        IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

DAVID GUTTORMSEN and TERRY
GUTTORMSEN, husband and wife,         No. 72506-8-I

                   Appellants,        DIVISION ONE




AURORA BANK, FSB, a federally
chartered savings bank; AURORA
LOAN SERVICES, LLC, a limited
liability company; NATIONSTAR
MORTGAGE LLC, a Texas limited         UNPUBLISHED OPINION
liability company; FEDERAL
NATIONAL MORTGAGE                     FILED: August 3, 2015
ASSOCIATION, a United States
government sponsored enterprise;
QUALITY LOAN SERVICE
CORPORATION OF WASHINGTON,
a Washington corporation, MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC., a Delaware
corporation; and DOE DEFENDANTS,
1-10,

                   Respondents,

            and


HSBC MORTGAGE SERVICES, INC.
a Delaware corporation,

                   Defendant.
No. 72506-8-1/2


      Becker, J. — This appeal is from the dismissal of a lawsuit filed by

borrowers to resist a scheduled nonjudicial foreclosure sale. The issues raised

by the borrowers do not reveal any infirmity with the foreclosure proceedings nor

do they provide grounds for a consumer protection action. We affirm.

      On February 23, 2006, appellants David and Terry Guttormsen executed a

promissory note in the amount of $200,000 payable to AIG Federal Savings

Bank. The Guttormsens secured the note with a deed of trust against real

property located in Everett, Washington. The deed of trust listed Stewart Title as

the trustee and the Mortgage Electronic Recording System (commonly referred

to as "MERS") as the beneficiary.

      A history of transactions involving the note and deed of trust is found in

the declaration of A.J. Loll, a vice-president of Nationstar Mortgage LLC.

Nationstar was servicing the loan at the time this suit was filed. According to Loll,

HSBC Mortgage Services Inc. purchased the note from AIG on April 22, 2006.

HSBC then indorsed the note in blank via an allonge. On August 28, 2007,

Federal National Mortgage Association (hereinafter "Fannie Mae"), purchased

the loan from HSBC. Aurora Loan Services LLC was servicing the loan at the

time of Fannie Mae's purchase and continued in that role until Nationstar

acquired the right to service the loan in July 2012.

       The Guttormsens failed to make the May 1, 2011, payment required under

the note. According to Loll, at the time of the motions for summary judgment in

this case, the Guttormsens were in arrears on their loan in the approximate

amount of $76,344.96.
No. 72506-8-1/3


       The record reflects that in November 2011, MERS assigned its rights as

the original beneficiary under the deed of trust to Aurora Bank FSB.

       On June 13, 2012, Aurora Bank FSB appointed Quality Loan Service

Corporation of Washington as the successor trustee. On July 13, 2012, Quality

Loan issued to the Guttormsens a notice of default.

       On December 17, 2012, Quality Loan recorded a notice of trustee's sale.

The notice set the date of the sale for April 19, 2013.

       On April 18, 2013, the Guttormsens filed suit in Snohomish County

Superior Court against Aurora Bank FSB and Aurora Loan Services (collectively

"Aurora"), Nationstar, Fannie Mae, Quality Loan, HSBC, MERS, and 10 unknown

defendants. The complaint asserted claims for violation of the deed of trust act,

chapter 61.24 RCW, and the Criminal Profiteering Act, chapter 9A.82 RCW,

against all the named defendants. The complaint also asserted a consumer

protection claim against Aurora, Quality Loan, Nationstar, and MERS. The

Guttormsens sought and obtained an order restraining the sale.

       On July 8, 2013, Quality Loan recorded a notice of discontinuance of

trustee's sale.

       On March 28, 2014, the superior court granted the motion for summary

judgment brought by Aurora, Nationstar, Fannie Mae, and MERS.

       On September 10, 2014, the superior court granted Quality Loan's motion

for summary judgment.

       The Guttormsens appeal.
No. 72506-8-1/4


       We review an order granting summary judgment de novo, performing the

same inquiry as the trial court. Owen v. Burlington N. & Santa Fe R.R. Co.. 153

Wn.2d 780, 787, 108 P.3d 1220 (2005). Amotion for summary judgment will be

granted where there is no genuine issue as to any material fact and the moving

party is entitled to judgment as a matter of law. CR 56(c). The nonmoving party

may not rely on speculation, argumentative assertions that unresolved factual

issues remain, or on having its affidavits considered at face value. Wash. Fed.

