Court Opinion

ID: 2734196
Source: CourtListenerOpinion
Date Created: 2014-09-18 16:12:14.726736+00
Date Added: 2024-06-11T12:16:17.367956
License: Public Domain

IN CLEitKI OFFICE
 ..,._COURT, 8'f.ln OF WASHINGTON

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         JUS

 IN THE SUPREME COURT OF THE STATE OF WASHINGTON

 CERTIFICATION FROM THE         )
 UNITED STATES DISTRICT         )
 COURT FOR THE WESTERN          )
 DISTRICT OF WASHINGTON         )
           IN                   )
                                )
 FLORENCE R. FRIAS,             )                  No. 89343-8
                                )
                 Plaintiff,     )                  ENBANC
                                )
           v.                   )                  Filed:        SEP 1 8 2014
                                )
 ASSET FORECLOSURE              )
 SERVICES, INC.; LSI TITLE      )
 AGENCY, INC.; U.S. BANK, N.A.; )
 MORTGAGE ELECTRONIC            )
 REGISTRATION SYSTEMS, INC.; )
 and DOE DEFENDANTS 1-20,       )
                                )
                 Defendants.    )
 _______________________)
         FAIRHURST, J.-We have been asked by the United States District Court for

 the Western District of Washington to determine whether state law recognizes a

 cause of action for monetary damages where a plaintiff alleges violations of the

 deeds of trust act (DTA), chapter 61.24 RCW, but no foreclosure sale has been
Frias v. Asset Foreclosure, Inc., No. 89343-8

completed. We are also asked to articulate the principles that would apply to such a

claim under the DTA and the Consumer Protection Act (CPA), chapter 19.86 RCW.

       We hold that the DTA does not create an independent cause of action for

monetary damages based on alleged violations of its provisions where no foreclosure

sale has been completed. The answer to the first certified question is no-at least not

pursuant to the DTA itself. We further hold that under appropriate factual

circumstances, DTA violations may be actionable under the CPA, even where no

foreclosure sale has been completed. The answer to the second certified question is

that the same principles that govern CPA claims generally apply to CPA claims

based on alleged DTA violations.

                     I.      FACTUAL AND PROCEDURAL HISTORY

       In September 2008, plaintiff Florence R. Frias entered a promissory note

secured by a deed of trust encumbering real property in Marysville, Washington.

Defendant U.S. Bank National Association was identified on the note and deed of

trust as the lender, and defendant Mortgage Electronic Registration Systems Inc.

was identified as the beneficiary on the deed of trust. Frias eventually defaulted on

her payments and attempted to contact representatives from U.S. Bank to obtain a

loan modification. While Frias was waiting for a response from U.S. Bank, she

received a notice of default followed by a notice of trustee's sale. Frias continued

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Frias v. Asset Foreclosure, Inc., No. 89343-8

working towards a loan modification, and the trustee's foreclosure sale was

voluntarily discontinued.

        Frias received another notice of trustee's sale in May 2011, which relied on

the prior notice of default. The notice of trustee's sale included an itemization of the

fees Frias needed to pay to stop the sale, including an auctioneer fee, a bankruptcy

check fee, an assignment recording fee, and a fee for the anticipated cost of recording

a trustee's deed following the trustee's sale, all of which Frias alleges are, at best,

unreasonable in amount and, at worst, simply illegal.

        Approximately 90 days later, in July 2011, Frias received a loan modification

offer from U.S. Bank. Frias alleges the modification offer was unworkable because

it required her to devote more than half of her gross income to her monthly mortgage

payments. The May 2011 notice of trustee's sale did not indicate the sale would be

delayed to accommodate Frias' efforts at loan modification, and the sale was not

discontinued or postponed after U.S. Bank made its July 2011 modification offer.

        In August 2011, Frias contacted a housing counselor in an attempt to

participate in mediation pursuant to the Washington foreclosure fairness act. LAws

OF   2011, ch. 58. Frias' case was referred to the appropriate agency and a mediator

was appointed. At the scheduled mediation session, Frias appeared, but no one

appeared on behalf of the beneficiary. The mediation was rescheduled and U.S.

Bank's attorney confirmed the foreclosure sale would be stayed pending mediation.

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Frias v. Asset Foreclosure, Inc., No. 89343-8

       At the second scheduled mediation session, Frias learned the sale had gone

forward as originally scheduled-after the first scheduled mediation session but

before the second. U.S. Bank was the successful bidder, but the sale was not

completed because the deed to the property was not issued. A third mediation session

was scheduled to give U.S. Bank time to reverse the wrongful foreclosure sale and

produce the required documentation. At that third session, U.S. Bank still did not

have all its required documentation and refused to consider modifying Frias' loan.

The mediator determined U.S. Bank had not participated in mediation in good faith.

       Frias claims she is now uncertain of her status-she still has title to her home

but has not entered a loan modification agreement and has not made any payments

on her promissory note since mediation, though she would like to. Frias alleges this

uncertainty has caused her emotional distress accompanied by physical symptoms.

       Frias filed a summons and complaint in Snohomish County Superior Court.

She named a cause of action against all defendants under the CPA, alleging that U.S.

