Aaron & Jaime Reinstra v. Glepco, Llc And Greg & Pamela Hinton ( 2013 )

IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON
GLEPCO, LLC, a Washington limited No. 67934-1-1
liability company; and GREG and
PAMELA HINTON, husband and wife,
DIVISION ONE
c
Respondents, r *
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PUBLISHED OPINION no
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v.
AARON REINSTRA and JAIME, K.O
REINSTRA, husband and wife and
NORTHWEST TRUSTEES SERVICES,
INC.,
Appellants. FILED: July 22. 2013
Spearman, A.C.J. — The underlying case is a quiet title action involving
property purportedly sold at a nonjudicial foreclosure sale. At the sale, the
respondents made a successful bid on the appellants' property, believing, based
on the address and other references in the deed of trust and notice of trustee's
sale, that they were bidding on a three-acre lot with a house on it. After the sale,
however, the buyers discovered that the legal description of the property in those
documents described only the drain field portion of the land. The respondents
brought a quiet title action against the appellants, arguing that the deed oftrust
beneficiary's security interest was in fact on the entire three-acre lot and that the
erroneous legal description should be reformed because it was the result of
No. 67934-1-1/2
scrivener's error or mutual mistake in the deed of trust between the beneficiary
and appellants. The trial court denied the appellants' CR 12(b)(6) motion, which
argued that reformation was unavailable as a matter of law. The court granted
summary judgment in favor of the respondents, ordered reformation of the legal
description in the trustee's deed, and quieted title in the respondents. The
questions on appeal are whether a court in equity may reform the legal
description of real property in conveyance documents in the context of a
nonjudicial foreclosure and, if so, whether the trial court in this case properly
granted summary judgment reforming the legal description based on mutual
mistake or scrivener's error. We hold that a trial court may reform conveyance
documents in this context. We further hold that the trial court properly granted the
trustee's sale buyers' requests for reformation and to quiet title to the disputed
property in their favor.
FACTS
On April 15, 2003, Aaron and Jaime Reinstra ("the Reinstras"), a married
couple, purchased property in Skagit County and received a statutory warranty
deed. The deed conveyed two adjacent lots, "A" ("The east 105 feet of the west
314 feet of the north 418 feet") and "B" ("The west 209 feet of the north 418
feet").1 Clerk's Papers (CP) at 111-12. To develop the property as they wished,
the Reinstras were required by Skagit County ("the County") to make a boundary
line adjustment to combine the two lots into one lot ("combined lot").
1The statutory warranty deed uses the term "parcel" rather than "lot." The parties use the
terms interchangeably.
No. 67934-1-1/3
On October 5, 2005, to complete the joining of the lots, the Reinstras
recorded a quit claim deed, and conveyed to themselves the property described.
The quit claim deed provided a legal description of LotA and then stated:
The herein described property will be combined or aggregated with
the contiguous property to theWest[2] owned by the Grantees. This
boundary adjustment is not for the purposes of creating an
additional building lot.
Id. The County issued a permit for the construction of a single residence and on-
site sanitary system to be built on the combined lot.
In 2006, the Reinstras borrowed $200,000 from Peoples Bank to build the
house on former Lot B. The loan was secured by a deed of trust dated May 4,
2006. The legal description of the land in the deed of trust described the
combined lot. The "assessor's parcel or tax account number" on the deed of trust
is the tax parcel number (P123543) assigned by the Skagit County Assessor to
the combined lot. In late 2006, the Reinstras refinanced and obtained a new loan
from Peoples Bank for $208,500, with the deed oftrust securing that loan also
describing the combined lot. The title policy for both loans refers to tax parcel
number P123543.
Between 2007 and 2008, Peoples Bank sold the Reinstras' loan to GMAC
Bank. On May 19, 2008, the Reinstras refinanced with GMAC, obtaining a loan
for $250,100 secured by a deed of trust. GMAC drew up the refinancing
paperwork and the Reinstras signed it. The Reinstras assumed GMAC had the
same security for the 2008 loan that Peoples Bank had: the combined lot. |dL
2The "contiguous property to the West" referred to Lot B.
