Deutsche Bank National Trust v. Michael And Bonnie Shields ( 2020 )

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
DEUTSCHE BANK NATIONAL No. 80913-0-I
TRUST COMPANY, as trustee for
Saxon Asset Securities Trust DIVISION ONE
2006-2 Mortgage Loan Asset
Backed Certificates Series 2006-2, UNPUBLISHED OPINION
Respondent,
v.
MICHAEL SHIELDS and BONNIE
SHIELDS,
Appellants,
FIDELITY NATIONAL TITLE
INSURANCE COMPANY; SAXON
MORTGAGE, INC., all occupants
of the premises; and all other
persons or parties unknown
claiming any right, title, estate, lien,
or interest in the real estate
described in the complaint herein,
Defendants.
SMITH, J. — Michael and Bonnie Shields appeal the denial of their motion
to vacate a foreclosure judgment as void. Shields contends that the court that
granted the foreclosure did not have jurisdiction because a different judge at the
superior court had stayed proceedings in a related action. Because the court
had jurisdiction over the foreclosure action and the related proceedings were
stayed only as to a third party, we affirm.
Citations and pin cites are based on the Westlaw online version of the cited material.
No. 80913-0-I/2
FACTS
Michael Shields took out a mortgage in 2006 against a home (property)
which his sister Bonnie was living in. Shields explains that this mortgage was
granted on different terms than those Shields had agreed to, and the mortgage
was ultimately the source of significant dispute and litigation. In 2008, Shields
defaulted on the loan. Deutsche Bank National Trust Company, the holder of the
deed of trust for the property, initiated several trustee sales which were
subsequently discontinued.
In 2012, Shields filed a lawsuit in King County Superior Court against
several parties, including Deutsche Bank and Regional Trustee Services
Corporation,1 the purported trustee for the property. Shields’s lawsuit sought to
enjoin the pending nonjudicial foreclosure sale and alleged that the defendants
had violated the Washington Consumer Protection Act (CPA), chapter 19.86
RCW, through misrepresentations regarding the transfer of the mortgage
promissory note and the basis for the foreclosure proceeding. Two days later,
Regional discontinued the pending trustee’s sale.
On July 25, 2014, the trial court for the 2012 action granted a motion for
summary judgment which purported to dismiss all claims against Deutsche Bank
but not against Regional. The order did not include any findings, as provided for
in CR 54(b), that there was no just reason for delay. On August 5, the court
entered an order appointing a receiver for Regional, and the case was stayed
1 Regional later changed its name to Old RTSC Corp. For simplicity, we
refer to it as “Regional.”
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pursuant to RCW 7.60.110.
On August 15, 2014, Deutsche Bank filed a judicial foreclosure action
against Shields, also in King County Superior Court, but the action was assigned
to a different judge. Regional was not listed as a party. On February 10, 2016,
the trial court for the 2014 action granted Deutsche Bank’s motion for summary
judgment and entered a decree of foreclosure.
On April 8, 2016, Shields filed an appeal of the foreclosure order. On April
13, 2016, Shields’s 2012 CPA lawsuit, which had been largely inactive since the
stay was ordered, was dismissed without prejudice.
We affirmed the foreclosure order. Deutsche Bank Nat’l Tr. Co. for Saxon
Asset Sec. Tr. 2006-2 Mortgage Loan Asset Backed Certificates Series 2006-2 v.
Shields, No. 75044-5-I (Wash. Ct. App. Oct. 2, 2017) (unpublished),
http://www.courts.wa.gov/opinions/pdf/750445.PDF. On July 27, 2018, we
issued a mandate terminating review. Subsequently, Shields filed a motion to
vacate the foreclosure order, contending that the order was void because the
2014 court did not have jurisdiction to hear the case. The trial court denied the
motion to vacate, holding that the 2014 court had proper jurisdiction over
Deutsche Bank’s 2014 foreclosure action. Shields appeals.
ANALYSIS
Shields contends that the trial court erred in denying the motion to vacate.
Shields asserts that the foreclosure order was void because the 2012 court
retained jurisdiction over the parties and the property until the 2012 action was
dismissed. Shields also contends Deutsche Bank could not file its foreclosure
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complaint while the 2012 action was stayed. We disagree.
Standard of Review
Generally, a trial court’s order on a motion to vacate is reviewed for abuse
of discretion. Larson v. State, 9 Wash. App. 2d 730, 744, 447 P.3d 168 (2019),
review denied, 194 Wash. 2d 1019 (2020). However, courts have “a
nondiscretionary duty to vacate void judgments.” Leen v. Demopolis, 62 Wn.