Bank refused to mediate in good faith in violation of the DTA, that various

defendants made numerous misrepresentations to her, that defendants Asset

Foreclosure Services Inc. and LSI Title Agency Inc. do not have legal authority to

act as foreclosing trustees in Washington, and that the defendants falsely inflated the

costs of the improper foreclosure sale for their own profit. Frias also named a cause

of action for violations of the DTA against Asset Foreclosure and LSI as purported

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Frias v. Asset Foreclosure, Inc., No. 89343-8

trustees. Frias alleges these defendants violated their duties of good faith by

initiating the foreclosure sale when they did not have legal authority to act as trustees

and when they made demands for unreasonable payments not permitted by the DTA.

       The matter was removed to the United States District Court for the Western

District of Washington, and all defendants successfully moved for dismissal under

Fed. R. Civ. P. 12(b)(6). As to the CPA claim, the federal court held Frias failed to

allege any compensable injury because her property had not been sold and she had

not paid any foreclosure fees. As to the DTA claim, the federal court held Frias could

not state a cause of action under the DTA because no foreclosure sale had occurred.

These holdings are consistent with prior western district decisions. E.g., Vawter v.

Quality Loan Serv. Corp. of Wash., 707 F. Supp. 2d 1115, 1123-24, 1129-30 (2010).

       Frias moved for reconsideration. While her motion was pending, Division

One of the Court of Appeals held in a published opinion that Washington law

recognizes a cause of action for monetary damages under both the DTA and CPA

for alleged DTA violations, even if no foreclosure sale has been completed. Walker

v. Quality Loan Serv. Corp., 176 Wash. App. 294, 313, 320, 308 P.3d 716 (2013). In

light of Walker, the federal court refrained from ruling on Frias' motion for

reconsideration and instead certified two questions to this court.

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Frias v. Asset Foreclosure, Inc., No. 89343-8

                    II.    CERTIFIED QUESTIONS PRESENTED

       1.     Under Washington law, may a plaintiff state a claim for damages
       relating to breach of duties under the [DTA] and/or failure to adhere to
       the statutory requirements of the [DTA] in the absence of a completed
       trustee's sale of real property?

       2.     If a plaintiff may state a claim for damages prior to a trustee's
       sale of real property, what principles govern his or her claim under the
       [CPA] and the [DTA]?

Order Certifying Questions to the Wash. Supreme Ct. at 3.

                            III.    STANDARD OF REVIEW

       Certified questions are matters of law we review de novo. Carlsen v. Global

Client Solutions, LLC, 171 Wash. 2d 486, 493, 256 P.3d 321 (2011). We consider the

questions presented in light of the record certified by the federal court. I d. Because

the federal court certified these questions in connection with a motion for dismissal

for failure to state a claim on which relief may be granted pursuant to Fed. R. Civ.

P. 12(b)(6), all facts alleged in the complaint are accepted as true. Bell At!. Corp. v.

Twombly, 550 U.S. 544, 555-56, 127 S. Ct. 1955, 167 L. Ed. 2d 929 (2007).

                                     IV.        ANALYSIS

       In light of the submissions made in this case, we must first specify the scope

and nature of our analysis. We then analyze whether the DTA implies a cause of

action for damages premised on DTA violations absent a completed foreclosure sale,

and we conclude it does not. Finally, we hold that the ordinary principles governing

CPA claims generally apply to CPA claims premised on alleged DTA violations.

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Frias v. Asset Foreclosure, Inc., No. 89343-8

A.     Our analysis is one of statutory construction, and we decline to consider
       submissions that make factual assertions and public policy arguments

       As a preliminary matter, we must address submissions by some parties and

amici that make factual assertions and policy arguments. In matters of statutory

construction, we are tasked with discerning what the law is, not what it should be.

We are in no position to analyze the large-scale impacts of accepting or rejecting

Frias' position. Bain v. Metro. Mortg. Grp., Inc., 175 Wash. 2d 83, 109, 285 P.3d 34

(2012) ("The legislature, not this court, is in the best position to assess policy

considerations."). And because this case is before us on certified questions from the

federal court, our decision will be made on the certified record. RCW 2.60.01 0( 4)-

(5); RAP 16.16(d); cf Bain, 175 Wash. 2d at 114 (declining to answer a certified

question because "resolution of the question before us depends on what actually

occurred with the loans before us, and that evidence is not in the record").

       We therefore decline all explicit and implicit requests that we take judicial

notice of irrelevant submissions, including all of the following: materials and

decisions from unrelated cases brought in federal bankruptcy courts or state superior

courts; cases interpreting unrelated federal statutes; studies about the impacts of

DTA-based actions on costs and on the availability of loan modifications; studies

showing Washington's continued economic volatility, linking foreclosure rates to

physical health problems, noting the financial disparity between borrowers and

lenders, and pointing to the presence of hedge funds and out-of-state lenders in the

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Frias v. Asset Foreclosure, Inc., No. 89343-8

loan servicing market; and news articles about unrelated instances of lender

misconduct and other homeowners' negative experiences with nonjudicial

foreclosure.

B.     The DTA does not create a cause of action for violations of its terms in the
       absence of a completed foreclosure sale

       A statute can create a cause of action either expressly or by implication.

