IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

EASTLAKE LOFTS CONDOMINIUM
ASSOCIATION,                               DIVISION ONE

                         Plaintiff,        No. 78266-5-I (consol. with
                                           No. 78267-3-I)
             V.
                                           UNPUBLISHED OPINION
KEVIN M. HOOVER and JANE DOE
HOOVER, husband and wife, and their
marital community; WILMINGTON
TRUST, N.A., as successor trustee to
CITIBANK, N.A., as Trustee for
Certificate Holders of Structured Asset
Mortgage Investments II Trust 2007-
AR5, Mortgage Pass Through
Certificates, Series 2007 AR-5,

                       Respondents,

THE CONDO GROUP, LLC;
EASTLAKE LOFTS 205 LLC, a
Washington limited liability company;
LAKEWOOD COMMONS 234 LLC, a
Washington limited liability company;
UMPQUA BANK, a bank organized
under the laws of Oregon; DELNA LIAN
JACOBS, an individual residing in
California; CHRISTINA JACOBS SPITZ,
an individual residing in California and
the Executor of the ESTATE OF
HAROLD LIAN; MAYNARD GROSS, an
individual residing in California;
unknown heirs of CARL ELLING LIAN;         FILED: July 29, 2019
WE TRUST COMPANY, a Washington
company;

                        Appellants.
No. 78266-5-1/2


       DWYER, J.   —   In 2011, Eastlake Lofts Condominium Association foreclosed

on a condominium owned by Kevin Hoover without properly serving process on

CitiBank, a junior lienholder. The Condo Group, LLC purchased the

condominium at a sheriff’s sale and, in 2013, sold itto Carl Lian, who financed

his purchase with a loan from Umpqua Bank. Lian later died. In 2016, CitiBank

successfully moved to vacate the original foreclosure judgment as against its

interest. Wilmington Trust, NA., the successor in interest to CitiBank, then

sought to foreclose on its existing lien, adding The Condo Group, LLC, Lian’s

heirs, and Umpqua Bank as third party defendants. The case is before us on

appeal from the trial court’s grant of summary judgment to Wilmington. Because

the evidence of record gives rise to competing inferences as to the applicability of

equitable defenses to the foreclosure action, summary judgment was improper.

Accordingly, we reverse.



       In 2007, Kevin Hoover purchased a condominium in the Eastlake Lofts

development with the aid of a $358,950 loan from CitiBank, secured by a deed of

trust. JPMorgan Chase Bank was the loan’s original servicer. CitiBank’s interest

in the property was placed into a securitized mortgage trust for which CitiBank

was a beneficiary, with Quality Loan Service Corporation (QLS) as trustee. In

2010, Hoover filed for chapter 7 bankruptcy protection and ceased paying dues

to the Eastlake Lofts Condominium Association (the Association).

      In July 2011, the Association commenced this action to foreclose its lien

on the condominium. It named CitiBank as a defendant. Personal service of the



                                         2
No. 78266-5-1/3


summons and complaint was not made on CitiBank in Washington but, rather,

was made at an office in Sioux Falls, South Dakota. No affidavit was sworn and

filed with the trial court to the effect that service on CitiBank could not have been

made within Washington, as required by RCW4.28.185(4).1 After neither Hoover

nor CitiBank made an appearance in the action, a default judgment and

foreclosure decree was entered in favor of the Association.

        A foreclosure sale took place in June 2012. The highest bidder, The

Condo Group, LLC (Condo Group), purchased the condominium for the amount

of the judgment debt, $20,100.2 After the one-year redemption period expired,

the King County Sheriff issued Condo Group a deed to the condominium

identifying the $20,100 purchase price. Condo Group recorded this deed with

the county auditor.

        In October 2013, Condo Group sold the condominium to Carl Lian for

$399,000 and conveyed a statutory warranty deed to him. Lian’s purchase of the

condominium was partially financed with a $100,000 loan from Sterling Savings

(now Umpqua) Bank.

