                                                                          FILED
                                                                       MARCH 7, 2019
                                                                In the Office of the Clerk of Court
                                                               WA State Court of Appeals, Division III



            IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
                               DIVISION THREE

MARY E. NIELSON, an individual,               )
                                              )        No. 35531-4-III
                       Appellant,             )
                                              )
       v.                                     )
                                              )
HOUSEHOLD FINANCE                             )        UNPUBLISHED OPINION
CORPORATION III; CALIBER HOME                 )
LOANS, INC., d/b/a CALIBER LOANS,             )
INC., U.S. BANK TRUST NATIONAL                )
ASSOCIATION; AND LSF9 MASTER                  )
PARTICIPATION TRUST,                          )
                                              )
                       Respondents.           )

       KORSMO, J. — Mary Nielson appeals from the dismissal of her claims against

Household Finance Corporation III (HFC), contending that the trial court erroneously

ruled that the statute of limitations had expired on her claims. Concluding that there are

factual issues to resolve concerning when Ms. Nielson discovered the alleged fraud, we

reverse.

                                          FACTS

       We state the facts in the light most favorable to Ms. Nielson.1 Ms. Nielson and

her then-husband purchased a mobile home with the proceeds of a loan issued by HFC.



       1
           Didlake v. State, 186 Wn. App. 417, 422, 345 P.3d 43 (2015).
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Nielson v. Household Fin. Corp., et al


The loan was secured solely by the home because the Nielsons did not own any real

estate. The home subsequently was placed on land owned by Ms. Nielson’s father.

       Sometime thereafter, Ms. Nielson inherited the land from her father, free and clear

of any debt. The couple refinanced the home loan through HFC in January 2006. They

drove from Quincy to Yakima to sign the refinancing papers, arriving shortly before the

end of the business day. Because it was late in the day, there was no time to read the

paperwork. Told that the refinancing was secured in the same manner as the original

loan, the couple signed the documents without reading them.2

       In fact, the loan document bears the legend on the first page: “YOU ARE GIVING

US A SECURITY INTEREST IN THE REAL ESTATE LOCATED AT THE ABOVE

ADDRESS.” Clerk’s Papers (CP) at 291. The same notice, but referencing the deed of

trust, is carried on the second page of the loan agreement. CP at 292. Ms. Nielson avers

that, even if she had read the document, she would not have understood that the real

estate was also encumbered. The deed of trust was recorded in Grant County in January

2006. That document describes the secured property using a metes and bounds

description without reference to a street address; it also references the tax parcel

identification numbers assigned to the home and to the land. CP at 177.




       2
        These facts come from an affidavit filed by Ms. Nielson. Our record does not
include any evidence from Mr. Nielson.

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Nielson v. Household Fin. Corp., et al


          Represented by counsel, the couple filed, and subsequently dismissed, bankruptcy

petitions in 2010, 2011, and 2012. The status of the land, as identified by the couple’s

filings, is reflected in the schedules filed with the bankruptcy court. In 2010, the

“Schedule A—Real Property” indicates that the couple owned in fee simple property

located at 2572 Beverly Burke Road in Quincy. That schedule reflects that a secured

claim of $47,800 against the property. CP at 723. The Schedule D listing of secured

creditors recognizes that HFC holds a claim worth $47,800 against the 2572 Beverly

Burke Road property. CP at 725. Those same documents in the 2011 bankruptcy filing

report the exact same information. CP at 740, 742.

          The 2012 filing states the information differently. The Schedule A—Real

Property filing distinguished between mobile home and land, attributing values of

$100,000 to the former and $10,000 to the latter.3 CP at 248. The Schedule D listing

recognized a “Home Mortgage 1st” involving a “residence” (described as 1993 Marlette

Triple Wide) and “location” (2572 Beverly Burke Road S.) with a value of $100,000. CP

at 251. The creditor is identified as HFC and the claim is valued at $45,928. CP at 251.

          The Nielsons dissolved their marriage by a decree of dissolution entered

November 8, 2013. Ms. Nielson contends repeatedly in her pleadings that the decree

awarded the home and land to her, and the trial court stated that Ms. Nielson now held


          3
              The same distinction was drawn in the Schedule C (exempt property) filing. CP
at 249.

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Nielson v. Household Fin. Corp., et al


the property as her own.4 However, the decree of dissolution provided in our record

expressly states, on two different pages, that the “Parties will share property at 2572

Beverly Burke Rd.” CP at 257, 258.

       HFC assigned the loan to Caliber Home Loans in the summer of 2015. Soon

thereafter, Caliber contacted Ms. Nielson about the loan. In their discussion, Nielson

learned that HFC and Caliber believed that the security interest attached to both the land

and the home. Over the next year, her attorney and the companies traded letters on the

topic. Finally, in September 2016, Ms. Nielson filed an action against HFC5 alleging

fraud, and related claims involving violations of state statutes, over the January 2006 loan

processing.

       The defendants moved to dismiss, citing to the statute of limitations. Ms. Nielson

argued that she only discovered the fraud in 2015 and filed suit the following year after

negotiations failed. The trial court, in a thoughtful letter opinion, explained that the

plaintiff had constructive notice of the security interest due to the recording on file in

Grant County. After discussing when each of the claims had accrued, and determining

that all were untimely, the court ordered the action dismissed. Ms. Nielson moved for




       4
        CP at 397 n.1.
       5
        Additional defendants were added, and theories of recovery modified, over three
subsequent amendments to the complaint. All defendants other than HFC have been
dismissed from the case and are no longer involved in this litigation.