Ducote v. Dep't of Soc. & Health Servs., 167 Wash. 2d 697, 702-03, 222 P.3d 785

(2009). At oral argument, Frias conceded that no provision of the DTA expressly

creates a cause of action for monetary damages premised on a trustee's material DTA

violations in the absence of a completed foreclosure sale. Wash. Supreme Court oral

argument, Frias v. Asset Foreclosure Servs., Inc., No. 89343-8 (Feb. 27, 2014), at 3

min., 20 sec., audio recording by TVW, Washington State's Public Affairs Network,

available at http://www.tvw.org. Frias' concession is well taken, and we consider

only whether such a cause of action is implied.

       As in all questions of statutory construction, our goal is to discern and give

effect to legislative intent. Transamerica Mortg. Advisors, Inc. v. Lewis, 444 U.S.
11, 15, 100 S. Ct. 242,62 L. Ed. 2d 146 (1976). To do so, we consider the following:

"[F]irst, whether the plaintiff is within the class for whose 'especial' benefit the

statute was enacted; second, whether legislative intent, explicitly or implicitly,

supports creating or denying a remedy; and third, whether implying a remedy is

consistent with the underlying purpose of the legislation." Bennett v. Hardy, 113

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Frias v. Asset Foreclosure, Inc., No. 89343-8

Wn.2d 912, 920-21, 784 P.2d 1258 (1990) (quoting In reWash. Pub. Power Supply

Sys. Sec. Litig., 823 F.2d 1349, 1353 (9th Cir. 1987)).

        Frias is within the class for whose benefit RCW 61.24.127 was enacted. We

can find no explicit legislative intent that addresses the issue presented, but implicit

legislative intent supports denying a remedy. Implying the cause of action Frias

seeks to assert would be neutral as to most underlying purposes of the legislation

and detrimental to one. Therefore, we hold the DTA does not imply a cause of action

for monetary damages premised on DTA violations absent a completed foreclosure

sale.

        1.    Frias is a member of the class for whose especial benefit RCW
              61.24.127 was enacted

        The plain language ofRCW 61.24.127, which is our primary focus, leaves no

doubt that it was enacted to benefit borrowers or grantors subjected to nonjudicial

foreclosure of owner-occupied real estate by preserving their right to bring damages

claims that might have been deemed waived before the statute was enacted. E.g.,

Brown v. Household Realty Corp., 146 Wash. App. 157, 169, 189 P.3d 233 (2008).

Frias is certainly a borrower who has been subjected to nonjudicial foreclosure

proceedings of her owner-occupied real property and so is within the class for whose

especial benefit the statute was enacted.

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Frias v. Asset Foreclosure, Inc., No. 89343-8

       2.     There is no legislative history that explicitly supports creating or
              denying a remedy, but there is implicit support for denying it

       Next, we look to explicit and implicit legislative intent. RCW 61.24.127(1)

provides, in relevant part, "The failure of the borrower or grantor to bring a civil

action to enjoin a foreclosure sale under this chapter may not be deemed a waiver of

a claim for damages asserting: ... (c) Failure of the trustee to materially comply

with the provisions of this chapter." Without question, this provision explicitly

recognizes an independent cause of action for damages premised on a trustee's

material DTA violations. However, it does not state when such a cause of action

accrues, so that is the question we must answer. Cf Ducote, 167 Wash. 2d at 703

(noting RCW 26.44.050 does create a cause of action for negligent investigation of

suspected child abuse but analyzing the class of individuals with standing to bring

such a claim as a separate inquiry).

       We cannot find any explicit indicators that the legislature intended to either

allow or deny the cause of action Frias seeks to assert. Indicators of implicit

legislative intent, however, show that the legislature did not intend to imply a cause

of action for money damages under the DTA absent a completed foreclosure sale.

              a)      There is no explicit legislative intent on the issue presented

       Something is "explicit" when it is "characterized by full clear expression

: being without vagueness or ambiguity : leaving nothing implied : UNEQUNOCAL."

WEBSTER'S THIRD NEW INTERNATIONAL DICTIONARY 801 (2002). Frias contends

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Frias v. Asset Foreclosure, Inc., No. 89343-8

there is explicit evidence of legislative intent supporting her position because "the

only logical reading" of RCW 61.24.127 is to presume that damages claims under

the DTA must exist prior to a foreclosure sale. Pl. Frias' Opening Br. on Questions

Certified to the Supreme Ct. by the U.S. Dist. Ct. at 50 (citing Walker, 176 Wash. App.

at 310-11); accord Bavandv. OneWest Bank, F.S.B., 176 Wn. App. 475,496,309

P.3d 636 (2013). This reading is logically mandated, Frias argues, because that

statute states a claim for damages under the DTA is not waived where the borrower

does not seek to enjoin the foreclosure sale, and, in order to be waived, the claim

must exist in the first place. Frias' interpretation, though reasonable, is not logically

mandated and does not provide the explicit legislative intent she attributes to it.

