Lyons v. U.S. Bank Nat'l Ass'n

Fl LE
IN CLERKS OFFICE
IIJPReM~ COURT, STATE OF WASHINGTON

D;~·;::; OCT 3 0 2014
/?(~~c.\2 Ronald R. t
CHiEFJIJsriCEJ Supreme Coort ~
-···~·

IN THE SUPREME COURT OF THE STATE OF WASHINGTON

WINNIE LYONS, a single person, ) No. 89132-0
)
Appellant, )
)
v. )
) EnBanc
U.S. BANK NATIONAL )
ASSOCIATION, as trustee for )
Stanwich Mortgage Loan Trust Series )
2012-3, by Carrington Mortgage )
Services, LLC; WELLS FARGO ) Filed OCT 3 0 2014
BANK, N.A., a chartered national )
bank; Wells Fargo Bank, N.A., as )
serv1cer, )
)
Defendants, )
)
and )
)
NORTHWEST TRUSTEE )
SERVICES, INC., as trustee, )
)
Respondent. )
_________________________ )

FAIRHURST, J.-Winnie Lyons brought suit against Northwest Trustee

Services Inc. (NWTS) based on its conduct as the trustee during foreclosure. Lyons
Lyons v. US. Bank Nat'l Ass 'n, No. 89132-0

alleged violations of the deed of trust act (DTA), chapter 61.24 RCW; violations of

the Consumer Protection Act (CPA), chapter 19.86 RCW; and the intentional

infliction of emotional distress. First, this case asks whether a plaintiff can even

bring a cause of action for damages under the DTA or the CPA in the absence of an

actual sale of the property. It then asks whether the trial court erred by granting

summary judgment in favor ofNWTS on all three claims. We affirm the trial court's

grant of summary judgment on the DTA and the intentional infliction of emotional

distress claims, but we reverse and remand the CPA claim to the trial court.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

In August 2007, Winnie Lyons signed a promissory note secured by a deed of

trust encumbering real property in Burien, Washington. The Burien property is

Lyons' primary residence and also the location from which she operates an adult

family home (AFH), 1 her sole source of income. Wells Fargo Bank NA was

identified on the deed of trust as the lender and beneficiary. Northwest Trustee

Services LLC was identified as the trustee. The deed of trust was recorded on August

31, 2007 in King County. In early 2009, Northwest Trustee Services LLC became

1
In her briefing, Lyons says she lives at the Burien address, but her declaration to the trial
court said she lived in Kent. In her reply brief she clarifies that she inadvertently signed the
declaration with this error. Reply Br. of Lyons at 2. At all times since she obtained the mortgage
she has resided and operated the AFH at the property in Burien. Id.
2
Lyons v. US. BankNat'l Ass'n, No. 89132-0

NWTS and Wells Fargo recorded an appointment of successor trustee naming

NWTS as the successor trustee.

In October 2009, an employee of Wells Fargo executed a beneficiary

declaration identifying Wells Fargo as trustee for Soundview Home Loan Trust

2006. This beneficiary declaration asserted, "Wells Fargo Bank, NA, as Trustee for

Soundview Home Loan Trust 2006-WFI is the actual holder of the promissory note

or other obligation evidencing the above-referenced loan or has requisite authority

under RCW 62A.3-301 to enforce said obligation." Clerk's Papers (CP) at 120. In

June 2010, another beneficiary declaration was executed by an employee of Wells

Fargo. It read, "Wells Fargo Banl(, NA, is the actual holder of the promissory note

or other obligation evidencing the above-referenced loan or has requisite authority

under RCW 62A.3-301 to enforce said obligation." CP at 118.

In October 2011, Lyons filed bankruptcy, and in January 2012 she applied for

a loan modification with Wells Fargo. On March 30, 2012, while Lyons was waiting

for a response regarding her application for a modification, she received a notice of

trustee's sale from NWTS informing her that her property was scheduled to be sold

on July 6, 2012. On April 5, 2012, Wells Fargo told Lyons' attorney that the in-

house modification had been approved. On April19, 2012, Lyons received the letter

confirming the modification. The terms required her to pay $10,000 by May 1, 2012.

3
Lyons v. US. Bank Nat'l Ass 'n, No. 89132-0

Wells Fargo informed Lyons they would discontinue the sale upon receipt of this

payment. She paid this amount to Wells Fargo as required.