                                              4
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Nielson v. Household Fin. Corp., et al


reconsideration. Believing itself bound by appellate court authority, the trial court denied

reconsideration.

       Ms. Nielson timely appealed the dismissal of HFC. A panel heard oral argument

of the case.

                                         ANALYSIS

       The sole issue presented is whether this action is barred by the statute of

limitations. We conclude that there is a factual question concerning when Ms. Nielson

discovered that the security interest included the land as well as the home.

       As with an appeal from a summary judgment ruling, this court reviews appeals

from a CR 12(b) dismissal de novo. Tenore v. AT & T Wireless Servs., 136 Wn.2d 322,

329-330, 962 P.2d 104 (1998). Dismissal “is appropriate only if it appears beyond doubt

that the plaintiff cannot prove any set of facts which would justify recovery.” Id. at 330.

       Ms. Nielson’s claims alleged violations of the Consumer Loan Act (CLA), ch.

31.04 RCW, the Consumer Protection Act (CPA), ch. 19.86 RCW, fraud, and negligent

misrepresentation. Violation of the CLA is actionable under the CPA. RCW 31.04.208.

The statute of limitations for CPA claims is four years after accrual, RCW 19.86.120,

while the statute of limitations is three years after accrual for the fraud and negligent

misrepresentation claims. RCW 4.16.080(4).




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Nielson v. Household Fin. Corp., et al


       This court has recognized that “RCW 4.16.080(4) effectively codifies the

discovery rule” for fraud and negligent misrepresentation claims. Shepard v. Holmes,

185 Wn. App. 730, 739, 345 P.3d 786 (2014). That rule also applies to CPA claims. Id.

at 740. Under the discovery rule, an action does not accrue until the plaintiff has

discovered, or reasonably should have discovered, the facts giving rise to the claim.

RCW 4.16.080(4); Sabey v. Howard Johnson & Co., 101 Wn. App. 575, 593, 5 P.3d 730

(2000); First Maryland Leasecorp v. Rothstein, 72 Wn. App. 278, 283, 864 P.2d 17

(1993).

       The trial court relied on the filing of the deed of trust as notice to Ms. Nielson that

HFC claimed an interest in her real estate. “When an instrument involving real property

is properly recorded, it becomes notice to all the world of its contents.” Strong v. Clark,

56 Wn.2d 230, 232, 352 P.2d 183 (1960). “When the facts upon which the fraud is

predicated are contained in a written instrument which is placed on the public record,

there is constructive notice of its contents, and the statute of limitations begins to run at

the date of the recording of the instrument.” Id.; accord Shepard, 185 Wn. App. at 740

(“One instance in which actual discovery will be inferred is where the facts constituting

the fraud were a matter of public record.”); W. Wash. Laborers-Emp’rs Health & Sec. Tr.

Fund v. Harold Jordan Co., 52 Wn. App. 387, 391, 760 P.2d 382 (1988) (“[W]hen the

facts upon which the fraud is predicated are contained in a written instrument which is

placed on public record, the aggrieved party receives constructive notice of its contents.

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Nielson v. Household Fin. Corp., et al


Thus, the statute of limitations begins to run from the date of the recording of the

instrument.”).

       Here, Ms. Nielson argues that her claim did not accrue until she was alerted by the

lenders that the security interest attached to the land. In turn, HFC argues that the deed of

trust filed in January 2006 constituted notice to Ms. Nielson and the world that there was

a security interest in the land, leading to an expiration of the statute of limitations in early

2010. HFC points to Shepard, a relatively recent case from this court, as controlling. We

think that case, and the others cited above, are distinguishable because they involve

notice to third parties, where here the party claiming fraud is a signatory to the

agreement.

       Shepard involved a land purchase in Benton County; the purchaser allegedly had

been misled by a plat map about the ability to subdivide the property and was unaware

that the former owner had consolidated the four lots. 185 Wn. App. at 734. She sued the

real estate company and the title company for misrepresentation. Id. at 733. This court

held that the public filing of the consolidation deed put the plaintiff on notice at the time

she purchased the property. Since her action accrued at that time, rather than when she

learned from the county that the property was now only one lot, her action was barred by

the statute of limitations. Id. at 741-743.




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       That situation is different from this one. HFC essentially is asking that we double

down and conclude that the allegedly fraudulent document has extra notice value to the

plaintiff because it was filed after she signed it. We think the parties to a contract have

even less incentive to check the public record about the contents of their agreements than

they would have at the time of signing, or immediately thereafter when they presumably

received a copy of the contract. They are not in the same position as third parties who

otherwise are unaware of the existence of an agreement, lien, etc., and are expected to

rely on the public record. First parties have no need to rely on the public record for their

own agreements.

       We think that there is a factual question in this case about when Ms. Nielson knew

about the lien extending to the land. Three facts, in combination, bring us to that

conclusion: (1) there had been a previous loan, secured only by the home; (2) the

representation that the agreement was the same as that previous loan, arguably negating

the need to read the new agreement; and (3) there was insufficient time to read the

agreement before the end of the business day.6 We think that the CR 12(b)(6) motion

foundered on these facts, which would justify a trier-of-fact to conclude that Ms. Nielson

was unaware that the lender’s lien extended to the real estate beneath her mobile home




       6
           A failure or a refusal to read the contract would not justify relief.

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until foreclosure was threatened. Whether her allegations are credible is a matter for a

fact-finder to take up.

       Reversed and remanded for further proceedings.

       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:




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