Justia Washington Supreme Court Opinion Summaries

Rocio Trujillo's home loan was secured by a deed of trust encumbering the home. She defaulted, and Northwest Trustee Services Inc. (NWTS), the successor trustee, sent a notice of default and scheduled a trustee's sale of her property. NWTS had a beneficiary declaration from Wells Fargo Bank. RCW 61.24.030(7)(a) (part of the Deeds of Trust Act) required that a trustee not initiate such a nonjudicial foreclosure without "proof that the beneficiary [of the deed of trust] is the owner of any promissory note ... secured by the deed of trust," and must include "[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." NTWS' declaration did not contain that specific statutory language. Instead, it stated under penalty of perjury, "Wells Fargo Bank, NA is the actual holder of the promissory note . . . or has requisite authority under RCW 62A.3-301 to enforce said [note]" (This declaration language differed from the language of RCW 61.24.030(7)(a), by adding the "or" alternative). Following the Washington Supreme Court's decision in "Lyons v. U.S. Bank National Ass 'n," (336 P.3d 1142 (2014)), the Court held in this case that a trustee could not rely on a beneficiary declaration containing such ambiguous alternative language. The Court found that Trujillo alleged facts sufficient to show that NWTS breached the DTA and also to show that that breach could support the elements of a Consumer Protection Act (CPA) claim. However, her allegations did not support a claim for intentional infliction of emotional distress or criminal profiteering. The Court therefore reversed in part and remanded for trial. View "Trujillo v. Nw. Tr. Servs., Inc." on Justia Law

The parties in this case, the Gamboas and Clarks, owned adjoining parcels of land separated by a gravel road in a rural area in Yakima County. Since coming to the parcel in 1992, the Gamboas used the gravel road as a driveway to access their home and some of their alfalfa crop. When the Clarks came to their parcel in 1995, they used the road to farm grapes, including watering the grape plants and spraying for weeds. The trial court found that "[t]he Gamboas and the Clarks both used the roadway as described above without any disputes until 2008. Each party was aware of the other's use of the roadway, but no one objected to the other's use until a dispute arose in 2008." A dispute arose over the Gamboas' dogs and the Clarks' irrigation practices, and "it eventually escalated into a dispute over which of them owned the land on which the roadway was situated." This case presented for the Supreme Court's review the issue of whether the Gamboas met one of the requirements of the rule that would allow them to continue using the road. Specifically, the Gamboas had to show that their use of the road was adverse to the Clarks. Since the evidence showed a reasonable inference that the Clarks let the Gamboas use the road out of "neighborly acquiescence," the Supreme Court held that the Gamboas did not show that their use of the road was adverse to the Clarks. Therefore, the Gamboas could not continue using the road. View "Gamboa v. Clark" on Justia Law

The Ninth Circuit Court of Appeals certified three questions to the Washington Supreme Court regarding the scope of landowners' or possessors' responsibility for harm that results when strangers commit criminal acts against invitees on business premises under Washington law. In 2005, Dominick Maldonado walked into the Tacoma Mall and opened fire on shoppers and mall employees, injuring seven people. At the time of the shooting, there were four unarmed security guards on duty and no security cameras. While the mall had an intercom system, it was inaudible and inaccessible on weekends, and the security guards were never trained to use it. Brendan McKown was one of the people injured, and brought a negligence action against the mall's lawdowner/possessor of the mall, landlord to the businesses in the mall, Simon Property Group, Inc. In his complaint, McKown alleged that Simon failed to exercise reasonable care to protect him from foreseeable criminal harm. After removing the case to federal district court, Simon moved for summary judgment, arguing Maldonado's acts were unforeseeable, and any negligence on Simon's part was not a proximate cause of McKown's injuries. The trial court denied Simon's motion, then on reconsideration, the trial court vacated its holding and granted the motion. On appeal, a panel of the Ninth Circuit Court of Appeals acknowledged it was bound to follow this court's interpretation of Washington law but expressed uncertainty as to the scope of a landowner's duty to protect business invitees from the criminal acts of third persons. In answering the Ninth Circuit's questions, the Washington Supreme Court held that when a duty is premised on evidence of prior similar acts, a landowner or possessor owes a duty to protect business invitees from third party criminal conduct when such conduct is foreseeable based on past experience of prior similar acts. The prior acts of violence on the business premises must have been sufficiently similar in nature and location to the criminal act that injured the plaintiff, sufficiently close in time to the act in question, and sufficiently numerous to have put the business on notice that such an act was likely to occur. Based on the limited focus of the questions and the briefing, the Court did not decide the circumstances under which a duty would arise when the duty is based solely on the business's place or character. View "McKown v. Simon Prop. Grp., Inc." on Justia Law