However, on March 29, 2012, Wells Fargo had sold Lyons' loan to U.S. Ban1c

National Association as trustee for Stanwich Mortgage Loan Trust Series 2012-3

with Carrington Mortgage Services LLC as the new servicer of the loan. This was

to become effective on May 1, 2012. NWTS received notice of the sale and service

release on Apri112, 2012. Lyons received notice of this sale on April 26, 2012.

On April 26, 2012, Lyons' attorney spoke with a representative ofNWTS to

inform it that Wells Fargo no longer had any beneficial interest in the loan after the

sale, that Carrington was the new servicer of the loan, and that Lyons had received

a loan modification so she was no longer in default. On June 11, 2012, Lyons'

attorney again called NWTS to inform them of the loan modification and the sale of

the loan. A NWTS employee informed her that Carrington had directed NWTS to

continue with the foreclosure sale as scheduled. On June 14, 2012, Lyons' attorney

called Carrington and an employee indicated that Carrington did not show the

property in foreclosure status. Another employee further indicated that Carrington

had not told NWTS to go forward with the sale. Lyons' attorney then sent a cease

and desist letter to NWTS and Carrington.

On June 18, 2012, Lyons' attorney followed up with NWTS. NWTS

acknowledged receipt and informed her the sale was still on but that the matter had

4
Lyons v. US. Bank Nat'! Ass'n, No. 89132-0

been referred to an attorney for NWTS. On June 19, 2012, the attorney for NWTS

informed Lyons' attorney that he needed to do his due diligence. Lyons' attorney

again spoke with NWTS' attorney on June 21, 2012. NWTS' attorney refused to

discontinue the sale, and Lyons' attorney filed the complaint. At the end of the day

on June 21, 2012, NWTS executed and recorded a notice of discontinuance of the

trustee's sale. 2

Lyons alleges that this situation has had serious emotional and economic

impacts on her. In March 2012, Lyons arrived home to be handed the notice of

trustee's sale by a family member of one of her full pay AFH clients. In addition to

the sense of humiliation Lyons felt, this client moved out approximately two weeks

later because of concern that Lyons was going to lose her business and her home.

Before leaving, this client shared her belief that the home was going to be foreclosed

on with other AFH clients, some of whom also moved shortly thereafter. The AFH

business is her primary source of income, and the loss of clients directly impacted

her financially. In her declaration, Lyons asserts that thereafter she struggled with

day-to-day tasks and felt hopeless. She began counseling with the pastor of her

church. Her pastor said that previously Lyons was a very positive woman with a

drive to succeed, but since the pending foreclosure she was fearful and depressed.

2
NWTS maintains that it did not discontinue the trustee's sale because the complaint was
filed, but that the dates are coincidental since NWTS was not served with the complaint until June
26,2012.
5
Lyons v. US. Bank Nat'! Ass 'n, No. 89132-0

Lyons asserts that she experienced constant nausea from the stress and continuously

worried about losing her business and the subsequent homelessness of herself, her

son, and the elderly clients she cared for.

NWTS moved for summary judgment. After argument, the court granted the

motion for summary judgment as to all claims against NWTS. Subsequently, Lyons

and the remaining defendants (Stanwich, Carrington, and Wells Fargo) entered a

stipulated order of dismissal. Lyons' motion for reconsideration of the order of

summary judgment was denied. We granted Lyons' petition for direct review.

II. ISSUES PRESENTED

1. If a nonjudicial foreclosure sale does not happen, can a plaintiff bring a
claim for damages under the DTA or the CPA?

2. Was the grant of summary judgment against Lyons on her CPA claim
improper?

3. Was the grant-of summary judgment against Lyons on her intentional
infliction of emotional distress claim improper?

III. ANALYSIS

Lyons alleges a range of errors by the trial court that resulted from it granting

summary judgment in favor of NWTS. We review questions of law and summary

judgment rulings de novo. Dreilingv. Jain, 151 Wn.2d 900, 908,93 P.3d 861 (2004);

Reid v. Pierce County, 136 Wn.2d 195, 201, 961 P.2d 333 (1998). "In reviewing an

order of summary judgment, we engage in the same inquiry as a trial court." Reid,

136 Wn.2d at 201. We interpret all the facts and inferences therefrom in favor of
6
Lyons v. US. Bank Nat'l Ass 'n, No. 89132-0

Lyons, the nonmoving party. !d. Summary judgment is appropriate only if the record

demonstrates there is no genuine issue of material fact and the moving party is

entitled to judgment as a matter of law. !d.

