Court Opinion

ID: 2815034
Source: CourtListenerOpinion
Date Created: 2015-07-07 21:38:04.880008+00
Date Added: 2024-06-11T09:32:39.436252
License: Public Domain

FILED
                                                                                            COURT OF APP7ALS
                                                                                                    kJi vISIO)N j"
                                                                                          2015 JUL - 7 AIM 8: 4 6
    IN THE COURT OF APPEALS OF THE STATE OF W

                                                 DIVISION II

U. S. BANK NATIONAL ASSOCIATION, AS                                         No. 46,'
TRUSTEE FOR LEHMAN BROTHERS
 SMALL BALANCE COMMERCIAL
MORTGAGE PASS- THROUGH
CERTIFICATES, SERIES 2007- 3, a national
association,

                                      Respondent,                     UNPUBLISHED OPINION

          ori

 MAXIM LISSAK, an individual,

                                       Appellant,

 VICTORY STATE LLC,,a Washington limited
 liability company; JOHN DOES 1 through 10,
 inclusive, and ROES 1 through 10, inclusive,

                                       Defendants.

         SUTTON, J. —         Maxim Lissak appeals the superior court' s order granting U.S. Bank

National Association' s ( U. S. Bank) motion to dismiss his counterclaims for declaratory judgment

arising out of a judicial foreclosure initiated against him by U.S. Bank. He argues that the superior

court erred in dismissing his counterclaims because he presented a " justiciable controversy" under

the Uniform Declaratory Judgments Act, chapter 7. 24 RCW ( UDJA) and that the superior court

violated his right to a jury trial. Because the superior court lacked jurisdiction under the UDJA to

grant   Lissak the   relief   he   sought and   because Lissak   never stated a claim under which   he   could
No. 46293 -1 - II

prevail at trial, the superior court properly dismissed his counterclaims and properly concluded

that he has no right to a jury trial on' his counterclaims. We affirm.

                                                                  FACTS

         On or about March 27, 2007, Lissak borrowed $333, 500.00 ( the loan.), evidenced by a Deed

of Trust, listing U. S. Bank as the loan beneficiary and the holder of the underlying promissory

note.   On April 1, 2012, Lissak defaulted on the loan by failing to make an installment payment

when due; he also failed to make all subsequent payments. U. S. Bank filed a judicial foreclosure

lawsuit to obtain a judgment to sell the property at a sheriff' s sale.

             In response, Lissak filed a denial to U. S. Bank' s lawsuit with affirmative defenses and

counterclaims          for    declaratory judgment       under      the UDJA.           He alleged..that ( 1) he informed U. S.

Bank that he       wanted        to   be   considered   for   a   loan      modification, (   2) U.S. Bank informed him that

only delinquent borrowers                  are considered     for loan      modifications, (    3) Lissak was informed that he

should       default   on     his loan to be     considered       for   a modification, ( 4),    he defaulted     on   his loan, ( 5)

U.S. Bank failed to consider him for a loan modification, and ( 6) that he " fully followed [ U.S.

Bank'   s]    advice    in   expectation      that [ U.S. Bank] would           offer   to him [ a] loan   modification."    Clerk' s

Papers ( CP)      at    83.    Lissak requested that the superior court enter a declaratory judgment on his

right to a loan modification under the UDJA, alleging that:

                     A true and justiciable controversy exists between Defendant Lissak and
             Plaintiff U.S. Bank National Association regarding Defendant' s rights to loan
             modification.  Adjudication of this controversy by this Court would definitively
             resolve the controversy.

                     A true and justiciable controversy exists between Defendant Lissak and
             Plaintiff U. S. Bank National Association regarding Defendant' s rights based on
             representations made by the Plaintiffs representatives with relation to loan

                                                                        2
No. 46293 -1 - II

        modification and            Defendant'       s reliance on such representations.           Adjudication of

        this controversy by this Court would definitively resolve the controversy.

CP at 84- 85. U. S. Bank moved to dismiss under CR, 12( b)( 6).

        The     superior court         granted       U. S. Bank'     s motion   to dismiss   under     CR 12( b)( 6).          Lissak

appeals.

                                                            ANALYSIS

        Lissak       argues     that ( 1)    the superior    court erred      in ruling that it lacked jurisdiction, (2) he

properly pled his counterclaims for declaratory judgment under the UDJA, and ( 3) the superior

court denied him his right to a jury trial when it dismissed his counterclaims. We disagree.

