Court Opinion

ID: 2788782
Source: CourtListenerOpinion
Date Created: 2015-03-24 18:11:09.3097+00
Date Added: 2024-06-11T11:28:48.081179
License: Public Domain

FILED
                                                                                                COURT OF APPEALS
                                                                                                     DIVISION 11
                                                                                               26115 MAR 24 AM 8: 33

                                                                                                               INGTON
      IN THE COURT OF APPEALS OF THE STATE OF
                                                                                WASHINGS
                                             DIVISION II

    KEITH PELZEL,                                                          No. 43294 -3 -II

                                 Appellant,

          v.

    NATIONSTAR MORTGAGE, LLC;                                     UNPUBLISHED OPINION
    QUALITY LOAN SERVICE
    CORPORATION OF WASHINGTON;
    HOMECOMINGS FINANCIAL NETWORK,
    INC., MORTGAGE ELECTRONIC
    REGISTRATION SYSTEMS, INC., ALL
    PERSONS UNKNOWN, CLAIMING ANY
    VALID SUBSISTING INTEREST, AND
    RIGHT TO THE POSSESSION IN THE
    PROPERTY DESCRIBED IN THE
    COMPLAINT ADVERSE TO PLAINTIFF' S
    TITLE, OR ANY CLOUD ON PLAINTIFF' S
    TITLE THERETO; and DOES I -X,
    INCLUSIVE,

                                  Respondents.

         WORSWICK, P. J. —    Keith Pelzel sued Nationstar Mortgage, LLC, Quality Loan Services

Corporation of Washington, Homecomings Financial Network, Inc., and Mortgage Electronic

Registration Systems, Inc. ( MERS)       to prevent Quality' s nonjudicial foreclosure of a deed of trust

secured by Pelzel' s property. Pelzel also sought damages under the Consumer Protection Act'

    CPA). The   superior court granted   summary judgment in favor    of   defendants.   Pelzel appeals,

1
    Chapter 19. 86 RCW.
No. 43294 -3 -II

arguing summary judgment              inappropriate because           the deed                           DTA) ( 1)
                                                                                              act2   (

                                was                           under              of   trust

Nationstar   was not a   beneficiary, ( 2) Nationstar had no authority to appoint a successor trustee,

 3) Quality lacked authority to initiate a nonjudicial foreclosure of Pelzel' s property on

Nationstar' s behalf, (4) MERS' s assignment of the deed of trust and note to Nationstar was

invalid, and ( 5) Nationstar failed to prove it was a servicer or agent for the note' s owner. Pelzel

also argues   summary judgment       was   inappropriate because   under   the CPA, ( 6) the defendants

deceived Pelzel by misrepresenting Quality' s authority to initiate a nonjudicial foreclosure of

Pelzel' s property on.Nationstar' s behalf, (7) Quality deceived Pelzel by falsely identifying

Nationstar as the note' s owner in the " notice of default" sent to Pelzel, and ( 8) MERS deceived

Pelzel by assigning the deed of trust and note as the nominee of Homecomings, the lender and

original beneficiary. We reject Pelzel' s arguments and affirm.

                                                   FACTS

A.      The Promissory Note and Deed of Trust

        In 2003, Keith Pelzel borrowed $ 104, 000 from the lender Homecomings Financial

Network, Inc. Pelzel signed a promissory note promising to repay the loan, and secured the note

with a deed of trust against his property. The deed of trust listed Pelzel as the borrower,

Homecomings as the lender, and Fidelity National Title as the trustee. The deed of trust then

said the following about MERS:

        MERS is a separate corporation that is acting solely as a nominee for
         Homecomings]        and [   Homecomings']    successors    and    assigns.     MERS is the

        beneficiary under this Security Instrument.

2 Chapter 61. 24 RCW.

                                                      2
No. 43294 -3 - II

Clerk' s Papers ( CP) at 37.

        Homecomings possessed the deed of trust and the note. Then, at some time prior to

January 23, 2009, Homecomings indorsed the note to GMAC Mortgage Company, who in turn

indorsed the note in blank. After the note was indorsed in blank, on January 23, 2009, Nationstar

took physical possession of the note. Nationstar had physical possession of the note at the time

of the motion for summary judgment.

        At some point, the Federal National Mortgage Association (Fannie Mae) purchased the

loan represented by the note, making Fannie Mae the note' s owner. See Trujillo v. Nw. Tr.