        Stewart Title acted as the closing agent and title insurer for Lian and

Umpqua in this transaction. Stewart Title had constructive knowledge of

CitiBank’s deed of trust on the condominium. However, neither Stewart, nor

Umpqua, nor Lian made an inquiry as to whether CitiBank considered the deed

of trust to be an active encumbrance against the condominium.


        1RCW4.28.185(4) states as follows: “Personal service outside the state shall be valid only
when an affidavit is made and filed to the effect that service cannot be made within the state.”
       2 At the time of the sale, the condominium was valued by the county assessor at $277,000.




                                                3
No. 78266-5-1/4


        In 2016, CitiBank, alleging improper service, moved to vacate the 2011

default judgment against it pursuant to CR 60(b)(5) for lack of personal

jurisdiction. After hearing argument, the trial court granted CitiBank’s motion and

vacated the judgment against it. Subsequently, Wilmington acquired CitiBank’s

interest. Wilmington then answered the Association’s 2011 complaint and

asserted a foreclosure claim, naming Condo Group, Lian, and Umpqua as third

party defendants. Lian died before he could be served. Wilmington’s third party

complaint was twice amended to designate Lian’s known heirs as third party

defendants. Lian’s heirs, Umpqua, and Condo Group all opposed Wilmington’s

foreclosure request, asserting their entitlement to several equitable defenses or

to bona fide purchaser protection.

        The trial court granted partial summary judgment to Wilmington and

entered a decree of foreclosure in its favor. This ruling also dismissed with

prejudice Condo Group and Umpqua Bank’s counterclaims against Wilmington.

In a supplemental judgment, the trial court awarded Wilmington attorney fees and

costs totaling $33,238.99. Condo Group, Lian’s heirs, and Umpqua Bank

appeal.3



        “The de novo standard of review is used by an appellate court when

reviewing all trial court rulings made in conjunction with a summary judgment

motion.” Folsom v. Burger King, 135 Wn.2d 658, 663, 958 P.2d 301 (1998). In


        ~ Together, Lian’s heirs and Umpqua Bank have submitted a single set of briefs, while
condo Group Ijas submitted a separate set of briefs. To avoid confusion, we will refer to Lian’s
heirs and Umpqua Bank collectively as “Umpqua.” However, Lian will be referred to as an
individual where actions he took are being discussed.


                                                4
No. 78266-5-115


reviewing a summary judgment order our inquiry is the same as the trial court’s.

Folsom, 135 Wn.2d at 663. Summary judgment is proper when all of the

pleadings, affidavits, depositions, and admissions on file show “that there is no

genuine issue as to any material fact and that the moving party is entitled to a

judgment as a matter of law.” CR 56(c). A material fact “is a fact upon which the

outcome of the litigation depends, in whole or in part.” Lamon v. McDonnell

Douglas Corn., 91 Wn.2d 345, 349, 588 P.2d 1346 (1979) (quoting Morris v.

McNicol, 83 Wn.2d 491, 494-95, 519 P.2d 7 (1974)).

      The party moving for summary judgment has the burden of showing that

there is no genuine dispute as to any issue of material fact. Once that burden is

met, the nonmoving party has the burden of producing evidence to show the

existence of such an issue. Kahn v. Salerno, 90 Wn. App. 110, 117, 951 P.2d

321 (1998). All evidence must be considered in the light most favorable to the

nonmoving party, and summary judgment may be granted only when a

reasonable person could reach but one conclusion. Lamon, 91 Wn.2d at 349

(quoting Morris, 83 Wn.2d at 494-95).