3
No. 67934-1-1/4
That deed of trust was recorded with the Skagit County Auditor and granted
GMAC a security interest in the "Property." "Property" is defined as "the property
that is described under... the heading 'Transfer of Rights in the Property.'" CP
at 341. The "Transfer of Rights in the Property" section identifies the address of
the property as 14022 Dodge Valley Road, in La Conner, Washington 98257,
with tax parcel number P123543. CP at 342. The section instructs, "[S]ee
attached legal description." |d. The attached legal description identifies the
Assessor's Parcel Number as P123543 and describes:
The East 105 ft. of the West 314 ft. of the North 418 ft. of the
Northwest quarter of the Northwest quarter of Section 9,
Township 33 North, Range 3 East, W. M. lying South of the
county road running along the North line of said subdivision.
CP at 355. This description includes former Lot A, but not former Lot B.
The Reinstras defaulted on their 2008 loan from GMAC. Northwest
Trustee Services, Inc. recorded a notice of trustee's sale with the Skagit County
Auditor on June 17, 2010. The notice states that the "Property" subject to the
May 19, 2008 deed of trust and described on the first page would be sold on
September 17, 2010. The property is identified as "commonly known as: 14022
Dodge Valley Road, La Conner, WA 98257" with tax parcel number P123543. CP
at 305. The Dodge Valley address is the address for the house on former Lot B.
The first page of the notice of trustee's sale states, "The Tax Parcel ID number
and Abbreviated Legal Description are provided solely to comply with the
recording statutes and are not intended to supplement, amend or supersede the
Property's full legal description provided herein." CP at 305. As in the deed of
No. 67934-1-1/5
trust, the legal description includes only former Lot A, as follows: "The East 105
ft. of the West 314 ft. of the North 418 ft." jU
Before the trustee's sale, Greg and Pamela Hinton, a married couple
(collectively with GLEPCO, LLC,3 "the Hintons"), checked Skagit County
Assessor records, which showed the property at the Dodge Valley Road address
as being three acres—the approximate size of the combined lot—and included a
photograph ofthe house with tax parcel number P123543. The Hintons visited
the property, examined the house and outbuilding, and saw that the three-acre
property was fenced on all sides except the north side abutting the street. No
fences ran through the interior ofthe property. They believed they would be
bidding on the combined lot.
At the trustee's sale, the Hintons made a successful bid of $283,137.51
and paid the trustee at the time of sale. As a result of the sale, the trustee
satisfied the obligation secured by the deed oftrust in the amount of
$278,831.27, recovered its own costs, and deposited the $3,541.24 surplus with
the court on December 28, 2010. The Reinstras moved out of the house 21 days
after the sale.4
The trustee's deed was recorded on September 29, 2010. Like the deed of
trust and notice of trustee's sale, the trustee's deed describes only former Lot A.
3GLEPCO's members are Greg and Pamela Hinton individually.
4The Reinstras claim they moved under pressure from the Hintons. At the hearing on the
Reinstras' CR 12(b)(6) motion, the Hintons' attorney stated that at that time the Hintons were in
possession of the house and had a renter in it. The Reinstras argue that the fact of their moving
outshould notbe considered for purposes ofthe CR 12(b)(6) motion, because the Hintons did
not allege possession of the house in their complaint.
No. 67934-1-1/6
Sometime after the trustee's sale, the Hintons became aware that the legal
description in the deed of trust, notice of trustee's sale, and trustee's deed did not
include former Lot B.
On January 26, 2011, the Hintons filed a complaint to quiet title and for
declaratory relief against the Reinstras.5 They alleged the Reinstras remained
record title holder of former Lot B by mutual mistake or through scrivener's error.
