Arnett et al v. Mortgage Electronic Registration Systems (MERS) et al

Filing 28

MEMORANDUM OPINION AND ORDER granting 14 Motion for Summary Judgment; granting 16 Motion for Joinder; granting 21 Motion for Summary Judgment. Authorized by Judge Barbara J. Rothstein on October 10, 2014. (BW)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT TACOMA

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BRENT J. ARNETT and AUTUMN M.
ARNETT, husband and wife; DANIEL K.
MOREHOUSE and JODEAN
MOREHOUSE, husband and wife,,

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Plaintiffs,
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v.
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MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.
(MERS), a Delaware corporation; SBMC
MORTGAGE, a California general
partnership; LANDAMERICA
TRANSNATION TITLE, an unknown
business entity; FEDERAL HOME
LOAN MORTGAGE CORPORATION
(FREDDIE MAC); U.S. BANK, N.A.
(USB), a Minnesota banking entity;
NORTHWEST TRUSTEE SERVICES,
INC. (NWTS), a Washington corporation;
BISHOP, WHITE, MARSHALL &
WEIBEL, P.S., a Washington
Corporation; JOHN DOES NOS. 1-50,

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Defendants.
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MEMORANDUM OPINION & ORDER 1

CASE NO. 14-cv-05298-BJR
MEMORANDUM OPINION &
ORDER GRANTING DEFENDANT
BISHOP, WHITE, MARSHALL &
WEIBEL’S MOTION FOR
SUMMARY JUDGMENT [14] AND
GRANTING DEFENDANTS
FEDERAL HOME LOAN
MORTGAGE CORPORATION,
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,
AND U.S. BANK, N.A.’S MOTION
FOR JOINDER [16] AND MOTION
FOR SUMMARY JUDGMENT [21]

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Before the Court are Defendant Bishop, White, Marshall & Weibel’s (“BWMW”)

2 Motion for Summary Judgment [14] and Defendants Federal Home Loan Mortgage Corporation
3 (“Freddie Mac”), Mortgage Electronic Registration Systems (“MERS”), and U.S. Bank, N.A.’s
4 (“USB”) (collectively, “U.S. Bank Defendants”) Motion for Joinder [16] and Motion for
5 Summary Judgment [21].

The motions are fully briefed and ripe for resolution.

Having

6 considered the parties’ arguments, pleadings, and relevant case law, the Court finds that a
7 hearing is unnecessary. For the reasons set forth below, Defendants’ Motions are GRANTED.
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I. BACKGROUND
This case concerns property located at 1403 8th Avenue, Milton, Pierce County,

10 Washington 98354 (“the Property”). 1 On June 11, 2007, Plaintiffs Daniel Morehouse, Autumn
11 Arnett, and Brent Arnett signed a Promissory Note (“Note”) promising to pay $370,000, plus
12 interest, to the holder of the Note, at that time Defendant SBMC Mortgage (“SBMC”). Affidavit
13 of Helen Jene Patton [22] (“Patton Aff.”), Ex. A (Note). Also on June 11, 2007, the Plaintiffs
14 executed a Deed of Trust (“DOT”) securing the repayment of the Note with an interest in the
15 Property. Patton Aff., Ex. D (Deed of Trust). The DOT listed the lender as SBMC, the trustee
16 as Defendant Landamerica Transnation Title, and Defendant MERS as the “nominee for the
17 Lender and Lender’s successors and assigns,” and beneficiary under the DOT. Id. Also on June
18 11, 2007, Plaintiff JoDean Morehouse, who did not sign the Note but did sign the DOT, executed
19 a quit claim deed ceding all interest in the Property to her husband, Plaintiff Daniel K.
20 Morehouse. Patton Aff., Ex. E (Quit Claim Deed).
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The legal description for the property is “Lot “C” of City of Milton Short Plat No.
23 9506080289, as recorded June 8, 1995 under Recording No. 9506080289, records of Pierce
County Auditor; Situate in the City of Milton, County of Pierce, State of Washington.” Notice
24 of Removal [1], Ex. 1 (Complaint) at ¶ 1.