                                       I. SUPERIOR COURT' S UDJA JURISDICTION

         We     review     de   novo a               on a motion      to dismiss   a claim under   CR 12( b)( 6).       Gorman v.
                                            ruling

City   of Woodinville, 175 Wash. 2d 68, 71, 283 P.3d 1082 ( 2014).                             The superior court properly

dismisses a complaint only if the complaint alleges no facts that would justify recovery. Gorman,
175 Wash. 2d      at   71.   We presume the plaintiff' s allegations to be true, and we draw all reasonable

inferences from those facts in the               plaintiff' s    favor. Gorman, 175 Wash. 2d              at   71. "    The UDJA `is

designed to settle and afford relief from insecurity and uncertainty with respect to rights, status

and other      legal   relations"'     and we construe          it   liberally. Pasado' s Safe Haven v. State, 162 Wn.

App.   746; 759, 259 P.3d 280 ( 2011) (              quoting DiNino v. State, 102 Wash. 2d 327, 330, 684 P.2d 1297

  1984));    RCW 7. 24. 120. The UDJA provides:

           A   person interested             under     a   deed,     will,   written   contract   or   other        writings

           constituting a contract, or whose rights, status or other legal relations are affected
           by a statute, municipal ordinance, contract or franchise, may have determined any
            question of construction or validity arising under the instrument, statute, ordinance,
            contract or franchise and obtain a declaration of rights, status or other legal relations
            thereunder.

                                                                      3
No. 46293 -1 - II

RCW 7.24. 020. CR 57, which governs declaratory judgments in civil cases, provides in pertinent

part:

                  The procedure for obtaining a declaratory judgment pursuant to the Uniform
          Declaratory Judgments Act, RCW 7. 24, shall be in accordance with these rules, and
          the right to trial by jury may be demanded under the circumstances and in the
          manner provided                  in   rules   38   and   39.    The existence of another adequate remedy
          does not preclude a judgment for declaratory relief in cases where it is appropriate.

          Lissak argues that his counterclaims fall within the UDJA because he and U. S. Bank " need

to know their               rights   and   liabilities       under   the U. S. Bank'        s   loan   modification process."           Br. of

Appellant      at      9.    Because Lissak does not seek to resolve a " question of construction or validity"

of a contract, we              hold that he does             not   have   a   justiciable controversy           under     the UDJA.      RCW

7. 24. 020.

          Under the UDJA, a person whose rights, status, or other legal relations are affected by a

contract   may         present a " question of construction or                    validity arising      under   the ...   contract,"
                                                                                                                                        so long

as the UDJA' s underlying requirements are met. RCW 7. 24. 020; see Branson v. Port ofSeattle,

 152 Wash. 2d 862, 877, 101 P.3d 67 ( 2004).                          To seek declaratory judgment under the UDJA, a person

must present a "             justiciable controversy."               Branson, 152 Wash. 2d            at   877. " Absent issues of major

public    importance, ...             a `justiciable controversy' must exist before a court' s jurisdiction may be

invoked    under            the [ UDJA]."        DiNino, 102 Wash. 2d at 330 ( quoting Diversified Indus. Dev. Corp. v.

Ripley,   82 Wash. 2d 811, 815, 514 P.2d 137 ( 1973)).                              A "justiciable controversy" requires all four of

the following elements:

              1) ...          an actual, present and existing dispute, or the mature seeds of one, as
          distinguished               from       a   possible,       dormant,       hypothetical,        speculative,       or   moot

          disagreement, ( 2) between                    parties    having     genuine and       opposing interests, ( 3) which
          involves             interests that        must      be direct          and   substantial,     rather than potential,

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No. 46293 - 1 - II

          theoretical, abstract or academic, and ( 4) a judicial determination of which will be
          final and conclusive."

Pasado'     s   Safe Haven, 162 Wn.          App.   at   761 (   alteration   in   original) (   quoting DiNino, 102 Wash. 2d at

330- 31).         Under the UDJA, a court may not add terms to the contract or write a new contract

because:

          courts do not have the power, under the guise of interpretation, to rewrite contracts
          the parties havedeliberately made for themselves[, and they] ... may not interfere
          with the freedom of contract or substitute their judgment for that of the parties to
          rewrite the contract.

McCormick            v.   Dunn &   Black, P.S., 140 Wash. App. 873, 891- 92, 167 P.3d 610 ( 2007).

          Lissak fails to establish a justiciable controversy because he does not dispute the

construction or validity of his contract with U.S. Bank upon which U. S. Bank initiated judicial

foreclosure proceedings, and because his claims are based on purported statements made by U.S.

