                                                                                             Filed
                                                                                       Washington State
                                                                                       Court of Appeals
                                                                                        Division Two

                                                                                          July 11, 2019




    IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                        DIVISION II
 DEUTCHE BANK NATIONAL TRUST                                       No. 51425-7-II
 COMPANY, as Trustee for Saxon Asset
 Securities Trust 2007-2 Mortgage Loan Asset
 Backed Certificates, Series 2007-2,

                               Appellant,

        v.

 GEORGE PETER BECK; DELBERT                                  UNPUBLISHED OPINION
 ARMSTRONG; PUGET SOUND LEASING
 CO., INC.; STATE OF WASHINGTON,
 DEPARTMENT OF REVENUE; UNITED
 STATES OF AMERICA, INTERNAL
 REVENUE SERVICE; AND PERSONS OR
 PARTIES UNKNOWN CLAIMING ANY
 RIGHT, TITLE, LIEN, OR INTEREST IN
 THE PROPERTY DESCRIBED IN THE
 COMPLAINT HEREIN,

                               Respondent.

       LEE, J. — Deutsche Bank National Trust Company appeals the superior court’s order

granting George P. Beck’s cross-motion for summary judgment and dismissing Deutsche Bank’s

foreclosure action. Deutsche Bank argues that the superior court erred because Deutsche Bank

never clearly and unequivocally accelerated Beck’s home mortgage loan, and therefore, the statute

of limitations did not bar Deutsche Bank’s foreclosure on the loan. We reverse the superior court’s
No. 51425-7-II



order granting Beck’s cross-motion for summary judgment and remand to the superior court for

further proceedings consistent with this opinion.

                                              FACTS

       On February 14, 2007, Beck executed a promissory note to Saxon Mortgage, Inc. for

$433,000 payable in monthly installments. The note was set to mature on March 1, 2037. The

note was secured by a deed of trust. The note was assigned to Deutsche Bank National Trust

Company as Trustee for Saxon Asset Securities Trust 2007-2 Mortgage Loan Asset Backed

Certificates, Series 2007-2.

       In July 2008, Beck stopped making monthly payments. In October, 2008, Beck was sent

a notice of default stating the amount of default was $17,170.23. The notice of default also stated,

       If the default(s) described above is (are) not cured within thirty days of the mailing
       of this notice, the lender hereby gives notice that the entire principal balance owing
       on the note secured by the Deed of Trust described in paragraph 1 above, and all
       accrued and unpaid interest, as well as costs of foreclosure, shall immediately
       become due and payable.

Clerk’s Papers (CP) at 108. On June 5, 2013, Beck was sent another notice of default that stated

the amount owing was $159,048.55 in principal and interest with additional costs for a total default

of $217,858.78.

       On July 6, 2016, Deutsche Bank filed a foreclosure complaint against Beck. Deutsche

Bank also filed a motion for summary judgment. Deutsche Bank’s motion for summary judgment

was supported by affidavits and exhibits establishing the above facts.




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No. 51425-7-II



       Beck filed a cross-motion for summary judgment. Beck did not dispute the underlying

facts of the case, but he argued that the October 2008 notice of default accelerated the loan and

triggered the statute of limitations. Therefore, the statute of limitations for foreclosure expired.

       Beck also argued that Deutsche Bank did not have authority to pursue the foreclosure

because the note was assigned to Deutsche Bank National Trust Company as Trustee for Saxon

Asset Securities Trust 2007-2 Mortgage Loan Asset Backed Certificates, Series 2007-2; therefore,

the Deed of Trust was originally improperly assigned to a non-existent entity. Beck included the

assignment of the Deed of Trust from Saxon Mortgage, Inc. to Deutsche Bank National Trust

Company, as Trustee for Saxon Asset Securities Trust 2007-2 on October 27, 2008. Beck also

included a second assignment of the Deed of Trust from Deutsche Bank National Trust Company,

as Trustee for Saxon Asset Securities Trust 2007-2 to Deutsche Bank National Trust Company as

Trustee for Saxon Asset Securities Trust 2007-2 Mortgage Loan Asset Backed Certificates, Series

2007-2 on October 4, 2011.

       The superior court granted Beck’s cross-motion for summary judgment, dismissed

Deutsche Bank’s foreclosure action, and awarded Beck his attorney fees and costs. Deutsche Bank

appeals.

                                            ANALYSIS

       Deutsche Bank argues that the superior court erred by granting Beck’s cross-motion for

summary judgment. We agree.

       We review summary judgment orders de novo. Washington Federal v. Azure Chelan, LLC,

195 Wn. App. 644, 652, 382 P.3d 20 (2016). Summary judgment is appropriate if no genuine




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No. 51425-7-II



issues of material fact exist and the moving party is entitled to judgment as a matter of law. CR

56(c). “‘A material fact is one upon which the outcome of the litigation depends.’” Washington

Federal, 195 Wn. App. at 652 (quoting Dong Wan Kim v. O’Sullivan, 133 Wn. App. 557, 559, 137

P.3d 61 (2006), review denied, 159 Wn.2d 1018 (2007)). We review facts and inferences in the

light most favorable to the non-moving party. Id.

       Here, there are no genuine issues of material fact as to the issues raised by Beck’s cross-

motion on summary judgment. The parties agree on the language contained in the October 2008

notice of default. Therefore, the issue is only legal: whether the language of the October 2008

notice of default accelerated the loan and triggered the statute of limitations.