Servs., Inc., 181 Wn.   App.   484, 487 -89, 326 P. 3d 768 ( 2014). But Fannie Mae did not take

physical possession of the note.

        On November 13, 2009, Nationstar appointed Quality as the deed of trust' s successor

trustee. From then onward, Quality served as the deed of trust' s successor trustee.

        On November 19, 2009, MERS, as nominee for Homecomings, executed a document

purporting to assign both the deed of trust and the note to Nationstar. MERS executed this

document even though Homecomings had already indorsed the note to GMAC and even though

Nationstar had already obtained physical possession of the note.3
B.      Notice ofDefault, Declaration of Ownership, and Trustee' s Sale

        In November of 2009, Quality, as successor trustee, sent Pelzel a notice of default, which

stated in part:

        The current owner /beneficiary of the Note secured by the Deed of Trust is:
        Nationstar Mortgage LLC

3 From the record it appears MERS may have been attempting to assign the deed of trust to
Nationstar, but failed to remove language assigning the note.

                                                    3
No. 43294 -3 - I1

         The Loan Servicer managing your loan, and whom you should contact about your
         loan is:
         Nationstar Mortgage LLC

CP at 17 ( emphasis added).

         In January of 2010, Nationstar' s authorized agent signed a " Declaration of Ownership,"

which stated under        penalty   of   perjury that Nationstar     was " actual   holder   of"   the   note.   CP at 176.

In September of 2010, relying on this declaration of Nationstar' s agent, Quality initiated a

nonjudicial foreclosure of Pelzel' s property by scheduling a trustee' s sale of Pelzel' s property.

C.       Pelzel' s Complaint and Summary Judgment

         Prior to the trustee' s sale, Pelzel filed a complaint against Nationstar, Quality,

Homecomings,        and   MERS, making         claims   for, among    other   things, ( 1) defect in trustee' s sale

under   the DTA, (2) defective initiation of foreclosure under the DTA, and ( 3) violation of the

CPA. Pelzel requested many forms of relief, including ( 1) declaratory relief, (2) an order

vacating the foreclosure sale, and ( 3) damages under the CPA. In response to Pelzel' s complaint,

Quality stopped the trustee' s sale.

         The defendants moved for summary judgment, and the superior court granted summary

judgment against Pelzel on all claims. The superior court ruled that no cause of action for

wrongful initiation of foreclosure existed, and that the lack of a completed foreclosure sale

rendered   Pelzel   unable   to   prove    damages   on   his   other claims.   Pelzel appeals.

                                                        ANALYSIS

         We review summary judgment orders de novo. Ranger Ins. Co. v. Pierce County, 164

Wn.2d 545, 552, 192 P. 3d 886 ( 2008).             Summary judgment is appropriate if, when viewing the

                                                                4
No. 43294 -3 - II

facts in the light most favorable to the nonmoving party, no genuine issues of material fact exist

and    the moving party   is   entitled   to judgment   as a matter of   law. 164 Wn.2d at 552.

          Interpretation of a statute is a question of law we also review de novo. Dep' t ofEcology

v.   Campbell & Gwinn, L.L. C., 146 Wn.2d 1, 9, 43 P. 3d 4 ( 2002).            Our objective in interpreting a

statute is to carry out the legislature' s intent. Arborwood Idaho, L.L.C. v. City ofKennewick, 151

Wn.2d 359, 367, 89 P. 3d 217 ( 2004). "         The `plain meaning' of a statutory provision is to be

discerned from the ordinary meaning of the language at issue, as well as from the context of the

statute in which that provision is found, the related provisions, and the statutory scheme as a

whole."    City   of Spokane    v.   Rothwell, 166 Wn.2d 872, 876 -77, 215 P. 3d 162 ( 2009). " In general,

words are given their ordinary meaning, but when technical terms and terms of art are used, we

give   these terms their technical meaning."        Swinomish Indian Tribal Cmty. v. Dep' t ofEcology,

178 Wn.2d 571, 581, 311 P. 3d 6 ( 2013).

          Turning to Pelzel' s arguments, we examine and reject his claims for relief under the DTA

as well as his claims for monetary damages under the CPA.4
                                 I. DECLARATORY RELIEF UNDER THE DTA

          At the superior court, Pelzel requested " a declaration of the rights and duties of the

parties, specifically Defendants Quality Loan and Nationstar initiated a defective foreclosure of

the   Property." CP at 12. Washington courts may issue declaratory judgments under the Uniform

