Court Opinion

ID: 4543200
Source: CourtListenerOpinion
Date Created: 2020-06-22 22:13:22.639767+00
Date Added: 2024-06-11T12:48:40.223035
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

 FRED FINDAHL, a single man,                               No. 80399-9-I

                    Respondent,                            DIVISION ONE

                   v.

 KELLIE MARIE DAVIS, CHARLES L.F.
 PAULSON, and ERICK J.C. PAULSON,
 Individually and as Trustees of the
 CHESTER L.F. PAULSON REVOCABLE
 TRUST,

                    Appellants,

 WELLS FARGO BANK, N.A.; and TOLIN                         UNPUBLISHED OPINION
 NICHOLS, JANE DOE NICHOLS, and
 their marital community,

                    Defendants,

 DANIEL and RANDELL WALTON,
 husband and wife, and their marital
 community,

                    Intervenor Defendants.

      BOWMAN, J. — Jacqueline Paulson, individually and as the personal

representative of the estate of Chester L.F. Paulson, appealed the trial court’s

order granting summary judgment in a quiet title action in favor of Fred Findahl.

Paulson challenged the trial court’s conclusion that a homeowner association’s

foreclosure on a residential property extinguished her judgment lien against the

     Citations and pin cites are based on the Westlaw online version of the cited material.
No. 80399-9-I/2

property. Because Paulson failed to establish a genuine issue of material fact for

trial and Findahl is entitled to judgment as a matter of law, we affirm.1

                                              FACTS

        The Yarrow Hill Owners Association (Yarrow Hill) manages a development

of homes in Kirkland. Yarrow Hill’s Covenants, Conditions, and Restrictions

(CCRs), recorded in 1986, authorize it to levy annual and special assessments to

pay for common expenses. Homeowners who fail to pay assessments are

subject to a lien on their property.

        In 2004, Thomas Mino bought residential property in the Yarrow Hill

development. At some point, he stopped paying the required assessments. On

February 15, 2011, Yarrow Hill filed an action to foreclose on the assessment

lien, naming Mino, Bank of America N.A., and several “John Does” as

defendants. Mino did not appear or respond to the lawsuit. On December 22,

2011, the court entered a decree of foreclosure, a default judgment of

$23,012.71, and an order directing the property to be sold. The judgment

provided that it was “a first and paramount lien upon the above-described real

estate.”

        On April 9, 2012, Chester Paulson obtained a judgment against Mino in

Oregon in an unrelated action for $380,923.57. On June 6, 2012, Chester

        1
          Appellant Jacqueline Paulson died while this appeal was pending. Her children and
heirs, Kellie Marie Davis, Charles L.F. Paulson, and Erick J.C. Paulson, both individually and as
trustees of the Chester L.F. Paulson Revocable Trust, filed a motion to change the designation of
parties under RAP 3.2(a), which allows substitution of the real party in interest upon the death of
an appellant. Respondent Findahl did not file an opposition to the motion. We grant the motion
to substitute the children and heirs of Jacqueline Paulson as the appellants in both their individual
capacities and as trustees of the Chester L.F. Paulson Revocable Trust.

                                                      2
No. 80399-9-I/3

executed an exemplification certificate to enforce the Oregon judgment in

Washington.2

       On June 7, 2012, Yarrow Hill voluntarily moved to dismiss the lien

foreclosure action against the remaining defendants without prejudice. In an

accompanying declaration, the attorney for Yarrow Hill stated:

             2.      On December 22, 2011, a Default Judgment was
       entered in this action against Defendants Thomas Mino and Jane
       Doe Mino.
             3.      No other Defendants were served, have appeared, or
       have answered.
             4.      This case as against all remaining Defendants should
       be dismissed without prejudice and without costs and fees.

The trial court’s order of dismissal, drafted by Yarrow Hill, states, “Now,

therefore, it is hereby ORDERED, ADJUDGED, AND DECREED that this case

shall be and hereby is dismissed without prejudice and without costs and fees.”

