IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
ROCIO TRUJILLO, an unmarried woman, Appellant,

NORTHWEST TRUSTEE SERVICES, INC., a Washington corporation, Respondent, WELLS FARGO, NA, Defendant. ro 'jlCD No. 70592-0-1 DIVISION ONE *"i i 1

_ ••'-• ro ;;•--•=

PUBLISHED co 'I FILED: June 2, 2014



### Cox, J. —The question that we decide is whetherthe successortrustee 

### under a deed of trust securing a delinquent note in this case breached its duty of 

### good faith undertheDeeds ofTrustAct, RCW 61.24.010(4).1 Specifically, we decide whether Northwest Trustee Services Inc. (NWTS), the successortrustee, 

### was entitled to rely on the beneficiary declaration of Wells Fargo Bank, N.A. for 

### authority to schedule atrustee's sale ofproperty owned byRocio Trujillo. We hold thatthe declaration satisfies the requirements of RCW 61.24.030(7)(a). Under the circumstances ofthis case, NWTS was entitled to rely on that

Brief ofAppellant (Oct. 7, 2013) at 7.No. 70592-0-1/2 declaration as evidence ofthe proofrequired under this statute. NWTS did not 

### violate its duty ofgood faith underthe Deeds ofTrustAct. The trial court properly granted NWTS's CR 12(b)(6) motion to dismiss.
We affirm. 

### The material facts are not disputed. In2006, Trujillo obtained a loan for $185,900 from Arboretum Mortgage Corp. This loan was evidenced by a 

### promissory note that was secured by a deed of trust dated March 29, 2006 

### encumbering her real property.2 The deed of trust was recorded in King County, Washington on March 31, 2006.3 

### Trujillo claims thatArboretum sold thisloan toWells Fargoin 2006.4 She further claims that Wells Fargo sold the loan to the Federal National Mortgage 

### Association ("Fannie Mae") and retained the loan servicing rights.5 This record reflects that the deed oftrust was assigned to Wells Fargo 

### from Arboretum bytheAssignmentofDeed ofTrustdated February 2, 2012.6 

## The assignmentwas recorded in King County, Washington on February2, 2012.7

2Clerk's Papers at 17. 3]o\ 4Brief ofAppellant at 6. 5Id, 6Clerk's Papers at 35. 7 Id.No. 70592-0-1/3 

### Trujillo admits that she "defaulted on [her loan] on November 1, 2011."8 By its beneficiary declaration dated March 14, 2012, delivered to NWTS, Wells Fargo declared under penalty of perjury that Wells Fargo "is the actual holder ofthe promissory note . . . evidencing the [delinquent Trujillo] loan or has 

### requisite authority under RCW62A.3-301 to enforce said [note]."9 The Notice of Default dated May 30, 2012, which NWTS transmitted to 

### Trujillo, itemized the amounts in arrears for the delinquent loan.10 Moreover, the notice provided to Trujillocontained certain contact information for her delinquent 

### loan.11 Specifically, this notice states, "The owner ofthe note is Federal National 

### Mortgage Association (Fannie Mae)," and itfurther provides Fannie Mae's address.12 The same page of this notice states, "The loan servicerfor this loan is 

### Wells FargoBank, N.A.," and itfurther states Wells Fargo's address.13 NWTSrecorded the Notice ofTrustee's Sale dated July 3, 2012.14 The notice was recorded on July 10, 2012, and itscheduled a sale date of November

8PlaintiffTrujillo's Complaint Against Foreclosure inViolation of Washington Deed of Trust Act at 3; Briefof Appellant at 6. 9Clerk's Papers at 36. 10 ]d, at 37-39. 11 Id at 38. 12jd, 13 id, 14 Id. at 41-44.No. 70592-0-1/4 

### 9, 2012 forTrujillo's property.15 Although this record does not tell us, we assume that sale did not occur, as originally scheduled. We reach this conclusion because this action followed that November 2012 scheduled sale date. In February 2013, Trujillo, acting pro se, commenced this action against NWTS and Wells Fargo. She claimed that NWTS and Wells Fargo violated various provisions of the Deeds ofTrust Act. She also claimed violations ofthe Criminal Profiteering Act and the Consumer Protection Act. She sought damages for these alleged violations as well as for claimed intentional infliction of emotional distress. Moreover, she sought injunctive reliefto restrain the
successortrustee's sale ofher property as well as an award of attorney fees. NWTS moved to dismiss Trujillo's complaint pursuant to CR 12(b)(6). The 

### trial court granted this motion and dismissed with prejudice her claims against NWTS. From this record, itappears thatthe trial court allowed separate claims 

### againstWells Fargo to stand unaffected by the court's decision on this NWTS motion.16 

### Trujillo appeals. Wells Fargo is not a party to this appeal.17 STANDARD OF REVIEW 

### Trujillo argues thatwe should review the trialcourt's order as a summary 

### judgment order under CR 56(c). NWTS argues that the trial court's order should be reviewed as a dismissal under CR 12(b)(6). We agree with NWTS.
15 Id, at 41-42. 

