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Sorrels v. Northwest Trustee Services, Inc.

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

June 17, 2015

R. SORRELS, as Trustee of the RCJS Trust, Plaintiff,
v.
NORTHWEST TRUSTEE SERVICES, INC., et al., Defendants.

ORDER ON JPMORGAN CHASE BANK, N.A.'S MOTION FOR JUDGMENT ON THE PLEADINGS

ROBERT J. BRYAN, District Judge.

THIS MATTER comes before the Court on JPMorgan Chase Bank, N.A.'s ("Chase") Motion for Judgment on the Pleadings (Dkt. 13). Plaintiff, R. Sorrels ("Mr. Sorrels"), did not file any opposition to the motion. The Court has considered the motion and the remainder of the file therein.

I. BACKGROUND

Before Mr. Sorrels commenced the present action to restrain the foreclosures of the two Deeds of Trust encumbering the subject property, located at 460 E. Sherwood Creek Rd, Allyn, Washington, 98524 (the "Property"), and for other relief.

Timothy Tworzydlo and Constance Tworzydlo (the "Tworzydlos") formerly owned the Property. In 1998 and 1999, the Tworzydlos signed two promissory notes and secured their payment of the notes by executing two respective Deeds of Trust against the Property. Defendant, Chase, is implicated in only one of the deeds of trust (the "Deed of Trust"), executed in 1998. See Dkt. 1-2.

a. The Deed of Trust

On August 31, 1998, the Tworzydlos executed a promissory note (the "Promissory Note") to Advanta National Bank USA ("Advanta") for a home equity credit limit of $39, 000.00, secured by the Deed of Trust, which was recorded on September 4, 1998. Dkt. 13, at 22-38. The Promissory Note was indorsed to Bankers Trust Company of California, N.A., as custodian or trustee, and later to Chase, in an Allonge to Mortgage Note. Id., at 39, 40.

On February 2, 2009, Advanta executed an Assignment of Deed of Trust recorded in Mason County, Washington on February 12, 2009, assigning the Deed of Trust to Deutsche Bank National Trust Company ("Deutsche Bank"). Id., at 42-43.

On June 20, 2013, Chase executed an Affidavit of Missing or Incomplete Assignment recorded in Mason County, Washington, under Auditor's File Number 2027734, on July 24, 2014, stating that "it appears there is a gap in the chain of assignment of the Security of [Deutsche Bank] as custodian or trustee and [Chase]" and that "such assignment(s) either were never completed or, if completed, were never recorded... such assignment(s) cannot now be obtained." Id., at 45-50. Although Chase is now in possession of the Promissory Note and the collateral file for the loan, no recording appears to exist assigning the Deed of Trust from Deutsche Bank to Chase. Id., at 39, 45-50.

On January 6, 2014, Chase executed an Appointment of Successor Trustee, appointing Northwest Trustee under the Deed of Trust. Id., at 52. Northwest Trustee executed a Notice of Trustee's Sale of the Property on February 23, 2015, setting a Trustee's Sale date of June 26, 2015, to foreclose on the Deed of Trust. Id., at 61-66.

The Tworzydlos transferred their interest in the Property to Mr. Sorrels on October 22, 2014, by executing a quit claim deed, which was recorded on November 5, 2014. Dkt. 13, at 54-59. A second quit claim deed for the Property was executed and recorded on December 2, 2014. Id. Prior to the Tworzydlos' quit claim deed assigning their interest in the Property to Mr. Sorrels, the Tworzydlos named their debt to Chase in bankruptcy actions. W.D.Wa. Case Nos. 05-46457; 13-42853, Dkt. 7.

b. State court proceedings

On November 25, 2014, Mr. Sorrels filed a complaint in Mason Superior Court against Northwest Trustee to restrain sale of the Property. Dkt. 7-1. That court issued an Order Restraining Northwest Trustee's Sale of the Property, which pertained only to the other deed of trust (thus not implicating Chase). Northwest Trustee's foreclosure action under the Deed of Trust at issue in this Order was not addressed in state court proceedings because the Northwest Trustee's action had not yet been initiated at that time. See Dkt.13, at 61-66, 72, 73.

On January 26, 2015, Northwest Trustee filed a motion to dismiss, or in the alternative, to require Mr. Sorrels to join U.S. Bank, Green Tree, and the Tworzydlos as co-defendants. Dkt. 7-2, at 2-37. On February 18, 2015, prior to the hearing on Northwest Trustee's motion, Mr. Sorrels filed an Amended Complaint, also naming Chase. Id., at 55-61. The Amended Complaint names Chase in Count III ("Quiet Title"), alleging that Chase does not have a valid interest in the Deed of Trust because Chase "does not hold a proper assignment." Dkt. 1-2, at 5. In his Amended Complaint, Mr. Sorrels requests the Court to declare that ...


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