                                                                          FILED 

                                                                        MAY 5,2015 

                                                                In the Office of the Clerk of Court 

                                                              W A State Court of Appeals, Division III 





         IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON 

                            DIVISION THREE 


MICHAEL URIBE and HELEN URIBE             )
husband and wife,                         )            No. 32315-3-111
                                          )
                      Appellants,         )
                                          )
        v.                                )
                                          )            UNPUBLISHED OPINION
LIBEY, ENSLEY & NELSON, PLLC, a           )
Washington professional limited liability )
company; BANK OF WHITMAN, now             )
known as COLUMBIA BANK, successor )
in interest to the FDIC as Receiver of    )
Bank of Whitman; and GARY LIBEY and )
JANE DOE LIBEY, husband and wife and )
the marital community comprised thereof, )
                                          )
                      Respondents.        )
                                                                                                           I
      KORSMO, J. -    This appeal arises from the nonjudicial foreclosures of deeds of
                                                                                                           I
trust securing cross-collateralized commercial loans. Concluding that the trial court
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                                                                                                           I
properly granted summary judgment in favor of the defendants, we afftrm.

                                         FACTS                                                             ~

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      In the early 2000s, Michael and Helen Uribe owned a 1,000 acre tract of land in

Benton County, then valued in excess of$3.75 million. They also owned a substantially
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less valuable piece of property in Franklin County. In order to finance a commercial                       I'
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endeavor, the Uribes took out a loan in the amount of$I,665,185.50 from the Bank of

Whitman (Bank). The loan was secured by a deed of trust on the Franklin County

property, a mortgage on the Benton County property, and a security interest in some

vehicles and equipment used in the Uribes' business. A few years later, the Uribes took

out a second commercial loan from the Bank in the amount of$571,000. This loan was

secured by a deed of trust on the Benton County property, a mortgage on the Franklin

County property, and a security interest in that same business property. Additionally, the

deed of trust on the Benton County property included a clause whereby it further secured

all prior indebtedness by the Uribes to the Bank.

       Following the collapse of the real estate market, the Uribes defaulted on both

loans. In March 2009, the Bank sent the Uribes notices of default. Before the Bank

could take any further action, the Uribes filed for bankruptcy, resulting in an automatic

stay on all foreclosure proceedings. The Bank then filed a motion for relief from the stay.

One year later, the bankruptcy court lifted the stay and abandoned the property from the

estate. That court determined that the total value of the security assets ($2,550,171) was

less than the total debt owed on the two loans ($2,745,982.78). The Bank then initiated

nonjudicial foreclosure proceedings on the two deeds of trust, as well as a replevin action

on the business property.

       The Bank sent new notices of default and then appointed Gary Libey as trustee.

Mr. Libey sent notices of trustee's sales to the interested parties. On September 8, 2010,

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the notices and Mr. Libey's appointment as trustee were filed with the Franklin and

Benton County Auditors. The notices were recorded approximately two hours before the

appointments were recorded.

       On December 17,2010, both properties were sold at auction to the Bank; there

were no other bidders. First, the Franklin County property was sold for $390,000 and the

purchase price was credited to the Franklin County loan. Then, the Benton County

property was sold for $1.2 million, with the purchase price credited in part to the Benton

County loan and in part to the Franklin County loan. In the separate replevin action, the

Bank realized an additional $281,487.14 from the sale of the Uribes' business property.

On December 28 and 30, Mr. Libey recorded the trustee's deeds for the two properties,

acknowledging full satisfaction of both loans. The Bank subsequently sold the Benton

County property to Randall Rupp for approximately $1.28 million.

      Ten months later, the Uribes brought an action against the Bank, Gary Libey,

Libey Ensley & Nelson, PLLC, Randall Rupp, and 7HA Family, LLC, alleging violations

of the Deeds of Trust Act (DTA), chapter 61.24 RCW, and the Consumer Protection Act

(CPA), chapter 19.86 RCW, as well as collusive bidding, conversion, civil conspiracy,

and racketeering. The Bank settled with the Uribes. The superior court later granted

summary judgment in favor of the remaining defendants. The Uribes appealed from that

decision, reasserting only their claims under the DTA and CPA.




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                                         ANALYSIS

       The Uribes allege two violations of the DTA, relating respectively to the validity

and procedure of the trustee's sale, which we will address in that order. Our resolution of

those issues precludes any need to discuss the CPA claim.

       The Validity a/the Sale

       The Uribes contend that because the notices of trustee's sales were recorded two

hours prior to Mr. Libey's appointment as trustee, the trustee's sales were invalid and

should be rescinded. In response, Mr. Libey contends that under the DTA, the Uribes

waived their ability to challenge the validity of the trustee's sale by failing to bring an

action to enjoin the sale.

       The DTA should be construed liberally to further its basic objectives: (1) that the

nonjudicial foreclosure process be efficient and inexpensive, (2) that the process should

allow adequate opportunity for parties to prevent wrongful foreclosure, and (3) that the

process should promote the stability ofland titles. Cox v. Helenius, 103 Wn.2d 383, 387,

693 P.2d 683 (1985). In order to prevent wrongful foreclosure, a statutory cause of

action is available to the debtor to enjoin an invalid foreclosure. See RCW 61.24.130.