Lyons alleges three causes of action against NWTS-one under the DTA, one

under the CPA, and one for intentional infliction of emotional distress. All of these

claims are supported by the same underlying conduct that Lyons alleges involves a

violation of RCW 61.24.030(7) in relation to the beneficiary declaration and a

breach of the duty of good faith under RCW 61.24.010(4). The trial court focused

on the issue of whether Lyons could bring a claim for damages under the DTA in

the absence of a trustee's sale, and there was almost no discussion of the CPA or the

intentional infliction of emotional distress claims during argument on the summary

judgment motion. Yet, the court granted NWTS' motion on all ofthese claims. We

begin by addressing the causes of action under the DTA and the CPA, including

Lyons' particular contentions regarding the beneficiary declaration and breach of the

duty of good faith. We then address the cause of action for intentional infliction of

emotional distress.

A. Without a nonjudicial foreclosure sale, a party may not bring a claim for
damages under the DTA, but they can bring a claim under the CPA

Recently we decided Frias v. Asset Foreclosure Services, Inc., _ Wn.2d

_ , 334 P.3d 529 (2014). Frias involved two certified questions from the federal

district court regarding whether a plaintiff could bring a claim for damages under
7
Lyons v. US. Bank Nat'l Ass 'n, No. 89132-0

the DTA or the CPA in the absence of a foreclosure sale and what principles would

govern each claim. This court carefully considered the language of the statute, the

intended beneficiaries of the statute, the explicit and implicit legislative intent, and

the purposes of the statute. The court concluded:

We hold that the DTA does not create an independent cause of
action for monetary damages based on alleged violations of its
provisions where no foreclosure sale has been completed. . . . We
further hold that under appropriate factual circumstances, DTA
violations may be actionable under the CPA, even where no foreclosure
sale has been completed .... [T]he same principles that govern CPA
claims generally apply to CPA claims based on alleged DTA violations.

334 P.3d at 531. Without the sale of the property, damages are not recoverable under

the DTA, but a CPA claim may be maintained regardless of the status of the property.

Frias clearly resolves the first issue in this case. Lyons cannot bring a claim for

damages under the DTA in the absence of a sale, but she may bring a claim for

similar actions under the CPA.

B. There were material issues of fact for trial regarding whether NWTS violated
provisions of the DTA, which could be used to support Lyons' CPA claim, so
granting summary judgment to NWTS on Lyons' CPA claim was improper

A CPA claim is a preexisting statutory cause of action with established

elements. Id. at 537. A claim under the CPA based on violations of the DTA must

meet the same requirements applicable to any other CPA claim. 3 The availability of

3
The law regarding CPA causes of action is fairly clear and settled. A cause of action is
available if the claim satisfies five elements: "'(1) [an] unfair or deceptive act or practice; (2)
occurring in trade or commerce; (3) public interest impact; (4) injury to plaintiff in his or her
8
Lyons v. US. Bank Nat'l Ass 'n, No. 89132-0

redress for wrongs during nonjudicial foreclosure under the CPA is well supported

in our case law. Id.; Bain v. Metro. Mortg. Grp., Inc., 175 Wn.2d 83, 119, 285 P.3d

34 (2012) (a plaintiff may bring a claim under the CPA arguing the facts specific to

the case); Walker v. Quality Loan Serv. Corp. of Wash., 176 Wn. App. 294, 320, 308

P.3d 716 (2013) (actions taken during the nonjudicial foreclosure process were

sufficient to support all five elements of a CPA claim and survive pretrial dismissal);

Vawter v. Quality Loan Serv. Corp. of Wash., 707 F. Supp. 2d 1115, 1129-30 (W.D.

Wash. 2010) (court discussed the five elements for a CPA claim and considered the

factual allegations supporting Vawter's DTA claim to support the CPA claim as

well); Klem v. Wash. Mut. Bank, 176 Wn.2d 771, 295 P.3d 1179 (2013) (property

was sold in this case, but court discussed action amounting to CPA claims in depth,

focusing on acts of defendants, not the fact the property was sold). The absence of a

completed sale of the property does not affect the availability of this cause of action.

