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Coble v. Suntrust Mortgage, Inc.

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

February 18, 2015

SUNTRUST MORTGAGE, INC. et al, Defendants.


JOHN C. COUGHENOUR, District Judge.

This matter comes before the Court on the motion for summary judgment of Defendants Suntrust Mortgage, Inc. ("SunTrust"), Federal Home Loan Mortgage Corporation ("Freddie Mac"), Federal National Mortgage Association ("Fannie Mae"), and Mortgage Electronic Registration Systems, Inc. ("MERS") (Dkt. No. 92); supporting exhibits (Dkt. Nos. 93 *SEALED, 94 & 95); Plaintiffs' response (Dkt. No. 111); Plaintiffs' supporting exhibits (Dkt. Nos. 112 & 113); Defendants' reply (Dkt. No. 114), Defendants' supplemental declaration (Dkt. No. 115), and Defendants' request for Judicial Notice regarding a fact in their reply (Dkt. No. 116).

Many of Plaintiffs' claims were waived when they failed to contest the foreclosure sale of both of their properties. With respect to Plaintiffs' residence, the claims that survive waiver lack merit. With respect to Plaintiffs' rental property, equitable principles urge the Court to retain jurisdiction over Plaintiffs' claims for trespass/property damage and invasion of privacy, although solely with respect to Defendant SunTrust. All other claims with respect to the moving Defendants warrant dismissal under summary judgment.

Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary and hereby GRANTS the motion in part for the reasons explained herein.


This case pertains to the nonjudicial foreclosure of two properties, a residence and a rental, formerly owned by Plaintiffs Jacque and Kathleen Coble ("The Cobles").

A. The Residence

The Cobles bought their residence at 3215 McLeod Road in Bellingham in 2002. Dkt. No. 77, p. 5. On June 25, 2007, they refinanced the property by executing a promissory note ("residence note"), indorsed in blank for $167, 700 payable to SunTrust. Id. At the same time, they executed a deed of trust with SunTrust Mortgage ("SunTrust" unless otherwise specified) to secure payment of the note. Id. That document listed SunTrust Mortgage as the lender, Washington Administrative Services as the trustee, and MERS as "beneficiary... solely as a nominee for Lender and Lendor's successors and assigns." Dkt. No. 29, Ex. 1. Shortly thereafter, SunTrust's parent company, SunTrust Bank, obtained the note, indorsed it in blank, and placed it in its vault where it has since remained. Dkt. No. 95, p. 4. SunTrust Mortgage retained servicing rights.

Between 2007 and January 13, 2012, SunTrust transferred all its beneficial interest, ownership, and right to payments on the note to Freddie Mac.[1] Dkt. No. 77, p. 6. On July 18, 2011, MERS assigned its own interest in the residence deed of trust to SunTrust. Id. at 8.

The Cobles defaulted on their loan in the fall of 2010. Dkt. No. 92, p. 4. In response, on March 2, 2011, Northwest Trustee Services ("NTS") requested a loss mitigation form from SunTrust, receiving it nine months later on December 5, 2011. Id .; see also Dkt. No. 111, p. 4. The form stated that the beneficiary's agent had contacted the Cobles to explore options to avoid foreclosure. The Cobles acknowledge receipt on December 5, 2011 but deny being offered a meeting to discuss options in lieu of foreclosure. See Dkt. No. 111, pp. 4-5, 11. Also on December 5, 2011, NTS issued a Notice of Default to the Cobles, listing Freddie Mac as owner of the note, and SunTrust as the loan servicer. Dkt. No. 77, p. 9. The Cobles received this notice, and wrote to NTS to dispute the default. Id. NTS responded, stating that they were communicating the issue with the servicer. Id. at 10. NTS was formally appointed by SunTrust as successor trustee for the residence deed of trust on January 13, 2012. Id. at 9-10.

On February 20, 2013, NTS delivered a Notice of Foreclosure to the Cobles, executing a Notice of Trustee Sale to foreclose the residence deed of trust five days later. Dkt. No. 77, p. 12. On July 2, 2013, NTS sold the Cobles' home to the "Beneficiary" for $260, 316, who directed NTS to issue the trustee's deed to Freddie Mac. Id. at 13. The Cobles did not move to restrain the sale. Dkt. No. 92, p. 4.

B. The Rental

At the same time they purchased their residence in 2007, the Cobles executed a note and deed of trust on an adjacent property they owned and intended to one day rent out for profit. Dkt. No. 77 at 14. The process surrounding the rental mortgage, indorsed promissory note, and deed of trust were identical as those for the residence-and involved the same Defendants-up until the Cobles defaulted on both loans in 2010. Id. at 14-17.

