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Nord v. Shoreline Savings Association

February 28, 1991

RICHARD G. NORD, ET AL, PETITIONERS,
v.
SHORELINE SAVINGS ASSOCIATION, ET AL, DEFENDANTS, ROBERT MONSON, RESPONDENT



En Banc. Brachtenbach, J. Dore, C.j., Utter, Dolliver, Andersen, Durham, Smith, and Guy, JJ., and Callow, J. Pro Tem., concur. Johnson, J., did not participate in the disposition of this case.

Author: Brachtenbach

The issue is whether recovery for emotional distress is allowable in an action for an intentional tort other than outrage absent proof that the emotional distress is "severe." The Court of Appeals held that severe emotional distress must be shown. Nord v. Shoreline Sav. Ass'n, 57 Wash. App. 151, 163, 787 P.2d 66 (1990). We reverse.

Richard Nord and Roger Childs (plaintiffs) and Robert Monson (defendant) formed a corporation in 1977 to develop and sell real estate. Financial difficulties led to the breakup of the corporation. In 1981 each party took over some of the troubled projects as individual business ventures. Defendant received a development project at Lake

Stevens, which he sought to complete through his solely owned corporation, Shomon Homes, Inc.

The parties were also partners in a partnership which acted as a holding company for completed development projects and other real estate developed by the parties. This partnership remained intact during the relevant time period. One asset of the partnership was Bo Van, a group of fourplexes maintained as rental units. The partnership's interest in Bo Van was subject to a first deed of trust and mortgage held by Shoreline Savings Association.

Defendant needed funds to complete the Lake Stevens Project, and asked Shoreline for additional financing. Shoreline refused. Defendant then obtained a loan commitment from Cascade Savings, a part of which was to be used to pay off the first mortgage on Bo Van. The Cascade loan commitment was contingent on defendant's obtaining financing from some other lender for a sum needed to pay off a sewer assessment at Lake Stevens. Defendant eventually gained Shoreline's agreement to finance the sewer assessment and to subordinate its loan to Cascade's loan, on condition that Shoreline be granted second deeds of trust on the Bo Van and Lake Stevens properties. Defendant alone signed, as president of Shomon Homes, the second deed of trust. Plaintiffs testified they did not consent to this transaction.

The financial difficulties of the parties continued, and about May 1982 defendant suggested to plaintiffs that they let the Bo Van property go back to Shoreline. Plaintiffs did not want to do so, thinking they had equity in the property. After attempts to sell the property at a price which their realtor said was too high but was insisted upon by defendant, the parties executed a quitclaim deed in favor of Shoreline in lieu of a deed of foreclosure.

In 1984 plaintiffs mortgaged their homes to satisfy debt for which defendant was also liable. Plaintiff Nord ultimately lost his house.

In the spring of 1986, while looking into another matter, plaintiff Nord learned of the second deed of trust on the Bo

Van property (the deed was originally filed in the wrong county by defendant). Plaintiffs sued defendant and others asserting several theories of liability.

Because of dismissal of claims and parties, by the time of trial the present parties were the only ones who proceeded to trial. During the 6-day trial, plaintiffs testified, in relevant part, as follows: Nord testified that when he began understanding what happened he was "shocked," and "very hurt," Report of Proceedings (July 7, 1988), at 49; he was "upset" and "incensed," Report of Proceedings (July 7, 1988), at 90. He testified that he found it very disturbing that they could have sold Bo Van. Report of Proceedings (July 7, 1988), at 140. He also testified that he trusted defendant "completely." Report of Proceedings (July 8, 1988), at 16, 17. Nord believed defendant when he said the property had to be deeded back to the bank because it would not sell. Report of Proceedings (July 8, 1988), at 26. Nord and Childs believed they had been duped. Report of Proceedings (July 7, 1988), at 122. Nord stated "I think we lost that property because Mr. Monson gave us advice and the advice served his best interest. I ...


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