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First-Citizens Bank & Trust Co. v. Reikow

Court of Appeals of Washington, Division 2

November 13, 2013

FIRST-CITIZENS BANK & TRUST COMPANY, successor in interest to Venture Bank, Appellant,
v.
Bruce A. REIKOW and Sandra J. Reikow, individually and the marital community comprised thereof; Karl R. Zetterberg and Jane Zetterberg, individually and the marital community comprised thereof, Respondents.

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[Copyrighted Material Omitted]

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Alexander Sether Kleinberg, Chrystina R. Solum, Eisenhower & Carlson PLLC, Tacoma, WA, for Appellant.

Jeffrey Paul Helsdon, Oldfield & Helsdon PLLC, Tacoma, WA, for Respondents.

BJORGEN, J.

[177 Wn.App. 789] ¶ 1 First-Citizens Bank & Trust Company sued Bruce and Sandra Reikow for a deficiency judgment following a trustee's sale of real property securing a commercial loan, then in default, which the Reikows had guaranteed. The trial court granted partial summary judgment to First-Citizens as to the amount of the debt and the Reikows' liability for any deficiency, but ultimately dismissed the complaint after holding an evidentiary hearing and finding that the fair value of the property exceeded the amount owing on the loan.

¶ 2 First-Citizens appeals, alleging that the trial court erred in denying it summary judgment as to all issues, and, in the alternative, that the court abused its discretion in determining the fair value of the foreclosed property. Because the trial court properly declined to determine the amount of deficiency on summary judgment and because substantial evidence in the record supports the trial court's fair value determination, we affirm.

FACTS

I. THE COMMERCIAL LOAN AND ASSOCIATED GUARANTIES

¶ 3 Venture Bank made a $6,746,803.53 commercial construction loan to NBP LLC, an entity in which the Reikows had a 50 percent interest and in which Bruce Reikow served as a managing member. To secure the promissory note, NBP [177 Wn.App. 790] granted the bank a deed of trust for the property under development, known as Narrows Business Park.

¶ 4 The Reikows also executed personal guaranties for the entire amount of the loan. These guaranties include language by which the Reikows purported to waive, among other things,[1]

any and all rights or defenses arising by reason of (A) any " one action" or " anti-deficiency" law or any other law which may prevent Lender from bringing any action, including a claim for deficiency, against Guarantor, ... or (F) any defenses

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given to guarantors at law or in equity other than actual payment and performance of the indebtedness.

II. NONJUDICIAL FORECLOSURE OF DEED OF TRUST

¶ 5 The Washington State Department of Financial Institutions subsequently closed Venture Bank and placed it in receivership. The receiver sold all of the failed bank's assets, including the note and associated guaranties at issue here, to First-Citizens. After NBP began missing scheduled loan payments, First-Citizens declared the promissory note in default and initiated nonjudicial foreclosure of the deed of trust under chapter 61.24 RCW.

¶ 6 First-Citizens submitted the sole bid at the trustee's sale, purchasing the property for $5,215,000.00 on July 9, 2010. At the time of the sale, the amount due on the note, including interest, foreclosure costs, charges, and fees stood at $7,168,710.74.

[177 Wn.App. 791] III. FIRST-CITIZENS' LAWSUIT AGAINST REIKOWS FOR DEFICIENCY

¶ 7 Following the trustee's sale, First-Citizens sued the Reikows personally ...


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