MEMORANDUM OPINION & ORDER 2

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On July 3, 2007, prior to collecting any mortgage payments, Defendant SBMC sent

2 Plaintiffs a letter indicating that it had assigned, transferred, or sold the servicing rights of the
3 loan to Defendant USB. Patton Aff., Ex. G. Accordingly, all payments were to be made to
4 USB. Id. USB took physical possession of the Note on June 27, 2007, and has had physical
5 possession of the Note since that date. Patton Aff. at ¶ 8.
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Two years later, in July 2009, Plaintiffs fell behind on their mortgage payments. Patton

7 Aff at ¶ 9. According to Plaintiff Brent Arnett, in August 2009 the Plaintiffs sought a loan
8 modification from U.S. Bank, N.A. and were told that to receive a modification, they needed to
9 “be two monthly payments behind.” Declaration of Brent Arnett [18] at ¶ 6. Plaintiffs monthly
10 payments were slightly lowered during a “trial period,” and Plaintiffs were told the modification
11 process would take ninety days. Id. Plaintiff Arnett declares that the Plaintiffs went through the
12 loan modification process for two years, made at least 100 calls to U.S. Bank and to Freddie
13 Mac, who they were told owned the loan, and finally were denied “because we made ten dollars
14 per month over the limit for a loan modification!” Id. Plaintiffs allege they were “treated
15 unfairly by U.S. Bank, N.A.” Id. at ¶ 5.
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On May 23, 2011, USB, through its agent Defendant Northwest Trustee Services, Inc.,

17 sent the Plaintiffs a Notice of Default (“NOD”) indicating that they were behind on their
18 payments by $44,590.96. Patton Aff., Ex. H (NOD). The NOD identified USB as the owner of
19 the Note, as well as the loan servicer for the loan. Id. On August 25, 2011, MERS assigned its
20 interest as beneficiary under the DOT to USB. Patton Aff., Ex. K. On August 25, 2011, USB
21 appointed Northwest Trustee Services, Inc., as the successor trustee under the DOT. Patton Aff.,
22 Ex. J. On March 1, 2013, USB substituted Defendant BWMW as substitute trustee. Patton Aff.,
23 Ex. P. On May 31, 2013, BWMW served a NOD on Plaintiff stating that they were in default in
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MEMORANDUM OPINION & ORDER 3

1 the amount of $128,951.40. Patton Aff., Ex. Q. On September 25, 2013, BWMW notified
2 Plaintiff of an impending trustee’s sale. Patton Aff., Ex. R.
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Plaintiffs commenced the instant litigation on January 22, 2014, in Pierce County

4 Superior Court. Defendants timely removed to this Court on April 7, 2014.
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II. STANDARD OF REVIEW
“The court shall grant summary judgment if the movant shows that there is no genuine

7 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
8 R. Civ. P. 56(a). The moving party bears the burden of demonstrating the absence of a genuine
9 issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The court “should
10 review all of the evidence in the record . . . [and] draw all reasonable inferences in favor of the
11 nonmoving party.” Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000). A
12 genuine issue for trial exists if “the evidence is such that a reasonable jury could return a verdict
13 for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). However,
14 “[t]he mere existence of a scintilla of evidence” in support of a nonmoving party’s position is not
15 sufficient to create a genuine issue of material fact. Anderson, 477 U.S. at 252.
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III. ANALYSIS

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Plaintiffs’ theory of the case is set out in their Complaint. Plaintiffs note that the original

