Mark And Julie Daviscourt v. Quality Loan Services

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
MARK AND JULIE DAVISCOURT,
a husband and wife and their marital No. 74979-0-1
community,
DIVISION ONE
Appellants,
UNPUBLISHED OPINION
V. CO.cz
Cza

QUALITY LOAN SERVICESt
CORPORATION OF WASHINGTON,
a Washington Corporation,

Respondent,

MCCARTHY HOLTHUS, LLP, a
California Limited Liability Partnership;
BANK OF AMERICA, N.A., a national
association,

Defendants,

SELECT PORTFOLIO SERVICING,
INC., a foreign corporation; BANK OF
NEW YORK MELLON FKA BANK OF
NEW YORK, a national association;
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,
a foreign corporation; MERSCORP
HOLDINGS, INC., a foreign corporation;
ALTERNATIVE LOAN TRUST
2005-62, MORTGAGE PASS-
THROUGH CERTIFICATS SERIES
2005-62; JOHN DOES 1-99, FILED: August 21, 2017

Respondents.

TRICKEY, A.C.J. — Mark and Julie Daviscourt appeal the dismissal, on
summary judgment, of their negligence, outrage, and civil conspiracy claims

against various defendants who initiated a nonjudicial foreclosure proceeding

against them after they defaulted on their loan. Underlying most of the

t It appears the case caption's reference to "Quality Loan Services Corporation of
Washington" is a typographical error. All other references in the record refer to "Quality
Loan Service Corporation of Washington."
No. 74979-0-1 /2

Daviscourts' claims are their assertions that the defendants recorded documents,

including a deed of trust and promissory note, containing false information about

the identities of the lender, beneficiary, and trustee, and that Quality Loan Service

Corporation of Washington (Quality) failed to maintain a physical address.

Because the Daviscourts have failed to establish that the defendants violated any

duty to them when they recorded the documents, that the defendants employed

unlawful means, and that the defendants' conduct was outrageous, we affirm.

The Daviscourts also claim that the defendants violated the Consumer

Protection Act, chapter 19.86 RCW (CPA), by violating the deeds of trust act,

chapter 61.24 RCW (DTA). Because the Daviscourts have not shown that any

violation by Quality constituted an unfair or deceptive practice, or that any of the

other defendants violated the DTA, we also affirm the dismissal of their CPA

claims.

FACTS

In 2005, the Daviscourts executed a promissory note in the amount of

$875,000 in favor of America's Wholesale Lender(AWL). They secured the note

with a deed of trust encumbering their home. The deed of trust identified AWL as

the lender, and stated that the lender was a corporation under the laws of New

York. The deed of trust identified Transnation as the trustee and Mortgage

Electronic Registration Systems, Inc.(MERS)as the beneficiary. The deed of trust

also contained an instruction to return the document to Countrywide Home Loans

(Countrywide) after recording.

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 No. 74979-0-1 / 3

In 2009, the Daviscourts sued Countrywide and other defendants on other

grounds related to a loan modification. The lawsuit identified Countrywide as the

lender for the 2005 loan.

In September 2011, MERS purported to assign its beneficial interest in the

deed of trust to the Bank of New York Mellon f/k/a Bank of New York (BONY).

In September 2013, BONY, acting as beneficiary, recorded an appointment

of successor trustee, appointing Quality as the trustee. An officer of Select

Portfolio Servicing, Inc. (SPS), acting as attorney in fact for BONY, signed the

appointment. The appointment listed an address in Poulsbo, Washington, for

Quality.

Also in September 2013, Quality sent the Daviscourts a notice of default

(NOD). The NOD identified SPS as the loan servicer, and BONY as the owner of

the note. It was signed by Quality as the trustee. The NOD listed the same

Poulsbo, Washington, address for Quality as the appointment had.

Around that time, the Daviscourts attempted to modify their loan with SPS.

Mark Daviscourt included letters of hardship with his requests to modify the loan.

A sample letter, from his physician, addressed "To Whom It May Concern" and

dated January 23,2007, explained that Mark suffered from depression and that

his "coping skills and executive functioning decline rapidly when under stress, or

exposed to situational changes."' The letters warned that "a seizure of [Mark's]

home would likely have a significantly adverse affect [sic] on [Mark's] future

medical condition."2 Mark sent the same letters to Quality.