### 16 Report ofProceedings (May 31, 2013) at 20-21. 17 Notice ofAppeal at 1.No. 70592-0-1/5 InCutlery. Phillips Petroleum Co., the supreme court explained that courts should "dismiss a claim under CR 12(b)(6) only if itappears beyond a 

### reasonable doubtthat no facts exist that would justify recovery."18 "'Underthis rule, a plaintiff's allegations are presumed to be true', and 'a court may consider 

### hypothetical facts not part ofthe formal record.'"19 "CR 12(b)(6) motions should be granted 'sparingly and with care' and 'only inthe unusual case inwhich plaintiff includes allegations that show on the face ofthe complaintthat there is


### some insuperable bar to relief.'"20 CR 12(b)(6), in part, provides: Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross claim, orthird party claim, shall be asserted inthe responsive pleading thereto ifone is required, except thatthe following defenses may at the option of the pleader be made by motion:... (6) failure to state a claim upon which relief can be granted
.... A motion making any ofthese defenses shall be made before pleading if a further pleading is 

### permitted.... Ifa pleading sets forth a claim for relief to which the adverse party is not required to serve a responsive pleading, he may assert at the trial any defense in law or fact to that claim for relief. If, on a motion asserting the defense numbered(6) to dismiss for failure ofthepleading to state a claim upon which reliefcan begranted, matters outside thepleadingare 

### presentedto andnotexcludedby the court, the motion shall be treatedas onefor summary judgmentanddisposedofas 

### providedin rule 56, andallparties shallbegiven reasonable opportunity to presentall materialmadepertinentto such a 

### motion byrule 56.[2^

18 124 Wn.2d 749, 755, 881 P.2d 216 (1994). 19]d, 

### 20 id, (quoting Hoffer v. State, 110 Wn.2d 415, 420, 755 P.2d 781 (1988)). 21 (Emphasis added.)No. 70592-0-1/6 A trial court's ruling on a motion to dismiss for failure to state a claim upon which relief can be granted under CR 12(b)(6) is a question of law and is 

### reviewed de novo by an appellate court.22 In contrast, under CR 56(c), a party may move for summaryjudgment if there is no genuine issue of material fact and the moving party is entitled to a judgment as a matter of law. A trial court's grant of summaryjudgment is also reviewed de novo.23 An appellate court treats a motion to dismiss as a motion for summary 

### judgment "when matters outside the pleading are presented to and not excluded 

### by the court."24 Butas the rule and case authority plainly indicate "[d]ocuments whose contents are alleged in a complaint but which are not physically attached to the pleading may ... be considered in ruling on a CR 12(b)(6) motion to dismiss."25 Correspondingly, where matters outside the pleadings are not considered by the court, the motion is not treated as one for summary 

### judgment.26

22Cutler. 124Wn.2dat755. 23 Aba Sheikh v. Choe. 156 Wn.2d 441, 447, 128 P.3d 574 (2006). 24 Sea-Pac Co., Inc. v. United Food and Commercial Workers Local Union 44, 103 Wn.2d 800, 802, 699 P.2d 217 (1985). 25 Rodriguez v. Loudeve Corp.. 144 Wn. App. 709, 726, 189 P.3d 168 (2008).26 Id. at 725.No. 70592-0-1/7 Additionally, where the "basic operative facts are undisputed and the core issue is one oflaw," the motion to dismiss need not be treated as a motion for 

### summaryjudgment.27 Here, the trial court entered an order granting NWTS's motion to dismiss under CR 12(b)(6). Because the supporting documents the trial court considered
were alleged in the complaint and the "basic operative facts are undisputed and the core issue is one of law," we review the order under CR 12(b)(6), not as a 

### summaryjudgment under CR 56(c).28 RCW61.24.030(7)(a) In her briefing, Trujillo identifies the sole issue on appeal as: Whether NWTS breached its duty ofgood faith by "recording, transmitting and serving the 

### [notice oftrustee's sale] after receiving a declaration from Wells [Fargo] stating 

### that [the bank] was the actual holder of the Note."29 The essence of the claim that she asserts is that the beneficiary declaration thatWells Fargo signed under 

### penalty of perjury and delivered to NWTS did not satisfy the requirements of RCW61.24.030(7)(a).30 We holdthat the declaration satisfied this statute.

27 Ortblad v. State, 85 Wn.2d 109, 111, 530 P.2d 635 (1975). 28 id, 29 Brief ofAppellant at 7. 30 Id. at 12-16, 26-27.No. 70592-0-1/8 "When construing a statute, our goal is to determine and effectuate 

### legislative intent."31 We first "give effect to the plain meaning of the language used as the embodiment of legislative intent"where possible.32 "Wedetermine plain meaning 'from all that the Legislature has said in the statute and related 

### statutes which disclose legislative intent about the provision in question.'"33 "In general, words are given their ordinary meaning, but when technical terms and 

### terms of art are used, we give these terms their technical meaning."34 This court reviews de novo questions involving the interpretation of statutes.35 The Deeds ofTrust Act, specifically RCW 61.24.030, states certain requisites for a trustee's sale for a nonjudicial foreclosure of a deed oftrust. The version ofthis statute that was in effect at the time of commencement ofthe 

### nonjudicial foreclosure proceeding involving Trujillo's real property in early 2012 stated, in relevant part: Itshall be requisite to a trustee's sale:

31 Swinomish Indian Tribal Cmtv. v. Wash. State Dep't of Ecology, 178 Wn.2d 571, 581, 311 P.3d 6 (2013).

32 Id. 33 Id, (internal quotation marks omitted) (quoting TracFone Wireless, Inc. v. Wash. Dep't of Revenue. 170 Wn.2d 273, 281, 242 P.3d 810 (2010)). 34 id, 35 Dep't of Ecology v. Campbell & Gwinn, LLC, 146 Wn.2d 1, 9, 43 P.3d 4 (2002).
8No. 70592-0-1/9 