18 DOT named MERS as the “beneficiary” of the DOT, purportedly vested with the power to
19 appoint successor trustees. Plaintiffs correctly point out that, according to Washington law, an
20 entity that is designated as a beneficiary by a security instrument but that “never held the
21 promissory note . . . is not a lawful beneficiary.” Bain v. Metro. Mortg. Grp., Inc., 285 P.3d 34,
22 42 (Wash. 2012). Plaintiffs argue that, because MERS never held the Note, they are not a lawful
23 beneficiary and thus could not appoint a successor trustee to initiate foreclosure against
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MEMORANDUM OPINION & ORDER 4

1 Plaintiffs. From this point, Plaintiffs argue that any subsequent beneficiary, namely USB, “ha[s]
2 no standing to proceed. This fact destroys standing for any of the other codefendants, since their
3 alleged claims flow from the authority—lack of authority—of the original ‘beneficiary,’
4 MERS.” Compl. ¶ 4.
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Plaintiffs bring suit for violation of Washington’s Deed Trust Act, RCW §§ 61.24, et

6 seq., Washington’s Consumer Protection Act, RCW §§ 19.86, et seq., slander of title, quiet title,
7 and fraud. Plaintiffs seek damages, declaratory relief, and injunctive relief. Compl. at 12-17.
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A. Defendant Bishop, White, Marshall and Weibel’s Motion for
Summary Judgment
Defendant BWMW moves for summary judgment as to all claims by Plaintiffs. BWMW
is the present trustee of the Property. BWMW was appointed substitute trustee on March 1,
2013, by Defendant USB. Patton Aff., Ex. P. On May 31, 2013, BWMW served a Notice of
Default on Plaintiff stating that they were in default in the amount of $128,951.40. Patton Aff.,
Ex. Q. On September 25, 2013, BWMW notified Plaintiff of an impending trustee’s sale. Patton
Aff., Ex. R.
Plaintiffs’ claims against BWMW are loosely articulated in the Complaint: “Defendant
[BWMW] . . . claim[s] to have authority to issue a Notice of Sale in this action . . . despite
having no standing to do so because of the failure of the putative beneficiary of any deed of trust
to have standing to appoint [BWMW] as a subsequent trustee with power of sale . . . [Defendant]
has a duty to the plaintiffs to ensure that the Deeds of Trust Act (“DTA”) is strictly observed in
nonjudicial foreclosure actions. They have failed to do so in this case . . . .” Compl. at 4-5.
1. Plaintiffs’ Deed of Trust Act Claim Against BWMW
Washington’s Deed of Trust Act requires that, before issuing a notice of trustee’s sale,
the trustee must “have proof that the beneficiary is the owner of any promissory note or other

MEMORANDUM OPINION & ORDER 5

1 obligation secured by the deed of trust.” RCW § 61.24.030(7)(a). “A declaration by the
2 beneficiary made under the penalty of perjury stating that the beneficiary is the actual holder of
3 the promissory note or other obligation secured by the deed of trust shall be sufficient proof as
4 required under this subsection” “[u]nless the trustee has violated his or her duty under RCW §
5 61.24.010(4). RCW § 61.24.030(7)(a) and (b). RCW § 61.24.010(4) simply states that the
6 trustee “has a duty of good faith to the borrower, beneficiary, and grantor.” The Deed of Trust
7 Act defines “beneficiary” as “the holder of the instrument or document evidencing the
8 obligations secured by the deed of trust,” i.e., the Note.
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Pursuant to RCW § 61.24.030(7)(a), Defendant BWMW received a declaration from U.S.