'Clerk's Papers(CP) at 307.
2 CP at 307.

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No. 74979-0-I /4

Receiving the NOD distressed Mark. Mark decided to commit suicide

because he felt that the shame of losing his home was unbearable. Concerned

about the pain his death would cause his family, he did not follow through with the

plan.

In February 2014, Quality sent the Daviscourts a notice of trustee's sale

because they had defaulted on their obligation. The notice listed a physical

address for Quality in Seattle, Washington. Mark made several attempts to visit

Quality at its Seattle office but, although locating the building and seeing a sign for

Quality, was not able to enter the office or reach anyone through the call box.

Following his unsuccessful visits to Quality, Mark again considered suicide.

In March 2014, Quality discontinued the sale.

In July 2014,the Daviscourts sued MERS, BONY,SPS, Quality, and others

for negligence, outrage, civil conspiracy, and violation of the CPA. In late

December 2015, the court granted Quality's motion for summary judgment. In

March 2016, the court granted summary judgment in favor of the remaining

defendants (the SPS defendants) and dismissed the Daviscourts' remaining

claims.

The Daviscourts appeal.

ANALYSIS

Summary Judgment

Summary judgment is appropriate "if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show

that there is no genuine issue as to any material fact and that the moving party is

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No. 74979-0-1/ 5

entitled to a judgment as a matter of law." CR 56(c). The affidavits "shall set forth

such facts as would be admissible in evidence." CR 56(e). Because witnesses'

opinions on legal issues are not admissible, neither a trial court nor an appellate

court may consider them when deciding whether to grant summary judgment. King

County Fire Prot. Dists. v. Hous. Auth. of King County, 123 Wn.2d 819, 826, 872

P.2d 516(1994).

The court must consider the facts and all reasonable inferences from those

facts in the light mostfavorable to the nonmoving party. Keck v. Collins, 184 Wn.2d

358, 370, 357 P.3d 1080 (2015). Appellate courts review summary judgment

decisions de novo. Keck, 184 Wn.2d at 370.

Throughout their brief, the Daviscourts rely on the affidavit of their expert

witness, Marie McDonnell, as proof that various recorded documents are false or

void or that various defendants lacked legal authority to take certain actions. The

Daviscourts note that neither McDonnell's "expertise nor opinions based upon

findings were challenged in the trial court."3 The defendants argue that the trial

court properly disregarded McDOnnell's legal conclusions. We agree with the

defendants and disregard all of McDonell's legal conclusions.

Negligence

The Daviscourts argue that the trial court erred by dismissing their

negligence claims on summary judgment because there were at least genuine

issues of material fact for each element of their claims. We disagree because the

Daviscourts have not shown that the defendants had a duty to protect them from

3 Appellants' Opening Br. at 10.
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No. 74979-0-1 /6

the type of harm alleged.

The tort of negligence has four elements: duty, breach, causation, and

damages. Schooley v. Pinch's Deli Mkt., Inc., 134 Wn.2d 468,474, 951 P.2d 749

(1998). "The existence of a duty may be predicated upon statutory provisions or

on common law principles." Degel v. Majestic Mobile Manor, Inc., 129 Wn.2d 43,

49, 914 P.2d 728 (1996). Under the common law, actors "have a duty to exercise

reasonable care to avoid the foreseeable consequences of their acts." Washburn

v. City of Federal Way, 178 Wn.2d 732, 757, 310 P.3d 1275 (2013) (citing

RESTATEMENT(SECOND)OF TORTS§281 cmts. C, d (1965)). Actors must also "avoid

exposing another to harm from the foreseeable conduct of a third party."

Washburn, 178 Wn.2d at 757 (citing RESTATEMENT § 302). "The existence of a

legal duty is a question of law for the court," but the scope of a duty is ordinarily a

question for the trier of fact. McKown v. Simon Prop. Grp., Inc., 182 Wn.2d 752,

762, 344 P.3d 661 (2015).

Here, the Daviscourts argue that the defendants have a duty not to record

false documents. The Daviscourts cite a warning in Werner v. Werner, that

corruption of the title registration system could cause "substantial economic loss

to the parties involved." 84 Wn.2d 360, 367,526 P.2d 370(1974). They also point

out that, in Meyers v. Meyers, the court held that a notary who negligently

performed her duties could be liable in tort. 81 Wn.2d 533, 534-36, 503 P.2d 59

(1972).

