Lyons v. US Bank | Washington Supreme Court - Violations of the Consumer Protection Act (CPA)
H/T Karen Pooley
IN THE SUPREME COURT OF THE STATE OF WASHINGTON
WINNIE LYONS, a single person, Appellant, v. U.S. BANK NATIONAL ASSOCIATION, as trustee for Stanwich Mortgage Loan Trust Series 2012-3, by Carrington Mortgage Services, LLC; WELLS FARGO BANK, N.A., a chartered national bank; Wells Fargo Bank, N.A., as serv1cer, Defendants, and NORTHWEST TRUSTEE SERVICES, INC., as trustee, Respondent. Excerpt: Lyons alleges three causes of action against NWTS-one under the DT A, one under the CPA, and one for intentional infliction of emotional distress. All of these claims are supported by the same underlying conduct that Lyons alleges involves a violation of RCW 61.24.030(7) in relation to the beneficiary declaration and a breach of the duty of good faith under RCW 61.24.010(4). The trial court focused on the issue of whether Lyons could bring a claim for damages under the DTA in the absence of a trustee's sale, and there was almost no discussion of the CPA or the intentional infliction of emotional distress claims during argument on the summary judgment motion. Yet, the court granted NWTS' motion on all ofthese claims. We begin by addressing the causes of action under the DT A and the CPA, including Lyons' particular contentions regarding the beneficiary declaration and breach of the duty of good faith. We then address the cause of action for intentional infliction of emotional distress. A. Without a nonjudicial foreclosure sale, a party may not bring a claim for damages under the DT A, but they can bring a claim under the CPA Recently we decided Frias v. Asset Foreclosure Services, Inc., _ Wn.2d _, 334 P.3d 529 (2014). Frias involved two certified questions from the federal district court regarding whether a plaintiff could bring a claim for damages under the DT A or the CPA in the absence of a foreclosure sale and what principles would govern each claim. This court carefully considered the language of the statute, the intended beneficiaries of the statute, the explicit and implicit legislative intent, and the purposes of the statute. The court concluded: We hold that the DTA does not create an independent cause of action for monetary damages based on alleged violations of its provisions where no foreclosure sale has been completed. . . . We further hold that under appropriate factual circumstances, DTA violations may be actionable under the CPA, even where no foreclosure sale has been completed .... [T]he same principles that govern CPA claims generally apply to CPA claims based on alleged DT A violations. 334 P.3d at 531. Without the sale of the property, damages are not recoverable under the DTA, but a CPA claim may be maintained regardless of the status of the property. Frias clearly resolves the first issue in this case. Lyons cannot bring a claim for damages under the DT A in the absence of a sale, but she may bring a claim for similar actions under the CPA. B. There were material issues of fact for trial regarding whether NWTS violated provisions of the DT A, which could be used to support Lyons' CPA claim, so granting summary judgment to NWTS on Lyons' CPA claim was improper A CPA claim is a preexisting statutory cause of action with established elements. Id. at 537. A claim under the CPA based on violations of the DTA must meet the same requirements applicable to any other CPA claim. 3 The availability of redress for wrongs during nonjudicial foreclosure under the CPA is well supported in our case law. Id.; Bain v. Metro. Mortg. Grp., Inc., 175 Wn.2d 83, 119, 285 P.3d 34 (2012) (a plaintiff may bring a claim under the CPA arguing the facts specific to the case); Walker v. Quality Loan Serv. Corp. of Wash., 176 Wn. App. 294, 320, 308 P.3d 716 (2013) (actions taken during the nonjudicial foreclosure process were sufficient to support all five elements of a CPA claim and survive pretrial dismissal); Vawter v. Quality Loan Serv. Corp. of Wash., 707 F. Supp. 2d 1115, 1129-30 (W.D. Wash. 2010) (court discussed the five elements for a CPA claim and considered the factual allegations supporting Vawter's DTA claim to support the CPA claim as well); Klem v. Wash. Mut. Bank, 176 Wn.2d 771, 295 P.3d 1179 (2013) (property was sold in this case, but court discussed action amounting to CPA claims in depth, focusing on acts of defendants, not the fact the property was sold). The absence of a completed sale of the property does not affect the availability of this cause of action. Whether a plaintiff will prevail on a CPA claim is a case by case determination of whether the plaintiff can satisfy the requisite elements. The main question raised by the parties surrounds whether the alleged actions of NWTS amount to unfair or deceptive practices under the CPA. [...]