                                                        Thi~ opinion was filed for rec9~/ ~_
                                                        m~.'oo~·~w
                                                                ~---~
                                                              Rcn0.!rl R. Carpenter
                                                              Supr.srnG£) Court Cl~&rk

IN THE SUPREME COURT OF THE STATE OF WASHINGTON


ONEWEST BANK, FSB, its               )
successor in interest and/or assigns,)
                                     )
                  Petitioner,        )    No. 91283-1
                                     )
v.                                   )    ENBANC
                                     )
MAUREEN M. ERICKSON,                 )
                                     )
                  Respondent,        )    Filed     FEB 0 1t 2016
                                     )
PALISADES COLLECTION LLC, )
ASSIGNEE OF AT&T; GONZAGA )
PREPARATORY SCHOOL, INC.; )
SOCIETY OF JESUS OREGON              )
PROVINCE; JOHN TRAYNOR               )
ANDJANEDOETRAYNOR,                   )
individually and marital community if)
any; ALBERT FAULKNER AND             )
JANE DOE FAULKNER,                   )
individually and marital community, )
if any; PHIL MCLEAN AND JANE )
DOE MCLEAN, husband and wife; )
LARRY SMITH AND JANE DOE )
SMITH, individually and marital       )
community if any; KEVIN R.            )
MALONE AND CHRISTINE                  )
MALONE, individually and marital )
community if any; OCCUPANTS OF )
THE PREMISES; QUALCHAN                )
HILLS HOMEOWNERS'                     )
ASSOCIATION; and any persons or )
One West Bank, FSB v. Erickson, No. 91283-1

parties claiming to have any right,         )
title, estate, lien or interest in the real )
property described in the complaint, )
                                            )
                       Defendants.          )
______________________ )

       FAIRHURST, J.-At its core, this case concerns the authority of an Idaho

court to impact property in Washington and whether we must respect that court's

orders. This case arose through OneWest Bank FSB's attempted foreclosure of

Washington property based on a reverse mortgage that an Idaho court ordered

through Bill McKee's conservatorship proceedings. McKee's daughter, Maureen M.

Erickson, challenges the foreclosure, claiming the reverse mortgage is void because

she was the actual owner of the property and the Idaho court had no jurisdiction to

affect Washington property, among other claims. The trial court granted summary

judgment for One West, allowing it to proceed with foreclosure, but the Court of

Appeals, Division Three, reversed and granted summary judgment for Erickson. We

must primarily decide whether the courts below were required to give full faith and

credit to the Idaho court orders. We hold that full faith and credit is due and One West

is entitled to foreclose its reverse mortgage on the Spokane property. We reverse the

Court of Appeals.




                                                2
One West Bank, FSB v. Erickson, No. 91283-1

                   I. FACTUAL AND PROCEDURAL HISTORY

A.    Background

      This case arose as a foreclosure action but is set against the backdrop of a

series of family disputes and litigation involving McKee, his property assets, and his

conservatorship.

      McKee purchased the property at issue, a home in Spokane, in 2001. Erickson

and her sons moved into the house, while McKee spent part of his time in the

Spokane home and part in Idaho throughout the next few years. McKee began living

on the property with Erickson's family around 2007.

      Erickson filed suit against McKee in Spokane for concealing her mother's will

and failing to transfer her assets due under the will. As a result of the litigation,

McKee transferred property to Erickson, including a quitclaim deed to the Spokane

property that was executed on June 28, 2007. Erickson did not record the deed for

over four years. On August 22, 2007, the Spokane County Superior Court signed an

order dismissing Erickson's action against McKee but did not enter formal judgment

until early 2008. The court acknowledged that its August 22, 2007 order "was signed

without formal judgment entered beforehand" and issued a judgment nunc pro tunc.

Clerk's Papers (CP) at 19. The judgment declared that Erickson held all rights to the

Spokane property.




                                           3
One West Bank, FSB v. Erickson, No. 91283-1

      Meanwhile, McKee's son initiated conservatorship proceedings for McKee in

district court in Idaho in early 2007. The Idaho court appointed Shelley Bruna as

McKee's conservator. 1

      When McKee was faced with financial difficulties, the Idaho court issued an

order on October 22, 2007 directing McKee's conservator to "facilitate a reverse

mortgage" on the Spokane property. CP at 108-12 (capitalization omitted). The order

appears to bear Erickson's signature, indicating that she "read and approved" the

order directing the reverse mortgage. CP at 111 (capitalization omitted). Bruna

entered into the reverse mortgage on October 25, 2007. The mortgage passed

through a series of assignments to OneWest. In 2008, McKee's Idaho

conservatorship was terminated and guardianship proceedings continued in the

Washington courts.

      McKee passed away on March 12, 2011. Pursuant to the terms ofthe reverse

mortgage, the balance was accelerated and declared due in full upon McKee's death.

Erickson requested and received an extension on the time to repay the loan until

December 12, 2011. On December 8, 2011, she recorded the quitclaim deed that her

father had signed in 2007 transferring the Spokane property to her. Erickson



       1
        The Idaho court signed letters of conservatorship appointing Bruna as McKee's
conservator on August 27, 2007. The letters were recorded on September 8, 2007, and a formal
order appointing Bruna was issued on September 24, 2007. The record does not indicate why the
Idaho court issued the formal order weeks after signing and recording the letters of
conservatorship.


                                             4
One West Bank, FSB v. Erickson, No. 91283-1

requested another payment extension on December 9, 2011, but it was not granted.

As a result of the failed payments, OneWest initiated foreclosure proceedings.

Erickson's defense to the attempted foreclosure forms the basis for our review.

B.    Procedural history

      1.     Trial court

      One West filed this foreclosure action in 2012 against multiple parties,

including Erickson, claiming an interest in the Spokane property. One West moved

for summary judgment, asserting that Erickson took title to the Spokane property

subject to the recorded reverse mortgage that OneWest now possessed. OneWest

claimed that it was a bona fide mortgagee protected by Washington's recording act,

chapter 65.08 RCW, because neither OneWest nor its predecessor had notice of

Erickson's interest in the property when the deed of trust was recorded on October

30,2007.

      In response, Erickson disputed OneWest's bona fide mortgagee status,

claiming OneWest's predecessor should have had inquiry notice that Erickson

claimed ownership to the Spokane property because she lived there and possessed a

quitclaim deed at the time Bruna executed the deed of trust. Erickson also challenged

the conservator's authority, claiming an Idaho court could not direct a conservator

to affect Washington property when McKee was not an Idaho resident. Finally, she




                                          5
One West Bank, FSB v. Erickson, No. 91283-1

asserted that One West did not hold the promissory note and claimed the deed of trust

was not properly acknowledged. Erickson requested summary judgment in her favor.

      In its reply, One West disputed the claim of inquiry notice, asserting there was

no reason to inquire about Erickson's potential property interests when all records

showed McKee as the property owner and current resident of the Spokane property

at the time his conservator entered into the deed oftrust on his behalf. One West also

responded to Erickson's argument that an Idaho conservator lacks authority over

nonresidents' out-of-state property, citing provisions of Idaho's Uniform Probate

Code to argue that conservators have broad statutory authority to manage property

in all states. Finally, One West claimed that it legally possessed the promissory note

and that the deed of trust was sufficiently acknowledged.

      One West then filed a surreply, which included a copy of the Idaho court order

directing Bruna to enter into a reverse mortgage on McKee's Washington property.

One West was initially unable to produce the official order because it was sealed.

