In the Matter of the Trustee's Sale of the Real Property of John W. Ball.
JPMorgan Chase Bank, NA, Respondent The Estate of John W. Ball, Appellant,
Oral Argument January 10, 2014.
Appeal from Pierce County Superior Court. Docket No: 11-2-14696-6. Date filed: 02/08/2012. Judge signing: Honorable Clinton P Johnson.
Jan Gossing and N. Brian Hallaq (of BTA Lawgroup PLLC ), for appellant.
Sakae S. Sakai (of Houser & Allison APC ), for respondent.
AUTHOR: Linda C.J. Lee, J. We concur: Joel Penoyar, P.J., Bradley A. Maxa, J.
[179 Wn.App. 561] ¶ 1 John W. Ball's estate (Estate) appeals the trial court's summary dismissal of the Estate's claim that the merger doctrine should preclude a junior lienholder from receiving excess funds from a trustee sale when the same entity also was the senior lienholder and was the successful bidder at the sale. Because the merger doctrine is inapplicable to this case and RCW 61.24.080(3) governs this situation, we affirm the trial court's ruling.
¶ 2 In April 2001, John W. Ball executed a deed of trust (Senior Deed) encumbering his property in favor of Washington Mutual Bank to secure a $52,000 loan. Five years later, Ball took out a $132,000 home equity line of credit, later increased to $154,700, also with Washington Mutual Bank. This credit line was again secured by a deed of trust (Junior Deed) encumbering his property. JPMorgan Chase Bank (Chase) later acquired both deeds of trust in receivership, and Northwest Trustee Services, Inc., succeeded as trustee under both deeds of trust. Ball died intestate on March 18, 2009, and Laureen Monette was appointed as the personal representative of his Estate.
¶ 3 The Estate later defaulted on the Senior Deed (then securing a debt of approximately $56,000), and Northwest Trustee sold the property by trustee's sale in September 2011. Home Sales, Inc., a wholly owned subsidiary of Chase, purchased the property for $92,500. After the amount of the Senior Deed was satisfied Northwest Trustee deposited the surplus funds ($35,286.22) into the court registry pursuant to RCW 61.24.080.
[179 Wn.App. 562] ¶ 4 In November 2011, the Estate moved the trial court to disburse the surplus funds to it, arguing that " [a]ny and all other claims would be subordinate to that of the Estate." Clerk's Papers at 31. Chase opposed this motion, arguing that it held a superior interest to the surplus funds by virtue of the Junior Deed, on which the Estate still owed $135,230.65. Chase also moved the trial court by cross motion to disburse the surplus funds to it. The superior court denied the Estate's motion, granted Chase's cross motion, and directed that the surplus funds be disbursed to Chase. The Estate appealed, and we stayed the appeal pending our decision in In re Trustee's Sale of Real Property of Giannusa, 169 Wn.App. 904, 282 P.3d 122 (2012).
¶ 5 The Estate argues that the trial court " erred by determining that [Chase] is entitled to surplus funds, as junior lien holder [sic], despite the fact that it was the successful bidder at the trustee sale" thereby merging " its deed of trust [with] its fee title in the property." Br. of Appellant at 5. Because RCW 61.24.080(3) governs this situation and the merger doctrine is ...