### (7)(a) That, forresidential real property, before the notice of trustee's sale is recorded, transmitted, or served, the trustee shall 

### haveproofthatthe beneficiaryis the ownerofany promissory note or other obligation secured by the deed of trust. A declaration 

### bythe beneficiary made underthe penalty of perjury stating thatthe beneficiary is the actual holderofthe promissory note or other 

### obligation secured by the deed of trust shallbe sufficientproofas requiredunderthis subsection. 

### (b) Unless the trustee has violated his or her duty under RCW 61.24.010(4), the trustee is entitledto rely on the beneficiary's declaration as evidence of proofrequiredunderthis subsection.[36] Both the former and current versions of RCW 61.24.030(7)(a) require a 

### trustee or successortrustee to have proofthat the beneficiary has authority to enforce a note "secured bythe deed of trust" before recording a notice of a trustee's sale.37 Prior to the 2011 amendments to this statute, there was no such 

### proofrequirement.38 RCW61.24.030(7)(a) specifies what proof of authority to enforce such a note "shall be sufficient." Finally, unless the trustee or successortrustee violates 

### his or her duty under RCW 61.24.010(4), he orshe is "entitled to rely on the 

### beneficiary's declaration" tosatisfytheproofrequirementofthestatute.39 Here, the parties advance conflicting views on howto read and properly 

### apply RCW 61.24.030(7)(a). Trujillo claim thatNWTS was required toobtain 36 Former RCW61.24.030 (Laws of2011, ch. 58, § 4) (emphasis added). 37 Compare id., with RCW 61.24.030 (Laws of 2012, ch. 185, § 9); see 

### also RCW 61.24.010(2) (permitting the resignation of a trustee named in a deed of trust and the appointment of a successortrustee). 38 See former RCW 61.24.030 (Laws of2009, ch. 292, § 8). 39RCW61.24.030(7)(b).No. 70592-0-1/10 

### proof from Wells Fargo that itwas the "owner" of her delinquent note.40 She further claims that without such proofthe successortrustee was not authorized to 

### record the notice oftrustee's sale.41 This argument is primarily based on the first sentence of this statute, which refers to the beneficiary as the "owner" ofthe

note. NWTS disagrees with this argument. Itargues thatWells Fargo, the beneficiary, was the "holder" ofthe note and, as such, had the authority to 

### provide the proof required underthis statute.42 This argument is primarily based
on the second sentence ofthe statute, which refers to the beneficiary as the "holder" ofthe note. NWTS further argues that itboth complied with this statute and its duty of good faith under the Deeds ofTrust Act. Thus, itclaims itwas entitled to rely on the beneficiary declaration thatWells Fargo provided. Commentators have noted that there has been considerable confusion both in judicial decisions and statutes overthe distinction between the "owner" of 

### a note and the "holder," who has the right to enforce the note.43 They have also identifiedWashington's Deeds of Trust Actas an example of this confusion.44

40 Brief ofAppellant at 7. 41 Id. 

### 42 Opening Brief ofAppellee Northwest Trustee Services, Inc. at 5-6. 43 Dale A. Whitman &Drew Milner, Foreclosing on Nothing: The Curious Problem ofthe Deed ofTrust Foreclosure without Entitlement to Enforce the Note, 66 Ark. L. Rev. 21, 26 (2013). 44 id, at 26 n.23.

10No. 70592-0-1/11 Resolution ofthe conflicting views in this case requires that we determine the legislature's intent inenacting this statute. To determine legislative intent, we focus our inquiry by examining certain key terms of this statute—"beneficiary," "owner," and "holder." In examining these key terms, we determine their plain 

### meanings from what this statute and related statutes say about them.45 And 

### where these technical terms are used, we give them their technical meanings.46 The first ofthese technical terms in RCW 61.24.030(7)(a) is "beneficiary." There is no dispute in this case thatWells Fargo is the "beneficiary" ofthe deed 

### oftrust securing Trujillo's delinquent note. This record contains the beneficiary declaration ofWells Fargo dated March 14, 2012 that states: BENEFICIARY DECLARATION (NOTE HOLDER) (Executed by Officer of Beneficiary)

The undersigned, under penalty ofperjury declares as follows: 

### Wells Fargo Bank, NA is the actual holder ofthe [Trujillo] promissory note ... or has requisite authority under RCW 62A.3- 301 to enforce said obligation. 

### [s/ VicePresident of LoanDocumentation]1471 There is no evidence in this record that contests either the validity or 

### truthfulness of this beneficiary declaration, signed by an officer of Wells Fargo
45 Swinomish Indian Tribal Cmtv.. 178 Wn.2d at 581. 46 id, 47 Clerk's Papers at 36.

11No. 70592-0-1/12 

### under penalty of perjury and delivered to NWTS for the purpose of complying with this statute. Absent conflicting evidence, the declaration should be taken as
true. We note that our conclusion about the status ofWells Fargo is consistent with the supreme court's analysis in Bain v. Metropolitan Mortgage Group, Inc. 

### regarding the Deeds ofTrustAct's definition of "beneficiary."48 As that court held, the beneficiary is "the holderofthe instrument or document evidencing the obligations secured by the deed oftrust, excluding persons holding the same as 

### security for a different obligation."49 The "instrument.
. . evidencing the obligation secured" by the deed oftrust is the note in this case.50 And the Uniform Commercial Code further clarifies that the "'holder'" ofthe note means 

### "'the person in possession'" ofthe note.51 This record reflects that Trujillo concedes in her pleadings that "as soon as Wells [Fargo] began the foreclosure process, Fannie Mae transferred 

### possession of the Note to Wells [Fargo]."52 This concession is significantin that it is consistent with the beneficiary declaration before us. It is also consistent

48 175 Wn.2d 83, 98-99, 285 P.3d 34 (2012). 

