Waiver Under Washington’s Deed of Trust Act Permitted Where Technical Violations Did Not Harm Plaintiff

Merry v Nationstar –Wn App 324745-III   Background to Deed of Trust In 2007, Sharon Weirich borrowed $205,440 from Countrywide Home Loans, Inc. and executed a Deed of Trust on her real property as security. The deed identified Countrywide as the lender, Landsafe Title of Washington as the Trustee, and the Mortgage Electronic Registration Systems, Inc. (MERS) as “a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns.” In Bain v. Metropolitan Mortgage Group, 175 Wn.2d 83, 93, 285 P.3d 34 (2012), the Supreme Court of Washington held that the MERS registry’s business practices in creating and transferring beneficial interests with regard to mortgages conflict with the requirements of Washington’s Deed of Trust Act. Beginning in 2011 MERS made a number of assignments and changes in ownership of the note, beneficiary, and trustee using the business practices found to conflict with the Deed of Trust Act.  Following these changes, in October 2012, Northwest Trustee Services, Inc. served Mrs. Weirich with a notice of default on behalf of Bank of America. The same month Ms. Weirich executed a deed of trust to Thomas Merry. This deed of trust secured payment of a $68,000 promissory note. Ms. Weirich also executed a power of attorney and an assignment of legal claims to Mr. Merry. In December 2012, Ms. Weirich received a notice of trustee’s sale informing her that her property would be sold on April 19, 2013 to satisfy her promissory note she originally gave to Countrywide. However, property was not sold on April 19, 2013 and no sale was rescheduled within the 120-day window...

State Supreme Court Finds Washington’s Anti-SLAPP Statute Violates Right to Jury Trial

On May 28, 2015, in Davis v Cox, the Washington State Supreme Court invalidated the Washington Anti-SLAPP statute, RCW 4.24.525. In a unanimous decision, the Court found that section (4)(b) of statute unconstitutionally violates the right to a jury trial. The Court further held that, because every other section in RCW 4.24.525 is dependent upon section (4)(b), the provision is nonseverable and the statute is invalid as a whole. The Washington Anti-SLAPP statute was adopted to address and dissuade “lawsuits brought primarily to chill the valid exercise of the constitutional rights of freedom of speech and petition for the redress of grievances”. A defendant may file a special motion to strike any “action involving public participation and petition”. If the action is found to involve “public participation and petition”, the responding party must “establish by clear and convincing evidence a probability of prevailing on the claim”. If the moving party prevails, the statute contains a provision for a mandatory $10,000 civil penalty and attorney fees for instituting a lawsuit in violation of the statute. The focus of the Court’s decision was the standard of proof placed upon the party responding to a special motion to strike. The responding party must “establish by clear and convincing evidence a probability of prevailing on the claim”. The Court held that the statutory language requires a trial judge to make factual findings and adjudicate the claim. Article I, Section 21 of the Washington State Constitution states, “The right of trial by jury shall remain inviolate”. The Court noted that, “At its core, the right of trial by jury guarantees litigants the right to...

Why Organize Early?

Although many company founders are reluctant to take the plunge into creating a corporate entity, often putting this step off for as long as possible, there are some good reasons to consider forming as soon as possible. Holding Period Stock Value The IRS will look at the time between forming and value given for stock at that time, and the company’s value at any financing or liquidity event. Hypothetically, if founders gave $.01 of value for their shares at formation, and they receive a funding round that values the company at $.50/share a week later, they need to be able to convince the IRS in an audit that they created enough value in the company in that one week to warrant the 50x increase in the value of the company. In a situation like this, your company is more than likely to arouse the suspicion that you sold yourselves shares at below market value. The General Partnership Many states, including Washington, have ratified some version of the Uniform Partnership Act (UPA). Washington’s is codified as chapter 25.05 of the Revised Code of Washington. Although the preferred form of entity for most startups is a C corporation, a founder should also be attentive to the provisions of the UPA or its equivalent in his or her state. The reason for this is that many of these acts contain provisions similar to the following from RCW 25.05.055:   (1) Except as otherwise provided in subsection (2) of this section, the association of two or more persons to carry on as co-owners a business for profit forms a partnership, whether or not...

USCIS Issues Fliers About Executive Actions on Immigration

USCIS Issues Fliers About Executive Actions on Immigration Immigration services has just released the first official rules for the President’s new immigration programs. (en Español as well!) They are providing the first concrete rules of what the President proposed last November. Among the highlights: DACA applicants can now be any age, instead of being limited to those born after June 15, 1981. So if you’re 34 or older, you can now apply for DACA as well. Our first solid rules governing who can apply for DAPA (Deferred Action for Parents of American citizens and legal permanent residents), such as their children having to be born before November 20, 2014 and that the parents need to have continuously resided here in the states since January 1, 2010. An expansion of the Provisional Waiver for Unlawful Presence program to people related to lawful permanent residents (Previously, the program only applied to people related to US citizens). A promise to work on the work Visa system to clarify and provide guidance for businesses and applicants. It’s all very exciting news. I can’t wait to learn more about these programs as they start to come online. (Remember: the expanded DACA doesn’t open up for applicants until late- February and DAPA won’t open until late May). In the mean time, talk with a lawyer about what you can do to get ready to apply. Share...

Note Terms Prevail Over Deed of Trust

Terms of Promissory Note prevail over conflicting terms of Deed of Trust. U.S. Bank National Association, etc. v. Yashouafar et al. 141217-U.-S.-Bank-N-A-v-Yashouafar The terms of a promissory note conflicted with the terms of a deed of trust. The note stated that a prepayment fee was not due until the indebtedness was prepaid. The deed stated that the prepayment fee was due immediately upon acceleration of the note. The deed provided that the terms of the note controlled over those of the deed. The court held that under the clear and explicit terms of the note and deed of trust, as interpreted to give effect to the mutual intention of the parties (California Civil Code sections 1636, 1638, 1639 and 1644), no prepayment fee was due until the actual prepayment of the note’s indebtedness. The court found that the Bank should not have used the date of acceleration of the note in calculating the prepayment fee and that the fee was not due until the note’s indebtedness was prepaid. The terms of the note controlled over those of the deed of trust because the deed provided that they would. If this provision had not been included in the deed of trust, the court may have determined that the prepayment fee would have been due immediately upon acceleration of the note.   Share...