The order includes Erickson's signature stating that she "read and approved" the

order directing the reverse mortgage. CP at 111 (capitalization omitted).

       The trial court granted partial summary judgment in favor of One West,

finding that One West was the holder of the promissory note and that the

acknowledgment on One West's deed of trust was sufficient. The court requested

additional briefing from the parties to resolve the remaining issues.



                                          6
One West Bank, FSB v. Erickson, No. 91283-1

      Erickson's supplemental brief reasserted her argument that One West was not

a bona fide mortgagee; claimed that Erickson asserted title to the property before the

mortgage and shared that information with the courts, the conservator, and the

lender; and responded to allegations that she may have perpetrated fraud on the

initial lender. Erickson attached a declaration providing "background" in order to

"understand the events that have led to the current situation affecting [her] property."

CP at 124. She explained that she obtained title to the property because she had

helped her father with the initial down payment, she remained his primary caregiver

for years, and he ultimately transferred title to her when she discovered he had

concealed her mother's will from her. She attached letters from her father to the

Idaho court, expressing his displeasure with the conservatorship proceedings and

claiming he was a Washington resident. Erickson also claimed she "[does] not recall

seeing or signing any court order" from the conservatorship proceedings, including

the order directing the mortgage that purportedly bore her signature. CP at 131.

       One West responded with an affidavit including faxes from Erickson stating

her intention to pay off the reverse mortgage and requesting extensions of time to

pay. One West also reasserted that it was a bona fide mortgagee because it had no

reason to know of or inquire about the unrecorded quitclaim deed, especially when

Erickson appeared to have signed the order directing the reverse mortgage and

allegedly provided funds to facilitate the closing of the reverse mortgage. In response



                                            7
One West Bank, FSB v. Erickson, No. 91283-1

to Erickson's challenge to the court order, One West reemphasized the conservator's

statutory authority to enter the reverse mortgage without a court order, 2 but also

pointed to the order as additional support. Finally, One West claimed that Erickson

could not collaterally attack the Idaho court's conservatorship proceedings because

"[a]ll such claims were already adjudicated by the Idaho Court in front of the proper

parties to the matter." CP at 175.

      The parties also raised multiple evidentiary challenges to declarations and

documents submitted in the summary judgment proceedings.

      The trial court granted summary judgment in favor of One West and rejected

all evidentiary challenges. First, it found the Idaho court order directing Bruna to

enter into the reverse mortgage was admissible as a business record but stated that

even if it were not, the "Order is not critical to this Court's determination of this

matter, and this Court would have reached the same conclusion without

consideration of the Idaho Order." CP at 188-89. Second, the trial court accepted

One West's exhibits relating to the closing and repayment of the loan, but again noted

that the trial court would have reached the same conclusion even if these exhibits

were inadmissible. Finally, the trial court recognized that Erickson's supplemental




       2
         0neWest asserted, "Under Idaho probate law, Shelley Bruna had broad power over all
property of Bill McKee as his conservator, including property in Washington State, and could
encumber the subject property without authorization from the Court." CP at 174 (citing portions
of the Idaho Uniform Probate Code).


                                               8
One West Bank, FSB v. Erickson, No. 91283-1

declaration was "predominately unsupported hearsay," but the court decided not to

strike the exhibit because it was helpful to understanding Erickson's "'side of the

story,"' although the court "assign[ed] it little weight." CP at 189. The trial court

held that One West was a bona fide purchaser for value and that Erickson took the

Spokane property subject to One West's deed oftrust.

      2.     Court ofAppeals

      On appeal, Erickson claimed a number of errors, which the Court of Appeals

summarized as follows:

      (1) [T]he trial court relied on inadmissible evidence, (2) Financial
      Freedom's deed of trust was not properly notarized and thus failed to
      attach to the property, (3) One West failed to prove it holds the note and
      cannot foreclose on the deed of trust alone, and (4) Shelley Bruna
      lacked the authority to encumber property that Bill McKee no longer
      owned because (a) Idaho law does not authorize a conservator for a
      nonresident to encumber real property outside of the state of Idaho, (b)
      Financial Freedom had actual or constructive knowledge that Maureen
      Erickson owned the property, and (c) OneWest's interest in the property
      is not superior to Financial Freedom's since One West was not a bona
      fide purchaser.

One West Bank, FSB v. Erickson, 184 Wn. App. 462,476-77, 337 P.3d 1101 (2014),

review granted, 183 Wn.2d 1001, 349 P.3d 857 (2015).

      The Court of Appeals concluded one issue was dispositive-that "the Idaho

court lacked authority to authorize a conservator to encumber the Spokane

residence"-and reversed on that ground without addressing the remaining issues.

!d. at 477. To reach this decision, the court analyzed Idaho law and concluded that



                                          9
One West Bank, FSB v. Erickson, No. 91283-1

conservators in that state have no statutory authority to encumber a nonresident's

property outside of Idaho and noted that the "undisputed facts" show that McKee

was a Washington resident throughout the conservatorship proceedings. Id.

      The Court of Appeals went on to address the issue of full faith and credit,

stating, "Even if Idaho law authorized the Idaho courts to approve a mortgage on

property in Washington State, we would rule to the contrary because we are not

bound by a foreign state's order concerning property here." Id. at 479. For support,

the court relied on "ancient principles" and cases suggesting that "the courts of one

state cannot directly affect the legal title to land situated in another state." Id. at 479-

80.    The court gave three reasons for rejecting OneWest's claim that Erickson

could not collaterally attack the conservator's authority. First, the record did not

demonstrate that the Idaho court ruled on McKee's domicile or its jurisdiction to

encumber Washington property. Second, the court questioned whether Erickson was

a party to the Idaho proceeding (and therefore whether the Idaho court could bind

her). Finally, the court recognized that even if the first two claims were true, it would

still reject the Idaho court's ruling on full faith and credit grounds because the Idaho

court did not have jurisdiction to encumber Washington property. Id. at 484-85.

       Finding no disputed issues of material fact, the Court of Appeals reversed the

trial court's summary judgment order for OneWest and instead granted summary

judgment in favor of Erickson.



                                             10
One West Bank, FSB v. Erickson, No. 91283-1

      One West filed a motion for reconsideration rmsmg three issues. First,

One West asserted that the parties did not have the opportunity to fully brief the full

faith and credit issue and claimed this court's decision in In re Marriage of

Kowalewski, 163 Wn.2d 542, 182 P.3d 959 (2008) should control. Second, One West

disputed the court's reading of Idaho law and claimed that the conservator had

statutory authority to encumber the property at issue. Third, OneWest requested an

alternative remedy of remand so One West could further pursue equitable arguments.

      After the Court of Appeals summarily denied OneWest's motion for

reconsideration, One West petitioned this court for review, raising multiple issues

but mainly focusing on whether a Washington court must give full faith and credit

to an Idaho court order encumbering Washington property. We granted review.

OneWest Bank, 183 Wn.2d 1001.

                                      II. ISSUES

       A.    Is an Idaho court order authorizing a conservator to encumber

Washington property with a reverse mortgage entitled to full faith and credit?

       B.    Does One West prevail as a bona fide mortgagee?

       C.    Is One West otherwise entitled to foreclose on the Spokane property?




                                           11
One West Bank, FSB v. Erickson, No. 91283-1

                                  III. ANALYSIS

A.    The Idaho court orders are entitled to full faith and credit

      One West seeks to foreclose a reverse mortgage on the Spokane property that

arose as a result of two Idaho court orders-one appointing Bruna as McKee's

conservator and one directing her to enter into the reverse mortgage on McKee's

property. We hold that Washington courts are required to give full faith and credit

to the Idaho proceedings. Erickson cannot now attack that court's decisions here.

