                                                     2013 au;j -a h.'i S: ^7
                                                          *!!'"' -£i




      IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

MARION RUCKER and APRIL                          DIVISION ONE
MILLER and CARL MILLER, as
husband and wife and the marital                 No. 67770-5-1
community thereof,

             Appellant,                          UNPUBLISHED OPINION




NOVASTAR MORTGAGE, INC., and
QUALITY LOAN SERVICING OF
WASHINGTON,

              Respondent.                        FILED: August 5, 2013


       Dwyer, J. — Marion Rucker and April Miller appeal from a summary

judgment order dismissing their claims under the Washington deeds of trust act,

chapter 61.24 RCW (DTA). They contend that genuine issues of material fact

exist regarding whether Rucker's property was actually sold at a trustee's sale
and that, accordingly, summary judgment in favor of NovaStar Mortgage, Inc.—

the winning bidder at the disputed trustee's sale—was improperly granted. They
further contend that, even if the sale did occur, it was invalid because the trustee,

Quality Loan Service Corporation of Washington (QLS), was not properly
appointed by an eligible beneficiary prior to the sale taking place. Because there
are genuine issues of material fact regarding QLS's authority to conduct a valid
trustee's sale, we reverse the trial court's summary judgment order and remand

for further proceedings.
No. 67770-5-1/2




        In early 2006, April Miller and her husband, Carl Miller, were seeking to

purchase a home. In February, Carl1 signed a purchase and sale agreement to
acquire a residence in Woodinville for $468,000. The couple asked April's father,

Marion Rucker, to assist them with the purchase. Rucker agreed.

        Rucker, who resided in California, was unable to travel to Washington to

sign the loan documents. Accordingly, April asked her sister, Micaela, ifshe

would sign the necessary documents on their father's behalf. Micaela agreed.

April thereafter arranged for Rucker to sign a durable power of attorney granting

to Micaela specific powers to buy, acquire, and do all acts necessary to complete

the purchase and sale of the property.2
        On March 23, 2006, Micaela met with an escrow agent to complete the

transaction. An addendum to the purchase and sale agreement assigned the

contract from Carl to Rucker. The purchase price of the property was satisfied by

two loans issued by NovaStar Mortgage, Inc. The promissory note for the first

position loan, in the amount of $374,400, listed Rucker as the borrower and
NovaStar as the lender. The promissory note for the second position loan, in the

amount of $93,600, also named Rucker as the borrower and NovaStar as the

lender.

          Each note was secured by a deed of trust. Both deeds of trust listed

          11n order to avoid confusion, April Miller and Carl Miller are referred to by their first
names throughout this opinion. April's sister, Micaela Rucker, is also referred to by herfirst
name.
          2Rucker signed the power of attorney on March 24, 2006, one day after the loan
documents were signed by Micaela.

                                                   -2-
No. 67770-5-1/3



Rucker as the grantor and both NovaStar and Mortgage Electronic Registration

Systems, Inc. (MERS) as "grantees." Quality Loan Services, located in San
Diego, California, was named as the trustee. NovaStar was additionally listed as
the lender, and MERS was additionally listed as the beneficiary, acting as the

"nominee" of NovaStar and NovaStar's "successors and assigns." These

documents were recorded on March 24, 2006.3
        April and Carl thereafter moved into the house on the Woodinville
property. Micaela also moved into the residence and resided there for several
months. Rucker began to make monthly payments on the loans.

        On June 15, 2006, both of Rucker's loans were conveyed by NovaStar to

JPMorgan Chase Bank and J.P. Morgan Trust Company. The loans were
securitized into the NovaStar Mortgage Funding Trust, Series 2006-2, NFI 2006-
2, Group II (Funding Trust). JPMorgan Chase and J.P. Morgan Trust served as
"co-trustees" of the Funding Trust.

         Pursuant to a "pooling and servicing agreement," NovaStar retained
responsibility for servicing Rucker's loans. The agreement stipulated that
NovaStar's authority as servicer included the power to

         effectuate foreclosure or other conversion of the ownership of the
         Mortgaged Property securing a related Mortgage Loan, including
         the employment ofattorneys, the institution of legal proceedings,
         the collection of deficiency judgments, the acceptance of
         compromise proposals and any other matter pertaining to a
         delinquent Mortgage Loan.