They sought a judgment reforming the trustee's deed and deed of trust and
quieting title to former Lot B in their favor. The Reinstras counterclaimed for
wrongful eviction and sought a judgment quieting title in their favor.
The Reinstras filed a CR 12(b)(6) motion to dismiss, arguing that the
remedy of reformation was barred by the statute offrauds and chapter 61.24
RCW. The trial court denied the motion. After the parties engaged in discovery,
the Hintons filed a summary judgment motion. Following a hearing, the trial court
found there were no disputed issues of material fact and granted summary
judgment on the Hintons' reformation and quiet title claims.
The Reinstras appeal from the order denying their CR 12(b)(6) motion and
the order granting summary judgment to the Hintons.
DISCUSSION
CR 12(b)(6) Ruling
Atrial court's ruling on a CR 12(b)(6) motion is a question of law reviewed
de novo. Cutlery. Phillips Petroleum Co., 124 Wn.2d 749, 755, 881 P.2d 2165The Hintons also sued the trustee who conducted the trustee's sale but this appeal
does not involve the trustee.
No. 67934-1-1/7
(1994). Under CR 12(b)(6), a complaint may be dismissed for failure to state a
claim upon which relief can be granted. "A CR 12(b)(6) motion is properly granted
when it appears from the face of the complaint that the plaintiff would not be
entitled to relief even if he proves all the alleged facts supporting the claim."
Citizens for Rational Shoreline Planning, et. al.. v. Whatcom County. 172Wn.2d
384, 389, 258 P.3d 36 (2011).
It is well settled that instruments subject to the statute of frauds6 may be
reformed where scrivener's error or mutual mistake leads to a deficient description
of land. Berg v. Ting, 125 Wn.2d 544, 553-54, 886 P.2d 564 (1995) (courts may
reform contract where scrivener's error or mutual mistake leads to deficient legal
description of land); Tenco, Inc. v. Manning, 59 Wn.2d 479, 485-86, 368 P.2d 372(1962) (courts may reform defective legal description resulting from mutual
mistake); Geooheoan v. Dever. 30 Wn.2d 877, 888-89, 194 P.2d 397 (1948)
(courts in equity may reform contract to correct scrivener's error or mutual
mistake). Where a legal description of property is inadequate due to scrivener's
error or mutual mistake, a document is not tested for compliance with the statute
offrauds until it is reformed to reflect the parties' intent.7 Halbert v. Forney, 88
6The real estate statute of frauds provides, "Every conveyance of real estate, or any
interest therein, and every contract creating or evidencing any encumbrance upon real estate,
shall be by deed " RCW 64.04.010: see also Martin v. Seiqel. 35Wn.2d 23, 212 P.2d 107(1950) (requiring every contract or agreement involving sale or conveyance of real property to
contain legal description of property, including lot number, block number, addition, city, county,
and state).
7Therefore, we rejectthe Reinstras' argumentthat, because the legal description in the
trustee's deed did not include the disputed land, reformation is precluded by the statute of frauds.
It is undisputed that the trustee's deed complied with the statute offrauds insofar as it related to
former Lot A; the only issue is whether the legal description should be reformed to also include
former Lot B.
No. 67934-1-1/8
Wn. App. 669, 673, 945 P.2d 1137 (1997) (citing Tenco, 59 Wn.2d at 485). Deeds
of trust and trustee's deeds are subject to the statute of frauds.
The Reinstras argue that trial courts are nonetheless precluded from
exercising their equitable powers of reformation if the instrument at issue arises
in the context of a nonjudicial foreclosure sale. Initially, the Reinstras contend the
Hintons lacked standing to bring a quiet title action because they had no "valid
subsisting interest" under RCW 7.28.0108 to former Lot B. We disagree. The
Hintons alleged in their complaint that they had an interest in former Lot B based
on having purchased the property in a trustee's sale, and their quiet title action is
concurrent with their effort to seek reformation of the trustee's deed based on
scrivener's error or mutual mistake. The Reinstras point to no authority
interpreting the statute to preclude the Hintons from asserting a valid subsisting
interest in former Lot B under these circumstances.
