Court Opinion

ID: 4266578
Source: CourtListenerOpinion
Date Created: 2018-04-23 21:54:42.732012+00
Date Added: 2024-06-11T14:31:14.987840
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

RAJBIR SINGH, as his separate estate,)           No. 76227-3-1
                                     )
                  Appellant,         )
                                     )           DIVISION ONE
                  v.                 )
                                     )
FEDERAL NATIONAL MORTGAGE            )
ASSOCIATION, an association,         )
QUALITY LOAN SERVICE CORP., a )
Washington Corporation,              )
NATIONSTAR MORTGAGE LLC.,            )           UNPUBLISHED OPINION
                                     )
                  Respondents.       )           FILED: April 23, 2018
                                     )

       MANN, A.C.J. — Rajbir Singh's home was nonjudicially foreclosed on after he

defaulted on his mortgage. Singh sued (1) the buyer at the trustee's sale, Federal

National Mortgage Association (Fannie Mae),(2) the trustee, Quality Loan Service

Corporation of Washington (Quality), and (3)the beneficiary of the deed of trust,

Nationstar Mortgage, LLC (Nationstar). He alleged that the defendants violated the

Washington's "Deed of Trust Act"(DTA), chapter 61.24 RCW,and the Consumer

Protection Act(CPA), chapter 19.86 RCW. Singh appeals the trial court's decision

granting the defendants' motion to dismiss for failure to state a claim upon which relief

can be granted. We affirm.
No. 76227-3-1/2

                                         FACTS

       In 2007, Singh purchased a home and property at 4925 S. 181st Place, in Sea-

Tac. In 2010, Singh borrowed $266,300.00 from Bank of America, N.A., and secured

the note with a deed of trust encumbering the property. Bank of America assigned its

beneficial interest to Nationstar. After Singh defaulted on the note, on January 7, 2016,

Quality recorded a notice of trustee's sale in King County. A sale date was set for May

6, 2016, and Nationstar was identified as the beneficiary of the deed of trust.

       Singh filed a voluntary petition for bankruptcy under Chapter 13 of the U.S.

Bankruptcy code on May 5, 2016—the day before the property was scheduled to be

sold. The next day, Quality continued the trustee's sale to June 3, 2016. On May 25,

2016, Singh's bankruptcy petition was dismissed. On June 2, Quality continued the

trustee's sale a second time to July 1, 2016. The sale went forward on July 1,2016,

and Fannie Mae was the successful bidder.

       After the trustee's sale, Singh sued Fannie Mae, Quality,'and Nationstar. He

alleged that the defendants violated the DTA and the CPA. Fannie Mae and Nationstar

moved to dismiss Singh's complaint under CR 12(b)(6) and submitted additional

documents in support of their motion. Quality also moved to dismiss Singh's complaint

and submitted additional documents in support of its motion.

       The court denied Singh's motion for summary judgment and granted the

defendants' motions to dismiss. Singh appeals.

                                        ANALYSIS

       Fannie Mae, Nationstar, and Quality filed their motion to dismiss under CR

12(b)(6). A CR 12(b) motion challenges the legal sufficiency of the allegations in the

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No. 76227-3-1/3

complaint. Contreras v. Crown Zellerback Corp., 88 Wash. 2d 735, 742, 565 P.2d 1173

(1977). A court should grant a CR 12(b)(6) motion to dismiss for failure to state a claim

only if the plaintiff cannot prove any set of facts that would justify recovery. Bavand v.

OneWest Bank, F.S.B., 176 Wn. App. 475,485, 309 P.3d 636(2013). We review a

ruling on a motion to dismiss de novo. McAfee v. Select Portfolio Servicing, Inc., 193
Wash. App. 220, 226, 370 P.3d 25 (2016).

       When a party submits documents that were not contained in the original

complaint for consideration by the court in assessing a CR 12(b)(6) motion, those

submissions generally convert the motion to dismiss into a motion for summary

judgment under CR 56. McAfee, 193 Wash. App. at 226. Because the defendants

submitted documents in support of their motions to dismiss, the submissions converted

the motions to dismiss to motions for summary judgment.