But, in both Werner and Meyers, the court was addressing the liability of

notaries for allegedly negligently performing specific statutorily-prescribed duties.

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No. 74979-0-1/ 7

Werner,84 Wn.2d at 361, 368-69(applying California law to determine the notary's

duties and liability and also holding that Washington could exercise personal

jurisdiction over a non-resident notary); Meyers, 81 Wn.2d at 535-36 (citing former

RCW 64.08.050 (1987)). In both cases, the defendant notaries acknowledged

deeds signed by people who were not who they claimed to be. Werner, 84 Wn.2d

at 361; Meyers, 81 Wn.2d. at 534-35. And, in both cases, the forged deeds were

used to convey the property away from the real owners. Werner,84 Wn.2d at 362;

Meyers, 81 Wn.2d. at 534-35. In those cases, it is easy to see why the notaries

would owe their statutory duties to the property owners' whose identities they had

allegedly failed to confirm.

By contrast, the Daviscourts have not shown why the defendants owe their

duty to not record false information specifically to them. The traditional purpose of

a recording statute is to protect subsequent purchasers from secret conveyances

and encumbrances. See 18 WASHINGTON PRACTICE REAL ESTATE: TRANSACTIONS

§ 14.5, at 126-27 (2d ed. 2004 & Supp. 2017); 1 JOYCE PALOMAR, PArroN AND

PALOMAR ON LAND TITLES § 12, at 57-58 (3d ed. 2003). Therefore, it is more likely

that the duty stemming from recording documents would be owed to subsequent

purchasers, not the original parties to a transaction, like the Daviscourts.

It is also clear from the Daviscourts' theory of negligence that the recording

of documents is only tangentially related to their claim. All the injuries the

Daviscourts suffered were at the hands of Quality, for allegedly failing to maintain

its physical location,4 or Countrywide, for listing AWL as a New York corporation

4 The Daviscourts did not argue that Quality was negligent for failing to maintain its
physical location in their opening brief.
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 No. 74979-0-1 /8

on the note and deed of trust, even though it, allegedly, did not exist.5 The

Daviscourts argue that recording documents containing false statements caused

confusion, which Mark believed he had to visit Quality in person in order to dispel.

Mark's attempts to find Quality's physical location were unsuccessful and

traumatic, causing him great emotional distress. And Mark's apparent need to

clear up the confusion also led to the discovery that AWL did not exist in 2005,

which caused him to have a psychological breakdown.

The Daviscourts have not shown that a duty exists under these

circumstances.6 Thus, the trial court did not err by granting the defendants'

motions for summary judgment on the Daviscourts' negligence claims.

Outrage

The Daviscourts argue that the defendants acted outrageously by pursuing

5 In his declaration, Mark claims that several documents provided by SPS appeared
forged. The Daviscourts repeat this claim in the facts section of their opening brief. This
alleged forgery also caused him distress. It does not appear that the Daviscourts'
negligence claim includes any alleged forgery.
Regardless, the Daviscourts would have had to specifically plead any allegation of
forgery in their complaint. RCW 62A.3-308(a). The SPS defendants argued in their reply
in support of their motion for summary judgment that the Daviscourts had not satisfied that
pleading standard. As appellants, the Daviscourts have the burden of providing a record
sufficient for review. See Story v. Shelter Bay Co., 52 Wn. App. 334, 345, 760 P.2d 368
(1988). They do not appear to have designated the complaint for review.
6 In their reply brief, the Daviscourts assert that they can "bootstrap their contentions that
[the defendants] violated" several specific "statutes into their assertions of negligence."
Appellants' Reply Br. at 8. We do not consider this argument or any new theories of
negligence the Daviscourts raised in their reply brief, because they were raised too late.
See Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801, 809,828 P.2d 549(1992).
7 Relying on Vawter v. Quality Loan Service Corp. of Washington, the SPS defendants
argue that the Daviscourts' outrage claim is barred by the economic loss rule. 707 F.
Supp. 2d 1115, 1128 (W.D. Wash. 2010). But Washington has replaced the "economic
loss rule" with the "independent duty doctrine," and the defendants do not offer any
argument to show that the Daviscourts' outrage claim would be barred under the
independent duty doctrine. See Hendrickson v. Tender Care Animal Hosp. Corp., 176
Wn. App. 757, 768-71, 312 P.3d 52(2013).
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No. 74979-0-1 /9

a nonjudicial foreclosure based on an "arguably void deed oftrust" when they knew

that Mark was particularly susceptible to emotional distress.8 The Daviscourts also

argue that the defendants' recording of documents containing falsities, Quality's

failure to maintain a physical location, and Quality's discontinuance of the trustee's

sale without notice to the Daviscourts all constitute outrageous and extreme

conduct. We disagree.

