# Fl LE 11-1 CLERKS OFFICE llJIREME COUR"f:.STATE OF WASHINGTON DATEF 

### r.B 06 2014

# '>-na~ 

# cy;. CHIIiF'.IUiriCS

IN THE SUPREME COURT OF THE STATE OF WASHINGTON
LAWRENCE JAMETSKY, ) ) Petitioner, ) ) v. ) ) RODNEY A. and JANE DOE OLSEN,) MATTHEWandJANEDOEFLYNN,) And MICHAEL and JANE DOE ) HABER, ) ) Respondents. )



# _________________________) No. 88215-1

EnBanc

Filed 

## FEB 06 2014

GONZALEZ, J.-WhenLawrence Jametsky lost hisjob during the fall of2008, he feared foreclosure onhis home. He already owed King County over $10,000 in back property taxes and hadno foreseeable means ofpaying offthe debt. Desperate to save his house, Jametsky sought help securing a loan. Atthe time, he had significant equity in his home and was willing to borrow against it. Through a series ofconnections, he was introducedto MatthewFlynn, a mortgage broker. Eventually, Flynn made Jametsky an offer. Jametsky was relieved; he thought Flynn was extending him a $100,000 loanthat would cover his debts, save his house, and allow him to regain financial solvency. With this understanding, he agreed to theJametsky v. Olsen, No. 88215-1 transaction. The offer, however, was not what it seemed. Instead ofreceiving a loan, Jametsky deeded his house to Rodney Olsen for $100,000 and entered into an 18- month lease with a buy-back option. After Jametsky realized whathad happened months after the fact, he sought reliefunder the distressed property conveyances act (DPCA), chapter 6L34 RCW, among other things. His suit was dismissed at summaryjudgment. The Court of Appeals affirmed, finding that Jametsky's property was not distressed at the time of the sale because no certificate ofdelinquency had been issued by King County. Jarnetsky v. Olsen, noted at 171 Wn. App. 1019 (20 12). We reverse the Court of Appeals, vacate the grant ofsummaryjudgment, and remand for further proceedings. We hold that a property canbe distressed under RCW 61.34.020(2)(a) before a certificate ofdelinquency is issued and instruct the trial court to consider a variety of factors in making this factual determination. I. FACTS AND PROCEDURALHISTORY Jametsky inherited his grandfather's home and has been living there for over 25 years. Though there were liens onthe house, the property was not mortgaged or otherwise encumbered. But, in the fall of2008, Jametsky suffered significant financial and crushing personal hardships and he sought to borrow money against his house. Jametsky lost hisjob and was already struggling to payhis property taxes. He
was two and a halfyears behind on his property tax payments, and without a steady

2Jametsky v. Olsen, No. 88215-1

source ofincome.hefeared he could not cure the $10,000 delinquency in time to avoid foreclosure. Worst ofall, in October 2008, Jametsky's teenage sonwas·murdered. Because oflearning disabilities and limited education, Jametsky was unable to read or understand legal documents, and so he sought assistance with obtaining a loan. Michael Haberrepresented himselfas someone who could help. He poured over Jametsky's financial and tax records and created a loan application that Jametsky
never actually saw. Some months later, Haber came to Jametsky and introduced Fly1m as an investor who was willing to assist. Haber and Flynn asked Jametsky aboutthe existing liens and outstanding tax bill and assessed other financial records. One morning in October 2008, four days after Jametsky's son was murdered, they woke Jametsky and told him that they had a deal that would allowhimto keep his home and pay offhis debts. All Jametsky hadto do was pay them back overtime. Jametsky was relieved. In earlyNovember, they came back, roused Jametsky from bed, and drove him to a Starbucks to signthe paperwork. When Jametsky asked what the papers were for, he was told thatthey were for a loan. Jametsky signed. Without knowing it at the time, Jametsky deeded his house to Olsen for $100,000. Dueto Jametsky's outstanding obligations and inflated fees, Jametsky only received $4,697 from the transaction even though his house was estimatedto be worth $230,000. Flynn and Haber, onthe other hand, received $7,000 and $3,000 respectively in commission.

