Source: http://stopforeclosurefraud.com/2012/08/
Timestamp: 2017-09-20 23:27:19
Document Index: 715465339

Matched Legal Cases: ['§ 62', '§ 10', '§ 1357', '§ 1', '§ 1', '§ 10', '§ 1357', '§ 62', '§ 10', '§ 1357', '§ 10', '§ 1357']

August, 2012 | FORECLOSURE FRAUD | by DinSFLA
Bristol County Commissioners sue for tax payments
Wondering how many counties all over the US will follow? Same pattern used every where I’m sure.
South Coast Today-
The Bristol County Commissioners have sued in federal court to recover deed excise taxes they claim are owed by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac).
Deed excise taxes of $4.56 per $1,000 are owed when a new deed is recorded with the county. Fannie Mae and Freddie Mac long have claimed they are exempt from these taxes, but a recent federal court ruling in Michigan found this exemption invalid, according to a news release from the county commissioners.
[SOUTH COAST TODAY]
JPMorgan Sued by Louisiana Pension Fund Over Forex Trades
Another Day, Another Lawsuit…come back tomorrow and the next and so on.
JPMorgan Chase & Co. (JPM) was accused in a lawsuit of manipulating clients’ foreign-exchange transactions for its own benefit.
The Louisiana Municipal Police Employees’ Retirement System filed a complaint yesterday in Manhattan federal court alleging that the bank took advantage of investors by causing them to pay what were often the worst currency rates available on a given trading day.
“JPMorgan’s scheme allowed it, in violation of its contractual and fiduciary obligations, to extract hundreds of millions of dollars in illicit risk free profits from its clients under the guise of FX trading,” according to the complaint.
POK v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC. | Superior Court of RI – MERS loses Motion to Dismiss in Quiet Title action
H/T Leagal
DARA POK; LIANG POK; CHANDARAROTH POK; AND LEANGTANG, v. MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; SOVEREIGN BANK, HARMON LAW OFFICES, PC; AND WELLS FARGO BANK, NA.
C.A. No. PC2011-2428.Superior Court of Rhode Island, PROVIDENCE, SC.Filed: August 24, 2012.
Defendants’ Mortgage Electronic Registration Systems, Inc. (“MERS”) and Wells Fargo Bank, NA (“Wells Fargo”) (collectively, “Defendants”)1 move this Court to dismiss the complaint (“Complaint”) filed by Plaintiffs Dara Pok, Liang Pok, Chandararoth Pok and Leang Tang (collectively, “Plaintiffs”) pursuant to Rule 12(b)(6) of the Rhode Island Superior Court Rules of Civil Procedure. The Complaint seeks declaratory relief to quiet title to certain real property located at 31 Cadillac Avenue, Cranston, Rhode Island (“the Property”). The Complaint alleges that due to alleged defects in the foreclosure process, the foreclosing party, Wells Fargo, had no right to exercise the statutory power of sale under Rhode Island law, thus rendering the foreclosure sale a nullity.
The facts gleaned from the Complaint and exhibits referred to explicitly therein are as follows: On September 12, 2008, Michael A. Moppin, Jane Moppin, and Gennaro Madonna Jr. conveyed title to the Property to Plaintiffs Dara Pok and Liang Pok by way of warranty deed. See Defs.’ Ex. A.2 That warranty deed was thereafter recorded in the land evidence records of the City of Cranston on September 18, 2008. (Compl. ¶ 10.) Thus, as of September 12, 2008, Dara Pok and Liang Pok held record title to the property.