      1.     Full faith and credit turns on jurisdiction

      The full faith and credit clause of the United States Constitution states, "Full

faith and credit shall be given in each state to the public acts, records, and judicial

proceedings of every other state." U.S. CONST. art. IV, § 1.

      Under full faith and credit principles, states are obligated to recogmze

judgments of sister states and parties can collaterally attack a foreign order "only if

the court lacked jurisdiction or constitutional violations were involved." State v.

Berry, 141 Wn.2d 121, 128, 5 P.3d 658 (2000). Otherwise, a Washington court

'"must give full faith and credit to the foreign judgment and regard the issues thereby

adjudged to be precluded in a Washington proceeding."' !d. (internal quotation

marks omitted) (quoting In re Estate of Tolson, 89 Wn. App. 21, 30, 947 P.2d 1242

(1997)). The party disputing a foreign order has the burden of establishing lack of

jurisdiction. In re Parentage of Infant Child F., 178 Wn. App. 1, 8, 313 P.3d 451



                                          12
One West Bank, FSB v. Erickson, No. 91283-1

(2013) (citing Williams v. S.S. Mut. Underwriting Ass 'n, 45 Wn.2d 209, 213, 273

P.2d 803 (1954)). The standard of review is de novo in determining whether a court's

refusal to accord full faith and credit to a foreign judgment was improper. !d. at 7.

      As a threshold matter to the full faith and credit issue, we must determine

whether the Idaho court had personal and subject matter jurisdiction to direct a

conservator to enter into a reverse mortgage on McKee's Spokane property.

      2.     Personal jurisdiction

      In determining whether an Idaho court has jurisdiction over the parties to a

conservatorship proceeding, we should apply the law of Idaho. See Brown v. Garrett,

175 Wn. App. 357, 367, 306 P.3d 1014 (2013) (applying the law of Texas to

determine if Texas had jurisdiction over the action the parties sought to enforce in

Washington); Indus. Fin. Co. v. Lovell, 9 Wn. App. 829, 831,515 P.2d 1304 (1973)

(applying the law of South Dakota to determine if the South Dakota court properly

obtained personal jurisdiction through service).

       Idaho courts have personal jurisdiction over their residents. See Jonasson v.

Gibson, 108 Idaho 459, 462, 700 P.2d 81 (Ct. App. 1985) ("Although the theory of

jurisdiction has changed somewhat since Pennoyer [v. Neff, 95 U.S. (5 Otto) 714,24

L. Ed. 565 (1877)], residence is still an adequate basis."). The Idaho long-arm statute




                                           13
One West Bank, FSB v. Erickson, No. 91283-1

also extends personal jurisdiction to the limits of the due process clause to include

jurisdiction over certain out-of-state residents. 3

       The Idaho court's general jurisdiction depends on where McKee was

domiciled when the conservatorship proceedings began in February 2007. There is

some dispute as to McKee's domicile at the time of the conservatorship proceedings.

Erickson contends, and the Court of Appeals agreed, that McKee was a Washington

resident during the relevant time period. Erickson supports this claim with her own

declaration and handwritten letters purportedly from her father to the Idaho court

asserting that he was a Washington resident. One West points out that the Idaho court

had already considered and rejected a challenge to McKee's domicile in the

conservatorship proceedings and urges this court to accept that determination.

       We agree that we cannot question McKee's domicile because the personal

jurisdiction issue was already litigated and decided in the Idaho conservatorship

proceedings. Generally, once a court determines it has personal jurisdiction, that

decision is entitled to res judicata. See Ins. Corp. of Jr., Ltd. v. Compagnie des

Bauxites de Guinee, 456 U.S. 694, 706, 102 S. Ct. 2099, 72 L. Ed. 2d 492 (1982)

("By submitting to the jurisdiction of the court for the limited purpose of challenging



        3
         That statute grants personal jurisdiction over causes of action arising from conducting
business within Idaho, committing a tort within Idaho, owning or using property within Idaho,
contracts involving the State, and other unrelated acts. IDAHO CODE § 5-514. Specific personal
jurisdiction applies only if the lawsuit "arise[s] out of or relate[ s] to" the party's contact with the
state. Houghland Farms, Inc. v. Johnson, 119 Idaho 72, 75, 803 P.2d 978 (1990).


                                                  14
One West Bank, FSB v. Erickson, No. 91283-1

jurisdiction, the defendant agrees to abide by that court's determination on the issue

of jurisdiction: That decision will be res judicata on that issue in any further

proceedings."); Perry v. Perry, 51 Wn.2d 358, 369-70, 318 P.2d 968 (1957);

RESTATEMENT (SECOND) OF JUDGMENTS § 10 (AM. LAW INST. 1982).

      According to the docket from the Idaho conservatorship proceedings, 4 it

appears that McKee objected to personal jurisdiction in the Idaho court, but the court

denied his objection and exercised jurisdiction over him. The docket states that a

"Motion To Dismiss For Lack of Jurisdiction," along with an "Affidavit of Bill E.

McKee Re: Domicile and Residence," were filed on June 6, 2007. CP at 97-98.

McKee submitted another affidavit regarding his domicile and residence on June 21,

2007. !d. at 98. On June 26, 2007, the docket indicates that the court issued an

"Order Denying Motion To Dismiss For Lack of Jurisdiction." !d.

       Although we do not have the particular Idaho court order at issue, we have

sufficient evidence that the Idaho court considered challenges to McKee's domicile

and ruled that it had jurisdiction to appoint a conservator over him. We accept the

Idaho court's determination that it had jurisdiction based on res judicata principles.

In addition, Erickson's bare assertions in a declaration in opposition to OneWest's

summary judgment motion that her father moved in with her in early 2007 are not

sufficient to overcome the evidence that the Idaho court properly exercised


       4
           0ne West did not submit copies of these documents because the case was sealed.


                                                 15
One West Bank, FSB v. Erickson, No. 91283-1

jurisdiction. McKee was an Idaho resident for 40 years. At the time of the

conservatorship proceedings, he owned property in multiple states, including Idaho.

Even an assertion that he began staying with Erickson at the Spokane property in

2007 is not sufficient to prove he affirmatively changed his domicile and intended

to remain only a Washington resident at that time. There was enough evidence for

the Idaho court to conclude it had sufficient contacts to exercise jurisdiction over

McKee. If Erickson wanted to challenge this determination, the Idaho court was the

proper forum for doing so. 5 She cannot collaterally attack that determination here.

       3.     Subject matter jurisdiction and power over out-ofstate property

       In addition to personal jurisdiction, we must decide whether the Idaho court

had subject matter jurisdiction and the power to enter orders affecting Washington

property. So long as a court in another state has jurisdiction, "the full faith and credit

clause of the Constitution precludes any inquiry into the merits of the cause of action,



       5
        Erickson had multiple opportunities for relief besides coming to Washington courts to
challenge the Idaho orders. As McKee was the protected party in the conservatorship proceedings,
he could have appealed the Idaho court orders with which he disagreed. Erickson could have
attempted to intervene in those proceedings to challenge the court's determinations. The docket
from the Idaho proceedings indicates Erickson was both aware of and participated in the
conservatorship by filing affidavits. That court was the proper forum for Erickson to challenge the
Idaho court's decisions. Not only did Erickson not challenge the conservatorship, but later it
appears that she signed the order stating she "read and approved" of the reverse mortgage. CP at
111 (capitalization omitted).
       Erickson also failed to avail herself of another significant protection. Had she simply
recorded her deed, her interest in the property would have been secured and she could have
challenged the Idaho court's authority over her property. But absent any recording or notice that
Erickson owned the property, the Idaho court properly adjudicated McKee's interests in the
property because he held record title.