10 Bank, N.A., stating that U.S. Bank was the actual holder of the promissory Note. Declaration of
11 Melanie Sattler [15] (“Sattler Decl.”), Ex. 3 (Declaration). The Declaration is dated July 29,
12 2011, and thus was given to BWMW prior to its issuance of a Notice of Trustee’s Sale on
13 September 25, 2013. Id.; Sattler Decl., Ex. 2 (Notice of Trustee’s Sale). Accordingly, BWMW
14 had sufficient proof, under the Deed of Trust Act, that U.S. Bank, N.A. was the actual holder of
15 the promissory Note, and was entitled to rely on U.S. Bank’s declaration.
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Plaintiffs make a number of arguments concerning U.S. Bank’s ability to appoint a

17 successor trustee; these arguments are discussed infra pp. 9-11. However, these arguments are
18 more properly directed at the other defendants and are not relevant to whether BWMW complied
19 with its duties as trustee under the Deed of Trust Act. BWMW was entitled to rely on USB’s
20 declaration that it was the holder of the Note. The only exception to this entitlement would be if
21 BWMW violated its duty of good faith. RCW §§ 61.24.030(7) and 61.24.010(4). Plaintiffs
22 present no facts or argument that would demonstrate that BWMW violated its duty of good faith.
23 The only portion of Plaintiffs’ brief that appears to tangentially address this subject is the
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MEMORANDUM OPINION & ORDER 6

1 following sentence: “BMW [sic] has also failed its duty to remain neutral and complete its due
2 diligence to protect the plaintiffs from harm by these violations of the DTA.” Pls.’ Resp. [17] to
3 Def.’s Mot. for Summ. J. at 8. However, Plaintiffs do not present any evidence or argument
4 regarding how Defendant failed in its duty. Plaintiffs seem to imply that BWMW’s acceptance
5 of USB’s declaration that it was the holder of the Note is, in itself, a violation of the duty of good
6 faith. Accepting this argument, however, would make RCW §§ 61.24.030(7) and 61.24.010(4)
7 nonsensical, as a trustee would never be entitled to accept a declaration as proof that the
8 declarant has a promissory note because such acceptance would, taking Plaintiffs’ argument,
9 violate the duty of good faith. Furthermore, Plaintiffs’ argument contradicts the plain wording of
10 RCW §§ 61.24.030(7) and 61.24.010(4). Accordingly, BWMW is entitled to summary judgment
11 as to Plaintiffs’ claims that BWMW violated its duty under the Deed of Trust Act.
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2. Plaintiffs’ CPA Claim Against BWMW

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To establish a violation of the CPA, a plaintiff must present evidence of “an unfair or
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deceptive act or practice . . . that . . . had the capacity to deceive a substantial portion of the
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public.” Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 719 P.2d 531, 535
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(Wash. 1986). Plaintiffs do not allege, or present evidence, that BWMW has engaged in an
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unfair or deceptive act or practice with the capacity to deceive a substantial portion of the public.
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Accordingly, Plaintiffs’ CPA claim fails.
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3.

Plaintiffs’ Slander of Title Claim Against BWMW

To establish a slander of title claim, a plaintiff must demonstrate that a defendant has spoken
words that (1) are false; (2) have been maliciously published; (3) are spoken with reference to
some pending sale of the property; (4) resulted in pecuniary loss or injury to the claimant; and

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MEMORANDUM OPINION & ORDER 7

1 (5) were such as to defeat the plaintiff's title. Schwab v. City of Seattle, 826 P.2d 1089, 1092
2 (Wash. App. 1992) (citing Pay ‘N Save Corp. v. Eads, 767 P.2d 592 (Wash. App. 1989)).
3 Plaintiffs present no evidence that BWMW maliciously published false words with reference to
4 the pending sale or purchase of property, and further do not present evidence that BWMW
5 caused them pecuniary loss or injury by defeating Plaintiffs’ title. As such, Plaintiffs’ slander of
6 title claim fails.
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4. Plaintiffs’ Fraud Claim Against BWMW
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A claim of fraud requires that a plaintiff put forth evidence of “(1) a representation of an
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existing fact, (2) its materiality, (3) its falsity, (4) the speaker's knowledge of its falsity or
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ignorance of its truth, (5) [the speaker's] intent that [the fact] should be acted upon by the person
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to whom it is made, (6) ignorance of [the fact's] falsity on the part of the person to whom it is
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made, (7) the latter's reliance on the truth of the representation, (8) [the right of the person] to
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rely on it, and (9) [the person's] consequent damage.” Cedell v. Farmers Ins. Co. of Washington,
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237 P.3d 309, 314-15 (Wash. App. 2010), aff’d in part, rev’d in part on other grounds, 295 P.3d
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239 (Wash. 2013). Plaintiffs present no evidence that BWMW knowingly presented a false,
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material fact from which Plaintiffs suffered damage. Accordingly, Plaintiffs’ fraud claim fails.
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5.