4 Defendants argue that Pelzel waived his CPA claims by failing to include an assignment of
error challenging the superior court' s denial of his CPA claims. See Ryder v. Port ofSeattle, 50
Wn.    App.   144, 155, 748 P. 2d 243 ( 1987). Because Pelzel argues the CPA throughout his brief,
we use our
           discretionary authority to consider Pelzel'          s claim.    See RAP 2. 5(   a);   Roberson v.
Perez, 156 Wn.2d 33, 39, 123 P. 3d 844 ( 2005).
No. 43294 -3 - II

Declaratory Judgments Acts to declare the rights of the parties if the plaintiff shows that a

justiciable controversy           exists.    To —
                                                Ro Trade Shows v. Collins, 144 Wn.2d 403, 410 -11, 27 P. 3d

1149 ( 2001).     Because Pelzel has made such a showing, we consider his arguments regarding

declaratory relief for alleged DTA violations. 6

          Under the DTA, a deed of trust is a three -party transaction. Bain v. Metro Mortg. Grp.,

Inc., 175 Wn.2d 83, 92 -93, 285 P. 3d 34 ( 2012).                       Land is conveyed by a borrower (the grantor), to

a   third party ( the trustee),      who     holds title in trust for the lender ( the      beneficiary), as security for

credit or a   loan. 175 Wn.2d           at   93.   The deed of trust protects the beneficiary by giving it the

power to nominate a trustee, who then has the power to sell the property at a trustee' s sale on the

beneficiary' s behalf if the         borrower defaults.            175 Wn.2d at 88; Rucker v. Novastar Mortg., Inc.,

177 Wn. App. 1, 10 -11, 311 P. 3d 31 ( 2013).

          MERS maintains a private electronic registration system for tracking ownership of

mortgage related        debt. Bain, 175 Wn.2d              at    95.    In many states, including Washington, MERS is

also often    listed   as   the   beneficiary      of a   deed   of    trust.   175 Wn.2d at 88. In Bain, our Supreme

Court held " MERS is an ineligible `beneficiary within the terms of the Washington Deed of

Trust Act,'    if it never held the promissory note or other debt instrument secured by the deed of

trust."    175 Wn.2d at 110 ( internal quotation marks omitted).

s Chapter 7. 24 RCW.

6 At the superior court, Pelzel requested an injunction to vacate the trustee sale. We do not
consider Pelzel' s claim for injunctive relief because Quality already stopped the trustee' s sale
and the record does not show that a new trustee' s sale was initiated. Thus, there was no trustee
sale for an injunction to stop.

                                                                        6
No. 43294 -3 -II

         Pelzel argues that when Quality initiated the nonjudicial foreclosure ( 1) Nationstar was

not   the lawful      beneficiary      under    the DTA, (2)       Nationstar had no authority to appoint a successor

trustee, ( 3)   Quality' s initiation of a nonjudicial foreclosure of Pelzel' s property on Nationstar' s

behalf was improper, (4) Nationstar' s foreclosure was improper, and ( 5) Quality lacked authority

to initiate a nonjudicial foreclosure against Pelzel' s property on Nationstar' s behalf. We reject

Pelzel' s arguments and hold that Nationstar was the deed of trust' s beneficiary with authority to

appoint Quality as successor trustee, which gave Quality authority to initiate a nonjudicial

foreclosure      of   Pelzel'   s   property   on    Nationstar'   s   behalf under RCW 61. 24. 030( 7). We further

hold that neither any defect in MERS' s assignment of the note and deed of trust nor Nationstar' s

relationship to the deed of trust' s owner Fannie Mae affected Quality' s authority to initiate a

nonjudicial foreclosure of Pelzel' s property on Nationstar' s behalf.

A.       Nationstar 's Status as Beneficiary Under the DTA

          Pelzel argues Nationstar was not the lawful beneficiary under the DTA. We disagree.

          1.    Definition ofBeneficiary

          The deed of trust' s beneficiary is traditionally the lender who loaned money to the

homeowner. Bain, 175 Wn.2d at 88. But lenders are free to sell the secured debt, typically by

selling the     note.    175 Wn.2d       at    88.   The DTA recognizes that the deed of trust' s beneficiary at

any   one   time   might not        be the   original   lender. 175 Wn.2d             at   88. Therefore, RCW 61. 24. 005( 2)

of the DTA defines " beneficiary" broadly as the " holder of the instrument or document

evidencing the         obligations secured           by the   deed     of   trust."   175 Wn.2d at 88.

