IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
JEAN MARIE BARTON and BYRON
LEE BARTON, No. 73336-2-1
Appellants, DIVISION ONE
JP MORGAN CHASE BANK, N.A.,
QUALITY LOAN SERVICE
CORPORATION OF WASHINGTON, UNPUBLISHED OPINION
and TRIANGLE PROPERTY f-r'-1
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Defendant.
Becker, J. - Because the appellants' claims were brought, or could and
should have been brought, in their previous lawsuits, they are barred by res
judicata. We affirm the trial court's dismissal of their claims.
FACTS
In August 2007, Byron and Jean Barton, husband and wife, obtained a
refinance loan from Washington Mutual Bank secured by a deed of trust to their
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home. This deed of trust provided that if the Bartons defaulted on their loan, the
lender could foreclose nonjudicially and sell the Bartons' home.
On September 25, 2008, the Federal Deposit Insurance Corporation
placed Washington Mutual in receivership and sold some of Washington Mutual's
assets to JP Morgan Chase Bank N.A. Chase thus became the beneficiary and
holder of the Bartons' loan note.
The Bartons defaulted on their loan as of about July 2011.
On June 7, 2012, Chase appointed Quality Loan Service Corporation as
successor trustee under the deed of trust for the purpose of foreclosing. The
next month, Quality issued a notice of default to the Bartons.
On August 20, 2012, Quality issued the first notice of sale to the Bartons.
The Bartons filed a pro se complaint in King County Superior Court against
Chase and Quality, among other defendants, to stop the sale of their home. The
defendants removed the proceedings to federal district court, and the court
dismissed the case without prejudice. The sale of the Bartons' property did not
go forward, and the first notice of sale eventually expired.
On April 4, 2013, Quality issued a second notice of sale to the Bartons.
Later that month, the Bartons again responded by filing a pro se complaint,
almost identical to their first, in King County Superior Court to stop the sale of
their home. We will refer to this complaint as the 2013 lawsuit. The defendants
again removed the case to federal district court, and the court again dismissed,
this time with prejudice. Again, the sale of the Bartons' property did not go
forward and the second notice of sale eventually expired.
No. 73336-2-1/3
On December 6, 2013, Quality issued a third notice of sale to the Bartons.
This time, the Bartons did not sue to stop the sale. The Bartons' home was sold
at auction on April 16, 2014, to the winning bidder, Triangle Property
Development Inc.
The month after their home was sold, the Bartons filed a complaint, again
pro se, in King County Superior Court against Chase and Quality, among other
defendants. We will refer to this complaint as the 2014 lawsuit. This lawsuit
alleged a variety of claims, including a consumer protection violation,
noncompliance with the deed of trust act, chapter 61.24 RCW, and an allegation
that the sale was void. Chase filed a motion to dismiss, and Quality joined.
Triangle intervened.
At oral argument on the defendants' motion to dismiss, in January 2015,
the Bartons were represented by an attorney for the first time throughout this
foreclosure process. Upon request of their attorney, the court allowed the
Bartons a chance to move to amend their complaint. The Bartons moved to
amend their complaint and filed a proposed amended complaint. On March 2,
2015, the superior court denied the Bartons' motion to amend their complaint and
dismissed all claims against Chase and Quality with prejudice. The Bartons
appeal.
The respondents contend the Bartons' claims are barred by the principle
of res judicata.1 Res judicata, or claim preclusion, bars the relitigation of claims
11t appears that the Bartons are referring to res judicata when they argue
the trial court erred in applying "the principle of equitable estoppel."
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and issues that were litigated, or might have been litigated, in a prior action.
Loveridqe v. Fred Meyer, Inc., 125 Wn.2d 759, 763, 887 P.2d 898 (1995). Res
judicata "applies where a final judgment previously entered and a present action
are so similar that the current claim should have been litigated in the former
action. In this way, res, judicata promotes judicial economy, efficiency, and
fairness to litigants." Storti v. Univ. of Wash., 181 Wn.2d 28, 40, 330 P.3d 159
(2014). See also Sound Built Homes, Inc. v. Windermere Real Estate/South,
Inc., 118 Wn. App. 617, 628, 72 P.3d 788 (2003) ("This court from early years
has dismissed a subsequent action on the basis that the relief sought could have
and should have been determined in a prior action.'")
For res judicata to apply, a prior judgment must have a concurrence of
identity with a subsequent action in (1) persons and parties, (2) the quality of the
persons for or against whom the claim is made, (3) subject matter, and (4) cause
of action. Loveridqe, 125 Wn.2d at 763. Here, there is no dispute that the
Bartons' 2013 lawsuit—the one dismissed with prejudice by the federal district
court—had the same parties and quality of persons as the current lawsuit—the
Bartons sued Chase and Quality, among other defendants.
The Bartons argue, however, that the cause of action and subject matter
are not identical. To determine whether two causes of action are identical for
purposes of res judicata, the court takes into account whether rights or interests
established in the prior judgment would be destroyed or impaired by prosecution
of the second action; whether substantially the same evidence is presented in the
two actions; whether the two suits involve infringement of the same right; and
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whether the two suits arise out of the same transactional nucleus of facts.
