United States District Court, W.D. Washington, Tacoma
US BANK NA, AS LEGAL TITLE TRUSTEE FOR TRUMAN 2012 SC2 TITLE TRUST, Plaintiff,
JOHN DIRWAYI, et al., Defendants. JOHN DIRWAYI and NATALIYA S. KAZIMEIRETS, Third-Party Plaintiffs,
WELLS FARGO BANK, N.A., RUSHMORE LOAN MANAGEMENT SERVICES, LLC, Third-Party Defendants.
ORDER GRANTING IN PART AND DENYING IN PART
PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT AND THIRD-PARTY
DEFENDANTS' MOTIONS FOR SUMMARY JUDGMENT
BENJAMIN H. SETTLE UNITED STATES DISTRICT JUDGE
matter comes before the Court on Third-Party Defendant Wells
Fargo Bank, N.A.'s (“Wells Fargo”) motion to
dismiss for failure to state a claim (Dkt. 14); and
Third-Party Defendant Rushmore Loan Management Services, LLC
(“Rushmore”) and Plaintiff U.S. Bank NA's
(“US Bank”) motion for summary judgment (Dkt.
34). The Court has considered the pleadings filed in support
of and in opposition to the motions and the remainder of the
file and hereby rules as follows:
PROCEDURAL AND FACTUAL BACKGROUND
30, 2017, Defendants and Third-Party Plaintiffs John Dirwayi
and Nataliya Kazimirets (“Dirwayis”) executed a
note and deed of trust to secure a home in Fife, Washington
(“Residence”). Dkt. 1-1, Exhs. A-B. In 2009, the
original lender assigned the deed to Wells Fargo, which
resulted in Wells Fargo also servicing the note.
Id., Exh. C.
2009, the Dirwayis requested mortgage payment assistance.
Dkt. 33, ¶ 7. On January 27, 2010, the Dirwayis and
Wells Fargo entered into a loan modification agreement.
Id. at 41-42.
2011, the Dirwayis approached Wells Fargo regarding another
loan modification. On May 14, 2011, Wells Fargo wrote the
Dirwayis informing them that they “may be eligible for
a modification offered by Fannie Mae (the owner of your
loan).” Id. at 44. Wells Fargo instructed the
Dirwayis that, to accept the offer, they were required to
make three trial period payments instead of the regular
monthly payments. Id. The letter also states that
“[a]fter all trial period payments are timely made,
your mortgage will be permanently modified.”
Id. In a “frequently asked questions”
supplement, Wells Fargo stated that “[y]our loan will
not be permanently modified until you successfully complete
the Trial Period Plan and you enter into a Loan
Modification” and that “[o]nce you make all of
your trial period payments on time, we will send you a Loan
Modification Agreement detailing the terms of the modified
loan. The Loan Modification Agreement will become effective
once you and we have signed it.” Id. at 46-47.
It is undisputed that the Dirwayis timely made the trial
September 9, 2011, Wells Fargo wrote the Dirwayis informing
them that they were eligible for a loan modification and
enclosed a modification agreement (“Second
Modification”). Id. at 51. The letter stated
that, “[i]f you comply with the terms of the required
Trial Period Plan, we will modify your mortgage . . .
.” Id. In order to accept the offer, Wells
Fargo instructed the Dirwayis to sign and return both copies
of the Second Modification. Id. The Dirwayis were
interested in the modification, so they signed the Second
Modification and returned it to Wells Fargo. Nataliya,
however, signed the Second Modification as “N.
Dirwayi/N. Kazimirets” when the printed name below the
signature line was “Nataliya S. Kazimirets.”
Id. at 58. Wells Fargo rejected the documents
because Nataliya's signature did not match the printed
Fargo sent a second set of documents to the Dirwayis with
instructions to sign the documents exactly as it appears on
the document. Id. at 60. On October 8, 2011, the
Dirwayis signed the documents, but Nataliya signed as
“N. Kazimirets.” Id. at 65. The Dirwayis
returned the documents and continued to remit the reduced
monthly payments. Wells Fargo rejected the documents, and the
delay violated Fannie Mae's requirement that the
documents be signed by October 1, 2011.
early 2012, Wells Fargo requested updated financial
information from the Dirwayis. Id. at 67-82. On
March 28, 2012, Wells Fargo informed the Dirwayis that they
did not qualify for a loan modification under the Home
Affordable Modification Program. Id. at 92-93. On
April 3, 2012, Wells Fargo wrote the Dirwayis informing them
that they may be eligible for a modification through Fannie
Mae. Id. at 96-101. The Dirwayis rejected the
proposed modification and trial payment plan.