The Reinstras next contend the Hintons' failure to read the legal description
in the deed of trust and notice of trustee's sale cannot be excused, citing
Washington Federal Sav. & Loan Ass'n v. Alsager, 165 Wn. App 10, 266 P.3d 905(2011) rev. denied, 173 Wn.2d 1025, 272 P.3d 851 (2012) and Skagit State Bank
v. Rasmussen, 109 Wn.2d 377, 745 P.2d 37 (1987). In Washington Federal, the
court rejected the argument of borrowers that no valid loan agreement had been
8 RCW 7.28.010, the statutory authority for quiet title actions, provides:
Any person having a valid subsisting interest in real property, and a right
to the possession thereof, may recover the same by action in the
superior court ofthe proper county, to be brought against the tenant in
possession; if there is no such tenant, then against the person claiming
the title or some interest therein, and may have judgment in such action
quieting or removing a cloud from plaintiffs title;....
8
No. 67934-1-1/9
formed and they did not breach the agreement because a notary misinformed
them about the terms of the loan and rushed them through the signing process.
Washington Federal. 165 Wn. App. at 12-14. The court refused to excuse the
borrowers from their failure to take the opportunity to read the loan documents. Id.
at 17. Similarly, in Skagit State Bank, a borrower signed loan documents without
reading them and sought to avoid the obligations contained therein on the ground
that the legal effect of the documents was misrepresented to him. Skagit State
Bank, 109 Wn.2d at 378. The court rejected his argument, explaining that the
evidence showed he would have understood the documents had he read them
and that he was not entitled to rely on another person's understanding of the
documents. Jd. at 384-86. These cases are inapposite; in neither was reformation
sought by a trustee's sale buyer based on mutual mistake or scrivener's error in
the legal description of property.
The Reinstras further argue that reformation is contrary to RCW
64.04.020, which requires that "[ejvery deed shall be in writing, signed by the
party bound thereby, and acknowledged by the party before some person
authorized by this act to take acknowledgments of deeds." In connection with
their reliance on this statute, the Reinstras cite Berg. Neither the statute nor Berg
prohibits reformation. The court in Berg, which involved property owners' quiet
title action over an easement across their neighbor's property, acknowledged the
remedy of reformation but noted there was no evidence of mutual mistake or
scrivener's error in that case. Berg. 125 Wn.2d at 553-55.
No. 67934-1-1/10
The Reinstras also contend the Deed of Trust Act ("the Act"), chapter
61.24 RCW, does not give courts authority to look beyond an unambiguous deed
of trust, notice of trustee's sale, and trustee's deed, citing McPherson v. Purdue.
21 Wn. App. 450, 585 P.2d 830 (1978) in support. In McPherson. the deed of
trust at issue conveyed two easements, but the grantor had title to only one of
them. jd. at 451. The trustee knew the easement was not included in the interest
to be foreclosed under the deed of trust but did not disclose this to the buyer. Id.The notices and deed purported to convey both easements but disclaimed all
express or implied warranties. ]d The buyer sued to quiet title and establish a
prescriptive easement. Id at 450. The court relied on the policy underlying
chapter 61.24 RCW and concluded that requiring a trustee to guarantee title or
make disclosures concerning defects of title would add burdens on the lender
and borrower. ]d at 452. The court stated that generally caveat emptor applied to
sales based on foreclosure of deeds of trust, ]d But, unlike here, the plaintiff in
McPherson did not seek reformation or assert mutual mistake or scrivener's error
in the deed of trust.