Plaintiffs’ Claim Against BWMW to Quiet Title

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A claim for quiet tile is “designed to resolve competing claims of ownership . . . of real
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property.” Kobza v. Tripp, 18 P.3d 621, 623-24 (Wash. App. 2001). Here, BWMW makes no
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claim to ownership of the property at issue. As such, Plaintiffs’ quiet title claim fails.
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As Plaintiffs have no valid claims as to Defendant BWMW, the Court GRANTS
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BWMW’s Motion for Summary Judgment.
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MEMORANDUM OPINION & ORDER 8

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B. Defendants MERS, Freddie Mac, and U.S. Bank, N.A.’s Motion for
Joinder

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U.S. Bank Defendants move to join in Defendant BWMW’s Motion for Summary

4 Judgment. The motion is unopposed and GRANTED.
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C. Defendants MERS, Freddie Mac, and U.S. Bank, N.A.’s Motion for
Summary Judgment
1. Defendants’ Motion to Dismiss Plaintiff JoDean Morehouse
Defendants first argue that Plaintiff JoDean Morehouse is not a proper Plaintiff. While
JoDean Morehouse did sign the Deed of Trust, Patton Aff., Ex. D, she did not sign the Note,
Patton Aff., Ex. A. On June 11, 2007, JoDean Morehouse then executed a Quit Claim Deed
transferring her interest in the Property to “Daniel Kerr Morehouse, married as his separate
property.” Patton Aff., Ex. E. Accordingly, Defendants argue that JoDean Morehouse lacks any
interest in the Property. Plaintiffs do not respond to this argument.
Defendants are correct. Plaintiff JoDean Morehouse has no interest in the Property at
issue, and therefore lacks standing. Accordingly, she is dismissed as a plaintiff.
2. Plaintiffs’ Claims Concerning U.S. Bank’s Beneficiary Status
As noted above, Plaintiffs argue that USB lacked the ability to appoint Defendant
BWMW as successor trustee. MERS was listed as the “nominee for Lender and Lender’s
successors and assigns [and] the beneficiary under this Security Instrument” in the Deed of
Trust. Patton Aff., Ex. D. at ¶ E. Plaintiffs present an Assignment of Deed of Trust, recorded on
August 25, 2011, in which MERS “as Beneficiary, hereby . . . assigns and transfers to U.S. Bank
National Association . . . all beneficial interest under [the Deed of Trust] . . . .” Patton Aff., Ex.
K. Plaintiffs correctly point out that, according to Washington law, an entity that is designated

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MEMORANDUM OPINION & ORDER 9

1 as a beneficiary but that “never held the promissory note . . . is not a lawful beneficiary.” Bain v.
2 Metro. Mortg. Grp., Inc., 285 P.3d 34, 42 (Wash. 2012).

Plaintiffs argue that, because

3 Defendant MERS never held the Note, they are not, and were never, a lawful beneficiary of the
4 DOT and thus could not appoint a successor trustee to initiate foreclosure against Plaintiffs.
5 Moreover, because MER never held the Note, it could not transfer any “interest” as beneficiary
6 to USB.
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Plaintiffs’ argument is correct as far as MERS’ inability to function as a beneficiary

8 under Washington law. However, USB points out that the propriety of its appointment of
9 BWMW as successor trustee does not derive from MERS’ transfer of MERS’ beneficiary status.
10 Rather, USB’s authority derives from its status as the holder of the promissory Note. Plaintiffs
11 fail to grapple in any meaningful way with this argument. Nor could they.
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USB has provided evidence, in the form of the affidavit of Heather Jene Patton, that USB