       On February 27, 2014, Yarrow Hill filed a motion in the lien foreclosure

action seeking a supplemental judgment for the amount of unpaid assessments

that had accrued since the 2011 default judgment against Mino. Yarrow Hill also

sought a finding that Mino had abandoned the property and asked the court to

terminate the redemption period under RCW 61.12.093.3 Yarrow Hill sent notice

       2
           We refer to Chester and Jacqueline Paulson by their first names when necessary for
clarity and mean no disrespect in doing so.
       3
         RCW 61.12.093 provides:
       In actions to foreclose mortgages on real property improved by structure or
       structures, if the court finds that the mortgagor or his or her successor in interest
       has abandoned said property for six months or more, the purchaser at the
       sheriff’s sale shall take title in and to such property free from all redemption rights
       as provided for in RCW 6.23.010 et seq. upon confirmation of the sheriff’s sale by
       the court. Lack of occupancy by, or by authority of, the mortgagor or his or her
       successor in interest for a continuous period of six months or more prior to the
       date of the decree of foreclosure, coupled with failure to make payment upon the
       mortgage obligation within the said six month period, will be prima facie evidence
       of abandonment.

                                                      3
No. 80399-9-I/4

of the motion for supplemental judgment to Mino by certified mail. In March

2014, the court entered a supplemental judgment of $27,095.30 against Mino

and modified the original judgment to eliminate the right of redemption. The

supplemental judgment provided that aside from the modification to the

redemption period, the “default judgment dated December 22, 2011 remains in

full force and effect.”

        The court scheduled a sheriff’s sale for May 23, 2014. Fred Findahl

bought the property at the sheriff’s sale. On August 18, 2014, Findahl filed a

quiet title action against multiple defendants, including Chester and “Jane Doe”

Paulson and their marital community “by reason of a judgment against” Mino

entered in 2007.4 Findahl moved for partial summary judgment, seeking a

determination that the sheriff’s sale eliminated Chester’s 2012 judgment lien.

Findahl also requested that the 2012 order of voluntary dismissal be corrected

nunc pro tunc to reflect that the court dismissed the remaining defendants, not

the Yarrow Hill foreclosure action as a whole.

        Chester died during the litigation and his spouse, Jacqueline Paulson,

became the personal representative of his estate. Jacqueline, individually and as

personal representative of Chester’s estate (Paulson), filed a cross motion for

summary judgment dismissal of the quiet title action.

        The trial court granted summary judgment for Findahl, finding that the

execution and sheriff’s sale of the property extinguished Paulson’s judgment

        4
          The trial court at first entered a default judgment quieting title as to the Paulsons but
later vacated the judgment due to lack of proper service.

                                                       4
No. 80399-9-I/5

lien.5 The trial court also found that Paulson had no right to notice during the

2011 execution process because Chester filed the lien judgment in 2012, after

the foreclosure action commenced. The trial court denied Paulson’s motion for

summary judgment dismissal. Paulson appeals the grant of summary judgment

for Findahl.

                                         ANALYSIS

        Summary judgment is proper if there are no genuine issues of material

fact and the moving party is entitled to judgment as a matter of law. CR 56(c);

Cotton v. Kronenberg, 111 Wash. App. 258, 264, 44 P.3d 878 (2002). We review a

trial court’s order granting summary judgment de novo. Mohr v. Grantham, 172
Wash. 2d 844, 859, 262 P.3d 490 (2011). In doing so, we engage in the same

inquiry as the trial court and consider the facts and reasonable inferences in a

light most favorable to the nonmoving party. Babcock v. Mason County Fire Dist.

No. 6, 144 Wash. 2d 774, 784, 30 P.3d 1261 (2001).

        Paulson acknowledges she had no right to notice of Yarrow Hill’s 2011

judicial foreclosure action because she was not a lienholder of record when

Yarrow Hill filed the action. And Paulson does not challenge the adequacy of

notice during the execution process. Instead, Paulson makes several arguments

about why she had a right to notice of Yarrow Hill’s 2014 motion for supplemental

judgment. Citing U.S. Bank of Washington v. Hursey, 116 Wash. 2d 522, 806 P.2d
245 (1991), she argues that because she was not given notice, the sheriff’s sale

        5
           The record contains a quitclaim deed signed by Mino on August 11, 2017 conveying his
interest in the property to Paulson. The trial court found that Mino could not have conveyed any
interest in the property to Paulson through the 2017 quitclaim deed because the 2014 sheriff’s
sale extinguished his interest. Paulson does not challenge this finding.