      "We review summary judgment orders de novo, considering the evidence and all

reasonable inferences from the evidence in the light most favorable to the nonmoving

party." Keck v. Collins, 184 Wash. 2d 358, 370, 357 P.3d 1080(2015). Summary

judgment is appropriate where there is no genuine issue of material fact and the moving

party is entitled to judgment as a matter of law. CR 56(c); Young v. Key

Pharmaceuticals Inc., 112 Wash. 2d 216, 225, 770 P.2d 182(1989).

                                     Deed of Trust Act

       Singh first argues that the trustee's sale was void as a matter of law because it

violated the requirement in the DTA requiring new sales to be scheduled no less than

45 days after the order dismissing Singh's bankruptcy petition was issued. We

disagree.

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No. 76227-3-1/4

       Singh is correct that RCW 61.24.130(4) provides that, where a sale has been

stayed by a bankruptcy petition, upon dismissal of the petition, if the trustee chooses to

set a new sale date, the new sale must be at least 45 days after the bankruptcy

dismissal:

      If a trustee's sale has been stayed as a result of the filing of a petition in
      federal bankruptcy court and an order is entered in federal bankruptcy
      court granting relief from the stay or closing or dismissing the case, or
      discharging the debtor with the effect of removing the stay, the trustee
      may set a new sale date which shall not be less than forty-five days after
      the date of the bankruptcy court's order.

RCW 61.24.130(4)(emphasis added).

       But, RCW 61.24.130(4) does not apply where a previously noticed sale has been

properly continued. RCW 61.24.130(5) provides that RCW 61.24.130(3) is "permissive

only and do[es] not prohibit the trustee from proceeding with a trustee's sale following

termination of any injunction or sale on any date to which such sale has been properly

continued in accordance with RCW 61.24.040(6)." Under RCW 61.24.040(6), a trustee

is allowed to continue a previously noticed sale for a period not exceeding 120 days.

Because Quality initially recorded a notice of sale set for May 6, 2016, and then

continued that sale to June 3,2016, and then July 1, 2016, the sale date complied with

RCW 61.24.040(6) and thus the 45-day period for setting a new sale in RCW

61.24.130(4) was not applicable. Although the sale occurred 37 days after Singh's

bankruptcy petition was dismissed, it did not violate RCW 61.24.130(4).

                                       Continuance

       Singh also argues that Quality's sale continuance violated the automatic stay.

We disagree.

                                          -4-
No. 76227-3-1/5

      When a bankruptcy petitioner files a petition for bankruptcy, the petitioner's

property becomes the property of the bankruptcy estate. 11 U.S.C.§ 541(a). An

automatic stay is imposed on proceedings to obtain possession of the property of the

estate. 11 U.S.C. § 362(a).

      In In the Matter of Roach,660 F.2d 1316, 1318 (9th Cir. 1981), the Ninth Circuit

held that the automatic stay provisions in 11 U.S.C. § 362 were not violated by a bank's

continuation of the foreclosure sale to a new sale date. In Roach, the borrower filed for

bankruptcy on the day that his property was to be sold at a trustee's sale. 660 F.2d at

1317. During the bankruptcy stay, the bank published a notice postponing the sale.

Roach,660 F.2d at 1317. The Roach court reasoned that because the bank maintained

the status quo and did not harass, interfere with, or gain any advantage over Roach by

postponing the sale, the postponement notice did not violate the automatic stay.

Roach,660 F.2d at 1318-19.

       Here, Quality did not violate the automatic stay by mailing Singh a notice of

postponement and postponing the trustee's sale to June 3, 2016. Continuing the sale

did not violate the stay because "[p]ostponement notices which specify a new sale date

do not violate 11 U.S.C. § 362." Roach,660 F.2d at 1318.

                                Consumer Protection Act

      Singh argues that the court erred by dismissing his CPA claim. Singh maintains

that he can establish a CPA claim because the defendants committed a per se violation

of the DTA.

      To prevail on a CPA claim, the plaintiff must prove an "(1) unfair or deceptive act

or practice;(2) occurring in trade or commerce;(3) public interest impact;(4) injury to

                                         -5-
No. 76227-3-1/6

plaintiff in his or her business or property;(5) causation." Klem V. Washington Mut.

Bank, 176 Wash. 2d 771, 782, 295 P.3d 1179 (2013). A CPA claim may be predicated

upon a per se violation of statute. Klem, 176 Wash. 2d at 787.

      Here, Singh fails to establish a CPA claim because he cannot show that these

defendants violated the DTA.

      Affirmed.

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WE CONCUR:

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