, and her failure to make a

good faith effort to obtain financing. At the hearing on summary judgment,

Campbell also argued that Greenberg had not acted in good faith because she

failed to take any action on the checklist she received for finalizing her loan.

The superior court granted Greenberg's motion for summary judgment,

stating in part:

There's also no question that there was a prior offer made on

an unrelated property, and under the facts before me, the

application initially was made for that property.

It is also clear from reviewing all of the facts that the intent of

Ms. Greenberg was to change her loan application to the second
No. 69927-0-1/7

property, the Kirkland property of Mr. Kirkland (sic) -- excuse me -

of Mr. Campbell's and that she did everything she needed to do

from Merrill Lynch's proposal and perspective to accomplish that

change in address. And that's not unusual. She's getting

preapproved, the amounts, the figures are very similar.

I understand the concern that Mr. Campbell makes, some

suggestion of fraud. Isimply can't find that there are any facts that

support that. Ifind that under the circumstances the burden is on

Mr. Campbell to show -- there's no question that she didn't obtain

financing, but then there's a burden on Mr. Campbell to show that

for some reason that she didn't obtain financing because of some

legal inability to follow through by Ms. Greenberg. that she did

something improper. And I don't find that she did, and I don't find

that Mr. Campbell sustained the burden that she did anything other

than what she was required to do by Merrill Lynch to continue with

the case.

There is the suggestion that she - on the second issue, on

the down payment issue, there's a suggestion - and Iwould say it's

conjecture - that she didn't have the funds to put $170,000 down,

but we have her affidavit that she did as well as brokerage

statements that suggest that she did as well.

And so I again find that Mr. Campbell did not sustain the

burden to show that she didn't have the money to pay the $170,000

at the time that it was scheduled to initially close, which was that

June 8th date.

So long story short, I do find that summary judgment in Ms.

Greenberg's favor is appropriate.[3]

The court also awarded Greenberg $21,853 in attorney fees under an

attorney fee provision in the PSA. Campbell appeals.

STANDARD OF REVIEW

The sole issue on appeal is whether the superior court erred in granting

summary judgment. We review that decision de novo, engaging in the same

3Report of Proceedings (Jan. 8, 2013) at 23-25 (emphasis added).

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No. 69927-0-1/8

inquiry as the trial court.4

A party may move for summary judgment by pointing out the absence of

evidence to support the opposing party's case.5 If a party carries that initial

burden, the burden then shifts to the opposing party to set forth specific facts

showing a genuine issue of material fact for trial.6 The nonmoving party may not

rely on speculation or "mere allegations, denials, opinions, or conclusory

statements" to establish a genuine issue of material fact.7 Summary judgment is

proper ifthe pleadings, affidavits, depositions, and admissions on file

demonstrate that there is no genuine issue of material fact and that the moving

party is entitled to summary judgment as a matter of law.8 All reasonable

inferences from the evidence must be drawn in favor of the nonmoving party.9

Applying these principles here, we conclude the court did not err in granting

summary judgment.

BURDEN OF PROOF

Initially, the parties disagree on the applicable burden of proof. Greenberg

correctly notes, and Campbell does not dispute, that a party moving for summary

4 Dillon v. Seattle Deposition Reporters. LLC, 179 Wn. App. 41, 58-59,

316P.3d 1119(2014).

5 Young v. Key Pharmaceuticals, Inc., 112 Wn.2d 216, 225 n.1, 770 P.2d

182(1989).

6 jd, at 225.

7 Int'l Ultimate. Inc. v. St. Paul Fire & Marine Ins. Co., 122 Wn. App. 736,

744, 87 P.3d 774 (2004).

8CR 56(c); Dillon, 179 Wn. App. at 59.

9 Lamon v. McDonnell Douglas Corp., 91 Wn.2d 345, 349, 588 P.2d 1346

(1979).

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No. 69927-0-1/9

judgment can carry their initial burden by pointing out the absence of evidence

supporting the opposing party's claim.10 Greenberg moved for summary

judgment on this basis below, arguing that Campbell had no evidence supporting

his claim that she breached their agreement and that she was therefore entitled

to the earnest money. The trial court adopted Greenberg's position, concluding

that "there's a burden on Mr. Campbell to show that. . . she didn't obtain

financing because . . . she did something improper."11 For the first time in his

reply brief, Campbell argues that this is not the appropriate burden of proof. We

do not consider arguments raised for the first time in a reply brief.12

GENUINE ISSUE OF MATERIAL FACT

Turning to the merits, Campbell contends the superior court erred in

concluding there was no evidence supporting his claim that Greenberg breached

the parties' agreement. He maintains there was evidence that she breached the

contract in two respects.

First, he contends "Greenberg failed to make a good faith effort to obtain

financing." He points out that "[t]here is in every contract an implied duty of good

faith and fair dealing . . . ."13 The duty "arises only in connection with terms

agreed to by the parties."14 This court has held that when, as here, a real estate

10 Young, 112 Wn.2d at 225 n.1.

11 Report of Proceedings (Jan. 8, 2013) at 24.

12 Cowiche Canyon Conservancy v. Boslev, 118 Wn.2d 801, 809, 828

P.2d 549 (1992).