                                                                       7
No. 43294 -3 - II

         Here, the note was the instrument or document evidencing the obligations secured by the

deed of trust. Thus, the note' s holder was the beneficiary under the DTA. Accordingly, we must

determine whether Nationstar was the note' s holder.

         2. Definition of "Holder"

         The Uniform Commercial Code (UCC) guides our interpretation of the DTA' s terms. 8

Bain, 175 Wn. 2d     at   104. The UCC defines " holder"   as "[   t] he person in possession of a

negotiable instrument that is payable either to bearer or to an identified person that is the person

in   possession."   RCW 62A. 1- 201( 21)( A). A note indorsed in blank is payable to bearer. RCW

62A.3- 205( b).

         Here, the undisputed evidence establishes that Nationstar was the note' s holder. Pelzel

does not challenge that the note was indorsed in blank or that Nationstar had actual physical

possession of it after it was indorsed in blank. Once the note was indorsed in blank, it became

payable to bearer. Because Nationstar had physical possession of the note and the note was

payable to bearer, Nationstar was the note' s holder. Thus, Nationstar was the holder of the

instrument evidencing the obligations secured by the deed of trust, which made Nationstar the

deed of trust' s beneficiary under the DTA.

B.       Nationstar' s Authority To Appoint a Successor Trustee

          Pelzel argues Nationstar had no authority to appoint a successor trustee. We disagree.

7 Title 62A RCW.

8 Pelzel argues that we should not use the UCC to guide its interpretation of the DTA' s terms.
But our Supreme Court has established that the UCC guides our interpretation of the DTA' s
terms. Bain, 175 Wn.2d        at   104.
No. 43294 -3 - II

          Only a lawful beneficiary has the power to appoint a successor to the original trustee

named    in the deed   of    trust. Bavand      v.   OneWest Bank, F.S.B.,     176 Wn. App. 475, 486, 309 P. 3d

636 ( 2013).    Only a properly appointed trustee may proceed with a nonjudicial foreclosure of

real   property.   176 Wn. App. at 486 -87.

          As discussed above, Nationstar was a lawful beneficiary because it held the note. Thus,

Nationstar had authority to appoint a successor trustee.

C.        Quality' s Authority To Initiate a Nonjudicial Foreclosure Under RCW 61. 24. 030( 7)

          Pelzel   argues    that   under   RCW 61. 24. 030( 7),   Quality lacked authority to initiate a

nonjudicial foreclosure against Pelzel' s property on Nationstar' s behalf. Again, we disagree.

          RCW 61. 24. 030       provides     that "[ i] t shall be requisite to a trustee' s sale ":

                   7)( a) That, for residential real property, before the notice of trustee' s sale
          is recorded, transmitted, or served, the trustee shall have proof that the beneficiary
          is the owner ofany promissory note or other obligation secured by the deed of trust.
          A declaration by the beneficiary made under the penalty of perjury stating that the
          beneficiary is the actual holder of the promissory note or other obligation secured
          by the deed of trust shall be sufficient proof as required under this subsection.

                    b) Unless the trustee has violated his or her duty [ of good faith] under RCW
          61. 24. 010( 4),the trustee is entitled to rely on the beneficiary' s declaration as
          evidence of proof required under this subsection.

          The note' s holder is the person or entity entitled to enforce the note. Trujillo, 181 Wn.

App. at 500. Conversely, the note' s owner is the person or entity entitled to the note' s economic

benefits.    181 Wn. App. at 497. Here, Nationstar was the note' s holder, but Fannie Mae was the

note' s owner.

          Under RCW 61. 24. 030( 7)( a), a successor trustee needs proof that the beneficiary is the

note' s holder, not that the beneficiary is the note' s owner, to initiate a nonjudicial foreclosure.

Trujillo, 181 Wn.      App.    at   502.    Accordingly, under RCW 61. 24. 030( 7)( b), the declaration from

                                                              9
No. 43294 -3 - II

Nationstar' s authorized agent was sufficient proof of Nationstar' s status as the note' s holder for

Quality to initiate a nonjudicial foreclosure against Pelzel' s property.