Whether a plaintiff will prevail on a CPA claim is a case by case determination of

whether the plaintiff can satisfy the requisite elements.

The main question raised by the parties surrounds whether the alleged actions

of NWTS amount to unfair or deceptive practices under the CPA. 4 The allegedly

business or property; (5) causation."' Klem v. Wash. Mut. Bank, 176 Wn.2d 771,782,295 P.3d
1179 (20 13) (alteration in original) (quoting Hangman Ridge Training Stables, Inc. v. Safe co Title
Ins. Co., 105 Wn.2d 778,780,719 P.2d 531 (1986)). The CPA "shall be liberally constmed" to
further its purposes. RCW 19.86.920.
4
Much of the briefing also questions whether Lyons can show an injury by NWTS.
Although emotional distress, embarrassment, and inconvenience are excluded, business and
9
Lyons v. U.S. Bank Nat 'lAss 'n, No. 89132-0

improper acts of NWTS are intertwined but can be generally categorized as

violations of two DTA statutes-violation of the duty of good faith under RCW

61.24.01 0(4) and noncompliance with RCW 61.24.030(7)( a), which instructs that a

trustee must have proof the beneficiary is the owner prior to initiating a trustee's

sale. 5 Whether undisputed conduct is unfair or deceptive is a question of law, not a

question of fact. See, e.g., Panag, 166 Wn.2d at 47 ("Whether a particular act or

practice is 'unfair or deceptive' is a question of law." (quoting Leingang v. Pierce

County Med. Bureau, Inc., 131 Wn.2d 133, 150, 930 P.2d 288 (1997))).

CPA jurisprudence is well settled, and determining what an unfair act is can

be done by looking to precedent. The DTA sets up a three party system for mortgages

where an independent trustee acts as the impartial party between a lender and a

borrower instead ofthe court. Klem, 176 Wn.2d at 790. IfLyons' alleged violations

are true, NWTS' actions would likely be considered unfair acts, but questions of fact

remain as to whether NWTS' actions amounted to such violations. These material

property injuries compensable under the CPA are relatively expansive. Frias, 334 P.3d at 538. The
injury element does not require that the homeowner lose their property in order to bring a claim
under the CPA. !d. "[T]he injury requirement is met upon proof the plaintiffs 'property interest
or money is diminished because of the unlawful conduct even if the expenses caused by the
statutory violation are minimal."' Panag v. Farmers Ins. Co. of Wash., 166 Wn.2d 27, 57, 204
P.3d 885 (2009) (quoting Mason v. Mortg. Am., Inc., 114 Wn.2d 842, 854,792 P.2d 142 (1990)).
Lyons has alleged that her AFH business was directly impacted by the actions ofNWTS. These
allegations are sufficient to satisfy the injury element of a CPA claim for the purposes of summary
judgment.
5
In RCW 61.24.135, the legislature listed some per se violations of the DTA that
automatically satisfy this element of a CPA claim. The acts complained of by Lyons do not violate
this section of the DTA and thus, even though they might violate a different statute, are not per se
violations. Lyons must show NWTS' actions were unfair or deceptive.
10
Lyons v. US. Bank Nat'l Ass 'n, No. 89132-0

questions of fact must be resolved by a fact finder, so the claim should have survived

summary judgment.

1. There were material issues of fact regarding whether NWTS did not act
in good faith

RCW 61.24.010(4) imposes a duty of good faith on the trustee toward the

borrower, beneficiary, and grantor. "[U]nder our statutory system, a trustee is not

merely an agent for the lender or the lender's successors. Trustees have obligations

to all of the parties to the deed, including the homeowner." Bain, 175 Wn.2d at 93.

This duty requires the trustee to remain impartial and protect the interests of all the

parties. "[T]he trustee in a nonjudicial foreclosure action has been vested with

incredible power. Concomitant with that power is an obligation to both sides to do

more than merely follow an unread statute and the beneficiary's directions." Klem,

176 Wn.2d at 791. A foreclosure trustee must "adequately inform" itself regarding

the purported beneficiary's right to foreclose, including, at a minimum, a "cursory

investigation" to adhere to its duty of good faith. Walker, 176 Wn. App. at 309-10.

A trustee does not need to summarily accept a borrower's side of the story or

instantly submit to a borrower's demands. But a trustee must treat both sides equally

and investigate possible issues using its independent judgment to adhere to its duty

of good faith. See, e.g., Coxv. Helenius, 103 Wn.2d 383,388,693 P.3d 683 (1985).