On September 16, 2008, Plaintiffs Chandararoth Pok and Leang Tang executed a note (“Note”) in favor of lender Sovereign Bank (“Sovereign”) for $183,007. To secure the Note, Plaintiffs Chandararoth Pok and Leang Tang contemporaneously executed a mortgage (“Mortgage”) on the Property.3 At the time the mortgage was executed neither Chanderoth Pok nor Leang Tang owned title to the property purporting to secure the Note they executed. The Mortgage identified Sovereign as the “Lender.” The Mortgage provides that “[t]his Security Instrument is given to MERS, (solely as nominee for Lender, as hereinafter defined, and Lender’s successors and assigns),” the Mortgage also provides that MERS is the mortgagee. (Defs.’ Ex. B at 1.)4 The Mortgage further provides that “Borrower does hereby mortgage, grant and convey to MERS (solely as nominee for Lender and Lender’s successors and assigns) and to the successors and assigns of MERS, with Mortgage Covenants upon the Statutory Condition and with the Statutory Power of Sale.” Id. at 1-2. In addition, the clear and unambiguous language of the Mortgage provides that
“Borrower understands and agrees that MERS holds only legal title to the interests granted by Borrower in this Security Instrument; but, if necessary to comply with law or custom, MERS, (as nominee for Lender and Lender’s successors and assigns), has the right: to exercise any or all of those interests, including, but not limited to, the right to foreclose and sell the Property; and to take any action required of Lender.” Id. at 2.
The Mortgage was recorded in the land evidence records for the City of Cranston on September 18, 2008. At the time of execution of the Mortgage, Plaintiffs Chandararoth Pok and Leang Tang did not have title to the Property referred to in the Mortgage. (Compl. ¶ 12.) Thus, as a matter of law, the Mortgage was ineffective to secure the obligations under the Note.5
On December 1, 2009, MERS, as nominee for Sovereign and mortgagee, assigned the Mortgage interest to Wells Fargo. (Compl. ¶ 14.) On October 27, 2010, MERS, in its capacity as nominee of the lender executed a second assignment as nominee for Sovereign and mortgagee under the Mortgage to Wells Fargo. (Compl. ¶ 15.). This raises another issue as to whether MERS which already assigned its interest in the mortgage has any interest to assign by way of a subsequent assignment.
Thereafter, Plaintiffs Chandararoth Pok and Leang Tang failed to make timely payments under the Note, thereby committing a payment default under the terms of the Note and Mortgage. Following the default, Wells Fargo exercised the statutory power of sale which it had acquired by way of accepting an assignment of the Mortgage and commenced foreclosure proceedings, ultimately foreclosing upon the Property owned by Dara Pok and Liang Pok.
Plaintiffs then filed the instant Complaint seeking a declaration from this Court that Plaintiffs Dara Pok and Liang Pok are the record title owners of the Property. Defendants have filed this Motion to Dismiss pursuant to Rule 12(b)(6) averring that Plaintiffs have failed to state a claim entitling them to the relief they seek. At the hearing, all parties waived oral argument, thereby submitting the matter to this Court on the written memoranda of law. After the submission of all memoranda by the parties, the Court then took this matter under consideration.
Ordinarily, the court’s review of a motion to dismiss is confined to the complaint, Barrette v. Yakavonis, 966 A.2d 1231, 1234 (R.I. 2009), and if the court considers matters outside of the complaint, the court must convert the motion into a motion for summary judgment. See Coia v. Stephano, 511 A.2d 980 (R.I. 1986). These rules provide, however, where the pleading refers to attachments, “[a] copy of any written instrument which is an exhibit to a pleading is a part thereof for all purposes.” Super. R. Civ. P. 10(c). The motion justice may consider and refer to documents incorporated into a complaint by reference when ruling on a motion to dismiss, without converting the motion into one under Rule 56. Bowen Court Assoc. v. Ernst & Young, LLP, 818 A.2d 721, 725-26 (R.I. 2003) (citing Super. R. Civ. P. 10(c)); 27A Federal Procedure L. Ed. § 62:509 (2004). Such documents “must be referred to explicitly,” and be “exhibit[s] annexed to the complaint.” 1 Kent, R.I. Civ. Prac. § 10.3 at 100 (1969); see also 5B Wright & Miller, Federal Practice & Procedure, 3d § 1357 (2006).