Defendants' response to the Cobles' default on the rental loan was handled differently than the residence default. Beginning in fall of 2010, the Cobles saw unknown persons driving to the rental property several times a week. Dkt. No. 77, p. 18. These people walked around the property and took photographs. Id. After several of these unexplained visitations, Mr. Coble discovered a sticker from a loan collector on the property deeming it "abandoned, " along with contact information for the collector. Id. at 19. Mr. Coble called the provided number and the collector informed him that he would have to contact his mortgage company. Id.

In early October 2010, another person-later revealed to be a loan collector-arrived and changed the locks on the rental property. Dkt. No. 77, p. 19. Defendants deny any involvement by Freddie Mac or MERS, but admit SunTrust's involvement in this effort to "secure" the property. Dkt. No. 91, p. 31. In response, the Cobles made a payment on their rental loan and called SunTrust demanding access. Dkt. No. 77, p. 19. SunTrust told them it was unable to provide access until the Cobles became current with their loan payments. Id. On October 7, 2010, SunTrust issued a letter to the Cobles telling them they had abandoned the rental property and would have ten days to respond and certify otherwise. Dkt. No. 111, p. 2. The Cobles allege that on the same day, SunTrust directed loan collectors to enter the property, winterize it, mow the lawn, and change the locks. Id. at 3. Mr. Coble alleges he sent the requested certification on October 15, 2010, within the ten day deadline set by SunTrust. Id. The loan collector's work commenced, per SunTrust's instructions, on October 16, 2010. Id.

The Cobles lacked access to the rental property for over two years. Dkt. No. 77, p. 20. They allege that during this time, several of their personal possessions-including surplus marble for countertop use, a glass-top stove, insulation materials, commercial-grade metal studs, and a twin-basin sink-were stolen. Id. The loan collectors who had changed the locks continued to maintain the property throughout the two year period; winterizing it, draining water lines, and adding antifreeze to toilets and sinks. Id. at 21.

On May 22, 2012, SunTrust executed a document declaring SunTrust the beneficiary and holder of the rental note secured by the rental deed of trust. Dkt. No. 77, p. 21. Thereafter, SunTrust executed a Foreclosure Loss Mitigation Form and events continued as they had for the residence property, culminating in a foreclosure sale first to Fannie Mae and then to a third-party buyer. Dkt. No. 77, p. 22.

C. The Present Suit

On September 18, 2013, nine months following the last foreclosure sale, the Cobles initiated this action. See Dkt. No. 77. The Cobles sue moving Defendants for: (1) trespass/property damage, [2] (2) invasion of privacy/intrusion upon seclusion, [3] (3) violation of the Deeds of Trust Act ("DTA"), RCW 61.24, et seq., (4) a quiet title action against Freddie Mac only, (5) misrepresentation by MERS and SunTrust, (6) violation of the Washington Consumer Protection Act ("CPA"), RCW 19.86, et seq., [4] and (7) seek injunctive relief staying a pending Whatcom County unlawful detainer action. Id. Plaintiffs seek declaratory relief, injunctive relief, money damages, as well as costs and attorney's fees. Id.


A. Judicial Notice

As a preliminary matter, the Court takes judicial notice of the fact that SunTrust Mortgage, Inc. was exempt from the mediation requirement of the Foreclosure Fairness Act in calendar years 2012, 2013, 2014, and 2015. This fact is capable of accurate and ready determination: Suntrust Mortgage, Inc. is listed as exempt on the Washington Department of Commerce's website.[5] Courts may take judicial notice at any stage of the proceeding where requested and supplied with necessary information from a sufficiently reliable source, see Fed. R. Ev. 201(d), and the Court does so with respect to SunTrust's exempt status.

B. Standard on Summary Judgment

"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). Material facts are those that may affect the case's outcome. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine if there is enough evidence for a reasonable jury to return a verdict for the nonmoving party. See id. at 49. At the summary-judgment stage, evidence must be viewed in the light most favorable to the nonmoving party, and all justifiable inferences must be drawn in the non-movant's favor. See Johnson v. Poway Unified Sch. Dist., 658 F.3d 954, 960 (9th Cir. 2011).

C. By Failing to Contest the Foreclosure Sales, Plaintiffs Waived Many of their Claims

1. Plaintiffs Waived their Right to Contest the Sale of Either Property

Under the DTA, a person waives "any proper grounds for invalidating [a] Trustee's sale" when they fail to "bring a lawsuit to restrain the sale." RCW 61.24.040(f)(IX). This doctrine operates to create a legal preference for suits restraining a foreclosure sale over those challenging it post factum so as to "promote the stability of land titles" while still "provid[ing] an adequate opportunity for interested parties to prevent wrongful foreclosure." E.g. Cox v. ...

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