### 49 id, (emphasis added) (quoting RCW 61.24.005(2)). 50 See id. at 101-03. 51 id, at 103-04 (quoting former RCW 62A. 1-201 (20) (2001)). 

### 52 Plaintiff Trujillo's ComplaintAgainst Foreclosure in Violation of Washington Deed ofTrust Act at 4 (emphasis added).

12No. 70592-0-1/13 with Bain's discussion ofwho constitutes a beneficiary for purposes ofthe Deeds ofTrust Act. For these reasons, we conclude that Wells Fargo, which states under penalty ofperjury, that it is the holder ofthe note, has provided proofthat it is the "beneficiary" ofthe deed oftrust securing the delinquent note for purposes of this

statute. We next consider the technical term "owner" in this statute. The term "owner" is not defined in the Deeds ofTrust Act. Likewise, the UCC does not 

### define the term for purposes of Article 3, Negotiable Instruments. Nevertheless, commentators have characterized ownership as "the right to economic benefits ofthe note."53 The UCC does, however, make clearthatthe "person entitled to enforce" 

### a note is not synonymous with the "owner" of the note. That distinction is 

### explained inUCC Comment 1 to RCW 62A.3-203, which states in relevant part:
Althoughtransfer of an instrument mightmean in a particular case that title to the instrument passes to the transferee, that result does not follow in all cases. The rightto enforce an instrument 

### andownership ofthe instrumentare two differentconcepts. A thief who steals a check payable to bearer becomes the holder of the check and a person entitled to enforce it, but does not become the owner ofthe check. Ifthe thieftransfers the check to a 

### purchaserthe transferee obtains the rightto enforce the check. If the purchaser is not a holder indue course, the owner's claim to 

### the check may be asserted againstthe purchaser. Ownership 

### rights in instruments may be determined byprinciples of the law of property, independent ofArticle 3, which do notdepend upon whether the instrument was transferred under Section 3-203.
53 Whitman, supra note 43, at 25.

13No. 70592-0-1/14 

### Moreover, aperson who has an ownership rightin an instrumentmightnotbe aperson entitledto enforce the instrument. For example, suppose X is the owner and holder of 

### an instrument payable to X. Xsells the instrument to Y but is unable to deliver immediate possession to Y. Instead, X signs a document conveying all of X's right, title, and interest inthe instrumentto Y. Although the document may be effective to give Y 

### a claim to ownership ofthe instrument, Y is not a person entitled to enforce the instrument until Y obtains possession ofthe instrument. No transfer ofthe instrument occurs under Section 3-203(a) until it is delivered to Y.

. . .[54] The absence ofa definition of "owner" in either the Deeds ofTrust Act or the UCC is not fatal to our determination ofthe effect ofthat term in RCW 61.24.030(7)(a). We say so for several reasons. First, the use of different words in the same statute ordinarily means that 

### the legislature did notintend them to mean the same thing.55 Applying that principle here, we conclude that the legislature intended the words "owner" and "holder" to mean different things. Indeed, as we explained earlier in this opinion, 

### the UCC states that these terms are not synonymous.56 Second, the supreme court stated decades ago that although these terms 

### are not synonymous, this does not preclude the possibilitythat an "owner" of a 

### note may also be its"holder." Where one has the status ofboth "owner" and "holder," it is the status of holder of the note that entitles the entity to enforce the obligation. Ownership ofthe note is not dispositive.
54 (Emphasis added.) 55 Guillen v. Contreras, 169 Wn.2d 769, 776-77, 238 P.3d 1168 (2010). 56 See UCC Comment 1 to RCW 62A.3-203.

14No. 70592-0-1/15 The supreme court stated these principles inJohn Davis & Co. v. Cedar 

### Glen No. Four, Inc.57 Inthat case, the supreme court had before it an appeal of a mortgage foreclosure in which John Davis &Company had foreclosed on real 

### property to satisfy delinquent notes of a corporation.58 James R. Scott and his wife held mortgages against the same property.59 The superior court decided that the mortgages ofJohn Davis securing the delinquent notes had lien priority


### over the mortgages held bythe Scotts.60 The Scotts appealed. On appeal, the Scotts contested the priority ofthe liens ofthe John Davis 

### mortgages.61 They argued that John Davis did not have authority to foreclose the mortgages.62 This was based on the fact that a corporation otherthan John Davis had advanced to the borrower the funds for the loans evidenced by the notes that were secured by the mortgages held by John Davis at the time ofthe 

### foreclosure.63 The supreme court rejected that contention by stating: [John Davis] is the holderandownerofthe notes and mortgages ofthe [borrower]. The holderof a negotiable instrument may sue thereon in his own name, and payment to him in due course discharges the instrument. See RCW 62.01.051. It is not

57 75 Wn.2d 214, 450 P.2d 166 (1969). 58 id, at 215. 59 id, 60 id, 61 id, at 222. 62 id, 63 id,
15No. 70592-0-1/16 necessary for the holderto first establish that he has some 

### beneficial interest in the proceeds.[64] This passage explains that, at common law, the holder of a note could also be its owner at the same time. In that case, John Davis was both "holder and owner" ofthe notes, as the court expressly stated in the opinion. 

