STEVEN F. SCHROEDER, a married man dealing with his sole and separate property, Appellant,
PHILLIP J. HABERTHUR, as trustee of a deed of trust, EXCELSIOR MANAGEMENT GROUP, LLC, an Oregon limited liability company, EXCELSIOR MORTGAGE EQUITY FUND II, LLC, an Oregon limited liability company, JAMES HANEY, and CLS MORTGAGE, INC., a Washington corporation, Respondents.
the fifth appeal to reach this court resulting from a deed of
trust issued in 2009. Since the trial court complied with the
Court's directives in the most recent appeal, we trust
this will be the last appeal. The primary issue presented by
this current appeal is whether the deed of trust act (DTA),
chapter 61.24 RCW, can be construed using definitions found
in the Uniform Commercial Code (UCC), Title 62A RCW. It can.
Agreeing with the trial court that growing or felling timber
does not constitute farming, we affirm.
of the procedural history and the underlying factual dispute
are necessary to place the trial court's ruling in
context, although we will attempt to avoid unnecessary
discussion of the previous actions. The land parcel in
question, a 200 acre property near the city of Colville, was
purchased by appellant Steven Schroeder's parents in
1959, and became his property in 1987 when he purchased the
land from them. Mr. Schroeder also owns other large parcels
of land immediately adjoining this parcel.
Excelsior Mortgage Equity Fund (Excelsior) loaned Mr.
Schroeder money in June 2007 and secured the loan by a deed
of trust on the 200 acre parcel. An appraisal from May 2007
described the property as 75 percent "Ag and timberland,
" and valued the land at $675, 000. Mr. Schroeder
operated a logging business from his home office and also
used the parcel for a scrap metal operation; he stored
hundreds of vehicles on the property and stored valuable
scrap materials in the buildings on the parcel.
Schroeder soon defaulted on the loan from Excelsior.
Schroeder V, 177 Wn.2d at 99-100. Mr. Schroeder
tried to contest the deed of trust on the basis that the
parcel was agricultural land and that foreclosure could not
be accomplished nonjudicially. Id. at 109. A new
deed of trust issued and a new loan was renegotiated in early
2009 to cure the default. In that document, the parties
stated that they agreed the land was not used for
Schroeder soon defaulted on the 2009 loan, and the matter was
set for nonjudicial foreclosure. Litigation ensued, but the
trial court declined to block the sale. The nonjudicial
foreclosure occurred, and the trustee conveyed a deed for the
parcel to Excelsior Mortgage, a related company. Additional
litigation continued as Mr. Schroeder sought damages and
other relief. The trial court dismissed the actions, finding
that Mr. Schroeder could not contest the nature of the
property given the stipulation in the 2009 deed of trust.
Washington Supreme Court reversed, concluding that the
requirements of the statute could not be waived by the
parties. Id. at 106-07, 109. Agricultural land could
not be foreclosed through the DTA's nonjudicial process.
Id. at 105-07, 115. The case was remanded, with the
requirement that "the trial court must hold a hearing to
determine whether the property was primarily agricultural at
relevant times." Id. at 115. The order
dismissing Schroeder's ancillary damages claims also was
reversed and remanded for discovery. Id., at 114-15.
lengthy nonjury trial concerning the nature of the property
was held over three days in February 2015 and resulted in a
transcript of nearly 1, 000 pages. The court heard from a
number of witnesses. Mr. Schroeder testified that he kept a
handful of pigs on the property and that cattle grazed among
the timber on that property as well as on adjoining lands he
owned on which he grew hay or other crops. He testified that
he ran his scrap business from the property and that timber
production and logging were occasional income sources for
him. A Stevens County deputy assessor testified that 180
acres of the parcel had been classified for tax purposes as
"designated forestland" since 2001. Report of
Proceedings (RP) at 691-92. The remainder of the parcel was
considered "improved." The forestland designation
carried a greater tax break than property in the "farm
and agricultural" classification.
for Mr. Schroeder argued that timber was a "crop"
and that the contrary definition found in the current UCC did
not apply to the earlier-adopted DTA. The trial court,
however, distinguished between "crop" and
"timber, " and ruled that the land was used
"for timber, and . . . if there's an ag use,
it's offset, if you will, by the storage of the cars and
the, the scrapping business that was run here." RP at
953-54. In the course of its ruling, the court considered the
UCC definitions argued by the parties, the tax designation,
Mr. Schroeder's representation on the deed of trust, and
the uses Mr. Schroeder made of the property. The trial court
gave primary importance to the classification of the land for
tax purposes. RP at 945. The court entered formal findings of
fact and conclusions of law in support of its ruling in April
2015. Mr. Schroeder appealed that ruling to this court.
February 2016, the trial court granted summary judgment to
Excelsior on the remainder of Schroeder's claims, but
then granted reconsideration so that Schroeder could obtain
new counsel. After Schroeder responded to the motion, the
court again granted summary judgment to Excelsior on June 1,
2016, dismissing the remaining claims. Mr. Schroeder also
appealed that decision to this court.
court consolidated the two appeals. A panel heard the case
primary issue is whether timber is a "crop" so that
the forest land should have been considered agricultural
property under the DTA. In light of our conclusion that
timber is not a "crop, " the issue we first
address, we summarily consider the claim of error related to
the summary judgment ruling on the damages claims.
are a number of general principles that have play in this
action. The initial case came to this court via appeal from a
nonjury trial. We review a bench trial to determine whether
substantial evidence supports the trial court's findings
of fact. In re Tr. 's Sale of Real Prop, of
Brown,161 Wn.App. 412, 415, 250 P.3d 134 (2011).
Substantial evidence is evidence sufficient to persuade a
rational fair-minded person that the premise is true.
Sunnyside Valley Irrig. Dist. v. Dickie, 149 Wn.2d
873, 879, 73 P.3d 369 (2003). Unchallenged findings of fact
are also verities on appeal. In re Estate of Jones,152 Wn.2d 1, 8, 93 P.3d 147 (2004). This court must then
determine if those findings support the trial ...