Court Opinion

ID: 4715098
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:43:15.471014+00
Date Added: 2024-06-11T08:07:25.765846
License: Public Domain

¶48 (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 breach of duties under the Deed of Trust Aet[, ch. 61.24 RCW,] 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 *434which 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) without a discussion of the various duties created in the statute. See majority at 417. 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, may sue a trustee for breach of this duty, even in the absence of a completed trustee’s sale.
Wiggins, J.
*434ANALYSIS
¶49 The legislature may implicitly or explicitly create a cause of action. See Ducote v. Dep’t of Soc. & Health Servs., 167 Wn.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 Wn.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.” Id. (quoting In re Wash. Pub. Power Supply Sys. Sec. Litig., 823 F.2d 1349, 1353 (9th Cir. 1987)).
¶50 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.

*435
Part 1: Frias is a member of the class protected by the statute

¶51 The first part of the test is satisfied because Frias is “within the class for whose ‘especial’ benefit the statute was enacted ...” Id. at 920. RCW 61.24.010(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

¶52 Legislative intent explicitly and implicitly supports creating a cause of action against the trustee (even prior to a completed trustee’s sale). Id. 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(l)(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.
¶53 The majority reaches a different conclusion. Majority at 423. 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. *436RCW 61.24.127(2)(a), (c), (e). The majority relies on the fact that all of the limitations rely on a past foreclosure sale to support its conclusion that the legislature intended a claim for damages only after a foreclosure sale.
|54 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.3
¶55 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 Wn.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 61.24.010(4). Here, the legislature did not explicitly provide a mechanism for protecting borrowers, beneficiaries, or grantors from a trustee who acts in bad faith.4 Therefore, we may assume that the legislature intended that there would be a judicial mechanism to *437enforce 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

¶56 Implying a remedy is consistent with RCW 61.24-.010(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.
¶57 A cause of action is also consistent with the overall objectives of the DTA. The objectives are that “ ‘the 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 Wn.2d 94, 104, 297 P.3d 677 (2013) (quoting Cox v. Helenius, 103 Wn.2d 383, 387, 693 P.2d 683 (1985)).
f 58 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 428-29. 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 the law from the beginning of the foreclosure process. When nonjudicial foreclosures are pursued and completed lawfully, the process will ultimately be more efficient.
¶59 The remedy also supports the second purpose, which is to “ ‘provide an adequate opportunity for interested parties to prevent wrongful foreclosure.’ ” Schroeder, 177 Wn.2d at 104 (quoting Cox, 103 Wn.2d at 387). Under RCW *43861.24.130, 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.
¶60 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.
¶61 I dissent in part and concur in part.
C. Johnson and González, JJ., concur with Wiggins, J.

 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 430.

 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 being foreclosed.” Id. 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.