Sav. v. Klein. 177 Wn. App. 22, 311 P.3d 53 (2013), review denied. 179Wn.2d

1019(2014).

Sufficiency of declarations

       To establish the admissibility of business records documenting their roles

and authority in the events leading up to the attempted foreclosure, the

respondents rely primarily on facts provided by the declarations of Loll and Sierra

Herbert-West.


       Loll, the vice-president of Nationstar whose declaration set forth factual

assertions related to the note and deed of trust, stated that the basis of his

declaration was either his personal knowledge or his review of Nationstar's

business records:

              2. I have personal knowledge of the matters set forth herein,
       or the facts set forth herein are based upon my review of
       Nationstar's business records, which records are made by myself
       or from information transmitted by a person with knowledge of the
       event described therein, at or near the time of the event described,
       and are kept and relied upon in the ordinary course or the regularly
       conducted business activity of that person and/or Nationstar, and it
       is the regular practice of Nationstar to make and maintain such
       business records.
No. 72506-8-1/5


                  3. I am familiar with Nationstar's practices and procedures
       in making and maintaining its business records, and I have
       reviewed and analyzed the relevant business records and other
       documents referenced and attached hereto. In particular, I am
       familiar with the systems that Nationstar uses to create and record
       information related to the residential mortgage loans that Nationstar
       services or serviced, including the process by which employees of
       Nationstar enter information into those systems. Nationstar's
       business records include the servicing records related to the loan
       that were generated prior to the assignment of servicing rights to
       Nationstar.


Loll attached to his declaration copies of the note, deed of trust, MERS'

assignment of the deed of trust to Aurora, and Aurora's assignment of the deed

of trust to Nationstar.

       Herbert-West is a trustee sales officer for Quality Loan. Her declaration

states that Quality Loan had Aurora's beneficiary declaration before it issued the

notice of trustee's sale and that the sale was discontinued. She attached to her

declaration both the beneficiary declaration and the notice of discontinuance of

trustee's sale.


       The Guttormsens assert that the trial court erred in admitting these

declarations, particularly Loll's.

       Normally, we review a trial court's decision to admit or exclude evidence

for an abuse of discretion. Discover Bank v. Bridges. 154 Wn. App. 722, 726,

226 P.3d 191 (2010). However, 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 ruling. Folsom v. Burger King. 135 Wn.2d 658, 663, 958

P.2d301 (1998).
No. 72506-8-1/6


       To be considered on summary judgment, a supporting declaration must be

made on personal knowledge, and the facts set forth must be admissible in

evidence.


       Supporting and opposing affidavits shall be made on personal
       knowledge, shall set forth such facts as would be admissible in
       evidence, and shall show affirmatively that the affiant is competent
       to testify to the matters stated therein. Sworn or certified copies of
       all papers or parts thereof referred to in an affidavit shall be
       attached thereto or served therewith.

CR 56(e). Washington courts consider the personal knowledge requirement to

be satisfied if the proponent of the evidence satisfies the business records

statute. See Discover Bank, 154 Wn. App. at 726. A business record is

admissible as competent evidence under certain, enumerated circumstances.

       A record of an act, condition or event, shall in so far as relevant, be
       competent evidence if the custodian or other qualified witness
       testifies to its identity and the mode of its preparation, and if it was
       made in the regular course of business, at or near the time of the
       act, condition or event, and if, in the opinion of the court, the
       sources of information, method and time of preparation were such
       as to justify its admission.

RCW 5.45.020.


       In Discover Bank, debtors appealed from a judgment requiring them to

pay their credit card debt. They argued that the trial court erred in considering

business records and affidavits from three employees of a debt collection agency

working on behalf of their creditor. This court rejected the debtors' argument that

the witnesses were not competent. The court properly considered the business

records based on the declarants' statements that they worked for the collections

agency, they had access to the debtors' account records in the course of their

employment, they made their statements based on personal knowledge and
No. 72506-8-1/7


review of the records and under penalty of perjury, and the attached account

records were true and correct copies made in the ordinary course of business.

Discover Bank. 154 Wn. App. at 726.