          3Micaela also signed, on behalf of Rucker, occupancy and financial affidavits, borrower's
certifications, and a Housing and Urban Development settlement statement. In addition, Rucker's
wife, Annette Rucker, later executed a quitclaim deed, relinquishing her interest in the Woodinville
 property.
No. 67770-5-1/4




In addition, the agreement specified that NovaStar was authorized to "exercise

this power in its own name." The relationship of NovaStar to JPMorgan Chase

and J.P. Morgan Trust was "intended by the parties to be that of an independent

contractor and not that of a joint venturer, partner or agent."

       In September 2006, Rucker ceased to make payments on the loans, and a
nonjudicial foreclosure action was initiated on his second position loan. On
December 6, 2006, NovaStar, acting as "beneficiary," executed an "Appointment

of Successor Trustee" appointing QLS as trustee.4 This document was recorded
on December 20, 2006.

       On December 8, 2006, a notice of default was sent by QLS to the

Woodinville residence. The notice was also posted on the property. The notice

stated that $5,053.04 must be paid to NovaStar in order to cure the default. QLS
stated that it was acting as "Agent for NOVASTAR MORTGAGE INC., the

Beneficiary."

       On March 16, 2007, MERS executed an "Assignment of Deed ofTrust"
purporting to transfer the beneficial interest in the deed of trust to NovaStar. This
document was recorded on March 28, 2007.

       On March 23, 2007, a notice oftrustee's sale was issued by QLS. This
document was mailed to the Woodinville residence, posted on the property, and
published on May 29, 2007 and June 19, 2007. The notice stated that a trustee's
sale would be held by QLS at the main entrance of the King County

        4QLS, a corporation formed under Washington law, is a different entity than the original
trustee, Quality Loan Services.
No. 67770-5-1/5



Administration building on June 29, 2007. The document stated that in order to

cure the default, $8,526.44 must be paid to "NOVASTAR MORTGAGE, INC., the

Beneficiary of your Deed of Trust and owner of the obligation secured thereby."

The notice further explained that a lawsuit could be brought in order to restrain

the sale and that "[fjailure to bring such a lawsuit may result in a waiver of any

proper grounds for invalidating the Trustee's sale."5
       April thereafter contacted both QLS and NovaStar regarding the upcoming

trustee's sale. She would later testify that she spoke to Lysette Vargas at QLS.

April stated that Vargas told her that due to uncertainty relating to the origination

of the loans, the sale would be postponed.

       Nevertheless, on June 29, 2007, the trustee's sale was held as scheduled.

Jake Patterson conducted the sale. The property was sold to NovaStar for the

"amount of the opening bid, $106,852.95."6 QLS thereafter issued a trustee's
deed to NovaStar, conveying its interest in the Woodinville property.

       On May 20, 2008, NovaStar filed an unlawful detainer action seeking to

evict April and Carl from the Woodinville property. A writ of restitution was

granted to NovaStar on October 8, 2008.

        Rucker and the Millers thereafter filed a lawsuit against NovaStar and QLS

seeking to quiet title, invalidate the trustee's deed, and restrain execution of the




        5 The notice of trustee's sale was recorded on March 28, 2007.
        6April and Carl also went to King County Administration building on the day of the
scheduled sale. Each would later testify that although they heard many properties being called,
they did not hear an announcement of the sale of the Woodinville property.
No. 67770-5-1/6



writ of restitution.7 On November 18, 2008, the trial court granted a preliminary

injunction prohibiting NovaStar from executing on the writ of restitution.

       Numerous procedural delays followed. April and Rucker retained and

then terminated the services of several different attorneys and law firms during

the course ofthe litigation.8 Rucker filed for Chapter 13 Bankruptcy on two
occasions during the proceedings, leading to stays of the state court

proceedings. The writ of restitution expired and was reissued several times.

