Court Opinion

ID: 4378206
Source: CourtListenerOpinion
Date Created: 2019-03-18 21:45:03.477309+00
Date Added: 2024-06-11T14:49:36.411502
License: Public Domain

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

 In the Matter of the Trustee's Sale                No. 77420-4-1
 of the Real Property of:
                                                    DIVISION ONE
 DANIEL ANDERSON,
                                                    PUBLISHED OPINION
 GLOBAL PROCEEDS, LLC,

                              Appellant,

                 V.

 UMPQUA BANK,

                               Respondent.          FILED: March 18, 2019

          CHUN, J. — A nonjudicial foreclosure sale of Daniel Anderson's property

yielded surplus proceeds. Umpqua Bank (Umpqua)and Global Proceeds, LLC.

(Global Proceeds)1 filed competing motions with the superior court for

disbursement of the surplus under RCW 61.24.080(3). The trial court denied

Global Proceeds' request and disbursed the full amount of the surplus to

Umpqua, despite Global Proceeds' assertion of a higher priority lien. Because

Global Proceeds failed to provide sufficient evidence of an enforceable lien, we

affirm.

          I The following series of events led to Global Proceeds' role in this matter: Anderson
originally borrowed money from GreenPoint Mortgage Funding, Inc. (GreenPoint). In October
2007, Countrywide Home Loans, Inc. (Countrywide) purchased GreenPoint's assets. Bank of
America then purchased Countrywide in July 2008. On June 5, 2012, Nationstar Mortgage
Holdings (Nationstar) bought the loan servicing rights to Anderson's loan from Bank of America.
Veripro Solutions (Veripro) serves as the internal collection division of Nationstar. Global
Proceeds, in turn, serves as the authorized collection agent for Veripro. Global Proceeds, as
agent for Veripro, claims the right to act in place of GreenPoint.
No. 77420-4-1/2

                                      1.
                                 BACKGROUND

       Daniel Anderson owned real property in Kent, Washington. On April 19,

2004, he obtained two loans from GreenPoint Mortgage (GreenPoint), both

secured by the property. The first was for $148,000, and the second was for

$27,700.

       On November 4, 2010, Umpqua received a judgment against Anderson in

the amount of $58,874.29. The judgment was recorded on March 25, 2011.

      Anderson died on January 25, 2014.

       On January 20, 2017, the trustee, Quality Loan Servicing Corporation of

Washington, conducted a nonjudicial foreclosure sale for the first position lien.

The trustee sold the property for $210,200, and satisfied GreenPoint's first

position lien. Pursuant to RCW 61.24.080, the trustee deposited the surplus with

the registry of King County Superior Court. After fees and costs, the deposited

net surplus funds amounted to $39,031.25.

      On May 15, 2017, Umpqua filed a motion to disburse the entirety of the

surplus funds toward their judgment lien. Umpqua noted that an online search of

King County real property records failed to produce other creditors with recorded

judgments against Anderson as of March 25, 2011, the recording date of its

judgment.

      On June 7, 2017, Global Proceeds filed an untimely objection to

Umpqua's request for disbursement. Global Proceeds asserted priority to funds

due to a balance owed on the second promissory note and deed of trust

recorded with GreenPoint on May 4, 2004. Global Proceeds supported this

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No. 77420-4-1/3

request with a declaration from Global Proceeds agent Stacey Hobrath "based

upon information and belief, and [her] own investigations." According to Hobrath,

Anderson had executed a promissory note secured by a deed of trust on April 19,

2004 in favor of GreenPoint. Hobrath reported an outstanding balance of

$22,960.51 on the promissory note, payable to Global Proceeds as the agent

authorized to act in place of GreenPoint.

       Despite the late opposition, a commissioner heard argument from

Umpqua and Global Proceeds on June 9, 2017. The commissioner continued

the hearing for further briefing on the enforceability of the promissory note, but

entered a finding entitling Umpqua to the $16,070.74 of the surplus in excess of

the disputed $22,960.51 claimed by Global Proceeds. The commissioner

reserved disbursement of the remaining funds.

       Before the next hearing, Umpqua requested Global Proceeds provide

"documentation itemizing any payments made (and the dates the payments were

made)on the promissory note under which Global Proceeds is claiming

entitlement to a portion of the surplus." Counsel for Global Proceeds responded

he was trying to obtain better information because he possessed only "an excel

sheet with some payments, but it lacks references to the debtor." Umpqua never

received additional information pertaining to this request.

       Global Proceeds subsequently filed its own motion for disbursement of the

funds. The motion did not include any documentary evidence to supplement

Hobrath's earlier declaration. After the noon deadline on the day before oral

argument, Global Proceeds submitted a copy of the Assignment of Deed of Trust

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No. 77420-4-1/4

for the second mortgage from GreenPoint to Bank of America, and a copy of an

April 20, 2017 letter establishing the payoff amount for the loan.

       On July 21, 2017, the commissioner heard oral argument on the

competing motions for disbursement of the surplus. Umpqua argued that Global

Proceeds failed to provide evidence of an enforceable debt. The commissioner

granted Umpqua's motion, allowing disbursal of the entire surplus.

       Global Proceeds filed a motion for revision, which the trial court denied.

Global Proceeds appeals.
                                        II.
                                     ANALYSIS

                   RCW 61.24.080 Distribution of Surplus Funds

       In this case, the trial court based its decision solely on documentary

evidence, declarations, and memoranda of law. Therefore, this court stands in

the same position as the trial court and reviews the decision de novo. Morgan v.

