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Court of Appeals Division I
State of Washington

Opinion Information Sheet

			

     IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON
                                      DIVISION ONE

JACK GRANT,                                 )       No. 66721-1-I
                                            )
                      Appellant,            )
                                            )
              v.                            )
                                            ) 
FIRST HORIZON HOME LOANS, a.k.a. )
First Horizon Corporation, d/b/a First      )
Horizon Home Loans;  QUALITY LOAN )
SERVICE CORPORATION OF                      )
WASHINGTON, a Washington                    )
corporation; STEWART TITLE, d/b/a           )
Stewart Title of Bellingham; STEWART )              UNPUBLISHED OPINION
TITLE OF WESTERN WASHINGTON,                )
INC., a Washington corporation, d/b/a       )
Stewart Title of Bellingham; STEWART )              FILED: May 29, 2012
TITLE OF BELLINGHAM, INC., a                )
Washington corporation, d/b/a Stewart       )
Title of Bellingham,                        )
                                            )
                      Respondents.          )
                                            )

       Ellington, J.  --  Jack Grant filed suit against his lender and others to enjoin 

foreclosure proceedings on his beachfront home in Whatcom County.  In addition to an 

injunction, he sought damages for breach of contract, bad faith, intentional infliction of 

emotional distress, interference with contractual relations, negligence, and violation of 

statutory requirements.  The court granted the defendants' CR 12(b)(6) and CR 12(c) 

motions to dismiss.  With one exception, we affirm the trial court.  Grant's complaint  

No. 66721-1-I/2

alleges facts sufficient to create a triable issue with respect to the defendants' right to 

foreclose.  On that issue, we reverse and remand for further proceedings.

                                       BACKGROUND

       In December 2003, Grant obtained an $800,000 construction loan from Horizon 

Bank to make improvements to his beach cottage in Blaine, Washington.  The following 

year, Grant submitted an application to First Horizon Home Loans for a new loan of 

$838,000 to refinance the construction loan.  As a condition for the new loan, Stewart 

Title informed Grant that his wife must be added to the title and must sign the note.  

Additionally, the loan amount approved was only $800,000.  Grant objected to the 

changes, but he ultimately executed a quitclaim deed adding his wife to the title.  Grant 

and his wife then signed the note and executed a deed of trust.  According to Grant, he 

received an oral commitment that the quitclaim deed would be held in a file and not 

recorded except in the event of default.  In fact, the quitclaim deed was recorded 

immediately.  Grant and his wife divorced in 2009.  Grant was awarded the beach 

property as his separate property.

       The loan documents are central to this dispute.  The promissory note identifies 
the lender as "First Horizon Corporation d/b/a First Horizon Home Loans."1 It requires 

monthly payments of $4,732, and provides that "the Lender may transfer this Note.  The 

Lender or anyone who takes this Note by transfer and who is entitled to receive 
payments under this Note is called the 'Note Holder.'"2

       1 Clerk's Papers at 655.

       2 Id.

                                               2 

No. 66721-1-I/3

       The deed of trust identifies the trustee as Stewart Title, the lender as First 

Horizon Corporation d/b/a First Horizon Home Loans, and the beneficiary and 

"nominee for Lender and Lender's successors and assigns" as Mortgage Electronic 
Registration Systems, Inc. (MERS).3 With respect to the lender's interests and rights, 

the deed of trust states:

       The beneficiary of this Security Instrument is MERS (solely as nominee 
       for Lender and Lender's successors and assigns) and the successors and 
       assigns of MERS.  This Security Instrument secures to the Lender: (i) the 
       repayment of the Loan, and all renewals, extensions and modifications of 
       the Note; and (ii) the performance of Borrower's covenants and 
       agreements under this Security Instrument and the Note.[4]

The deed of trust describes MERS' interests and rights as follows:

       Borrower understands and agrees that MERS holds only legal title to the 
       interests granted by Borrower in this Security Instrument, but, if necessary 
       to comply with law or custom, MERS (as nominee for Lender and Lender's 
       successors and assigns) has the right:  to exercise any or all of those 
       interests, including, but not limited to, the right to foreclose and sell the 
       Property; and to take any action required of Lender including, but not 
       limited to, releasing and canceling this Security Instrument.[5]

The deed of trust also provides that it and the note can be sold without notice:

       The Note or a partial interest in the Note (together with this Security 
       Instrument) can be sold one or more times without prior notice to 
       Borrower.  A sale might result in a change in the entity (known as the 
       "Loan Servicer") that collects Periodic Payments due under the Note and 
       this Security Instrument and performs other mortgage loan servicing 
       obligations under the Note, this Security Instrument, and Applicable Law.  
       There also might be one or more changes of the Loan Servicer unrelated 
       to a sale of the Note.  If there is a change of the Loan Servicer, Borrower 
       will be given written notice of the change which will state the name and 
       address of the new Loan Servicer, the address to which payments should 

       3 Clerk's Papers at 659.

       4 Clerk's Papers at 660.

       5 Id.

                                               3 

No. 66721-1-I/4

       be made and any other information RESPA requires in connection with 
       the transfer of servicing.[6]

With respect to the trustee, the deed of trust provides:

       In accordance with Applicable Law, Lender may from time to time appoint 
       a successor trustee to any Trustee appointed hereunder who has ceased 
       to act.  Without conveyance of the Property, the successor trustee shall 
       succeed to all the title, power and duties conferred upon Trustee herein 
       and by Applicable Law.[7]

       In April 2010, Grant stopped making payments on the loan.  Quality Loan 

Service Corporation of Washington (Quality) issued a notice of default on July 15, 

2010.  Quality identified itself as the agent for the "current owner/beneficiary of the 

Note secured by the Deed of Trust":

       The Bank of New York Mellon f/k/a The Bank of New York, as Trustee for 
       the holders of the Certificates, First Horizon Pass-Through Certificates 
       Series FH05-01, by First Horizon Home Loans, a division of First 
       Tennessee Bank National Association, Master Servicers, in its capacity 
       as agent for the Trustee under the Pooling and Servicing Agreement c/o 
       MetLife Home Loans a division of MetLife Bank NA.[8]

(We refer to this conglomeration as BNYM).

       Grant wrote to First Horizon several times before and after the notice of default

to request a "standstill" of his payments while he attempted to sell the home.  He 

received no favorable response.

       On July 20, 2010, MERS recorded an assignment to BNYM of the deed of trust
"together with the Promissory Note secured by said Deed of Trust".9 On September 10, 

       6 Clerk's Papers at 669.

       7 Clerk's Papers at 670.

       8 Clerk's Papers at 293.

       9 Clerk's Papers at 300.

                                               4 

No. 66721-1-I/5

2010, BNYM appointed Quality as successor trustee of the deed of trust.  In this 

capacity, Quality issued a notice of trustee's sale on September 28, 2010.  The notice 

set a sale date of January 7, 2011.

       Grant filed a complaint in Whatcom County Superior Court seeking to enjoin the 

trustee's sale.  He also asked the court to declare the note and deed of trust void, quiet 

title in his favor, and award damages and attorney fees. 

       Grant's complaint focused, in large part, on the conduct of First Horizon and 

Stewart Title during the closing of his loan in December 2004.  He alleged he had 

signed the note and deed of trust under duress.  He also argued that, as a result of his 

wife being made a co-owner of the property, he had been "unable to use, sell or 

otherwise deal with the [p]roperty" before the market collapsed, causing him to lose 
money.10

       Grant also alleged several irregularities in the transfers and assignments of the 

note and deed of trust.  Among other things, he alleged that MERS, as "nominee" for 

the beneficiary, had no authority to transfer or sell the note or deed of trust.  Grant also 

alleged MERS' purported assignment of the note to BNYM was invalid because MERS 

has never been the holder of the note.  Additionally, Grant claimed that BNYM's 

designation of Quality as its agent and its subsequent appointment of Quality as 

successor trustee were invalid, and that Quality could not be appointed as trustee in 

any event because Stewart Title had never resigned that role.  Accordingly, Grant 

argued, none of the defendants had authority to foreclose.

       10 Clerk's Papers at 229-30.

                                               5 

No. 66721-1-I/6

       Based on these allegations, Grant asserted causes of action for (1) breach of 

contract; (2) bad faith/"breach of duties"; (3) intentional infliction of emotional distress; 

(4) interference with contractual relations; (5) negligence; and (6) violation of various 

statutory requirements.  Grant also asserted several affirmative defenses, presumably 

to the enforcement of the note and deed of trust, including "wrongful conduct, undue 
influence and duress."11  On November 5, 2010, the trial court granted Grant's request 

for a temporary restraining order enjoining the trustee's sale.  

