Court Opinion

ID: 4716270
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:45:09.187192+00
Date Added: 2024-06-11T08:07:27.914581
License: Public Domain

Stephens, J.
¶45 (dissenting) I respectfully dissent because the majority erroneously equates the entry provisions at issue with actual possession. Months after Laura Jordan defaulted on her loan, Nationstar Mortgage LLC inspected Jordan’s property and determined that it was vacant. Pursuant to the deed of trust’s entry provisions, Nationstar secured the home by changing the lock to the front door and posted instructions on how Jordan could enter the home if she returned. This practice is not inconsistent with Washington’s lien theory of mortgages and RCW 7.28.230(1). Accordingly, the first certified question should be answered in the affirmative.
¶46 “Washington courts have hesitated to ‘invoke public policy to limit or avoid express contract terms absent legislative action.’” Brown v. Snohomish County Physicians Corp., 120 Wn.2d 747, 753, 845 P.2d 334 (1993) (quoting State Farm Gen. Ins. Co. v. Emerson, 102 Wn.2d 477, 481, 687 P.2d 1139 (1984)). It is undisputed that the deed of *895trust’s entry provisions were contractually agreed to and authorized Nationstar to change the locks on Jordan’s home after default. And as the majority correctly notes, Washington’s legislature has not “specifically invalidate [d] such contrary agreements in its codification of hen theory prohibiting the lender from taking possession of property before foreclosure.” Majority at 886.
¶47 The majority nevertheless finds the entry provisions contravene Washington’s rule against lenders taking pre-foreclosure possession of borrowers’ property. The majority does so by describing the entry provisions as authorizing the lender to take “possession.” Id. at 884-85, 888. But the certified question asks not whether lenders can take “possession” of property before foreclosure. Instead, it asks whether the lender can “enter, maintain, and secure the encumbered property” before foreclosure. Order Certifying Questions to Wash. Supreme Court, Jordan v. Nationstar Mortg., LLC, No. 2:14-CV-0175-TOR at 9 (E.D. Wash. Aug. 10, 2015). Absent legislation stating otherwise, the entry provisions at issue are not inconsistent with Washington’s lien theory of mortgages and RCW 7.28.230(1).
¶48 The majority cites inapposite authority to equate the entry provisions with actual possession. At the outset, the majority’s reliance on the Restatement is misplaced. Restatement (Third) of Prop: Mortgages § 4.1 (Am. Law. Inst. 1997). The Restatement does not contemplate entry provisions, like those considered here, but rather a lender taking possession. The Restatement merely reiterates the general rule against accelerated preforeclosure possession of property. In illustrative applications of this rule, the Restatement examines instances where the mortgagee has “file [d] an action to obtain possession of [the property].” Id. cmt. b, illus. 1-3. Here, however, Nationstar has not filed an action to obtain possession of Jordan’s property. Instead, after Jordan defaulted on her loan, Nationstar took contractually authorized steps to secure the abandoned property—and it *896posted instructions on how Jordan could access the property, consistent with her continued right of possession.
¶49 Neither of the two Court of Appeals decisions cited by the majority support equating the entry provisions to possession. Aldrich v. Olson does not even interpret “possession” in RCW 7.28.230(1). 12 Wn. App. 665, 531 P.2d 825 (1975). And Coleman v. Hoffman merely clarifies the difference between the right to possession (applicable to foreclosure actions) and actual possession (applicable to premises liability matters): “Although RCW 7.28.230 effectively precludes a mortgagee from obtaining possession of property to the mortgagor’s exclusion, the statute does not bear on the question of whether a mortgagee actually possesses the property. Actual possession, not a right to possession, is the critical inquiry in premises liability cases.” 115 Wn. App. 853, 863-64, 64 P.3d 65 (2003). But unlike the landlords in Aldrich and Coleman, Nationstar never possessed the property to Jordan’s exclusion. Rather, Nationstar provided Jordan with instructions on how to enter her home if she returned. At no point did Nationstar ever object to Jordan’s continued right to possession before foreclosure.
¶50 Finally, even if we regarded the entry provisions as interfering with Jordan’s right to possession, Nationstar was nevertheless justified in securing Jordan’s abandoned property. The Restatement recognizes three exceptions to the general rule that mortgagees cannot obtain possession of the mortgagor’s property before foreclosure: (1) mortgagor consent, (2) mortgagee’s possession as the result of peaceful entry in good faith after purchasing the property at a void or voidable foreclosure sale, and (3) mortgagor abandonment. Restatement § 4.1 cmt. c. Here, the evidence supported Nationstar securing Jordan’s home under the mortgagor abandonment exception. Months after Jordan defaulted on her loan, Nationstar inspected Jordan’s property and determined that it was vacant. Nationstar then changed the locks, which it was allowed to do under the *897entry provisions in order to secure the property. Cf. PNC Bank, NA v. Van Hoornaar, 44 F. Supp. 3d 846, 856-57 (E.D. Wis. 2014) (dismissing trespass claim against lender for changing a homeowner’s locks upon default because the mortgage agreement authorizing the lender to secure the premises upon default or abandonment created an implied consent to entry); see also Tennant v. Chase Home Fin., LLC, 187 So. 3d 1172, 1181-82 (Ala. Civ. App. 2015). Moreover, public policy considerations support Nationstar securing Jordan’s abandoned property: “Not only is it important to protect the [property] against the elements and vandalism, but society is benefited by [the property’s] productive use.” Restatement § 4.1 cmt. c.
¶51 Pursuant to entry agreements like the one mutually agreed on by Nationstar and Jordan, a lender may “enter, maintain, and secure” seemingly abandoned property before foreclosure without taking “possession” of it. Because the first certified question should be answered in the affirmative, I dissent.
Madsen, C.J., and Gordon McCloud, J., concur with Stephens, J.
Reconsideration denied August 29, 2016.