           IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON



DANIEL J. WATSON and KETWARIN                           No. 69352-2-I
ONNUM, husband and wife,
                                                        DIVISION ONE
              Respondents,
                                                        ORDER GRANTING MOTION
      v.                                                TO PUBLISH OPINION


NORTHWEST TRUSTEE SERVICES,
INC.,
                                                                                   C=3



              Petitioner,                                                          IK      —>_.
                                                                                   3S»
                                                                                   zo      o-~
                                                                                           T,^--,..
CITIMORTGAGE, INC.; NATIONAL                                                       CO

LEGAL HELP CENTER, INC.; and                                                               S>~g-„,,
                                                                                   3»>

JOHN DOES 1-10,
                                                                                         ~'cp
              Defendants.



       The respondents, Daniel J. Watson and Ketwarin Onnum, having filed a motion

to publish opinion, and the hearing panel having reconsidered its prior determination

and finding that the opinion will be of precedential value; now, therefore it is hereby:

       ORDERED that the unpublished opinion filed January 21, 2014, shall be

published and printed in the Washington Appellate Reports.

       DATED this Ifl^davof MflrcVl                     .2014.
                                                  For the Court:




                                                                 Judge     lj
                                                                Cr>':U\ HI- Am.? u> niv t
                                                                                  c
                                                                                    uiv i
                                                                 STATE Or ViASHJHGfO!-;

                                                                 2QIUAH21 PH Is 26

     IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON



DANIEL J. WATSON and KETWARIN                        No. 69352-2-
ONNUM, husband and wife,
                                                     DIVISION ONE
                Respondents,
                                                        PUBLISHED OPINION
      v.



NORTHWEST TRUSTEE SERVICES,
INC.,
                                                     FILED: January 21, 2014
                Petitioner,

CITIMORTGAGE, INC.; NATIONAL
LEGAL HELP CENTER, INC.; and
JOHN DOES 1-10,

                Defendants.



       Leach,     C.J.   —    Northwest Trustee    Services   Inc.   (NWTS)    seeks

discretionary review of the superior court's denial of NWTS's motion for

summary dismissal of the claim by Daniel Watson and Ketwarin Onnum (the

Watsons) for damages allegedly caused by NWTS's breach of the foreclosure

fairness act, chapter 61.24 RCW (FFA).      The Watsons cross petition, seeking

review of the superior court's dismissal of their claims under the Consumer

Protection Act, chapter 19.86 RCW (CPA).          Because the trial court committed

probable error and substantially altered the status quo when it dismissed the

Watsons' CPA claims, we grant the Watsons' petition and reverse the trial court's

decision.   Because the trial court did not commit error when it denied NWTS's
No. 69352-2-1 / 2




motion for summary dismissal of the Watsons' FFA claims, we deny NWTS's

petition.

                                  Background

        In April 2003, Daniel Watson and his wife, Ketwarin Onnum, financed the

purchase of a home by executing a promissory note payable to ABN AMRO

Mortgage Inc. and a companion deed of trust.      Through various mergers and

business transactions, CitiMortgage acquired the note and a beneficial interest

under the deed of trust. It later appointed NWTS as successor trustee.

        On February 5, 2011, NWTS sent the Watsons a notice of default.      On

March 22, 2011, NWTS recorded a notice of trustee's sale, with the sale

scheduled for June 24, 2011.       On June 20, 2011, the Watsons filed for

bankruptcy, which caused the trustee sale to be postponed and then canceled.

        On July 22, 2011, the FFA amended the deeds of trust act, chapter 61.24

RCW (DTA).1 Among other changes, the FFA changed the requirements for

preforeclosure notice2 and allowed recovery of damages for violations of the

CPA.3

        On September 22, 2011, the bankruptcy court discharged the Watsons'

debts, including the note. On November 8, 2011, NWTS recorded an amended

notice of trustee's sale, with a new sale date of December 23, 2011.     NWTS

mailed a copy of the notice by certified and first class mail to the Watsons and


        1 RCW61.24.005-.177 (Laws of 2011, ch. 364, § 3).
        2 RCW 61.24.030, .031, .040.
        3 RCW 61.24.135.
No. 69352-2-1 / 3




posted a copy of the notice at the premises. NWTS did not send a new notice of

default or otherwise contact the Watsons before recording this notice.4 A third

party purchased the Watsons' house at a trustee's sale on December 23, 2011.

The trustee's deed recorded by NWTS on January 10, 2012, referred to the

March 22, 2011, notice of trustee's sale, which described the notice of the sale

that was ultimately canceled, but did not mention the notice recorded November

8,2011.