A trustee's failure to act impartially between note holders and mortgagees, in

11
Lyons v. US. Bank Nat'! Ass 'n, No. 89132-0

violation of the DTA, can support a claim for damages under the CPA. Klem, 176

Wn.2d at 792.

Lyons says that NWTS violated its duty to act in good faith by failing to act

impartially toward her. Lyons points to various indicators that she believes

demonstrates NWTS' lack of good faith:

( 1) NWTS knew that Ms. Lyons had filed bankruptcy in 2011 (2)
NWTS knew that Ms. Lyons had engaged in a review for a loan
modification (3) In the bankruptcy [matter], NWTS, sister company,
RCO represented Wells Fargo's interest (4) Lyons' counsel on
numerous occasions contacted NWTS to discuss either the loan
modification or the fact Wells Fargo no longer had any beneficial
interest (5) NWTS knew that Wells Fargo requested a service release
and that NWTS needed to provide Wells Fargo with an invoice or
NWTS would not be paid (6) NWTS provided Wells Fargo with that
invoice on or about April 2012 (7) NWTS changed the scheduled
foreclosure sale loan number when it knew about the service release to
Carrington (8) NWTS, Nanci Lambert, indicated that Carrington
instructed NWTS to continue with the scheduled foreclosure sale (9)
Before a lawsuit was filed, several telephonic phone conversations took
place (10) On or about June 14, 2012, NWTS received a cease and
desist letter, coupled with proof of the loan modification.

Opening Br. ofLyons at 34-35 (footnotes omitted). Put simply, Lyons claims NWTS

deferred to the course of action that Wells Fargo had previously initiated without

giving any credence to what she, the borrower, was telling it about a change in the

situation between the parties.

We find that Lyons has presented material issues of fact. The conflict over the

actual beneficiary was brought to the attention ofNWTS on April 26, 2012, but there

is no evidence in the record that anyone at NWTS investigated this conflict until
12
Lyons v. US. Bank Nat'! Ass 'n, No. 89132-0

their attorney informed Lyons' attorney it would do so on June 19, 2012. 6 It is a

material issue of fact whether NWTS investigated the status of the loan and the

proper beneficiary earlier than when it referred the matter to their attorney. If Lyons'

allegations are true and NWTS knew about the conflicting information regarding

their right to initiate foreclosure but did not look into this matter, there are issues

regarding whether this indicates deferral to Wells Fargo and therefore lack of

impartiality. These issues of fact regarding NWTS' actions must be resolved before

a court can determine if they have violated the duty of good faith. Considering the

evidence in the light most favorable to Lyons, this claim should have survived

summary judgment.

2. There were material issues of fact regarding whether the beneficiary
declaration was proper and whether NWTS could rely on it

Lyons alleges multiple issues with the beneficiary declaration. Because of

these issues, Lyons claims NWTS did not have proper proof that Wells Fargo was

the owner of the note and could direct NWTS to foreclose. Thus, Lyons alleges that

NWTS violated RCW 61.24.030(7)(a), which requires that "before the notice of

trustee's sale is recorded, transmitted, or served, the trustee shall have proof that the

beneficiary is the owner of any promissory note or other obligation secured by the

6The only possible evidence NWTS investigated is that NWTS told Lyons it had spoken
with Carrington and Carrington had directed it to continue the sale. But, it is unclear whether
NWTS actually did speak to Carrington since Carrington's records indicated that the property was
not in foreclosure and Carrington denies ever instructing NWTS to continue with the sale.
13
Lyons v. U.S. Bank Nat'! Ass 'n, No. 89132-0

deed of trust." The trial court determined there were no issues of material fact and

granted summary judgment. We disagree and find that when considering the

allegations in favor of Lyons, some material factual issues remain that necessitate

the denial of summary judgment.

Lyons claims that the second beneficiary declaration was defective because

the language did not prove Wells Fargo, the beneficiary, was the owner, as required

by RCW 61.24.030(7)(a). Bain emphasized that the act requires a trustee to have

proof that the beneficiary is the actual owner of the note to be foreclosed on. 175

Wn.2d at 102 (citing RCW 61.24.030(7)(a)), 111 ("If the original lender had sold

the loan, [it] would need to establish ownership of that loan, either by demonstrating

that it actually held the promissory note or by documenting the chain of

transactions."). Seeking to foreclose without being a holder of the applicable note in

violation of the DTA is actionable in a claim for damages under the CPA. I d. at 115-

20.