                                                   5
No. 80399-9-I/6

did not extinguish her judgment lien, and so the trial court erred in granting

summary judgment in Findahl’s quiet title action.6

        Paulson first argues that the voluntary order of dismissal dismissed

Yarrow Hill’s lien foreclosure action as a whole. She contends that the voluntary

dismissal of a complaint renders the proceedings “a nullity,” and thus Yarrow Hill

could obtain a supplemental judgment only by filing a new action and serving all

lienholders of record. But the court entered the order dismissing the entire lien

foreclosure action without prejudice in error. It is clear from Yarrow Hill’s motion

that the relief they requested was to dismiss the action only as to any remaining

defendants. At the summary judgment hearing, the trial court entered an order

correcting the dismissal order nunc pro tunc to reflect the court’s intention.

“[W]here the record demonstrates that the court intended to take, and believed it

was taking, a particular action only to have that action thwarted by inartful

drafting,” it properly enters a nunc pro tunc order to reflect that intention. In re

Pers. Restraint of Hendrickson, 165 Wash. 2d 474, 479, 198 P.3d 1029 (2009).

Paulson does not challenge the trial court’s authority to do so.

        In the alternative, Paulson argues the court lacked authority to enter the

supplemental judgment. Paulson contends that once Yarrow Hill voluntarily

dismissed the remaining defendants, the judgment became a final order and

Yarrow Hill could not seek additional relief without moving to alter or vacate the

        6
          Hursey held that a foreclosure of a senior lien extinguishes junior interests only when
the foreclosure action names the holders of those interests as defendants. Hursey, 116 Wash. 2d at
526.

                                                   6
No. 80399-9-I/7

judgment pursuant to CR 59(h) or CR 60.7 But Paulson cites no Washington

authority to support this proposition. Furthermore, Yarrow Hill did not seek to

alter or amend the original judgment. Rather, Yarrow Hill sought additional

postjudgment relief—a second judgment for unpaid assessments that had

accrued since the entry of the first judgment and waiver of the redemption period

because Mino had abandoned the property since entry of the first judgment.

Neither CR 59(h) nor CR 60 would apply here.

        Finally, Paulson contends that once Yarrow Hill sought a judgment for

unpaid assessments for the years 2012, 2013, and 2014, she had a right to

notice because her 2012 judgment lien was senior in priority. But Paulson cites

no authority in support of the proposition that a foreclosing party must give notice

to lienholders who record their interest after the foreclosure action commences.

Moreover, a homeowner assessment lien’s priority date relates back to the date

the association records its CCRs. Klahanie Ass’n v. Sundance at Klahanie

Condo. Ass’n, 1 Wash. App. 2d 874, 880, 407 P.3d 1191 (2017), review denied,

190 Wash. 2d 1015, 415 P.3d 1192 (2018). “[O]nce a lien for future advances is

recorded, it takes priority over subsequently recorded liens, even where an

obligation under the lien for future advances does not in fact arise until after the

subsequent lien is recorded.” BAC Home Loans Servicing, LP v. Fulbright, 180
Wash. 2d 754, 763, 328 P.3d 895 (2014). Because Yarrow Hill recorded the CCRs

        7
          CR 59(h) authorizes the trial court to alter or amend a judgment if a motion is brought
within 10 days after entry of the judgment. Under CR 59(h), the trial court may “modify a
judgment to make it conform to the judgment intended to be entered.” Seattle-First Nat’l Bank
Connell Branch v. Treiber, 13 Wash. App. 478, 480-81, 534 P.2d 1376 (1975). CR 60 provides
several grounds for vacation of a judgment, including mistake, excusable neglect, fraud, or newly
discovered evidence.

                                                    7
No. 80399-9-I/8

in 1986, all of the delinquent assessments related back to that date and had

priority for foreclosure purposes over Paulson’s 2012 judgment against Mino.

       Because Paulson fails to establish a genuine issue of material fact to

defeat Findahl’s quiet title claim and Findahl is entitled to judgment as a matter of

law, we affirm the trial court’s summary judgment order in favor of Findahl.

WE CONCUR:

                                             8