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Selene RMOF II REO Acquisitions II LLC v. Ward

Supreme Court of Washington, En Banc

August 3, 2017

SELENE RMOF II REO ACQUISITIONS II, LLC, Petitioner,
v.
VANESSA D. WARD and all occupants of the premises located at 7913 South 115th Place m/k/a 7911 South 115th Place, Seattle, WA 98178, Respondents.

          MADSEN, J.

         This case involves transfers of property that once belonged to Vanessa Ward and now belongs to Selene RMOF II REO Acquisitions II LLC, which acquired the property in 2012 from a purchaser at a nonjudicial foreclosure sale. It also concerns Ward's claim that she was the victim of mortgage fraud regarding the property in 2004 and that all subsequent property transfers were therefore void.[1] Selene challenges an unpublished Court of Appeals, Division One, decision reversing an order granting Selene a writ of restitution evicting Ward from Selene's property. At issue is whether Selene was authorized to bring an unlawful detainer action as a purchaser from someone who had bought the property at a nonjudicial foreclosure sale. Also at issue is whether the summary procedures of unlawful detainer were available where Ward asserted ownership of the property she occupied via an unrecorded quitclaim deed. We hold that unlawful detainer was available to Selene under the circumstances of this case and reverse the Court of Appeals.

         FACTS

         The disputed property is a single family residence in King County. Parcel data from the King County Department of Assessments shows that Ward bought the property in 1999 by statutory warranty deed. It also shows that Ward quitclaimed the property to Chester Dorsey in 2000 in a transaction involving foreclosure. Ward asserts that in 2004, Dorsey quitclaimed the property back to her through a deed that was notarized but never recorded.[2] Parcel data of course does not show that alleged transaction, but it shows rather that in 2005, Dorsey sold the property by statutory warranty deed to Fred and Grace Brooks, who in turn sold it by statutory warranty deed to James Dreier in 2007.

         Dreier executed a deed of trust on the property to secure a loan, and in 2009, LaSalle Bank acquired the property at a nonjudicial foreclosure sale on the deed of trust. Ward still occupied the property, and LaSalle and its successor filed two unlawful detainer actions against her but apparently did not further pursue them. In 2012, LaSalle sold the property to Selene by special warranty deed, and in 2014, Selene filed a third unlawful detainer action against Ward, alleging that she was "believed to be a tenant of the former owner of the property." Clerk's Papers (CP) at 1, 79. Selene further alleged that Selene had acquired its interest from LaSalle after foreclosure and that pursuant to RCW 61.24.060 (discussed below), the purchaser at a trustee's sale had a right to summary unlawful detainer proceedings to obtain possession of the property under chapter 59.12 RCW. An initial writ of restitution was ordered and then vacated for lack of proper service. Ward subsequently moved for an order setting the case for trial and denying the writ of restitution, contending that the unlawful detainer proceeding could not go forward because she had color of title and was not a tenant.

         At the unlawful detainer hearing, Ward repeatedly asserted that she was the property owner, that she had paid the mortgage until 2007, and that she was the victim of fraud involving Dorsey and another person who had stolen and then paid off her mortgage. Am. Verbatim Report of Proceeding (VRP) at 1-6, 18, 20. But she admitted that she had not made any mortgage payments since 2007 and that she had notice of the foreclosure proceeding. She testified that she filed a lawsuit to enjoin the foreclosure on the day of the sale, but she admitted that her suit was dismissed because she failed to pursue it.

         The trial court granted a writ of restitution to Selene, stating that Ward had had time either to appeal the dismissal of her suit or pursue other remedies. Ward appealed, and Division One reversed in an unpublished decision, holding that because Ward held a quitclaim deed to the property, the summary unlawful detainer action was not available. Selene RMOF II REO Acquisitions II LLC v. Ward, No. 72504-1-1, slip op. at 1 (Wash.Ct.App. Feb. 29, 2016) (unpublished), http://www.courts.wa.gov/opinions/PDF/725041.pdf, review granted, 186 Wn.2d 1008, 380 P.3d 458 (2016). Division One also held that because Selene did not purchase the property at the foreclosure sale, unlawful detainer proceedings under RCW 61.24.060(1) did not apply. Id. Selene petitioned for review, which this court granted.

         ANALYSIS

         Whether unlawful detainer is available to Selene

         "As with all questions of law, questions of statutory interpretation are reviewed de novo." Berrocal v. Fernandez, 155 Wn.2d 585, 590, 121 P.3d 82 (2005). Here, the Court of Appeals held that because Selene was not the initial purchaser at the nonjudicial foreclosure sale, it could not bring an unlawful detainer action under RCW 61.24.060(1) to obtain possession of the property that it owned. RCW 59.12.032 provides, "An unlawful detainer action, commenced as a result of a trustee's sale under chapter 61.24 RCW, must comply with the requirements of RCW 61.24.040 [(addressing service requirements)] and 61.24.060." Thus, RCW 59.12.032 "authorizes the purchaser at a deed of trust foreclosure sale to bring an unlawful detainer action to evict the previous owner of the home, provided the sale complied with the statutory foreclosure rules." Fed. Nat'l Mortg. Ass'n v. Ndiaye, 188 Wn.App. 376, 381, 353 P.3d 644 (2015). RCW 61.24.060(1) provides, in relevant part, "The purchaser at the trustee's sale shall be entitled to possession of the property on the twentieth day following the sale .... The purchaser shall also have a right to the summary proceedings to obtain possession of real property provided in chapter 59.12 RCW." See also Ndiaye, 188 Wn.App. at 381-82. Restated, "[a]s a means to gain possession of real property, unlawful detainer is available to one who holds a title as a purchaser at a deed of trust foreclosure sale." Id. at 384 (citing Puget Sound Inv. Grp., Inc. v. Bridges, 92 Wn.App. 523, 526, 963 P.2d 944 (1998)); see also RCW 61.24.060(1).

