          IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

WASHINGTON STATE                               No. 71524-1-1
DEPARTMENT OF REVENUE,
                                               DIVISION ONE
                       Appellant,

                v.



THE FEDERAL DEPOSIT INSURANCE
CORPORATION, as the receiver for
THE COWLITZ BANK, a Washington
State banking corporation,

                       Respondent,

MACDONALD LIVING TRUST;                        PUBLISHED OPINION
GRANITE HIGHLANDS, LLC,
a Washington limited liability company;
ESTATE OF ARCH MACDONALD;
ESTATE OF PAULINE MACDONALD;
SOPER HILL PROPERTIES, INC., a
Washington corporation; and
DOUGLAS B. MACDONALD, in his
capacity as Trustee for the
MACDONALD LIVING TRUST,
Personal Representative of the ESTATE
OF ARCH MACDONALD, and Personal
Representative of the ESTATE OF
PAULINE MACDONALD,

                        Defendants.            FILED: Septembers, 2015
       Schindler, J. — Any conveyance, assignment, or transfer of ownership of title to

real property is subjectto a real estate excise tax, chapter 82.45 RCW. Former RCW
No. 71524-1-1/2


82.45.010(3)(i) (2010)1 excludes a "transfer or conveyance made pursuant to a deed of

trust or an order of sale by the court in any mortgage, deed of trust, or lien foreclosure

proceeding or upon execution of a judgment." We hold the superior court erred in

granting the motion of a receiver appointed under RCW 7.60.025(1 )(c) to exempt the

sale of real property from the real estate excise tax as "a court-ordered sale in an action

to execute on a judgment." We reverse the order exempting the sale from the real

estate excise tax.


       The facts are not in dispute. Between 2004 and 2007, Cowlitz Bank loaned

approximately $13 million to the MacDonald Living Trust, Granite Highlands LLC, the

Estate of Arch MacDonald, the Estate of Pauline MacDonald, and Soper Hill Properties

Inc. The borrowers executed promissory notes secured by deeds of trust on property

located throughout Washington.

       The borrowers defaulted on the loan. On July 31, 2009, Cowlitz Bank filed a

"Complaintfor Monies Due" against the debtors in Clark County Superior Court.

        On January 29, 2010, Cowlitz Bank and the debtors entered into a "Forbearance

Agreement." The debtors agreed to entry of a $14.5 million stipulated judgment for the

amount due plus interest. Cowlitz Bank agreed not to execute on the "Stipulated

Judgment" or foreclose on the deeds of trust before March 31, 2010.

        On May 7, 2010, Cowlitz Bank filed the Stipulated Judgment in Clark County

Superior Court. In mid-May, Cowlitz Bank recorded the Stipulated Judgment with the




        11n 2014, the legislature amended the real estate excise tax statute to exclude a transfer on
death deed, codified as RCW 82.45.010(3)(b). See Engrossed Second Substitute H.B. 1117, 63rd
Leg., Reg. Sess. (Wash. 2014). Effective June 12, 2014, subsection RCW 82.45.010(3)(i) was
renumbered as RCW 82.45.010(3)0). Laws of 2014, ch. 58, § 24.
No. 71524-1-1/3


auditor in Clark County, King County, and Benton County. On May 17, Cowlitz Bank

filed an abstract of the judgment in King County Superior Court.

       On July 30, 2010, the Washington State Department of Financial Institutions

closed Cowlitz Bank. The Federal Deposit Insurance Corporation (FDIC) assumed

responsibility for the bank's assets. By operation of law, FDIC is the successor in

interest to the "rights, titles, powers, and privileges" of Cowlitz Bank with the authority

"to realize upon the assets of the institution."2

       FDIC decided that rather than "complete seriatim foreclosures or seek writs of

execution property by property" on the deeds of trust securing the $13 million loan and

the Stipulated Judgment, "itwould be most efficient" to file a motion to appoint "a

general receiver... to give effect to the judgment and control, sell, and manage [the

debtors'] assets."

