US Bank NA v. Dirwayi et al

Filing 64

ORDER Granting Plaintiff's 59 Motion for Summary Judgment, Default Judgment and Decree of Foreclosure signed by Judge Benjamin H. Settle.(GMR)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT TACOMA

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US BANK N.A., AS LEGAL TITLE
TRUSTEE FOR TRUMAN 2012 SC2
TITLE TRUST,
Plaintiff,

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v.

CASE NO. C17-5532 BHS
ORDER GRANTING PLAINTIFF’S
MOTION FOR SUMMARY
JUDGMENT, DEFAULT
JUDGMENT, AND DECREE OF
FORECLOSURE

JOHN DIRWAYI, et al.,

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Defendants.

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______________________________

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JOHN DIRWAYI and NATALIYA S.
KAZIMIRETS,

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Third-Party Plaintiffs,
v.

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WELLS FARGO BANK, N.A.,
RUSHMORE LOAN MANAGEMENT
SERVICES, LLC,

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Third-Party Defendants.
This matter comes before the Court on Plaintiff US Bank N.A.’s, as Legal Title

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Trustee for Truman 2012 SC2 Title Trust (“US Bank”), unopposed motion for summary

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judgment, default judgment, and decree of foreclosure. Dkt. 59. The Court has

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considered the pleadings filed in support of the motion and the remainder of the file and

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hereby grants the motion for the reasons stated herein.

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I.

PROCEDURAL AND FACTUAL BACKGROUND

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On July 30, 2017, Defendants and Third-Party Plaintiffs John Dirwayi and

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Nataliya Kazimirets (“Dirwayis”) executed a note and deed of trust to secure a home in

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Fife, Washington (“Residence”). Dkt. 1-1, Exhs. A, B. In 2009, the original lender

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assigned the deed to Third-Party Defendant Wells Fargo Bank N.A. (“Wells Fargo”),

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which resulted in Wells Fargo also servicing the note. Id., Exh. C.

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In 2009, the Dirwayis requested mortgage payment assistance. Dkt. 33, ¶ 7. On

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January 27, 2010, the Dirwayis and Wells Fargo entered into a loan modification

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agreement. Id. at 41–42.

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In 2011, the Dirwayis approached Wells Fargo regarding another loan

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modification. On May 14, 2011, Wells Fargo wrote the Dirwayis informing them that

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they “may be eligible for a modification offered by Fannie Mae (the owner of your

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loan).” Id. at 44. Wells Fargo instructed the Dirwayis that, to accept the offer, they were

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required to make three trial period payments instead of the regular monthly payments. Id.

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The letter also states that “[a]fter all trial period payments are timely made, your

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mortgage will be permanently modified.” Id. In a “frequently asked questions”

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supplement, Wells Fargo stated that “[y]our loan will not be permanently modified until

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you successfully complete the Trial Period Plan and you enter into a Loan Modification”

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and that “[o]nce you make all of your trial period payments on time, we will send you a

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Loan Modification Agreement detailing the terms of the modified loan. The Loan

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Modification Agreement will become effective once you and we have signed it.” Id. at

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46–47. It is undisputed that the Dirwayis timely made the trial payments.

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On September 9, 2011, Wells Fargo wrote the Dirwayis informing them that they

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were eligible for a loan modification and enclosed a modification agreement (“Second

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Modification”). Id. at 51. The letter stated that, “[i]f you comply with the terms of the

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required Trial Period Plan, we will modify your mortgage . . . .” Id. In order to accept

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the offer, Wells Fargo instructed the Dirwayis to sign and return both copies of the

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Second Modification. Id. The Dirwayis were interested in the modification, so they

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signed the Second Modification and returned it to Wells Fargo. Nataliya, however,

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signed the Second Modification as “N. Dirwayi/N. Kazimirets” when the printed name

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below the signature line was “Nataliya S. Kazimirets.” Id. at 58. Wells Fargo rejected

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the documents because Nataliya’s signature did not match the printed name below the

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signature line.

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Wells Fargo sent a second set of documents to the Dirwayis with instructions to

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sign the documents exactly as the printed name appeared on the document. Id. at 60. On

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October 8, 2011, the Dirwayis signed the documents, but Nataliya signed as “N.

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Kazimirets.” Id. at 65. The Dirwayis returned the documents and continued to remit the

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reduced monthly payments. Wells Fargo rejected the documents, and the delay violated

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Fannie Mae’s requirement that the documents be signed by October 1, 2011.