Next, the Reinstras argue reformation denies their right under RCW
61.24.100(1)9 to be free of deficiency judgment. They contend the court's role
should be limited to determining whether the procedures in the Act have been
followed, citing Udall v. T.D. Escrow Services. Inc.. 159 Wn.2d 903, 911, 154
9RCW 61.24.100(1) provides, "Except to the extent permitted in this section for deeds of
trust securing commercial loans, a deficiency judgment shall not be obtained on the obligations
secured by a deed of trust against any borrower, grantor or guarantor after a trustee's sale under
that deed of trust."
10
No. 67934-1-1/11
P.3d 882, (2007). They contend that ifthe bank had bid at the trustee's sale and
received former Lot A, itwould be barred by RCW 61.24.100(1) from receiving
former Lot B. They note that GMAC had the option under RCW 61.24.100(2)(a)10
to sue on its note and have recourse to their assets, including former Lot B.
Because it did not, it is bound by the trustee's sale. They contend a trustee's sale
buyer should not receive more relief than the lender under the same
circumstances.
This argument is not supported by the cited authority. It is not clear that
RCW 61.24.100(1) would bar the bank from seeking reformation if it had
purchased the property at the trustee's sale. The statute prohibits a deficiency
judgment after a trustee's sale, but it is unclear why reformation—whether sought
by the bank or the Hintons—would equate to a deficiency judgment if the
evidence showed that the property in dispute was subject to the lender's security
interest and should have been incorporated in the legal description to begin with.
Moreover, the Reinstras assume, without explaining why, that the Hintons are
prohibited from doing what the bank may not. Finally, the cited portion of Udall
addressed whether a trustee could withhold the deed from a purchaser after a
nonjudicial foreclosure because of insufficient price. Udall, 159 Wn.2d at 911.
The court concluded that the trustee could not do so "unless the sale itself was
void due to a procedural irregularity that defeated the trustee's authority to sell
10 RCW 61.24.100(2)(a) provides, "Nothing in this chapter precludes an action against
any person liable on the obligations secured by a deed of trust or any guarantor prior to a notice
of trustee's sale being given pursuant to this chapter or after the discontinuance of the trustee's
sale."
11
No. 67934-1-1/12
the property." Jd Butthis is not the issue before us. Udall says nothing about the
issue presented here, whether mutual mistake or scrivener's error can be the
basis for reformation of a deed following a trustee's sale.
The Reinstras also contend the Hintons, as trustee's sale buyers, may not
seek reformation because they were not a party to the 2008 deed of trust. We
disagree. "Standing to assert a claim in equity resides in the party entitled to
equitable relief; it is not dependent on the legal relationship of those parties."
Smith v. Monson, 157 Wn. App. 443, 445, 236 P.3d 991 (2010) (party who
conveyed property to relatives had standing to seek equitable remedy of quiet
title based on equitable mortgage to challenge the relatives' conveyance to third
parties). In Martin v. Walters, 5Wn. App. 602, 490 P.2d 138 (1971), the court
rejected the argument that reformation of an instrument was impermissible
because the original parties to the instrument were not involved in the action:
The successors in interest to the two parties were before the
court and if the original instrument contained, as the court
found that it did, a mutually mistaken description of the
property leased, reformation was a proper remedy.
]d at 604-05. Though these cases do not involve a trustee's sale buyer, as here,
the Hintons are successors in interest to the deed oftrust. They would benefit
from establishment of mutual mistake or scrivener's error in that instrument. The
Reinstras cite no authority holding that reformation can be sought only by the
parties to the contract.
Finally, the Reinstras argue that a party cannot invoke mutual mistake
where it assumes the risk ofthat mistake, citing Denaxas v. Sandstone Court of
12
No. 67934-1-1/13
Bellevue. LLC 148 Wn.2d 654, 667-68, 63 P.3d 125 (2003) and CPL
(Delaware) LLC v. Conlev. 110 Wn. App. 786, 791-92, 40 P.3d 679 (2002). They
contend the Hintons should not be able to invoke mutual mistake or scrivener's
error because a trustee makes no warranties under the Act and the Act allocates
risk to trustee's sale buyers. But those cases refer to the risk at the time a party
enters into an agreement. The Hintons were not a party to the deed of trust and
no risk was assumed by them as part of the creation or signing of that document.