"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 "first element of the test goes to the jury

only after the court 'determine[s] if reasonable minds could differ on whether the

conduct was sufficiently extreme to result in liability." Robel v. Roundup Corp.,

148 Wn.2d 35, 51, 59 P.3d 611 (2002)(alteration in original)(quoting Dicomes v.

State, 113 Wn.2d 612, 630, 782 P.2d 1002 (1989)). "Liability exists 'only where

the conduct has been 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." Grimsby v. Samson, 85 Wn.2d 52,

59, 530 P.2d 291 (1975) (emphasis omitted) (quoting RESTATEMENT (SECOND)

TORTS § 46, cmt. d).

Void Deed of Trust and Note

We address first the Daviscourts' argument that the defendants' conduct

was outrageous because the defendants attempted to nonjudicially foreclose on

8 Appellants' Opening Br. at 26.
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No. 74979-0-1 / 10

the Daviscourts' house based on a deed of trust and note that were "arguably" or

"potentially" void.9 The Daviscourts allege that the note and deed of trust are void

because both documents listed AWL as the lender and AWL did not exist in 2005.

Because AWL was a known trade name for Countrywide, we disagree.

AWL is Countrywide's assumed business name. Dawson v. Bank of New

York Mellon, 3:16-CV-01427-HZ, 2016 WL 7217626, at *3(D. Or. Dec. 13, 2016)

(holding several courts have concluded that "the fact that AWL is Countrywide's

assumed business name cannot be disputed"); see also Tvshkevich v. Wells Fargo

Bank N.A., 215CV2010JAMACPS,2016 WL 193666, at *9-10 (E.D. Cal. Jan. 15,

2016), report and recommendation adopted,2016 WL 1162687(E.D. Cal. Mar. 24,

2016).

As the Daviscourts point out, the defendants have not proved that AWL was

Countrywide's "legitimate trade name in Washington" in 2005.19 But, even if

Countrywide failed to register AWL as a trade name, it does not follow that the

deed of trust or promissory note are void or that the documents contained falsities.

A person's failure to register the trade name prevents the person from being able

to file a lawsuit in the assumed name, but does not "impair the validity of any

contract or act of such person or persons and shall not prevent such person or

persons from defending any suit." RCW 19.80.040. Moreover, the Daviscourts'

lawsuit against Countrywide in 2009 suggests they were aware of AWL's status as

Countrywide's assumed business name long before the events giving rise to their

current lawsuit occurred.

9 Appellants' Opening Br. at 26.
'° Appellants' Reply Br. at 5 n.5.
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Accordingly, we reject the Daviscourts' argument that the defendants

behaved outrageously by pursuing a nonjudicial foreclosure. Similarly, we reject

any of the Daviscourts' other arguments that rely on their allegation that the

recorded documents contained false information because they listed AWL as the

original lender.

Falsities

It is not clear exactly which false statements the Daviscourts are referring

to at this point, but we assume the Daviscourts are referring to (1)statements that

AWL, rather than Countrywide, was the original lender;(2) statements that MERS

is or was a beneficiary; and (3) statements that MERS assigned its interest to

BONY.

(1) AWL & Countrywide

As discussed above, it was notfalse to list AWL as the original lender. Thus,

none of the defendants behaved outrageously by recording documents that listed

AWL as the lender.

(2) MERS as Beneficiary

Under Bain v. Metropolitan Mortgage Group, Inc., MERS is not the

beneficiary of a deed of trust when it does not have physical possession of the

promissory note. See 175 Wn.2d 83, 99, 285 P.3d 34 (2012). Characterizing

MERS as the beneficiary has the capacity to deceive. Bain, 175 Wn.2d at 117.

