Lyons v U.S. Bank National Association (WA SC October 30, 2014)
Lyons defaulted on the note secured by a trust deed on her home. In October 2011, Lyons filed bankruptcy, and in January 2012 she applied for a loan modification with Wells Fargo. On March 30, 2012, 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 on July 6, 2012. On April 5,2012, Wells Fargo told Lyons’ attorney that the in-house modification had been approved. On April 19,2012, Lyons received the letter confirming the modification. The terms required her to pay $10,000 by May 1,2012.
Wells Fargo informed Lyons they would discontinue the sale upon receipt of this payment. She paid this amount to Wells Fargo as required. However, on March 29, 2012, 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. This was to become effective on May 1,2012. NWTS received notice of the sale and service release on April 12,2012. Lyons received notice of this sale on April 26, 2012.
On April 26, 2012, Lyons’ attorney spoke with a representative of NWTS to inform it that Wells Fargo no longer had any beneficial interest in the loan after the sale, that Carrington was the new servicer of the loan, and that Lyons had received a loan modification so she was no longer in default. On June 11, 2012, 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. On June 14, 20 12, 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.
On June 18, 2012, 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 for NWTS. On June 19,2012, the attorney for NWTS informed Lyons’ attorney that he needed to do his due diligence. Lyons’ attorney again spoke with NWTS’ attorney on June 21, 2012. NWTS’ attorney refused to discontinue the sale, and Lyons’ attorney filed the complaint. At the end of the day on June 21, 2012, NWTS executed and recorded a notice of discontinuance of the trustee’s sale. Lyons alleges that this situation has had serious emotional and economic impacts on her. In March 2012, Lyons arrived home to be handed the notice of trustee’s sale by a family member of one of her full pay AFH clients. In addition to the sense of humiliation Lyons felt, this client moved out approximately two weeks later because of concern that Lyons was going to lose her business and her home. Before leaving, this client shared her belief that the home was going to be foreclosed on with other AFH clients, some of whom also moved shortly thereafter. The AFH business is her primary source of income, and the loss of clients directly impacted her financially. In her declaration, Lyons asserts that thereafter she struggled with day-to-day tasks and felt hopeless. She began counseling with the pastor of her church. Her pastor said that previously Lyons was a very positive woman with a drive to succeed, but since the pending foreclosure she was fearful and depressed. Lyons asserts 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.
These facts could support a Consumer Protection Action but not a claim for the tort of outrage
The court held “Taking the facts in a light most favorable to Lyons, summary judgment was inappropriate and a cause of action under the CPA could be supported.
Lyons also alleged a claim for the tort of outrage, otherwise known as intentional infliction of emotional distress. “The tort of outrage requires the proof of three elements: (I) extreme and outrageous conduct, (2) intentional or reckless infliction of emotional distress, and (3) actual result to plaintiff of severe emotional distress.” Kloepfel v. Bokor, 149 Wn.2d 192, 195,66 P.3d 630 (2003). “The question of whether certain conduct is sufficiently outrageous is ordinarily for the jury, but it is initially for the court to determine if reasonable minds could differ on whether the conduct was sufficiently extreme to result in liability.” Dicomes v. State, 113 Wn.2d 612,630, 782 P.2d 1002 (1989); see Robel v. Roundup Corp., 148 Wn.2d 35, 51, 59 P.3d 611 (2002). “The first element requires proof that the conduct was ‘so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. ‘” Robel, 148 Wn.2d at 51 (emphasis omitted) (internal quotation marks omitted) (quoting Dicomes, 113 Wn.2d at 630).
The court ultimately concluded: “She claims that the conduct of NWTS in not confirming the proper beneficiary and in not suspending the trustee’s sale when she contacted them was so outrageous as to go beyond all bounds of decency. But these allegations are not so outrageous that they shock the conscience 0r go beyond all sense of decency. While perhaps the actions might have violated the DTA and could support a claim under the CPA, the acts are not sufficiently outrageous to support a claim for outrage.
Foreclosure Not Outrageous