This case arose from a longstanding issue between Public Utility District No. 1 of Okanogan County (PUD) and the Department of Natural Resources (DNR) over the installation of an electrical transmission line through school lands managed by DNR in the Methow Valley. At issue was whether PUD was statutorily authorized to condemn a right of way through school trust lands for the construction of a transmission corridor and, if so, whether the particular school lands were nonetheless exempt from condemnation as a result of their trust status as school lands or their then-present use for cattle grazing. The trial court and Court of Appeals concluded that PUD is statutorily authorized to condemn school lands and that the particular school lands at issue are subject to condemnation. Finding no reversible error, the Supreme Court affirmed. View "Pub. Util. Dist. No. 1 of Okanogan County v. Washington" on Justia Law

In consolidated cases, the issue common to all and presented for the Supreme Court's review centered on whether guarantors of commercial loans whose own property have not been foreclosed are protected from deficiency judgments under the deeds of trust act (DTA) after the borrower's property has been foreclosed. The Supreme Court found they are not. View "Wash. Fed. v. Harvey" on Justia Law

Plaintiffs sued their neighbors, arguing, among other things, that the noise, smoke, fumes, and traffic associated with a small motor repair shop was in effect a nuisance in fact and that their neighbors are subject to nuisance per se liability because the business lacked required permits. The trial judge entered detailed findings of fact on the plaintiffs' nuisance in fact claims; found that the alleged noise, smoke, fumes, and traffic related to the business did not injure the plaintiffs' property, unreasonably detract from the plaintiffs' enjoyment of their property, or cause cognizable damages; and dismissed the case. The Court of Appeals reversed in part, concluding the trial court erred by not deciding whether the business was required to obtain any more permits. Finding that the plaintiffs did not establish that the business was a nuisance per se, the Supreme Court reinstated the trial court's judgment. View "Moore v. Steve's Outboard Serv." on Justia Law

In the 1980s, Charles Spencer and George Livingston formed a partnership to develop and sell property in rural Lincoln County near the confluence of Lake Roosevelt and the Spokane River. Over the next 20 years, the partnership and its successors built the Deer Meadows Golf Course Complex (including a golf course, restaurant, hotel, store, and club), platted several nearby parcels of property into subdivisions, and sold lots to private land owners for homes and vacation properties. A plat identifying the golf course was recorded. A local newspaper quoted Spencer as saying he built the golf course complex "so it would help sell the residential lots around here," and the lots were advertised accordingly. Ownership of the unsold lots and the golf course changed forms and hands over time. After Spencer passed away and after most of the lots were sold, Livingston closed down the golf course complex and began the process of platting the course into new residential lots. Many of those who had bought homes in the various subdivisions developed by Spencer and Livingston believed they had been promised that the golf course complex would remain a permanent fixture of their community, and relied on that promise when they made the decision to purchase their respective homes. Some of those homeowners formed the Riverview Community Group, which filed this lawsuit seeking to bar the defendants from selling off the former golf course as individual homes. Riverview sought to impose an equitable servitude on the golf course property that would limit its use to a golf course or, if that was untenable, for other equitable relief. It also sought injunctive relief. The trial judge issued a memorandum decision granting the Livingstons' motion under CR 12(b )(7) for failure to join indispensable parties. The following month, the trial court issued an order stating that "the legal issue of whether an equitable servitude can be created by implication is a question of first impression in the State of Washington" and granted summary judgment in favor of the defendants to expedite review. The Court of Appeals largely reversed the trial court's legal rulings, finding that Riverview had organizational standing and the individual property owners were not essential parties, and concluding that Washington recognized equitable covenants. However, it affirmed summary judgment on the grounds that it would be "irrational to require the defendants to rebuild and operate a failing business." The Washington Supreme Court granted Riverview's petition for review, affirming most of the Court of Appeals' legal rulings but finding dismissal was based on facts not found in the record. The Court therefore affirmed in part, reversed in part, and remanded to the trial court for further proceedings. View "Riverview Cmty. Grp. v. Spencer & Livingston" on Justia Law