### Significantly, the quoted language also makes clearthat, at common law, itwas the status of holder ofthe note that was dispositive on the question ofwho 

### had authority to enforce the note and mortgage. Likewise, paymentto the holder 

### discharged the debt evidenced by the note, regardless ofownership. The question ofownership was irrelevant to both enforcement and discharge, as 

### evidenced by the omission of the term "owner" in the above discussion by the supreme court concerning enforcement and discharge. It is also noteworthy that the supreme court cited former RCW62.01.051 

### in support of its analysis in John Davis. The case was decided in 1969, but the events itdescribed occurred before enactment ofthe UCC inWashington in
1965. 

### Significantly, the principles offormer RCW 62.01.051 were incorporated intoArticle 3, Negotiable Instruments, when the UCC was enacted in Washington.65 Specifically, RCW 62A.3-301 now states: "Person entitled to enforce" an instrument means (i)the holderof 

### the instrument, (ii) a nonholder inpossession of the instrument who 

### has the rights of a holder, or (iii) a person notin possession of the instrument who is entitled to enforce the instrument pursuant to 

### 64 ]d, at 222-23 (emphasis added). 65 See former RCW 62.01.051 (1955).
16No. 70592-0-1/17 

### RCW 62A.3-309 or 62A.3-418(d). Aperson may be a person entitled to enforce the instrument even though the person is not the ownerofthe instrument or is in wrongful possession ofthe instrument.!66^ The language ofsubsection (i) of this provision ofthe current UCC makes clear, as did the John Davis court, that the "holder" ofa note is entitled to enforce 

### the note. Italso makes clearthat a "holder" may enforce the note "even though the [holder] is not the owner" ofthe note.67 We have no reason to conclude that the legislature intended to depart from either the common law, as articulated in John Davis, or the UCC, as articulated in RCW62A.3-301, inenacting RCW61.24.030(7)(a) regarding proof ofwho is entitled to enforce a note that is secured by a deed oftrust. The language ofthe first sentence of RCW 61.24.030(7)(a) could have more clearly stated that a beneficiary who is the owner of a note is not always the holder of the note. The holder is entitled to enforce it. Better still, the legislature could have eliminated any reference to "owner" ofthe note inthis provision because it is the "holder" ofthe note who is entitled to enforce it, regardless of ownership. Nevertheless, when we consider the second sentence ofthis statute, 

### specifying that the beneficiary must be the holder ofthe note for purposes of proof, together with the case authority and other related statutes we have discussed, we must conclude that the required proofis that the beneficiary must be the holder ofthe note. It need not show that it is the owner ofthe note.



### 66 (Emphasis added.) 67RCW62A.3-301.
17No. 70592-0-1/18 

### We next address the meaning of the technical term "holder." In doing so,
we follow the analysis and conclusion setforth bythe supreme court in Bain.68 There, the supreme court explained that the interpretation ofthe Deeds of 

### Trust Actshould be guided by relevant provisions of the Washington UCC, which include Article 3, Negotiable Instruments, and Article 1, general provisions.69 RCW 62A. 1-201 provides the definition of "holder" of a note: (21) "Holder" with respect to a negotiable instrument, means: (A) The person inpossession of a negotiable instrument that is payable eitherto bearer or to an identified person that is the person 

### inpossession;.
. . .[70] Likethe definition for "beneficiary," the definition of "holder" does not include any reference to the term "owner." Here, as we observed early inthis opinion, the record reflects thatWells Fargo had possession ofTrujillo's note from the beginning ofthe foreclosure 

### proceeding.71 By definition, it is the "holder" ofthat note. Moreover, as the beneficiary declaration states, Wells Fargo is also entitled to enforce the note, a negotiable instrument, under RCW 62A.3-301 because it is the "holder ofthe instrument." RCW 61.24.030(7)(a), properly read, does not require Wells Fargo to also be the "owner" ofthe note. Rather, it

68 Bain, 175 Wn.2d at 103-04. 69 Id, 

### 70 (Emphasis added.) 

### 71 See PlaintiffTrujillo'sComplaintAgainst Foreclosure in Violation of Washington Deed ofTrust Act at 4.
18No. 70592-0-1/19 requires that a person entitled to enforce a note be a holder and need not also be

an owner. In sum, the beneficiary declaration inthis case is sufficient under RCW 61.24.030(7)(a). ProofthatWells Fargo was the holder ofthe note was sufficient under this statute. At oral argument ofthis case, recently retained appellate counsel for Trujillo made a new argument on appeal. Counsel conceded, as the record reflects, that "as soon as Wells [Fargo] began the foreclosure process, Fannie 

### Mae transferredpossession of the Note to Wells [Fargo]."72 Nevertheless, counsel took the position that such possession was not "legal possession ofthe promissory note as required to be the 'holder' under the UCC, RCW62A.1- 201(b)(21), and to be the 'beneficiary' under the Deed[s] ofTrustAct, RCW 

### 61.24.005(2)."73 Insupport of this argument, counsel cites the Report ofthe Permanent Editorial Board for the Uniform Commercial Code dated November 

### 14, 2011 ("Report").74 Counsel also cites § 18.31 ofWashington Practice, 

### "Powers of Collection Agents."75 Because these authorities have nothing to do with this case, we reject this new argument on appeal.