13 took possession of the Note on June 27, 2007, and has been in physical possession of the Note
14 since that date. Patton Aff. at ¶ 8. Also in evidence is a July 3, 2007, letter sent by Defendant
15 SBMC to Plaintiffs indicating that SBMC had assigned, transferred, or sold the servicing rights
16 of the loan to USB as of August 1, 2007. Patton Aff., Ex. G (Letter from SBMC). Prior to said
17 transfer, SBMC sent Plaintiffs a notice that it had a history of assigning or transferring 100% of
18 its mortgages; Plaintiffs signed and acknowledged this notice. Patton Aff., Ex. F (Notice).
19 Plaintiffs appear to have made payment on their mortgage to USB for the better part of two
20 years, until they fell behind on payment in July of 2009. Patton Aff. at ¶ 9.
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The Note itself contemplates such a transfer.

Paragraph 1 of the Note, entitled

22 “Borrower’s Promise to Pay,” states that “I understand that the Lender may transfer this note.
23 The Lender or anyone who takes this Note by transfer and who is entitled to receive payments
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MEMORANDUM OPINION & ORDER 10

1 under this Note is called the “Note Holder.” Patton Aff., Ex. A (Note). The Note also states, in
2 Paragraph 10, that a separate Deed of Trust protects the Note Holder from loss if the borrower
3 does repay the loan. Id. The Deed of Trust also contains language contemplating a transfer.
4 Paragraph 20 of the Deed of Trust states that “The Note or a partial interest in the Note (together
5 with this Security Instrument) can be sold one or more times . . . .” Patton Aff., Ex. D (Deed of
6 Trust). Plaintiffs have presented no evidence to contradict the evidence in the record that SBMC
7 transferred the Note to USB and that USB has been the holder of the Note since June 27, 2007.
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As the holder of the Note, USB is entitled to appoint a successor trustee to foreclose on

9 the property secured by the Deed of Trust. See Patton Aff., Ex. D (Deed of Trust) at ¶ 24
10 (“Substitute Trustee. In accordance with Applicable Law, Lender [i.e., the holder of the Note]
11 may from time to time appoint a successor trustee to any Trustee appointed hereunder . . . the
12 successor trustee shall succeed to all the title, power, and duties conferred upon the Trustee
13 herein . . . ”). This is in accordance with Washington law. See Bain, 285 P.3d at 36 (holding that
14 “only the actual holder of the promissory note or other instrument evidencing the obligation may
15 . . . appoint a trustee to proceed with a nonjudicial foreclosure . . . ”; See also Myers v. Mortg.
16 Elec. Registration Sys., Inc., 2012 WL 678148, at * 3 (W.D. Wash. Feb. 24, 2012) (finding that a
17 party holding the note is empowered to appoint a trustee because of its possession of the note,
18 and not because of any assignment of beneficiary status); In re Jacobsen, 402 B.R. 359, 367
19 (Bankr. W.D. Wash. 2009) (holding that “[i]n Washington, only the holder of the obligation
20 secured by the deed of trust is entitled to foreclose . . . [t]ransfer of the note carries with it the
21 security, without any formal assignment or delivery, or even mention of the latter”); Fidelity &
22 Deposit Co. of Maryland v. Ticor Title Ins. Co., 943 P.2d 710, 713 (Wash. App. 1997) (holding
23 that the security instrument follows the debt, i.e., note). Indeed, the Deed of Trust Act itself
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MEMORANDUM OPINION & ORDER 11

