Court Opinion

ID: 9898086
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:28:23.050078+00
Date Added: 2024-06-11T09:16:36.650906
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DEUTSCHE BANK NATIONAL TRUST
COMPANY, as Trustee for Long Beach                No. 85006-7-I
Mortgage Loan Trust 2006-4,
                                                  DIVISION ONE
                            Respondent,

              v.
                                                  UNPUBLISHED OPINION
JOHN E. ERICKSON AND SHELLEY A.
ERICKSON, individuals residing in
Washington,
                            Appellants,

BOEING EMPLOYEES' CREDIT UNION, a
Washington corporation; AMERICAN
GENERAL FINANCIAL SERVICES, INC., a
Delaware corporation; TBF FINANCIAL,
LLC, an Illinois limited-liability corporation;
JUSTIN. PARK & ROMERO PARK &
WIGGINS, PS, a Washington professional
services corporation; RANDAL
EBBERSON, an individual residing in
Washington; THE LAW FIRM OF KEATING
BUCKLIN & MCCORMICK, INC, PS, a
Washington professional services
corporation; CITY OF AUBURN,
WASHINGTON, a Washington municipality;
CHARLES JOINER, an individual residing
in Washington; PAUL KRAUSS, an
individual residing in Washington; DAN
HEID, an individual residing in Washington;
SHELLEY COLEMAN, an individual
residing in Washington; BRENDA
HEINEMAN, an individual residing in
Washington; and THE WASHINGTON
CITIES INSURANCE AUTHORITY, a
municipal organization of Washington
public entities,
                            Defendants.
No. 85006-7-I/2

 JPMORGAN CHASE BANK, N.A., a
 national banking association; LONG
 BEACH MORTGAGE LOAN TRUST, 2006-
 4; and JOHN DOES 1-99,

                  Third Party Defendants.

       SMITH, C.J. — This is the fourth appeal before this court arising from John

and Shelley Erickson’s 2009 default on their mortgage. Deutsche Bank National

Trust Company (Deutsche Bank), via its corporate assignee, executed on the

foreclosure judgment and purchased the property at a sheriff’s sale. The

Ericksons appeal the trial court’s orders confirming the sheriff’s sale and denying

reconsideration. They argue that Deutsche Bank’s corporate assignee is a

“nonparty” that lacked authority to enforce the judgment or purchase the property

as a judgment creditor. They also argue that an error in the judgment amount

upon which the sale was based requires reversal. We conclude that the

Deutsche Bank was authorized to act via its corporate assignee. But because

the sheriff’s sale was confirmed based on a substantial miscalculation of the

judgment amount, we remand to the trial court for a determination as to whether

this irregularity requires a new sale.

                                         FACTS1

       John and Shelley Erickson used their home in Auburn to secure a

$476,000 loan from Long Beach Mortgage Company. Long Beach was part of

       1We adopt the facts as set out in the opinion from the direct appeal in this
matter. Deutsche Bank Nat. Tr. Co. for Long Beach Mort. Loan Tr. 2006-4 v.
Erickson, No. 73833-0-I (Wash. Ct. App. Feb. 13, 2017) (unpublished), http://
www.courts.wa.gov/opinions/pdf/738330.pdf (Erickson II).

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No. 85006-7-I/3

Washington Mutual, Inc., until it failed. Deutsche Bank Nat. Tr. Co. for Long

Beach Mort. Loan Tr. 2006-4 v. Erickson, No. 73833-0-I, slip op. at 2 (Wash. Ct.

App. Feb. 13, 2017) (unpublished), http://www.courts.wa.gov/opinions/pdf/

738330.pdf (Erickson II). JP Morgan Chase purchased Washington Mutual’s

assets. Erickson II, slip op. at 2. Shortly after executing the loan, Long Beach

sold it into Long Beach Mortgage Loan Trust 2006-4. Id. at 2-3. Deutsche Bank

was the trustee of the Long Beach Mortgage Loan Trust. Id. at 3. J.P. Morgan

Chase later assigned its beneficial interest under the deed of trust to Deutsche

Bank. Id.

       The Ericksons defaulted on their payments in 2009. Id. The Ericksons

filed suit against Deutsche Bank in 2010, arguing the bank lacked standing to

enforce the note because it was not the original creditor and could not produce

the original note. Id. The lawsuit was removed to federal court, which held that

the defendants provided sufficient evidence to prove their ownership of the note

and dismissed the lawsuit on summary judgment. Erickson v. Long Beach

Mortg. Co., No. 10-1423 MJP, 2011 WL 830727 (W.D. Wash. Mar. 2, 2011)

(court order) (Erickson I), aff’d., 473 F. App’x. 746 (9th Cir. 2012).