### 72 id, (emphasis added). 73 Statement ofAdditional Authorities (April 3, 2014) at 1-2. 

### 74 id, (citing Reportof PermanentEditorial Board for the Uniform Commercial Code, Application ofthe Uniform Commercial Code to Selected Issues Relating to Mortgage Notes 9 n.38 (2011)). 

### 75 id, at 2 (citing 18 William B. Stoebuck&JohnW.Weaver, Washington Practice: Real Estate Transactions § 18.31, at 364-66 (2d ed. 2004)).
19No. 70592-0-1/20 This argument is primarily based on footnote 38 ofthe Report. That 

### footnote cites UCC § 9-313 and then discusses how possession ofcollateral may 

### not be relinquished when it is delivered to another person.76 However, it is vital to understand the context ofthis footnote. The main text ofthe Report that is associated with this footnote states: Section 9-203(b) of the Uniform Commercial Code provides that three criteria must be fulfilled in orderfor the owner ofa mortgage note effectively to create a "security interest" (either an interest inthe note securing an obligation or the outright sale of the note to a buyer) in it.

The thirdcriterion may befulfilled in eitherone oftwo ways. Either the debtor/seller must "authenticate" a "security agreement" that describes the note orthe securedpartymusttake possession ofthe notepursuantto the debtor's security 

### agreement.^ Reading footnote 38 inthe context ofthe main text, it is clearthatthis portion ofthe Report addresses the criteria for the owner of a mortgage note to create a security interest inthat note. One ofthe ways is for the secured party to take possession ofthe note. 

### Butthat has nothing to do withthe nonjudicial foreclosure proceeding that is the subject ofthis action. That is because the foreclosure proceeding is not based on the creation of a personal property security interest inthe note. Rather, 

### the security interest underlying the foreclosure proceeding is the lien created by the deed oftrust inthe real property securing the note that is inthe possession of
76 See Report of Permanent Editorial Board, supra note 74, at 9 n.38. 

### 77 id, (emphasis added) (footnotes omitted).
20No. 70592-0-1/21 

### Wells Fargo. Thus, UCC § 9-313, which is concerned withsecurity interests in notes, has no bearing on this case. 

### Another section ofthe Report makes this point clear: Article 3 ofthe UCC provides a largely complete set of rules governing the obligations of parties on the note, including how to determine who may enforce those obligations and, thus, to whom those obligations are owed.

UCC Section 3-301 provides only three ways inwhich a person may qualify as the person entitled to enforce a note, two ofwhich require the person to be in possession of the note (which may include possession by a third party that possesses it for the person):

• The first way that a person may qualify as the person entitled to enforce a note is to be its "holder."[78] Thus, Article 3, specifically § 3-301, is dispositive on the question ofwho is entitled to enforce the note. And, as we also previously discussed inthis opinion, Bain and other authorities make reference to Article 3 ofthe UCC 

### appropriate forpurpose of the Deeds of TrustAct.79 There is no authority supporting the proposition thatArticle 9 ofthe UCC applies to this nonjudicial 

### foreclosure proceeding. We reject counsel's attemptto use UCC § 9-313 for a purpose for which itwas not intended. 

### The reference to § 18.31 ofWashington Practice adds nothing of substance to counsel's new argument. We also reject that reference to the extent it is used to supportthe argument that possession ofthe note in this case 

### 78 Id, at 4-5 (footnote omitted). 79 See Bain, 175 Wn.2d at 103-04; Whitman, supra note 43, at 26 n.23.
21No. 70592-0-1/22 

### is inadequate to establish eitherthe ability to enforce the note orthe beneficiary status ofWells Fargo. For these reasons, counsel's reliance on RCW62A.9A-313, which addresses security interests in personal property, is wholly unpersuasive. In the Statement ofAdditional Authorities dated March 5, 2014, counsel 

### forTrujillo cites In re Meyer.80 Counsel states that the United States Bankruptcy Courtfor the Western District ofWashington has determined that being an owner 

### of the note is a requirement ofRCW 61.24.030(7)(a).81 Thatcase says no such thing. 

### Rather, that court expressly stated that it did not have to address the 

### argument that counsel now makes in this case: The Meyers argue that a trustee may not rely on a 

### beneficiary declaration executed byanyone other than the 

### beneficiary. Further, they argue that the trustee must have proof, in the words ofthe statute, that the beneficiary is the "owner" ofthe 

### note as opposed to the holder of the note. It is notnecessary to address eitherofthese arguments, however, because the Court concludes that NWTS could not rely on the Beneficiary Declaration because ithad no proofthatWells Fargo had authority to execute that declaration on behalfof U.S. BankJ82! 

### Thus, Meyer does not provide any supportfor this new argument. Counsel also cites Beaton v. JPMoroan Chase Bank. N.A. in a Statement 

### of Additional Authorities dated March 5, 2014 to supportthe argument that RCW

80 Statement of Additional Authorities (March 6, 2014) at 1 (citinginjre Meyer, 506 B.R. 533 (Bankr. W.D. Wash. 2014)). 81 id, 82 Meyer. 506 B.R. at 548 (emphasis added).

22No. 70592-0-1/23 

### 61.24.030(7)(a) requires proofthat the beneficiary must be the "owner" ofthe note.83 We decline to follow that decision for several reasons. 