But, absent a showing that this characterization caused damages, the

characterization of MERS as the beneficiary is immaterial. Bavand v. OneWest

Bank,-196 Wn. App. 813, 843,385 P.3d 233(2016).

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Here, in 2005, the parties executed the deed of trust, designating MERS as

the beneficiary. In 2011, MERS purported to assign its interest to BONY. Given

that these events occurred before the Supreme Court's 2012 decision in Bain, and

that, even now, the fact that MERS is designated as a beneficiary is usually

immaterial, we conclude that it was not outrageous for the parties to record or

serve documents stating that MERS is a beneficiary.

(3) BONY as Beneficiary '

It was not outrageous for any of the parties to list BONY as the beneficiary

on documents or record a document on behalf of BONY purporting to appoint

Quality as a trustee, because those statements are not false. BONY is the

beneficiary because it is the holder of the note and the deed of trust follows the

note.

The Daviscourts have two main objections to the defendants' argument that

BONY is the beneficiary because it holds the note. First, they argue that the note

is not a negotiable instrument because it is subject to negative amortization. It

appears that the Daviscourts are arguing that, because the note was not a

negotiable instrument it fell outside the Uniform Commercial Code, Title 62A RCW

(UCC), and, therefore, BONY would need to be able to demonstrate valid

assignments and a chain of title in order to enforce the note.

The beneficiary is "the holder of the instrument or document evidencing the

obligations secured by the deed of trust, excluding persons holding the same as

security for a different obligation." RCW 61.24.005(2). "Under the UCC, the

'holder' of the note is '[t]he person in possession of a negotiable instrument that is

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 No. 74979-0-1 / 13

payable either to bearer or to an identified person that is the person in possession."

Bucci v. Nw. Tr. Servs., Inc., 197 Wn. App. 318, 328, 387 P.3d 1139 (2016)

(alteration in original) (quoting RCW 62A.1-201(b)(21)(A)), review denied, 188

Wn.2d 1012, 394 P.3d 1011 (2017). A negotiable instrument is "an unconditional

promise or order to pay a fixed amount of money, with or without interest or other

charges described in the promise or order." RCW 62A.3-104(a). "[N]egotiability

exists if the fixed amount can be determined from the face of the instrument, except

for amounts of interest,for which reference to information not contained in the note

is allowable." Bucci, 197 Wn. App. at 330.

Here, the Daviscourts argue that their note is not a negotiable instrument

because the possibility of negative amortization means that the principal amount

is subject to change." This court recently rejected an argument identical to the

Daviscourts' in Bucci v. Northwest Trustee Services. 197 Wn. App. at 328-32.

There, the court held that, despite the possibility of negative amortization, the note

was a negotiable instrument under the UCC. Bucci 197 Wn. App. at 331-32.

Bucci controls. The note is a negotiable instrument. Therefore, BONY is the holder

of the note.

Second, they argue that BONY cannot be the beneficiary because the

defendants failed to prove that BONY was not holding the note as security for a

different obligation. The Daviscourts argue that there is at least a material question

of fact for this issue. We disagree. BONY's declaration of ownership is evidence

that BONY is not holding the note to secure some other obligation because the

'I Although the note identifies a fixed principal amount of $875,000, that principal changes
if the Daviscourts' monthly payment is less than the interest that has accrued that month.
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No. 74979-0-1 /14

note indicates that BONY is the beneficiary, and that, as beneficiary, BONY

understands that the trustee will rely on the declaration in order to initiate a

trustee's sale. If BONY were holding the note as security for another obligation, it

could not call itself as the beneficiary.

The Daviscourts argue that the defendants' admission that BONY holds the

note as trustee for a securitized trust means that BONY is holding the note as

securitjt for a different obligation. They ask how the court can "know that the

separate obligation owed by the trustee to investors does not involve

rehypothecation unless the purported beneficiary provides some evidence

addressing this fact."12 We reject both of these arguments because they are

purely speculative. The Daviscourts' have not offered any actual evidence to

contradict BONY's declaration that it is the beneficiary.

In sum, BONY is the beneficiary. Therefore, it was not outrageous for any

of the defendants to record or serve documents that stated or relied on the fact

that BONY is the beneficiary, including documents by which BONY appointed

Quality as its trustee.