3Jametsky v. Olsen, No. 88215-1 For some time, Jametsky made whathe thought were loanpayments to 0 lsen. These were, however, under the documents Jametsky signed at Starbucks, rental payments. Therecord is not entirely clear on the exact sequence ofsubsequent events. But, over a year after the transaction, Olsenbegan sending eviction notices to Jametsky, alleging nonpayment ofrent and a failure to vacate at the end ofthe lease term. Around the same time, Jametsky learned that he did notreceive a loan, but instead he had deeded his home to Olsen. In July 2010, Jametsky filed a complaint seeking to quiet title and alleging violations ofDPCA, unfair and deceptive practices, and a civil conspiracy. Thetrial court found there were no genuine issues ofmaterial fact and granted Olsen's motion for summaryjudgment in its entirety. The trialjudge found that Jametsky's home did not meet the definition of"distressedproperty" under the DPCAbecause no certificate ofdelinquency for unpaid property taxes had been issued by King County. Because claims ofunfair and deceptive practices under the Consumer Protection Act, chapter 19.86 RCW, were based onthe alleged DPCA violations, these claims were dismissed as a result ofthat determination as well. Finally, Jametsky's civil conspiracy claim failed due to insufficient evidence ofany communication among the parties. The Court ofAppeals affirmed. We granted review and now reverse. II. ISSUE Must a certificate ofdelinquency be issued before a property is considered distressed under RCW 61.34.020(2)(a)? 4Jametsky v. Olsen, No. 88215-1 III. ANALYSIS A. Standard ofReview Statutory interpretation is a question oflawreviewed de novo. Dep 't of Ecology v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 9, 43 P.3d 4 (2002) (citing State v. Breazeale, 144 Wn.2d 829,837,31 P.3d 1155 (2001); State v. J.M, 144 Wn.2d472, 480, 28 P.3d 720 (2001)). The goal ofthe inquiry is to ascertain and carry out the legislature's intent. 

### Id. Ifpossible, we "must give effect to [the] plainmeaning [ofa statute] as an expression oflegislative intent." 

### I d. at 9-10. This plain meaning is derived from the context ofthe entire act as well as any "related statutes which disclose legislative intent about the provision in question." 

### Id. at 11. Because "'[p]lainlanguage does not require construction,'" we need not consider outside sources ifa statute is unambiguous. State v. Delgado, 148 Wn.2d 723, 727, 63 P.3d 792 (2003) (quoting State v. Wilson, 125 Wn.2d 212, 217, 883 P.2d 320 (1994)). A statute is ambiguous when, after examination, we find "that it is subject to
more than one reasonable interpretation. 5' City of Seattle v. Winebrenner, 167 Wn.2d 451,456,219 P.3d 686 (2009) (citing State v. Jacobs, 154 Wn.2d 596,600-01, 115 P.3d 281 (2005)). Atthat point, we "mayresort to statutory construction, legislative history, and relevant case law for assistance in discerning legislative intent." Christensen v. Ellsworth, 162 Wn.2d 365, 373, 173 P.3d 228 (2007).

5Jametsky v. Olsen, No. 88215-1 B. The DPCA Applies Only to Transactions Involving "DistressedHomes" or "Distressed Homeowners" The DPCA's protections are reserved for desperate circumstances that may induce homeowners into unscrupulous deals. Butthese additional procedural safeguards are afforded only to transactions involving "distressedhomes" or "distressed homeowners." See, e.g., RCW 61.34.050, .060, .070, 080. The act defines distressed homes as dwellings that are either (1) "indanger offoreclosure or at risk of loss due to nonpayment oftaxes" or (2) "indanger offoreclosure or ... inthe process ofbeing foreclosed due to a default under the terms ofa mortgage." RCW 61.34.020(2)(a)-(b). While the defmition sectionexpressly .defines "in danger of foreclosure," 1there is no corollary for "atrisk ofloss due to nonpayment oftaxes." See ch. 61.34 RCW. Nonetheless, the plain meaning ofRCW 61.34.020(2)(a) is clear. The act is remedial, and we construe remedial statutes liberally in accordance with the

