                                                                                               Filed
                                                                                         Washington State
                                                                                         Court of Appeals
                                                                                          Division Two

                                                                                           May 10, 2016
       IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

                                          DIVISION II
    IOAN A. PAUNESCU and DANIELA PAUNESCU,                              No. 47265-1-II

                          Appellants,

           v.

    GERHARD H. ECKERT and MARGARETHE                              UNPUBLISHED OPINION
    ECKERT AS TRUSTEES OF THE ECKERT
    FAMILY TRUST, and SCOTT RUSSON and JANE
    DOE RUSSON, husband and wife,

                          Respondents.


          SUTTON, J. — Ioan and Daniela Paunescu1 appeal the trial court’s order granting summary

judgment in a nonjudicial foreclosure action and awarding attorney fees and costs to Gerhard and

Margarethe Eckert and Scott Russon and his wife. The Paunsecus argue that the nonjudicial

foreclosure sale of their property was invalid and that other procedural irregularities occurred.

They also appeal the trial court’s orders on summary judgment. We hold that the deed of trust and

promissory note were enforceable, the successor trustee was properly appointed, and the

nonjudicial foreclosure sale was valid. Therefore, we affirm the trial court’s order granting

summary judgment and dismissing the Paunescus’s claims against the Eckerts and the Russons,

affirm the trial court’s order denying partial summary judgment to the Paunescus, and affirm the

trial court’s order awarding the Eckerts and the Russons their reasonable attorney fees and costs.




1
    We refer to Ioan and Daniela Paunescu by their first names for clarity and intend no disrespect.
No. 47265-1-II


                                              FACTS

       In 2005, the Paunescus purchased property located in Vancouver. Ioan obtained loans from

MIT lending and Bank of America to finance the purchase of the property, and secured the loans

with two deeds of trust on the property. In 2007, Ioan sought to obtain another loan to refinance

the Bank of America loan and to add a six-bedroom addition to the Paunescu residence to operate

an adult family home business

       A loan broker introduced Ioan to the Eckerts, who agreed to privately loan the Paunescus

$290,000 to expand the property to accommodate an adult family home business. The Paunescus

obtained a permit to add six bedrooms to their home for the specific purpose of running an adult

family home, and the floor plan was approved by the county before the loan was completed. In

February 2008, the State approved the Paunescus’s license to operate an adult family home

business using the six-bedroom addition to their residential home.

       In May 2007, the Paunescus signed a promissory note to The Eckert Trust, as “Holder,”

for $290,000. Clerk’s Papers (CP) at 202. The promissory note specified that Ioan would pay

interest-only payments of $2,900 per month until May 2008, when the entire balance would be due

in full. The promissory note also contained a commercial property clause that Daniela initialed on

behalf of Ioan as his attorney, which stated that “the sums represented by this Note are being used

for business, investment or commercial purposes, and not for personal, family or household

purposes.” CP at 203. Daniela stated in her deposition that she had an opportunity to read the

commercial loan clause in the promissory note but “at that time, I did not read it.” CP at 347, 487.




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No. 47265-1-II


       The promissory note was secured by a deed of trust on the Paunescus’s property. Daniela

granted the deed of trust to Fidelity National Title Insurance Company as Trustee and “The Eckert

Trust” as beneficiary. CP at 190. The Eckerts stated that the Paunescus did not object to the form

on any of the loan documents and that if they had objected, the loan would not have been approved

at that point until the objections were resolved.

       In September 2013, after the Paunescus stopped making payments and failed to pay the

balance of the promissory note in full by the due date, the Eckerts sent a notice of default to the

Paunescus. The Eckerts appointed Scott Russon as successor trustee and Russon began nonjudicial

foreclosure proceedings under chapter 61.24 RCW. Russon mailed a notice of trustee’s sale to

MIT Lending, the Paunescus, and the Paunescus’s attorney at the time. At the trustee’s sale in

February 2014, the Eckerts purchased the property and subsequently conveyed the property to the

Eckert Family Trust.

       Before the trustee’s sale took place, the Paunescus did not object or take any action to

restrain the sale. Russon began eviction proceedings on behalf of the Eckerts and notified the

Paunescus that they had 60 days to vacate the property following the trustee’s sale. In March 2014,

the trial court granted the Eckerts a writ of restitution. The State revoked the Paunescus’s business

license due to their default on the Eckerts’s loan.