       Frias conflates the right to bring a cause of action with the time at which a

particular claim accrues. One cannot waive a right that does not exist, but one can

waive the right to bring a claim for damages before the claim accrues. A classic

example is the contractual preinjury release-party A agrees not to bring a cause of

action for damages arising from the contract even if party B is negligent. Because at

the time the contract is signed, it is unknown whether Bever will be negligent, A's

claim for damages has not yet accrued. However, a contractual preinjury release will

be upheld as a valid waiver of A's right to bring a claim forB's negligence, should

it ever occur, so long as the provision does not violate public policy. See Vodopest

v. MacGregor, 128 Wash. 2d 840, 848, 913 P.2d 779 (1996).

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Frias v. Asset Foreclosure, Inc., No. 89343-8

       We can find no statute or legislative history that explicitly-that is, without

vagueness, ambiguity, or implication-addresses whether one can bring an action

for damages under the DTA absent a completed foreclosure sale. There is simply no

explicit legislative intent either way.

              b)      Implicit legislative intent counsels against accepting Frias'
                      position

       Because there is no explicit statement of legislative intent regarding whether

a claim for damages under the DTA is actionable absent a completed foreclosure

sale, we must look for sources that might imply the answer. Frias contends that this

issue was not raised in the process of enacting RCW 61.24.127 because it was

already decided; that is, the legislature assumed it was already settled that a claim

for damages under the DTA absent a completed foreclosure sale is actionable. The

defendants contend that the legislature simply never considered whether to allow

such a claim or not, and so has not implicitly recognized it-at least not yet.

Available sources support the defendants' position.

       It is undisputed that the legislature's primary purpose m enacting RCW

61.24.127 was to supersede the Court of Appeals' holding in Brown, 146 Wash. App.
157. See Hr'g on S.B. 5810 Before the S. Fin. Insts., Hous. & Ins. Comm. 61st Leg.,

Reg. Sess. (Feb. 18, 2009), at 58 min., 33 sec.; 1 hr., 12 min., 14 sec.; Hr'g on S.S.B.

5810 Before the S. Fin. Insts., Hous. & Ins. Comm. 61st Leg., Reg. Sess. (Feb. 24,

2009), at 36 min., 55 sec.; Hr'g on E.S.B. 5810 Before the H. Judiciary Comm. 61st

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Frias v. Asset Foreclosure, Inc., No. 89343-8

Leg., Reg. Sess. (Mar. 23, 2009), at 45 min., 7 sec. 1 Brown held that a cause of action

for damages under the DTA is waived when the borrower does not seek to enjoin

the foreclosure sale before it happens. The damages claim at issue in Brown was not

brought until well after a completed foreclosure sale, and the question of whether to

allow a damages claim under the DTA absent a completed foreclosure sale was not

raised in connection with the enactment of RCW 61.24.127 in any source we can

locate.

          Other than her argument that RCW 61.24.127 necessarily presumes a cause

of action for damages under the DTA absent a completed foreclosure sale, Frias does

not point to, and we cannot locate, any provision or legislative history implicitly

supporting her position. As discussed above, we do not find that argument

persuasive. We also cannot simply resort to our general rule of construing the DTA

in favor of borrowers to resolve the question. The purpose of that rule is to protect

the borrowers' interests in his or her own real property, but construing the DTA as

Frias advocates here would not protect her real property interests-it would provide

monetary compensation in the absence of damage to Frias' real property interests.

Cf Udall v. TD. Escrow Servs., Inc., 159 Wash. 2d 903, 916, 154 P.3d 882 (2007)

(rejecting borrower's argument that his interpretation should prevail because the act

complained of"does not injure the borrower's interests").

          1
          Recordings of all committee hearings cited herein are available at http://www.tvw.org.
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Frias v. Asset Foreclosure, Inc., No. 89343-8

       On the other hand, the defendants' position finds support in RCW

61.24.127(2), which sets restrictions on the nonwaived claims enumerated in RCW

61.24.127(1 ). The way the legislature phrased these restrictions strongly implies that

a cause of action under the DTA for a trustee's material statutory violations is not

available until after a completed foreclosure sale:

       The non waived claims listed under subsection ( 1) of this section are
       subject to the following limitations:
              (a) The claim must be asserted or brought within two years from
       the date of the foreclosure sale or within the applicable statute of
       limitations for such claim, whichever expires earlier;

              (c) The claim may not affect in any way the validity or finality
       of the foreclosure sale or a subsequent transfer of the property;
              (d) A borrower or grantor who files such a claim is prohibited
       from recording a lis pendens or any other document purporting to create
       a similar effect, related to the real property foreclosed upon;
               (e) The claim may not operate in any way to encumber or cloud
       the title to the property that was subject to the foreclosure sale, except
       to the extent that a judgment on the claim in favor of the borrower or
       grantor may, consistent with RCW 4.56.190, become a judgment lien
       on real property then owned by the judgment debtor.

RCW 61.24.127(2). Notably, all of these limitations refer to "the" foreclosure sale.

The use of a definite article "the"-as opposed to an indefinite article "a"-is

indicative of the legislature's intent to specify or particularize the word that follows.