1Under the statute: (11) "In danger offoreclosure" means any ofthe following: (a) The homeowner has defaulted on the mortgage and, under the terms ofthe mortgage, the mortgagee has the rightto accelerate full payment ofthemortgage and repossess, sell, or cause to be sold, the property; (b) The homeowner is at leastthirty days delinquent on any ioan that is secured by the property; or (c) The homeowner has a good faith beliefthat he or she is likely to default onthe mortgage within the upcoming four months due to a lack offunds, and the homeowner has reported this belief. RCW 61.34.020. 6Jarnetsky v. Olsen, No. 88215-1 legislative purpose behind them. Int 'IAss 'n of Fire Fighters v. City of Everett, 146 Wn.2d 29, 34, 42 P.3d 1265 (2002)(citing Gaglidari v. Denny'sRests., Inc., 117 Wn.2d 426,450-51, 815 P.2d 1362 (1991)). Accordingly,' a trial court must conduct a

. . factual inquiry and consider a variety offactors when determining whether a property is distressed because it is "atrisk ofloss due to nonpayment oftaxes." 1. RCW61.34.020{2)(a) is notambiguous We find the plain meaning of"atrisk ofloss due to nonpayment oftaxes" unambiguous because it is not subject to more than one reasonable interpretation. Nothing in the DPCA or any related statute contradicts or obfuscates the plain meaning ofthe phrase. Furthermore, neither party contends that the relevant portion ofthe DPCA is ambiguous. The parties dispute only the plain meaning ofthe "atrisk ofloss" and whether RCW 84.64.050 is a related statute for purposes ofthat determination. Respondents argue for a bright-line rule. They believethat a dwelling only becomes a distressed property under RCW 61.34.020(2)(a) once the county treasurer has issued a certificate ofdelinquency under RCW 84.64.050 ofthe lien foreclosure act. Jametsky and the attorney generaF contend that construing the statute in this way

------------ 2The attorney general appears in this matter as an amicus. Itis well established that " [ w]here an agency is charged with the administration and enforcement ofa statute, the agency's interpretation ofan ambiguous statute is accorded great weight in determining legislative intent." Waste Mgmt. of Seattle, Inc. v. Utils. & Transp. Comrn 'n, 123 Wn.2d 621, 628, 869 P.2d 1034 (1994) (emphasis omitted). The DPCA is a consumer protection statute and "[t]he Attorney General is charged with the administration and enforcement ofthe
... Consumer Protection 7Jametsky v. Olsen, No. 88215-1 undermines the legislative intent ofthe DPCA. They contend that "atrisk" should be given its plain, dictionary meaning and that RCW 84.64.050 is not a related statute for purposes ofstatutory interpretation. We agree with 

### Jametsky and the attorney general. 2. The DPCA is a remedialstatute that must be construedliberally The DPCA is a remedial statute that protects vulnerable homeowners from equity skimming and other fraudulent and predatory schemes. See RCW 61.34.010. 3 Its remedial nature permeates the chapter. The act makes a willful pattern ofequity skimming a class B felony. RCW 61.34.030. In establishing that any violation ofthe DPCA is "anunfair method ofcompetition" for the purposes ofthe Consumer Protection Act, the legislature found "the practices covered by [the DPCA] are matters vitally affecting the public interest." RCW 61.34.040(1). As further evidence ofits remedial purpose, courts may impose up to $100,000 in exemplary damages for bad faith violations ofthe DPCA. RCW 61.34.040(2).

