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Arnold v. Wells Fargo Bank, N.A.

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

November 13, 2014

MARK and DEBORAH ARNOLD, Plaintiffs,
v.
WELLS FARGO BANK, N.A., et al., Defendants.

ORDER GRANTING DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT

BENJAMIN H. SETTLE, District Judge.

This matter comes before the Court on Defendants Bank of America, N.A. ("BANA"), Mortgage Electronic Registration Systems, Inc. ("MERS"), and Wells Fargo Bank, N.A.'s ("Wells Fargo") motion for summary judgment (Dkt. 15) and Defendant Quality Loan Service Corporation of Washington's ("QLS") motion for summary judgment (Dkt. 19). The Court has considered the pleadings filed in support of and in opposition to the motions and the remainder of the file and hereby grants the motions for the reasons stated herein.

I. PROCEDURAL HISTORY

On October 11, 2013, Plaintiffs Mark and Deborah Arnold ("Arnolds") filed a complaint against BANA, MERS, Wells Fargo, and QLS (collectively "Defendants") in Pierce County Superior Court for the State of Washington. Dkt. 1-1 ("Comp."). The Arnolds allege numerous causes of action. Id.

On November 18, 2013, QLS removed the matter to this Court. Dkt. 1.

On September 18, 2014, BANA, MERS, and Wells Fargo filed a motion for summary judgment (Dkt. 15) and QLS filed a motion for summary judgment (Dkt. 19). On October 6, 2014, the Arnolds responded. Dkt. 21. On October 10, 2014, BANA, MERS, and Wells Fargo replied (Dkt. 22) and QLS replied (Dkt. 23).

II. FACTUAL BACKGROUND

The Arnolds own the real property commonly known as 3721 Soundview Drive West, University Place, WA 98466 ("Property"). Comp. ¶ 6. On about August 17, 2006, non-party Homestone Mortgage, Inc. ("Homestone") originated a $600, 000 loan in favor of the Arnolds. Dkt. 17, Declaration of Andrea Kruse ("Kruse Dec."), Ex. A ("Note"). The loan is memorialized by an Adjustable Rate Note dated August 17, 2006. Id. The loan is secured by the Property via a deed of trust ("DOT"). Comp. ¶ 16, Ex. A. The DOT names Homestone as "Lender, " the Arnolds as "Borrowers, " Commonwealth as "Trustee, " and MERS as "nominee for Lender and Lender's successors and assigns." Id.

The loan was sold multiple times after origination. Wells Fargo purchased the loan from Homestone on or about September 5, 2006. Kruse Dec. ¶ 3. On October 1, 2006, Wells Fargo sold the loan to an asset-backed pool owned by Merrill Lynch. Id. When Wells Fargo purchased the loan, Homestone indorsed the Note as specifically payable to Wells Fargo. Note at 7. Wells Fargo retained servicing rights for the loan and acted as an agent of the owner for the purpose of communicating with the Arnolds, receiving and processing payments, and enforcing the loan. Kruse Dec. ¶ 4. Ms. Kruse declares that Wells Fargo indorsed the Note in blank to Merrill Lynch. Id. ¶ 7.

BANA purchased Merrill Lynch on September 14, 2008. Comp. ¶ 52. Upon purchase, BANA became successor to Merrill Lynch as administrator of the pool of mortgages that contains the loan. Kruse Dec. ¶ 3.

The DOT was assigned twice. First, on June 16, 2011, MERS assigned its record interest in the Deed of Trust to Wells Fargo, which was recorded on June 20, 2011. Comp., Ex. C. Then, on January 4, 2013, Wells Fargo assigned the DOT to BANA via a Corporate Assignment of Deed of Trust recorded January 4, 2013. Comp., Ex. E.

The Arnolds have failed to make the required payments on the loan and Wells Fargo initiated a foreclosure action. It is undisputed that the Arnolds' last payment was February 2011. On February 11, 2013, Wells Fargo recorded the appointment of QLS as successor trustee of the DOT. Comp., Ex. F ("Appointment"). Wells Fargo executed the Appointment as "servicer and attorney-in-fact" for BANA. Id. That same day, QLS served the Arnolds with a notice of default. Comp., Ex. G ("Notice of Default"). The Notice of Default identifies BANA as the "owner of the Note secured by the Deed of Trust." Id. On March 19, 2013, QLS recorded a notice of trustee's scheduling the nonjudicial foreclosure of the Property for July 19, 2013. Comp., Ex. H ("Notice of Sale").

Through discovery, Wells Fargo has learned that the Arnolds rented the property from September 2011 until February 2013 ...


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