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In early 2012, Wells Fargo requested updated financial information from the

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Dirwayis. Id. at 67–82. On March 28, 2012, Wells Fargo informed the Dirwayis that

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they did not qualify for a loan modification under the Home Affordable Modification

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Program. Id. at 92–93. On April 3, 2012, Wells Fargo wrote the Dirwayis informing

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them that they may be eligible for a modification through Fannie Mae. Id. at 96–101.

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The Dirwayis rejected the proposed modification and trial payment plan.

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On July 23, 2012, Wells Fargo referred the Dirwayis’ loan for foreclosure

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proceedings. On September 27, 2012, the foreclosing Trustee, Quality Loan Service

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Corp. of Washington, recorded a notice of trustee’s sale scheduled for January 25, 2013.

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Id. at 106–109. On November 5, 2012, Wells Fargo transferred the loan to US Bank and

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transferred servicing of the loan to Third-Party Defendant Rushmore Loan Management

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Services, LLC (“Rushmore”). Id. at 111–112; Dkt. 34-1, ¶ 7.

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On July 26, 2013, the Dirwayis filed suit in state court to stop the foreclosure

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proceeding and asserted a claim for breach of the Second Modification. At some point in

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early 2014, the parties reached a settlement. On April 29, 2014, the Dirwayis’ attorney

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sent Rushmore’s attorney signed copies of another loan modification agreement (“2014

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Proposed Modification”). Dkt. 34-3. The proposed payment amount was similar to the

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Second Modification, and both agreements established a 40-year payment plan. Id. The

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new modification, however, indicated an increased deferred principal balance. Id.

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Although the Dirwayis signed the agreement, their attorney instructed Rushmore’s

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attorney to hold the signed copies in trust until the Dirwayis delivered a countersigned

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copy of the settlement agreement. Id.

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On May 29, 2014, all parties in the suit executed a notice of settlement, and the

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court subsequently dismissed the complaint without prejudice. US Bank and Rushmore

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assert that, “in order to accommodate” the Dirwayis, they “entered a system adjustment”

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to alter the terms of the loan. Id. ¶ 12. The altered terms appear to be consistent with the

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terms of the 2014 Proposed Modification. Id. After the adjustment, the Dirwayis made

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payments of $2,058.81 from May 2014 to May 2015. Id. ¶ 13.

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In May 2015, Rushmore’s attorney sent the Dirwayis’ attorney a letter stating that

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the 2014 Proposed Modification would be revoked if the Dirwayis did not sign and return

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the proposed settlement agreement. Dkt. 42 at 5. On June 1, 2015, Rushmore’s attorney

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informed the Dirwayis’ attorney that he could no longer accept payments on behalf of

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Rushmore. Id. On July 25, 2015, the Dirwayis’ attorney sent Rushmore’s attorney a

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letter with the Dirwayis’ June 2015 and July 2015 payments. Id. at 7. Rushmore’s

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attorney returned the checks and informed the Dirwayis’ attorney that Rushmore was in

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the process of revoking the loan modification agreement because the Dirwayis failed to

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enter the settlement agreement. Id.

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On April 27, 2016, US Bank filed the instant judicial foreclosure action in Pierce

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County Superior Court for the State of Washington. Dkt. 1-1 at 2–39. On February 10,

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2017, the state court entered an order of default against all unknown defendants in the

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complaint. Dkt. 2-3 at 4–5. On June 6, 2017, the Dirwayis filed an answer with

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affirmative defenses and counterclaims and included a third-party complaint. Dkt. 1-1 at

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40–58. The Dirwayis asserted counterclaims against US Bank for breach of contract and

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violation of the Washington Consumer Protection Act (“CPA”), RCW Chapter 19.86. Id.

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In the third-party complaint, the Dirwayis asserted claims against Wells Fargo and

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Rushmore for breach of contract, equitable indemnity, unjust enrichment, and violations

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of the CPA. Id.

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On July 12, 2017, Wells Fargo removed the matter to this Court. Dkt. 1.

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On August 31, 2017, Wells Fargo filed a motion to dismiss. Dkt. 14. On

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November 15, 2017, the Court converted the motion to a motion for summary judgment

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and requested subsequent briefing. Dkt. 25. On April 10, 2018, the Court granted the

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motion in part and denied the motion in part. Dkt. 45. On June 28, 2018, Wells Fargo

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filed a second motion for summary judgment on the Diwayis’s remaining breach of

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contract claim. Dkt. 52. The Diwayis did not respond. On September 13, 2018, the

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Court granted Wells Fargo’s motion. Dkt. 63.

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On August 13, 2018, US Bank filed the instant motion for summary judgment,

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default judgment, and a decree of foreclosure. Dkt. 59. As of the date of this order, the

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Diwayis have not responded.