Laws ofthe state ofWashington." GoldSeal Chinchillas, Inc. v. State, 69 Wn.2d 828, 833, 420 P.2d 698 (1966). 3The legislature finds that persons are engaging inpatterns ofconduct which defraud innocent homeowners oftheir equity interest or other value inresidential dwellings under the guise ofa purchase ofthe owner's residence butwhich is in fact a device to convert the owner's equity interest or other value in the residence to an equity skimmer, who fails to make payments, diverts the equity or other value to the skimmer's benefit, and leaves the innocent homeowner with a resulting financial loss or debt. The legislature further finds this activity ofequity skimming to be contrary to the public policy ofthis state and therefore establishes the crime ofequity skimming to address this form ofreal estate fraud and abuse. RCW 61.34.010. 8Jametsky v. Olsen, No. 88215-1 We construe remedial consumer protection statutes, such as the DPCA, liberally in favor ofthe consumers they aim to protect. Carlsen v. Global Client Solutions, LLC, 171 Wn.2d 486, 498, 256 P.3d 321 (2011) ("[A]s a remedial statute enacted to stem the 'numerous unfair and deceptive practices' rife in the growing debt adjustment industry, the debt adjusting statute should be construed liberally in favor ofthe consumers it aims to protect." (quoting PerformanceAudit: DebtAdjusting, LicensingandRegulatoryActivities, ReportNo. 77-13, at 7 (Jan. 20, 1978) (on file with Wash. State Archives, H.B. 86) (1979))); State v. Pike, 118 Wn.2d 585, 591, 826 P.2d 152 (1992) ("[C]onsumer protection statutes like [the automotive repair act (ARA)] have been adopted 'to foster fair dealing
... in a trade which [has] been replete with frequent instances ofunscrupulous conduct.' As a remedial statute, the ARA is to be liberally construed to further this legislative purpose." (fourth alteration in the original) (citation omitted) (quoting 1-5 Truck Sales & Serv. Co. v. Underwood, 32 Wn. App. 4, 11, 645 P.2d 716 (1982))). Because ofthis, "atrisk ofloss" must be construed to offer homeowners more rather than less protection. And so, a certificate ofdelinquency need not issue for a propertyto be deemed distressed under RCW 61.34.020(2)(a). 3. RCW84.64.050 is not a relatedstatute Respondents offer RCW 84.64.050 as evidence that the legislature intended a
narrow definition of"distressedproperty" inthe context ofpotential tax foreclosures. But we consider only those extrinsic statutes "which disclose legislative intent about 9Jametsky v. Olsen, No. 88215-1 the provision in question." Campbell & Gwinn, 146 Wn.2d at 11. RCW 84.64.050 sheds little light on the legislative intent ofthe DPCA, and so we reject respondents' position and find that this statute does not define "atrisk ofloss due to nonpayment of taxes." The stated legislative intent ofthe DPCA is to protect innocent homeowners from equity skimming and othermisconduct that contravenes public policy. See RCW 61.34.010. Nothing contained in RCW 84.64.050 relates to that legislative intent.4 Chapter 84.64 RCW pertains exclusively to the procedures related to tax foreclosure and redemption, not remedies afforded defrauded homeowners. See ch. 84.64RCW. Furthermore, "[t]he legislature is presumed to enact laws with full knowledge ofexisting laws." Thurston County v. Gorton, 85 Wn.2d 133, 138, 530 P.2d 309 (1975). Mindful ofthis principle, we find the absence ofany reference to RCW 84.64.050 anywhere in RCW 61.34.020 orthe DPCA as a whole telling. Other related statutes, such as mortgage and real estate broker licensing statutes and those defining "financial institutions," were explicitly cited by legislature in the DPCA. See RCW 61.34.020(3)(a)(ix), .020(3)(a)(x), (3)(b), (8), (9), (11)(c). Thus, the legislature's failure to cite RCW 84.64.050 in a statute replete with external references