City of Olympia v. Drebick, 156 Wash. 2d 289, 297-98, 126 P.3d 802 (2006) (citing

Cowiche Growers, Inc. v. Bates, 10 Wn.2d 585,618, 117 P.2d 624 (1941) (Simpson,

J., dissenting)). Plainly, the specific foreclosure sale referred to in RCW
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Frias v. Asset Foreclosure, Inc., No. 89343-8

61.24.127(2) is the foreclosure sale the borrower or grantor did not bring a civil

action to enjoin. While foreclosure generally is a process rather than an event, "the

foreclosure sale" is a single, specific event, and the limitations in RCW 61.24.127(2)

all speak of that foreclosure sale in the past tense, clearly contemplating it has

already happened. 2

       From the limited evidence available, we find there is no legislative intent that

implicitly supports recognizing the DTA cause of action Frias seeks to assert; all the

evidence implies that the legislature has not yet considered whether to allow a cause

of action for damages under the DTA absent a completed foreclosure sale. Because

the legislature has never considered the issue, it would be strange to hold the

legislature has already implicitly decided it-we are not in a position to impute to

the legislature the intent we think it will have if it does consider the issue. Further,

the limitations in RCW 61.24.127(2) provide implicit support for the defendants'

position-under the current statutory framework, there is no independent cause of

action under the DTA for DTA violations absent a completed foreclosure sale.

       2
        While a foreclosure sale did occur in this case, it was voided, as allowed by RCW
61.24.050(2). Once something is declared void, it never happened at all for legal purposes.
BLACK'S LAw DICTIONARY 1709 (9th ed. 2009) (defining "void" as "[o ]fno legal effect; null").

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Frias v. Asset Foreclosure, Inc., No. 89343-8

       3.     Implying the remedy Frias seeks would not promote the purposes
              behind RCW 61.24.127 and the DTA

       Finally, we consider the purposes behind RCW 61.24.127 specifically and the

DTA generally to determine whether implying a cause of action for a trustee's

material DTA violations absent a completed foreclosure sale is consistent with those

purposes. Deciding the issue in Frias' favor would be inconsistent with one of the

purposes of the DTA and neutral to the other relevant purposes.

       As discussed above, the purpose behind RCW 61.24.127 was to supersede

Brown. Brown dealt with a damages action brought after a completed foreclosure

sale, and so implying a damages action absent a completed foreclosure sale neither

furthers nor hinders the legislature's specific purpose in passing RCW 61.24.127.

       The purposes of the DTA generally are well established: '"First, the

nonjudicial foreclosure process should remain efficient and inexpensive. Second, the

process should provide an adequate opportunity for interested parties to prevent

wrongful foreclosure. Third, the process should promote the stability ofland titles."'

Schroeder v. Excelsior Mgmt. Grp., LLC, 177 Wash. 2d 94, 104, 297 P.3d 677 (2013)

(quoting Cox v. Helenius, 103 Wash. 2d 383, 387, 693 P.2d 683 (1985)). Clearly, if a

borrower's claim for damages accrues as soon as the trustee engages in material

noncompliance with the DTA (or as soon as the borrower reasonably should know

of the facts tending to show such noncompliance), nonjudicial foreclosure will be

rendered less efficient and more expensive.

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Frias v. Asset Foreclosure, Inc., No. 89343-8

       The accrual of a damages claim prior to a completed foreclosure sale is neutral

as to the purpose of giving interested parties adequate opportunities to prevent

wrongful foreclosure. Wrongful foreclosure is prevented when a borrower obtains a

restraining order or injunction based on material DTA violations, while wrongful

foreclosure is compensated when a borrower recovers damages for material DTA

violations. There is no indication that stability of land titles will be either promoted

or impeded by accepting Frias' interpretation ofRCW 61.24.127 because a cause of

action for damages under RCW 61.24.127 cannot serve to affect title to the real

property at issue. RCW 61.24.127(2).

       Thus, implying a presale damages action under RCW 61.24.127 would be

inconsistent with the DTA's purpose of efficient and inexpensive foreclosure, and is

neutral as to the other purposes relevant to our consideration.

       We therefore hold that, while Frias is a member of the class for whose especial

benefit RCW 61.24.127 was passed, available sources of legislative intent indicate

the legislature has never actually considered whether to create a cause of action for

monetary damages under the DTA absent a completed foreclosure sale. What the

legislature would do upon considering the issue is beyond our judicial ken. Imputing

to the legislature an intent to create this cause of action would be at odds with RCW

61.24.127(2) and would not serve the purposes underlying RCW 61.24.127 or the

DTA generally. Under the existing statutory framework, we hold there is no

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Frias v. Asset Foreclosure, Inc., No. 89343-8

actionable, independent cause of action for monetary damages under the DTA based

on DTA violations absent a completed foreclosure sale.

C.     Even in the absence of a completed foreclosure sale, violations of the DTA
       may be actionable under the CPA under ordinary CPA principles

       Frias' CPA claim must be analyzed under the same principles that apply to

any CPA claim. Even where there is no completed foreclosure sale and no allegation

the plaintiff has paid any foreclosure fees, it is possible for a plaintiff to suffer injury

to business or property caused by alleged DTA violations that could be compensable

under the CPA.