       On April 9, 2013, FDIC filed an ex parte "Motion and Petition for Appointment of

General Receiver" in King County Superior Court. FDIC requested appointment of

Pacific Realty Advisors LLC as the general receiver "to give effect to the Judgment and

control, sell, and manage [the debtors'] assets."

       A commissioner granted the ex parte motion and appointed Pacific Realty as the

general receiver "to give effect to the Judgment and to preserve, protect, market and

sell the Assets."


       The ex parte order states the debtors "have demonstrated their inability or

unwillingness to effectively market and sell the Collateral," and in the absence of a

court-appointed receiver, "the Judgment will not be timely satisfied, in whole or in part."

Subject to the direction of the court, the ex parte order gives the receiver "the exclusive

       212 U.S.C. § 1821(d)(2)(A)(i), (E); Sharpe v. FDIC. 126 F.3d 1147, 1152 (9th Cir. 1997).

                                                   3
No. 71524-1-1/4


power and authority to sell, transfer, or otherwise liquidate the Assets in accordance

with RCW 7.60.260(1), (2) &(3)" and to "manage, operate, lease, maintain and control

the Assets." The order includes a provision stating that any sale of real property is

exempt from real estate excise tax.

       The "Order Appointing General Receiver" states, in pertinent part:

              28.      Should any Assets that are real property be sold by the
       Receiver pursuant to this order, such sale shall be considered a transfer
       or conveyance made upon execution of a judgment for purposes of
       [former] RCW 82.45.010(3)(i), and therefore the sale is exempt from real
       estate excise tax. On ex parte application for cause shown, the notice for
       any sale of any Assets pursuant to RCW 7.60.260 may be shortened and
       limited to all parties requesting special notice of this proceeding, the
       parties herein, and any party that has a filed lien against such Assets.
       The ultimate sale of such Assets shall be made free and clear of liens and
       all rights of redemption, with any and all security interests and other liens
       encumbering such Assets transferring and attaching to the proceeds of
       the sale, net of reasonable expenses incurred in the disposition of such
       Assets.

       On September 24, 2013, the receiver entered into a "Vacant Land Purchase and

Sale Agreement" with private buyers for property located in Clark County, Granite

Highlands "Lot 6," in the amount of $72,950. On November 18, the receiver filed a

"Motion to Approve the Sale of Real Property (Lot 6, Granite Highlands Phase IV) Free

and Clear of Liens." The receiver asked the court to approve the purchase and sale

agreement, authorize payment to the broker, and disburse the remaining sale proceeds

to FDIC. The receiver states that as "a court-ordered sale ... to execute on a

judgment," the transaction should be exempt from the state real estate excise tax.

       Because this is a court-ordered sale in an action to execute on a
       judgment, the Transactions proposed should be exempt from Real Estate
       Excise Tax pursuant to [former] RCW 82.45.010 (3)(i). This exemption is
       noted in paragraph 28 of the [Order Appointing General Receiver],
No. 71524-1-1/5


      The Washington State Department of Revenue filed an objection to the request

to exempt the sale from the state real estate excise tax. The Department of Revenue

argued the exemption for a sale of real property under former RCW 82.45.010(3)(i) did

not apply to the purchase and sale agreement in a receivership. In response, FDIC

argued that because the receiver was appointed by the court to "give[ ] effect" to the

Stipulated Judgment and "giving effect to a judgment is synonymous with execution of a

judgment," the sale was exempt from real estate excise tax.3
       The court overruled the objection of the Department of Revenue. The court

granted the receiver's motion to approve the purchase and sale agreement. The court

ruled that "the sale of the Property shall be considered an order of sale by the Court to

execute upon a judgmentfor purposes of [former] RCW 82.45.010(3)(i) and therefore

the sale is exempt from real estate excise taxes." The court denied the motion for

reconsideration.