       The Watsons filed a lawsuit against NWTS and CitiMortgage, alleging

wrongful foreclosure and to quiet title. They later amended the complaint to

include additional claims for violation of the CPA. The amended complaint also

added National Legal Help Center as a defendant. NWTS and CitiMortgage filed

an amended joint motion for summary judgment. The court dismissed all claims

against CitiMortage and requested additional briefing on the claims against

NWTS, which the parties provided. The trial court dismissed the Watsons' CPA

claim, but not their claim for wrongful foreclosure for failure to comply with the

FFA.


       Both NWTS and the Watsons seek discretionary review.

                                     Analysis

       Discretionary review is available in the following circumstances:


        4 The Watsons attempted to seek legal help by contacting a California
entity called the "National Legal Help Center," but this entity is apparently not an
attorney or counsel approved by HUD (U.S. Department of Housing and Urban
Development), and contrary to its representations to the Watsons, it did not stop
the foreclosure.
No. 69352-2-1/4


             (1) The superior court has committed an obvious error which
      would render further proceedings useless;

             (2) The superior court has committed probable error and the
      decision of the superior court substantially alters the status quo or
      substantially limits the freedom of a party to act;

            (3) The superior court has so far departed from the accepted
      and usual course of judicial proceedings, or so far sanctioned such
      a departure by an inferior court or administrative agency, as to call
      for review by the appellate court; or

               (4) The superior court has certified, or all the parties to the
      litigation have stipulated, that the order involves a controlling
      question of law as to which there is substantial ground for a
      difference of opinion and that immediate review of the order may
      materially advance the ultimate termination of the litigation.151
       NWTS contends that by denying its motion for summary judgment as to

the wrongful foreclosure claim, the trial court "committed an obvious error which

would render further proceedings useless." The Watsons argue that the court

committed error warranting review by dismissing their CPA claims.

Wrongful Foreclosure under the FFA

       The trial court denied NWTS's motion to dismiss the Watsons' wrongful

foreclosure claims on two alternative grounds. First, the court ruled that the FFA

is a remedial statute and, as such, should be applied retroactively. Alternatively,

the trial court ruled that it did not need to apply the FFA retroactively because the

"precipitating event" triggering the statute's application was not the February

2011 notice of default but the amended notice of trustee's sale, recorded in

November 2011, after the effective date of the FFA.




        RAP 2.3(b).
No. 69352-2-1 / 5




      Courts presume that statutory amendments operate prospectively and

generally disfavor retroactive application because "'individuals should have an

opportunity to know what the law is and to conform their conduct accordingly.'"6
A statute applies retroactively if it changes the legal effect of "'prior facts or

transactions"'7 or "'attaches new legal consequences to events completed before

its enactment.'"8 But a statute does not apply retroactively "merely because it is

applied in a case arising from conduct antedating the statute's enactment or

upsets expectations based in prior law."9 "A statute operates prospectively when
the precipitating event for operation of the statute occurs after enactment, even

when the precipitating event originated in a situation existing prior to

enactment."10

       NWTS argues that under the FFA, the preforeclosure requirements are

linked to the original notice of default sent in February 2011, before the FFA took

effect. NWTS contends that the process that culminated in the trustee's sale was

one continuous transaction. Therefore the trial court erred by applying the July

2011 FFA amendments to the sale process.




       6 Loeffelholz v. Univ. of Wash., 175 Wn.2d 264, 272, 285 P.3d 854 (2012)
(quoting Landqrafv. USI Film Prods., 511 U.S. 244, 265, 114 S. Ct. 1483, 128 L
Ed. 2d 229 (1994)); In re Pers. Restraint of Flint, 174 Wn.2d 539, 546, 277 P.3d
657(2012).
       7 Flint, 174 Wn.2d at 547 (internal quotation marks omitted) (quoting State
v. Varna, 151 Wn.2d 179, 195, 86 P.3d 139 (2004)).
       ""Flint. 174 Wn.2d at 548 (internal quotation marks omitted) (quoting State
v. Pillatos. 159Wn.2d459.471, 150 P.3d 1130 (2007)).
       ^Tandgraf, 511 U.S. at 269 (citation omitted).
       10 In re Estate of Burns, 131 Wn.2d 104, 110-11, 928 P.2d 1094 (1997).
No. 69352-2-1 / 6