Here, the Complaint expressly references the warranty deed to Plaintiffs Dara Pok and Liang Pok, the Mortgage deed and the two assignments of the Mortgage interest. Defendants have submitted the Mortgage and the deed with their Motion. The Plaintiffs have not contested the authenticity of these documents as true and accurate copies of the documents referred to in the Complaint. Thus, this Court must decided whether to exclude these materials and adjudicate this matter using the motion to dismiss standard of review under Rule 12(b)(6), or consider them and convert the Motion into a motion for summary judgment under Rule 56. The Court finds that all documents submitted by Defendants were explicitly referred to by Plaintiffs in the Complaint, but not annexed to the Complaint. The Court will consider “documents expressly relied upon or integral to the complaint and matters of public record, if the claims of the Plaintiffs are based upon such documents.” Rowe v. Morgan Stanley, 191 F.R.D. 398, 405 (D. N.J. 1999); see also Kriegel v. Mortgage Electronic Registration Systems, No. PC 2010-7099, 2011 WL 4947398 at * 4 (R.I. Super. Oct. 13, 2011) (Rubine, J.); In re Burlington Coat Factory, 114 F.3d 1410, 1426 (3rd Cir. 1997). Plaintiffs’ Complaint to void the foreclosure sale expressly references and certainly finds its basis in the Mortgage and warranty deed, both of which are public record. Accordingly, this Court will consider Defendants’ Motion as a Motion to Dismiss under Rule 12(b)(6).
12(b)(6) Motion to Dismiss Standard of Review
“The `sole function of a motion to dismiss’ pursuant to Rule 12(b)(6) is `to test the sufficiency of the complaint.'” McKenna v. Williams, 874 A.2d 217, 225 (R.I. 2005) (quoting Rhode Island Affiliate, ACLU, Inc. v. Bernasconi, 557 A.2d 1232, 1232 (R.I. 1989)). For purposes of the motion the Court “assumes the allegations contained in the complaint to be true and views the facts in the light most favorable to the plaintiffs.” Giuliano v. Pastina, Jr., 793 A.2d 1035, 1036-37 (R.I. 2002) (quotation omitted). The motion “should be granted only when it is clear beyond a reasonable doubt that the plaintiff would not be entitled to relief under any set of facts that could be proven in support of the claim.” Siena M.D. v. Microsoft Corp., 796 A.2d 461, 463 (R.I. 2002) (citation omitted).
Plaintiffs have properly set forth allegations in the Complaint averring that Chandararoth Pok and Leang Tang did not have title to the Property at the time they executed the Note and Mortgage. (Compl. ¶ 12.) Accepting these allegations as true, as this Court must, and viewing them in the light most favorable to Plaintiffs, Plaintiffs have properly set forth a claim for relief, in that a mortgage is a conveyance or retention of an interest in real property as security for performance of an obligation. Restatement (Third) of Property Mortgages § 1.1 (1997); see also Black’s Law Dictionary (9th ed. 2009) (defining a mortgage as a conveyance of title to property that is given as security for the payment of a debt or the performance of a duty). In the instant matter, Sovereign lent money to Chandararoth Pok and Leang Tang, accepting a Mortgage on the Property to secure the borrowers obligations under the Note. As borrowers under the Note, Chanadararoth Pok and Leang Tang executed the Mortgage to secure the Note without holding any interest in the Property described in the Mortgage. The Mortgage was designed to serve as a security for the Note, and thus to convey to Sovereign as security for their obligations under the Note. As a result, the Mortgage is a nullity, thus leaving borrowers liable to Sovereign, or the current note holder, under an unsecured Note. Chandararoth Pok and Leang Tang knew, or should have known, that they did not own the Property at the time they pledged the Property as security for the Note. Likewise, through due diligence, Sovereign should have realized its mistake. At a minimum, the Defendants should have realized that the Property described in the Mortgage was titled to persons other than the borrowers.
Accepting the allegation in the complaint as true that Chandararoth Pok and Leang Tang did not have any interest or title to the Property at the time they executed the Note and Mortgage, then the Mortgage is void and of no force or effect, as discussed supra. The invalidity of the Mortgage renders borrowers’ obligations under the Note unsecured. One cannot execute a mortgage, thereby conveying title to the Property, if they do not have an interest in the Property. Stated differently, a party cannot effectively convey by mortgage deed, that refers to Property which it does not own. See Restatement (Third) of Property Mortgages, § 1.1 (1997). It is axiomatic that if the Mortgage is ineffective, and therefore void, MERS was never properly granted the authority to exercise the statutory power of sale following Chandararoth Pok and Leang Tang’s default under the Note. Likewise, any subsequent assignments of the void Mortgage are ineffective to convey the statutory power of sale. Therefore, Wells Fargo lacked the authority to enforce the statutory power of sale following default. Accordingly, Plaintiffs have set forth allegations in the Complaint which clearly state a claim for relief, thereby the motion to dismiss must be denied.6
Defendants’ Motion to Dismiss is denied. Counsel for the prevailing party shall prepare an Order in accordance with this Decision.