       In January 2014, Deutsche Bank filed a foreclosure action in King County

Superior Court to foreclose on the Ericksons’ property. The trial court granted

Deutsche Bank’s motion for summary judgment and on August 27, 2015, entered

a judgment and decree of foreclosure against the Ericksons. This court affirmed,

concluding that Deutsche Bank held the note and that collateral estoppel

prevented the Ericksons from relitigating the issue. Erickson II, slip op. at 2.

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No. 85006-7-I/4

       In 2019, the Ericksons filed a CR 60 motion in superior court to vacate the

2015 judgment on the ground that Deutsche Bank did not hold the note and

therefore could not foreclose. Erickson v. Deutsche Bank Nat'l Tr. Co. for Long

Beach Mort. Loan Tr. 2006-4, No. 81648-9-I, slip op. at 2-3 (Wash. Ct. App. Nov.

29, 2021), http://www.courts.wa.gov/opinions/pdf/816489.pdf (Erickson III). The

trial court granted summary judgment in favor of Deutsche Bank and this court

affirmed. Erickson III, slip op. at 1.

       In 2020, the Ericksons filed suit against attorneys who represented

Deutsche Bank in Erickson II and Erickson III, arguing that they perpetrated fraud

upon the court because Deutsche Bank did not properly hold the note. Erickson

v. Power, No. 82755-3-I, slip. op. at 4 (Wash. Ct. App. April 25, 2022), http://

www.courts.wa.gov/opinions/pdf/827553.pdf (Erickson IV). The trial court

granted summary judgment for the defendants and this court affirmed. Erickson

IV, slip op. at 1.

       A sheriff’s sale of the property was held on October 14, 2022. Deutsche

Bank, via its corporate assignee, purchased the property under a credit bid in the

amount of $1,146,435.80. A sheriff’s return on sale of real property issued on

October 19, 2022 noted that the sale resulted in a deficiency of $410,423.45.

Deutsche Bank moved for confirmation of sale. The Ericksons objected. On

December 12, 2022, the trial court found that there were no substantial

irregularities in the proceedings and confirmed the sale. The Ericksons

unsuccessfully moved for reconsideration.

       The Ericksons now appeal.

                                          4
No. 85006-7-I/5

                                     ANALYSIS

                                 Standard of Review

       Confirmation of a purchase at a judicial sale is governed by RCW

6.21.110. A sheriff's sale must be confirmed unless “there were substantial

irregularities in the proceedings concerning the sale, to the probable loss or injury

of the party objecting.” RCW 6.21.110(3). “ ‘[C]onfirmation of judicial sales rests

largely within the discretion of the trial court’ and so is reviewed for manifest

abuse of such discretion.” Sixty-01 Ass'n of Apartment Owners v. Parsons, 181

Wn.2d 316, 322, 335 P.3d 933 (2014) (quoting Braman v. Kuper, 51 Wn.2d 676,

681, 321 P.2d 275 (1958)). “A trial court abuses its discretion when its decision

is based on untenable grounds or is made for untenable reasons.” Shandola v.

Henry, 198 Wn. App. 889, 896, 396 P.3d 395 (2017). We generally defer to a

sale “absent substantial irregularities or great inadequacies.” Sixty-01 Ass’n, 181

Wn.2d at 327.

                                Corporate Assignee

       The Ericksons do not challenge the validity of the August 27, 2015

judgment and decree of foreclosure entered in favor of Deutsche Bank as the

judgment creditor. Rather, they argue that the trial court erred in confirming the

sheriff’s sale because it was based on a credit bid submitted in the name of a

nonparty entity without assignment of the judgment. The Ericksons are incorrect.

       Under RCW 6.17.030, a judgment may be executed upon in the name of

an assignee. The statute provides in relevant part:

                                          5
No. 85006-7-I/6

               When a judgment recovered in any court of this state has
       been assigned, execution may issue in the name of the assignee
       after the assignment has been recorded in the execution docket by
       the clerk of the court in which the judgment was recovered.

RCW 6.17.030.