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No. 47265-1-II


       In July 2014, the Paunescues sued the Eckerts and the Russons, alleging multiple causes

of action2 and seeking a declaratory judgment to invalidate both the deed of trust to The Eckert

Trust and the trustee’s sale of their residential property. The trial court granted summary judgment

to the Eckerts and the Russons, denied partial summary judgment to the Paunescus, and awarded

the Eckerts and the Russons their attorney fees and costs. The Paunescus appeal.

                                           ANALYSIS

                               I. NOTICE OF APPEAL AND BRIEFING

       While the Paunescus briefed the issue of summary judgment they failed to properly appeal

the trial court’s orders dated January 16, 2015 or January 30, 2015 as required under RAP 5.3(a).3

While the Paunescus filed their notice of appeal on February 24, 2015, they attached only the trial

court’s January 30, 2015 order awarding attorney fees and costs to the Eckerts and the Russons.

The Eckerts do not provide any briefing on the Paunescus’s failure to properly appeal the trial

court’s summary judgment order or the denial of their partial motion for summary judgment.

       A notice of appeal must be filed within 30 days after the entry of the decision of the trial

court and must designate the decision or part of decision which the party wants reviewed.

RAP 5.2(a); RAP 5.3(a). We hold pro se litigants to the same standard and same rules of procedure

on appeal as attorneys. West v. Wash. Ass’n of County Officials, 162 Wn. App. 120, 137 n. 13,



2
  The Paunescues’s amended complaint sought declaratory relief, quiet title, the establishment of
a homestead exception and alleges breach of fiduciary duty, and alleged violations of the Unfair
Business Practices Act (RCW 19.86), the Consumer Loan Act (RCW 31.04), and the usury statute
(RCW 19.52.020).
3
 The party filing the notice of appeal should attach to the notice of appeal a copy of the signed
order or judgment from which the appeal is made. RAP 5.3(a).



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No. 47265-1-II


252 P.3d 406 (2011). Appellants are required to provide argument in support of the issues

presented for review. RAP 10.3(a)(6),(g).4

       Because the Paunescucs briefed the issue related to the validity of the nonjudicial

foreclosure order, which was the subject of the trial court’s summary judgment orders, we exercise

our discretion under RAP 18.145 to reach the merits of this issue.6

                                      II. SUMMARY JUDGMENT

       We review a trial court’s grant of summary judgment de novo and engage in the same

inquiry as the trial court. Wash. Fed. v. Harvey, 182 Wn.2d 335, 339, 340 P.3d 846 (2015).

Summary judgment is proper where, viewing the facts in the light most favorable to the nonmoving

party, “the pleadings, depositions, answers to interrogatories, and admissions on file, together with

the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving




4
  RAP 10.3(a)(6) and (g) state that the brief of the appellant should contain under appropriate
headings the argument in support of the issues presented for review, together with citations to legal
authority and references to relevant parts of the record, and the appellate court will only review a
claimed error which is included in an assignment of error or clearly disclosed in the associated
issue pertaining thereto.
5
  An appellate court may, on its own motion, affirm or reverse a decision or any part thereof on
the merits. RAP 18.14(a).
6
  To the extent that the Paunescus argue alleged misconduct by the trial attorneys to support their
argument that the trial court erred in its award of attorney fees, that issue is not before us because
they have not provided argument to support the claim of error as required under RAP 10.3(a)(6),
(g).

The Paunescus also argue that the Eckerts and the Russons violated CR 30(b)(2) by deposing
Daniela soon after the Paunescus’s attorney withdrew and before they had an opportunity to find
new counsel. The Paunescus raise this argument for the first time in their reply brief, thus, we do
not consider it under RAP 10.3(c) (reply brief is limited to a response to the issues to which the
reply brief is directed).


                                                  5
No. 47265-1-II


party is entitled to a judgment as a matter of law.” CR 56(c). We consider the facts and all

reasonable inferences from those facts in the light most favorable to the nonmoving party. Lyons

v. U.S. Bank Nat’l Ass’n, 181 Wn.2d 775, 783, 336 P.3d 1142 (2014).

       A court may order a continuance of a summary judgment motion if the party opposing the

motion can show that he is unable to present facts essential to justify his opposition. CR 56(f).

The fact that all discovery has not been completed is not a basis to continue a summary judgment

motion. See Manteufel v. Safeco Ins. Co. of Am., 117 Wn. App. 168, 175, 68 P.3d 1093 (2003).