1. Defendant Sovereign Bank is not a party to this Motion to Dismiss. Defendant Harmon Law Offices, PC was voluntarily dismissed by Plaintiffs.
2. As discussed infra, the Complaint does not attach any exhibits, however it explicitly refers to the warranty deed granting title to Plaintiffs Dara Pok and Laing Pok. Accordingly, this Court may properly consider the deed as submitted by Defendants without converting this Motion to Dismiss under Rule 12(b)(6) to a motion for summary judgment under Rule 56. A motion justice may consider and refer to documents incorporated into a complaint by reference when ruling on a motion to dismiss. Bowen Court Assoc. v. Ernst & Young, LLP, 818 A.2d 721 (R.I. 2003) (citing Super. R. Civ. P. 10(c)). Such documents “must be referred to explicitly.” 1 Kent, R.I. Civ. Prac. § 10.3 at 100 (1969); see also 5B Wright & Miller, Fed. Prac. & Proc., 3d § 1357 at 377.
3. In the Complaint, Plaintiffs allege that the Mortgage was executed on September 18, 2009. (Compl. ¶ 11.) However, the Mortgage explicitly provides that the date of the execution of the Mortgage instrument was September 16, 2008. The Court will not accept as true “facts which are legally impossible or facts which by the record or a document attached to the [C]omplaint appear to be unfounded.” 27A Fed. Proc., L. Ed. § 62:509 (1996). “In the case of conflict between the pleading and the exhibit, the exhibit controls.” 1 Kent, R.I. Civ. Prac. § 10.3 at 100; see also 5B Wright & Miller, Federal Practice & Procedure, Civil 3d § 1357 at 555 (citations omitted).
4. As set forth supra, the Complaint does not contain any exhibits, however it explicitly refers to the Mortgage executed by Plaintiffs. Accordingly, this Court may properly consider the Mortgage as submitted by Defendants without converting this Motion to Dismiss under Rule 12(b)(6) to a motion for summary judgment under Rule 56. A motion justice may consider and refer to documents incorporated into a complaint by reference when ruling on a motion to dismiss. Bowen Court Assoc. v. Ernst & Young, LLP, 818 A.2d 721 (R.I. 2003) (citing Super. R. Civ. P. 10(c)). Such documents “must be referred to explicitly.” 1 Kent, R.I. Civ. Prac. § 10.3 at 100 (1969); see also 5B Wright & Miller, Fed. Prac. & Proc., 3d § 1357 at 377.
5. This court has previously addressed the issue of whether an assignee of the mortgage can foreclose if it is not simultaneously the holder of the Note. This case, however raises a different and novel issue, that is whether persons who are strangers to the title may pledge property owned by others to secure debt owed by the them. The response to this issue is obviously no.
6. Although Plaintiffs have suggested a number of other reasons the foreclosure was ineffective, the Plaintiffs’ memoranda failed to discuss the most obvious defect in the Mortgage, the fact that the borrowers, although signing the Mortgage deed, did not own the Property described in the Mortgage.
15 Occupy Homes Minnesota organizers face up to two years in jail for peacefully linking arms outside a house
This only makes sense if you have one of these extremely low 3.66~% interest rates of today.
Ethos lifts the lid on a Pandora’s Box of systemic issues that guarantee failure in every aspect of our lives
Hosted by twice Oscar nominated actor and activist Woody Harrelson, Ethos lifts the lid on a Pandora’s Box of systemic issues that guarantee failure in every aspect of our lives, from the environment to our democracy and our own personal liberty.
Banks Prepare for Paperless Future
But sticky or not, cards are coming for people who often make use of check cashing stores like RiteCheck. Starting in March 2013, the government will stop issuing paper checks, including ones for Social Security, disability or other benefits. Recipients will receive payments through direct deposit into a bank account or a prepaid card, including the government’s own GoDirect card, issued by Comerica Bank. By 2033, the paper check may be extinct altogether, according to a paper published by the Federal Reserve of Philadelphia.