       1.     RCW 61.24.127 does not modify the elements of a cause of action
              under the CPA or the time at which such an action accrues

       Unlike a DTA-based cause of action for damages, the CPA is a preexisting

statutory cause of action, with established elements. RCW 61.24.127 plainly intends

to preserve, rather than modify, the availability of a CPA claim where a borrower

does not seek to enjoin a foreclosure sale before it happens. See RCW

61.24.127(2)(£) (preserving statutory CPA remedies, notwithstanding limitations on

damages for other nonwaived claims under RCW 61.24.127). Further, because CPA

actions, unlike DTA actions for a trustee's material violations, are governed by their

own body of statutes and case law, the limitations in RCW 61.24.127(2) are not at

odds with a CPA cause of action absent a completed foreclosure sale, as they are in

the case of a DTA cause of action for damages.

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Frias v. Asset Foreclosure, Inc., No. 89343-8

       2.     Frias arguably pleaded injuries that could be compensable under the
              CPA

       Compensable injuries under the CPA are limited to "injury to [the] plaintiff in

his or her business or property." Hangman Ridge Training Stables, Inc. v. Safeco

Title Ins. Co., 105 Wash. 2d 778, 780, 719 P .2d 531 ( 1986). Without question, where

a plaintiff actually loses title to her house in a foreclosure sale or actually remits

foreclosure fees, that plaintiff has suffered injury to his or her property. However,

those injuries are not necessary to state a CPA claim-other business or property

injuries might be caused when a lender or trustee engages in an unfair or deceptive

practice in the nonjudicial foreclosure context. We believe Frias did allege some

injuries that may be compensable under the CPA.

       The CPA's requirement that injury be to business or property excludes

personal injury, "mental distress, embarrassment, and inconvenience." Panag v.

Farmers Ins. Co. of Wash., 166 Wash. 2d 27, 57, 204 P.3d 885 (2009). The financial

consequences of such personal injuries are also excluded. Ambach v. French, 167
Wash. 2d 167, 178, 216 P.3d 405 (2009). Otherwise, however, the business and

property injuries compensable under the CPA are relatively expansive.

       Because the CPA addresses "injuries" rather than "damages," quantifiable

monetary loss is not required. Panag, 166 Wash. 2d at 58. A CPA plaintiff can establish

injury based on unlawful debt collection practices even where there is no dispute as

to the validity of the underlying debt. !d. at 55-56 & n.13. Where a business demands

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Frias v. Asset Foreclosure, Inc., No. 89343-8

payment not lawfully due, the consumer can claim injury for expenses he or she

incurred in responding, even if the consumer did not remit the payment demanded.

!d. at 62 ("Consulting an attorney to dispel uncertainty regarding the nature of an

alleged debt is distinct from consulting an attorney to institute a CPA

claim. Although the latter is insufficient to show injury to business or property, the

former is not." (citations omitted)). The injury element can be met even where the

injury alleged is both minimal and temporary. Mason v. Mortg. Am., Inc., 114 Wash. 2d
842, 854, 792 P.2d 142 (1990).

       Here, Frias alleges she was denied the chance to obtain a reasonable loan

modification because U.S. Bank refused to participate in mediation in good faith.

Where a more favorable loan modification would have been granted but for bad faith

in mediation, the borrower may have suffered an injury to property within the

meaning ofthe CPA. Cf Klem v. Wash. Mut. Bank, 176 Wash. 2d 771, 795, 295 P.3d
1179 (2013) (holding a CPA injury was pleaded where a falsely backdated

notarization allowed a foreclosure sale to happen earlier than it could have

otherwise, cutting short the borrower's chance to close sale on the real property with

a private purchaser for a higher price).

       Frias further alleges numerous illegal fees have been added to her debt. Even

though she has not paid those fees, expenses incurred in investigating their legality

may be compensable, and she may be entitled to equitable relief in the form of those

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Frias v. Asset Foreclosure, Inc., No. 89343-8

fees being stricken, if they have not already been. Panag, 166 Wash. 2d at 62-63. Frias

also alleges that she appeared for a scheduled mediation session and no one appeared

on behalf of U.S. Bank and that when Frias appeared for the rescheduled mediation

session, U.S Bank was not prepared. The expenses Frias incurred in the extra

mediation sessions allegedly necessitated by U.S. Bank's failure to prepare and

mediate in good faith could be an injury compensable under the CPA. !d. at 64.

       Although Frias' alleged emotional distress and associated physical symptoms

are not compensable under the CPA, she did plead other injuries to her property that

could be compensable under the CPA. Loss of title or payment of illegal fees are

sufficient, but not necessary, to plead an injury compensable under the CPA based

on alleged DTA violations.

       3.     CPA claims alleging DTA violations are governed by the same
              principles as other CPA claims

       As noted above, nothing about the DTA indicates a CPA claim should be

subject to a different analysis where the CPA claim is premised on alleged DTA

violations as opposed to any other alleged wrongful acts. In response to the second

certified question, we hold that the analysis of the elements of a CPA action premised

on alleged DTA violations is the same as the analysis of the elements of a CPA claim

premised on any other allegedly unfair or deceptive practice with a public interest

impact occurring in trade or commerce that has allegedly proximately caused injury

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Frias v. Asset Foreclosure, Inc., No. 89343-8

to a plaintiffs business or property. See, e.g., ch. 19.86 RCW; Klem, 176 Wash. 2d at

782-97; Panag, 166 Wash. 2d at 37-65; Hangman Ridge, 105 Wash. 2d at 783-93.