App. 473, 478, 815 P.2d 269 (1991). Therefore, we review a decision whether to
vacate a judgment for voidness de novo. Ahten v. Barnes, 158 Wash. App. 343,
350, 242 P.3d 35 (2010) (quoting Dobbins v. Mendoza, 88 Wash. App. 862, 871,
947 P.2d 1229 (1997)).
CR 60(b)(5) permits a court to vacate a judgment if the judgment is void.
A court’s judgment is void if the court “‘lacks jurisdiction of the parties or of the
subject matter, or . . . lacks the inherent power to make or enter the particular
order involved.’” Metro. Fed. Sav. & Loan Ass’n of Seattle v. Greenacres Mem’l
Ass’n, 7 Wash. App. 695, 699, 502 P.2d 476 (1972) (quoting Robertson v.
Commonwealth, 181 Va. 520, 536, 25 S.E.2d 352 (1943)). However, if a court
has jurisdiction, “‘no error in the exercise of such jurisdiction can make the
judgment void.’” Greenacres, 7 Wash. App. at 700 (quoting Dike v. Dike, 75 Wash. 2d
1, 8, 448 P.2d 490 (1968)). Accordingly, the question of whether an order is void
does not depend on whether it was rightly decided, but only on whether the court
had jurisdiction to enter it.
Trial Court’s Jurisdiction To Hear the Foreclosure Action
Shields contends that the 2014 court did not have jurisdiction to hear
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Deutsche Bank’s 2014 action because Deutsche Bank was still a party to the
2012 action when it filed its complaint. We agree that Deutsche Bank was still a
party but disagree that the 2014 court did not have jurisdiction.
CR 54(b) addresses judgments in cases with multiple parties and provides
that “the court may direct the entry of a final judgment as to . . . fewer than all of
the . . . parties only upon an express determination in the judgment, supported by
written findings, that there is no just reason for delay and upon an express
direction for the entry of judgment.” Furthermore, “[i]n the absence of such
findings, determination and direction, any order . . . which adjudicates . . . the
rights and liabilities of fewer than all the parties shall not terminate the action as
to any of the . . . parties.” CR 54(b). If these findings have been omitted, the trial
court may revise the order to add them on its own motion or on motion of a party.
CR 54(b).
“Under the priority of action rule, the trial court which first obtains
jurisdiction is the court in which this matter will normally proceed.” Seattle
Seahawks, Inc. v. King County, 128 Wash. 2d 915, 916, 913 P.2d 375 (1996); see
also RCW 4.28.020 (“From the time of the commencement of the action . . . the
court is deemed to have acquired jurisdiction and to have control of all
subsequent proceedings.”). Thus, if complaints are filed in two different courts,
we will ask whether the actions share the same subject matter, parties, and relief,
to determine whether a decision in one court would bar proceedings in the other.
In re Matter of 13811 Highway 99, Lynnwood, Washington, 194 Wash. App. 365,
374, 378 P.3d 568 (2016) (quoting Bunch v. Nationwide Mut. Ins. Co., 180 Wash.
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App. 37, 41-42, 321 P.3d 266 (2014)).
In this case, the order dismissing Deutsche Bank from the 2012 action did
not include the findings described in CR 54(b) that there was “no just reason for
delay.” As such, Shields correctly notes that the order failed to dismiss Deutsche
Bank from the action.
Nonetheless, this failure did not strip the 2014 court of authority to hear
the 2014 action. Shields does not contend that the superior court as a whole
lacked subject matter jurisdiction to hear the 2014 action, only that the 2014 court
was precluded from hearing it because Deutsche Bank was still a party to the
2012 action.2 However, both the 2012 court and the 2014 court are part of the
same superior court, and it was the King County Superior Court, not a specific
judge, who had jurisdiction over Shields’s 2012 action. See State v. Caughlan,
40 Wash. 2d 729, 731-32, 246 P.2d 485 (1952) (court did not err by hearing motion
to dismiss while case was pending before another department of the same court:
“Although there are sixteen departments in the Superior Court for King County,
each department presided over by a different judge, there is only one Superior
Court for King County, and the authority of all of the judges therein is identical”).3
2 We further note that there is no basis to conclude that the court lacked
personal jurisdiction over Shields, because the issue of personal jurisdiction is
waived if not raised in or before the responsive pleading. CR 12(h)(1).