To hear bankers, entrepreneurs, and even policymakers tell it, cash is unsafe and expensive. The move to electronic payments will bring millions of people onto the financial grid, provide greater financial security, and improve economic mobility and opportunity for those who are unbanked, or typically those who are too poor to qualify for a checking account. It will also provide a massive cost savings to the government.
Isaac Gradman: Investor End Games: All Is Not Well in the Garden
– Chance the Gardener, Being There (1979)
Bloomberg Motion: Release MBIA vs Countrywide Docs
Proposed Intervenor Bloomberg LP’s Memorandum Of Law In Support of Their Motion To Intervene And For Certain Relief
[ipaper docId=104029295 access_key=key-oc42p70yuo0i8hgegxd height=600 width=600 /]
FRIZZELL vs MURRAY | WA State Appeals Court Rules Even After Foreclosure Sale, Borrowers Can Sue Over Allegedly Deceptive Loans
No. 42265-4-II
TAMARA FRIZZELL,
BARBARA MURRAY and GREGORY
MURRAY, wife and husband, d/b/a SOUND
Johanson, A.C.J. — Despite her relatively low income, Tamara Frizzell received a loan
secured by her home from lenders Gregory and Barbara Murray.1 She quickly defaulted and the
Murrays foreclosed on her home. But before the trustee’s sale, Frizzell sought and obtained an
order restraining the sale, conditioned on Frizzell depositing a $15,000 payment and $10,000
bond into the court registry by the following morning. Frizzell failed to meet this condition, and a
trustee sold her home the next day. Frizzell then sued the Murrays on various common law and
statutory grounds, but the trial court granted the Murrays’ summary judgment motion, reasoning
that Frizzell waived her right to post-sale relief because she failed to actually restrain the
trustee’s sale. On appeal, Frizzell claims that the trial court erred in granting summary judgment
because (1) she did not waive her right to post-sale relief, and (2) genuine issues of material fact
existed in her original complaint regarding (a) her capacity to contract, (b) the loan’s purpose, (c)
whether the loan amounted to a de facto sale, and (d) other statutory-based claims. We reverse
the trial court’s summary judgment order because Frizzell did not waive her right to post-sale
relief, and we do not reach Frizzell’s other claims.
Frizzell owned real estate, and her friend, Douglas Baer, had a power of attorney signed
by Frizzell authorizing him to engage in financial transactions on her behalf.2 In 2008, Frizzell
told Baer that she wanted a $20,000 loan to pay some past-due bills. Baer called a phone number
from a newspaper advertisement for a business that loans money against real estate and spoke
with Gregory about a $20,000 loan. Gregory offered Baer a better interest rate on a larger loan,
and, according to Baer, “[t]he amount of the loan increased over time,” to $100,000. Clerk’s
Papers (CP) at 146.
Though Frizzell and Baer agreed that Baer would control the money, and though Baer
presented to Gregory and Barbara his power of attorney to act on Frizzell’s behalf, Barbara
refused to loan the money to Baer and, instead, desired to loan the money directly to Frizzell.
Frizzell had no involvement in the loan negotiation or lending process, but she did meet with
Barbara for a half hour to sign the final loan papers, securing the loan with a deed of trust on her
The $100,000 loan required Frizzell to pay a $1,000 monthly payment, which covered the
interest only — and full repayment was due in three years. Gregory also explained to Baer that the
Murrays only offered loans for “business purposes” and not for personal uses. CP at 89. He
provided Baer loan paperwork and explained that Frizzell needed to complete it before the
issuance of any loan. Frizzell had no business to operate, but Baer stored between 40 and 50
wheelchairs and scooters at Frizzell’s house and suggested they start a wheelchair and scooter
business. Neither Frizzell nor Baer had business experience or business knowledge generally, but
the Murrays never requested that Frizzell supply them a business plan or business proformas.
Barbara did note Baer’s collection of wheelchairs and scooters, and she understood that Baer
“was good at fixing things” and “had a connection in Bellevue or Redmond” with whom he
planned to do business. CP at 207. Barbara did not ask how, specifically, Frizzell and Baer
would use the loan proceeds.