       Then, on July 16, 2010, the trustee's deed—granted by QLS to NovaStar

at the trustee's sale three years before—was amended and rerecorded "upon

sale to correct the vesting." The Bank of New York Mellon—as "Successor

Trustee under the NovaStar Mortgage Funding Trust, Series 2006-2"—was

substituted for NovaStar as the grantee of the trustee's deed.9
        Both parties thereafter moved for summary judgment. On September22,
2011, the trial court entered an order granting NovaStar's motion for summary

judgment and denying the summary judgment motion of Rucker and April. The
court ordered that NovaStar was entitled to immediate possession of the

Woodinville property and to reissuance of a writ of restitution.




        7On March 21, 2011, the trial court entered "a stipulation and order" permitting QLS to
cease participation in the litigation. Theorder stipulated that Rucker and April would seek no
damages against QLS, but that QLS would be bound by any order orjudgment issued by the trial
court with regard to the Woodinville property.
       8The attorneys and law firms that have represented Rucker and the Millers include: (1)
Clausen Law Firm; (2) Joseph Rockne; (3) W. Dan Nelson; (4) Diane B. Templin; (5) Betts
Patterson Mines; (6) Marja Starczewski; and (7) Jason Anderson.
        9 The record does not reflect on what date the Bank of New York Mellon succeeded
JPMorgan Chase and J.P. Morgan Trust as the trustee ofthe Funding Trust.

                                                 -6-
No. 67770-5-1/7



       Rucker and April appeal. 10



        Rucker and April first contend that the trial court erred by granting

summary judgment to NovaStar because, they contend, there are genuine issues

of material fact regarding whether a trustee's sale actually occurred. We

disagree.

        In reviewing an order of summary judgment, we engage in the same

inquiry as the trial court. Lvbbert v. Grant County. 141 Wn.2d 29, 34, 1 P.3d

1124 (2000). The facts and all reasonable inferences therefrom must be viewed

in the light most favorable to the nonmoving party. Lvbbert. 141 Wn.2d at 34.

Summary judgment is proper where there are no genuine issues of material fact

and the moving party is entitled to judgment as a matter of law. Lvbbert. 141

Wn.2d at 34. Mere allegations or conclusory statements of facts unsupported by

evidence are not sufficient to establish a genuine issue. Baldwin v. Sisters of

Providence in Wash.. Inc.. 112 Wn.2d 127, 132, 769 P.2d 298 (1989). Nor may

the nonmoving party rely on "speculation, argumentative assertions that

unresolved factual issues remain, or in having its affidavits considered at face

value." Seven Gables Corp. v. MGM/UA Entm't Co.. 106 Wn.2d 1, 13, 721 P.2d 1

(1986). Although normally leftfor the trial process, questions of fact may be

treated as matters of law when reasonable minds could reach only one



         10 In its motion for summaryjudgment, NovaStar stated that April had filed for dissolution
of her marriage to Carl and that Carl no longer resided at the Woodinville property. Accordingly,
NovaStar requested that Carl be dismissed from the lawsuit. Although the trial court's disposition
of that issue is not disclosed by the parties, only Ruckerand April are represented in this appeal.
No. 67770-5-1/8



conclusion. Colo. Structures. Inc.. v. Blue Mountain Plaza. LLC. 159 Wn. App.

654, 661, 246 P.3d 835 (2011).

      The DTA governs the procedures for nonjudicial foreclosure in

Washington. See 18 William B. Stoebuck & John W. Weaver, Washington

Practice: Real Estate: Transactions § 20.1, at 403 (2d ed. 2004). A deed of

trust differs from a standard mortgage because it involves not only a lender and a

borrower, but also a third party called a trustee. See Bain v. Metro. Mortq. Grp..

Inc.. 175 Wn.2d 83, 92-93, 285 P.3d 34 (2012). If a borrower defaults on the

loan, the trustee may conduct a nonjudicial foreclosure sale. Such sales must

occur in a "designated public place within the county where the property is

located." RCW 61.24.040(5). Either the trustee or its authorized agent must "sell

the property at public auction to the highest bidder." RCW 61.24.040(4). The

purchaser at the trustee's sale is "entitled to possession of the property on the

twentieth day following the sale." RCW 61.24.060(1).