      As we have stated,

               “The object and function of summary judgment procedure is
      to avoid a useless trial. A trial is not useless, but is absolutely
      necessary where there is a genuine issue as to any material fact.”
      Barberv. Bankers Life & Cas. Co., 81 Wn.2d 140, 144, 500 P.2d 88
      (1972). “A material fact is one upon which the outcome of the
      litigation depends.” Balise v. Underwood, 62 Wn.2d 195, 199, 381
      P.2d 966 (1963). Importantly, “even if the basic facts are not in
      dispute, if the facts are subject to reasonable conflicting inferences,
      summary judgment is improper.” Southside Tabernacle v.
      Pentecostal Church of God, 32 Wn. App. 814, 821, 650 P.2d 231
      (1982). Indeed, “[s]ummary judgment procedures are not designed
      to resolve inferential disputes.” Sanders v. Day, 2 Wn. App. 393,


                                         5
No. 78266-5-116


       398, 468 P.2d 452 (1970). “It seems obvious that in situations
       where, though evidentiary facts are not in dispute, different
       inferences may be drawn therefrom as to ultimate facts such as
       intent,.   a summary judgment would not be warranted.” Preston
                  .   .


       v. Duncan, 55 Wn.2d 678, 681-82, 349 P.2d 605 (1960); accord
       Weisert v. Univ. Hosp., 44 Wn. App. 167, 172, 721 P.2d 553
       (1986).

Kelleyv. Tonda, 198 Wn.App. 303, 310-11, 393 P.3d 824 (2017).

       ‘[T]he question of whether equitable relief is appropriate is a question of

law.” Niemann v. Vaughn Cmty. Church, 154 Wn.2d 365, 374, 113 P.3d 463

(2005). Due to the discretionary nature of decisions made in equity, granting

equitable relief on summary judgment may often be inappropriate.

Cornish CoIl, of the Arts v. 1000 Virginia Ltd. P’ship, 158 Wn. App. 203, 220, 242

P.3d 1 (2010). Equitable claims must be analyzed pursuant to the facts of each

case to which a party seeks their application; even when a court

“recognize[s] ‘factors’ to guide the court’s determination of the equitable issues

presented, these considerations are not exclusive, but are intended to reach all

relevant evidence.” Vasguez v. Hawthorne, 145 Wn.2d 103, 107-08, 33 P.3d

735 (2001). In other words, even when there is evidence satisfying all such

“factors,” equitable relief does not necessarily follow. Instead, “the focus remains

on the equities involved between the parties.” Vasguez, 145 Wn.2d at 107.

                                         Ill

       First among the sundry defenses asserted by Umpqua and Condo Group

against Wilmington’s efforts to foreclose is the doctrine of laches. Laches bars

Wilmington’s action, they assert, because Wilmington and CitiBank, collectively,

unreasonably delayed the foreclosure action, and during the period of this delay,



                                         6
No. 78266-5-1/7


the condominium’s ownership situation changed to the extent that enforcement of

the deed of trust would work an injustice. For its part, Wilmington denies that any

delay was unreasonable and avers that the trial court was correct to dismiss this

defense on summary judgment. Because the evidence of record gives rise to

competing inferences as to the propriety of the asserted defense, trial court fact-

finding is necessary.

        Laches is an equitable defense that is based on estoppel.4 Real

Progress, Inc. v. City of Seattle, 91 Wn. App. 833, 843-44, 963 P.2d 890 (1998).

The doctrine applies when a defendant affirmatively establishes “(1) knowledge

by plaintiff of facts constituting a cause of action or a reasonable opportunity to

discover such facts; (2) unreasonable delay by plaintiff in commencing an action;

and (3) damage to defendant resulting from the delay in bringing the action.”

Davidson v. State, 116 Wn.2d 13, 25, 802 P.2d 1374 (1991). “To constitute

laches there must not only be a delay in the assertion of a claim but also some

change of condition must have occurred which would make it inequitable to

enforce it.” Waldrip v. Olympia Oyster Co., 40 Wn.2d 469, 477, 244 P.2d 273

(1952). “[W]hen asserted in opposition to the interest of a landowner, flaches]

must be proved by clear and convincing evidence.” Arnold v. Melani, 75 Wn.2d

143, 148, 449 P.2d 800, 450 P.2d 815 (1968). “Generally, laches depends upon




       ‘~ “‘Laches has been applied by Washington courts since 1894.” Newport Yacht Basin
Ass’n of Condo. Owners v. Supreme Nw., Inc., 168 Wn. App. 56,77 n.17, 277 P.3d 18(2012)
(quoting Deane W. Minor, Recent Development, Hayden v. City of Port Townsend, 93 Wn.2d
870, 613 P.2d 1164 (1980), 56 WASH. L. REV. 549, 554 (1981) (citing Rigneyv. Tacoma Light&
Water Co., 9 Wash. 576, 38 P. 147 (1894)).