         Like the declarants in Discover Bank. Loll and Herbert-West made

declarations under penalty of perjury. They declared that (1) they were an officer

or an employee of Nationstar and Quality Loan, respectively, (2) they had

personal knowledge from their own review of records related to the Guttormsens'

note and deed of trust, and (3) the attached records were true and correct

copies. Loll also declared that he had personal knowledge of Nationstar's

practice of maintaining business records.

         The Guttormsens zero in on Loll's statement that the business records he

reviewed were made by himself "or from information transmitted by a person with

knowledge of the event described therein." They argue that this statement

means his declaration was inadmissible under the business records exception

because it contains information compiled and received from third parties. They

cite State v. Weeks. 70 Wn.2d 951, 425 P.2d 885 (1987), and 5C Karl B.

Tegland, Washington Practice: Evidence Law and Practice § 803.39 (5th ed.

2007).

         The transactions discussed by Loll appear to be solidly and legitimately

rooted in Nationstar's business records. And in any event, the Guttormsens fail

to show how any of the challenged statements of fact by Loll are material. For

example, they question how Loll knew that HSBC acquired ownership of the note

from AIG and how he knew that Fannie Mae purchased it from HSBC. But
No. 72506-8-1/8


ownership of the note is not relevant. Trujillo v. Nw. Tr. Servs., Inc., 181 Wn.

App. 484, 502, 326 P.3d 768 (2014), review granted. 182 Wn.2d 1020 (2015).

The important question is whether the entity that initiated the nonjudicial

foreclosure was the holder of the note. The record contains a declaration of

beneficiary, by Nationstar as Aurora's agent, that Aurora Bank FSB was the

actual holder of the note as of December 5, 2012. The foreclosure process

began after that date.

       The Guttormsens fault Loll for failing to explain why the note was later

transferred from Aurora to Nationstar, for failing to set forth terms and conditions

of the transfer, and for failing to attach documentation of the transfer. The

Guttormsens cite no authority, and we have found none, requiring a declarant to

attach documentation to verify each assertion made. Further, they do not explain

why the terms of the Aurora to Nationstar transfer were material.

       Loll declared that Aurora directed MERS to execute a corporate

assignment of the deed of trust in favor of Aurora. The Guttormsens challenge

Loll's competence to testify about the MERS assignment. Again, there is no

showing of materiality. The respondents do not rely on the MERS assignment to

establish their authority to act.

       Loll declared that Nationstar, as Aurora's attorney in fact, executed an

assignment of the deed of trust to Fannie Mae in September 2012. This was an

incorrect statement, because as is shown by the document itself—attached by

Loll to his declaration—the document was Aurora's assignment of the deed of




                                          8
No. 72506-8-1/9


trust to Nationstar, not to Fannie Mae. This minor discrepancy does not by itself

raise a credibility issue that requires Loll's entire declaration to be discounted.

       The Guttormsens complain generally in their brief that Loll's declaration

should be regarded as unreliable because of details he omitted:

       Indeed, A.J. Loll fails to provide the Court facts that would establish
       (1) what specific documents he is referring to and obtained his
       information from; (2) how the documents he/she refers to or relies
       on are maintained, whether in hard copy or electronic; (3) if the
       records are maintained by electronic means, whether the computer
       document retrieval equipment used by NATIONSTAR is standard;
       (4) the original source of the materials maintained; (5) the identity of
       person who compiled the information contained in the files or
       computer printouts; (6) when the entries were made and whether
       they were made at or near the time of the happening or event; and
       (7) how Nationstar relies on these records; or (8) any means by
       which the trial court could evaluate the authenticity of the
       documents provided and the reliability of A.J. Loll's testimony. See
       RCW 5.45.020; State v. Smith, 16 Wn. App. 425, 558 P.2d 265
       (1976) and State v. Kane. 23 Wn. App. 107, 594 P.2d 1357 (1979).
       Absent establishment of each of these elements, the information
       A.J. Loll provides is unverifiable, unreliable and inadmissible. CR
       56(e); RCW 5.45.020; ER 803.

(Footnote omitted.) The authorities cited by the Guttormsens do not support their

assertion that the listed items of information are required to make Loll's

declaration admissible.

       We conclude that the trial court did not err in considering the Loll and

Herbert-West declarations in support of the motions for summary judgment.