       Here, as Rucker and April correctly point out, NovaStar's entitlement to

Rucker's property depends upon the existence of the trustee's sale. NovaStar

was the winning bidder at the sale, acquiring title to Rucker's propertythrough

conveyance of a trustee's deed. If no trustee's sale in fact took place, then

NovaStar never took title to the property, was not entitled to possession following

the sale, and, accordingly, has no right to enforce the writ of restitution.

       However, there is no genuine issue of material fact with regard the

existence of the sale. The foreclosure sale was scheduled for 10:00 a.m. on

June 29, 2007. The notice of trustee's sale stated that the sale would be

                                         -8-
No. 67770-5-1/9



conducted at the main entrance of the King County Administration building.

Patterson, the authorized agent of QLS charged with conducting the sale,

testified that the sale went forward as scheduled:

       I conducted the Sale on June 29, 2007, at 10 a.m. at the main
       entrance to the Administration Building, 500 4th Avenue, Seattle,
       WA.... I did not call a postponement of the Sale; and the property
       was sold back to the beneficiary for the amount of the opening bid,
       $106,852.95.

Patterson submitted several examples of a "certificate of sale" in which a

property had been sold back to the beneficiary at a trustee's sale. The document

pertaining to the sale of the Woodinville property was identical to these

certificates of sale.11

       In contrast to this affirmative evidence of the sale, the testimony of April

and Carl constitutes mere speculation. April stated in her declaration that an

employee of QLS told her that the sale would be postponed. Nevertheless, she

and her husband decided to attend the sale because she was "still concerned

that a sale might take place." April explained that upon arriving at the King

County Administration building at the appointed time, she spoke to several

persons about the sale. She stated: "No one we spoke with had any information

about the property or the sale. We stayed in the sale area for some time after

10:00 a.m. We heard many properties being called. No one called my father's

property." Similarly, Carl stated in his declaration that "[w]e heard many

properties being called. No one called my father in law's property."

        11 Patterson also submitted examples of documents generated when a foreclosure sale is
either postponed or cancelled. The certificate of sale for the Woodinville property did not
resemble these documents.
No. 67770-5-1/10



        Neither Carl nor April, however, offered any evidence identifying with

whom they spoke at the trustee's sale.12 Patterson specifically testified that he
did not "tell anyone that the sale had been cancelled or postponed." As

Patterson explained, "[fjoreclosure sales are literally organized mayhem; there

are numerous criers, crying any number of properties at once. Unless an

individual knew which caller would be calling a particular property, it would be

practically impossible to ascertain which properties were called or postponed."

Accordingly, the fact that April and Carl did not hear Rucker's property being

called does not indicate that no sale took place.

        Similarly, April's testimony that an employee of QLS told her that the

property would not be sold is not evidence that no sale occurred. It is true that

ordinarily such a statement by a QLS employee could give rise to an inference

that the sale had not taken place. Here, however, it is undisputed that the sale

was conducted, not by QLS, but by North West Legal Support, Inc., the

authorized agent of QLS charged with selling the property at foreclosure.

Accordingly, the employee at QLS would not have had personal knowledge of
the sale. Moreover, in this case, the person who actually conducted the sale

testified that the sale took place as scheduled. Patterson, "acting as an

independent contractorfor North West Legal Support," stated in his affidavit that


        12 April's memory regarding the day ofthe sale was hazy. At the hearing on Rucker's
motion for a preliminary injunction, April was unable to describe the location of the King County
Administration building or to indicate where in the building the sale had taken place. By way of
explanation, she told the court: "I'm sick, Your Honor, and I'm on medication so—I have a virus
and I have cancer, so I'm a little sick today. I barely made it here."


                                                  10-
No. 67770-5-1/11



the Woodinville property was sold to NovaStar at the trustee's sale. This

testimony was supported by additional documentation evidencing the sale.