                                                16
One West Bank, FSB v. Erickson, No. 91283-1

the logic or consistency of the decision, or the validity of the legal principles on

which the judgment is based." Milliken v. Meyer, 311 U.S. 457, 462, 61 S. Ct. 339,

85 L. Ed. 278 (1940).

      Erickson does not dispute that the Idaho District Court is a court of general

subject matter jurisdiction. See IDAHO CODE § 1-701. Rather, the jurisdictional issue

turns on whether the Idaho court had the power to affect property in another state.

      a)     Courts have jurisdiction to indirectly affect interests in, but not directly
             transfer title to, out-of-state property

      Erickson agrees with the Court of Appeals that the Idaho court's orders

appointing and directing the conservator to enter into the reverse mortgage on

McKee's Spokane property are not entitled to full faith and credit because an out-

of-state court has no jurisdiction to enter orders affecting property in Washington.

She asserts that only Washington courts have power over property in this state.

      OneWest contends that the jurisdictional rules regarding a foreign court's

adjudication ofWashington property are more nuanced. More specifically, One West

asserts that actions involving personal interests in property, as opposed to actions

adjudicating legal title to real property, need not be adjudicated in the state where

the real property is located. For support, One West relies primarily on Kowalewski,

163 Wn.2d 542. We agree with One West.

       This court most recently addressed the issue of a state's power to adjudicate

out-of-state property interests in Kowalewski. This case involved a marriage


                                           17
One West Bank, FSB v. Erickson, No. 91283-1

dissolution action and the Pierce County Superior Court's attempt to divide property,

including certain real property in Poland. Mr. Kowalewski claimed the Washington

court lacked jurisdiction to affect title to property outside of the state.

      We rejected Mr. Kowalewski's claim and held that a court with proper

personal and subject matter jurisdiction "has power to divide the parties' personal

interests in all property brought to its attention, wherever situated." Id. at 544. We

agreed with Mr. Kowalewski that an out-of-state court cannot "directly ... affect

title to real property located outside the state," id. at 548, but went on to distinguish

between "jurisdiction to adjudicate personal interests in real property, which is a

transitory action, and jurisdiction to adjudicate legal title to real property, which is a

local action that must be brought in the situs state," id. at 547.

       Applying this distinction, we stated that the marital dissolution proceeding

was not an in rem action over title to the Polish property, but rather "an in personam

action in which a Washington court has jurisdiction to determine the parties' relative

interests in all property brought to the court's attention." Id. at 549-50.

       Kowalewski rests on a foundation of "nearly 200 years" of cases upholding

the power of courts to determine personal interests in out-of-state property. Id. at

548 (citing Massie v. Watts, 10 U.S. (6 Cranch) 148, 3 L. Ed. 181 (1810)). Indeed,

many of the cases on which Erickson and the Court of Appeals rely to claim lack of




                                            18
One West Bank, FSB v. Erickson, No. 91283-1

jurisdiction recognize this distinction between an out-of-state court's powers over

title to property versus personal interests in property.

      For instance, in Fall v. Eastin, 215 U.S. 1, 30 S. Ct. 3, 54 L. Ed. 65 (1909),

the United States Supreme Court addressed the authority of a Washington court to

enter a divorce decree affecting title to land in Nebraska. The Court held that

Nebraska courts need not give full faith and credit to a Washington court's order

attempting to transfer land in Nebraska because the transfer of title to real property

can be ordered only by the jurisdiction where the land is located. However, Fall goes

on to point out an exception to this rule for courts sitting in equity, stating that a

court has the power to "indirectly act upon real estate in another State" through its

in personam jurisdiction over the party. Id. at 8. "Whatever [the court] may do

through the party it may do to give effect to its decree respecting property, whether

it goes to the entire disposition of it or only to affect it with liens or burdens." I d.

       Erickson also relies on Brown v. Brown, 46 Wn.2d 370, 281 P.2d 850 (1955)

to claim that the Idaho court lacked jurisdiction to encumber Washington property.

In Brown, a California court entered a default divorce decree and purported to award

the husband land in Washington. Brown upheld the wife's collateral attack on the

California court order, holding the California court lacked jurisdiction because "the

courts of one state can not directly affect the legal title to land situated in another

state." Id. at 372. However, Brown also acknowledged that a court could have the



                                             19
One West Bank, FSB v. Erickson, No. 91283-1

power to enforce its decree and indirectly affect the property through its power over

the person. I d. According to Kowalewski's discussion of Brown, the California court

may have lacked jurisdiction to directly transfer title to Washington property but it

could still have "exercise[d] its coercive powers to accomplish indirectly what it

could not do directly." 163 Wn.2d at 547.

      Other cases support the proposition that a court has authority to determine

parties' personal interests in out-of-state property, even when that court may lack

jurisdiction to directly transfer title to the property. Id. at 549 (collecting cases);

Silver Surprize, Inc. v. Sunshine Mining Co., 74 Wn.2d 519, 526, 445 P.2d 334

(1968) ("[A]n action brought to try the naked question of title to land must be

brought in the state where the land is situate," but where "the action is transitory and

one over which the court has jurisdiction, the court may hear and determine the

action even though a question of title to foreign land may be involved, and even

though the question of title may constitute the essential point on which the case

depends.").

       Both Erickson and the Court of Appeals fail to recognize the important

distinction between a court's power to indirectly affect interests in out-of-state

property compared to a court's lack of jurisdiction to directly transfer title to such




                                           20
One West Bank, FSB v. Erickson, No. 91283-1

property. 6 If the Idaho court orders merely determined personal interests in the

Washington property and did not directly transfer legal title, then they are entitled to

full faith and credit.

       b)     The Idaho court had jurisdiction to order a reverse mortgage as an
       interest in, rather than transfer of title to, out-ofstate property

       The Idaho court orders at issue fall within the court's in personam jurisdiction

to adjudicate personal interests in out-of-state property. The first order, which

appoints Bruna as McKee's conservator, did not adjudicate any interests in real

property. The second order, which directs Bruna to enter into a reverse mortgage,

did not rise to the level of directly transferring legal title to property. The court

merely used its jurisdiction over the person, not the property, to direct the mortgage.

       Moreover, the resulting mortgage itself did not directly transfer title. Although

some states hold that a mortgage conveys legal title to real property, Washington

follows the lien theory. See John Davis & Co. v. Cedar Glen #Four, Inc., 75 Wn.2d

214, 221-22, 450 P.2d 166 (1969) ("A mortgage does not vest legal title in a

mortgagee. It only creates a lien upon the land in favor of the mortgagee as against

the interest of the mortgagor."); Bain v. Metro. Mortg. Grp., Inc., 175 Wn.2d 83, 92-



       6At  oral argument, Erickson's attorney asserted a new theory-that the Idaho court must
have directly transferred title from Erickson to McKee and awarded him the Spokane property.
Wash. Supreme Court oral argument, OneWest Bank, FSB v. Erickson, No. 91283-1 (Oct. 22,
2015), at 21 min., 32 sec., audio recording by TVW, Washington State's Public Affairs Network,
http://www.tvw.org. We find no support in the record for this proposition and will not consider
this theory based on speculation alone.