23, 2012, Wells Fargo referred the Dirwayis' loan for
foreclosure proceedings. On September 27, 2012, the
foreclosing Trustee, Quality Loan Service Corp. of
Washington, recorded a notice of trustee's sale scheduled
for January 25, 2013. Id. at 106-109. On November 5,
2012, Wells Fargo transferred the loan to U.S. Bank and
transferred servicing of the loan to Rushmore. Id.
at 111-112; Dkt. 34-1 ¶ 7.
26, 2013, the Dirwayis filed suit in state court to stop the
foreclosure proceeding and asserted a claim for breach of the
Second Modification. At some point in early 2014, the parties
reached a settlement. On April 29, 2014, the Dirwayis'
attorney sent Rushmore's attorney signed copies of
another loan modification agreement (“2014 Proposed
Modification”). Dkt. 34-3. The proposed payment amount
was similar to the Second Modification, and both agreements
establish a 40-year payment plan. Id. The new
modification, however, indicated an increased deferred
principal balance. Id. Although the Dirwayis signed
the agreement, their attorney instructed Rushmore's
attorney to hold the signed copies in trust until the
Dirwayis delivered a countersigned copy of the settlement
29, 2014, all parties in the suit executed a notice of
settlement, and the court subsequently dismissed the
complaint without prejudice. U.S. Bank and Rushmore assert
that, “in order to accommodate” the Dirwayis,
they “entered a system adjustment” to alter the
terms of the loan. Id. ¶ 12. The altered terms
appear to be consistent with the terms of the 2014 Proposed
Modification. Id. After the adjustment, the Dirwayis
made payments of $2, 058.81 from May 2014 to May 2015.
Id. ¶ 13.
2015, Rushmore's attorney sent the Dirwayis' attorney
a letter stating that the 2014 Proposed Modification would be
revoked if the Dirwayis did not sign and return the proposed
settlement agreement. Dkt. 42 at 5. On June 1, 2015,
Rushmore's attorney informed the Dirwayis' attorney
that he could no longer accept payments on behalf of
Rushmore. Id. On July 25, 2015, the Dirwayis'
attorney sent Rushmore's attorney a letter with the
Dirwayis' June 2015 and July 2015 payments. Id.
at 7. Rushmore's attorney returned the checks and
informed the Dirwayis' attorney that Rushmore was in the
process of revoking the loan modification agreement because
the Dirwayis failed to enter the settlement agreement.
April 27, 2016, U.S. Bank filed the instant judicial
foreclosure action. Dkt. 1-1 at 2-39. On June 6, 2017, the
Dirwayis filed an answer with affirmative defenses and
counterclaims and included a third-party complaint. Dkt. 1-1
at 40-58. The Dirwayis asserted counterclaims against U.S.
Bank for breach of contract and violation of the Washington
Consumer Protection Act (“CPA”), RCW Chapter
19.86. Id. In the third-party complaint, the
Dirwayis asserted claims against Wells Fargo and Rushmore for
breach of contract, equitable indemnity, unjust enrichment,
and violations of the CPA. Id.
August 31, 2017, Wells Fargo filed a motion to dismiss. Dkt.
14. On November 15, 2017, the Court converted the motion to a
motion for summary judgment and requested subsequent
briefing. Dkt. 25. On January 26, 2018, Wells Fargo filed an
opening brief. Dkt. 32. On February 15, 2018, U.S. Bank and
Rushmore filed a motion for summary judgment. Dkt. 34. On
February 28 and March 5, 2018, the Dirwayis responded. Dkts.
39, 41. On March 8 and 9, 2018, Wells Fargo, U.S. Bank, and
Rushmore replied. Dkts. 43, 44.