                                   V.     CONCLUSION

       We hold the answer to the first question certified by the federal court is no:

Washington does not recognize an independent cause of action under the DTA

seeking monetary damages for alleged DTA violations absent a completed

foreclosure sale.

       We hold the answer to the second question is that under appropriate

circumstances DTA violations may be actionable under the CPA regardless of

whether a foreclosure sale has been completed. Such claims are governed by the

ordinary principles applicable to all CPA claims.

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Frias v. Asset Foreclosure, Inc., No. 89343-8

WECONCUR:t

f   Judge C.C. Bridgewater participated as a ju8tice pro tempore at the

    argument of this appeal but died prior to the filing of the opinion.

                                                23
Frias v. Asset Foreclosure, Inc., eta/. No. 89343-8
Wiggins, J., dissenting in part/concurring in part

                                        No. 89343-8

       WIGGINS, J. (dissenting in part/concurring in part)-The United States District

Court for the Western District of Washington certified two questions for our review.

While I agree with the majority's answer to the second question, I disagree with the

majority's answer to the first. The first certified question is whether "a plaintiff [may)

state a claim for damages relating to a breach of duties under the Deed of Trust Act

and/or failure to adhere to the statutory requirements of the Deed of Trust Act in the

absence of a completed trustee's sale of real property." Order Certifying Questions

to the Wash. Supreme Ct. at 3. The majority's answer is no; the answer should be

the careful, lawyerly response: it depends. It depends on who the defendant is (e.g.,

a borrower, grantor, trustee, or guarantor) and which statutory duty the defendant

breached.     The majority categorically precludes claims for damages absent a

completed trustee's sale under the deeds of trust act (DTA), chapter 61.24 RCW,

without a discussion of the various duties created in the statute. See majority at 2. I

would focus on the trustee's duty of good faith to the borrower, beneficiary, and

grantor, which is the violation Florence Frias asserts. I conclude that a borrower, like
Frias v. Asset Foreclosure, Inc., eta/. No. 89343-8
Wiggins, J., dissenting in part/concurring in part

Frias, may sue a trustee for breach of this duty, even in the absence of a completed

trustee's sale.

                                          ANALYSIS

       The legislature may implicitly or explicitly create a cause of action. See Ducote

v. Oep't of Soc. & Health Servs., 167 Wash. 2d 697, 702-03, 222 P.3d 785 (2009).

Whether a statute creates a cause of action is a matter of statutory construction.

Transamerica Mortg. Advisors, Inc. v. Lewis, 444 U.S. 11, 15, 100 S. Ct. 242, 62 L.

Ed. 2d 146 (1979). As in most matters of statutory construction, our ultimate goal is

to determine the intent of the legislature. See id. at 15-16. If the legislature does not

expressly create a cause of action, our court utilizes a three-part test to determine the

legislature's intent. Bennett v. Hardy, 113 Wash. 2d 912, 920-21, 784 P.2d 1258 (1990).

We determine whether the plaintiff is "within the class for whose 'especial' benefit the

statute was enacted"; whether "legislative intent, explicitly or implicitly, supports

creating or denying a remedy"; and "whether implying a remedy is consistent with the

underlying purpose of the legislation." /d.

       Using this test, I conclude that the legislature implicitly created a cause of action

against a trustee for breach of its duty of good faith that is not dependent on a

completed trustee's sale.

            Part 1: Frias is a member of the class protected by the statute

       The first part of the test is satisfied because Frias is "within the class for whose

'especial' benefit the statute was enacted .... " Bennett, 113 Wash. 2d at 920. RCW

                                               2
Frias v. Asset Foreclosure, Inc., eta/. No. 89343-8
Wiggins, J., dissenting in part/concurring in part

61.24.01 0(4) states, "The trustee or successor trustee has a duty of good faith to the

borrower, beneficiary, and grantor." The clear legislative intent is to protect borrowers,

beneficiaries, and grantors from actions taken in bad faith by trustees. Frias is a

borrower under the act, whose interest the legislature sought to protect.

                   Part 2: Legislative intent supports creating a claim

       Legislative intent explicitly and implicitly supports creating a cause of action

against the trustee (even prior to a completed trustee's sale). Bennett, 113 Wash. 2d at

920.   The explicit support is found in RCW 61.24.127. The statute states that a

borrower or grantor does not waive a claim for damages due to a trustee failing to

"materially comply with the provisions of this chapter" by failing to enjoin a foreclosure

sale. RCW 61.24.127(1 )(c). This recognition of a claim against the trustee supports

the creation of a cause of action for breach of a trustee's duty of good faith. The

legislature placed no explicit limitation on when a borrower or grantor may bring suit.

       The majority reaches a different conclusion. Majority at 10. It agrees that RCW

61.24.127 recognizes a cause of action against a trustee but concludes the claim is

available only after a trustee's sale. See id. It relies on RCW 61.24.127(2), which

subjects the nonwaived claims to certain limitations.        The limitations include, for

example, the claim must be brought within two years of the "foreclosure sale or within

the applicable statute of limitations for such claim, whichever expires earlier," and the

claim cannot affect the validity of the foreclosure sale or cloud the title.         RCW

61.24.127(2)(a), (c), (e). The majority relies on the fact that all of the limitations rely

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Frias v. Asset Foreclosure, Inc., eta/. No. 89343-8
Wiggins, J., dissenting in part/concurring in part

on a past foreclosure sale to support its conclusion that the legislature intended a

claim for damages only after a foreclosure sale.

