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Rutherford v. Chase Bank, N.A.

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

September 11, 2014

CHASE BANK, N.A., et al., Defendants.


MARSHA J. PECHMAN, Chief District Judge.

This matter comes before the Court on Defendant JP Morgan Chase Bank N.As motion for summary judgment. (Dkt. No. 18.) Defendant Northwest Trustee Services, Inc. ("NWTS"), joins in the motion. (Dkt. No. 23.) Having reviewed the moving papers, Plaintiffs responses, reply, and all related papers, the Court GRANTS the motions. (Dkt. Nos. 18, 23.)


Plaintiff Richard Rutherford refinanced his Sammamish, Wash., home in 2007, with Washington Mutual Bank, FA ("WaMu"). (Dkt. No. 20-1, Deposition of Richard Rutherford, hereinafter referred to as "Rutherford Dep." at Ex. 1.) In doing so, he executed a deed of trust, granting WaMu a security interest in his home. (Id. at Ex. 2.) JP Morgan Chase, the Defendant in this case, acquired all loans and loan commitments of WaMu from the Federal Deposit Insurance Corporation, acting as a Receiver for Washington Mutual. (Dkt. No. 21.)[1]

Within 13 months, Rutherford defaulted on the loan. (Rutherford Dep. at 31.) In an effort to cure the default, Rutherford began talking with Defendant about a loan modification in December 2008. (Id. at 34.) Rutherford recalls the terms he worked out with Defendant were as follows-a 1% interest only payment, gradually increasing to 5% interest only. (Id. at 35.) If the loan was modified, Rutherfords principal balance was $1, 030, 000.00. (Id. at 36.) Rutherford would repay this amount, plus interests, over 420 months. (Id.) Although he felt like the parties had worked out an agreement, he knew it would not merely be a verbal one, but it needed to be in writing. (Id. at 37.)

On January 2, 2009, Defendant sent Rutherford a proposed Loan Modification Agreement (the "January loan modification"). (Dkt. No. 19-1.) The January loan modification stated:

Thank you for your continued interest in our Homeownership Preservation Program.... The Agreement was prepared consisted with the terms you discussed with a loan workout specialist. The Agreement will not be binding or effective until it has been signed by both you and the lender in compliance with the instructions and conditions in this letter.

(Id. at 2.) The January loan modification also contained a "Notice of No Oral Agreements." (Id. at 5.) It advised Rutherford:

The written loan agreement represents the final agreement between the parties and may not be contracted by evidence of prior, contemporaneous, or subsequent oral agreements of the Parties. There are no unwritten oral agreements between the parties.

(Id.) According to Rutherford, the January loan modification had the same terms he discussed with Defendant over the phone. The January loan modification required Rutherford to send two signed and notarized copies of the agreement to Defendant by January 12, 2009. (Rutherford Dep. at ex. 6.) He was also required to send a certified or cashiers check for $1000 by January 12, 2009. (Id.)

Rutherford claims he timely sent these documents back to Defendant, as evidenced by a DHL courier service slip from January 5, 2009. (Dkt. No. 30-1.) Rutherford has never produced a signed copy of the January loan modification agreement. (Dkt. No. 19 at 3.) Likewise, Defendants business records do not contain or reflect ever having received from Rutherford a signed loan modification agreement during the period from January 2, 2009 to March 8, 2009. (Id.) Rutherford believes he also sent a check to Defendant. (Dkt. No. 30 at 3.) He offers a copy of his January 2009 personal bank records, showing a personal check for $1000 cleared in January 12, 2009. (Dkt. No. 30-1 at 2.) Rutherford has been unable to produce a copy of the check or otherwise confirm who the payee was. Yet he also recalls the first check he sent was returned to him. (Rutherford Dep. at 40, 57-58.)

In subsequent communications, Rutherford learned that he needed to sign additional documents and/or send a different or replacement check. (Id. at 63.) He explains, "I felt they didnt accept something to do with what I sent in, but whether they were not accepting my loan modification, in terms of their acceptance of the contract, no, I dont believe that." (Id. at 76.)

Defendant sent Rutherford a second loan modification package in late January 2009. (Id. at Ex. 10.) On February 25, 2009, Defendant notified Rutherford that it had cancelled his request for a loan modification workout due to his failure to timely return the loan modification documents. (Dkt. No. 19 at 3.) On March 6, 2009, Rutherford signed a loan modification package. (Rutherford Dep. at 75.) He explains his signing of this second agreement as "Well, they had, I mean, its clear to me they had new requirements. They had me notarize this, for one.[2] They had new requirements I know because they had me redo it, so I know there was something not accepted with the first loan modification; whether it was the check, whether it was just that they needed a notary, now Im seeing they have it notarized." (Id. at 75.) Defendant received Rutherfords signed March 6, 2006 loan modification documents and a check on March 9, 2009. (Dkt. No. 19 at 3.) The check was returned to Rutherford. (Id.)

Rutherford wrote to Defendant in mid to late March 2009 to note: "My previous acceptance of a loan modification agreement was subsequently rejected because I did not get documentation in ...

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