Case Name: John Schultz, Appellant, v. Mildred Werelius, Respondent
Court: Washington Court of Appeals
Jurisdiction: Washington
Decision Date: 1991-02-01
Citations: 60 Wash. App. 450
Docket Number: No. 12812-8-II
Parties: John Schultz, Appellant, v. Mildred Werelius, Respondent.
Judges: 
Reporter: Washington Appellate Reports
Volume: 60
Pages: 450–458

Head Matter:
[No. 12812-8-II.
Division Two.
February 1, 1991.]
John Schultz, Appellant, v. Mildred Werelius, Respondent.
John J. Sinclair, for appellant.
Edward E. Younglove III and Swanson, Parr, Cordes, Younglove, Peeples & Wyckoff, for respondent.

Opinion:
Worswick, C.J.
Does the assignee of a purchaser's interest in a real estate contract have standing to commence an action to set aside a forfeiture, when the assignment was made after the notice of intent to forfeit was recorded? The answer plainly is no. We affirm a summary judgment dismissing the action.
Mildred Werelius was the vendor under a real estate contract. The original purchasers assigned their interest to Daniel Snook. Snook was later convicted for operating a large amphetamine laboratory on the property. On September 6, 1988, Werelius recorded a notice of intent to forfeit the real estate contract on the grounds that Snook had used the property as an illegal drug laboratory, had created and left chemical waste there, and had failed to maintain required insurance. The notice of intent to forfeit was mailed to Snook and the original purchasers.
On September 9, Snook assigned his interest in the contract, for no apparent consideration, to John Schultz. This assignment was recorded on September 12. Schultz did not attempt to cure the default or enjoin the forfeiture, and on December 19,1988, a declaration of forfeiture was recorded, forfeiting all purchasers' interests in the property.
On January 11, 1989, Schultz filed an action to set aside the declaration of forfeiture asserting that, as the assignee of all of Snook's rights, he had standing to bring this action. The trial court disagreed. It granted Werelius's motion for summary judgment.
The Real Estate Contract Forfeiture Act (RCW 61.30) provides that actions to set aside a declaration of forfeiture may be commenced only by persons entitled to notice under RCW 61.30.040(1) and (2), namely:
(1) . . . [E]ach purchaser last known to the seller . . . and to each person who, at the time the notice of intent to forfeit is recorded, is the last holder of record of a purchaser's interest. . . .
(2) . . . .
(a) The holders and claimants of record at the time the notice of intent to forfeit is recorded of any interests in or liens upon all or any portion of the property . . .
(b) All persons occupying the property at the time the notice of intent to forfeit is recorded and whose identities are reasonably discoverable by the seller.
(Italics ours.) Substantial compliance with the forfeiture act is required of vendors. Powell v. Moss, 51 Wn. App. 530, 535, 754 P.2d 697, review denied, 111 Wn.2d 1005 (1988). The same standard should apply to purchasers, because one of the goals of the forfeiture act is to clarify the rights of both purchasers and sellers. Hume, The Washington Real Estate Contract Forfeiture Act, 61 Wash. L. Rev. 803, 804 (1986) . Substantial compliance with forfeiture requirements by the vendor includes both record and personal notice. RCW 61.30.040, .050. It follows that substantial compliance by one claiming a purchaser's interest includes notifying the seller of that interest, either by personal notice or recording because, consistent with the general theme permeating real estate law, the vendor's obligations depend upon such notice. 3 R. Powell, Real Property ¶ 450[l][c][i] (1987) . Snook and Schultz gave no such notice. RCW 61.30.140 is unambiguous as to who has standing to set aside a declaration of forfeiture. Snook, not Schultz, had a right to notice of the intent to forfeit, as the last holder of record of the purchaser's interest at the time Werelius recorded the notice of intent to forfeit. Accordingly, Snook, not Schultz, had standing to commence the action to set aside the forfeiture.
Despite the plain words of the statute, Schultz argues that the assignment he received from Snook transferred all rights in the property, including the right to commence an action to set aside the forfeiture. It is true that contract rights are assignable unless the assignment is forbidden by statute or violative of public policy, International Comm'l Collectors, Inc. v. Mazel Co., 48 Wn. App. 712, 716-17, 740 P.2d 363 (1987). This principle, however, does not help Schultz, for the right to commence an action to set aside a forfeiture is conferred by statute, not by contract. Had the Legislature intended to extend standing to assignees of assignments recorded after the notice of intent to forfeit, the forfeiture act would have so stated.
Schultz argues that the denial of standing to assignees would lead to absurd results, such as in the case of the death of the purchaser after the notice of intent to forfeit is recorded. However, the Legislature contemplated this and similar situations. RCW 61.30.010(7) extends the definition of "purchaser" to include a personal representative in a probate proceeding.
Moreover, an action to set aside a declaration of forfeiture is only one of several remedies. The class of persons permitted to cure the default or seek to enjoin the forfeiture is broader than the class permitted to commence an action to set aside the forfeiture once it has taken place. RCW 61.30.090(2) provides that the default can be cured by "any guarantor of or any surety for the purchaser's performance" or by n[a]ny person having a lien of record against the property which would be eliminated in whole or part by the forfeiture", in addition to the persons entitled to notice of intent to forfeit. RCW 61.30.110(2) provides that any person permitted to cure the default can bring an action to restrain the recording of the declaration of forfeiture. It is possible that Schultz might have been within this class of guarantors, sureties, and lienholders, and might have had the right to cure the default or enjoin the forfeiture. See Hume, supra, 61 Wash. L. Rev. at 818-19. However, his decision to wait until the declaration for forfeiture was recorded deprived him of such remedies, if indeed he had any.
In his motion for reconsideration, Schultz asserted for the first time that he was an occupant of the property when the notice of intent to forfeit was recorded, and therefore had standing to commence the action to set aside the forfeiture. This assertion was not a proper ground for seeking reconsideration under CR 59, and the court was within its discretion to deny the motion to reconsider. Holaday v. Merceri, 49 Wn. App. 321, 324, 742 P.2d 127, review denied, 108 Wn.2d 1035 (1987).
Affirmed.
Alexander, J., concurs.
RCW 61.30.010(7) defines purchaser, as follows:
"'Purchaser' means the person denominated in a real estate contract as the purchaser of the property or an interest therein or, if applicable, the purchaser's successors or assigns in interest to all or any part of the property, whether by voluntary or involuntary transfer or transfer by operation of law. If the purchaser's interest in the property is subject to a proceeding in probate, a receivership, a guardianship, or a proceeding under the federal bankruptcy laws, 'purchaser' means the personal representative, the receiver, the guardian, the trustee in bankruptcy, or the debtor in possession, as applicable. However, 'purchaser1 does not include an assignee or any other person whose only interest or claim is in the nature of a lien or other security interest."