      Given the evidence presented, reasonable minds could conclude only that

Rucker's property was sold at the trustee's sale. See Colorado Structures. 159

Wn. App. at 661. The evidence presented by Rucker and April was not

inconsistent with a sale taking place. The trial court did not err by granting

summary judgment with regard to this issue.

                                         Ill

       Rucker and April next contend that the trustee's sale is invalid because

NovaStar had no authority to appoint QLS as successor trustee. This is so, they

assert, because NovaStar was not the holder of Rucker's promissory note at the
time that NovaStar executed the appointment. Accordingly, they reason,

because QLS was not statutorily authorized to conduct a trustee's sale, the sale
of theWoodinville property must be vacated. We agree that the trial court erred
by dismissing this claim on summary judgment.
       A nonjudicial foreclosure sale must be conducted by a "trustee or its
authorized agent." Former RCW 61.24.040(4) (1998). The trustee may be
named in the deed of trust or be replaced by the "beneficiary." Former RCW

61.24.010(2) (1998). The "beneficiary" is defined as "the holder of the instrument
or document evidencing the obligations secured by the deed oftrust." Former
RCW 61.24.005(2) (1998). After the appointment is properly recorded, the
successor trustee is "vested with all powers of an original trustee." Former RCW

61.24.010(2) (1998).

                                        -11 -
No. 67770-5-1/12



      Because the DTA dispenses with many protections commonly enjoyed by

borrowers, "lenders must strictly comply with the statutes, and courts must strictly

construe the statutes in the borrower's favor." Amresco Independence Funding.

Inc. v. SPS Props.. LLC. 129 Wn. App. 532, 537, 119 P.3d 884 (2005).

Applying these principles, our Supreme Court has explained that "only the actual

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

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

foreclosure on real property." Bain. 175 Wn.2d at 89. "[Wjhen an unlawful

beneficiary appoints a successor trustee, the putative trustee lacks the legal
authority to record and serve a notice oftrustee's sale." Walker v. Quality Loan
Serv. Corp.. No. 65975-8-I, slip op. at 7 (Wash. App. Aug. _, 2013). Such

actions by the improperly appointed trustee, we have explained, constitute
"material violations of the DTA." Walker. No. 65975-8-I, slip op. at 10.

       This, of course, is precisely the defect in the foreclosure proceedings that

Rucker and April assert occurred in this case. At the time that NovaStar
appointed QLS as successor trustee, it did not hold the promissory note, having
already conveyed the note to JPMorgan Chase and J.P. Morgan Trust as co
trustees ofthe Funding Trust. Accordingly, Rucker and April assert, NovaStar
was not a proper beneficiary underthe DTA. Because NovaStar had no "power
to appoint a trustee to proceed with a nonjudicial foreclosure," Bain. 175 Wn.2d
at 89, the company could not lawfully appoint QLS to foreclose on Rucker's
property. And, because QLS was not a proper successor trustee vested with the
power to conduct a nonjudicial foreclosure sale, the subsequent sale of the
                                        -12-
No. 67770-5-1/13



property was improper.

       NovaStar concedes that it did not hold the promissory note at the time that

it appointed QLS as successor trustee. Instead, NovaStar contends that the

pooling and servicing agreement—setting forth the company's duties as the

servicer of Rucker's loans—expressly authorized NovaStar to commence all acts

necessary for foreclosure in its own name. In essence, the company argues that

it was entitled to act as an agent for the true beneficiary.

       As NovaStar correctly points out, in Bain, our Supreme Court explained

that a note holder may utilize agents under the DTA. 175 Wn.2d at 106

("[Njothing in this opinion should be construed to suggest an agent cannot

represent the holder of a note. Washington law, and the deed of trust act itself,

approves of the use of agents."). However, the court continued, "'a prerequisite
of an agency is control of the agent by the principal.'" Bain. 175 Wn.2d at 107

(quoting Moss v. Vadman. 77 Wn.2d 396, 402, 463 P.2d 159 (1969)). "[Ajgency

requires a specific principal that is accountable for the acts of its agent." Bain.

175 Wn.2d at 107. Accordingly, where an entity fails to identify a lawful principal

who controls its actions, it has not established that it is an agent for purposes of

the DTA. Bain, 175 Wn.2d at 107.