       This process was properly followed. On November 8, 2018, a Corporate

Assignment of Deed of Trust was recorded in King County. The assignment

identified the assignor as “Deutsche Bank National Trust Company, as Trustee

for Long Beach Mortgage Loan Trust 2006-4” and the assignee as “Deutsche

Bank National Trust Company, as Trustee, in Trust for Registered Holders of

Long Beach Mortgage Loan Trust 2006-4, Asset-Backed Certificates, Series

2006-4.” Based on this recorded assignment, Deutsche Bank’s corporate

assignee was authorized to execute on the foreclosure judgment and purchase

the property as a judgment creditor at the sheriff’s sale. Contrary to the

Ericksons’ claim, there is no doubt as to the identity of the purchaser and no

need to substitute parties.2 The trial court did not abuse its discretion in

confirming the sheriff’s sale or in denying reconsideration as to this issue.

                                Redemption Amount

       The Ericksons also assign error to the trial court's confirmation of the

sheriff’s sale based on “an erroneously calculated value of the underlying

       2  Deutsche Bank acknowledges that the sheriff’s return on sale of real
property appears to have left out the phrase, “In Trust for Registered Holders” in
identifying its corporate assignee as the credit bidder that purchased the
property. We agree with Deutsche Bank that this omission does not put the
identity of the purchaser in question or prejudice the Ericksons in any way.

                                          6
No. 85006-7-I/7

judgment and which created the wrong amount for redemption.”3 They contend

that the error amounts to a substantial irregularity that warrants overturning the

sale. For the first time on appeal, Deutsche Bank acknowledges that there was

an apparent error in the amount of prejudgment interest calculated under the

accepted bid, and that as a result, the Ericksons were notified that the amount

required to redeem the property was $141,712.13 higher than it should have

been. On August 30, 2023, in an effort to correct the error, Deutsche Bank filed

an amended “Notice of Expiration of Redemption Period” in superior court that

reflects a reduced redemption amount. Deutsche Bank asserts that this

correction maintained the rights of all parties and that no further action is

necessary. In reply, the Ericksons argue that the miscalculation amounts to a

substantial irregularity that created an excessive deficiency and reduced the time

for them to exercise their redemption rights. They assert that the error requires

reversal and remand to the superior court with instructions to set aside the order

confirming sale.

       Chapter 6.23 RCW governs the statutory redemption of real property sold

at a sheriff's sale. The judgment debtor or their successor may redeem the

property from the purchaser within one year after the date of the sale. RCW

6.23.020(1)(b); Performance Constr. v. Glenn, 195 Wn. App. 406, 409, 380 P.3d

618 (2016). If no redemption is made within the one-year redemption period, the

       3  Although not entirely clear, it appears that the Ericksons raised this
issue for the first time in their motion for reconsideration.

                                          7
No. 85006-7-I/8

purchaser is entitled to a sheriff's deed. RCW 6.23.060; Performance, 195 Wn.

App. at 418.

       Here, the one-year statutory redemption period commenced when the

property was sold on October 14, 2022. As Deutsche Bank now acknowledges,

the Notice of Expiration of Redemption Period affirmatively misinformed the

Ericksons that the amount required to redeem the property was $141,712.13

higher than it should have been.4 Deutsche Bank asserts that the amended

notice cured the error but, as the Ericksons point out, it was filed only six weeks

before the one-year redemption period expired on October 14, 2023.

       Based on the record before us, it is unclear if the trial court considered

whether the miscalculation amounted to a “substantial irregularit[y]” that resulted

in “probable loss or injury” to the Ericksons. See RCW 6.21.110(3). Although

the matter was raised in the motion to reconsider, and the court indicated that

there was no basis for reconsideration, it failed to specifically address this new

issue raised. Nor has the trial court had an opportunity to address whether the

amended Notice of Expiration of Redemption Period cured the error.

       We therefore remand to the trial court to enter findings of fact, conclusions

of law, and an order addressing these matters. Specifically, the court should

consider (1) the basis and amount of the miscalculation, (2) whether the

amended notice cured the error, and (3) whether a new sale is required on the

ground that the miscalculation amounted to a “substantial irregularit[y] in the

       4 We also note that neither the original nor the amended Notice of
Expiration of Redemption Period includes the sheriff’s address, as
RCW 6.23.030(3) requires.

                                          8
No. 85006-7-I/9

proceedings concerning the sale, to the probable loss or injury of the party

objecting.” RCW 6.21.110(3).

      Remanded.

WE CONCUR:

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