       The Department of Revenue appeals the decision that the sale of Lot 6 is exempt

from the real estate excise tax. The Department of Revenue contends the court erred in

ruling the sale of property by a receiver appointed by the court to give effect to the

judgment is exempt from the real estate excise tax underformer RCW 82.45.010(3)(i).
       The meaning of a statute is a question of law we review de novo. Dep't of

Ecology v. Campbell & Gwinn. LLC. 146 Wn.2d 1, 9, 43 P.3d 4 (2002). Our objective is

to ascertain and give effect to legislative intent. Campbell &Gwinn, 146 Wn.2d at 9.
We look first to the text of a statute to determine its meaning. Griffin v. Thurston County

Bd. of Health. 165 Wn.2d 50, 55, 196 P.3d 141 (2008). Statutory interpretation begins

with the plain meaning of the statute. Lake v. Woodcreek Homeowners Ass'n. 169

       3 Emphasis in original.
No. 71524-1-1/6


Wn.2d 516, 526, 243 P.3d 1283 (2010). Plain meaning "is discerned from all that the

Legislature has said in the statute and related statutes which disclose legislative intent

about the provision in question." Campbell & Gwinn. 146 Wn.2d at 11. When the

meaning of the statute is plain on its face, the court must give effect to that plain

meaning as the expression of the legislature's intent. Bostain v. Food Express. Inc..

159 Wn.2d 700, 708, 153 P.3d 846 (2007); City of Spokane v. Spokane County. 158

Wn.2d 661, 673, 146 P.3d 893 (2006). Statutes are to be read together, whenever

possible, to achieve a " 'harmonious total statutory scheme .. . which maintains the

integrity of the respective statutes.'" Emplovco Pers. Servs.. Inc. v. City of Seattle. 117

Wn.2d 606, 614, 817 P.2d 1373 (1991)4 (quoting State v. O'Neill. 103 Wn.2d 853, 862,

700 P.2d 711 (1985)). An interpretation that reads language in isolation is too limited

and fails to apply this rule. Jongeward v. BNSF Rv.. 174 Wn.2d 586, 595, 278 P.3d 157

(2012): see Davis v. Mich. Dep't of Treasury. 489 U.S. 803, 809, 109 S. Ct. 1500, 103 L

Ed. 2d 891 (1989) ("It is a fundamental canon of statutory construction that the words of

a statute must be read in their context and with a view to their place in the overall

statutory scheme."). The construction of two statutes shall be made with the

assumption that the legislature does not intend to create an inconsistency. State v.

Bash. 130 Wn.2d 594, 602, 925 P.2d 978 (1996).

       We also employ traditional rules of grammar in discerning the plain language of

the statute. In re Forfeiture of One 1970 Chevrolet Chevelle. 166 Wn.2d 834, 838-39,

215 P.3d 166 (2009). We must" 'construe statutes such that all of the language is

given effect.'" Lake. 169 Wn.2d at 526 (quoting Rest. Dev.. Inc. v. Cananwill. Inc.. 150

Wn.2d 674, 682, 80 P.3d 598 (2003)); Davis v. Dep't of Licensing. 137 Wn.2d 957, 963,

       ; Alteration in original.

                                              6
No. 71524-1-1/7


977 P.2d 554 (1999). A construction that would render a portion of a statute

meaningless or superfluous should be avoided. Ford Motor Co. v. City of Seattle. 160

Wn.2d 32, 41, 156 P.3d 185 (2007). "[W]e avoid interpretations 'that yield unlikely,

absurd or strained consequences.'" Brouohton Lumber Co. v. BNSF Rv.. 174 Wn.2d

619, 635, 278 P.3d 173 (2012) (guoting Kilian v. Atkinson. 147Wn.2d 16, 21, 50 P.3d

638 (2002)). "Where the language of a statute is clear, legislative intent is derived from

the language of the statute alone." City of Spokane v. Rothwell. 166 Wn.2d 872, 876,

215 P.3d 162 (2009). Ifthe statute is unambiguous, the inquiry ends. Ifthe plain

language is subject to only one interpretation, our inquiry is at an end. Lake. 169 Wn.2d

at 526.