                                             7
No. 78266-5-U8


the particular facts and circumstances of each case.” Lopp v. Peninsula Sch.

Dist. No. 401, 90 Wn.2d 754, 759, 585 P.2d 801 (1978).

                 “A court of equity moves upon consideration of conscience,
        good faith and reasonable diligence. Knowledge and unreasonable
        delay are essential elements of the defense of laches. The precise
        time that may elapse between the act complained of as wrongful
        and the bringing of suit to prevent or correct the wrong does not, in
        itself, determine the question of laches. What constitutes
        unreasonable delay is a question of fact dependent largely upon
        the particular circumstances. No rigid rule has ever been laid
        down.”

Stewartv. Johnston, 30 Wn.2d 925, 935-36, 195 P.2d 119 (1948) (quoting Fed.

United Corp. v. Havender, 24 Del. Ch. 318, 345, 11 A.2d 331 (1940)).

        The chief element of laches in dispute before us is whether an

unreasonable delay took place. Genuine issues of material fact exist regarding

the reasonableness of CitiBank’s, and its successor in interest Wilmington’s,

decisions not to pursue foreclosure at an earlier time. Condo Group and

Umpqua contend that CitiBank, and later Wilmington, unreasonably delayed the

commencement of foreclosure proceedings when CitiBank, purportedly aware of

the default judgment in 2012, took no action to vacate that judgment until 2016,

with no foreclosure proceeding being commenced by Wilmington until December

of that year.5




         ~ To the extent that the third party defendants dispute the validity of the trial court’s
vacation of the 2012 default judgment, they are wrong. They do not have standing to challenge
this decision as they were not parties to the case at the time.
          Nor was CitiBank required to give notice to any of the third party defendants of its motion
to vacate. CR 60(e)(3) provides that a motion to vacate “shall be served upon all parties affected
in the same manner as in the case of summons in a civil action.” Only parties to the litigation
must be served—the rule does not require that notice be given to every conceivable entity with an
interest in the outcome of the litigation. Again, at the time the motion to vacate was brought,
none of the third party defendants were parties to the case.


                                                 8
No. 78266-5-1/9


       Condo Group analogizes CitiBank’s and Wilmington’s courses of action to

that taken by a junior lienholder in Carison v. Gibraltar Savings of Washington,

50 Wn. App. 424, 749 P.2d 697 (1988). The Carisons, junior lienholders, saw

their interest wiped out in a foreclosure sale by the senior lienholder and took no

action to assert their interest when the borrower challenged the foreclosure.

Carlson, 50 Wn. App. at 426, 431. More than three years after receiving notice

of the foreclosure, they sued to invalidate the foreclosure sale and reinstate their

lien. Carlson, 50 Wn. App. at 427. The court held that this suit was barred by

laches, as the Carlsons had notice of the original foreclosure, and the “most

charitable interpretation” of the undisputed facts was that they were waiting for

their rights to be vindicated in the borrower’s litigation rather than acting

themselves. Carlson, 50 Wn. App. at 431.

       In both the trial court and on appeal, Wilmington asserts that the delay

was the result of events taking place outside the arena of litigation: First, in

August 2013, after loan servicing responsibility was transferred from JPMorgan

Chase Bank, N.A. to Select Portfolio Services (SPS), the latter determined that

Chase had not sufficiently completed loss mitigation efforts with the borrower,

and SPS placed the loan on a collection hold while this was attempted; then,

when loss mitigation failed, SPS consulted a law firm to develop a litigation

strategy to recover the property. Wilmington does not cite to any document in

the record that details this process other than a declaration in support of its

motion for summary judgment. Clerk’s Papers at 866-67. The declaration is not

supported by any other evidence.



