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Pelzel v. LSI Title Agency, Inc.

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

September 18, 2014

KEITH PELZEL, Plaintiff,
v.
LSI TITLE AGENCY, INC.; GMAC MORTGAGE, LLC; HOMECOMINGS FINANCIAL NETWORK, INC.; FIRST AMERICAN TITLE INSURANCE COMPANY; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; et al, Defendants.

ORDER GRANTING MOTION FOR SUMMARY JUDGMENT FILED BY DEFENDANTS LSI AND MERS AS JOINED IN BY DEFENDANT FATICO AND DENYING PLAITIFF'S MOTION FOR EXTENTION OF TIME

KAREN L. STROMBOM, Magistrate Judge.

This matter comes before the Court on the filing of a motion for summary judgment brought by defendants LSI Title Agency, Inc. ("LSI") and Mortgage Electronic Registration Systems, Inc. ("MERS"). The parties have consented to have this matter heard by the undersigned Magistrate Judge pursuant to 28 U.S.C. § 636(c), Federal Rule of Civil Procedure ("Fed. R. Civ. P.") 73 and Local Rule MJR 13. After having reviewed defendants' motion for summary judgment, the notice of joinder in that motion filed by defendant First American Title Insurance Company ("FATICO"), plaintiff's motion for extension of time to file a response to defendants' motion for summary judgment, defendants' responses thereto, and the remaining record, the Court finds that plaintiff's motion for extension of time to respond to the summary judgment should be denied, that the motion for summary judgment should be granted and that all claims asserted by plaintiff should be dismissed.

FACTUAL AND PROCEDURAL HISTORY

On September 5, 2005, plaintiff signed a promissory note for a loan in the amount of $350, 000 from defendant Homecomings Financial Network, Inc. See ECF #70-1, Exhibit 1. That note was secured by a deed of trust dated the same date against certain real property owned by plaintiff located at 20847 O'Connor Road, Centralia, Washington.[1] See ECF #70, p. 1; ECF #70-1, Exhibit 1. The deed of trust identified MERS as the beneficiary and FATICO as the trustee thereof. See ECF #70-1, Exhibit 1. In September 2009, MERS assigned all beneficial interest it had in the deed of trust to GMAC Mortgage, LLC ("GMAC"). See ECF #70, p. 2; ECF #70-1, Exhibit 2. Also in September 2009, GMAC appointed LSI as successor trustee. See ECF #70, p. 2; ECF #70-1, Exhibit 3.

On October 7, 2009, a copy of the deed of trust containing a corrected legal description of the real property referenced in the initial deed of trust was recorded. See ECF #2-2, Exhibit K; ECF #70, p. 2; ECF #70-1, Exhibit 4. On November 16, 2009, LSI sent plaintiff a notice of default in regard to his loan based on the corrected deed of trust, indicating that as of that date an estimated $346, 031.07 was required to pay of the entire debt secured by the deed of trust. See ECF #2-1, Exhibit A, pp. 31-36; ECF #70, p. 2; ECF #70-1, Exhibit 5. On October 18, 2010, LSI recorded a notice of trustee's sale in regard to the real property, stating that as of that date the amount to cure the defaulted payments on the outstanding loan was $56, 755.42, and that the required amount to pay off the loan was $372, 488.34. See ECF #2-2, Exhibit P. The notice also stated that the sale would occur on January 21, 2011, and that the loan default would have to be cured before January 10, 2011, to discontinue the sale. See id.

On January 6, 2011, plaintiff filed a complaint in Thurston County Superior Court for defect in trustee's sale, defective initiation of foreclosure, quiet title, slander of title, breach of contract, violation of Washington's Consumer Protection Act, unjust enrichment, and breach of trustee's fiduciary duty of good faith. See ECF #2-1, Exhibit A. Plaintiff sought relief in the form of, among other things, vacating the trustee's sale, damages, and voiding of all security interests in the real property. See id. That same date, plaintiff also filed in superior court a motion for a temporary restraining order to restrain the trustee sale, but cancelled the hearing on that motion based on defendants' apparent agreement to continue the trustee's sale. See ECF #2-2, Exhibit P; ECF #21, p. 2. Because the sale was only postponed, instead of cancelled, on February 2, 2011, plaintiff filed the motion again in state court. See ECF #21, p. 2.

On February 3, 2011, defendants filed a notice of removal of plaintiff's complaint to this Court. See ECF #1. On March 9, 2011, plaintiff again filed a motion for temporary restraining order and preliminary injunction, this time in this Court, to restrain the trustee's sale. See ECF #19. That motion was withdrawn on March 28, 2011, in light of defendants notifying plaintiff that the trustee sale had been placed on indefinite hold. See ECF #27.

On August 17, 2012, plaintiff filed for chapter 11 bankruptcy, which was converted to a chapter 7 bankruptcy case on April 1, 2013. See ECF #61, p. 2. Mark Waldron was appointed as chapter 7 trustee for plaintiff's bankruptcy estate. See id. According to a declaration from Mr. Waldron, dated December 27, 2013, plaintiff's lawsuit "was not identified as an asset of the Bankruptcy Estate on [his] schedules, " although at some point he "became aware of" it "and the claims being asserted... against the various defendants." Id. at pp. 1-2. Mr. Waldron also states in the declaration that he had "tentatively reached a settlement with the defendants in this case that, once approved by the Bankruptcy Court, would result in a dismissal of all [such] claims... with prejudice, " but that he had "not yet been able to seek [such] approval... because of other issues" he was "addressing with [plaintiff] and his counsel, " although he "hop[ed] to have those issues resolved within the next couple of months." Id . There is no indication in the record before this Court as to what, if anything, has happened in regard to the resolution of those issues or the Bankruptcy Court's approval of the tentative settlement.

Defendants LSI and MERS filed their motion for summary judgment on August 5, 2014, arguing plaintiff's claims against them should be dismissed because:

• plaintiff is a chapter 7 bankruptcy debtor, not the real party in interest in this case, and thus lacks standing to prosecute his claims;
• plaintiff cannot assert a claim under Washington's Deed of Trust Act;
• plaintiff cannot maintain a quiet title claim against GMACM, LSI or MERS;
• plaintiff cannot maintain a slander of title ...

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