          Every sale of real property is subject to the state real estate excise tax "at the

rate of one and twenty-eight one-hundredths percent of the selling price." RCW

82.45.060. The real estate excise tax statute broadly defines the "sale" of real property

subject to the excise tax. RCW 82.45.010. RCW 82.45.010(1) states, in pertinent part:

          [T]he term "sale" has its ordinary meaning and includes any conveyance,
          grant, assignment, quitclaim, or transfer of the ownership of or title to real
          property, including standing timber, or any estate or interest therein for a
          valuable consideration, and any contract for such conveyance, grant,
          assignment, quitclaim, or transfer, and any lease with an option to
          purchase real property, including standing timber, or any estate or interest
          therein or other contract under which possession of the property is given
          to the purchaser, or any other person at the purchaser's direction, and title
          to the property is retained by the vendor as security for the payment of the
          purchase price. The term also includes the grant, assignment, quitclaim,
          sale, or transfer of improvements constructed upon leased land.

          The definition of "seller" expressly includes a receiver. RCW 82.45.020 defines

"seller" as:

          [A]ny individual, receiver, assignee, trustee in bankruptcy, trust, estate,
          firm, copartnership, joint venture, club, company, joint stock company,
No. 71524-1-1/8


        business trust, municipal corporation, quasi municipal corporation,
        corporation, association, society, or any group of individuals acting as a
        unit, whether mutual, cooperative, fraternal, nonprofit or otherwise; but it
        shall not include the United States or the state of Washington.1^

        A receivership is governed by chapter 7.60 RCW. The purpose of chapter 7.60

RCW is "to create more comprehensive, streamlined, and cost-effective procedures

applicable to proceedings in which property of a person is administered by the courts of

this state for the benefit of creditors and other persons having an interest therein." Laws

of 2004, ch. 165, §1.

        A "receiver" is "a person appointed by the court as the court's agent, and subject

to the court's direction, to take possession of, manage, or dispose of property of a

person." RCW 7.60.005(10). A "general receiver" is appointed "to take possession and

control of all or substantially all of a person's property with authority to liquidate that

property."6 RCW 7.60.015. A receiver may be appointed in a number of circumstances,

including "to give effect to the judgment." RCW 7.60.025(1 )(c).

        The real estate excise tax statute exempts certain transactions from the tax.7

Exemptions to a tax law must be narrowly construed. Taxation is the rule and

exemption is the exception. TracFone Wireless. Inc. v. Dep't of Revenue. 170 Wn.2d

273, 296-97, 242 P.3d 810 (2010).

        The seller has the burden of showing the exemption applies. Belas v. Kiga. 135

Wn.2d, 913, 932, 959 P.2d 1037 (1998). Because statutes exempting property from

taxation must be strictly construed," 'it devolves upon those claiming the exemption to



        5 Emphasis added.
        6 In contrast, a "custodial receiver" is "appointed to take charge of limited or specific property of a
person [and] is not given authority to liquidate property." RCW 7.60.015.
        7 See RCW 82.45.010(3).

                                                       8
No. 71524-1-1/9


clearly show that the property is within the statute.'" Belas. 135 Wn.2d at 932 (quoting

Spokane County v. City of Spokane. 169 Wash. 355, 358, 13 P.2d 1084 (1932)).

      [I]t has been the well settled rule in this state for over 70 years that the
      court will find an exemption from taxation only where the legislature has
      authorized such by clear and explicit language; statutes exempting
      persons or property from taxation are to be strictly construed. Thurston
      County v. Sisters of Charity of House of Providence. 14 Wash. 264, 265,
      44 P. 252 (1896). More recently, in Pacific Northwest Conference of the
       Free Methodist Church of North America v. Barlow. 77 Wn.2d 487, 492,
      463 P.2d 626 (1969), we noted the rationale underlying the rule that
      exemptions are not to be extended by judicial construction to property
      other than that which is expressly designated by law.