### There, the federal district court forthe Western District ofWashington considered whether the successor trustee under a deed oftrust in that case 

### violated the Deeds ofTrustAct.84 Specifically at issue was whether proof that the beneficiary is the owner of a note secured by a deed oftrust is required by 

### 61.24.030(7)(a).85 That court held that the beneficiary declaration in that case
was deficient because itrelied on RCW 62A.3-301 to show authority to enforce 

### the note.86 According to that court, this was deficient because the beneficiary who provided the declaration "could be a nonholder in possession or a person 

### not inpossession who is entitled to enforce the instrument."87 In short, the court decided that ownership ofthe note was required.88

83 Statement ofAdditional Authorities (March 6, 2014) at 1 (citing Beaton v. JPMorgan Chase Bank, N.A.. 2013 WL 1282225 at *4-5 (W.D. Wash. March 26, 2013)). 84 Beaton. 2013 WL 1282225, at *4. 85 id, at *4-*5. 86 id, 87 id, at *5. 88 Id.
23No. 70592-0-1/24 First, until now, no state appellate court has decided the meaning of RCW 61.24.030(7)(a). Thus, there has been no authoritative decision on this question of state law.89 Second, the Beaton court omitted any analysis ofthe portion ofthe 

### beneficiary declaration inthat case that expressly stated that the beneficiary was 

### "the actual holder of the promissory note."90 For the reasons we explained earlier in this opinion, proof ofthat status is what entitles a beneficiary to enforce a note secured by a deed of trust. Ownership ofthe note is irrelevant. Third, the Beaton court also misread RCW 62A.3-301 as an impediment to 

### proof of the right to enforce a note. Properly read, this statute merely clarifies that one entitled to enforce a note may be any ofthree specified persons: 

### (i) the holderof the instrument, (ii) a nonholder inpossession of the instrumentwho has the rights of a holder, or (iii) a person not in 

### possession of the instrument who is entitled to enforce the 

### instrument pursuant to RCW 62A.3-309 or62A.3-418(d).t911 The plainwords of this statute also make clearthat: 

### Aperson may be a person entitled to enforce the instrumenteven 

### though the person is not the ownerof the instrument or is in 

### wrongful possession of the instrument.1921 For these reasons, we decline to follow the decision in Beaton.



### 89 See Bain, 175 Wn.2d at 90-91 (certifyingquestions regarding the Deeds ofTrustAct to the Washington State Supreme Court). 90 See RCW 61.24.030(7)(a). 91 RCW 62A.3-301 (emphasis added). 92 Id, (emphasis added).

24No. 70592-0-1/25
Counsel also cites Pavino v. Bank ofAmerica, N.A. in his Further 

### Statement Re Additional Authoritydated May 7, 2014.93 There, the federal district courtfor the Western District ofWashington stated that there is no "legal authority holding that a 'person entitled to enforce' an instrument within the 

### meaning of RCW 62A.3-301 qualifies as a 'beneficiary' withinthe meaning of 

### RCW61.24.005(2)."94 But in Bain, the supreme court rejected that view.95 Thus, this argument is not persuasive. 

### Counsel further argues that "'[t]he rights ofpro se litigants require careful 

### protection where highlytechnical requirements are involved, especially when 

### enforcing these requirements might result in a loss of the opportunity to 

### prosecute ... a lawsuit on the merits.'"96 He cites Garaux v. Pulleyin support of this argument.97 There, the court had before it a motion to dismiss.98 The issue was whetherthe district court had abused its discretion in applying certain procedural 

### rules relating to the motion.99 The court held the district court had abused its

93 Further Statement Re Additional Authority (May 7, 2014) at 1 (citing 

### Pavino v. Bank ofAmerica. N.A., 2011 WL 834146 (W.D. Wash. March 4, 2011)). 94 Pavino, 2011 WL 834146, at *4. 95 See BaiD, 175 Wn.2d at 104. 

### 96 Supplemental StatementofAdditional Authorities (April 29, 2014) at 1 (quoting Garaux v. Pulley, 739 F.2d 437 (1984)). 97 id, (citing Garaux v. Pulley, 739 F.2d 437 (1984)). 98 Garaux, 739 F.2d at 437. 99 id, at 439-40. 25No. 70592-0-1/26 

### discretion in applying the rule that disadvantaged a pro se litigant.100 That is the context in which the Ninth Circuit made the following statement: District courts must take care to insure that pro se litigants are provided with proper notice regarding the complex procedural issues involved in summaryjudgment proceedings. We hold that where the non-moving party is appearing pro se, the notice requirements of Rule 56(c) must be strictly adhered to when a motion to dismiss under Rule 12(b)(6) is converted into one for 

### summaryjudgment.1"1011 Here, there is no procedural rule that is being applied to disadvantage Trujillo. Rather, we construe the relevant statutes to determine what the laws require. There is no violation ofthe principle cited inthat federal case. Trujillo makes a number of arguments in her briefs asserting thatWells Fargo must prove that it is the owner of her delinquent note. None are persuasive. Trujilloargues that the idea thatthe beneficiary, note holder, and note 

### owner are the same person "permeates" the Deeds of TrustAct.102 She points to a number of provisions to supportthis argument.103 Nothing aboutthese citations undercuts our conclusion that owner and holder are not legally synonymous terms for purposes of this act.