       Here, NovaStar's agreement with JPMorgan Chase and J.P. Morgan

Trust—the apparent holders of the note at the time QLS was appointed

successor trustee—specified that NovaStar's authority as loan servicer included

all powers necessary to "effectuate foreclosure or other conversion of the

ownership of the Mortgaged Property securing a related Mortgage Loan."

                                         -13-
No. 67770-5-1/14



NovaStar is correct that the agreement expressly permitted the company to

"exercise this power in its own name." However, contrary to NovaStar's

assertion that it acted only as an agent, the agreement specified that NovaStar's

relationship to JPMorgan Chase and J.P. Morgan Trust was "intended by the

parties to be that of an independent contractor and not that of a joint venturer,

partner or agent." (Emphasis added.)

        The language of this agreement cannot be reasonably construed to

indicate that NovaStar was acting as the agent of the true beneficiary. Instead,

the agreement appears to give unlimited power to NovaStar to pursue

foreclosure actions. There is no suggestion in the agreement that any entity was

"accountable for the acts of [NovaStar]." Bain, 175 Wn.2d at 107. Indeed, an

inference arises that NovaStar acted without direction from any lawful principal.

Because the evidence does not establish that NovaStar was acting as the agent

of JPMorgan Chase and J.P. Morgan Trust—the apparent beneficiaries under
Rucker's deed of trust—it may well be that NovaStar had no statutory authority to

appoint QLS as successor trustee. If this proves true at trial, then QLS had no
authority to conduct a trustee's sale of Rucker's property and the foreclosure
proceedings were contrary to the DTA. Walker. No. 65975-8-I, slip op. at 10.
        Rucker and April do not seek damages based upon this alleged DTA
violation. Instead, they contend only that the foreclosure sale must be vacated.
Accordingly, we must determine whether vacation ofa sale is an available
remedy where a trustee is not properly appointed prior to conducting a trustee's
sale.

                                        -14-
No. 67770-5-1/15



       In two recent cases, our Supreme Court has explained that the vacation of

a foreclosure sale is required where a trustee has conducted the sale without

statutory authority. In Schroeder v. Excelsior Management Group. LLC. 177

Wn.2d 94, 297 P.3d 677 (2013), a property was sold at a trustee's sale despite

evidence that the land was used primarily for agriculture. The court explained

that the DTA's express requirement that such land be foreclosed judicially cannot

be waived contractually. Schroeder. 177 Wn.2d at 107, 112. Moreover, "[a]

trustee in a nonjudicial foreclosure may not exceed the authority vested by that

statute." Schroeder. 177 Wn.2d at 112. Accordingly, the court directed that "the

trial court must hold a hearing to determine whether the property was primarily

agricultural at relevant times; if it was, the nonjudicial foreclosure sale shall be
vacated." Schroeder. 177 Wn.2d at 115.

       Similarly, in Albice v. Premier Mortgage Services ofWashington. Inc..174
Wn.2d 560, 276 P.3d 1277 (2012), the trustee had continued the trustee's sale

for 161 days, thus exceeding the 120-day maximum set forth by RCW
61.24.040(6). The court explained that the trustee's failure to act within the
allotted time violated the statute, thus divesting the trustee of statutory authority.

Albice. 174 Wn.2d at 568. Without such authority, the court explained, "any

action taken is invalid." Albice. 174 Wn.2d at 568. Accordingly, the court

remanded to the trial court to "enter an order declaring the sale invalid." Albice,

174Wn.2dat575.

       Here, Rucker and April contend not only that QLS exceeded its statutory

authority, but that QLS was never a proper trustee at all. If the failure of a
                                         -15-
No. 67770-5-1/16



properly-appointed trustee to follow statutory procedures can result in the

vacation of a sale, this remedy is equally appropriate where an entity conducts a

trustee sale in the complete absence of authority. There are genuine issues of

material fact regarding whether QLS conducted the sale of Rucker's property

without such authority. If it is determined at trial that NovaStar was not acting as

the agent of a true beneficiary, then the appointment of QLS was improper, and it

follows that QLS had no statutory authority to conduct the trustee's sale. As in

Schroeder and Albice. in such circumstances, vacation of the sale is a proper

remedy.13
       The trial court erred by granting summary judgment to NovaStar based

upon a determination that the trustee's sale was valid.14 Atrial is required to
determine whether QLS was a properly-appointed successor trustee entitled to

conduct the sale.