Belas. 135Wn.2dat933.

       Former RCW 82.45.010(3)(i) exempts from the real estate excise tax "[a]ny

transfer or conveyance made pursuant to a deed of trust or an order of sale by the court

in any mortgage, deed of trust, or lien foreclosure proceeding or upon execution of a

judgment, or deed in lieu of foreclosure to satisfy a mortgage or deed of trust." The

language "[a]ny transfer or conveyance made pursuant to ... an order of sale by the

court in any mortgage, deed of trust, or lien foreclosure" is separate and distinct from

the phrase "upon execution of a judgment." Former RCW 82.45.010(3)(i); Gray v.

Suttell&Assocs., 181 Wn.2d 329, 339, 334 P.3d 14 (2014) (use of "or" is disjunctive

unless there is clear legislative intent to the contrary); In re Marriage of Caven. 136

Wn.2d 800, 810, 966 P.2d 1247 (1998) ("The sentence containing the two phrases

separates them with the disjunctive 'or' which grammatically indicates that the phrases

are alternatives. . .. [T]he phrases were meant to be interpreted as alternatives, and not

as modifiers of each other.").

       FDIC does not dispute that the order approving the receiver's motion to enter into

the purchase and sale agreement for Granite Highlands Lot 6 is not "an order of sale by
No. 71524-1-1/10


the court in any mortgage, deed of trust, or lien foreclosure action." Former RCW

82.45.010(3)(i); see also Wash. Dep't of Revenue, Determination No. 11-0227, 31

Wash. Tax Dec. 57, 60 (2012) (under plain language of the statute, "an order of sale by

the court in a judicial foreclosure" is not subject to the real estate excise tax).

       The parties dispute the meaning of the language "upon execution of a judgment."

The Department of Revenue argues "upon execution of a judgment" as used in former

RCW 82.45.010(3)(i) refers to the statutory scheme for execution of judgments under

chapter 6.17 RCW and sales upon execution under chapter 6.21 RCW. FDIC claims

the exemption applies to a court-ordered sale where a receiver is appointed under RCW

7.60.025(1 )(c) to "give effect to the judgment." FDIC claims the language "to give effect

to the judgment" is the same as "execution" of a judgment." We disagree with FDIC.
       " '[l]t is an elementary rule that where the Legislature uses certain statutory

language in one instance, and different language in another, there is a difference in

legislative intent.'" Guillen v. Contreras. 169 Wn.2d 769, 776, 238 P.3d 1168 (2010)8
(quoting State v. Jackson, 137 Wn.2d 712, 724, 976 P.2d 1229 (1999)). A difference in

legislative intent is presumed where the legislature uses certain language in one
instance but different language in another. Woodbury v. City of Seattle. 172 Wn. App.

747, 753, 292 P.3d 134(2013).

       Where the legislature uses certain statutory language in one statute and
       different language in another, a difference in legislative intent is
       evidenced.. .. We assume the legislature means exactly what it says and
       we interpret the wording of statutes according to those terms. Where the
       legislature uses different terms, we deem the legislature to have intended
       different meanings.

Chevelle. 166 Wn.2d at 842.



       8 Alteration in original.

                                               10
No. 71524-1-1/11



       Here, the language in the receivership statue that allows the court to appoint a

receiver "to give effect to the judgment" is not the same as the language that exempts a

transaction from the real estate excise tax "upon execution of a judgment." RCW

7.60.025(1 )(c); former RCW 82.45.010(3)(i). There is a difference between

enforcement of a judgment by writ of execution under chapter 6.17 RCW and a receiver

giving "effect to the judgment" under chapter 7.60 RCW. For instance, unlike an

execution of a judgment under chapter 6.17 RCW, the privately negotiated sale of real

estate by a receiver under chapter 7.60 RCW is not subject to a public auction and the

sale results in a transfer of property that is not subject to redemption rights.