3 Jurisdiction is a potentially ambiguous term. In family law cases in
particular, a specific judge may sometimes choose to retain “jurisdiction” over a
specific matter and instruct parties to bring future disputes before that judge’s
department. In re Marriage of Rounds, 4 Wash. App. 2d 801, 806, 423 P.3d 895
(2018). This use of the word jurisdiction “does not refer to personal jurisdiction or
subject matter jurisdiction.” Rounds, 4 Wash. App. 2d at 802 n.1. As such, the
retention of jurisdiction in that meaning of the word would not strip another judge
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Thus, even if we were to conclude that Deutsche Bank’s 2014 foreclosure action
was substantially the same as Shields’s 2012 CPA action, this would not render
the 2014 court’s order void. While it may have avoided confusion for both
actions to be heard before the same judge, there is no basis to conclude the
judgment was void under CR 60(b)(5).4
Effect of the Stay of Proceedings
Shields contends that the stay of proceedings in Shields’s 2012 action
stripped the 2014 court of authority to hear the 2014 foreclosure action. We
disagree.
RCW 7.60.110(1)(a) provides that the entry of an order appointing a
receiver automatically initiates a stay of the “commencement . . . of a judicial . . .
proceeding against the person over whose property the receiver is appointed.”
This stay automatically expires 60 days after the order of appointment is entered
unless the court extends it. RCW 7.60.110(2). In some cases, a violation of a
stay is considered void. See Brunetti v. Reed, 70 Wash. App. 180, 184, 852 P.2d
1099 (1993) (action taken in violation of a bankruptcy proceeding stay is void);
but see Everett Shipyard, Inc. v. Puget Sound Envtl. Corp., 155 Wash. App. 761,
769, 231 P.3d 200 (2010) (superior court retained jurisdiction during stay of
proceedings pending arbitration and therefore erred in vacating a dismissal on
in the same court of “the inherent power to make or enter the particular order
involved.” See Greenacres, 7 Wash. App. at 699.
4 Shields further contends that Deutsche Bank misrepresented facts in the
motion to vacate hearing. Because these facts do not affect whether the
judgment is void, we need not address this argument. See Reed v. Davis, 65
Wash. 2d 700, 709, 399 P.2d 338 (1965) (“We may sustain the trial court on a
correct ground not considered by it.”).
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the basis that it had not had jurisdiction).
In this case, a receiver was appointed over Regional’s property, not over
Shields’s property. As such, the stay prohibited the commencement of certain
actions against Regional, but not against Shields. RCW 7.60.110. Because
Deutsche Bank’s 2014 action did not name Regional as a defendant,5 it did not
violate the stay of proceedings. Thus, the 2014 court’s order granting a
foreclosure was not void, and the trial court properly denied the motion to vacate.
Shields raises concerns about the effect of racial prejudice associated with
mortgage practices when discussing the terms and conditions under which
Shields acquired the mortgage. The fact that racism persists in home lending
practices, with lasting impacts on the access to housing and wealth available to
people of color generally and Black people specifically, has been explored in
legal and academic scholarship.6 While this reality should be kept in mind when
5 Shields contends that because Deutsche Bank included as a defendant
“all other persons or parties unknown claiming any right, title, estate, lien, or
interest in the real estate described in the complaint herein,” Regional was a
party to the 2014 action. This statement was added pursuant to RCW 4.28.150,
which provides for service by publication for unknown entities, and does not
apply to Regional, whose role as trustee was known. Regional served as a
trustee for the previously attempted nonjudicial foreclosure and did not have a
role in the judicial foreclosure. See Klem v. Washington Mut. Bank, 176 Wash. 2d
771, 789-90, 295 P.3d 1179 (2013) (In a judicial foreclosure, as opposed to a
nonjudicial foreclosure, the judge takes the role of the trustee as the impartial
third party to the sale.).
6 See, e.g., Benjamin Howell, Exploiting Race and Space: Concentrated
Subprime Lending as Housing Discrimination, 94 CALIF. L. REV. 101, 102 (2006)
(“Where lending discrimination once took a binary form—bigoted loan officers
rejecting loan applicants because of their skin color—the new model of
discrimination is exploitation. Unscrupulous lenders now prey on a history of
racial redlining by aggressively marketing overpriced loan products with onerous
terms in the same neighborhoods where mainstream lenders once refused to
lend.” (citation omitted)).
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addressing the significant issues surrounding foreclosures, Shields has not
shown that this had any effect on the narrow procedural issue presented in this
case. The trial court did not err.
Deutsche Bank requests attorney fees on appeal. Attorney fees may be
awarded on appeal where permitted by statute or contract. Aiken v. Aiken, 187
Wash. 2d 491, 506, 387 P.3d 680 (2017). In this case, the deed provides that the
lender is entitled to recover reasonable attorney fees in any action to construe or
enforce the deed. Similarly, the note permits the note holder to recover
reasonable attorney fees in an action to enforce the note. We therefore grant
Deutsche Bank’s request for fees pursuant to RAP 18.1.
We affirm.
WE CONCUR:
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