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II.
A.

DISCUSSION

Standard
Summary judgment is proper only if the pleadings, the discovery and disclosure

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materials on file, and any affidavits show that there is no genuine issue as to any material

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fact and that the movant is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c).

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The moving party is entitled to judgment as a matter of law when the nonmoving party

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fails to make a sufficient showing on an essential element of a claim in the case on which

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the nonmoving party has the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317,

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323 (1986). There is no genuine issue of fact for trial where the record, taken as a whole,

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could not lead a rational trier of fact to find for the nonmoving party. Matsushita Elec.

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Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986) (nonmoving party must

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present specific, significant probative evidence, not simply “some metaphysical doubt”).

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See also Fed. R. Civ. P. 56(e). Conversely, a genuine dispute over a material fact exists

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if there is sufficient evidence supporting the claimed factual dispute, requiring a judge or

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jury to resolve the differing versions of the truth. Anderson v. Liberty Lobby, Inc., 477

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U.S. 242, 253 (1986); T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors Ass’n, 809 F.2d

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626, 630 (9th Cir. 1987).

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The determination of the existence of a material fact is often a close question. The

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Court must consider the substantive evidentiary burden that the nonmoving party must

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meet at trial – e.g., a preponderance of the evidence in most civil cases. Anderson, 477

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U.S. at 254; T.W. Elec. Serv., Inc., 809 F.2d at 630. The Court must resolve any factual

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issues of controversy in favor of the nonmoving party only when the facts specifically

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attested by that party contradict facts specifically attested by the moving party. The

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nonmoving party may not merely state that it will discredit the moving party’s evidence

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at trial, in the hopes that evidence can be developed at trial to support the claim. T.W.

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Elec. Serv., Inc., 809 F.2d at 630 (relying on Anderson, 477 U.S. at 255). Conclusory,

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nonspecific statements in affidavits are not sufficient, and missing facts will not be

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presumed. Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 888-89 (1990).

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B.

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US Bank’s Motion
In this case, US Bank moves for summary judgment on terms either identical to or

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substantially similar to the terms of the Second Modification. Dkt. 59 at 8–16. The

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Court has ruled that the Diwayis failed to perform their obligations under the Second

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Modification and therefore they may not maintain a breach of contract claim based on

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that agreement. Dkt. 63 at 8. However, precluding a party from maintaining a claim for

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damages does not necessarily mean that the contract is invalid. On the issue of invalidity,

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US Bank and Wells Fargo argued that the Dirwayis failed to properly sign the Second

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Modification, which resulted in improper formation of the contract. Dkt. 45 at 9. In its

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previous order, the Court found US Bank’s position suspect because US Bank’s

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complaint seeks enforcement of the Second Modification. Id. Thus, a conclusion that the

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Second Modification was not properly formed and that the original loan terms should be

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enforced would go beyond the bounds of the complaint, which the Court will not do. In

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other words, US Bank filed a complaint for enforcement of the Second Modification and

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may not alter the scope of its claim in a motion for summary judgment. Therefore, the

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Court agrees with US Bank’s current motion seeking judgment on the terms of the

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Second Modification.

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On this issue, the Court finds that US Bank has submitted sufficient admissible

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evidence to establish a right to judgment. The Dirwayis have failed to submit any

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evidence in opposition. Where no factual showing is made in opposition to a motion for

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summary judgment, the court is not required to search the record sua sponte for some

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genuine issue of material fact. See Carmen v. San Francisco Unified School Dist., 237

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F.3d 1026, 1029 (9th Cir. 2001). Likewise, “[i]t is not our task, or that of the district

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court, to scour the record in search of a genuine issue of triable fact. We rely on the

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nonmoving party to identify with reasonable particularity the evidence that precludes

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summary judgment.” Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996). Therefore,

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the Court grants US Bank’s motion because it has shown that it is entitled to judgment as

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a matter of law and that no question of material fact exists for the factfinder.

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Regarding a default judgment, the Court concludes that US Bank is entitled to a

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default judgment for all unknown defendants in the complaint because US Bank has

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established priority to the property over any unknown occupier or party claiming interest

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in the Residence. Thus, the Court grants US Bank’s motion on this issue.

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III.

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ORDER

Therefore, it is hereby ORDERED that US Bank’s unopposed motion for
summary judgment, default judgment, and decree of foreclosure, Dkt. 59, is GRANTED.
The Court will enter a judgment as a separate docket entry.
Dated this 4th day of October, 2018.

A

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BENJAMIN H.SETTLE
United States District Judge

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