                                                IV


        NovaStar contends that even if the trustee's sale was invalid, Rucker and

April waived their right to challenge the sale by failing to bring a presale lawsuit to
restrain the nonjudicial foreclosure. We disagree.

        "Waiver is an equitable principle that can apply to defeat someone's legal

        13 Rucker and April further assert that the note and deed oftrustare void because Rucker
had not yet executed a power ofattorney at the time that Micaela signed these documents on his
behalf. However, even if Micaela signed without properauthority, Rucker clearly ratified
Micaela's signing ofthe note and deed oftrust by subsequently making six months ofpayments
on the loans. Indeed, Ruckertestified that itwas his intentto grant to Micaela the powerto act on
his behalf with respect to"an agreement ofsale, loan application, note, mortgage, [and] deed of
trust regarding the purchase and financing ofthe premises." The trial court did not err by
determining that no genuine issue ofmaterial fact existed with respectto this issue.
       14 Because material issues of fact exist, the trial court did not err by denying the motion of
Rucker and April for summary judgment in their favor.

                                               -16-
No. 67770-5-1/17



rights where the facts support an argument that the party relinquished their rights

by delaying in asserting or failing to assert an otherwise available adequate

remedy." Albice. 174 Wn.2d at 568. Our Supreme Court has explained that in

the foreclosure context, a person may waive his or her postsale claims where the

person: (1) received notice of the right to enjoin the sale, (2) had actual or

constructive knowledge of a defense to foreclosure priorto the sale, and (3)

failed to bring an action to obtain a court order enjoining the sale. Plein v.

Lackey. 149 Wn.2d 214, 227, 67 P.3d 1061 (2003). However, the court has

explained, waiver does not apply to all circumstances or types of postsale
challenges.15 Albice. 174 Wn.2d at 570. Instead, waiver is applicable "only
where it is equitable under the circumstances and where it serves the goals of
the act."16 Albice. 174 Wn.2d at 570. "[I]n determining whether waiver applies,

the second goal—that the nonjudicial foreclosure process should result in .. .
interested parties having an adequate opportunity to prevent wrongful
foreclosure—becomes particularly important." Albice. 174 Wn.2d at 571.

        In Albice. the owners of a residence entered into a forbearance agreement

to cure the default on their loan. 174 Wn.2d at 564. They agreed to tender

monthly payments in order to postpone the nonjudicial foreclosure sale. Jd.
Although each payment was tendered late, the loan servicer nevertheless

        15 "Where applicable, waiver only applies to actions to vacate the sale and not to
damages actions." Klem v. Wash. Mut. Bank. 176 Wn.2d 771, 796, 295 P.3d 1179 (2013). Here,
of course, Rucker and April seek only to vacate the sale.
        16 The DTA is construed to further three basic objectives: "'First, the nonjudicial
foreclosure process should remain efficient and inexpensive. Second, the process should
provide an adequate opportunity for interested parties to prevent wrongful foreclosure. Third, the
process should promote the stability of land titles.'" Schroeder. 177 Wn.2d at 104 (quoting Coxv,
Helenius. 103 Wn.2d 383, 387, 693 P.2d 683 (1985)).

                                                -17-
No. 67770-5-1/18



accepted the payments. ]d. However, when the homeowners tendered their final

payment 17 days late, the loan servicer deemed this to constitute a breach of the

forbearance agreement. Id. Accordingly, the payment was rejected. Id.

Although the forbearance agreement provided that upon breach, a 10-day written

notice would be issued, the homeowners never received such a notice. |d. The

property was thereafter sold at a trustee's sale only six days after the loan

servicer's rejection of the homeowners' final payment. Id.

