Court Opinion

ID: 4342851
Source: CourtListenerOpinion
Date Created: 2018-11-19 19:25:18.57111+00
Date Added: 2024-06-11T14:21:38.812925
License: Public Domain

FILED
                                                               COURT OF APPEALS DIV
                                                                STATE OF WASHINGTON
                                                               2018 NOV 19 AM 9:05

       IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

VALENTINA POLETAYEVA,          )
                                )                No. 77353-4-1
               Appellant,       )
                                )                DIVISION ONE
          v.                    )
                                )
SPECIALIZED LOAN SERVICES, LLC,t)
                                         )
                     Defendant/          )
                     Counterclaim        )       UNPUBLISHED OPINION
                     Plaintiff,          )
                                         )       FILED: November 19, 2018
KAREN GIBBON, Trustee,                   )
                                         )
                     Defendant.          )
                                         )

      SMITH, J. —Valentina Poletayeva appeals the trial court's summary

judgment of fpreclosure. Because Poletayeva did not raise a genuine issue of

material fact regarding the existence of a default and because New Penn

Financial LLC is otherwise entitled to foreclose, we affirm.

                                      FACTS

      On April 19, 2007, Poletayeva executed a promissory note in the amount

of $550,000 in favor of Countrywide Home Loans Inc. Countrywide endorsed the

        t Specialized Loan Services LLC (SLS), the original defendant and
counterclaim plaintiff in this case, was replaced by New Penn Financial LLC,
d/b/a SheIlpoint Mortgage Services, below. The case caption was not updated to
reflect this substitution.
No. 77353-4-1/2

note in blank. The note is secured by a deed of trust encumbering a

condominium located at 819 Virginia Street, Unit 1404, in Seattle.

       On or about April 23, 2009, Poletayeva and Countrywide entered into a

loan modification agreement that reduced the interest rate and the amount of

Poletayeva's monthly payments under the note.1 Poletayeva made three

payments pursuant to the loan modification. She alleges that after these three

payments, Bank of America, which had by then acquired the underlying loan,

notified her that the interest rate on the loan was still the original 12.25 percent

and that the payments she made based on the loan modification were

insufficient. Poletayeva then engaged, unsuccessfully, in efforts to obtain

another loan modification from Bank of America.

       In 2011, the deed of trust was assigned to the Bank of New York Mellon

(BNYM), as the trustee for the certificate holders of the "CWABS, Inc., Asset-

Backed Certificates, Series 2007-8." Clerk's Papers at 79. On or about May 13,

2012, BNYM,through its servicing agent, SLS, sent notice to Poletayeva

regarding default and acceleration under the note and the deed of trust based on

Poletayeva's failure to make monthly payments when due. Poletayeva

attempted, unsuccessfully, to obtain a loan modification from SLS.

       In October 2015, Poletayeva filed suit against SLS in advance of a

trustee's sale of the condo, scheduled for October 9, 2015. SLS, in its capacity

       1 The record does not contain a fully executed copy of the loan
modification agreement; the copies provided in the record are only executed by
Poletayeva. But, New Penn does not dispute that the loan modification
agreement went into effect.
                                          2
No. 77353-4-1/3

as servicing agent on behalf of BNYM, counterclaimed for judicial foreclosure.2

On June 23, 2017, SLS filed a motion for summary judgment on its counterclaim,

requesting that the trial court enter a judgment of foreclosure and order the sale

of the condo.

       Poletayeva did not file a response to SLS's motion for summary judgment.

At the initial hearing on the motion, Poletayeva's counsel requested a

continuance. The trial court agreed to continue the hearing to August 4, 2017,

but imposed sanctions on Poletayeva's counsel. The trial court also ordered

Poletayeva to file any response by July 28, 2017, and SLS to file any reply by

August 2, 2017.

       Poletayeva did not file a timely response. But on August 1,2017,

Poletayeva filed two declarations (her own declaration and the declaration of her

counsel) in opposition to SLS's motion for summary judgment.

       Meanwhile, SLS separately moved to substitute New Penn as the

defendant and counterclaim plaintiff in the action, explaining that on or about

December 1, 2016, BNYM had transferred the underlying loan from SLS to New

Penn. Poletayeva did not file a response to the motion to substitute.