A. SUMMARY JUDGMENT PROCEDURE

       The Paunescus argue that the timing of the summary judgment hearing was improper

because after the Eckerts and the Russons had deposed Daniela, defendants’ counsel asserted that

they would like to depose Ioan as well, but did not do so.

       CR 56(f) allows a party to move to continue a summary judgment hearing if the party

opposing the motion cannot present facts essential to justify the party's opposition to the motion

and provides that the court may order a continuance to permit affidavits to be obtained, depositions

to be taken, or discovery to be conducted.

       The Paunescus did not file a motion to continue the summary judgment motion under

CR 56(f). Instead, Daniela told the trial court on December 12, 2014 that she did not have any

objection to proceeding with the summary judgment hearing on January 16, 2015 and first raised

her objection to the summary judgment proceeding at the January 30 hearing on the attorney fees

award, after the trial court heard and granted summary judgment. The Eckerts and the Russons

chose not to depose Ioan and the Paunescus chose not to ask for or file a motion to continue the




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No. 47265-1-II


summary judgment motion prior to the motion being heard on December 12, 2014. The Paunescus

do not present any basis to set aside or reverse the trial court’s summary judgment orders.

B. THE NONJUDICIAL FORECLOSURE

       The Paunescues argue that (1) the nonjudicial foreclosure sale was invalid because The

Eckert Trust, named as beneficiary on the deed of trust,7 is not the correct legal entity and cannot

be a legal beneficiary of a deed of trust,8 (2) the loan was a loan for residential property, not a

commercial loan, (3) Russon was not properly appointed as a successor trustee, (4) Russon failed

to follow proper nonjudicial foreclosure procedure under RCW 61.24.030, and (5) the homestead

exemption applies.9 We disagree.




7
 The Paunescus also argue that their first deed of trust on the property, to which the Eckerts’s loan
was junior, is invalid because it lists “Mortgage Electronic Registration Systems, Inc. (MERS)” as
beneficiary of the deed of trust. Br. of Appellant at 10; CP at 296. That deed is irrelevant to this
case and MERS is not involved with the transaction between the Paunescus and the Eckerts. Thus,
we do not further address this argument.
8
 The Paunescus also argue that they are entitled to relief from the trial court’s summary judgment
order under CR 60. We do not address this argument because the Paunescus did not raise it below
or in their opening appellate brief. RAP 2.5(a), 10.3(c).
9
  They also raise several other issues that were not fully briefed or were not preserved. In their
amended complaint, the Paunescus also alleged a breach of fiduciary duty by Russon and
violations of the Unfair Business Practice Act (RCW 19.86), Consumer Loan Act (RCW 31.04),
and usury statute (RCW 19.52). CP 26–28. We do not address these issues because these issues
were not addressed in either the Paunescus’s motion for partial summary judgment or the orders
on summary judgment, thus these issues are waived on appeal. RAP 2.5(a).

Additionally, the Paunescus argue that the trustee reported false information to the Department of
Social and Health Services. We do not address this issue because the Paunescus did not provide
argument in their brief and we hold the Paunsecus to the same standard and same rules of procedure
on appeal as attorneys. West, 162 Wn. App. at 137 n. 13. Appellants are required to provide
argument in support of the issues presented for review. RAP 10.3 (a)(6), (g). Assignments of
error not argued in brief are waived. Sullins v. Sullins, 65 Wn.2d 283, 285, 396 P.2d 886 (1964).


                                                 7
No. 47265-1-II


1. Deed of Trust & Promissory Note

        A beneficiary is the “holder of the instrument or document evidencing the obligations

secured by the deed of trust.” RCW 61.24.005(2). The term “holder” refers to the person or entity

that is in actual possession of the promissory note secured by the deed of trust. Bain v. Metro.

Mortg. Grp., Inc., 175 Wn.2d 83, 101, 285 P.3d 34 (2012). Here, The Eckert Trust is named as

the holder of the promissory note secured by the deed of trust and the promissory note identifies

The Eckert Trust as the beneficiary of the deed of trust.

        A trust as an entity is separate from the trustor, the trustee, and the beneficiary of the trust.

See e.g. RCW 11.96A.030(6) (defining the persons interested in a trust, including the “persons

holding powers over the trust . . . assets”). Assets of a trust belong to the trust, not to the trustee.