       Under these circumstances, our Supreme Court concluded that "waiver

cannot be equitably established." Albice. 174 Wn.2d at 571. The court explained

that, during the period that the homeowners were making payments under the
forbearance agreement, they had no reason to seek to restrain the sale because

they reasonably believed that such a sale would not proceed:
       [The homeowners] had no knowledge of theiralleged breach in
       time to restrain the sale. [The homeowners] tendered all payments,
       albeit late, under the Forbearance Agreement. [The loan servicer]
       accepted all of those late payments and permitted [the trustee] to
       continue the sale each time, except for the last. By repeatedly
       accepting the prior late payments, [the loan servicer] created
       expectancy in [the homeowners] that their last late payment would
       also be accepted. [The homeowners] could not have known [the
       loan servicer] would consider their last late payment a breach of the
       agreement, having never done so before. They reasonably
       believed their last payment cured the default. While the
       Forbearance Agreement stated they would receive a 10-daywritten
       notice upon breach, [the homeowners] never received this notice.
       They rightly assumed the sale would be canceled after they
       tendered their last payment.

Albice. 174 Wn.2d at 571-72. Because the loan servicer misled the homeowners

into believing that the sale would not take place—thereby depriving them ofthe
opportunity to prevent an unlawful foreclosure—the court held that the
                                        -18-
No. 67770-5-1/19



homeowners did not waive their rights by failing to bring a presale lawsuit.17
Albice. 174Wn.2dat572.

        Here, there are genuine issues of material fact regarding the reasons for

the decision not to file a lawsuit to restrain the sale. In both the trial court and on

appeal, Rucker and April assert that they reasonably relied upon the

representation of a QLS employee that the sale would not take place. This

employee, however, did not testify and, accordingly, April's statements were the

only evidence that such a representation was made. No written confirmation of

the alleged postponement was presented. Nor is it clear that the failure to

pursue a lawsuit to restrain the sale was entirely prompted by the QLS

employee's representation. April also testified that she did not pursue a

foreclosure sale because she was unaware that as a tenant of the property, she

had any right to challenge the sale.18 For his part, Rucker testified that he had no
personal knowledge that a foreclosure sale was even set to take place.

        Nevertheless, in reviewing a summary judgment order, the evidence must

be viewed in the light most favorable to the nonmoving party. Both Rucker and

April assert that they would have filed a lawsuit had they known that the


        17 The courtfurther explained that its decision would serve to promote the stability of land
titles, the third goal of the DTA. "[T]o ensure trustees strictly comply with the requirements of the
act, courts must be able to review postsale challenges where, like here, the claims are promptly
asserted." Albice, 174 Wn.2d at 572. Enforcing such statutory compliance, the court noted,
"encourages trustees to conduct procedurally sound sales." Albice, 174 Wn.2d at 572. The court
explained that when trustees strictly comply with their legal obligations under the act, "interested
parties will have no claim for postsale relief, thereby promoting stable land titles overall." Albice,
174Wn.2dat572.
        18 Contrary to April's belief, the notice of trustee's sale stated that "[ajnyone having any
objections to this sale on any groundswhatsoever will be afforded an opportunity to be heard as
to those objections if they bring a lawsuit to restrain the sale pursuant to RCW 61.24.130."

                                               -19-
No. 67770-5-1/20



foreclosure sale would go forward. NovaStar points to no evidence indicating

that a QLS employee did not, in fact, represent to April that no sale would take

place. Nor does it argue that a homeowner would not be entitled to rely upon

such a representation. Instead, the corporation points only to evidence

demonstrating that the sale took place as scheduled. Such evidence, however,

is not relevant to the question of reliance.

        Because there are genuine issues of material fact regarding, first, whether

a representation was made and, second, whether Rucker and April reasonably

relied upon that representation in failing to bring a lawsuit to restrain the sale, the

trial court erred by determining on summary judgment that Rucker and April

waived their right to challenge the sale.19
        Reversed.




We concur:




      19 Ruckerand April further contend that there are issues of fact regarding whether
NovaStar was, in fact, the winning bidder at the trustee's sale. Because we determine that a trial
is required, we do not address this remaining contention.

                                              -20-