Quality's Physical Location & Failure to Notify the Daviscourts

Finally, the Daviscourts argue that two specific acts by Quality were

outrageous:(1) failing to maintain a physical address, and (2) failing to notify the

Daviscourts that it had discontinued the trustee's sale. First, all of Mark's attempts

to visit Quality's physical location in Seattle occurred in March 2014. The failure

to maintain a physical office for one month is not outrageous or extreme. Second,

12 Appellants' Opening Br. at 43.
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No. 74979-0-1/15

Mark does not cite any authority requiring the trustee to inform the borrower that it

is discontinuing the trustee's sale. Mark's opinion that "Quality stopped the sale

without telling [him] in order to taunt [him] and cause [him] injury" is just that, an

opinion.13 He does not offer any evidence that Quality's conduct was outside the

bounds of decency. Even assuming Quality was aware that Mark was "peculiarly

susceptible to emotional distress," none of its acts were outrageous enough to

warrant liability.14

Accordingly, the trial court did not err by granting the defendants' motions

for summary judgment on the Daviscourts' outrage claims.

Civil Conspiracy

The Daviscourts argue that the trial court erred by granting the defendants'

motions for summary judgment on their civil conspiracy claims because the

defendants' conspired to accomplish a lawful purpose, foreclosing on the deed of

trust, through unlawful means, specifically, illegally recording false documents.

The Daviscourts argue that, by recording the documents containing false

statements, the defendants violated two criminal laws. We disagree because the

Daviscourts have not shown that the defendants' conduct violated either statute.

"[A]n actionable civil conspiracy exists if two or more persons ... combine

to accomplish some purpose not in itself unlawful by unlawful means." Corbit v. J.

I. Case Co., 70 Wn.2d 522, 528,424 P.2d 290 (1967).

The Daviscourts argue that the defendants attempted to nonjudicially

foreclose by unlawfully filing documents containing false statements. They rely on

13 CP at 256.
14 Appellants' Opening Br. at 27.
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No. 74979-0-1 / 16

two criminal statutes to support their claim that the defendants' conduct was

unlawful: RCW 9.38.020 and RCW 40.16.030. Even assuming that the defendants

recorded documents containing some false information, the Daviscourts have not

produced evidence that the defendants' acts violated either statute.

First, under RCW 9.38.020, "[e]very person who shall maliciously or

fraudulently execute or file for record any instrument, or put forward any claim, by

which the right or title of another to any real or personal property is, or purports to

be transferred, encumbered or clouded, shall be guilty of a gross misdemeanor."

The Daviscourts make no attempt to show that the defendants acted

maliciously or fraudulently. Because the Daviscourts do not show that the

defendants had the necessary mens rea, they have not shown that the defendants

violated this statute.

Second, under RCW 40.16.030, "[e]very person who shall knowingly

procure or offer any false or forged instrument to be filed, registered, or recorded

in any public office, which instrument, if genuine, might be filed, registered or

recorded in such office under any law of this state or of the United States, is guilty

of a class C felony."

In State v. Price, the court had to decide whether a "steelhead receiving

ticket" was an instrument for purposes of RCW 40.16.030. 94 Wn.2d 810, 817-19,

620 P.2d 994 (1980). The court determined that the legislature intended

"instrument" to encompass a document,

which is required or permitted by statute or valid regulation to be filed,
registered, or recorded in a public office if (1) the claimed falsity
relates to a material fact represented in the instrument; and (2a)the
information contained in the document is of such a nature that the

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government is required or permitted by law, statute or valid regulation
to act in reliance thereon; or (2b) the information contained in the
document materially affects significant rights or duties of third
persons, when this effect is reasonably contemplated by the express
or implied intent of the statute or valid regulation which requires the
filing, registration, or recording of the document.

Price, 94 Wn.2d at 819. The Supreme Court has affirmed the use of this test.

State v. Hampton, 143 Wn.2d 789, 793-94, 24 P.3d 1035 (2001).

The Daviscourts have not shown that the documents at issue in this case

are "instruments" within the meaning of the statute because they have not shown

that any of the falsities are material or materially affect the Daviscourts' rights: As

explained above, it was not false to say that AWL was the lender, that BONY was

the beneficiary, or that BONY appointed Quality as a successor trustee. There

remains an argument, at least, that the identification of MERS as the original

beneficiary was false. But that designation was immateria1.15

Accordingly, the Daviscourts have not shown that any of the defendants

employed or conspired to employ any unlawful means to accomplish their goal of

enforcing the nonjudicial foreclosure. The trial court did not err by granting the

defendants' motions for summary judgment on the civil conspiracy claim.