      The trial court granted the motion to substitute on August 4, 2017,

dismissing SLS and substituting New Penn as the defendant and counterclaim

plaintiff. And on August 8, 2017, the trial court entered an order granting the

motion for summary judgment and ordering the sale of the condo.

       2 Poletayeva did not designate a copy of her complaint or the counterclaim
complaint as required by RAP 9.6(b)(1)(C). But we have a sufficient record to
decide this case.
                                         3
No. 77353-4-1/4

       Poletayeva appeals.

                                     ANALYSIS

                        Summary Judgment of Foreclosure

A. Standard of Review

       We review summary judgment orders de novo, viewing all evidence and

reasonable inferences in the light most favorable to the nonmoving party. Keck

v. Collins, 184 Wn.2d 358, 370, 357 P.3d 1080(2015). "[S]ummary judgment is

appropriate where there is `no genuine issue as to any material fact and . . . the

moving party is entitled to a judgment as a matter of law." Elcon Const., Inc. v.

E. Wash. Univ., 174 Wn.2d 157, 164, 273 P.3d 965(2012)(second alteration in

original)(quoting CR 56(c)). Once the moving party shows there are no genuine

issues of material fact, the nonmoving party must bring forth specific facts to

rebut the moving party's contentions. Elcon Const., Inc., 174 Wn.2d at 169.

"The nonmoving party may not rely on speculation, argumentative assertions, 'or

in having its affidavits considered at face value; for after the moving party

submits adequate affidavits, the nonmoving party must set forth specific facts

that sufficiently rebut the moving party's contentions and disclose that a genuine

issue as to a material fact exists." Becker v. Wash. State Univ., 165 Wn. App.

235, 245-46, 266 P.3d 893(2011)(quoting Seven Gables Corp. v. MGM/UA

Entm't Co., 106 Wn.2d 1, 13, 721 P.2d 1(1986)). "A material fact is one upon

which the outcome of the litigation depends." Baldwin v. Silver, 165 Wn. App.

463, 472, 269 P.3d 284(2011)(quoting Vacova Co. v. Farrell, 62 Wn. App. 386,

395, 814 P.2d 255 (1991)).

                                          4
No. 77353-4-1/5

B. New Penn's Right To Foreclose

       The "holder" of a promissory note secured by a deed of trust is authorized

to judicially foreclose the deed of trust following a default under the promissory

note. RCW 61.24.005(2)(defining "beneficiary" of deed of trust as "the holder of

the instrument or document evidencing the obligations secured by the deed of

trust."); 18 WILLIAM B. STOEBUCK & JOHN W.WEAVER,WASHINGTON PRACTICE,

REAL ESTATE: TRANSACTIONS § 20.19, at 437(2d ed. 2004)("Washington's deed

of trust act gives the beneficiary an election to foreclose judicially."); see also

Deutsche Bank Nat'l Trust Co. v. Slotke, 192 Wn. App. 166, 168, 367 P.3d 600

("The holder of a promissory note secured by a deed of trust has authority to

elect to commence a judicial foreclosure of that deed of trust"), review denied,

185 Wn.2d 1037 (2016). The "holder" of a note that is endorsed in blank is the

person in possession of the note. RCW 62A.3-205(b)(note endorsed in blank is

payable to bearer); RCW 62A.1-201(b)(21)(A)("holder" of a note includes the

person in possession of a note payable to bearer). Constructive possession is

sufficient to make one the "holder" of a note. RCW 62A.3-201 cmt. 1 (a holder

can possess "directly or through an agent"); Gleeson v. Lichty, 62 Wash.656,

659,114 P.518(1911)("But, if we assume that the note was not in his actual

possession, it was clearly under his control, and therefore constructively in his

possession"); Barkley v. GreenPoint Mortg. Funding, Inc., 190 Wn. App. 58, 69,

358 P.3d 1204(2015)(bank was holder of note through its agent), review denied,

184 Wn.2d 1036 (2016).

                                           5
No. 77353-4-1/6

       Here, it is undisputed that Poletayeva executed the note and that the deed

of trust on the condo secures Poletayeva's obligations under the note. It is also

undisputed that the note is endorsed in blank. Additionally, New Penn submitted

an affidavit in support of the motion for summary judgment, stating that its

counsel is in possession of the note on New Penn's behalf. In short, New Penn

established that it is the "holder" of the note and therefore entitled to judicially

foreclose the deed of trust in the event of a default under the note.3 To this end,

New Penn also established via affidavit that in September 2009, a default

occurred under the note when Poletayeva failed to make the regular installment

payment due in September, and all subsequent payments thereafter.

