Opinion ID: 3134113
Heading Depth: 4
Heading Rank: 2

Heading: Trujillo and Lyons

Text: In Trujillo, a homeowner claimed the trustee violated its duty of good faith under RCW 61.24.010(4) when the trustee relied on a beneficiary declaration to satisfy RCW 61.24.030(7)(a). The declaration said the purported beneficiary, Wells Fargo, was 'the actual holder of the promissory note ... evidencing the ... loan or has requisite authority under RCW 62A.3-301 to enforce said [note].' Trujillo, 181 Wn. App. at 488 (emphasis added) (first and third alterations in original). The Court of Appeals synthesized the concepts of beneficiary, id. at 495-97, owner, id. at 497-501, and holder, id. at 501-02. It concluded, RCW 61.24.030(7)(a), properly read, does not require Wells Fargo to also be the 'owner' of the note. Rather, it requires that a person entitled to enforce a note be a holder and need not also be an owner. Id. at 502. The Court of Appeals thus held the trustee did not violate its duty of good faith when it relied on this declaration. We decided Lyons shortly afterwards. As relevant here, in Lyons we considered whether a trustee violated its duty of good faith when it relied on a beneficiary declaration similar to the one in Trujillo to satisfy RCW 61.24.030(7)(a). The declaration in Lyons said the purported beneficiary was the actual holder of the promissory note ... or has requisite authority under RCW 62A.3-301 to enforce said obligation. Lyons, 181 Wn.2d at 780 (emphasis added). We held that the declaration at issue here does not comply with RCW 61.24.030(7)(a), because it is ambiguous concerning which of the three grounds under RCW 62A.3-30 1 the purported beneficiary invoked. I d. at 791. We held a purported beneficiary satisfies -33- Brown v. Wash. State Dep 't of Commerce, No. 90652-1 RCW 61.24.030(7)(a) by providing a declaration stating it is the actual holder of the note. But, by RCW 61.24.030(7)(a)'s terms, we recognized a purported beneficiary does not satisfy RCW 61.24.030(7)(a) by stating that it meets the second or third method of obtaining PETE status under RCW 62A.3-301(ii) and (iii). We thus remanded the case for trial, instructing the trustee that it must satisfy RCW 61.24.030(7)(a) but may not just rely on this ambiguous declaration. !d. at 791. 17 As relevant here, our holdings in Lyons and Trujillo confirm that a trustee can rely on a declaration consistent with its duty of good faith if the declaration unambiguously states the bendiciary is the actual holder. 18 Here, the declaration does not suffer from the ambiguity at issue in Lyons and Trujillo. It states that M&T Bank is the actual holder of the promissory note. AR at 169. It does not have a following or ...  provision that created ambiguity about whether the declarations at issue in Lyons and Trujillo complied with RCW 61.24.030(7)(a)'s terms. Because these cases turned on ambiguity in the declaration that is not present here, they do not control our analysis. 17 As noted, our recent decision in Trujillo is consistent with this holding. 18 Accordingly, Brown's argument that the Department failed to act in good faith because it knew Freddie Mac was the owner of the note is not well taken. Cf RCW 61.24.030(7)(b) (providing a trustee cannot rely on a beneficiary declaration if the trustee has violated its duty of good faith); RCW 61.24.163(5)(c) (incorporating the method of proving beneficiary status under RCW 61.24.030(7)(a) for the purpose ofFFA mediation). The situation would be different if the Department had information contradicting M&T Bank's declaration that it was the actual holder of the note, but no one contested the truth ofM&T Bank's declaration. That declaration was therefore sufficient proof as required by RCW 61.24.030(7)(a) and RCW 61.24.163(5)(c). -34- Brown v. Wash. State Dep 't of Commerce, No. 90652-1