To promote stability of land titles, failure to bring an action "may result in a waiver of

any proper grounds for invalidating the Trustee's sale." RCW 61.24.040(1)(t)(IX).

Waiver ofa post-sale challenge occurs where a party (1) received notice of the right to

enjoin the sale, (2) had actual or constructive knowledge of a defense to foreclosure prior

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to the sale, and (3) failed to bring an action to obtain a court order enjoining the sale.

Plein v. Lackey, 149 Wn.2d 214,227,67 P.3d 1061 (2003). Waiver is not strictly applied.

It only will occur where it is equitable under the circumstances and furthers the goals of

the act. Albice v. Premier Mortg. Servs. o/Wash., Inc., 174 Wn.2d 560, 570,276 P.3d

1277 (2012).

       It is uncontested that the Uribes received adequate notice of their statutory rights

and that they did not bring an action to enjoin the trustee's sale. They argue that waiver

is inappropriate because they had no actual knowledge of the filing defects related to the

appointment of Libey and his notices of sale. However, the Uribes had constructive

knowledge of the order in which the documents were recorded by the county clerk. I That

is sufficient for waiver. Additionally, equitable considerations favor applying waiver to

these circumstances. The Uribes are complaining of an extremely minor, technical

failure in the foreclosure proceeding, which has not apparently harmed them in any way.

Finally, applying waiver here furthers the purposes of the DTA by promoting the stability

of land titles in a situation where the complaining party had ample opportunity to correct

the error before the sale. Consequently, application of waiver is appropriate in this

situation.




       I Indeed, the Uribes' theory of liability against Rupp was that Rupp purchased the
property with constructive notice of the filing defect.

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       The Uribes argue unpersuasively that waiver cannot apply to procedural

irregularities. They rely on inapposite precedent. See Schroeder v. Excelsior Mgmt.

Grp., LLC, 177 Wn.2d 94, 297 P.3d 677 (2013); Bavand v. One West Bank, FS.B., 176

Wn. App. 475, 309 P.3d 636 (2013). Unlike the present situation, both of these cases

dealt with situations where the lender lacked statutory authority under the DTA to initiate

the foreclosure, and the borrower brought an action to enjoin the sale.

       The Uribes argue alternatively that waiver does not apply to an action for

damages, and that if the sale is not to be invalidated, they should be able to obtain money

damages. 2 Again, the cases cited to support this argument do not apply as they involve

contractual or common law waiver rather than the statutory waiver of the DTA. See

Schroeder, 177 Wn.2d at 114; Klem v. Wash. Mut. Bank, 176 Wn.2d 771, 796, 295 P.3d

1179 (2013). Failure to bring an action under the DTA to enjoin a foreclosure cannot

serve to waive claims for damages in certain situations. See RCW 61.24.127. However,

that provision does not apply to the commercial loans at issue here. RCW 61.24.127(4).

If this court were to conclude that waiver never applies to claims for damages, this

provision of the DTA would be meaningless. Courts will not construe a statute so as to

render it meaningless. State v. KL.B., 180 Wn.2d 735, 742, 328 P.3d 886 (2014).




      2   It seems doubtful that the Uribes would be able to sustain a claim for damages,
as they have been unable to clearly state any harm actually resulting from this defect.

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       The Procedure ofthe Sale

       The Uribes make a variety of contentions that aspects of the sale violated the

DTA, all of which are without any legal support.

       First, they contend that recovering on the Franklin County loan against the Benton

County property constituted a deficiency judgment in violation of the DTA.3 RCW

61.24.100. However, the DTA specifically allows for a party to pursue multiple

foreclosures against separate collateral securing a commercia/loan. 4 RCW

61.24.1 00(3)(b).

       Next, the Uribes argue that Mr. Libey violated the DTA by failing to deposit the

surplus from the sale of the Benton County property with the clerk of the county court.

RCW 61.24.080. However, the Benton County deed of trust secured not just the Benton

County loan, but also all other debt owed by the Uribes to the Bank. Since the total debt

owed far exceeded the proceeds from the sale, there was no surplus to deposit.

       Finally, the Uribes argue that because the Franklin County property was sold first,

and the trustee's deed for the Franklin County property states that its sale satisfied in full



        3 In briefing this issue, the Uribes rely heavily on a letter from Mr. Libey to the
bank describing the anticipated foreclosure process and requesting indemnification. They
argue that this letter indicated that Mr. Libey knew the foreclosure was unlawful. In fact
the letter states a considered belief that the sale would be in compliance with the DTA,
but that he expected trouble because the Uribes are "quite litigious."
       The trial court ruled on this issue relying on Donovick v. Seattle-First Nat'l Bank,
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111 Wn.2d 413, 757 P.2d 1378 (1988).

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the obligation secured by that deed of trust, the Franklin County loan was satisfied before

the Benton County property was sold. However the Trustee's Deed was issued five days

after both sales, and consequently after the Franklin County loan was credited with a

portion of the sale from the Benton County property.

      Because there is no merit to the Uribes' claims under the DTA, we need not

address their claim under the CPA or their request for attorneys' fees.

      Affirmed.

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

Washington Appellate Reports, but it will be filed for public record pursuant to RCW

2.06.040.




WE CONCUR:




      Brown, J.




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