We disagree with the Reinstras that anything in the Act or the cited
authorities precludes a trial court from exercising its equitable power to reform a
legal description in a conveyance instrument because the instrument in question
arises in the context of a nonjudicial foreclosure sale. The Act is silent on
reformation. It is true that under RCW 61.24.040, potential buyers are notified
that "[t]he sale will be made without warranty, express or implied, regarding title,
possession, or encumbrances . . ."11 RCW 61.24.040(1 )(f)- But we do not
understand this statute to preclude reformation where a defect in the legal
description is alleged as the product of scrivener's error or mutual mistake. The
trial court did not err in denying the CR 12(b)(6) motion.
11 Here, the trustee's deed stated, in accordance with the statute:
This conveyance is made without representations or warranties of any kind,
expressed or implied. By recording this Trustee's Deed, Grantee understands,
acknowledges and agrees that the Property was purchased in the context of a
foreclosure, that the trustee made no representations to Grantee concerning the
Property and that the trustee owed no duty to make disclosures to Grantee
concerning the Property, Grantor relying solely upon his/her/their/its own due
diligence investigation before electing to bid for the Property.
CPat310.
13
No. 67934-1-1/14
Summary Judgment
Next we determine whether the trial court, after concluding that
reformation was an available remedy, properly found mutual mistake or
scrivener's error based on the evidence before it and properly granted the
Hinton's motion for summary judgment. We review summary judgment motions
de novo, engaging in the same inquiry as the trial court. Sheikh v. Choe, 156
Wn.2d 441, 447, 128 P.3d 574 (2006). Summary judgment is appropriate if,
viewing the facts and all reasonable inferences therefrom in the light most
favorable to the nonmoving party, there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law. Michael v. Mosouera-
Lacv. 165 Wn.2d 595, 601-02, 200 P.3d 695 (2009); CR 56(c). Summary
judgment is appropriate if reasonable minds could reach but one conclusion from
all the evidence. Clements v. Travelers Indem. Co., 121 Wn.2d 243, 249, 850
P.2d 1298 (1993). The exercise by the superior court of equity discretion is
reviewed under the abuse of discretion standard. Wilhelm v. Beversdorf. 100 Wn.
App. 836, 848-50, 999 P.2d 54 (2000).
The Reinstras point to no specific issues of disputed fact on summary
judgment.12 They argue, instead, that summary judgment was improperly granted
because the deed of trust, notice of trustee's sale, and trustee's deed all describe
former Lot A and not former Lot B. But this is the very genesis of the parties'
12 At the summary judgment hearing below, the trial courtasked the Reinstras whether
there was any evidence that the actual intent of GMAC and the Reinstras was to sell only former
Lot A at the foreclosure sale or evidence that the legal description in the deed of trust was in fact
the intended legal description. The Reinstras acknowledged they did not have evidence directly
on that point. The Reinstras also agreed that there were no disputed issues of fact forwhich trial
was necessary.
14
No. 67934-1-1/15
dispute and does not show that a scrivener's error or mutual mistake was not
made at the time the deed of trust was executed.
Reformation by a court is an equitable remedy that brings a writing that is
materially different from the parties' agreement into conformity with that
agreement. Denaxas. 148 Wn.2d at 669 (citing Akers v. Sinclair. 37 Wn.2d 693,
702, 226 P.2d 225 (1950)). A party seeking reformation must prove the facts
supporting it by clear, cogent, and convincing evidence. Akers, 37 Wn.2d at 703.