13 Badgett v. Sec. State Bank. 116 Wn.2d 563, 569, 807 P.2d 356 (1991).

14 Id,; Johnson v. Yousoofian, 84 Wn. App. 755, 762, 930 P.2d 921 (1996).

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No. 69927-0-1/10

contract makes third-party financing a condition of the duty to close, "[a] buyer

has a duty to act in good faith to attempt to obtain third-party financing."15

It is undisputed that third-party financing was a condition precedent of

Greenberg's duty to close. It is also undisputed that Greenberg applied for

financing on April 26, 2011 and received a preapproval letter on May 17, 2011.

Campbell argues the trial court erroneously focused on the April 26, 2011

application, that the application was "immaterial," and that the good faith issue

actually turned on the May 17, 2011 preapproval letter and Greenberg's inaction

thereafter. He contends an issue of fact exists whether Greenberg acted in good

faith during that period.16 He points out, as he did in summary fashion at oral

argument below, that the checklist attached to the May 17, 2011 preapproval

letter outlined the steps she needed to take for final approval of her loan. He

contends Greenberg's inaction regarding the checklist, "coupled with the parallel

lack of action at Merrill Lynch [and] the lack of documents or Merrill Lynch

testimony ... to prove otherwise," demonstrate a lack of good faith. We

disagree.

15 Salvo v. Thatcher, 128 Wn. App. 579, 585, 116P.3d 1019(2005).

16 Although Campbell discusses several questions he raised below

regarding the April 26, 2011 financing application, he does so to show the

misplaced focus of the trial court. He concludes that the April 26, 2011 financing

application is irrelevant and that Greenberg's breach occurred between May 17,

2011 and the closing date. Accordingly, we do not address the arguments

relating to the April 26, 2011 application. We note, however, that these

arguments also sufferfrom Campbell's erroneous view of the burden of proof.

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No. 69927-0-1/11

As discussed above, it was Campbell's burden to provide evidence

showing a breach of the duty of good faith. Although he contends Greenberg

took no action on the loan checklist, she stated in her deposition that, due to her

husband's illness, she had turned everything over to her agent and her financial

advisor at Merrill Lynch. There is no evidence to show that anything needed by

Merrill Lynch to process the loan was not timely provided, either by her, her

agent, or her financial advisor. Campbell also fails to discuss the specific matters

on the list and provides no evidence that they were in any way related to Merrill

Lynch's failure to fund the loan by the closing date. Likewise, he provides no

evidence supporting his claim that there was a "parallel lack of action at Merrill

Lynch" between May 17th and early June. Even if such evidence existed, there

is no evidence that Merrill Lynch's lack of action was caused by any action or

omission by Greenberg.

On the other hand, there is unrebutted evidence that the delay in

processing the loan was not Greenberg's fault. On June 01, 2011, Greenberg's

agent stated in an e-mail to Campbell that the lender needed an extension of the

closing date in order to sell stock for the down payment. Two days later, she

explained to Campbell that the extension was also due to "the way real estate is

handled in [Wisconsin]. The bank was expecting to have 45 days after the

inspection contingency was removed. They are working diligently on this and will

keep us apprised of any changes in the closing date."

11
No. 69927-0-1/12

In addition, Greenberg's actions in June showed good faith efforts to

obtain financing. When it became apparent that Merrill Lynch could not fund the

loan by the closing date, Greenberg did not terminate the agreement but instead

sought an extension of the closing date to finalize the loan. She also pursued

alternative financing.

In sum, Campbell failed to produce evidence demonstrating a genuine

issue of fact whether Greenberg breached her duty to pursue financing in good

faith.17

Second, Campbell contends Greenberg's failure to tender the down

payment fund breached the PSA. But tender of the down payment was excused

under the agreement if financing was unavailable.18 And while Greenberg's

efforts to procure a down payment are relevant to the question of her good faith,

Campbell points to nothing showing that Greenberg did not make good faith

efforts to obtain the down payment. Instead, he simply argues that Greenberg

came forth with no evidence showing that she made good faith efforts to procure

the down payment by the closing date. But as discussed above, the burden was

17 Campbell argues in passing that "[t]he trial court erred in allowing

admission of the alleged May 4th application" because "it is considered a 'lost

instrument.'" App. Br. at 31. This argument apparently refers to Greenberg's

claim that she notified Merrill Lynch on May 4th that her prior financing application

now applied to the offer she made on Campbell's property. This argument

appears to be made for the first time on appeal and, in any event, is too

conclusory to merit discussion. RAP 2.5(a); MP Medical Inc. v. Wegman, 151

Wn. App. 409, 420-21, 213 P.3d 931 (2009).

18 See Salvo, 128 Wn. App. at 586.

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No. 69927-0-1/13

on Campbell to demonstrate Greenberg's lack of good faith.

Campbell fails to demonstrate a genuine issue of fact. Greenberg was

entitled to judgment as a matter of law. The superior court properly granted

Greenberg's motion for summary judgment. And Greenberg was entitled to an

award of her attorney fees and expenses under the "prevailing party" provision in

the PSA.

Likewise, Greenberg is entitled to reasonable fees and expenses under

that provision on appeal, subject to her compliance with RAP 18.1.

We affirm the order on summary judgment and award fees on appeal to

Greenberg.

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WE CONCUR:

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