                                              21
One West Bank, FSB v. Erickson, No. 91283-1

93, 285 P.3d 34 (2012) (deed oftrust securing a mortgage does not convey title); 18

WILLIAM B. STOEBUCK & JOHN W. WEAVER, WASHINGTON PRACTICE: REAL

ESTATE: TRANSACTIONS§ 18.2, at 305 (2d ed. 2004) ("Washington is a 'lien-theory'

state. Since territorial days, decisions of the state supreme court have held that a

mortgage does not convey title as in the old English mortgage and as in a number of

American states, but gives the mortgagee only a lien on the mortgaged land."); RCW

7.28.230(1) ("A mortgage of any interest in real property shall not be deemed a

conveyance so as to enable the owner of the mortgage to recover possession of the

real property, without foreclosure and sale according to law."). Like other

mortgages, borrowers in Washington retain legal title to their property in their name

when they enter into a reverse mortgage. RCW 31.04.505(2). Since the Idaho court

orders did not directly transfer title to out-of-state property, Erickson's jurisdictional

argument fails.

      Erickson attempts to distinguish Kowalewski. She points out that Kowalewski

involved a Washington court determining property interests in real property located

in another country, and that the full faith and credit clause applies only to orders

issued in the United States. Indeed, Kowalewski recognizes that the full faith and

credit clause does not apply to foreign countries and states, "It remains for the Polish

courts to decide what effect, if any, the Washington decree has on the legal

ownership of real property in Poland." 163 Wn.2d at 552. Erickson seems to argue



                                            22
One West Bank, FSB v. Erickson, No. 91283-1

that Washington courts have similar authority to determine the validity of the Idaho

court orders at issue. However, we explicitly noted in a footnote in Kowalewski that

the full faith and credit clause requires states to recognize the judgments of other

states. Id. at 552 n.1. This case falls squarely within the full faith and credit clause

because it involves a Washington court's enforcement of Idaho court orders.

      We hold that the Idaho court orders are entitled to full faith and credit in

Washington courts. Under the full faith and credit clause, a state is required to

enforce the judgment of sister states unless there is a jurisdictional or constitutional

defect. A Washington court can therefore examine whether the Idaho courts had

jurisdiction; but once it recognizes Idaho's jurisdiction, it cannot question the

validity of those court orders or the conservator's statutory authority. Full faith and

credit requires us to accept those determinations by the Idaho court because it had

personal jurisdiction over McKee's conservatorship proceedings and jurisdiction to

enter the reverse mortgage order as a judgment affecting personal interests in out-

of-state property.

B.     One West prevails as a bona fide mortgagee

       Having decided the Idaho court orders are enforceable in Washington, this

case comes down to a recording act issue-two parties claim interests in the same

property, and their interests relative to one another depend on when each recorded




                                           23
One West Bank, FSB v. Erickson, No. 91283-1

their deed and what notice they had. The trial court held that Erickson took title to

the Spokane property subject to the reverse mortgage. We agree.

      Washington is a "race-notice" jurisdiction. See RCW 65.08.070. 7 Our

recording act modifies the common law rule of "first in time, first in right" to

determine property interests and instead gives priority to bona fide purchasers. The

term "purchaser" includes a mortgagee and subsequent assignees of a mortgage.

RCW 65.08.060(2). In order to qualify as a bona fide purchaser or mortgagee under

Washington law, a party must pay value for an interest in land, record its interest

first, and act in good faith without notice of a prior party's unrecorded interest. See

Miebach v. Colasurdo, 102 Wn.2d 170, 175,685 P.2d 1074 (1984); RCW 65.08.070.

"Notice" includes both actual notice and constructive notice. See Miebach, 102

Wn.2d at 176 ('" [K]nowledge of facts sufficient to excite inquiry is constructive

notice of all that the inquiry would have disclosed."' (quoting Peterson v. Weist, 48

Wash. 339,341,93 P. 519 (1908))).




       7
        RCW 65.08.070 provides:
       A conveyance of real property, when acknowledged by the person executing the
       same (the acknowledgment being certified as required by law), may be recorded in
       the office of the recording officer of the county where the property is situated. Every
       such conveyance not so recorded is void as against any subsequent purchaser or
       mortgagee in good faith and for valuable consideration from the same vendor, his
       or her heirs or devisees, of the same real property or any portion thereof whose
       conveyance is first duly recorded. An instrument is deemed recorded the minute it
       is filed for record.


                                                 24
One West Bank, FSB v. Erickson, No. 91283-1

       The trial court held that One West was a bona fide purchaser and that Erickson

took her interest in the property subject to One West's mortgage. A review of the

record indicates that Erickson did not record her deed to the Spokane property until

years after One West's predecessor recorded the reverse mortgage, even though

Erickson claims she obtained her interest first. 8 Erickson does not dispute that

One West, through its predecessor, qualifies as a purchaser for value with a prior

recorded interest. Rather, she claims One West is not a bona fide mortgagee because

its predecessor had notice of Erickson's existing interest in the Spokane property

when it obtained the reverse mortgage. Because Erickson's interest was not recorded

at that time, record notice was not possible, 9 so Erickson must show OneWest's

predecessor had actual or constructive notice. The party claiming a purchaser had

notice of a prior party's interest has the burden to prove such notice. Biles-Coleman

Lumber Co. v. Lesamiz, 49 Wn.2d 436, 439, 302 P.2d 198 (1956).


       8
          Erickson claims McKee originally quitclaimed the Spokane property to her on June 28,
2007, but she did not record that deed for another four years. CP at 23. McKee's conservator
entered into the reverse mortgage on October 25, 2007, and the deed of trust was recorded five
days later. CP at 33, 36. Erickson recorded her deed on December 8, 2011. CP at 23.
         9
           Erickson claims OneWest or its predecessor should be charged with constructive notice
because the 2007 quitclaim deed and the 2008 court order conveying property to Erickson "were
matters of public record before the Deed of trust was assigned to One West" because they were
part of court proceedings and they predated One West's predecessor's October 2007 deed of trust.
Br. of Appellant at 23. But matters of public record are distinguishable from the record chain of
title for a particular parcel of real property recorded in the county where the property sits. The
latter is sufficient to defeat bona fide purchaser status, but we do not necessarily expect subsequent
purchasers to inquire into the former. Erickson could have recorded her quitclaim deed or a lis
pendens noting the litigation in the county office if she wanted to provide notice of her interest in
the property. See RCW 4.28.320 (filing a lis pendens imparts constructive notice to purchasers or
encumbrancers).
One West Bank, FSB v. Erickson, No. 91283-1

      Erickson fails to meet her burden of proving that One West's predecessor had

actual or constructive knowledge of Erickson's interest in the property. She alleges

that she and her father would have told anyone who asked them that she was the true

owner of the Spokane property. But what she might have told people who never had

reason to inquire of her potential ownership in the first place is irrelevant to

determining actual or constructive knowledge. In order to satisfy inquiry knowledge,

a party must at least have knowledge of facts to trigger the inquiry. Miebach, 102

Wn.2d at 175-76. Erickson claims that she told the Idaho court and individuals

involved in the loan process that she owned the property. But this is not sufficient to

put the mortgagee on notice in this context, for even if we accept Erickson's

allegations as true, the Idaho court considered her claims that she owned the property

and still ordered the conservator to enter the mortgage over what it deemed to be

McKee's property. The mortgagee was entitled to rely on this order, especially

considering that it bears Erickson's signature consenting to McKee's conservator

entering into a reverse mortgage on his Spokane property.