                                           9
No. 78266-5-1/10


        Condo Group and Umpqua argue that CitiBank and its servicers’ efforts to

mitigate losses with Kevin Hoover from 2013 to early 2015 had nothing to do with

the status of the property, and that CitiBank, as a deed of trust beneficiary, did

nothing to assert its rights when notified of the sheriff’s sale. They point to the 65

months that transpired between CitiBank becoming clearly aware of the sheriff’s

sale and Wilmington’s December 2016 assertion of the right to foreclose. In

support, they also point to an October 2012 communication between QLS and

CitiBank that conveyed the position of Condo Group that the deed of trust

security interest had been extinguished and a cease and desist letter from Condo

Group to QLS that led to QLS’s cancellation of a planned trustee’s sale.

        Further, they argue that communications between CitiBank’s lawyers and

Condo Group offering to buy the property from Condo Group showed that

CitiBank recognized Condo Group as the property’s rightful owner. They also

assert that constructive notice was given by the recording of the statutory

warranty deed in 2013. As for Wilmington’s allegedly unreasonable delay in

moving to foreclose after vacation of the default judgment, the record does not

disclose precisely when or how Wilmington acquired CitiBank’s interest in the

property.6

       The parties’ appellate arguments demonstrate that the evidence before

the trial court at the time of the motion for summary judgment supported




       6 With regard to the laches, equitable estoppel and bona fide purchaser issues, we list

examples of competing inferences drawn by the parties. These lists are not exhaustive and other
competing inferences may exist.


                                              10
No. 78266-5-I/i I


competing inferences.7 Fact-finding is necessary to determine which inferences

should properly be drawn and whether the facts, as found by a fact finder,

support application of laches. The trial court erred by granting summary

judgment when facts were in dispute.

                                                  IV

         Condo Group and Umpqua next assert that the doctrine of equitable

estoppel bars Wilmington’s efforts to enforce its deed of trust. They assert that

the trial court erred by dismissing this defense. As with aches, the evidence put

forth by the parties gives rise to competing inferences that rendered summary

judgment improper.

        The elements of equitable estoppel are: (1) an act or omission by the first

party; (2) an act by another party in reliance on the first party’s act, and (3) an

injury that would result to the relying party if the first party were not estopped

from repudiating the original act. Kramarevcky v. Dep’t of Soc. & Health Servs.,

122 Wn.2d 738, 743, 863 P.2d 535 (1993). This doctrine is not favored and must

be proved by clear, cogent, and convincing evidence. Robinson v. City of

Seattle, 119 Wn.2d 34, 82, 830 P.2d 318 (1992). Moreover, our Supreme Court

has explained that “mere silence or acquiescence will not operate to work an

estoppel where the other party has constructive notice of public records which



         ~ Wilmington also disputes the third element of laches, namely, that the third party
defendants would be prejudiced by the late assertion of its foreclosure right, because the parties
are covered by a title insurance policy. The applicability of relief does not turn on whether a party
is insured. Alaska Pac. S. S. Co. v. Sperry Flour Co., 94 Wash. 227, 230, 162 P.26 (1917). Nor
does Wilmington show that the availability of title insurance extends to cover the entire loss that
the third party defendants would suffer were it to foreclose. Thus, there are also genuine issues
of material fact regarding the third element of laches.


                                                 11
No. 78266-5-1/12


disclose the true facts.” Waldrip, 40 Wn.2d at 476. “Where the parties have

equal means of knowledge there can be no estoppel in favor of either.” Waidrip,

40 Wn.2d at 476. “[V}ery clear and cogent evidence” is required ‘to estop an

owner out of a legal title to real property.” Tyree v. Gosa, 11 Wn.2d 572, 578,

119 P.2d 926 (1941).

        The crux of the parties’ dispute over the applicability of equitable estoppel

is the second element: whether Condo Group, and later Lian and Umpqua,

reasonably relied on CitiBank’s actions and inaction in the wake of the default

judgment.8 To support its claim that Wilmington is equitably estopped from

commencing its foreclosure proceeding, Condo Group points to Board of

Regents of University of Washington v. City of Seattle, 108 Wn.2d 545, 553-54,

741 P.2d 11(1987). That case dealt with a dispute over the City’s easement

over Fourth Avenue, which traversed property owned by the Board of Regents.