On August 26, 2008, Frizzell submitted to the Murrays a completed “Business Real Estate
Loan Application,” a declaration of purpose, and other paperwork. CP at 255. In her completed
application, Frizzell explained that the loan would be used for a “wheelchair/scooter business,”
and, when prompted to list any liabilities, Frizzell wrote “Hard Cash Loan[.] This Info. Should
Not Matter.” CP at 100, 101 (some capitalization omitted). She listed the loan’s uses on the
declaration of purpose as “wheelchair + scooter business.” CP at 105 (some capitalization
omitted). Frizzell also signed a disclosure form that warned, “the borrower is encouraged to seek
there [sic] own legal advice in all maters [sic] with regard to this loan prior to signing.” CP at
After the Murrays subtracted the loan’s fees, Frizzell received just under $88,000. Frizzell
used the loan to pay bills, and then she bought roughly $60,000 in oil industry stocks on
eTrade — stocks that plummeted, and Frizzell lost her investment. Frizzell made the first three
scheduled $1,000 payments, and the Murrays received the last payment on December 3, 2008.
Then, Frizzell stopped making any payments. Barbara initiated the foreclosure process on
Frizzell’s home through a non-judicial sale under the deed of trust, and a trustee’s sale was
scheduled for February 19, 2010.
Before the trustee’s sale, Frizzell filed a civil action against the Murrays. Her complaint
alleged a number of legal and equitable grounds for relief that would provide a basis for
restraining the trustee’s sale, and she sought relief in the form of money damages for statutory
violations, invalidation of the promissory note and deed of trust, and an injunction “barring
enforcement of the deed of trust through foreclosure sale.” CP at 8.
During her deposition, Frizzell explained that she did not understand what the “business
loan” meant, expressing, “I can’t say, because I don’t understand what went on.” CP at 259
(emphasis omitted). When asked if she understood that she was “borrowing [the] funds from the
Murrays[,]” Frizzell responded, “I’m not sure.” CP at 262 (emphasis omitted). Baer opined that
offering a loan to Frizzell “was like giving the money to a small child who had no conception of
how to spend the money, what would be required to pay it back, and what would happen if it
were not paid back.” CP at 146. Frizzell acknowledged that she suffered from a learning
disability, and a clinical psychologist, Dr. Mark Whitehill, stated that, after observing and testing
Frizzell, he believed she “is characterologically disposed to conform to what she believes others
want, and to keep her own feelings suppressed. Had she believed that the Murrays wanted her to
sign the loan agreement, in all likelihood she would have felt compelled to do so.” CP at 197. He
added that Frizzell suffers severe memory deficits, strongly suggestive of “incipient dementia” that
affects her ability to remember what she would have been told about the “nature, effect, and
terms” of the loan, as well as the ability to make rational decisions based on that memory. CP at
197. Ultimately, he expressed significant concerns about Frizzell’s capacity to contract.
Frizzell also sought to enjoin the trustee’s sale, and on February 18, 2010, the trial court
entered an order enjoining the trustee’s sale scheduled for the following day, “conditioned upon
plaintiff’s payment into the registry of the court the sum of $15,000 representing arrearages on
the deed of trust and a bond in the sum of $10,000 on or before February 19, 2010 at 9:45 a.m.”
CP at 125. The injunction lapsed when Frizzell failed to remit the $15,000 and post the bond by
the following morning. The trustee foreclosed on the home, and Barbara purchased the property
at the sale and ejected Frizzell from the property. Following discovery, the Murrays moved to
dismiss all of Frizzell’s claims on summary judgment. First, the Murrays moved that the trial
court dismiss Frizzell’s claim on summary judgment because she failed to restrain the trustee’s
sale and thus waived all claims and defenses relating to the deed of trust and promissory note.
Second, in the alternative, the Murrays moved that the trial court enter partial summary judgment
regarding Frizzell’s competency to contract, as well as the propriety of the transaction under
various state statutes. The trial court granted the Murray’s motion for summary judgment on all
of Frizzell’s claims “based on the Plaintiff’s failure to obtain pre-sale injunctive relief.” CP at 305.
Frizzell timely appeals.