      Erickson also claims that One West's predecessor should have had notice of

her ownership because she occupied the property when the predecessor entered into

the reverse mortgage. For support, Erickson relies on cases that suggest a person's

possession of property may be enough to put subsequent purchasers on inquiry

notice that the person possessing the property may own an interest in the land. See



                                          26
One West Bank, FSB v. Erickson, No. 91283-1

Glaser v. Holdorf, 56 Wn.2d 204,210,352 P.2d 212 (1960) ("[P]ossession of land

may be notice to all persons dealing with it of whatever rights the one in possession

claims."); Chittick v. Boyle, 3 Wn. App. 678, 683, 479 P.2d 142 (1970) (purchaser

with notice that a renter possessed the property under a lease from the prior owner

was under a "duty to conduct a reasonably prudent inquiry as to the contents of such

lease"); Nichols v. DeBritz, 178 Wash. 375, 380, 35 P.2d 29 (1934) (a party's actual

possession of property constitutes '"notice to [purchasers or mortgagees] of

whatsoever rights a prudent and reasonable inquiry would have revealed"' (quoting

Field v. Copping, Agnew & Scales, 65 Wash. 359, 362, 118 P. 329 (1911))).

      Although purchasers or mortgagees may often be charged with notice of

inspecting property and discovering that an unrecorded interest holder actually

possesses the property, this principle does not necessarily extend to circumstances

where the record title owner lives on the property. Here, the parties agree that McKee

lived on the Spokane property when One West's predecessor entered into the reverse

mortgage. McKee, not Erickson, was the record holder at that time. Erickson fails to

show why a lender should be required to further assess whether others living on the

property, such as McKee's daughter acting as his caretaker, might hold a secret

unrecorded interest in the property.

       Without further facts to support a claim of inquiry notice, Erickson fails to

meet her burden of challenging One West's status as a bona fide mortgagee. We



                                          27
One West Bank, FSB v. Erickson, No. 91283-1

uphold the trial court's determination that OneWest is a bona fide mortgagee and

Erickson's later-recorded interest in the Spokane property is subject to the reverse

mortgage.

C.    One West is otherwise entitled to foreclose on the Spokane property

      Both parties reassert a number of other issues that the Court of Appeals did

not address because it found one issue-the conservator's authority-dispositive.

We find that the remaining issues are properly resolved in favor of One West.

       1.     Admissibility of the Idaho court order

      First, Erickson challenges the admissibility of the Idaho court order directing

the conservator to enter into the reverse mortgage. OneWest's attorneys were

initially unable to obtain this order because the Idaho proceedings were sealed, then

they later provided a copy of the order that they obtained through their client.

Erickson asserts that the document is inadmissible and improperly authenticated. 10

       We agree with the trial court's determination that "[t]here are justifiable

reasons for not being able to authenticate the Order, as the Idaho court file is sealed.

There are sufficient indicia of authenticity, and the Order is admissible as a business


       10
        More specifically, Erickson asserts,
      There is no indication where this faxed document originated and no one
      purported to authenticate it. The purported document appears to have been
      assembled from multiple faxed transmissions, appears to have been signed
      by an Idaho judge on different pages, contains no signatures that have been
      authenticated, does not show that it was ever entered, and does not show
      that it was ever circulated by the court clerk to anyone.
Answer to One West Bank FSB's Pet. for Review at 14.


                                              28
One West Bank, FSB v. Erickson, No. 91283-1

record. The records are capable of being authenticated." CP at 188. We also reject

Erickson's assertion that One West fails to prove that One West's predecessor relied

on this Idaho court order. As discussed above, the deed of trust and promissory note

were both signed by Bruna, explicitly noting her authority as McKee's conservator

and stating she was entering the transaction "pursuant to court order." CP at 35, 47.

This indicates One West's predecessor knew of the court order when entering into

the reverse mortgage with Bruna.

      2.     Acknowledgment on the deed of trust

      Second, Erickson claims the acknowledgment on the original lender's deed of

trust is statutorily defective and therefore invalid. More specifically, Erickson asserts

that the notary was required to explicitly state that McKee's conservator (who signed

the original deed of trust) actually appeared before the notary public, but he failed

to do so. This claim raises two issues: first, whether a notary is required to

specifically assert that the signer appeared before him; and second, if so, what effect

that deficient acknowledgment has on the deed of trust.

       RCW 64.04.010 requires that conveyances of an interest in property must be

by deed. Deeds must be in writing, signed, and properly acknowledged. RCW

64.04.020. A person certifying the acknowledgment of a document involving real

property must

       recit[ e] in substance that the person . . . known to him or her as, or
       determined by satisfactory evidence to be, the person ... whose name


                                           29
One West Bank, FSB v. Erickson, No. 91283-1

      ... [is] signed to the instrument as executing the same, acknowledged
      before him or her on the date stated in the certificate that he, she, or
      they, executed the same freely and voluntarily.

RCW 64.08.050 (emphasis added). Erickson relies on the emphasized language to

claim that a proper acknowledgment must confirm that the person actually signed

the document in a notary's presence. Erickson also points to RCW 42.44.080(1),

which provides the standards by which notaries public certify a document's

aclmowledgment: '.'In taking an aclmowledgment, a notary public must determine

and certify, either from personallmowledge or from satisfactory evidence, that the

person appearing before the notary public and making the aclmowledgment is the

person whose true signature is on the document." That statute also includes an

example of a statement that is "sufficient" for a notary to certify aclmowledgment,

which includes the phrase: "I certify that I know or have satisfactory evidence that

(name of person) is the person who appeared before me." RCW 42.44.100.

      If we accept Erickson's interpretation that notaries are required to explicitly

state that the person signing a deed appeared before them, the notarization on the

deed of trust at issue fails to meet that requirement. A Spokane notary public signed,

dated, and sealed the deed of trust with the following statement: "I hereby certify

that I lmow or have satisfactory evidence that BILL E. MCKEE by Shelley Bruna,

as his Conservator signed this instrument and aclmowledged it to be the free and

voluntary act for the uses and purposes mentioned in the instrument." CP at 44



                                         30
One West Bank, FSB v. Erickson, No. 91283-1

(boldface omitted). The notarization does not state that Bruna appeared before the

notary when she signed the instrument; it merely states the notary had sufficient

evidence to confirm she signed it. OneWest claims the notary could have had

satisfactory evidence to identify Bruna as the party signing the document without

explicitly stating that Bruna appeared before the notary, but OneWest does not

provide any facts to explain what this evidence might entail.

      But even if the notary were required to explicitly state that Bruna appeared

before him, the deficient acknowledgment does not necessarily render the deed of

trust invalid. OneWest cites to cases involving the long-standing Washington rule

that a defectively acknowledged deed is still valid between the parties to that deed

and their heirs. See, e.g., Ockfen v. Ockfen, 35 Wn.2d 439,441, 213 P.3d 614 (1950)

(unacknowledged deed is good between both grantor/grantee and "between the heirs

of the grantor and the grantee"). Erickson counters that those cases are inapplicable

because she was not an original party to the deed of trust and she did not obtain the

property as McKee's heir.

      Both parties likely state the rule too narrowly. True, many cases state simply

that a defectively acknowledged deed is good between the parties to that deed.