       Because New Penn established that there were no genuine issues of

material fact regarding its entitlement to foreclose, Poletayeva was required to

"set forth specific facts rebutting [New Penn's] contentions" to defeat summary

judgment. Elcon Const., 174 Wn.2d at 169. As further discussed below,

Poletayeva failed to do so, and therefore summary judgment was proper.

       As an initial matter, Poletayeva argues that the trial court erred by failing

to consider her untimely declaration filed in opposition to the motion for summary

judgment. We disagree. The trial court specifically observed that "[Poletayeva's]

       3 Poletayeva's first  assignment of error suggests that she takes issue with
the trial court's order substituting New Penn as the defendant and counterclaim
plaintiff, and dismissing SLS. We decline to consider this issue, for which
Poletayeva provided no argument. Holland v. City of Tacoma, 90 Wn. App. 533,
538, 954 P.2d 290(1998)("Passing treatment of an issue or lack of reasoned
argument is insufficient to merit judicial consideration.")(citing State v. Johnson,
119 Wn.2d 167, 171, 829 P.2d 1082 (1992)). In any event, as discussed herein,
New Penn demonstrated that it was the holder of the note and entitled to
foreclose.
                                           6
No. 77353-4-1/7

declaration is interesting, but it has nothing to refute anything that is before the

Court." Report of Proceedings(RP)(August 4, 2017) at 22. The trial court also

observed that Poletayeva's declaration "cites to no law." RP (August 4, 2017) at

22. These statements make it apparent that despite its being untimely filed,

Poletayeva's declaration was considered by the trial court in ruling on summary

judgment.

       Poletayeva next argues that the trial court failed to take into account the

facts that she presented—namely that Poletayeva's default was caused by

Countrywide and its successor, Bank of America, when they notified her after the

loan modification that her interest rate was still 12.25 percent. But Poletayeva's

assertions do not raise any issue of material fact on which the instant litigation—

regarding New Penn's right to foreclose—depends. Specifically, Poletayeva has

brought forth no specific facts to rebut New Penn's assertions that it is the holder

of the note and that Poletayeva defaulted thereunder. Indeed, Poletayeva

acknowledges in her briefing that a default occurred. Finally, Poletayeva cites no

authority for her apparent assertion that New Penn is not entitled to foreclose

where an undisputed default exists under the terms of the note, but the borrower

alleges that the default was caused by the acts of a nonparty. See Mann v. King

County, 194 Wn. App. 795, 819-20, 378 P.3d 203(absent supporting argument

and citations to authority, an argument is deemed waived), review denied, 186

Wn.2d 1028 (2016). Accordingly, summary judgment was proper.

                                          7
No. 77353-4-1/8

                           New Penn's Request for Costs

       New Penn requests costs on appeal. New Penn's request for costs

should be directed to the commissioner or court clerk pursuant to RAP 14.2,

which provides: "A commissioner or clerk of the appellate court will award costs

to the party that substantially prevails on review, unless the appellate court

directs otherwise in its decision terminating review."

       As a final matter, this court is in receipt of a letter from Poletayeva dated

October 17, 2018, in which Poletayeva requests that this court "deny the

[respondent] the grant of attorney's fees, since it will be an unbearable financial

burden." But New Penn did not request attorney fees on appeal, and none are

awarded (other than statutory attorney fees that the clerk or commissioner may

award as costs under RAP 14.3(a)).5 Accordingly, we need not reach the merits

of Poletayeva's request.

       Affirmed.

WE CONCUR:
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       4 The letter was served on New Penn.
      5 Cf. Stiles v. Kearney, 168 Wn. App. 250, 267, 277 P.3d 9(2012)(party
requesting fees on appeal must provide argument and citation to authority to
advise the court of the appropriate grounds for an award of attorney fees).
                                          8