Although ownership can be proved in different ways, the statute itself

suggests one way: "A declaration by the beneficiary made under the penalty of

perjury stating that the beneficiary is the actual holder of the promissory note ...

shall be sufficient proof as required under this subsection." RCW 61.24.030(7)(a).

Typically, unless the trustee has violated a duty of good faith, it is entitled to rely on

the beneficiary's declaration when initiating a trustee's sale. See RCW

14
Lyons v. US. Bank Nat'l Ass 'n, No. 89132-0

61.24.030(7)(b ). But if there is an indication that the beneficiary declaration might

be ineffective, a trustee should verify its veracity before initiating a trustee's sale to

comply with its statutory duty.

The United States District Court for the Western District of Washington

recently decided Beaton v. JPMorgan Chase Bank N.A., No. C11-0872 RAJ, 2013

WL 1282225 (Mar. 26, 2013) (court order), where it interpreted a beneficiary

declaration similar to the declaration in this case. It read, '" JPMorgan Chase Bank,

N.A. successor in interest to Washington Mutual Bank flm Washington Mutual

Bank, FA is the actual holder of the promissory note or other obligation evidencing

the above-referenced loan or has requisite authority under RCW 62A.3-301 to

enforce said obligation."' ld. at *5. The court held that this provision indicated that

"Chase could be a nonholder in possession or a person not in possession who is

entitled to enforce the instrument neither of which is proof that 'the beneficiary is

the owner of any promissory note or other obligation secured by the deed of trust."'

ld. (citation omitted) (quoting RCW 61.24.030(7)(a)). Because DTA provisions

must be strictly complied with, the ambiguity regarding whether the beneficiary

declaration satisfied the statutory requirement created enough of a question of

whether there was a violation of the DTA to survive summary judgment in that case.

I d. Lyons encourages the court to adopt the reasoning in Beaton.

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Lyons v. US. Bank Nat'! Ass 'n, No. 89132-0

NWTS argues that Beaton is wrongly decided and that the language of the

beneficiary declaration, in conjunction with the statutory requirements of the DTA

and case law, is valid. Notably, NWTS points out that a beneficiary declaration is

not the exclusive manner in which a trustee can satisfy RCW 61.24.030(7). This

declaration uses the phrase "or has requisite authority," and only a holder has the

requisite authority to act as a beneficiary under Bain. CP at 118. Since requisite

authority under the DTA and Washington case law is strictly limited to a holder

status, NWTS argues both clauses in the beneficiary declaration provide proof that

Wells Fargo was a holder for the purposes of RCW 61.24.030(7)( a).

Because DTA provisions should be strictly construed, we find, consistent with

Beaton, that the declaration at issue here does not comply with RCW

61.24.030(7)(a). On its face, it is ambiguous whether the declaration proves Wells

Fargo is the holder or whether Wells Fargo is a nonholder in possession or person

not in possession who is entitled to enforce the provision under RCW 62A.3-301.

But NWTS, as trustee, can still prove that Wells Fargo was the owner of the note in

a way other than through the beneficiary declaration referenced in RCW

61.24.030(7)(a). Thus, there remains a material issue of fact as to whether Wells

Fargo was the owner prior to initiating the trustee's sale. NWTS will need to furnish

that proof but may not just rely on this ambiguous declaration.

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Lyons v. US. Bank Nat'! Ass 'n, No. 89132-0

Additionally, Lyons claims the second beneficiary declaration was never

proper because of the existence of the first beneficiary declaration. The first

declaration identified Wells Fargo as trustee for Soundview, yet less than a year later

Wells Fargo asserts that it is the holder. It is not entirely clear how Wells Fargo could

give its interest to Soundview and then give it back to itself eight months later.

Material questions of fact remain as to whether the second beneficiary declaration

was valid and whether NWTS should have questioned its efficacy in light of the

prior beneficiary declaration. Taking the facts in a light most favorable to Lyons,

summary judgment was inappropriate and a cause of action under the CPA could be

supported.