Violations of the deed of trust act

       The deed of trust act does not create an independent cause of action for

monetary damages based on alleged violations of its provisions where, as here,

no foreclosure sale has been completed. Frias v. Asset Foreclosure Servs., Inc.,

181 Wn.2d 412, 417, 334 P.3d 529 (2014). But under appropriate factual
No. 72506-8-1/10


circumstances, violations of the deed of trust act may be actionable under the

Consumer Protection Act, chapter 19.86 RCW, even where no foreclosure sale

has been completed. Frias, 181 Wn.2d at 417.

       To prevail on an action for damages under the Consumer Protection Act,

the plaintiff must establish (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, and (5) causation. Hangman Ridge Training Stables Inc. v.

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

       Whether a particular action gives rise to a Consumer Protection Act

violation is reviewable as a question of law. Leingang v. Pierce County Med.

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

       To prove that an act or practice is deceptive, neither intent nor actual

deception is required. The question is whether the conduct has "the capacity to

deceive a substantial portion of the public." Hangman Ridge, 105 Wn.2d at 785.

The Guttormsens assert that an unfair or deceptive act or practice is presumed

where MERS is involved. Bain v. Metro. Mortg. Group, Inc., 175 Wn.2d 83, 285

P.3d 34 (2012). In Bain, our Supreme Court held that, notwithstanding the fact

that MERS was listed as the original beneficiary of the deed of trust, MERS was

not the holder of the note and thus did not have authority to appoint a trustee to

enforce the note. Bain, 175 Wn.2d at 88. But because it was "likely true" that

"lenders and their assigns are entitled to name [MERS] as their agent," the court

stated that "nothing in this opinion should be construed to suggest an agent

cannot represent the holder of a note." Bain, 175 Wn.2d at 106. The problem in



                                          10
No. 72506-8-1/11



Bain was that MERS appeared to be acting on its own, without direction from a

principal.

       Contrary to the Guttormsens' argument, Aurora's appointment of Quality

Loan as successor trustee to Stewart Title was not "based upon" MERS'

assignment of its beneficiary interest to Aurora. As holder, Aurora's entitlement

to enforce was independent of MERS. Aurora's actions were not unfair or

deceptive for purposes of proving a consumer violation. The Guttormsens point

to the mere fact that MERS was listed as the original beneficiary, which, under

Bain, is not enough. Bain, 175 Wn.2d at 120.

       The violation of the trustee's duty of good faith may be actionable as a

violation of the Consumer Protection Act. See Frias, 181 Wn.2d at 417. The

Guttormsens allege Quality Loan violated its duty of good faith by relying on the

beneficiary declaration when it had knowledge that the beneficiary was the holder

but not the owner of the note. Their argument rests on the assumption that the

beneficiary must be both the owner and the holder of the note to enforce it. That

argument was rejected by this court in Truiillo, 181 Wn. App. 484. The

Guttormsens assert that Truiillo was "made irrelevant by" Lvons v. U.S. Bank

National Association, 181 Wn.2d 775, 336 P.3d 1142 (2014). We disagree. In

Lvons, the beneficiary declaration created an issue of material fact because the

beneficiary did not explicitly state that it was the holder of the note, and therefore
it was unclear whether the alleged beneficiary had authority to enforce the note.

That problem does not exist here. Nothing in Lvons undermines Truiillo's holding

that a holder of an instrument need not also be the owner to enforce it. Quality


                                          11
No. 72506-8-1/12


Loan was entitled to rely on Aurora's unambiguous declaration that it was the

holder of the note. We adhere to Truiillo.

      An unusual feature of this case is that the deed of trust was recorded

twice, one minute apart. On March 23, 2006, at 12:40 p.m., U.S. Recordings Inc.

recorded the deed of trust under Snohomish County recording number

200603230406—the "406 recording." At 12:41 p.m., U.S. Recordings recorded

the same deed of trust again, under Snohomish County recording number

200603230407—the "407 recording." How this happened is not explained in the

record.

      The Guttormsens argue that Quality Loan committed a consumer violation

by proceeding with the notice of default and notice of trustee's sale without

investigating why there had been two recordings, a minute apart, of the same

deed of trust. Some documents in the record refer to the 406 recording while

others refer to the 407 recording. The Guttormsens allege that by proceeding

toward foreclosure without clarifying the situation, Quality Loan materially

violated its duty of good faith. We are unable to regard this issue as anything but

a red herring. There was only one deed of trust. The Guttormsens do not make

clear what they think Quality Loan had a duty to do upon noticing the double

recording. There is no evidence of injury.