A mutual mistake occurs if the parties had the same intentions but their written
agreement does not accurately express their intentions. Snyder v. Peterson. 62
Wn. App. 522, 527, 814 P.2d 1204 (1991). A mistake is a belief not in accord
with the facts. Simonson v. Fendell. 101 Wn.2d 88, 91, 675 P.2d 1218 (1984). "A
scrivener's error occurs when the intention of the parties is identical at the time of
the transaction but the written agreement errs in expressing that intention."
Reynolds v. Farmers Ins. Co.. 90 Wn. App. 880, 885, 960 P.2d 432 (1998). A
court ascertains the parties' intent "'by viewing the contract as a whole, the
subject matter and objective of the contract, all the circumstances surrounding
the making of the contract, the subsequent acts and conduct of the parties to the
contract, and the reasonableness of respective interpretations advocated by the
parties.'" Berg v. Hudesman. 115 Wn.2d 657, 667, 801 P.2d 222 (1990) (quoting
Stenderv. Twin City Foods. Inc.. 82 Wn.2d 250, 254, 510 P.2d 221 (1973)).
To establish either mutual mistake or scrivener's error, it must be shown
that the parties to the instrument possessed the same intentions. Here, the
undisputed evidence establishes that GMAC and the Reinstras, in executing the
15
No. 67934-1-1/16
2008 deed of trust, intended to secure the loan with the combined lot and thus
have the legal description in the deed of trust describe the combined lot. By
2005, a single legal lot had been created so that the Reinstras could build a
house and drain field on the property. The deeds of trust for the 2006 Peoples
Bank loan and the subsequent refinance with Peoples Bank contained a legal
description of the combined lot. The Reinstras' deposition testimony establishes
that when they signed the loan documents for the 2006 Peoples Bank loan and
the 2007 refinance, they correctly assumed that the bank's security interest was
on the combined lot.13 Peoples Bank then sold the Reinstras' loan, with no
change in the legal description of the property, to GMAC in 2007 or 2008.
The change in the legal description arose during the May 2008 refinance
with GMAC.14 There were no discussions, however, between the Reinstras and
GMAC about modifying the legal description or the security from the previous
loan with Peoples Bank. The Reinstras assumed GMAC would have the same
security for the 2008 loan that Peoples Bank had in 2006. While there is no
evidence in the record from GMAC, we can discern no logical reason
whatsoever, nor is any offered, as to why GMAC would have agreed to eliminate
the valuable part of the security with the house on it. We can also discern no
reason why the parties would have agreed that the security on the loan would
only be part of what was a single legal lot. Moreover, all other references to the
13
The testimony of Aaron Reinstra and Jaime Reinstra does not materially differ.
14 The Hintons suggest that the source of the defect in the legal description in the 2008
deed of trust is the 2005 quit claim deed from the Reinstras to themselves, which combines
former Lots A and B but contains a legal description of only former Lot A and was the last "vesting
document" at the time of the 2008 loan.
16
No. 67934-1-1/17
property in the 2008 deed of trust (the street address and tax parcel number)
make it clear that the parties to the deed of trust intended GMAC to have a
security interest in the combined lot.
The undisputed evidence shows the incorrect legal description in the 2008
deed of trust was the result of a mutual mistake. GMAC and the Reinstras
intended to secure the loan with the combined lot. But the legal description did
not accurately describe the entire property subject to the bank's security interest.
Thus, the parties' belief as to what land was described by the legal description
was not in accord with the fact that the legal description actually only covered
former Lot A, not former Lot A and former Lot B. The trial court properly granted
summary judgment on this issue.
The undisputed evidence also shows that the inaccurate legal description
was the result of scrivener's error. The Reinstras point to the lack of evidence
regarding GMAC's document preparation and the scrivener. However, proof of a
fact to be established may be by direct or circumstantial evidence. Lamphiear v.
Skagit Corp.. 6 Wn. App. 350, 356, 493 P.2d 1018(1972); see ajso 6
Washington pattern jury Instructions (WPI) 1.03 (evidence may be direct or
circumstantial, and one is not necessarily more or less valuable than the other).