       Because the DTA eliminates many protections enjoyed by borrowers

under judicial foreclosures, "lenders must strictly comply with the statutes and

courts must strictly construe the statutes in the borrower's favor."11 Under the

FFA it "shall be requisite to a trustee's sale" that a written notice of default

containing specific information set forth in the statute first be transmitted by the

beneficiary or the trustee to the borrower.12 A trustee, beneficiary, or authorized

agent may not issue this notice of default until 30 days after satisfying certain due

diligence requirements.13 The beneficiary or agent first must send a letter that

includes information such as the borrower's right to meet with a HUD-approved

housing counselor or attorney who can help with mediation, assist in arranging a

meeting with the lender, or work toward a                  resolution such as a   loan

modification.14     This "Pre-Foreclosure Options Letter" or a "Notice of Pre-

Foreclosure Options" must provide toll-free numbers to help borrowers find HUD-

approved housing counselors or civil legal aid resources.15

       Where the filing of a bankruptcy court petition has stayed a trustee's sale,

the trustee may set and give notice of a new sale date not less than 45 days after

the date of the bankruptcy court order permitting the sale.16 RCW 61.24.130(5)

through (6) allow a trustee's sale "on any date to which such sale has been


       11 Albice v. Premier Mortq. Servs. of Wash., Inc., 174 Wn.2d 560, 567, 276
P.3d 1277 (2012).
       12 RCW 61.24.030(8).
       13 RCW 61.24.031 (1)(a), (5).
       14 RCW 61.24.031 (1)(c)(iii), (iv), (f), (2)-(4).
       15RCW61.24.031(1)(c)(ii).
       16 RCW 61.24.130(4).
No. 69352-2-1 / 7




properly continued in accordance with RCW 61.24.040(6)." This statute allows a

trustee to continue the sale for a period or periods not exceeding a total of 120

days.17

       NWTS claims its original March 22, 2011, notice of trustee's sale fulfilled

its obligations under the DTA. But this notice described a sale scheduled for

June 24, 2011. NWTS first continued and ultimately canceled this sale. RCW

61.24.040(6) allowed continuance of the June 24, 2011, sale date for no more

than 120 days, or until October 22, 2011.18 After that date, the DTA required a
new notice. Therefore, although NWTS labeled its second notice an "amended"

notice of trustee's sale, this notice necessarily scheduled a new sale. Because

NWTS       recorded   the   "amended"   notice   in   November   2011,   the   notice

requirements of the FFA applied.

          Because NWTS failed to comply with the FFA's notice requirements

before recording its November 2011 notice of trustee's sale, the Watsons have

demonstrated issues of material fact regarding the lawfulness of NWTS's

nonjudicial sale of the Watsons' property. NWTS has failed to establish grounds

for discretionary review. We dismiss its petition for review.

Violation of the CPA

          We next address the Watsons' petition for review. Because the trial court

committed probable error and substantially altered the status quo when it


          17 RCW 61.24.040(6).
      18 See Rouse v. Wells Fargo Bank, N.A.. No. C13-5706, 2013 WL
5488817, at *2 (W.D. Wash. Oct. 2, 2013).
No. 69352-2-1 / 8




dismissed the Watsons' CPA claims, we grant the Watsons' petition and reverse

the trial court's dismissal of this claim.


          The FFA states in a section added in 2011,

          It is an unfair or deceptive act in trade or commerce and an unfair
          method of competition in violation of the consumer protection act,
          chapter 19.86 RCW, for any person or entity to: (a) Violate the duty
          of good faith under RCW 61.24.163; (b) fail to comply with the
          requirements of RCW 61.24.174; or (c) fail to initiate contact with a
          borrower and exercise due diligence as required under RCW
          61.24.031.l19]

          Relying on its retroactivity analysis, the trial court ruled that "creation of a

new cause of action (a per se violation of the Consumer Protection Act) affects a

substantive right and therefore the FFA is not retroactive with respect to the

Consumer Protection Act claim." Because we conclude that the FFA applied to

NWTS's November 2011 notice, we also conclude that the FFA provisions

addressing the CPA apply.              The trial court erred and substantially altered the

status quo when it dismissed the Watsons' CPA claims.                   We reverse the trial

court's        dismissal   of   the   Watsons'   CPA     claims   and   remand   for   further


proceedings.

                                            Conclusion


          Because the trial court did not commit error when it denied NWTS's

motion for summary dismissal of the Watsons' FFA claims, we deny NWTS's

petition.       Because the trial court committed probable error and substantially

altered the status quo when it dismissed the Watsons' CPA claims, we grant the


          19
               RCW 61.24.135(2) (Laws of 2011, ch. 58, §14).
No. 69352-2-1 / 9




Watsons' petition, reverse the trial court's dismissal of their CPA claims, and

remand for further proceedings consistent with this opinion.



                                                     /^^^, C .
WE CONCUR:




  Sx>te/>
    fi