          The Guttormsens argue that they were deceived by the notice of default.

Where the property secured by the deed of trust is residential, the notice of

default must include the name and address of the owner of the promissory note

or other obligation secured by the deed of trust. RCW 61.24.030(8)0). Here, the


                                          12
No. 72506-8-1/13


notice identified Fannie Mae as the current owner of the note and Aurora as the

current loan servicer. It gave Fannie Mae's address as "c/o Aurora Bank FSB."

The Guttormsens claim using Aurora's address for Fannie Mae was a statutory

violation that prevented them from realizing Fannie Mae was involved. They say

that if they had known Fannie Mae was involved, they could have pursued

Fannie Mae sponsored programs that might have provided them a modification

of their loan.

       The respondents did not conceal Fannie Mae's ownership of the note.

The statute is not violated merely because the contact information for an entity is

through another entity. The notice of default plainly listed Fannie Mae as the

owner. The Guttormsens offer no proof that they tried to get in touch with Fannie

Mae but were prevented from doing so.

       The Guttormsens have failed to establish necessary elements of a

consumer protection claim.

Criminal profiteering

       The Guttormsens also argue that the trial court erred in dismissing their

claim under the Criminal Profiteering Act.

       The Criminal Profiteering Act provides a civil cause of action to a person if

injured in his or her "person, business, or property by an act of criminal

profiteering that is part of a pattern of criminal profiteering activity, or by an

offense defined" in enumerated criminal statutes. RCW 9A.82.100(1)(a).

"Criminal profiteering" is "any act, including any anticipatory or completed

offense, committed for financial gain, that is chargeable or indictable under the


                                           13
No. 72506-8-1/14


laws of the state in which the act occurred." RCW 9A.82.010(4). The

Guttormsens assert that the respondents are liable under the act for attempting
to collect a debt for which they have no lawful interest in violation of RCW

9A.82.045 and for extortion in violation of RCW 9A.56.120 and RCW 9A.56.130.

       The Guttormsens identify no action by the defendants that constitutes

either extortion or an attempt to collect on a debt in which the collector has no

lawful interest. The trial court properly dismissed the Guttormsens' criminal

profiteering claim.

Additional discovery

       The Guttormsens claim that the trial court erred by denying their request

to continue discovery under CR 56(f). We review a trial court's denial of a CR

56(f) motion for abuse of discretion. Qwest Corp. v. City of Bellevue. 161 Wn.2d

353, 369, 166 P.3d 667 (2007).

       Where the party opposing summary judgment cannot, for reasons stated,

present essential facts to justify his or her opposition, courts may order a

continuance to permit additional discovery.

      Should it appear from the affidavits of a party opposing the motion
      [for summary judgment] that he cannot, for reasons stated, present
      by affidavit facts essential to justify his opposition, the court may
      refuse the application for judgment or may order a continuance to
      permit affidavits to be obtained or depositions to be taken or
      discovery to be had or may make such other order as is just.

CR 56(f). A party seeking such a continuance must provide an affidavit stating

what evidence it seeks and how this evidence will raise an issue of material fact

precluding summary judgment. Durand v. HIMC Corp., 151 Wn. App. 818, 214

P.3d 189(2009), review denied. 168Wn.2d 1020(2010). "A trial court may deny


                                         14
No. 72506-8-1/15


a motion for a continuance when: '(1) the requesting party does not have a good

reason for the delay in obtaining the evidence, (2) the requesting party does not

indicate what evidence would be established by further discovery, or (3) the new

evidence would not raise a genuine issue of fact.'" Qwest, 161 Wn.2d at 369,

quoting Butler v. Joy, 116 Wn. App. 291, 299, 65 P.3d 671 (2003).

      The Guttormsens did not file an affidavit. They made their request for a

continuance at the end of their response to the respondents' motion for summary

judgment. There, they stated that they needed a continuance to "flesh out the

ownership of the subject note and deed of trust and the agency relationships, if

any, among the defendants and the possible assignment of the subject obligation

to a mortgage backed security trust."

      The Guttormsens did not specifically identify the evidence they believe

would be uncovered ifthey were to obtain a continuance. And they did not state

a good reason for their delay in obtaining whatever information they believe

would be uncovered. Under these circumstances, the trial court did not abuse its

discretion by denying the Guttormsens' request for a CR 56(f) continuance.

      Affirmed.




WE CONCUR:




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