        1.   RCW 61. 24. 030( 7)( a): ProofRequired To Initiate a Nonjudicial Foreclosure

        Pelzel argues RCW 61. 24. 030( 7)( a) requires a successor trustee to have proof the

beneficiary is the note' s owner prior to initiating a nonjudicial foreclosure. We disagree.

        The first sentence of RCW 61. 24. 030( 7)( a) suggests that the trustee must have proof that

the beneficiary is the owner of the note. But the second sentence of RCW 61. 24. 030( 7)( a)

suggests that a declaration establishing the beneficiary is the actual note' s holder meets the

requirements of the statute.

        A note is a negotiable instrument governed by article 3 of the UCC. RCW 62A.3 - 102.

RCW 62A.3 -301 of the UCC governs who is entitled to enforce the note. RCW 62A.3 - 301

provides:

         Person entitled to enforce" an instrument means ( i) the holder of the instrument,
         ii) a nonholder in possession of the instrument who has the rights of a holder, or
         iii) a person not in possession of the instrument who is entitled to enforce the
        instrument   pursuant   to RCW 62A. 3 - 309    or   62A. 3- 418( d).   A person may be a
       person entitled to enforce the instrument even though the person is not the owner
        of the instrument or is in wrongful possession of the instrument.

 Emphasis added.)

        In Trujillo, consistent with Bain' s statement that courts should use the UCC to interpret

the DTA' s terms, Division One applied RCW 62A.3 - 301 to interpret RCW 61. 24. 030( 7)( a).

Division One concluded that despite ambiguity in RCW 61. 24.030( 7)( a)' s language, it requires a

beneficiary' s declaration to establish only that the beneficiary is the note' s holder, regardless of

whether the beneficiary is the note' s owner:

                                                  10
No. 43294 -3 - II

         RCW 62A. 3- 301( i)]         makes clear ...       the " holder" of a note is entitled to enforce
        the note. It also makes clear that a " holder" may enforce the note " even though the
         holder] is not the owner" of the note.

        We have no reason to conclude that the legislature intended to depart from either
        the   common        law ...
                                 or the UCC, as articulated in RCW 62A.3 - 301, in enacting
        RCW 61. 24. 030( 7)( a) regarding proof of who is entitled to enforce a note that is
        secured by a deed of trust.         The language of the first sentence of RCW
        61. 24. 030( 7)( a) could have more clearly stated that a beneficiary who is the owner
        of a note     is   not always   the holder    of   the   note.   The holder is entitled to enforce it.
        Better still, the legislature could have eliminated any reference to " owner" of the
        note in this provision because it is the " holder" of the note who is entitled to enforce
        it, regardless of ownership.

        Nevertheless, when we consider the second sentence of this statute, which specifies
        that the beneficiary must be the holder of the note for purposes of proof, together
        with the case authority and other related statutes we have discussed, we must
        conclude that the required proof is that the beneficiary must be the holder of the
        note. It need not show that it is the owner of the note.

181 Wn. App. at 500 -01 ( alteration in original).

        We adopt Division One' s reasoning and hold that proof that the beneficiary is the note' s

holder is sufficient for a successor trustee to initiate a nonjudicial foreclosure, regardless of

whether the beneficiary is the note' s owner. Looking to related provisions, this interpretation

makes RCW 61. 24. 030( 7)( a) consistent with RCW 61. 24. 005( 2)' s language that defines the

 beneficiary"    as   the " holder."    Thus, we hold that under RCW 61. 24. 030( 7)( a), proof that the

beneficiary is the note' s holder is sufficient for a successor trustee to initiate a nonjudicial

foreclosure.

        2. RCW 61. 24. 030( 7)( b):          Adequate Proof ofHolder Status

        Pelzel   argues      that   under   RCW 61. 24. 030( 7)( b),     Quality cannot accept a declaration of

Nationstar' s authorized agent as proof that Nationstar was the note' s holder. We disagree.

                                                                 11
No. 43294 -3 - II

         RCW 61. 24. 030( 7)( b) states that the beneficiary' s declaration is sufficient, but not

necessary, to establish proof that the beneficiary is the note' s holder, unless the trustee has

violated its duty of good faith in some other way. An authorized agent can make declarations on

its principal' s behalf:

          T] he fact of the agency being once established by proper evidence, then the acts
         and declarations of the agent done or made within the scope of his agency, and
         while employed in or about the business of his principal, are binding upon the
         principal, for the reason that the acts and declarations of the agent are then deemed
         to be the acts and declarations of the principal himself.