15 Relying on State v. Sanders, the Daviscourts argue that the statute does not require the
falsity to be material. 86 Wn. App. 466, 470, 937 P.2d 193(1997). In Sanders, Division
Two of the Court of Appeals held that the State did not have to prove that a forged child
support order "was 'materially false' in order to establish a violation of RCW 40.16.030."
86 Wn. App. at 470. But that case did not examine whether the forged child support order
was an instrument. Sanders, 86 Wn. App. at 470.
Two interpretations of Sanders are possible. First, it is holding that materiality is
not relevant to whether a document is an instrument for purposes of the statute. In that
case, it would conflict with Hampton and Price, and would not be good law. Second, it
applies only to cases where there is no question that the document at issue is an
instrument. Either way, it is not controlling here.
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No. 74979-0-1/ 18

Consumer Protection Act

The Daviscourts argue that the SPS defendants violated the CPA, because

SPS, not BONY, appointed Quality as trustee, in violation of the DTA. Because

SPS was acting as BONY's agent, we disagree.

The Daviscourts argue that Quality violated the CPA because it violated the

DTA when it failed to maintain a physical address, ignored problems with its

appointment as trustee, and failed to notify the Daviscourts that it had cancelled

the trustee's sale. We conclude that none of Quality's actions were violations of

the CPA because none constituted an unfair or deceptive act.

The CPA forbids unfair competition and unfair or deceptive acts. "Unfair

methods of competition and unfair or deceptive acts or practices in the conduct of

any trade or commerce are hereby declared unlawful." RCW 19.86.020. The

Supreme Court identified five elements for a private cause of action for violation of

the CPA: "(1) unfair or deceptive act or practice; (2) occurring in trade or

commerce;(3) public interest impact;(4) injury to plaintiff in his or her business or

property;(5)causation." Hangman Ridge Training Stables, Inc. v. Safeco Title Ins.

Co. 105 Wn.2d 778, 780, 719 P.2d 531 (1986).

Unfair or Deceptive Acts — SPS Defendants

The Daviscourts allege that the SPS defendants violated RCW

61.24.010(2) and RCW 61.24.030(7) when SPS appointed Quality as a trustee,

even though BONY was the beneficiary of the deed of trust.

Under RCW 61.24.030(7), the trustee must have proof that the beneficiary

is the owner of the promissory note secured by the deed of trust before it may

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record notice of the trustee's sale. "A declaration by the beneficiary made under

the penalty of perjury stating that the beneficiary is the actual holder of the

promissory note or other obligation secured by the deed of trust shall be sufficient

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

The Daviscourts argue that only a beneficiary, not an agent of the

beneficiary, may make that declaration. They are mistaken. An agent may make

the declaration and act on behalf of the beneficiary in DTA proceedings, so song

as the agent identifies the principal whose control it is under. See Rucker v.

Novastar Morta., Inc., 177 Wn. App. 1, 15, 311 P.3d 31(2013)(quoting Bain, 175

Wn.2d at 107).

Here, the declaration of ownership explicitly stated that the person signing

the document, a "Document Control Officer for Select Portfolio Servicing, Inc.,"

was "duly authorized to make [the] declaration on behalf of" BONY, and identified

BONY the beneficiary.16 SPS, acting "as Attorney in Fact" for BONY, appointed

Quality.17

We conclude that, because SPS was acting as BONY's agent, neither

BONY nor SPS violated the DTA when SPS appointed Quality as the trustee.

Thus, the Daviscourts have not shown that the SPS defendants engaged in any

unfair or deceptive practices, and the trial court appropriately dismissed the

Daviscourts' CPA claims against them.

16 CP at 54.
17 CP at 31-32.
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Unfair or Deceptive Acts — Quality

The Daviscourts argue that Quality violated the DTA. We conclude that,

even assuming Quality violated the DTA,the Daviscourts have not shown that that

violation constitutes an unfair or deceptive act.

The DTA assigns the trustee a "duty of good faith to the borrower,

beneficiary, and grantor." RCW 61.24.010(4).