4The relevant portion ofthe statute reads, "Afterthe expiration ofthree years from the date of delinquency, when any property remains onthe tax rolls for which no certificate ofdelinquency has been issued, the county treasurer mustproceed to issue certificates ofdelinquency onthe property to the county for all years' taxes, interest, and costs." RCW 84.64.050(1). 10Jametsky v. Olsen, No. 88215-1
cannot be viewed as accidental and further supports our conclusion that it is not relevant for defining "atrisk ofloss due to nonpayment oftaxes." 4. Theplain meaning of RCW61.34.020(2)(a) To resolve the question presented, we give the operative term "atrisk" its plain, dictionary definition of"vulnerable," which comports with the common understanding ofthe phrase and its use by the legislature in other statutory schemes.5 Thoughwe recognize this interpretation may have practical difficulties, it is faithful to the legislature's intent and wehave no doubt that trial courts are well equipped to conductthe requisite case-specific factual inquiries to determine whether a property is sufficiently "atrisk" to be characterized as distressed. Without a doubt, case-by-case determinations require more effort. But such flexibility is the only way "atrisk ofloss due to nonpayment oftaxes" canbe determined fairly. More solvent individuals with adequate resources and an ability to

5ThoughMerriam- Webster's ThirdInternational Dictionary does not define the term "atrisk," other sources provide satisfactory alternatives. "Atrisk" canbe defined as "exposed to a usu[ally] specified danger or loss." MERRIAM-WEBSTER'S COLLEGIATE DICTIONARY 1011 (10th ed. 1993). Alternatively, "atrisk" can also be defined as "[i]n an endangered state." THE AMERICAN HERITAGE DICTIONARY OF THE ENGLISH LANGUAGE 1514 (5th ed. 2011). Perhaps the most apt idiomatic definition for "atrisk" is "vulnerable; likely to be lost or damaged." COLLINS ENGLISH DICTIONARY, available athttp:/ /www.collinsdictionary.com/dictionary/english/at-risk (last visited Jan. 31, 2014). These are all acceptable definitions that are in accord with a commonsense understanding ofthe term. Furthermore, these definitions are consistent with the legislature's use of"atrisk" as a term ofart in other statutes. See, e.g., RCW 43 .185C.210(1) ("The transitional housing operating and rent program is createdto assist individuals and families who are homeless or who are at risk ofbecoming homeless
...."), RCW 28A.l75.145(2)(g) ("[o]utreach and counseling targeted to students identified as at risk ofdropping out ofschool"), RCW 74.41.030(3) ("'Eligible participant
...' means an adult who needs substantially continuous care or supervisionbyreason ofhis or her functional disability and maybe at risk ofplacement into long-term care facility."). 11Jametsky v. Olsen, No. 88215-1

secure credit may notbe "atrisk ofloss" until their tax default has reached a more advanced stage. Others, who have lost income or experienced some financial hardship, may be "atrisk ofloss" earlier in the process. By considering and balancing
a variety ofnon-exclusive factors, such as (1) the total amount owedto the county including all fees and other costs; (2) the total number ofpayments the delinquency represents and when foreclosure could occur; (3) the financial ability ofthe homeowner to meet or cure this obligation at the time ofthe transaction;6 and (4) any discrepancy betweenthe sale price and the fair market value ofthe property, trial courts will be able to accurately conclude whether a distressedproperty was conveyed and whether the protections ofthe DPCA apply to the transaction in question. That said, this basic framework should be viewed as a starting point and does not purportto account for unique factors and circumstances that may exist in certain cases. Therefore, trial courts faced with deciding whether a property is distressed as a result ofa property tax delinquency must, atthe very least, begintheir analysis withthis



## . . mqmry. IV. CONCLUSION RCW 84.64.050 is not a related statute for purposes ofconstruing the plain meaning ofRCW 61.34.020(2)(a) and a property can be "atrisk ofloss due to nonpayment oftaxes" before a certificate ofdelinquency has been issued. We vacate

6 This calculation can be based on income, savings, and credit worthiness and take other financial obligation into account. 12Jametsky v. Olsen, No. 88215-1 the decisions ofthe lower courts and remand the case for further proceedings consistent with this opinion.

13Jametsky v. Olsen, No. 88215-1



### WE CONCUR:

14

# {/my~v**s~/9·**