Ennis   v.   Smith, 171 Wash. 126, 130, 18 P. 2d 1 ( 1933); see also State v. Austin, 65 Wn.2d 916,

920 -21, 400 P. 2d 603 ( 1965).    Accordingly,       we   hold that   under   RCW 61. 24. 030( 7)( b), the

declaration of a beneficiary' s agent stating the beneficiary is the note' s holder is sufficient proof

that the beneficiary is the note' s holder, unless the trustee has violated its duty of good faith in

some other way.

         Here, Pelzel does not allege any other way in which Quality violated its duty of good

faith as successor trustee. Thus, we reject Pelzel' s argument.

D.       MERS' s Assignment of the Deed of Trust

         Pelzel argues Quality' s initiation of a nonjudicial foreclosure of Pelzel' s property on

Nationstar' s behalf was improper because MERS' s assignment of the deed of trust and note to

Nationstar was invalid. We reject this argument.

         As we discussed above, because Nationstar held the note,. Quality was authorized to

initiate a nonjudicial foreclose of Pelzel' s property on Nationstar' s behalf. Under the DTA " a

security interest follows the    obligation   it   secures."    In re Butler, 512 B. R. 643, 656 ( Bankr. W.D.

Wash. 2014).       Thus, the deed of trust (the security interest) followed the note (the obligation the

                                                           12
No. 43294 -3 - II

deed of trust secures) to Nationstar. This is true regardless of whether the deed of trust was

assigned properly or at all. See 512 B. R. at 656.

        Likewise, Nationstar was the note' s holder because the note was payable to bearer and

Nationstar had physical possession of it, regardless of whether the note was assigned properly or

at all. Thus, the validity of MERS' s deed of trust or note assignments to Nationstar had no effect

on Quality' s authority to initiate a nonjudicial foreclosure of Pelzel' s property on Nationstar' s

behalf, and Pelzel' s argument fails. 512 B. R. at 656.

E.      Servicer or Agent for Fannie Mae

        Pelzel argues that Nationstar' s foreclosure was improper because Nationstar did not

prove that it was a servicer or agent for the note' s owner, Fannie Mae. We disagree.

        As the note' s holder, Nationstar was the beneficiary entitled to appoint a successor

trustee, and Quality had authority to initiate a nonjudicial foreclosure of Pelzel' s property on

Nationstar' s behalf, regardless of whether Nationstar owned the note. Accordingly, whether

Nationstar was the servicer or agent of the note' s owner had no effect on Quality' s authority to

initiate a nonjudicial foreclosure of Pelzel' s property on Nationstar' s behalf. Pelzel' s claims for

declaratory relief under the DTA fail.

                                                  II. CPA

        Pelzel raises arguments under the DTA and CPA on appeal. In the superior court, Pelzel

requested damages and attorney fees against the defendants. After the briefing was filed in this

case, our Supreme Court held that absent a completed foreclosure sale, a plaintiff could bring a

cause of action for monetary damages for alleged DTA violations under the CPA, but not under

the DTA.   Frias    v.   Asset Foreclosure Servs., Inc., 181 Wn.2d 412, 433, 334 P. 3d 529 ( 2014).

                                                     13
No. 43294 -3 - II

Because no completed foreclosure sale occurred in Pelzel' s case, we consider Pelzel' s claims for

damages under only the CPA, not the DTA.

         Under Washington'           s   CPA, "[ u] nfair methods of competition and unfair or deceptive acts

or practices     in the   conduct of     any trade   or commerce are ...         unlawful."         RCW 19. 86. 020. To

prevail on a CPA claim, a plaintiff must prove that ( 1) the defendant engaged in an unfair or

deceptive      act or practice, ( 2)     the act occurred in trade or commerce, ( 3)              the act affects the public

interest, ( 4)   the plaintiff suffered injury to his business or property, and ( 5) the injury was

causally   related   to the   act.   Hangman Ridge           Training Stables,    Inc.     v.   Safeco Title Ins. Co., 105

Wn.2d 778, 780, 719 P. 2d 531 ( 1986).               Failure to establish even one of these elements is fatal to

the   claim.   Indoor Billboard /Wash., Inc.          v.   Integra Telecom of Wash., Inc., 162 Wn.2d 59, 74,

170 P. 3d 10 ( 2007).

         The CPA does         not    define the term " deceptive," but implicit in that term is " the

understanding that the         actor misrepresented          something   of material       importance." Hiner v.

