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Smith v. Fidelity National Title Insurance Co.

United States District Court, W.D. Washington, Seattle

May 30, 2014

DAVE F. SMITH, Plaintiff,


THOMAS S. ZILLY, District Judge.

THIS MATTER comes before the Court on a motion to dismiss brought by defendants Ocwen Loan Servicing, LLC ("Ocwen") and U.S. Bank National Association ("U.S. Bank"), docket no. 9, which is joined by defendant Fidelity National Title Insurance Company ("Fidelity"), docket no. 13. Having reviewed all papers filed in support of, and in opposition to, defendants' motion, the Court enters the following order.


Plaintiff Dave F. Smith is a junior lien holder as to commercial real property located at 1344 17th Street SE, in Auburn, Washington. Smith Decl. at ¶ 2 (docket no. 14-2); see Exs. 1-3 to Compl. (docket nos. 1-1, 1-2, & 1-3). Defendant U.S. Bank, as trustee for Lehman Brothers Small Balance Commercial Mortgage Pass-Through Certificates, Series 2006-1, is the successor beneficiary of a senior deed of trust on the same commercial property. Exs. 1 & 2 to Request for Judical Notice (docket no. 10-1). Fidelity is the successor trustee under the senior deed of trust. Id. at Ex. 3. Ocwen acts as servicer for the senior lien holder. See Compl. at ¶ 3.6 (docket no. 1-1).

On May 31, 2013, Fidelity sent to the grantors of the senior deed of trust a Notice of Foreclosure and a Notice of Trustee's Sale. See Ex. 1 to Boyd Decl. (docket no. 14-3); Ex. 4 to Request for Judicial Notice (docket no. 10-1). The Notice of Foreclosure indicated that "[n]otice and other process may be served upon the trustee at: Fidelity National Title Insurance Company, c/o Chicago Title Ins. Attn: Trustee Services Dept, 701 Fifth Ave, Suite 2300, Seattle, WA 98104" and provided a local telephone number of XXX-XXX-XXXX. Ex. 1 to Boyd Decl. (docket no. 14-3 at 6). On January 23, 2014, one of plaintiff's attorney's employees called the local number and spoke with an underwriter at Chicago Title, who stated that legal documents for Fidelity could be served at Chicago Title's office, and such materials would be forwarded to Fidelity. Boyd Decl. at ¶¶ 2-6. For purposes of this litigation, however, Fidelity was served with the summons and complaint via the Insurance Commissioner.[1] Id. at ¶ 10 & Ex. 4.

Plaintiff initiated this action in King County Superior Court, alleging two claims, one under Washington's Deed of Trust Act and the other under Washington's Consumer Protection Act ("CPA"). See Compl. at § IV & V (docket no. 1-1). The case was removed on the basis of diversity jurisdiction. Notice of Removal at ¶ 3 (docket no. 1). In this litigation, plaintiff essentially seeks to permanently enjoin defendants from non-judicially foreclosing on the senior deed of trust. See Compl. at ¶ 8.3 (docket no. 1-1 at 11). Defendants now move to dismiss plaintiff's claims.


A. Conversion to Summary Judgment

If, in deciding a motion brought under Rule 12(b)(6), the Court considers matters outside the pleadings, [2] the Court must treat the motion as one for summary judgment. Fed.R.Civ.P. 12(d). A party represented by counsel who submits matters outside the pleadings and invites consideration of them in connection with a Rule 12(b)(6) motion has the requisite notice that the Court might use them to decide the motion, requiring that it be transformed into a motion for summary judgment. See Grove v. Mead Sch. Dist. No. 354 , 753 F.2d 1528, 1533 (9th Cir. 1985). Plaintiff having proffered, in opposition to defendants' Rule 12(b)(6) motion, his own declaration, as well as the declaration of his attorney's employee, the Court is satisfied that plaintiff is "fairly apprised, " id. at 1532, the motion may be converted into one for summary judgment. Summary judgment must be granted if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). When the record taken as a whole could not lead a rational trier of fact to find for the non-moving party, summary judgment is warranted. See Celotex Corp. v. Catrett , 477 U.S. 317, 322-23 (1986).

B. Washington Address and Telephone Number

Under Washington's Deed of Trust Act, a title insurance company authorized to insure title to real property under Washington law may act as trustee of a deed of trust. RCW 61.24.010(1)(b). Prior to any notice of trustee's sale and continuing until the date of any such sale, the trustee must maintain a street address in Washington at which personal service of process may be effected, and the trustee must have a physical presence and telephone service at such address. RCW 61.24.030(6). The crux of both of plaintiff's claims in this case is that Fidelity failed to comply with RCW 61.24.030(6). The undisputed facts, however, indicate to the contrary. Indeed, plaintiff's counsel's employee confirms that Fidelity's agent answered the number provided in the Notice of Foreclosure and was willing to accept service on behalf of Fidelity at the Washington address set forth in the same document. Boyd Decl. at ¶¶ 2 & 6 (docket no. 14-3).[3] The statute does not prohibit a trustee from designating an in-state agent to satisfy the physical presence requirement. See RCW 61.24.030(6); see also Douglas v. ReconTrust Co., N.A. , 2012 WL 5470360 at *5 (W.D. Wash. Nov. 9, 2012). Plaintiff cites no authority to support a different interpretation of the statute. The Court therefore HOLDS, as a matter of law, that no violation of RCW 61.24.030(6) occurred, and defendants are entitled to summary judgment as to plaintiff's claims under the Deed of Trust Act and the CPA.


For the foregoing reasons, defendants' motion to dismiss, docket nos. 9 and 13, is treated as a motion for summary judgment, and the motion is GRANTED. Plaintiff's claims are DISMISSED with prejudice. The Clerk is DIRECTED to enter judgment accordingly, to send a copy of this ...

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