In 1906, the City pursued a condemnation action and obtained a default

judgment awarding it the easement over Fourth Avenue. In 1984, the Board

belatedly challenged the condemnation due to a dispute over a pedestrian

skybridge permit. Bd. of Regents, 108 Wn.2d at 549. Our Supreme Court

rejected this challenge on the ground that the “State failed to challenge the

original 1906 condemnation award while, with knowledge that the City depended

upon the validity of that award, the City improved, graded, and regulated Fourth

Avenue without challenge from the State.” Bd. of Regents, 108 Wn.2d at 555.


         8 As with laches, Wilmington also avers that the existence of title insurance negates the

third party defendants’ assertion of potential monetary loss. For the reasons discussed above,
we disregard this assertion.


                                                12
No. 78266-5-1/13


        Notwithstanding the notable difference between a delay of 75 years and a

delay of 4 years, Condo Group asserts that it justifiably relied upon various of

CitiBank’s actions and inactions during the interval between the original

foreclosure by the Association and the initiation of Wilmington’s foreclosure

proceeding. These actions or inactions include CitiBank’s silence prior to the

2012 sheriff’s sale, CitiBank’s scheduling and cancellation of its own trustee’s

sale on its deed of trust, also in 2012, and CitiBank’s attempt to purchase the

property from Condo Group in 2013. Thus, Condo Group contends, CitiBank

acknowledged that its security interest had been extinguished by the 2012

sheriff’s sale.

       Wilmington, however, asserts that none of these actions amounted to an

acknowledgment that its security interest had been extinguished. Wilmington

avers that communications between Condo Group and CitiBank were of a

sporadic nature, that it had no part in the trustee’s sale planning as it was a

beneficiary and not a trustee of the trust, and that any other communications

prior to CitiBank’s motion to vacate were aimed at resolving the issue without

waiving its rights.

       Ultimately, again, while the parties do not dispute the underlying facts, the

record gives rise to competing inferences as to the import of and rationale for

CitiBank’s actions and communications. Similarly, questions remain and

competing inferences exist as to the degree of reliance that Condo Group placed

upon CitiBank’s behavior. Summary judgment dismissal of the equitable

estoppel defense was improper.



                                         13
No. 78266-5-1/14


                                           V

       Next, Umpqua asserts entitlement to bona fide purchaser protection. The

bona fide purchaser doctrine provides that a good faith purchaser for value who

is without actual, constructive, or inquiry notice of another’s interest in real

property has a superior interest in the property. Tomlinson v. Clarke, 118 Wn.2d

498, 500, 825 P.2d 706 (1992); see also Miebach v. Colasurdo, 102 Wn.2d 170,

175, 685 P.2d 1074 (1984) (“A bona fide purchaser for value is one who without

notice of another’s claim of right to, or equity in, the property prior to his

acquisition of title, has paid the vender a valuable consideration.” (quoting

Glaserv. Holdorf, 56 Wn.2d 204, 209, 352 P.2d 212 (1960))). The rule has also

been applied to “bona fide mortgagors or [e]ncumbrancers as well as bona fide

purchasers,” bringing Umpqua within its purview. Miller v. Am. Says. Bank &

Trust Co., 119 Wash. 243, 247-48, 205 P.388 (1922) (citing Geo. M. McDonald

&Co. v. Johns, 62 Wash. 521, 522, 114 P.175(1911)).

       “Good faith” “means [a subsequent purchaser] shall not have knowledge

or notice of the other party’s interest in some way outside the recording of the

instrument that creates that interest.” 18 WILLIAM B. STOEBUcK & JOHN W.