Bridgestone /Firestone, Inc., 91 Wn.            App.       722, 730, 959 P. 2d 1158 ( 1998), rev' d on other

grounds,    138 Wn.2d 248 ( 1999). For            an unfair or       deceptive   act, "[   a] plaintiff need not show that

the act in question was intended to deceive, but that the alleged act had the capacity to deceive a

substantial portion of        the   public."   Hangman Ridge          Training Stables Inc.,         105 Wn.2d at 785.

         Pelzel argues that when Quality initiated the nonjudicial foreclosure ( 1) the defendants

violated the CPA by misrepresenting that Quality had authority to initiate a nonjudicial

foreclosure of Pelzel' s property on Nationstar' s behalf, (2) Quality violated the CPA by giving

Pelzel a notice of default identifying Nationstar as the note' s owner, and ( 3) MERS violated the

CPA by assigning the deed of trust and note to Nationstar as the nominee of Homecomings. We

                                                                14
No. 43294 -3 - I1

hold that the defendants did not misrepresent Quality' s authority to initiate a nonjudicial

foreclosure of Pelzel' s property on Nationstar' s behalf, and we further hold that Pelzel failed to

demonstrate how either the Notice of Default' s misstatement that Nationstar owned the note or

MERS' s assignment of the deed of trust on Homecoming' s behalf caused him injury.

A.      Quality' s Authority To Initiate a Nonjudicial Foreclosure ofPelzel' s Property on
        Nationstar' s Behalf

        Pelzel argues the defendants violated the CPA by misrepresenting that Quality had

authority to initiate a nonjudicial foreclosure of Pelzel' s property on Nationstar' s behalf. We

disagree.

        As we discussed above, Quality had authority to initiate a nonjudicial foreclosure of

Pelzel' s property on Nationstar' s behalf because Nationstar was the note' s holder and the deed of

trust' s beneficiary. Thus, any representation that Quality had authority to initiate a nonjudicial

foreclosure of Pelzel' s property on Nationstar' s behalf was a true representation, and thus, not a

deceptive act. Pelzel' s claim fails.

B.      Notice ofDefault

        Pelzel argues that Quality violated the CPA by giving Pelzel a notice of default that

identified Nationstar as the note' s owner, when Nationstar was not the owner. We disagree.

        The notice of default properly informed Pelzel that he was in default and that Nationstar

was the entity Pelzel should contact. Pelzel provided no evidence or argument as to how the

statement that Nationstar was the owner /beneficiary injured him. Because Pelzel provided no

evidence that any injury was causally related to the notice of default' s misstatement that

Nationstar owned the note, he has failed to prove all the necessary elements of a CPA claim, and

his CPA claim fails.

                                                  15
No. 43294 -3 - II

C.      Assignment of the Deed of Trust

        Pelzel argues MERS violated the CPA by assigning the deed of trust and note to

Nationstar as the nominee of Homecomings because Nationstar already held the note, meaning

that MERS no longer had physical possession of the note and Homecomings was no longer the

note' s beneficiary. Again, we disagree.

        As we discussed above, because Nationstar was the beneficiary who held the note,

Quality was entitled to initiate a nonjudicial foreclosure of Pelzel' s property on Nationstar' s
behalf, regardless of whether MERS' s assignment of the note and deed of trust was valid.

Butler, 512 B. R. at 656. MERS' s assignment of the note and deed of trust directed those who

read it to Nationstar, the very entity authorized to enforce the note. Pelzel has provided no

evidence or argument how MERS' s assignment, even if deceptive, caused Pelzel any injury.

Because Pelzel provided no evidence that any injury was causally related to MERS' s assignment,

he has failed to prove all the necessary elements of a CPA claim, and his CPA claim fails.

                                          ATTORNEY FEES

        Pelzel requests attorney fees and costs on appeal under the CPA. Only a prevailing party

may recover attorney fees under the CPA. RCW 19. 86. 090; Swain v. Colton, 44 Wn. App. 204,

206 -07, 721 P. 2d 990 ( 1986).   Here, because Pelzel is not a prevailing party, he is not entitled to

attorney fees on appeal. 44 Wn. App. at 206 -07.

                                                    16
No. 43294 -3 - II

         We affirm.

        A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports, but will be filed for public record in accordance with RCW

2. 06. 040, it is so ordered.

 We concur:
                                                                    Worswick, P. J.
                                                                                      CF

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