100 id, 101 |d_

102 Reply Brief ofAppellant at 4-7. 

### 103 id, (citing RCW 61.24.040(2); RCW61.24.070(2); RCW 61.24.163; RCW 61.24.005(2), (7); RCW 61.24.020).

26No. 70592-0-1/27 First, she cites RCW 61.24.040(2) and the language inthe notice of foreclosure form.104 Itstates, "The attached Notice ofTrustee's Sale is a consequence of default(s) inthe obligation to , the Beneficiary ofyour 

### Deed of Trust and owner of the obligation secured thereby."105 This form is nothing more than that. Itdoes not state the law. Our discussion earlier in this opinion extensively discusses the controlling law. Inany event, the statute states 

### that the formneed only be "substantially" followed.106 Second, Trujillo cites RCW 61.24.070(2), which states who may bid at a trustee's sale.107 Itstates, "The trustee shall, at the request ofthe beneficiary, 

### credit toward the beneficiary's bid all or any part ofthe monetary obligations 

### secured by the deed oftrust."108 Trujillo argues that this "type of bid would not be possible ifthe 'beneficiary' of the DOTwas not the 'owner' of the debt obligation secured bythe DOT."109 This argument makes no sense. As we made clear earlier in this opinion, the holder of the note is entitled to enforce the note. 

### Bidding at the sale is merely one of the rights to enforce the note. There simply is no requirement that the bidder at the foreclosure sale must be the owner of the

note. 

### 104 Reply Briefof Appellant at 5 (citing RCW 61.24.040(2)). 105 rcw 61.24.040(2) (alteration in original). 106 id, 

### 107 Reply Briefof Appellant at 5-6 (citing RCW 61.24.070(2)). 108 RCW 61.24.070(2). 

### 109 Reply Brief ofAppellant at 6.
27No. 70592-0-1/28 Third, Trujillocites RCW 61.24.163, which outlines the foreclosure 

### mediation program.110 Subsection (5) explains the required documents that the 

### beneficiary must transmit to the mediator.111 These documents include: Proofthat the entity claiming to be the beneficiary is the owner of any promissory note or obligation secured by the deed oftrust. 

### Sufficient proof may be a copy ofthe declaration described in RCW 

### 61.24.030(7)(a).t1121 This statute's references to the beneficiary declaration in RCW 61.24.030(7)(a) 

### does nothing to undercut the lawthatthe terms "owner" and "holder" are not legal 

### synonyms. We reach this conclusion despite the reference inthe above text that mentions "owner" but not "holder." 

### Trujillo also argues that statements by two senators at a senate and house 

### judiciary committee meeting show that certain legislators believed that the "beneficiary" of a deed of trust should be the "holder" andthe "owner" of the promissorynote.113 In view of our analysis detailed earlier in this opinion, we 

### reject the argument that these comments byonlytwo legislators showlegislative intent contrary to what we discussed previously in this opinion. 

### In sum, the Wells Fargo beneficiary declaration in this case is sufficient to comply with RCW61.24.030(7)(a).

110 id, (citing RCW 61.24.163). 111 RCW 61.24.163(5). 112RCW61.24.163(5)(c). 

### 113 Reply Brief ofAppellant at 7-11.
28No. 70592-0-1/29 RCW61.24.030(7)(b) 

### Trujillo next argues that the requirements of RCW61.24.030(7)(b) were 

### not met.114 We disagree. RCW 61.24.030(7)(b) states: Unless the trustee has violated his or her duty under RCW 

### 61.24.010(4), the trustee is entitledto rely on the beneficiary's declaration as evidence of proofrequiredunderthis subsection,[115] RCW 61.24.010(4) provides that a "trustee or successortrustee has a duty ofgood faith to the borrower, beneficiary, and grantor." Here, Trujillo fails to substantiate that there was any breach ofany duty by NWTS under RCW 61.24.010(4). Accordingly, NWTS was entitled to rely on this Wells Fargo declaration, as the plain words ofthe statute provide. In her Statement ofAdditional Authorities dated April 3, 2014, Trujillo cites Schroeder v. Excelsior Management Group, LLC and Klem v. Washington Mutual 

### Bank to support her argumentthat NWTSbreached its duty of good faith.116 While these cases discuss the duty a trustee owes the beneficiary and the debtor, they do nothing to substantiate that NWTS breached its duty ofgood faith when it relied on this beneficiary declaration. Thus, these cases are not helpful.



### 114 id, at 13. 115 (Emphasis added.) 116 Statement ofAdditional Authorities (April 3, 2014) at 1 (citing Schroeder v. Excelsior Mgmt. Group, LLC, 177Wn.2d94, 102 n.3, 107, 114,297 

### P.3d 677 (2013); Klem v. Wash. Mut. Bank. 176 Wn.2d 771, 788-92, 295 P.3d 1179(2013)).
29No. 70592-0-1/30
MOTION TO SUPPLEMENT THE RECORD Trujillomoves to supplement the record pursuant to RAP 9.6(a) with certain documents, some ofwhich have already been authorized by this court. We deny the motion to the extent ofthe remaining documents. Trujillo asserts that her response to Wells Fargo's motion for attorney fees and costs and its attachment, a letterfrom a state senator, are "necessary" because itexplains the legislature's intent underlying SB 5191. In SB 5191, the legislature considered but declined to adopt a bill that would have changed the 

### definition of "beneficiary" from its current meaning of "holder" to "owner."117 We deny the request to supplement the record with Trujillo's response to Wells Fargo's motion and its attachment. Trujillo's response to Wells Fargo's motion for attorney fees and costs was not before the trial court when itgranted NWTS's motion to dismiss. And these materials are not necessary to our decision. We affirmthe order granting NWTS's CR 12(b)(6) motion to dismiss.

WE CONCUR: 

# SstQjuwq,.;

117 See Opening Briefof Appellee NorthwestTrustee Services, Inc. at 9- 10.
30