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...

Business Liability for Foreseeable Harm

McKown v Simon Property Group, Supreme Court of Washington, March 5, 2015 Decision:  050405-McKnown-v-Simon-Properties After 40 years of practicing U.S. law, I have grown to appreciate the gift we received from our colonizing parent, the common law. The civil law systems suffer from the same rigidity that all statutes impose: one size fits all. The legislature drafts a statute as a solution to a perceived problem not understanding how it might be unjust in a different fact situation. The common law can smooth out these injustices by providing court-made law which reacts to the facts and needs of justice in a particular case. The negatives of the common law system that has decisions made by juries include unpredictability and indefensible awards. The common law has invented tools to minimize the negatives. One of those tools is “foreseeability”. It allows a court to claim that no one could have foreseen the harm so the defendant is not liable. Foreseeability is often the only legal barrier protecting a business from liability. Unfortunately it has proven to be a two-edged sword. The limits of foreseeably was highlighted in McKown v Simon Property Group. On Sunday, November 20, 2005, Dominick S. Maldonado walked into the Tacoma Mall and opened fire on shoppers and mall employees, injuring seven people. Maldonado wore a dark trench coat concealing a MAK-90 rifle and an Intratec Tec-9 pistol, and carried a guitar case filled with ammunition. McKown, an employee at one of the retail stores, tried to stop Maldonado, but was shot and wounded. Simon Property Group owned the Tacoma Mall. Under Washington Law, the Tacoma Mall is liable to McKown...

Failure to Reconvey: Quiet Title Without a Quiet Title Action

What do you do when a seller fails to reconvey the title to property following payment of the loan, then dies? Failure to reconvey puts a cloud on the title that must be quieted. However, a quiet title action can be a drawn out and expensive matter. Is there a way to obtain a quiet title without a quiet title action? Failure to Reconvey Recently, a client called in a panic on a Friday afternoon. She was selling her home and it was closing day of her sale. The former owner had failed to reconvey the property and then died. The old title company’s solution to the failure to reconvey fell through. The new title company had just informed my client that they would not issue a title insurance policy without a hold-back of hundreds of thousands of dollars. They also said that she needed a quiet title, that this would require a quiet title action, which would take six to nine months, and the costs would be her responsibility. However, the sale could not close without the title insurance policy. My client obtained an extension of the closing date, granted the buyers a rental agreement at no cost to them while she worked to enable the sale to close. However, she was frustrated, angry, and afraid she was about to have no house, no money, months of litigation she could ill afford, and all the liability of having renters with no money for the rent. My client had purchased the home with seller financing nineteen years earlier on a five year Note backed by a Deed of Trust....

Personal Jurisdiction over Foreign Manufacturers

State v LG Electronics, Wash app, div 1, January 12, 2015:150112 State-v-LG-Electronics There has been ongoing debate in the courts over how much contact foreign manufacturers must have with a state for the state court to assert personal jurisdiction over foreign manufacturers and make the foreign manufactures defend in the state’s courts. The state’s power is constrained by the due process clause of the Fourteenth Amendment. The foundational case is International Shoe Co. v. Washington, 326 U.S. 310 (1945), in which the United States Supreme Court] held that a state may authorize its courts to exercise personal jurisdiction over an out-at-state defendant if the defendant has “certain minimum contacts with [the state] such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” The courts have subsequently developed two concepts of personal jurisdiction: (1) General Jurisdiction and (2) Specific Jurisdiction. General jurisdiction “permits the exercise of personal jurisdiction over a nonresident defendant where the defendant’s ‘continuous corporate operations within a state (are] so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.'” Daimler AG v Bauman, 134 S. Ct. at 754-55 (2014). Specific jurisdiction, which since International Shoe “has become the centerpiece of modern jurisdictional theory,” requires that suit arise out of or relate to the defendant’s contacts with the forum. Daimler, 134 S. ct. at 754-55. Specific Jurisdiction requires proof of three elements (1) minimum contacts; (2) action “arises” from minimum contacts; and (3) asserting jurisdiction does not offend traditional notions of fair play and substantial justice. In State v LG...

Mental Health Advance Directives Enhance Estate Planning

When Should You Prepare Your Estate Plan? The basic rule is that it is never to early to begin an estate plan and certain events, such as marriage, the birth of a child, divorce, or death may require a plan to be updated. Estate planning, however, is something that many people want to avoid thinking about. In fact, many people put it off until something startles them into action. That something might be a birthday, the birth of a child, the realization of the size of an estate, a stroke, a serious illness or injury, or even the first inklings that a spouse or loved one is in the early stages of dementia. In some cases, there may be urgency to make plans while the person has the capacity to make choices and convey his or her wishes. Estate planning in these cases is likely to include much more than a simple will. The person may also need to make significant financial and medical plans to prepare for future medical and mental health needs. Individuals who are experiencing the effects from a stroke, traumatic brain injury, or the onset of dementia, and those who believe they are at a higher risk for brain injury or dementia may want to include the preparation of a Mental Health Advance Directive in their estate planning process.  Mental Health Advance Directives can provide dignity for the person and comfort for the person’s family who knows how to respond to a difficult situation. What is a Mental Health Advance Directive? In 2003, Washington enacted its Mental Health Advance Directive law. A Mental Health Advance Directive is...