City of Federal Way, 166 Wash. 2d 747, 753, 213 P.3d 596 (2009).

       The Deed of Trust Act(DTA) provides for distribution of surplus funds from

a nonjudicial foreclosure sale. RCW 61.24.080(3). "Interests in, or liens or

claims against the property eliminated by sale under this section shall attach to

the surplus in the order of priority that it had attached to the property, as

determined by the court." RCW 61.24.080(3). A party seeking disbursement of

surplus funds must file a motion with the superior court holding the deposited

funds. RCW 61.24.080(3). The priority of competing creditor rights is

determined by the order in which the liens attached to the property. In re Matter

of Deal, 85 Wash. App. 580, 583, 933 P.2d 1084 (1997). A junior lienholder's

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No. 77420-4-1/5

interest is eliminated by the trustee Sale and attaches to the surplus. In re Tr.'s

Sale of Real Prop. of Giannusa, 169 Wash. App. 904, 910, 282 P.3d 122(2012).

       RCW 61.24.080(3) requires a party seeking disbursement to file a motion

with the superior court. But the statute omits guidance on the contents of the

motion necessary to establish a claim to the surplus funds. However,

RCW 61.24.080(3) tasks the superior court with deciding the order of priority of

attachment to original property and continuing on to the surplus. To perform this

duty, the trial court must determine the existence of any interests in the property.

Claimants under RCW 61.24.080(3) must therefore provide evidence to establish

the existence and balance of the lien. Without this information, the trial court

cannot evaluate the priority of competing claims to the surplus funds.

       Every case has a burden of production, met when the plaintiff produces

evidence sufficient to support a finding on each element of the cause of action.

Carle v. McChord Credit Union, 65 Wash. App. 93, 98, 827 P.2d 1070 (1992).

"[P]arties must first satisfy the court that they have a quantity of evidence fit to be

considered by the trier of fact." State v. Paul, 64 Wash. App. 801, 806, 828 P.2d

594(1992)(emphasis omitted). In ordinary civil cases, this burden of production

amounts to "evidence from which a rational trier of fact could find by a

preponderance of the evidence the facts required by the substantive law." In re

Dependency of C.B., 61 Wash. App. 280, 285, 810 P.2d 518, 521 (1991). Applying

these principles, a party claiming surplus funds from a foreclosure sale under

RCW 61.24.080(3) needs to demonstrate the right to assert the debt and the

amount owed by a preponderance of evidence. Claimants seeking funds under

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No. 77420-4-1/6

RCW 61.24.080(3) must produce evidence admissible under the Rules of

Evidence. See ER 1101(a).

        Here, Umpqua provided definitive evidence of its judgment lien. Umpqua

submitted a certified copy of the King County Superior Court judgment entered

on its behalf against Anderson. Umpqua also included a copy of the official

record of the judgment. Global Proceeds does not dispute the validity of

Umpqua's judgment.

        In contrast, Global Proceeds produced minimal evidence in support of its

claimed interest in the surplus. Global Proceeds failed to produce a promissory

note or deed of trust signed by Anderson, and any evidence of payment history,

or a calculation of the balance owed. In addition to Hobrath's conclusory

declaration, Global Proceeds submitted a copy of the Assignment of the Deed of

Trust from GreenPoint to Bank of America executed on July 5,2012. The

Assignment transferred "all beneficial interest" under the Deed of Trust originally

made by Anderson on April 19, 2004, for the loan amount of $27,700.00.

Additionally, Global Proceeds produced a letter from Veripro Solutions listing a

payoff amount of $22,960.51 for the loan as the sole evidence of the outstanding

balance of the lien.

        Taken together, Global Proceeds' evidence establishes neither its right to

assert the debt nor the amount owed by a preponderance of the evidence.

Therefore, Global Proceeds cannot meet its burden of production.2 Without

        2 Global Proceeds centers its argument on the statute of limitations, claiming the trial
court erroneously concluded its lien was unenforceable because the statute of limitations had run
on the promissory note. But Global Proceeds' focus on the statute of limitations misses the larger
issue—the inadequacy of its evidence. The statute of limitations issue is merely one potential

                                               6
 No. 77420-4-1/7

adequate evidence of Global Proceeds' lien, the trial court did not err by

disbursing the funds to Umpqua.

                                          Attorney fees

           Global Proceeds requests attorney fees and costs from the surplus funds

 under the terms of the Promissory Note. However, Global Proceeds merely

asserts, without legal argument, its entitlement to fees under the promissory

note. This does not constitute an adequate request for fees on appeal. "The

party requesting fees on appeal is required by RAP 18.1(b) to argue the issue

and provide citation to authority in order to advise the court as to the appropriate

grounds for an award of attorneys'fees and costs." Blueberry Place

Homeowners Ass'n v. Northward Homes, Inc., 126 Wash. App. 352, 363 n.12, 110
P.3d 1145 (2005). Nor is Global Proceeds a prevailing party. Thus, we decline

to award fees.

          Affirmed.

                                                              ce....„9
WE CONCUR:

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problem stemming from Global Proceeds' failure to produce sufficient evidence of the lien.
Regardless of the statute of limitations, the copy of the Assignment of Deed of Trust and the letter
summarily listing a payoff amount does not establish the continued existence of the lien and its
outstanding balance by a preponderance of the evidence. Without adequate evidence to satisfy
the burden of production, the trial court cannot assess the merits of Global Proceeds' claim to the
surplus funds.

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