WEAVER, WASHINGTON PRACTIcE: REAL ESTATE: TRANSACTIONS             § 14.10 (2d ed.
2004). “The burden of establishing that a purchaser had prior notice of another’s

claimed right or equity rests upon the one who asserts such prior notice.” Biles

Coleman Lumber Co. v. Lesamiz, 49 Wn.2d 436, 439, 302 P.2d 198 (1956).

      A bona fide purchaser of an interest in land is entitled to rely on record

title. Lind v. City of Bellinqham, 139 Wash. 143, 147, 245 P. 925 (1926); Levien



                                           14
No. 78266-5-1115


v. Fiala, 79 Wn. App. 294, 299, 902 P.2d 170 (1995). The determination of a

buyer’s status as a bona fide purchaser is a mixed question of law and fact

because what a purchaser knew is a factual question, but the legal significance

of that knowledge is a legal question. Peoples Nat’l Bank of Wash. v. Birney’s

Enters., Inc., 54 Wn. App. 668, 674, 775 P.2d 466 (1989); Steward v. Good, 51

Wn. App. 509, 512, 754 P.2d 150 (1988).

       A purchaser is on notice if he or she has knowledge of facts sufficient to

put an ordinarily prudent person on inquiry and a reasonably diligent inquiry

would lead to the discovery of title or sale defects. Steward, 51 Wn. App. at 513

(quoting Peterson v. Weist, 48 Wash. 339, 341, 93 P. 519 (1908)). A court must,

therefore, determine whether events surrounding the property’s sale created a

duty on the subsequent purchaser’s part to inquire into possible flaws in the

foreclosure process. Albice v. Premier Mortq. Servs. of Wash., Inc., 157 Wn.

App. 912, 929, 239 P.3d 1148 (2010), affd, 174 Wn.2d 560, 276 P.3d 1277

(2012).

       A major factor in determining whether the purchaser had inquiry notice is

the purchaser’s real estate investment experience. Miebach, 102 Wn.2d at 176

(purchaser with 23 years of investment experience was not bona fide purchaser).

Another factor is the price paid for a property. It is not unusual for a foreclosure

proceeding to result in a property being sold for less than its fair market value.

Albice, 157 Wn. App. at 931. However, an inadequate purchase price may be a

factor that puts a purchaser on notice of another party’s claim of right to, or equity

in, the property. See Casa del Rev v. Hart, 110 Wn.2d 65, 72, 750 P.2d 261



                                         15
No. 78266-5-1/16


(1988); Miebach, 102 Wn.2d at 176-77. While there is no set standard for

determining an inadequate purchase price,

        Generally, however, a court is warranted in invalidating a sale
        where the price is less than 20 percent of fair market value and,
        absent other foreclosure defects, is usually not warranted in
        invalidating a sale that yields in excess of that amount.      While.   .   .


        the trial court’s judgment in maffers of price adequacy is entitled to
        considerable deference, in extreme cases a price may be so low
        (typically well under 20% of fair market value) that it would be an
        abuse of discretion for the court to refuse to invalidate it.

RESTATEMENT (THIRD) OF PROP.: MORTGAGES                § 8.3 cmt. b (AM.        LAW INST. 1997).

        In this case, Condo Group purchased the property at the sheriff’s sale for

$20,100, at a time when the condominium was valued at $277,000. Thus, the

purchase price was approximately 7.3 percent of the property’s fair market value.

Thus, the recorded history of the property, which showed the extinguishment of

CitiBank’s security interest, weighs in favor of bona fide purchaser status. The

purchase price, however, could give rise to a different inference.

        That the foreclosure sale was the result of a judicial foreclosure action is

also of significance. A search of the court file by Lian would have revealed that

CitiBank was a named defendant in a judicial action, that CitiBank had been

served with process, that CitiBank had not challenged the sufficiency of the

service, that the superior court judge had treated the service as sufficient, and

the entry of a judgment and decree against CitiBank extinguishing its interest.9

These facts give rise to inferences of benefit to Lian and Umpqua. That




        ~ A buyer might reasonably conclude that a judicial foreclosure action is more likely to be
absent injustice or mistake than would be a nonjudicial foreclosure action.