       The language of the statute governing the appointment of a receiver also

recognizes the distinction between "giv[ing] effect to the judgment" under RCW

7.60.025(1 )(c) and upon "execution of a judgment" under chapter 6.17 RCW and

chapter 6.21 RCW. In describing the circumstances where the court may appoint a

receiver, RCW 7.60.025(1) provides, in pertinent part:

       A receiver may be appointed by the superior court of this state in the
       following instances

              (c) After judgment, in order to give effect to the judgment;

              (e) To the extent that property is not exempt from execution, at the
       instance of a judgment creditor either before or after the issuance of any
       execution, to preserve or protect it. or prevent its transfer;
              (f) If and to the extent that property is subject to execution to
       satisfy a judgment, to preserve the property during the pendency of an
       appeal, or when an execution has been returned unsatisfied.191
       "[U]pon execution of a judgment" under former RCW 82.45.010(3)(i) clearly

refers to the statutes governing the execution of judgments—chapter 6.17 RCW,

"Executions;" and chapter 6.21 RCW, "Sales under execution"—and not to a receiver

       9 Emphasis added.

                                              11
No. 71524-1-1/12


appointed "to give effect to the judgment" under RCW 7.60.025(1 )(c). See ajso WAC

458-61A-208(6)(a) ("The real estate excise tax does not apply to a transfer of real

property made by a county sheriff pursuant to a court decree. A real estate excise tax

affidavit must be filed with the county.").10

        In the alternative, FDIC asserts the sale of property in the receivership is exempt

from the real estate excise tax because it is an execution of a judgment as defined in

RCW 6.17.060.11 FDIC's argument ignores the statutory requirement to obtain a writ of

execution under chapter 6.17 RCW. The statute requires the creditor to obtain a writ

that directs the sheriff to execute the writ of execution by public auction and sale within

60 days. RCW 6.17.020, .120; RCW 6.21.030, .050. Clearly, if the receiver had

obtained a writ of execution on the property under chapter 6.17 RCW, the statutory

exemption under former RCW 82.45.010(3)(i) would apply. But the undisputed record

establishes that FDIC decided to seek appointment of a receiver to sell the property

rather than obtain a writ of execution under chapter 6.17 RCW.12

        We hold the real estate excise sales tax exemption that excludes transfer of a

conveyance "upon execution of a judgment" under former RCW 82.45.010(3)(i) does


        10 The reliance of the parties on dictionary definitions of the word "execute" is misplaced. Where,
as here, the legislative intent is clear, we do not look to the dictionary to define a statutory term. Michaels
v. CH2M Hill. Inc.. 171 Wn.2d 587, 601, 257 P.3d 532 (2011).
        11 RCW 6.17.060 describes three kinds of execution:
        First, against the property of the judgment debtor; second, for the delivery of the
        possession of real or personal property or such delivery with damages for withholding the
        same; and third, commanding the enforcement of or obedience to any other order of the
        court. In all cases there shall be an order to collect the costs.
         12 FDIC also claims the challenge to the order exempting the purchase and sale agreement from
the real estate excise tax is an inappropriate collateral attack on the order appointing the receiver. But
FDIC concedes, as it must, that the order was entered by a commissioner ex parte without notice to the
Department of Revenue. We also reject the argument that the Department of Revenue is collaterally
estopped from challenging the decision because the court granted an exemption in a previously approved
sale by the receiver. We do not consider arguments raised for the first time on appeal. RAP 2.5(a); LJK
Operating. LLC v. Collection Grp.. LLC. 181 Wn.2d 117, 126, 330 P.3d 190 (2014).

                                                      12
No. 71524-1-1/13


not apply to the sale of real property where the receiver is appointed under RCW

7.60.025(1 )(c) to "give effect to the judgment." We reverse the determination that sale

of the property by the receiver appointed to give effect to the judgment is exempt from

the real estate excise tax.




                                                 %i0 oMi.
WE CONCUR:




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