The Daviscourts argue that Quality violated the DTA by breaching its duty

of good faith to them in two ways. First, the Daviscourts argue that Quality violated

its duty of good faith when it "ignored obvious problems with its appointment as

trustee."18 Because, as explained above, there was nothing wrong with that

appointment, we reject that argument. In their reply brief, the Daviscourts argue

that Quality was not entitled to rely on the declaration of ownership because the

declaration was contested." But none of the evidence the Daviscourts cite gives

rise to an inference that Quality would have known the declaration was contested

before it initiated foreclosure proceedings.

Second, the Daviscourts argue that Quality violated its duty of good faith by

failing to notify the Daviscourts that it had cancelled the trustee's sale. Once again,

the Daviscourts do not cite any authority that a trustee has a duty to notify the

borrower when it cancels the sale. The Daviscourts cite numerous examples of

courts holding that a trustee's actions or inactions violated the CPA, but all of the

actions are more serious than failing to notify the borrower that the trustee has

cancelled the sale. See, e.q., Klem v. Wash. Mut. Bank, 176 Wn.2d 771, 789-92,

18 Appellants' Opening Br. at 47.
18 Appellants' Reply Br. at 24.
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295 P.3d 1179 (2013)("Quality abdicated its duty to act impartially toward both

sides" when it refused to postpone a trustee's sale because it did not have the

beneficiary's permission.).20

We conclude that the Daviscourts have not shown that Quality breached its

duty of good faith when it failed to notify them that it had cancelled the sale.

Finally, the Daviscourts argue that Quality violated its statutory duty to

maintain a physical presence in Washington.

The trustee "must maintain a physical presence" at a "street address" in

Washington, prior to the date of the notice of trustee's sale and continuing

thereafter through the date of the trustee's sale. RCW 61.24.030(6). The statute

does not define "physical presence."

Here, Mark's unsuccessful attempts to access Quality's office and his

observation that the callbox at Quality's alleged address did not list Quality in the

directory are sufficient to raise a genuine issue of material fact whether Quality had

any employees working at its address in Seattle. Therefore, the Daviscourts have

likely raised a genuine issue of material fact whether Quality violated the DTA.

But, regardless, that is not the end of the inquiry. The Daviscourts also have

to show that the violation of the DTA is an unfair or deceptive act. Relying on Frias

v. Asset Foreclosure Services, Inc., the Daviscourts appear to argue that any

violation of the DTA is automatically a deceptive or unfair practice. 181 Wn.2d

412, 432-33, 334 P.3d 529 (2014). In fact, the holding in Frias is much more

20 But, in Klem, the court also relied on the trustee's fiduciary duty to the grantor. 176
Wn.2d at 789-92. In 2008, the legislature amended the DTA, adding a provision that
explicitly stated that the trustee does not have a fiduciary duty to the grantor. RCW
61.24.010(3)(amended by LAWS OF 2008, ch. 153, § 1).
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limited. "[U]nder appropriate circumstances, DTA violations may be actionable

under the CPA .... Such claims are governed by the ordinary principles applicable

to all CPA claims." Frias, 181 Wn.2d at 433. To show that an act is unfair or

deceptive under ordinary CPA principles, a "plaintiff need not show the act in

question was intended to deceive, only that it had the capacity to deceive a

substantial portion of the public." Panag v. Farmers Ins. Co., 166 Wn.2d 27, 47,

204 P.3d 885 (2009).

Here, the Daviscourts have not made any showing that the failure to

maintain a physical presence had the capacity to deceive a substantial portion of

the public. Accordingly, we conclude that the trial court properly granted summary

judgment dismissing the Daviscourts' CPA claims.

Affirmed.

WE CONCUR:

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 Daviscourt v. Quality Loan Services Corporation of Washington
No. 74979-0-1

DWYER, J.(concurring)—I disagree that a question of fact was

presented regarding whether Quality maintained a physical presence at a street

address in Washington. All evidence is that it did.

The Dayiscourts' evidence is that Mark located the Quality office at

the street address set forth but that he was unable to gain access. Nothing in the

statute requires that a borrower—without an appointment—be granted access to

Quality's office at the borrower's whim.

No question of fact is presented on this issue. In all other respects,

I join in the majority opinion.