See RCW 11.96A.050(1)(b) (venue is proper in any county “where any real property that is an

asset of the trust is located”).      The trustee and trust are distinct because the trustee has

“discretionary power to acquire . . . the trust property” according to law. RCW 11.98.070

(emphasis added). The trustee holds business assets for the trust, uses the trust’s general assets for

the purpose of the trust, and can guarantee “on behalf of the trust” any loan to the business or

secure a loan with “any other property of the trust.” RCW 11.98.070(21)(e). Thus, a trust can be

a legal beneficiary of a deed of trust when it holds the promissory note secured by the deed of trust.

        The Paunsecus point to inconsistencies in how the trust name is described, arguing that the

deed of trust is invalid because the loan proceeds came from “the Eckert Family Trust” but the quit

claim deed granted the property from “The Eckert Trust” to the Eckerts individually, as trustees of

“the Eckert Family Trust.” CP at 335. This difference in the names used to describe the trust is a

scrivener’s error, but the error does not invalidate the deed of trust at issue. Furthermore, the



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No. 47265-1-II


record does not demonstrate that the Paunescus objected at the time to obtaining the loan proceeds

from “The Eckert Trust.” The Paunescus do not cite any persuasive authority10 to support their

argument. Therefore, there is no genuine issue of material fact on whether the deed of trust and

promissory note are valid and enforceable.

2. Character of the Loan

       The Paunescus argue that the loan was a residential loan, not a commercial loan. Again,

we disagree.

       A commercial loan is “a loan that is not made primarily for personal, family, or household

purposes.” RCW 61.24.005(4). We determine the purpose of a loan according to the borrower’s

manifestations of intent for use of the loan proceeds. Brown v. Giger, 111 Wn.2d 76, 82, 757 P.2d

523 (1988).

       Before the Paunescus received the loan proceeds, they decided to use the money to

construct an addition to their home for the purpose of conducting an adult family home business,

but they had also considered using the addition as a duplex to supplement their income. They had

obtained a permit from the county in which the property exists and secured a floor plan with

approval by the county. The Eckerts understood that the Paunescus would use the loan proceeds

for the adult family home business as well. The promissory note included a provision stating that

the “sums represented by this Note are being used for business, investment or commercial




10
   The Paunescues cite Lowman v. Guie, 130 Wash. 606, 607, 228 P. 845 (1924) (holding that
under Washington incorporation statutes, a “common-law trust” is not a corporate entity), and
Portico Mgmt. Grp., LLC v. Harrison, 202 Cal. App. 4th 464, 474, 136 Cal. Rptr. 3d 151 (2011)
(“a trust is not an entity distinct from its trustees and capable of legal action on its own behalf”).
But neither of these cases apply here.


                                                  9
No. 47265-1-II


purposes, and not for personal, family or household purpose,” and the Paunescus initialed that

provision. CP at 203. The objective evidence demonstrates that the Paunescus’s loan was a

commercial loan. The Paunescus fail to raise any genuine issue of material fact as to the character

of this loan.

3. Appointment of Successor Trustee

        The Paunescus argue that because the deed of trust listed an invalid beneficiary, the

appointment of Russon as the successor trustee was also invalid. We disagree.

        The actual holder of the promissory note or other instrument evidencing the obligation may

be the beneficiary with the power to appoint a trustee to proceed with a nonjudicial foreclosure on

real property. Bain, 175 Wn.2d at 89. Because The Eckert Trust is listed as the holder on the

promissory note and as beneficiary of the deed of trust, the Eckerts, as trustees, had the power to

appoint Russon as a successor trustee under RCW 61.24.010. Russon’s appointment was valid

and once the Paunescus defaulted on their loan, he had the right to proceed with the nonjudicial

foreclosure process under RCW 61.24.030.

4. Trustee’s Sale Process

        The Paunescus argue that Russon failed to follow the statutory process to foreclose on a

promissory note secured by their residential property. We disagree because the Paunescus did not

challenge the nonjudicial foreclosure sale as they could have done under RCW 61.24 and the




                                                10
No. 47265-1-II


objective evidence demonstrates that the Eckerts were loaning the money for commercial

purposes.11

       The nonjudicial foreclosure process must follow the requirements of chapter 61.24 RCW.

Bain, 175 Wn.2d at 108. RCW 61.24.030 controls these procedures for commercial loans.

Compare RCW 61.24.030, with RCW 61.24.031(7)(a) (requires the trustee to take certain due-

diligence steps to contact the borrower before a nonjudicial foreclosure does not apply to a deed

of trust “[s]ecuring a commercial loan”).