We review summary judgment orders de novo. York v. Wahkiakum Sch. Dist. No. 200,
163 Wn.2d 297, 302, 178 P.3d 995 (2008). Under CR 56(c), summary judgment is appropriate if
the record presents no genuine issue of material fact and the moving party is entitled to a
judgment as a matter of law. Oltman v. Holland Am. Line USA, Inc., 163 Wn.2d 236, 243, 178
P.3d 981, cert. dismissed, 129 S. Ct. 24 (2008).
Frizzell argues that the trial court erred in granting summary judgment because she did not
waive her right to seek post-sale relief when she sought and obtained an order restraining the
trustee’s sale. We agree. Waiver is the intentional and voluntary relinquishment of a known
right, or such conduct as warrants an inference of relinquishment of such right, and it may result
from an express agreement or may be inferred from circumstances indicating an intent to waive.
Lande v. S. Kitsap Sch. Dist. No. 402, 2 Wn. App. 468, 474, 469 P.2d 982 (1970) (citing
Bowman v. Webster, 44 Wn.2d 667, 669, 269 P.2d 960 (1954)). Waiver is also an equitable
principle that defeats someone’s legal rights where the facts support an argument that a party
relinquished its rights by delaying in asserting or failing to assert an otherwise available adequate
remedy. Albice v. Premier Mortg. Servs. of Wash., Inc., 174 Wn.2d 560, 569, 276 P.3d 1277
The three goals of Washington’s Deed of Trust Act (WDTA)3 are (1) to provide an
efficient and inexpensive nonjudicial foreclosure process, (2) to provide adequate opportunities
for interested parties to prevent wrongful foreclosures, and (3) to promote stability of land titles.
Plein v. Lackey, 149 Wn.2d 214, 225, 67 P.3d 1061 (2003). And the WDTA provides the only
means by which a grantor may preclude a sale once foreclosure has begun. Cox v. Helenius, 103
Wn.2d 383, 388, 693 P.2d 683 (1985). Under the WDTA,
afforded an opportunity to be heard as to those objections if they bring a lawsuit to
restrain the sale pursuant to RCW 61.24.130. Failure to bring such a lawsuit may
result in a waiver of any proper grounds for invalidating the Trustee’s sale.
RCW 61.24.040(1)(f) (emphasis added). The legislature’s use of “may” in this statute neither
requires nor intends us to strictly apply waiver rules; so under this statute, we apply waiver only
where it is equitable under the circumstances and serves the WDTA’s goals. Albice, 174 Wn.2d
The trial court here erred when it found that Frizzell waived her right to post-sale relief
and dismissed her claim on summary judgment. For instance, the Murrays cite RCW
61.24.040(1)(f) in their argument that Frizzell’s failure to actually enjoin the trustee’s sale resulted
in her waiving her right to pursue all post-sale relief. But, RCW 61.24.040(1)(f) simply addresses
how one may challenge a trustee’s sale or seek to invalidate a trustee’s sale. It expressly states
that failure to bring a lawsuit to restrain a trustee’s sale may result in waiving the right to
invalidate the trustee’s sale. Frizzell’s claims, however, extend beyond her attempt to invalidate
the trustee’s sale. Here, Frizzell alleged a Consumer Protection Act violation and monetary
damages, claims that are distinct from the trustee’s sale, and forms of relief that RCW
61.24.040(1)(f) does not portend to preclude seeking post-sale relief by failing to bring a lawsuit
restraining a trustee’s sale.
Next, the Murrays cite Plein and Brown v. Household Realty Corp., 146 Wn. App. 157,
189 P.3d 233 (2008), review denied, 165 Wn.2d 1023 (2009), to support their argument that
Frizzell’s failure to actually obtain injunctive relief waived her right to any post-sale claims. These
cases, though, are distinguishable from the present matter.
