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In re Application of Warren

Court of Appeals of Washington, Division 2

September 17, 2019

IN THE MATTER OF THE APPLICATION OF FRANK WARREN: SCHNARRS & CHERI LYNN SCHNARRS, TOGETHER AS HUSBAND AND WIFE TO REGISTER TITLE TO LAND HEREINAFTER DESCRIBED, Appellants,
v.
WILMINGTON SAVINGS FUND SOCIETY, FSB, D/B/A CHRISTIANA TRUST, NOT INDIVIDUALLY BUT AS TRUSTEE FOR PRETIUM MORTGAGE ACQUISITION TRUST, ITS SUCCESSORS AND/OR ASSIGNS; JOHN DOE; JANE DOE; ALL OTHER PERSONS OR PARTIES UNKNOWN CLAIMING ANY RIGHT, TITLE, ESTATE, LIEN OR INTEREST INTO, OR UPON THE REAL PROPERTY DESCRIBED HEREIN, Respondents.

          Glasgow, J.

         Frank and Cheri Schnarrs owned real property in Olympia, Washington. They borrowed money using the property as collateral and later defaulted on the loan. The trustee instituted a nonjudicial foreclosure and sold the property at auction to Wilmington Savings Fund Society as trustee for Pretium Mortgage Acquisition Trust. Wilmington recorded the trustee's deed.

         Months later, the Schnarrses filed a petition under the Torrens Act, chapter 65.12 RCW, seeking to register under that statute as owners of the property. The superior court dismissed the Schnarrses' petition with prejudice in part because the Torrens Act requires petitioners to be owners of the property and the Schnarrses no longer owned the property when they filed the petition. The Schnarrses appeal. We affirm.

         FACTS

         The legislature enacted the Torrens Act in 1907 as an alternative to Washington's recording statute. Laws of 1907, ch. 250. The adoption of the Torrens Act created an independent system of recording land titles separate from the recording act. McMullen & Co. v. Croft, 96 Wash. 275, 276, 164 P. 930 (1917). Under the Torrens Act, proper registration with the office of the registrar of titles provides conclusive evidence that the person recorded on the register is the owner of the registered property. See RCW 65.12.480. But the Torrens Act registration system has apparently fallen into disuse as a result of modern title recording systems, including the use of title companies and private electronic registration systems such as the Mortgage Electronic Registration System, Inc. See, e.g., Bain v. Metro. Mortg. Grp., Inc., 175 Wn.2d 83, 88, 285 P.3d 34 (2012).

         The Schnarrses borrowed $187, 500 against their property in Olympia. Years later, they defaulted on their loan. The trustee, Clear Recon Corp provided them with a notice of default, which the Schnarrses failed to cure. The trustee then provided the Schnarrses with notice of nonjudicial foreclosure. It also executed and recorded a notice of trustee's sale in the county auditor's office. The Schnarrses again took no action to cure the default. Clear Recon Corp sold the property at public auction to Wilmington Savings Fund Society, not individually but as trustee for Pretium Mortgage Acquisition Trust. Wilmington then recorded its trustee's deed.

         Four months after Wilmington recorded its deed, Micah James Anderson, on behalf of the Schnarrses, signed and filed in superior court a Torrens Act petition and application seeking to register the Schnarrses' title to the land under the Act. Anderson signed the Torrens petition and other documents, but Anderson is not an attorney. Anderson and the Schnarrses then attempted to bring a series of default motions, all of which were ultimately denied for various reasons, most importantly because the pleadings had not been signed by a party or a licensed attorney.

         Frank Schnarrs eventually signed and filed an amended Torrens Act petition and application for registration of land titles almost eight months after Wilmington had recorded its trustee's deed. This amended petition is the one at issue in this appeal. The amended petition named Cheri Schnarrs as a party and applicant.

         Wilmington filed a CR 12(b)(6) motion to dismiss with prejudice. Wilmington also requested that the superior court take judicial notice of the promissory note, the deed of trust, the trustee's deed, and the order granting Wilmington's motion to dismiss the Schnarrses' complaint in a separate case. Wilmington also asked for attorney fees.

         The court took judicial notice of the documents Wilmington submitted and granted Wilmington's motion to dismiss with prejudice, but denied Wilmington's request for attorney fees. The court concluded that the foreclosure action precluded the Schnarrses' claim. The court clarified that it was dismissing the case under CR 12(b)(6), but its ruling would be the same if it had converted the motion to dismiss to a motion for summary judgment.

         On January 22, 2018, Frank Schnarrs filed a notice of appeal, but Cheri Schnarrs was not mentioned in the notice. Frank Schnarrs passed away while the appeal was pending. Cheri Schnarrs filed a motion for substitution of parties under RAP 3.2, requesting that she be substituted for her husband in the appeal. Wilmington opposes this motion.

         ANALYSIS

         I. Substitution

         Cheri Schnarrs filed a motion to substitute her as a party to this appeal, alleging that she was a party to the lawsuit below, she is the successor in interest of Frank Schnarrs, and she desires to move forward with the appeal. RAP 3.2(a) requires substitution of parties on appeal "when it appears that a party is deceased." See also, State v. Webb, 167 Wn.2d 470, 478, 219 P.3d 695 (2009). Cheri Schnarrs submitted a declaration explaining that she and her husband owned the property at issue as community property and with right of survivorship. This declaration is sufficient to warrant the substitution of Cheri Schnarrs as a successor in interest. In addition, RAP 5.3(i) allows this court ...


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