       I disagree with the majority's reasoning. Of course the limitations contemplate

a completed trustee's sale-the legislature was specifically discussing the effects of

failing to enjoin a sale on other claims that borrowers and grantors may bring. There

is no indication that the legislature intended for this language to limit the availability of

a claim for damages against a trustee for failing to materially comply with the DTA. 1

       There is also implicit support for allowing a claim before a trustee's sale is

complete. We assume that the legislature is aware of the doctrine of implied cause

of action, which is that the legislature "would not enact a statute granting rights to an

identifiable class without enabling members of that class to enforce those rights."

Bennett, 113 Wash. 2d at 919-21. RCW 61.24.010 creates a duty and a corresponding

right. "The trustee or successor trustee has a duty of good faith to the borrower,

beneficiary, and grantor." RCW 61.24.01 0(4 ). Here, the legislature did not explicitly

provide a mechanism for protecting borrowers, beneficiaries, or grantors from a

trustee who acts in bad faith. 2 Therefore, we may assume that the legislature intended

1 Interestingly, the majority abandons its reasoning when discussing the Consumer Protection
Act (CPA), chapter 19.86 RCW. RCW 61.24.127(1) treats violations of Title 19 RCW the
same as a claim against a trustee for failing to materially comply with the DTA, and subsection
(2) provides applicable limitations. The majority concludes that despite subsection (2)'s
limitations, a CPA claim may be commenced absent a completed trustee's sale. Majority at
18.

2 RCW 61.24.130 is not the mechanism. It allows borrowers, grantors, guarantors, or other
people interested in a lien to enjoin a trustee sale "on any proper legal or equitable ground."
RCW 61.24.130(1 ). However, it requires the applicant to pay the clerk of the court "the sums
that would be due on the obligation secured by the deed of trust if the deed of trust was not

                                              4
Frias v. Asset Foreclosure, Inc., eta/. No. 89343-8
Wiggins, J., dissenting in part/concurring in part

that there would be a judicial mechanism to enforce the statutory right. I have no

reason to conclude that it intended this remedy only after a trustee's sale.

        Part 3: Implying   a remedy is consistent with the purpose of the statute
       Implying a remedy is consistent with RCW 61.24.01 0(4 )-which imposes a duty

on the trustee to act in good faith toward borrowers, beneficiaries, and grantors-and

is consistent with the purposes of the DTA. This implied remedy encourages trustees

to act in good faith and allows early intervention for a breach of the duty.

       A cause of action is also consistent with the overall objectives of the DTA. The

objectives are that '"[t]he nonjudicial foreclosure process should remain efficient and

inexpensive[;] ... the process should provide an adequate opportunity for interested

parties to prevent wrongful foreclosure[; and] the process should promote the stability

of land titles."' Schroeder v. Excelsior Mgmt. Grp., LLC, 177 Wash. 2d 94, 104, 297 P.3d
677 (2013) (quoting Cox v. Helenius, 103 Wash. 2d 383, 387, 693 P.2d 683 (1985)).

       The majority opines that allowing a claim for damages to accrue as soon as a

trustee violates the DTA would be inconsistent with the first objective articulated by

Schroeder because the nonjudicial foreclosure will be rendered less efficient and more

expensive than judicial foreclosure. Majority at 16-17. The majority opinion provides

no reasoning for this conclusion, and I disagree. Allowing damage claims to accrue

before a trustee sale should incentivize the trustee to conform to the requirements of

being foreclosed." /d. It does not appear that the legislature intended this to be the sole
remedy for misdeeds by a trustee. The legislature did not make the trustee's duty contingent
on the ability of borrowers to pay their arrears.

                                              5
Frias v. Asset Foreclosure, Inc., et at. No. 89343-8
Wiggins, J., dissenting in part/concurring in part

the law from the beginning of the foreclosure process. When nonjudicial foreclosures

are pursued and completed lawfully, the process will ultimately be more efficient.

       The remedy also supports the second purpose, which is to "'provide an

adequate opportunity for interested parties to prevent wrongful foreclosure."'

Schroeder, 177 Wash. 2d at 104 (quoting Cox, 103 Wash. 2d at 387). Under RCW 6, a

borrower, grantor, or guarantor may restrain a trustee's sale only if it pays the clerk of

the court sums that would be due on the obligation if there was no foreclosure. If a

borrower has insufficient resources to pay the sums due, the borrower will be unable

to stop a wrongful trustee's sale.        Allowing the cause of action before the sale

encourages trustees to adhere to the required procedures.

       All three parts of the implied cause of action test are satisfied. A cause of action

against a trustee for violation of its duty of good faith should be available even in the

absence of a completed trustee's sale. I disagree with the majority's answer to the

first certified question.

                                               6
Frias v. Asset Foreclosure, Inc., eta/. No. 89343-8
Wiggins, J., dissenting in part/concurring in part

       I dissent in part and concur in part.

                                               7