In August 2007, Winnie Lyons signed a promissory note secured by a deed of trust encumbering her real property in Burien. The property served as Lyons' primary residence and was also where she operated an adult family home (AFH). Wells Fargo Bank NA was the lender and beneficiary; Northwest Trustee Services LLC (NWTS) was the trustee. In October 2009, an employee of Wells Fargo executed a beneficiary declaration identifying Wells Fargo as trustee for Soundview Home Loan Trust 2006. In June 2010, another beneficiary declaration was executed by an employee of Wells Fargo naming Wells Fargo Bank as the actual holder of the promissory note or other obligation evidencing the above-referenced loan "or has requisite authority under RCW 62A.3-301 to enforce said obligation." In 2011, Lyons filed bankruptcy, and in January 2012 she applied for a loan modification with Wells Fargo. While Lyons was waiting for a response regarding her application for a modification, she received a notice of trustee's sale from NWTS informing her that her property was scheduled to be sold. Wells Fargo told Lyons' attorney that the modification had been approved, the terms of which were that Lyons had to pay $10,000 by a set deadline. Wells Fargo informed Lyons they would discontinue the sale upon receipt of this payment. Lyons made the payment as requested, however, Wells Fargo had sold Lyons' loan to U.S. Bank National Association as trustee for Stanwich Mortgage Loan Trust Series 2012-3 with Carrington Mortgage Services LLC as the new servicer of the loan (to be effective May 1, 2012). NWTS received notice of the sale and service release; Lyons received notice of this sale. Lyons' attorney was informed that Wells Fargo no longer had any beneficial interest in the loan after the sale, Lyons had received a loan modification, so she was no longer in default. Lyons' attorney again called NWTS to inform them of the loan modification and the sale of the loan. A NWTS employee informed her that Carrington had directed NWTS to continue with the foreclosure sale as scheduled. Lyons' attorney called Carrington and an employee indicated that Carrington did not show the property in foreclosure status. Another employee further indicated that Carrington had not told NWTS to go forward with the sale. Lyons' attorney then sent a cease and desist letter to NWTS and Carrington. Lyons' attorney followed up with NWTS; NWTS acknowledged receipt and informed her the sale was still on but that the matter had been referred to an attorney. Lyons' attorney again spoke with NWTS' attorney, who refused to discontinue the sale. Lyons' attorney filed the complaint. NWTS then executed and recorded a notice of discontinuance of the trustee's sale. Lyons alleged that this situation the foreclosure sale created had serious emotional and economic impacts on her. In addition to the sense of humiliation Lyons felt, Lyons alleged she lost business as a result of the foreclosure process. Lyons asserted that she experienced constant nausea from the stress and continuously worried about losing her business and the subsequent homelessness of herself, her son, and the elderly clients she cared for. NWTS moved for summary judgment. After argument, the court granted the motion for summary judgment as to all claims against NWTS. Subsequently, Lyons and the remaining defendants (Stanwich, Carrington, and Wells Fargo) entered a stipulated order of dismissal. Lyons' motion for reconsideration of the order of summary judgment was denied. We granted Lyons' petition for direct review. After its review, the Supreme Court affirmed the trial court's grant of summary judgment on the alleged violations of the deed of trust act (DTA) and the intentional infliction of emotional distress claims, but the Court reversed and remanded as to Lyons' Consumer Protection Act (CPA) claim. View "Lyons v. U.S. Bank Nat'l Ass'n" on Justia Law

This case centered on the interpretation of a state tax deduction statute. Former RCW 82.04.4292 (1980) provided that in computing their business and occupation (B&O) tax, banks and financial institutions could deduct from their income "amounts derived from interest received on investments or loans primarily secured by first mortgages or trust deeds on nontransient residential properties." Between 2004 and 2007, petitioner Cashmere Valley Bank invested in mortgage-backed securities known as real estate mortgage investment conduits (REMICs) and collateralized mortgage obligations (CMOs). Cashmere claimed that interest earned on these investments was deductible under RCW 82.04.4292. Upon further review, the Supreme Court concluded Cashmere could not claim the deduction because its investments in REMICs and CMOs were not "primarily secured" by first mortgages or trust deeds. The ultimate source of cash flow was mortgage payments. However, Cashmere's investments were not backed by any encumbrance on property nor did Cashmere have any legal recourse to the underlying trust assets in the event of default. Thus, Cashmere's investments were not "primarily secured" by mortgages or trust deeds. View "Cashmere Valley Bank v. Dep't of Revenue" on Justia Law

The United States District Court for the Western District of Washington certified a question of Washington law to the Washington Supreme Court. The issue centered on whether Washington law recognized 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 completed. The Supreme Court was 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. The Court held 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 was no-at least not pursuant to the DT A itself. Furthermore, the Court found 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 was that the same principles that govern CPA claims generally apply to CPA claims based on alleged DTA violations. View "Frias v. Asset Foreclosure Servs., Inc." on Justia Law