C. No issues of fact remain for the claim of intentional infliction of emotional
distress, so summary judgment was proper

Lyons also alleges a claim for the tort of outrage, otherwise known as

intentional infliction of emotional distress. "The tort of outrage requires the proof of

three elements: (1) extreme and outrageous conduct, (2) intentional or reckless

infliction of emotional distress, and (3) actual result to plaintiff of severe emotional

distress." Kloepfel v. Bokor, 149 Wn.2d 192, 195,66 P.3d 630 (2003). "The question

of whether certain conduct is sufficiently outrageous is ordinarily for the jury, but it

is initially for the court to determine if reasonable minds could differ on whether the

conduct was sufficiently extreme to result in liability." Dicomes v. State, 113 Wn.2d

612, 630, 782 P.2d 1002 (1989); see Robel v. Roundup Corp., 148 Wn.2d 35, 51, 59
17
Lyons v. US. Bank Nat'! Ass 'n, No. 89132-0

P.3d 611 (2002). "The first element requires proof that the conduct was 'so

outrageous in character, and so extreme in degree, as to go beyond all possible

bounds of decency, and to be regarded as atrocious, and utterly intolerable in a

civilized community."' Robel, 148 Wn.2d at 51 (emphasis omitted) (internal

quotation marks omitted) (quoting Dicomes, 113 Wn.2d at 630).

Conduct during foreclosure could support a claim for intentional infliction of

emotional distress, but it must satisfy the high burden applicable to these claims.

RESTATEMENT (SECOND) OF TORTS § 46, cmt. d (1965); compare Montgomery v.

SOMA Fin. Corp., No. C13-360 RAJ, 2014 WL 2048183, at *7 (W.D. Wash. May

19, 2014) (court order) (plaintiffs alleged that the bank induced them to default, then

foreclosed on the property using a perjured declaration; the court found that

reasonable minds could differ as to whether this egregious conduct was sufficiently

outrageous and so the claim survived summary judgment), with Vawter, 707 F. Supp.

2d at 1128 ("Chase's and MERS 's actions in connection with the nonjudicial

foreclosure process, as alleged by the Vawters, may be problematic, troubling, or

even deplorable" but is insufficiently outrageous for an intentional infliction of

emotional distress claim), and McGinley v. Am. Home Mortg. Serv., Inc., No. 2:10-

CV-01157 RJB, 2010 WL 4065826, at *11 (W.D. Wash. Oct. 15, 2010) (court order)

(claim resting on alleged nondisclosures associated with loan refinance, terms of the

loan, and subsequent nonjudicial foreclosure proceedings was insufficiently

18
Lyons v. US. Bank Nat'! Ass 'n, No. 89132-0

outrageous to survive summary judgment), and Cervantes v. Countrywide Home

Loans, Inc., 656 F.3d 1034, 1046 (2011) ("plaintiffs essentially allege that the

lenders offered them loans that the lenders knew they could not repay; this is not

inherently 'extreme and outrageous"'), and Wells v. Chase Home Fin., LLC, No.

C10-5001RJB, 2010 WL 4858252, at *8 (W.D. Wash. Nov. 19, 2010) (court order).

To support her claim for intentional infliction of emotional distress, Lyons

relies on the same factual allegations above. She claims that the conduct of NWTS

in not confirming the proper beneficiary and in not suspending the trustee's sale

when she contacted them was so outrageous as to go beyond all bounds of decency.

But these allegations are not so outrageous that they shock the conscience or go

beyond all sense of decency. While perhaps the actions might have violated the DTA

and could support a claim under the CPA, the acts are not sufficiently outrageous to

support a claim for outrage. We affirm the trial court's grant of summary judgment

on the intentional infliction of emotional distress claim.

IV. CONCLUSION

If a trustee's sale has not occurred, an allegedly wronged homeowner cannot

bring a damages claim under the DTA. However even if a trustee's sale has not

occurred, an allegedly wronged homeowner can bring a claim for damages under the

CPA. Material issues of fact remain as to whether NWTS violated the CPA by not

acting in good faith or by improperly relying on a questionable beneficiary

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Lyons v. US. Bank Nat'! Ass 'n, No. 89132-0

declaration. We affirm the court's grant of summary judgment in favor of NWTS

for the DTA and intentional infliction of emotional distress claims. We reverse the

grant of summary judgment on the CPA claim and remand to the trial court.

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Lyons v. US. Bank Nat'l Ass 'n, No. 89132-0

WE CONCUR:

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