Plein involved a corporate officer who brought an action for nonjudicial foreclosure on a
deed of trust on real property after the corporation defaulted on a promissory note. Plein, 149
Wn.2d at 220. A junior lienholder, Plein, brought his own action against the corporate officer
seeking to permanently enjoin the trustee’s sale and to obtain a declaration voiding the deed of
trust. Plein, 149 Wn.2d at 220. But the trial court dismissed Plein’s complaint on summary
judgment, and the Supreme Court affirmed the trial court, holding that Plein had waived his right
to contest nonjudicial foreclosure and the trustee’s sale because he did not seek a preliminary
injunction or any other order to restrain the sale. Plein, 149 Wn.2d at 229. The Supreme Court
stated, “We hold that by failing to obtain a preliminary injunction or other restraining order
restraining the trustee’s sale, as contemplated by RCW 61.24.130, Plein waived any objections to
the foreclosure proceedings.” Plein, 149 Wn.2d at 229. Here, unlike Plein, Frizzell not only
sought a preliminary injunction to restrain the trustee’s sale, but she also obtained a restraining
order.4 Accordingly, Plein is distinguishable from the present matter.
In Brown, the borrowers under deeds of trust, the Browns, brought an action against their
lender, Household Realty, two years after a foreclosure on the Browns’ property, alleging
multiple common law and statutory claims. Brown, 146 Wn. App. at 160. The trial court granted
summary judgment in Household’s favor and Division One of this court affirmed, holding that the
Browns waived their claims by failing to request a preliminary injunction or restraining order
enjoining the sale under the WDTA. Brown, 146 Wn. App. at 171.
Again, Brown is distinguishable. There, Division One held that a borrower waives claims
against a lender by failing to timely request a preliminary injunction or restraining order enjoining
nonjudicial foreclosure sale at least five days before the sale date. Brown, 146 Wn. App. at 163,
170. But the court left unanswered whether “a party who files a lawsuit after the initiation of the
foreclosure process and unsuccessfully attempts to obtain a preliminary injunction restraining the
sale could prevail at trial yet be barred from obtaining relief.” Brown, 146 Wn. App. at 170.
Unlike the Browns, Frizzell filed a complaint seven days before the sale seeking an injunction
barring enforcement of the deed of trust through the trustee’s sale, as well as a motion to enjoin
the trustee sale three days before the scheduled foreclosure; and the trial court enjoined the
trustee sale, provided that Frizzell post a bond and pay arrearages. Therefore, Brown differs from
the present matter.
Moreover, in Albice the Supreme Court clarified how waiver applies under the WDTA.
The court held that we should not rigidly apply the WDTA’s waiver rule but instead apply it as an
equitable tool only where, for example, the facts support an argument that a party relinquished its
rights by delaying in asserting or failing to assert an otherwise available adequate remedy. See
Albice, 174 Wn.2d at 570. And, ultimately, a party must intentionally or voluntarily waive its
legal rights to effectuate a valid waiver; but here, Frizzell never intended or volunteered to
relinquish her right to raise claims against the Murrays. Unlike the borrowers in Plein and Brown,
Frizzell pursued her claims before the trustee’s sale and actually obtained an order restraining the
trustee’s sale, though on the condition that she pay a sizeable sum of money and bond by the
following morning. Albice dictates that waiver applies only when equitable where, for example,
the facts support an argument that Frizzell relinquished her rights by delaying in asserting or
failing to assert an otherwise available adequate remedy. See Albice, 174 Wn.2d at 570. Such
Frizzell did not delay or fail to assert an available adequate remedy. Accordingly, it would
be inequitable to apply waiver under these facts.5 We hold that the trial court erred in determining
that Frizzell waived her right to relief by failing to obtain pre-sale relief and in granting the
Murray’s summary judgment motion. Therefore, we remand to the trial court for action
1 For clarity, we refer to Gregory Murray as “Gregory” and Barbara Murray as “Barbara.”
2 Baer believed Frizzell’s property — a house with a fish pond, front deck, fruit trees, and a
yard — was worth roughly $250,000. The property value had been assessed at $225,000, and
Frizzell estimated its market value at $300,000.
3 Ch. 61.24 RCW.
4 Frizzell did not restrain the looming trustee’s sale because the trial court conditioned its
restraining order on Frizzell’s paying $15,000 in arrearages and a $10,000 bond into the court
registry by the following morning. Frizzell did not meet these conditions.
5 In addition, we also agree with Frizzell that if she lacked the capacity to contract, it would be
inequitable to conclude that she voluntarily relinquished known rights related to that contract.
But the trial court did not reach Frizzell’s other issues because it granted summary judgment on
an alternative ground.