       RCW 4.16.040 provides a six year statute of limitations for actions on promissory notes

and deeds of trust. Merceri v. Bank of New York Mellon, 4 Wn. App. 2d 755, 759, 434 P.3d 84,

review denied, 192 Wn.2d 1008 (2018). When the note is paid in installments, the six year statute

of limitations runs against each individual installment when it is due. Id. at 759-60. However,

when a note is accelerated, “the entire remaining balance becomes due and the statute of limitations

is triggered for all installments that had not previously become due.” 4518 S. 256th, LLC v. Karen

L. Gibbon, P.S., 195 Wn. App. 423, 434-35, 382 P.3d 1 (2016), review denied, 187 Wn.2d 1003

(2017). “‘[A]cceleration must be made in a clear and unequivocal manner which effectively

apprises the maker that the holder has exercised his right to accelerate the payment date.’”

Merceri, 4 Wn. App. 2d at 761 (quoting Glassmaker v. Richard, 23 Wn. App. 35, 38, 593 P.2d

179 (1979)).




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No. 51425-7-II



       Deutsche Bank argues that the language in the October 2008 notice of default did not

accelerate Beck’s debt because the language was conditional and referenced actions that could be

taken in the future—not actions that were currently being taken. We agree.

       The language in the October 2008 notice of default stated,

       If the default(s) described above is (are) not cured within thirty days of the mailing
       of this notice, the lender hereby gives notice that the entire principal balance owing
       on the note secured by the Deed of Trust described in paragraph 1 above, and all
       accrued and unpaid interest, as well as costs of foreclosure, shall immediately
       become due and payable.

CP at 108. This language does not clearly and unequivocally express that Deutsche Bank elected

to accelerate the debt in 2008.

       First, the language in the October 2008 notice of default is conditional. At the time the

notice was sent, the loan was not accelerated because it explicitly provided that Beck had 30 days

to cure the default before the loan could be accelerated. However, Beck argues that, because he

did not cure the default, the language in the notice acted to automatically accelerate the loan once

the condition was satisfied. But acceleration is not self-executing. Merceri, 4 Wn. App. 2d at 760.

Therefore, to actually exercise the option to accelerate the debt, Deutsche Bank would have had to

take some clear, unequivocal action to accelerate the loan once the condition for acceleration

identified in the notice was met.

       Second, the language in the October 2008 notice of default was a warning of an intended

future action—it was not a statement of an action that was taken. For example, in Merceri, the

court held that a notice of default stating that the loan “will be accelerated” if the default was not

cured was not a declaration that the entire balance was due or that the loan was accelerated. Id. at




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No. 51425-7-II



761. Similarly, here, the October 2008 notice of default’s statement of default did not include an

accelerated balance due; it only identified 4 delinquent payments totaling $16,015.96 and late

charges totaling $18.50.1 And no language in the October 2008 notice of default specifically

informed Beck that the full principle amount of the loan plus all accrued interest is immediately

due and payable. Id.

       The conditional, future warning language of the October 2008 notice of default did not

clearly and unequivocally express that Deutsche Bank was exercising the option to accelerate the

loan. Accordingly, the superior court erred by granting Beck’s cross-motion for summary

judgment.2



1
  Attached to the same notice of default was a “Notice Required by the Fair Debt Collection
Practice Act” which included the following paragraph:

       As of the date of this letter, you owe $455,806.95. Because of interest, late charges,
       and other charges that may vary from day to day, or may apply only upon payoff,
       the amount due on the day you pay may be greater. Hence if you pay the amount
       shown above, an adjustment may be necessary after we receive your check, in
       which event we will inform you before depositing the check for collection.

CP at 111. However, this statement could not be a clear and unequivocal acceleration of the loan
because it was attached to the same notice in which acceleration of the loan was made conditional
on the failure to cure the default within 30 days. Instead, this statement is more reasonably
construed simply as a statement of the full amount of the debt as of October 17, 2008 (the date the
letter was sent) and not a statement of the amount that was currently owed or that was attempted
to be collected. Accordingly, a statement of the full amount of the debt owed attached to a notice
of default which makes acceleration conditional on failure to cure within 30 days, would not be a
clear and unequivocal action accelerating the debt.
2
  Because we reverse the superior court’s grant of summary judgment in favor of Beck, we also
reverse the superior court’s award of attorney fees and costs to Beck. Further, we decline to
address which payments, if any, are barred by the statute of limitations or Beck’s argument that
Deutsche Bank lacks authority to foreclose. These issues may be properly addressed by the
superior court on remand.


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No. 51425-7-II



                                ATTORNEY FEES ON APPEAL

        Deutsche Bank requests attorney fees on appeal under RAP 18.1 and the terms of the note.

We grant attorney fees under RAP 18.1(a) “[i]f applicable law grants to a party the right to recover

reasonable attorney fees or expenses.” Both the note and the deed of trust provide Deutsche Bank

the right to recover reasonable attorney fees for actions brought to enforce the note. Because this

is a foreclosure action to enforce the note and this appeal protected Deutsche Bank’s interests in

the foreclosure and note enforcement action, Deutsche Bank is entitled to recover attorney fees on

appeal under the terms of the note and the deed of trust.

        We reverse the superior court’s order granting summary judgment and remand to the

superior court for further proceedings consistent with this opinion.

        A majority of the panel having determined that this opinion will not be printed in the

Washington Appellate Reports, but will be filed for public record in accordance with RCW 2.06.040,

it is so ordered.



                                                     Lee, J.
 We concur:



 Maxa, C.J.




 Cruser, J.




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