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Renfroe v. Quality Loan Service Corp. of Washington

United States District Court, E.D. Washington

December 29, 2017

JAN M. RENFROE, Plaintiff,
QUALITY LOAN SERVICE CORP. OF WASHINGTON; BANK OF AMERICA, N.A., successor by merger to BAC Home Loans Servicing, LP, f/k/a Countrywide Home Loans Servicing, LP; CITIBANK, N.A., as trustee of NRZ Pass-Through Trust VI; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC.; and BANK OF NEW YORK MELLON, as trustee on behalf of the Certificateholders of the CWHEQ Inc., CWHEQ, Revolving Home Equity Loan trust Series 2006-C. Defendants.



         This matter arises from a non-judicial foreclosure commenced against Plaintiff Jan Renfroe's Oroville, Washington home under Washington's Deed of Trust Act (DTA), Wash. Rev. Code (RCW) § 62.A. Renfroe seeks declaratory and injunctive relief, quiet title in her favor, and damages under Washington's Consumer Protection Act. Renfroe argues that the foreclosure was commenced by an invalid beneficiary, that the foreclosure documents provided incorrect information, and that the foreclosure was barred by the statute of limitations. Mortgage Electronic Registration Systems, Inc. (MERS) and Citibank, N.A. (Citibank) (collectively, Defendants), brought this motion for summary judgment on all claims. They argue that the foreclosure proceedings complied with the DTA, and that Renfroe has failed to identify any deceptive acts or practices in which Citibank or MERS engaged.

         The Court heard oral argument on Defendants' motion on December 20, 2017. After reviewing the file, the briefing, and the arguments presented at the hearing, the Court is fully informed and grants Defendants' motion. The undisputed facts show that the foreclosure was advanced and continued on proper authority and proceeded in compliance with the DTA. Accordingly, summary judgment for Defendants is appropriate on all claims.


         In 2005, Jan and her then-husband Rand Renfroe obtained a $154, 3500.00 loan evidenced by a note (the Note), ECF No. 5-1, and secured by a deed of trust (the Deed of Trust) against their residential property in Oroville, Washington, ECF No. 5-2. The Deed of Trust identified MERS as the beneficiary “solely as nominee for Lender and Lender's successors and assigns.” ECF No. 5-2 at 3. The loan requires monthly payments over thirty years and matures in the year 2035. Id.

         The Note and Deed of Trust changed hands several times after origination. Sometime after its origination, Federal National Mortgage Association (Fannie Mae) bought the loan. See ECF No. 5-3 at 5. Bank of America acted as Fannie Mae's servicing agent and held the Note for Fannie Mae. ECF No. 5-5. In August 2010, Bank of America appointed Quality Loan Service Corp. of Washington (Quality Loan) as the successor trustee under the Deed of Trust. ECF No. 5-4. In May 2011, MERS, the original beneficiary, assigned the Note to BAC Home Loans. ECF No. 36-4. BAC Home Loans later merged with Bank of America. Bank of America provided Quality Loan with a beneficiary declaration confirming under penalty of perjury that Bank of America held the Note. ECF No. 5-5. It also provided Quality Loan with a copy of the Note. ECF Nos. 5-1, 5-5. In April 2016, Fannie Mae sold the loan to Citibank. ECF No. 5-7. Citibank took possession of the Note and provided Quality Loan with a beneficiary declaration confirming it held the Note. ECF No. 5-6.

         Meanwhile, the Renfroes fell behind in their monthly payments. As a result of the 2008 recession, Jan Renfroe began to experience financial hardship. ECF No. 36 at 2. In 2011, she stopped making monthly payments on the loan. ECF No. 1-1 at 4.

         On May 9, 2014, Bank of America, through its attorneys at Bishop, Marshall & Weibel, P.S., issued a notice of default. ECF No. 5-3. At that time, Bank of America held the Note.[1] The Notice identified Fannie Mae as the Note owner and Bank of America as the acting servicer. Id. On December 21, 2016, Quality Loan issued a notice of sale. ECF No. 5-7. The notice of sale identified Quality Loan as the trustee and Citibank as the beneficiary. ECF No. 5-7 at 1, 4. The notice of sale set the original auction date for April 28, 2017. Id. at 2. Before the auction date, Renfroe filed a “wrongful foreclosure” action in the Superior Court of Okanogan County. ECF No. 9.


         Summary judgment is appropriate 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). Once a party has moved for summary judgment, the opposing party must point to specific facts establishing that there is a genuine dispute for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). If the nonmoving party fails to make such a showing for any of the elements essential to its case for which it bears the burden of proof, the trial court should grant the summary judgment motion. Id. at 322. “When the moving party has carried its burden under Rule [56(a)], its opponent must do more than simply show that there is some metaphysical doubt as to the material facts. . . . [T]he nonmoving party must come forward with ‘specific facts showing that there is a genuine issue for trial.'” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (internal citation omitted). When considering a motion for summary judgment, the Court does not weigh the evidence or assess credibility; instead, “the evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).


         A. Renfroe's Deed of Trust Act claims lack merit.

         Renfroe seeks declaratory and injunctive relief regarding nonjudicial foreclosure proceedings initiated against the Oroville Property, damages under the Consumer Protection Act, and quiet title in her favor. The foundation for each of these claims is Defendants' alleged violation of Washington's DTA. Renfroe's theory of the case is as follows: (1) the Note is not endorsed in blank; (2) Bank of America obtained beneficiary status through an assignment by the original beneficiary, MERS; (3) because MERS is not a valid beneficiary, it cannot assign beneficiary status; and (4) any beneficiary interest Bank of America purported to have as the result of an assignment from MERS is invalid.

         While Renfroe's argument is logically sound, it is ultimately unavailing because the evidence in the record shows that the Note was endorsed in blank, making the note holder the deed of trust beneficiary. Bank of America asserts that it held the Note when it initiated foreclosure and Renfroe cannot generate a genuine issue of fact to dispute this assertion. Ultimately, the undisputed facts in the record show that-while the Note and Deed of Trust changed hands several times- Defendants acted with proper authority and in compliance with the DTA.

         1. Washington's Deed of Trust Act

         To understand Renfroe's argument, it is first necessary to briefly review Washington's DTA. The DTA establishes a “three party system for mortgages where an independent trustee acts as the impartial party between a lender and a borrower instead of the court.” Lyons v. U.S. Bank Nat. Ass'n, 336 P.3d 1142, 1148 (Wash. 2014). A statutory deed of trust operates as an “equitable mortgage” by conveying title to the trustee to secure the home loan. RCW § 61.24.005. The DTA allows parties to ...

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