         In Savings Bank of Puget Sound v. Mink, 49 Wn.App. 204, 741 P.2d 1043 (1987), Division One discussed the legislative intent underlying the availability of unlawful detainer in the nonjudicial foreclosure context. Division One stated:

[Chapter 61.24 RCW] provides the method for nonjudicial foreclosure of a deed of trust. The chapter was designed by the Legislature to avoid costly, time-consuming judicial foreclosure proceedings, and also to "provide an adequate opportunity [or notice] for interested parties to prevent wrongful foreclosure." Detailed notice requirements for each stage of the foreclosure proceeding are set forth in the chapter.

Id. at 207-08 (citations omitted) (quoting Cox v. Helenius, 103 Wn.2d 383, 387, 693 P.2d 683 (1985)). Concerning unlawful detainer, the court opined:

For its part, [chapter 59.12 RCW] is designed to provide expeditious, summary proceedings for the removal of persons in the possession of the property of another, Munden v. Hazelrigg, 105 Wn.2d 39, 711 P.2d 295 (1985), who are either in breach of a condition to that occupancy, have committed waste, have unlawfully entered, or have held over after expiration of a tenancy for a definite term. [(Citing former RCW 59.12.030 (1983) (defining "unlawful detainer").] We believe that the Legislature intended to preserve the summary nature of foreclosure actions permitted under [chapter 61.24 RCW] in referring purchasers to the unlawful detainer statutes for the removal of "reluctant "former owners. [Chapter 61.24 RCW] provides for detailed notices and provides opportunities to cure for the defaulting property owner. . . . Application of [unlawful detainer] to these proceedings will provide a remedy that is consistent with the spirit and intent of the Legislature in enacting [chapter 61.24 RCW] and will do so without prejudice to the rights of the defaulting party. We so hold.

Id. at 208 (emphasis added) (footnote omitted). Division Three has similarly recognized the underlying legislative impetus behind RCW 61.24.060(1), stating:

The statutory scheme of the act gives the purchaser at a trustee's sale the right to possession on the 20th day following the sale. RCW 61.24.060. The act was designed by the legislature to avoid time-consuming judicial foreclosure proceedings and to save substantial time and money to both the buyer and the lender. This feature of the act has been applauded as meeting the needs of modern real estate financing. By the terms of the act it is clear the legislature did not contemplate that after the trustee's sale further lengthy proceedings would be required to obtain possession. It gave the purchaser at a trustee's sale the right to obtain possession of the real property by summary proceedings in an unlawful detainer action.

Peoples Nat'l Bank of Wash. v. Ostrander, 6 Wn.App. 28, 31, 491 P.2d 1058 (1971) (emphasis added) (citation omitted).

         In light of the noted legislative intent, it would be anomalous to read RCW 61.24.060(1) to thwart such intent by limiting the availability of unlawful detainer to the first purchase following a nonjudicial foreclosure sale. By its terms, the statute makes available expedited eviction proceedings to the property's deed holder following a nonjudicial foreclosure sale. But the statute's language does not expressly limit the availability of unlawful detainer to only the first owner of the property following foreclosure. To read the statute as doing so, as Ward advocates, defeats the noted legislative purpose of providing expedited proceedings to facilitate real estate financing and transactions.

         Finding no Washington cases directly on point, Selene relies on Evans v. Superior Court, 61 Cal.App. 3d 162, 136 Cal.Rptr. 596 (1977). There, the California appellate court addressed the comparable question presented here, "[w]hether a subsequent purchaser from a purchaser at a foreclosure sale can maintain an unlawful detainer action under [the California unlawful detainer statute, California Code of Civil Procedure section 1161a]." Id. at 167. The Evans court explained that while the cause of action for unlawful detainer was historically available only to a landlord against his tenant, the remedy has been expanded by statute to additional categories of plaintiffs and defendants. The Evans court noted that California Code of Civil Procedure section 1161a, which provides for removal of holdover persons in various circumstances, is framed in terms of the events that may give rise to the unlawful detainer action and the persons against whom such actions may be brought, but the statute is silent as to who may bring such actions. Id. The, Evans court stated, "The policy behind the statute is clear, however: to provide a summary method of ouster where an occupant holds over possession after sale of the property. That policy would not be served by restricting availability of the action to the original purchaser at a foreclosure sale." Id. at 168 (emphasis added). Accordingly, ...


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