Berschauer Phillips Const. Co. v. Mut. of Enumclaw Ins., 175 Wn. App. 222, 230,
308P.3d681 (2013).
Here, the Bartons' 2013 and 2014 lawsuits both arose out of the August
2007 loan transaction between the Bartons and Washington Mutual. Both
lawsuits involve Chase and Quality's alleged infringement of the Bartons' rights
regarding the foreclosure of their home. The same evidence is necessary for
each suit—the Bartons' loan note and deed of trust, the purchase and
assumption agreement between the FDIC and Chase, and the notices of default
and sale. The causes of action were identical for res judicata purposes. For the
same reasons, the subject matter was also identical.
The Bartons claim that Chase is an unlawful beneficiary because their
loan was not properly assigned or transferred to Chase. They raised the same
claim in their 2013 complaint. The federal district court specifically rejected this
claim when it granted the defendants' motions to dismiss with prejudice: "The
Chase Entities acquired plaintiffs' loans through a purchase and assumption
agreement with the FDIC. No additional approval, assignment, or consent was
necessary to affect the transfer. 12 U.S.C. § 1821(d)(2)(G)(i)(ll). Any liabilities
arising from the way the loans were negotiated and/or structured remained with
the FDIC; the named defendants cannot be held responsible for claims related to
the origination of the loan under any of the theories mentioned in plaintiffs'
complaint." This ruling established Chase's status as lawful owner of the
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Bartons' loan, a status that would be destroyed ifwe ruled differently in this
current suit. This claim is barred by res judicata.
The Bartons' additional claims addressed below were all raised for the first
time in their proposed amended complaint. The trial court denied leave to amend
the complaint. Because the Bartons have not assigned error to the trial court's
order denying their motion for leave to amend and have not explained how the
new claims are properly before this court notwithstanding that order, it is doubtful
that they are entitled to review of the new claims. Assuming for the sake of
argument that the new claims were properly considered by the trial court on the
merits, we briefly address them.
The Bartons first claim that they never received a notice of preforeclosure
options as required by RCW 61.24.031(1). As trustee, Quality was required to
issue a notice of preforeclosure options before it issued the notice of default to
the Bartons in July 2012. See RCW 61.24.031 (1)(a). To the extent the Bartons
are alleging that they never received a notice of preforeclosure options at any
time, this claim is barred by res judicata because it could have and should have
been brought in their earlier complaints.
The Bartons argue that when RCW 61.24.031 was amended effective
June 7, 2012, it added the requirement of sending a notice of preforeclosure
options prior to issuing a notice of default. The same notice of preforeclosure
options was already required under RCW 61.24.031(1) before the amendment.
See former RCW 61.24.031 (effective July 22, 2011, to June 6, 2012); Laws of
2012, ch. 185 (showing exact amendments to RCW 61.24.031(1)). The timing of
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the amendments thus does not alter our conclusion that this claim could have
and should have been brought in the earlier lawsuits.
The Bartons claim the April 2014 trustee's sale was wrongful because
they were not issued a notice of default related to this sale. But the Bartons
acknowledge that Quality issued a notice of default to them in July 2012, before
issuing the first notice of sale in August 2012. Quality was not required to issue a
new notice of default before each new notice of trustee's sale. Leahy v. Quality
Loan Serv. Corp. of Wash.. 190 Wn. App. 1, 359 P.3d 805 (2015), review denied,
185 Wn.2d 1011 (2016). Therefore, regarding the notice of default, the Bartons
failed to state a claim upon which relief can be granted. See Tenmore v. AT&T
Wireless Servs., 136 Wn.2d 322, 329-30, 962 P.2d 104 (1998) (dismissal under
CR 12(b)(6) is appropriate only if it appears beyond doubt that the plaintiff cannot
prove any set of facts which would justify recovery), cert, denied, 525 U.S. 1171
(1999).
The Bartons also claim that the respondents did not enter into the
foreclosure mediation program with them in violation of RCW 61.24.163. The
notice of default issued to the Bartons in July 2012 put them on notice of the
possibility of mediation: "You may be eligible for mediation in front of a neutral
third party to help save your home. CONTACT A HOUSING COUNSELOR OR
AN ATTORNEY LICENSED IN WASHINGTON NOW to assess your situation
and refer you to mediation if you might benefit. Mediation MUST be requested
between the time you receive the Notice of Default and no later than twenty days
after the Notice of Trustee Sale is recorded." (Emphasis in original.) Thus, the
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Bartons were aware of the mediation program before they even filed their first
lawsuit, yet they did not make any claim alleging failure to mediate when they
filed their 2012 and 2013 complaints. This claim is barred by res judicata
because it could have and should have been brought in these earlier complaints.
We conclude that the trial court properly granted the respondents' motion
to dismiss the Bartons' 2014 lawsuit, including the Bartons' allegation that the
foreclosure sale was invalid.
Affirmed.
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WE CONCUR:
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