However, this principle is not necessarily limited only to parties to that deed; the rule

is often stated in this manner because the case just involves the parties to the original

deed. See, e.g., Anderson v. Thursday, Inc., 76 Wn.2d 54, 58, 455 P.2d 932 (1969)



                                           31
One West Bank, FSB v. Erickson, No. 91283-1

(the fact that a deed was not acknowledged would "be of no avail between the

parties" even if that claim were properly raised); Bremner v. Shafer, 181 Wash. 376,

383-84, 43 P.2d 27 (1935) (mortgage of community property that husband but not

wife acknowledged is valid "between the parties" where "the question presented

rais[es] an issue only as between the original parties to the transaction").

      The few cases addressing the validity of a defectively acknowledged deed as

to parties who are not the original grantor or grantee find the deed is still valid against

the grantor's successors and those with notice of the deed. See In re Estate ofDeaver,

151 Wash. 454,456,276 P. 296 (1929) (deed lacking notary public's seal "was valid

as between the parties, and valid as to all persons claiming under the grantor, except,

perhaps, a purchaser of the property for a valuable consideration who took without

actual notice of the outstanding deed"); Edson v. Knox, 8 Wash. 642, 646, 36 P. 698

(1894) (unacknowledged deed still conveyed equitable title to grantee; grantor "and

those holding under him" were therefore "estopped from asserting his legal title"

(emphasis added)); Ockfen, 35 Wn.2d at 441 (unacknowledged deed is good both

between grantor/grantee and "where the controversy is between the heirs of the

grantor and the grantee"); Lynch v. Cade, 41 Wash. 216, 219, 83 P. 118 (1905)

("Conceding that the [unacknowledged] mortgage would be void as to the

purchasers without notice on creditors of the mortgagors, it was good as between the




                                            32
One West Bank, FSB v. Erickson, No. 91283-1

parties." (emphasis added)). These cases are consistent with a nationwide trend that

finds defectively acknowledged deeds still bind persons with notice of the deed. 11

       Here, Erickson had notice of the deed of trust encumbering the Spokane

property. It appears that Erickson had actual notice because she signed the Idaho

court order, indicating that she "read and approved" the order directing Bruna to

enter into the reverse mortgage on McKee's property. CP at 111 (capitalization

omitted). In addition, Erickson had record notice based on RCW 65.08.030, which

states that an improperly acknowledged deed that is recorded 12 "shall impart the

same notice to third persons" as if it were properly acknowledged. Because Erickson

was clearly aware of and consented to the deed of trust encumbering the Spokane

property when it was executed, she should not now be permitted to challenge a

technical defect in the notary's certification of acknowledgment. 13

       3.      Holder of the promissory note

       Third, Erickson asserts that OneWest fails to prove that it is the holder of the

promissory note for the reverse mortgage and therefore it has no rights to foreclose.



       11
           "In practically all jurisdictions, statutes provide for the acknowledgment of deeds, usually
only in order that the deed may be recorded under the recording laws, and when this is the case,
an unacknowledged deed is binding between the parties thereto, their heirs and representatives,
and persons having actual notice of the instrument, and will convey at least an equitable title." 23
AM. JUR. 2D Deeds § 88 (citations omitted) (emphasis added).
        12
           A notation on the deed oftmst indicates that it was properly recorded in Spokane County,
the county in which the property is located. CP at 36.
        13
           It is notable that Erickson does not allege any facts involving fraud in Bnma's execution
of the deed of tmst, nor does she claim that the deed was forged. She merely claims a technical
error was made in the notarization process.


                                                  33
One West Bank, FSB v. Erickson, No. 91283-1

Erickson claims that One West does not have legal rights to enforce the reverse

mortgage because it can prove only that it possesses the deed of trust but not the

promissory note. 14

       OneWest provides evidence of successive assignments: Financial Freedom

(the original beneficiary) assigned both the deed of trust and the promissory note to

Mortgage Electronic Registration Systems Inc. (MERS); then MERS assigned the

deed of trust to OneWest. CP at 48-50. Both assignments are recorded. !d. The

document transferring the mortgage interest from MERS to One West does not

mention the promissory note; it assigns only the deed of trust. However, One West's

assistant secretary asserts in a sworn affidavit that One West "is the holder of the

[promissory] Note, and the current beneficiary of record under the Deed of Trust.

[OneWest] maintains control of the loan documents, including the original

promissory Note." CP at 29. One West attached the promissory note to the affidavit.

One West also asserts that its claim of possession is valid under article 3 of the

Uniform Commercial Code, Title 62A RCW, which governs negotiable instruments.

Erickson claims One West's assertions are not sufficient to prove it actually obtained

or maintains physical possession of the promissory note.




       14
        A promissory note represents the debtor's obligation to pay. The deed of trust secures a
mortgage, which is a lien on the property functioning as security for the debtor's obligation to pay.


                                                 34
One West Bank, FSB v. Erickson, No. 91283-1

      But even if we accept Erickson's claim that a party seeking foreclosure must

prove it has both the deed of trust and promissory note to foreclose on a mortgage,

we find that OneWest has met this burden. This case is distinguishable from many

issues involving MERS litigation. This is not a case in which MERS itself is seeking

to foreclose; 15 a separate bank, OneWest, was assigned the deed of trust and is

pursuing foreclosure. Nor is this a case where the promissory note does not exist.

And because OneWest initiated this case as a judicial foreclosure, the additional

protections in the deeds of trust act, chapter 61.24 RCW, at issue in other cases do

not apply. Contra Bain, 175 Wn.2d 83 (involving nonjudicial foreclosures); Brown

v. Dep 't of Commerce, 184 Wn.2d 509, 359 P.3d 771 (2015) (same); see RCW

61.24.030. Here, OneWest has produced the original promissory note. Its assistant

secretary stated in a sworn affidavit that OneWest holds the promissory note and

maintains control of the loan documents. Erickson provides no facts to dispute this

evidence. Therefore, we reject Erickson's claim that OneWest does not hold the

promissory note.




       15
        This issue spurred litigation in a number of jurisdictions. See 2 BAXTER DUNAWAY, THE
LAW OF DISTRESSED REAL ESTATE: FORECLOSURE, WORKOUTS, PROCEDURES § 24:20 (1985).


                                             35
One West Bank, FSB v. Erickson, No. 91283-1

                               IV. CONCLUSION

      We reverse the Court of Appeals and hold that Washington courts are required

to give full faith and credit to the Idaho conservatorship proceedings. One West is

entitled to summary judgment and may proceed with foreclosure.




                                         36
One West Bank, FSB v. Erickson, No. 91283-1




WE CONCUR:




                                      37
One West Bank, FSB v. Maureen Erickson, No. 91283-1
(Gordon McCloud, J., concurring)




                                    No. 91283-1

      GORDON McCLOUD, J. (concurring)-! agree with the majority that

One West Bank FSB is entitled to summary judgment, and, accordingly, I concur. I

write separately, however, because I would not reach the question of whether the

Idaho court orders at issue in this case-the order appointing Shelly Bruna as

conservator and the subsequent order directing her to facilitate a reverse mortgage

of Bill McKee's Washington residence-are entitled to full faith and credit in

Washington.