Bank representatives, upon which he apparently seeks to contractually bind U. S. Bank to consider

him for       a   loan    modification.      But he presents neither evidence of a contract, nor any basis for

requiring U. S. Bank to modify his loan.                    Nor does he plead the existence of an agreement with

U.S. Bank to modify his loan; their contract is the Deed of Trust, which requires Lissak to make

payments under the terms of the promissory note, and under which U. S. Bank may foreclose upon

Lissak'   s     default.'    Lissak fails to show that this contract required U. S. Bank to modify his loan or

  See CP        at If an [ e] vent of [d] efault has occurred and is continuing, Lender shall have the
                     11, 25 ("
remedies of a secured party under the Uniform Commercial Code, in addition to all remedies
provided        by this    Instrument   or   existing    under applicable      law."), CP        at   27 (" If an [ e] vent of [d] efault

has occurred and is continuing, Lender may, regardless of the adequacy of Lender' s security or the
solvency of Borrower and even in the absence of waste, enter upon and take and maintain full
control of        the Mortgaged       Property"), CP at 46 ( the " failure by Borrower to pay or deposit when
 due any amount required by the Note, this Instrument, or any other Loan Document" triggers
 default).
No. 46293 -1 - II

to even consider a loan modification. If the superior court would have elected to interpret such a

provision into the contract, it would have rewritten the contract by adding language to which the

parties never agreed,       thereby exceeding its jurisdiction           under   the UDJA.       See McCormick, 140
Wash. App. at 891; see also In re Marriage ofMudgett, 41 Wash. App. 337, 341, 704 P.2d 169 ( 1985)

 holding that, under the UDJA, a court is not.permitted to add new terms to a contract or rewrite a

contract).

          Because Lissak fails to present evidence of a contract between him and U.S. Bank for the

right to a loan modification, his argument is, at best, relegated to the parties' rights and liabilities

under a potential contract.         Accordingly, Lissak' s dispute is         merely "`    possible, ...      hypothetical,

 or] speculative,"'      and is not a justiciable controversy for the superior court. Pasado' s Safe Haven,

162 Wn.      App.   at   761 ( quoting DiNino, 102 Wash. 2d            at   330- 31).    Because his counterclaims for

declaratory judgment do not satisfy all four elements to present a justiciable controversy, the

superior court properly granted U. S. Bank' s CR 12( b)( 6) motion and dismissed his counterclaims.2

2 Lissak also argues that the superior court erred in ignoring his pleadings and misinterpreting his
arguments, and that the court treated his counterclaims for declaratory judgment as a request for
the court to modify his loan rather than a request to decide his right to be considered for a loan
modification. Because Lissak' s request would revise or create contractual obligations in the Deed
of   Trust between him        and   U. S. Bank, the      superior    court    properly held that "       ordering a loan
modification would amount            to creating a new     contract or     altering   an   existing   one,"   and thus " the

 court   lacks jurisdiction    under   the [ UDJA] to     provide    the    relief sought    by [ Lissak]."      CP at 106

 citing Mudgett, 41 Wn.        App.    at   341).   We see no misinterpretation of Lissak' s counterclaims; he
 sought relief that went beyond a question of validity or construction of the contract already in place
 between Lissak and U. S. Bank. Lissak' s request was thus outside the scope of the UDJA and the
 superior court correctly dismissed his counterclaims.

                                                            M
No. 46293 -1 - II

                                                    II. JURY TRIAL RIGHT

          Lissak also argues that the superior court violated his right to a jury trial by granting U.S.

Bank' s   motion    to      dismiss. See WASH. CONST.             art.   I, § 21 ("   The right of trial by jury shall remain

inviolate.").    But because he fails to show a " justiciable controversy" for his counterclaims and he

cannot prevail at        trial, there is   no right    to   a   jury   trial.   McCormick, 140 Wash. App. at 891 ( court

may   exercise   jurisdiction only         over    justiciable    controversies);        see also Sudar v. Dep' t of Fish &

Wildlife Comm'         n,       Wn.     App. ,       347 P.3d 1090, 1096 ( 2015) ("            The trial court may grant a

CR 12( b)( 6)    motion when no            facts   exist   that   would     justify   recovery," such as when there is no

justiciable controversy.).         And he cites no other factual support or legal authority for his statement

that the superior court violated his right to a jury trial, thus we need not address his argument

further.3

          Because the superior court lacked jurisdiction under the UDJA to grant Lissak the relief he

sought4 and because Lissak never stated a claim under which he could prevail at trial, the superior

court properly dismissed his counterclaims and properly concluded that he has no right to a trial

3
    RAP 10. 3(   a)(   6)    requires   the appellant' s brief to include "             argument in support of the issues
presented for review, together with citations to legal authority and references to relevant parts of
the record."

4 We do not decide whether Lissak may have other remedies available to him.

                                                                   7
No. 46293 -1 - II

on his counterclaims. 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.

                                                   SUTTON, 7.
 We concur:

    HSON,     CC.T.   -