       Because the Paunescus received notice of the right to enjoin the sale, had knowledge of a

defense to a nonjudicial foreclosure prior to the sale, and failed to bring an action to enjoin the

sale, they waived the right to contest the nonjudicial foreclosure. Frizzell v. Murray, 179 Wn.2d

301, 306-07, 313 P.3d 1171 (2013) (holding that the mortgagor waives the right to contest the

nonjudicial foreclosure when they receive notice of the right to enjoin sale, had knowledge of

nonjudicial foreclosure prior to the sale, and failed to enjoin the sale). Although the Paunescus

may not have read or understood the loan paperwork, Daniela acknowledged at her deposition that




11
   From their argument that the nonjudicial foreclosure sale was invalid, the Paunescus also
challenge the unlawful detainer action that Russon brought following the trustee’s sale and the
garnishment proceedings Russon instituted to collect the Eckert’s judgment against the Paunescus.
Russon’s unlawful detainer action proceeded under a different cause number than this case. The
Paunescus did not designate the orders from the unlawful proceeding action in their notice of
appeal in this case. We will review orders not designated in the notice of appeal only if the order
prejudicially affects the decision designated in the notice of appeal and the trial court entered the
order before we accepted review. RAP 2.4(b). We will review a final judgment that is not
designated in the appellant’s notice of appeal “only if the notice designates an order deciding a
timely posttrial motion.” RAP 2.4(c). The final order in the unlawful detainer action and the
garnishment proceedings do not affect the orders designated in the Paunescus’s current notice of
appeal. Thus, we do not review the propriety of these orders.


                                                 11
No. 47265-1-II


she had time to read the documents and to ask questions if she had wanted to do so. Thus, the

Paunescus waived their challenges to the nonjudicial foreclosure.

5. The Homestead Exemption

       The Paunescus argue that the nonjudicial foreclosure sale did not extinguish their

homestead rights. The homestead exemption is not applicable here.

       The homestead exemption protects from “execution or forced sale” a person’s homestead

subject to certain exceptions. RCW 6.13.070-080. A nonjudicial foreclosure, the process that

occurred here, conducted by a trustee under a deed of trust that empowers the trustee to sell the

property, is not a forced sale. Felton v. Citizens Fed. Sav. & Loan Ass’n of Seattle, 101 Wn.2d

416, 423, 679 P.2d 928 (1984); see also RCW 6.13.080(2)(a) (The homestead exemption is not

available against an execution or forced sale in satisfaction of judgments obtained on debts secured

by security agreements describing as collateral the property that is claimed as a homestead.). A

trustee sale is conducted pursuant to a power of sale granted to the trustee, thus the grantor has

consented to a lawful trustee sale. Felton, 101 Wn.2d at 423. Therefore, the nonjudicial

foreclosure sale here is not subject to the Paunescus’s homestead rights.

                                 III. ATTORNEY FEES AND COSTS

       The Eckerts and the Russons request reasonable attorney fees and costs on appeal. We

grant their requests.




                                                12
No. 47265-1-II


       RAP 18.1(a) provides that we may award a party reasonable attorney fees and costs on

appeal when an applicable law grants the party the right to recover them. We may award attorney

fees and costs when a contractual provision authorizes the award. Durland v. San Juan County,

182 Wn.2d 55, 76, 340 P.3d 191 (2014). See also RCW 4.84.330 (authorizing an award for

attorney fees and costs to the prevailing party in an action to enforce a contractual provision entered

into after September 21, 1977).

       The deed of trust between Ioan and The Eckert Trust included a clause for attorney fees

and costs with the following language to “protect the security interest” of the deed of trust by

Ioan’s covenant and agreement: “To pay all costs, fees[,] and expenses in connection with this

Deed of Trust, including the expenses of the Trustee incurred in enforcing the obligation secured

hereby and Trustee’s and attorney’s fees actually incurred, as provided by statute.” CP at 190-91.

Because the Eckerts and the Russons are the prevailing parties on appeal, we grant them their

reasonable attorney fees and costs on appeal.

                                          CONCLUSION

       We hold that the deed of trust and promissory note were enforceable, the successor trustee

was properly appointed, and that the nonjudicial foreclosure sale was valid. Therefore, we affirm

the trial court’s summary judgment order dismissing the Paunescus’s claims against the Eckerts




                                                  13
No. 47265-1-II


and the Russons, affirm the trial court’s order awarding the Eckerts and the Russons their

reasonable attorney fees and costs, and affirm the trial court’s order denying partial summary

judgment to the Paunescus.

        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.



                                                    SUTTON, J.
 We concur:



 MAXA, A.C.J.




 MELNICK, J.




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