                                                16
No. 78266-5-1/17


Wilmington contends that other facts might negate or overcome these inferences

is of no moment on summary judgment.

         Finally, there is a lack of evidence in the record as to what real estate

investment experience, if any, Lian had at the time he purchased the property.

Indeed, there is no indication of what business experience Lian accrued during

his life or what knowledge he had of the condominium in question.1° If Lian was

experienced, inferences beneficial to Wilmington could be drawn. The contrary

would be the case were he inexperienced, On remand, evidence can be

adduced better completing the picture.11 As the evidence now stands, trial court

fact-finding is necessary. Summary judgment was improper.




          10 There is also a dispute as to whether the existence of an unreleased deed of trust,

 recorded prior to the Association’s foreclosure judgment, would be sufficient to put Lian and
 Umpqua on inquiry notice. Judicial foreclosure of a senior mortgage, if valid, extinguishes all
junior interests whose holders were named as defendants. Worden v. Smith, 178 Wn. App. 309,
319-20, 314 P.3d 1125 (2013) (citing U.S. Bank of Wash. v. Hursey, 116 Wn.2d 522, 526, 806
 P.2d 245 (1991)). Our courts have recognized that the bona fide purchaser rule protects a
 purchaser who acquires property at a judicial sale, but was not a party to the action giving rise to
the sale, even if the judgment is subsequently overturned on appeal. Grand lnv. Co. v. SavaQe,
49 Wn. App. 364, 368-69, 742 P.2d 1262 (1987) (citing Prince v. Mottman, 84 Wash. 287, 295,
 146 P. 841 (1915)). In this case, the judgment was simply vacated after Condo Group, and Lian,
took title to the property. Whether these parties were aware that the default judgment herein was
subject to vacation, and when such knowledge arose, is, again, a question of fact precluding
summary judgment.
          ~ Umpqua also asserts that CitiBank and Wilmington’s period of silence amounted to a
waiver of its claims against it. Unlike its other equitable defenses, Umpqua cannot show that a
genuine issue of material fact precluded dismissal of this defense on summary judgment.
          “Waiver is an equitable principle that can apply to defeat someone’s legal rights where
the facts support an argument that the party relinquished their rights by delaying in asserting or
failing to assert an otherwise available adequate remedy.” Albice, 174 Wn.2d at 569. Waiver
must be shown by substantial evidence of unequivocal acts or conduct showing intent to waive,
“and the conduct must also be inconsistent with any intention other than to waive.” Mid-Town Ltd.
P’ship v. Preston, 69 Wn. App. 227, 233, 848 P.2d 1268 (1993).
          The evidence relied upon by Lian and Umpqua in asserting that Wilmington or CitiBank
waived its security interest does not point to any actions by Wilmington or CitiBank that show an
intent to waive the security interest. Their conduct is not plainly inconsistent with any other
intention besides walking away from the deed of trust. The doctrine of waiver is not applicable.
The defense was properly dismissed.


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No. 78266-5-1/18


                                           VI

       Next, we turn to Wilmington’s unjust enrichment claim. At trial, this claim

was dismissed as moot. Wilmington does not challenge this dismissal, but seeks

to reserve its claim of unjust enrichment as an alternative remedy in the event we

reverse the foreclosure decree and deny it the benefit of the deed of trust.

Because we remand this case for further proceedings, the claim should be

reinstated.

                                           VII

       After granting Wilmington’s motion for summary judgment, the trial court

issued a supplemental judgment awarding to Wilmington $33,238.99 in attorney

fees and costs. Given our resolution of the issues herein, that award must be

vacated. Any award of trial or appellate attorney fees must await the

identification of a substantially prevailing party.

       Affirmed in part, reversed in part, and remanded for proceedings

consistent with this opinion.




WE CONCUR:



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