                                    ANALYSIS

      As the majority notes, the trial court resolved this case without addressing that

constitutional question.   It concluded instead that One West was a bona fide

purchaser for value under Idaho statutory law. Majority at 9. Indeed, neither party

raised the issue of full faith and credit in the trial court-that issue was first

introduced into this case when the Court of Appeals issued its opinion. As the

majority explains, the Court of Appeals agreed with Erickson's arguments about


                                          1
One West Bank, FSB v. Maureen Erickson, No. 91283-1
(Gordon McCloud, J., concurring)


Idaho statutory law: it held that Idaho's probate code confers no authority on

conservators to "encumber a nonresident's property outside of Idaho." Majority at

9-10 (citing One West Bank, FSB v. Erickson, 184 Wn. App. 462,477,337 P.3d 1101

(2014), review granted, 183 Wn.2d 1001, 349 P.3d 857 (2015)). But it did not end

its analysis there. Instead, it went on to state that even if Idaho law did authorize

such an encumbrance, Washington courts "are not bound by a foreign state's order

concerning property here." One West, 184 Wn. App. at 479.

      The majority properly rejects that conclusion because it misconstrues our

precedent: a prior controlling decision of our court has clearly held that a foreign

court order can lawfully affect interests in real property located here, provided the

order does not actually transfer title to that property. Majority at 16-22. Neither of

the orders at issue in this case transfers title; the Court of Appeals therefore erred by

opining that they were unenforceable under our precedent. I concur completely in

this portion of the majority's analysis.

       I disagree, however, with the majority's decision to go on to hold that these

orders are binding on our courts because of the full faith and credit clause. Majority

at 23. Article IV, section 1 of the United States Constitution guarantees full faith




                                            2
One West Bank, FSB v. Maureen Erickson, No. 91283-1
(Gordon McCloud, J., concurring)


and credit to a state court's "final judgment." 1 It does not, however, extend that

guarantee to orders that are interlocutory or subject to modification. 2 The problem

in this case is that we can't tell whether the Idaho orders are final judgments or

interlocutory orders subject to modification. Neither party ever presented the trial

court with any "judgment" from the Idaho case. And, according to the Idaho District

Court of Shoshone County docket sheet filed as part of the record in this case, 3 both

of the orders relevant here (the "Letters of Conservatorship" appointing Bruna as

conservator, Clerk's Papers (CP) at 18, and the "Order Directing [Bruna] to

Facilitate a Reverse Mortgage of Property," CP at 108) issued in the middle of




       1
         Baker v. Gen. Motors Corp., 522 U.S. 222, 231, 118 S. Ct. 657, 139 L. Ed. 2d 580
( 1998) ("A final judgment in one state, if rendered by a court with adjudicatory authority
over the subject matter and persons governed by the judgment, qualifies for recognition
through the land." (quoting U.S. CONST. art. IV,§ 1)); see Durfee v. Duke, 375 U.S. 106,
109-10, 84 S. Ct. 242, 11 L. Ed. 2d 186 (1963) (every state must give the 'judgment" of a
court of another state "at least the res judicata effect which the judgment would be
accorded in the State which rendered it"; "a judgment of a court in one State is conclusive
upon the merits in a court in another State only if the court in the first State had power to
pass on the merits-had jurisdiction, that is, to render the judgment").

       2
         E.g., Padron v. Lopez, 289 Kan. 1089, 1101, 220 P.3d 345 (2009) (full faith and
credit is not required when a decree is interlocutory or subject to modification under the
law of the rendering state); Bard v. Charles R. Myers Ins. Agency, 839 S.W.2d 791, 794
(Tex. 1992) (full faith and credit not required when decree is interlocutory or subject to
modification under the law of the rendering state).

       3
       In re Guardianship & Conservatorship ofMcKee, No. CV -07-120 (First Dist. Ct.,
Shoshone County, Idaho).

                                              3
One West Bank, FSB v. Maureen Erickson, No. 91283-1
(Gordon McCloud, J., concurring)


litigation. CP at 99. It is possible that these orders are "final judgments" 4 for

purposes of full faith and credit analysis. But it is possible that they are not. No

record was ever developed on this question, no argument was made on this "final

judgment" question, and no ruling was entered by the trial court on this question.

The parties simply did not raise the issue of full faith and credit in the trial court.

And because the Court of Appeals based its opinion entirely on what it called

"ancient principles" prohibiting courts from affecting property interests in another

state, OneWest, 184 Wn. App. at 479-80, the parties understandably limited their

briefing on the full faith and credit issue, in this court, to those ostensibly ancient

principles.

      I would keep this court's holding within similar limits. I would reject, as the

majority does, the Court of Appeals' assertion that foreign judgments can never

"affect[]" property interests in our state. !d. But I would clarify that this conclusion

is based on an analysis of the scope of the foreign court's jurisdiction or power to

act, not on the full faith and credit clause-which concerns our own court's duty (or

lack thereof) to honor such foreign court orders under the full faith and credit clause.

       Indeed, I would make clear that the full faith and credit clause is not even

relevant to the question presented here, i.e., whether One West was entitled to rely



       4 Baker,   522 U.S. at 231.
                                           4
One West Bank, FSB v. Maureen Erickson, No. 91283-l
(Gordon McCloud, J., concurring)


on those orders. I would therefore go straight to the issue of whether One West is a

bona fide purchaser. No decision on whether the orders are actually entitled to full

faith and credit is needed to answer that question. Instead, we need only analyze

what constitutes a bona fide purchaser under Idaho law.

      That analysis shows that Idaho statutory law protects One West as a bona fide

mortgagee. The reason is that, as the majority notes, in the trial court the parties

disputed an Idaho conservator's statutory authority to affect a nonresident's out-of-

state property. Majority at 5-8. The trial court ruled in favor of One West on this

issue, rejecting Erickson's arguments that the reverse mortgage exceeded the

jurisdictional limits of Idaho's probate code. See CP at 60 (Mem. in Opp. to Pl.'s

Mot. for Summ. J.) (arguing that OneWest's predecessor should have known that

Idaho statutes do not confer "authority [on] a conservator appointed in Idaho to

transfer real property interests in Washington purportedly belonging to a

Washington resident"). The trial court was correct. Even if we accepted Erickson's

argument that the conservator lacked actual statutory authority to encumber

McKee's out-of-state property because he was not an Idaho resident, Idaho

conservatorship law would protect OneWest's interests as a bona fide mortgagee

anyway. That law specifically protects third parties who deal with conservators,

even in situations when the court may have lacked jurisdiction:


                                          5
One West Bank, FSB v. Maureen Erickson, No. 91283-1
(Gordon McCloud, J., concurring)


      A person who in good faith either assists a conservator or deals with
      him for value in any transaction other than those requiring a court order
      as provided in section 15-5-408 of this Part, is protected as if the
      conservator properly exercised this power. The fact that a person
      knowingly deals with a conservator does not alone require the person
      to inquire into the existence of a power or the propriety of its exercise,
      except that restrictions on powers of conservators which are endorsed
      on letters [of conservatorship] are effective as to third persons .... The
      protection here expressed extends to instances in which some
      procedural irregularity or jurisdictional defect occurred in proceedings
      leading to the issuance of letters [of conservatorship].

IDAHO CODE§ 15-5-423.


                                    CONCLUSION

      I would reverse the Court of Appeals' decision and affirm the trial court's

decision to grant summary judgment to One West on the basis that it is a bona fide

mortgagee under Idaho statutory law. I would not reach the question of whether the

orders at issue in this case are final judgments entitled to full faith and credit. In this

way, I would avoid reaching a constitutional question that was neither argued in the

trial court nor thoroughly briefed on appeal. I therefore respectfully concur.




                                             6
One West Bank, FSB v. Maureen Erickson, No. 91283-1
(Gordon McCloud, J., concurring)




                                         7