And here, there is substantial, undisputed circumstantial evidence that the
incorrect legal description was due to a scrivener's error. The parties to the deed
of trust intended GMAC's security interest to include the combined lot. The
Reinstras relied on GMAC to do the paperwork for the 2008 refinance. The legal
description failed to capture that intent. The mistake was adopted by the
17
No. 67934-1-1/18
Reinstras and GMAC when they signed the deed of trust, and was then carried
over into the notice of trustee's sale and trustee's deed. On this issue, because
reasonable minds could reach but one conclusion from the evidence, summary
judgment was properly granted. Clements. 121 Wn.2d at 249.
Finally, as noted, reformation is an equitable remedy reviewed for abuse
of discretion. Wilhelm. 100 Wn. App. at 848-50. The trial court did not abuse its
discretion in determining that the equities weighed in favor of the Hintons. The
Hintons believed they were bidding on the combined property and the Reinstras
believed the trustee's sale was on the combined property.15 If title to former Lot B
is left in the Reinstras, the Hintons' payment to the trustee would satisfy the
Reinstras' obligation to GMAC while the Reinstras would be able to keep the
valuable part of the property with the house and the Hintons would be left with
only the drain field.
It was possible the Reinstras could have been harmed by the defective
legal description in the deed of trust ifother interested bidders, who would have
bid and paid more than what the Hintons did, were dissuaded after having
noticed the defective description. However, the Reinstras do not argue that they
were entitled to additional proceeds from the sale or present other evidence that
they were actually harmed as a result of the defective legal description.16 The
Reinstras present no evidence of a lack of actual competition in bidding on their
15 The Reinstras were not aware of the difference in the legal description between the
2008 GMAC deed of trust and the 2006 Peoples Bank deed of trust until after the trustee's sale.
16 RCW 61.24.080 governs the disposition of the proceedsof a trustee's sale. The
Reinstras do not explain whether there were any other interests in or liens on the property before
they could collect any surplus as provided under subsection (3).
18
No. 67934-1-1/19
property. They provide the affidavit of real estate broker Peter Papadopulos, who
stated that he decided not to participate in the sale because he noticed the
discrepancy in the legal description. But Papadopulos's declaration states only
that after noticing the discrepancy he "chose not to investigate any further." CP at
329. He did not state that he would have bid a specific amount over what the
Hintons offered had he believed former Lot B was included. Moreover, the
Reinstras do not point to evidence contradicting the Hintons' claim that they
made a "full-price" cash offer.17
The trial court correctly determined on summary judgment that the legal
description in the 2008 deed of trust did not express the identical intentions of
GMAC and the Reinstras and was the result of mutual mistake or scrivener's
error. It properly determined that reformation was appropriate and ordered the
legal description in the trustee's deed reformed to include former Lot B. Finally,
after the trial court properly granted reformation of the trustee's deed to include
former Lot B, there were no remaining disputed issues for purposes of the quiet
title action. The trial court therefore properly granted summary judgment on that
issue.
Attorney's Fees on Appeal
The Hintons seek attorney's fees on appeal based on the following
provision in the 2008 deed of trust:
17 While the trustee's sale price was less than the assessor's value of $559,500 for tax
year 2010, there is no evidence in the record that any other bidder would have offered more than
the Hintons did at the foreclosure sale.
19
No. 67934-1-1/20
Attorneys' Fees. Lender shall be entitled to recover its reasonable
attorneys' fees and costs in any action or proceeding to construe or
enforce any term of this Security Instrument. The term "attorneys'
fees," whenever used in this Security Instrument, shall include
without limitation attorneys' fees incurred by Lender in any
bankruptcy proceeding or on appeal.
CP at 189. The Hintons' request is denied. The quoted language provides no
basis for awarding fees to the Hintons; it provides for fees to the lender in an
action to construe or enforce the deed of trust.
Affirmed and remanded for further proceedings.18
AiA
WE CONCUR: 0 ^