1 defines “Beneficiary” as “the holder of the instrument or document evidencing the obligations
2 secured by the deed of trust,” i.e., the Note. RCW § 61.24.005(2). 2 Here, USB has held the
3 Note since June 27, 2007, having been transferred the Note by the original lender, SBMC. As
4 such, USB was entitled, as holder of the Note, to appoint BWMW as successor trustee on March
5 1, 2013. Patton Aff., Ex. P (Appointment of Successor Trustee).
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Plaintiffs briefly argue that “the investigation of the loan origination shows U.S. Bank,

7 N.A. as merely the loan servicer and the investor (funding entity) was FEDERAL HOME LOAN
8 MORTGAGE CORPORATION (“Freddie Mac”).” Pls.’ Resp. [25] to Defs.’ M. for Summ. J. at
9 4. Plaintiffs appear to be confused as to Freddie Mac’s role in “funding” the underlying loan and
10 imply, without specifically arguing, that this “funding” implies ownership or possession of the
11 Note. 3 However, Plaintiffs have presented no evidence that creates a genuine issue of material
12 fact as to USB’s possession of the Note.
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3. Plaintiffs’ CPA Claim Against U.S. Bank Defendants

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Violation of the CPA requires “an unfair or deceptive act or practice . . . which affects the
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public interest . . . a showing of injury to plaintiff in his or her business or property . . . [and] a
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This definition of “Beneficiary” was the statutory language relied on by the Washington
Supreme Court in Bain in reaching its conclusion that, because in that case, it never held the
19 Note, MERS could not be the beneficiary of the security instrument.
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This funding mechanism is explained in an FAQ publicly available on the Federal
Housing Finance Agency’s website: “Do Fannie Mae and Freddie Mac make loans directly to
home buyers? No. Fannie Mae [sic] Freddie Mac support the nation’s housing finance system
through the secondary mortgage market and do not make loans directly to borrowers; rather,
banks, credit unions, and other retail financial institutions originate home loans to borrowers.
Generally, lenders do not retain the mortgages they originate as assets on their own books.
Instead, they often sell conventional conforming mortgage loans soon after origination to Fannie
Mae or Freddie Mac.” Federal Housing Finance Agency, Frequently Asked Questions (Oct. 9,
2014, 12:23 PM), at http://fhfaoig.gov/LearnMore/FAQ#FannieMaeFreddieMac3.

MEMORANDUM OPINION & ORDER 12

1 causal link . . . between the unfair or deceptive act complained of any the injury suffered.”
2 Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 719 P.2d 531, 535 (Wash. 1986).
3 Plaintiffs do not allege or present evidence of an unfair or deceptive act or practice on the part
4 USB or Freddie Mac. As to MERS, Plaintiffs appear to argue that MERS’ assignment of its
5 “beneficiary” interests to USB was an “unfair or deceptive act or practice” because, pursuant to
6 Washington law, MERS was not a legitimate beneficiary and as such had no “interests” to
7 assign. However, Plaintiffs have failed to establish that MERS’ action had a “causal link” to any
8 injury they have suffered or are likely to suffer, such as foreclosure on their home. This is
9 because the power to appoint a trustee to initiate foreclosure stems from USB’s status as holder
10 of the promissory Note, not from any wrongful assignment by MERS. Plaintiffs therefore cannot
11 establish a causal link between wrongful action by MERS and injury to themselves. As such,
12 Plaintiffs’ CPA claim fails as to U.S. Bank Defendants.
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4. Plaintiffs’ Slander of Title Claim Against U.S. Bank Defendants
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To establish a slander of title claim, a plaintiff demonstrate that a defendant has spoken

16 words that (1) are false; (2) have been maliciously published; (3) are spoken with reference to
17 some pending sale of the property; (4) resulted in pecuniary loss or injury to the claimant; and
18 (5) were such as to defeat the plaintiff's title. Schwab v. City of Seattle, 826 P.2d 1089, 1092
19 (Wash. App. 1992) (citing Pay ‘N Save Corp. v. Eads, 767 P.2d 592 (Wash. App. 1989)).
20 Plaintiffs present no evidence that U.S. Bank Defendants have maliciously published false words
21 with reference to the pending sale or purchase of the Property. As such, Plaintiffs’ slander of
22 title claim fails.
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5. Plaintiffs’ Fraud Claim Against U.S. Bank Defendants

