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Nationstar Mortgage LLC v. Drexel Investment Inc.

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

August 26, 2014

DREXEL INVESTMENT INC., et al., Defendants.




Before the Court are Defendants Drexel Investment ("Drexel"), Suneet Diwan, and Jared Huyett's (collectively, "the Defendants") Motion for Summary Judgment [47], filed on April 29, 2014, and Plaintiff's Motion for Partial Summary Judgment [52], filed on June 5, 2014. The motions are fully briefed and ripe for resolution. Having considered the parties' arguments, pleadings, and relevant case law, the Court finds that a hearing is unnecessary. For the reasons set forth below, Defendants' Motion for Summary Judgment [47] is GRANTED; Plaintiff's Motion for Partial Summary Judgment [52] is GRANTED IN PART.


This case concerns property known as 3306 Claremont Avenue, Seattle, Washington, 98144 ("the Property"). In September of 2010, Plaintiff's predecessor-in-interest, Aurora Loan Services, LLC, [1] acquired ownership of the Property. Decl. of Adam G. Hughes in Support of Pl.'s Mot. for Summ. J. [53] ("Hughes Decl."), Ex. 1. (Trustee's Deed).

Between February 2009 and June 2011, defaulted defendants Trina Y. Jacobs, Arlando Ray Jacobs, and Clarence Roland (collectively, "defaulted Defendants") caused multiple fraudulent documents to be recorded with the King County Recorder's Office that purported to grant them title to the Property. In addition, Trina Jacobs filed a lawsuit against Aurora Loan Services seeking a temporary restraining order; this suit was dismissed and found to have been advanced without reasonable cause. Hughes Decl. at ¶ 4; Hughes Decl., Ex. 2. Aurora Loan Services filed suit against Defendants Jacobs and Roland in King County Superior Court; this case was resolved in Aurora Loan Services favor in September 2012. Hughes Decl. at ¶ 5; Hughes Decl., Ex. 3.

Shortly after the resolution of the Superior Court case, on October 5, 2012, Defendants Jacobs and Roland recorded a forged document that purported to assign the deed of trust for the Property from Aurora Loan Services to a fictitious entity named "Northwest Central Pacific 2006 Corporate Pass Thru Certificates Series 2006." Hughes Decl., Ex. 5.

The Property was sold by National Recovery REO Services Inc. to Defendant Drexel Investments, Inc., on April 9, 2013. Hughes Decl., Ex. 7. Also on April 9, 2013, a Deed of Trust with Eastside Funding, LLC as the grantee and Drexel Investments, LLC as the grantor was recorded. Real estate brokers facilitated the purchase of the Property by Drexel. Defs.' Resp., Ex. 2 (Declaration of Suneet Diwan ("Diwan Decl.")) at ¶ 7. NexTitle provided escrow services and First American Title Company ("FirstAm") issued two title insurance policies (for the buyer and lender). Defs.' Mot., Ex B. Drexel subsequently took possession of and changed the locks on the Property.

On April 14, 2013, local RE/MAX agent Patrick Armstrong, acting on behalf of Plaintiff, posted a notice on the door of the Property, asserting ownership. Diwan Decl. at ¶ 5; Hughes Decl., Ex. 8. The notice stated that the Property had been foreclosed on September 2, 2010, by Aurora Loan Services and was currently "Bank owned." Hughes Decl., Ex. 8. The notice warned that any attempt to re-occupy the property would be met with legal action. Id. Further, Armstrong changed the locks on the Property. Diwan Decl. at ¶ 5.

Defendant Diwan, acting as General Counsel for Defendant Drexel, e-mailed Armstrong on April 14, 2013. Hughes Decl., Ex. 9. Diwan attached to the e-mail the deed purporting to grant Drexel title to the Property. Id. In the e-mail Diwan asserts that Drexel bought the property on April 9, 2013, accuses Armstrong of "illegally trespass[ing] and damage[ing] my locks on my company's property, " and demands that Armstrong pay $240.58 to cover the cost of changing the locks. Hughes Decl. ¶¶ 10-11; Hughes Decl., Ex. 9. Diwan stated that Armstrong should not enter the property and that if Armstrong wished to pursue the matter further, his attorney should contact Diwan. Hughes Decl., Ex. 9.

Armstrong responded to Diwan's e-mail on the same day, April 14, 2013. Hughes Decl., Ex. 9. Armstrong stated that "I appreciate you sending me this & have forwarded it on. I was only doing what was requested of me by [Plaintiff] (who purchased all of Aurora's assets)... in their listing agreement. If you want go to after them for the money feel free to do so. I, also have lost money on this. I wish you the best and apologize for the confusion & inconvenience." Hughes Decl., Ex. 9; Cruz Decl. ¶ 3. Diwan's own real estate agent also e-mailed him and stated that "[m]y contacts said that internal lines were crossed at the bank. He sends his apologies and has offered to cover the invoice you attached. He's putting the check in today's mail and hopes that you will excuse the mix up." Hughes Decl., Ex. 9.[2]

Drexel proceeded to have improvements made on the Property. Diwan Decl. at ¶ 6. According to Drexel, Northlake, a company owned by Defendant Diwan's family, repaired the front deck, painted and put new flooring in, built a laundry room, performed landscaping, installed new windows, repaired parts of the kitchen, installed new appliances, installed new baseboards, doors, and trim, made repairs to the exterior, and installed new glass in the rear door of the Property. Defs.' Mot., Ex C. Drexel made these improvements for the purpose of renting the Property. At some point, Drexel began renting the Property to a tenant for approximately $2, 200 to $2, 400 a month. Diwan Dep. at pp. 60-64.

On June 2, 2013, Nationstar's attorney contacted Drexel and notified them that the purported seller, National REO Recovery Services, Inc., did not have authority to sell the Property. Diwan Decl. at ¶ 7. On June 28, 2013, Nationstar sent Drexel a letter stating that the conveyance was fraudulent and demanding Drexel assist Nationstar in restoring Nationstar's title to the Property. Defs.' Mot., Ex. E. Drexel refused to quitclaim interest in the property, "in order to protect its rights in the improvements it made to the Property in good faith...." Diwan Decl. at ¶ 8. Plaintiff commenced the instant litigation on July 16, 2013.


"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). The moving party bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The court "should review all of the evidence in the record... [and] draw all reasonable inferences in favor of the nonmoving party." Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000). A genuine issue for trial exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However, "[t]he mere existence of a scintilla of evidence" in support of a nonmoving party's position is not sufficient to create a genuine issue of material fact. Anderson, 477 U.S. at 252.


A. Defendants' Motion for Summary Judgment

Defendants move for summary judgment on two of Plaintiff's claims: Slander ...

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