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MEMORANDUM OPINION & ORDER 13

1

A claim of fraud requires that a plaintiff put forth evidence of “(1) a representation of an

2 existing fact, (2) its materiality, (3) its falsity, (4) the speaker's knowledge of its falsity or
3 ignorance of its truth, (5) [the speaker's] intent that [the fact] should be acted upon by the person
4 to whom it is made, (6) ignorance of [the fact's] falsity on the part of the person to whom it is
5 made, (7) the latter's reliance on the truth of the representation, (8) [the right of the person] to
6 rely on it, and (9) [the person's] consequent damage.” Cedell v. Farmers Ins. Co. of Washington,
7 237 P.3d 309, 314-15 (Wash. App. 2010), aff’d in part, rev’d in part on other grounds, 295 P.3d
8 239 (Wash. 2013). For the reasons discussed above, Plaintiffs have failed to present evidence
9 that U.S. Bank Defendants presented a false, material fact from which Plaintiffs suffered injury.
10 Accordingly, Plaintiffs’ fraud claim fails.
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6. Plaintiffs’ Claim to Quiet Title Against U.S. Bank Defendants

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Finally, a claim for quiet tile is “designed to resolve competing claims of ownership . . .
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of real property.” Kobza v. Tripp, 18 P.3d 621, 623-24 (Wash. App. 2001). RCW § 7.28.300
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outlines when a plaintiff may quiet title against a mortgage or deed of trust: “The record owner
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of real estate may maintain an action to quiet title against the lien of a mortgage or deed of trust
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on the real estate where an action to foreclose such mortgage or deed of trust would be barred by
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the statute of limitations . . . .” The Note signed by Plaintiffs states that the date of maturity of
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the loan is July 1, 2047. Patton Aff., Ex. A at ¶ 3. RCW § 4.16.040(1) imposes a six-year statute
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of limitations on “promissory notes and deeds of trust.” This six-year statute of limitations
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begins when the note becomes due. See Westar Funding, Inc. v. Sorrels, 239 P.3d 1109, 1113
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(Wash. App. 2010) (finding that the statute of limitations on a 1992 note that came due in 1994
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expired six years after the note became due, i.e., in 2000). Accordingly, the statute of limitations
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has not run on the Note, and Plaintiffs have no basis on which to quiet title.
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MEMORANDUM OPINION & ORDER 14

1

Because Plaintiffs have failed to support any of their claims against U.S. Bank

2 Defendants, the Courts GRANTS Defendants Federal Home Loan Mortgage Corporation,
3 Mortgage Electronic Registration Systems, and U.S. Bank, N.A.’s Motion for Summary
4 Judgment.
5

IV. Conclusion

6

For the reasons stated above, IT IS HEREBY ORDERED that:

7 (1)

Defendant Bishop, White, Marshall & Weibel’s Motion for Summary Judgment [14] is

8

GRANTED.

9 (2)

Defendants Federal Home Loan Mortgage Corporation, Mortgage Electronic Registration

10

Systems, and U.S. Bank, N.A.’s Motion for Joinder [16] is GRANTED.

11 (3)

Defendants Federal Home Loan Mortgage Corporation, Mortgage Electronic Registration

12

Systems, and U.S. Bank, N.A.’s Motion for Summary Judgment [21] is GRANTED.

13 (4)

Plaintiff JoDean Morehouse is DISMISSED from this case.

14

SO ORDERED.

15 Dated: October 10, 2014
16
17
__________________________________________

18

BARBARA J. ROTHSTEIN
UNITED STATES DISTRICT JUDGE

19
20
21
22
23
24

MEMORANDUM OPINION & ORDER 15