       First Horizon, Stewart Title, and Quality each filed motions to dismiss under CR 

12(b)(6) or CR 12(c), arguing that most of Grant's claims were based on conduct 

occurring in 2004 and therefore barred by the statutes of limitation.  Quality and First 

Horizon also argued that Grant's claims for intentional infliction of emotional distress, 

bad faith/breach of duty, Consumer Protection Act (CPA) violations, "wrongful 

foreclosure," and negligence failed on their merits.

       After argument on the motions, the court concluded the statute of limitations had 

run on the claims of intentional infliction of emotional distress, on the interference with 

contractual relationship, negligence, and CPA claims.  The court also indicated 

defendants were entitled to judgment on the breach of contract and wrongful initiation 
of foreclosure claims.12 The court directed the parties to submit a proposed order 

conforming to its ruling.

       11 Clerk's Papers at 241.

       12 The court noted, however, that Grant may have a cause of action for wrongful 
foreclosure if the property is eventually lost at a trustee sale.

                                               6 

No. 66721-1-I/7

       Before the hearing on the proposed orders, Grant moved to amend his complaint 

to add First Tennessee Bank National Association and The Bank of New York Mellon 

as defendants.  In his proposed amended complaint, Grant alleged that the discovery 

rule and the doctrine of equitable tolling applied to save his claims from the statute of 

limitations.  He also asserted a new affirmative defense of recoupment and new causes 

of action, including violations of the Uniform Commercial Code (UCC) and the Truth in 

Lending Act (TILA), breach of Stewart Title's "express agreement to hold the Quitclaim
Deed in their file,"13 and civil fraud.

       Though no order had yet been entered, Grant also filed a motion for 

reconsideration on grounds that the statute of limitations had been tolled.

       At the February 4, 2011 hearing on the proposed orders, the court noted that 

any motion for reconsideration was premature.  The court then signed an order 

granting the defendants' motions.  Grant did not seek reconsideration.  He now 

appeals.

                                        DISCUSSION

                                     Standard of Review

       An order dismissing a claim under CR 12(b)(6) or CR 12(c) is reviewed de 
novo.14 Dismissal under CR 12 is appropriate only if "'it appears beyond doubt that the 

plaintiff cannot prove any set of facts to justify recovery.'"15 In making this 

determination, "'a plaintiff's allegations are presumed to be true and a court may 

       13 Clerk's Papers at 70.

       14 Burton v. Lehman, 153 Wn.2d 416, 422, 103 P.3d 1230 (2005).

                                               7 

No. 66721-1-I/8

consider hypothetical facts not included in the record.'"16 CR 12(b)(6) motions "should 

be granted 'sparingly and with care' and 'only in the unusual case in which plaintiff 

includes allegations that show on the face of the complaint that there is some 
insuperable bar to relief.'"17

                                      Deeds of Trust Act

       Quality issued the notice of default as an agent of BNYM, which it identified as 

the current owner/beneficiary of the note.  In his complaint, Grant alleged it was not 

clear that either BNYM or Quality had any right to issue the notice of default or the 

notice of trustee sale that followed.

       Under the deeds of trust act (DTA), chapter 61.24 RCW, the trustee must "have 

proof that the beneficiary is the owner of any promissory note or other obligation 
secured by the deed of trust" before issuing a notice of trustee's sale.18 Thus, if BNYM 

is not the owner of the note, then neither it nor Quality as its agent and/or trustee had 

authority to foreclose, and the initiation of that proceeding was unlawful.  

       The record indicates that BNYM acquired whatever interest it has in the note 

and deed of trust by assignment from MERS.  But nothing in the record establishes that 

MERS had any interest in the note to convey.  The note makes no mention of MERS.  It 

       15 Id. (quoting Tenore v. AT&T Wireless Servs., 136 Wn.2d 322, 330, 962 P.2d 
104 (1998)); Pasado's Safe Haven v. State, 162 Wn. App. 746, 752, 259 P.3d 280 
(2011).

       16 Burton, 153 Wn.2d at 422 (quoting Tenore, 136 Wn.2d at 330)).

       17 Tenore, 136 Wn.2d at 330 (quoting Hoffer v. State, 110 Wn.2d 415, 420, 755 
P.2d 781 (1988)).

       18 RCW 61.24.030(7)(a).

                                               8 

No. 66721-1-I/9

identifies only "First Horizon Corporation d/b/a First Horizon Home Loans" as the "Note 
Holder."19 There is no evidence that First Horizon transferred the note to MERS or 

BNYM.

       Quality argues the DTA does not require it to prove its authority to file the notice 
of default before doing so.  That may be so,20 but that does not change the requirement 

that Quality must in fact be authorized to act on behalf of the beneficiary.  Grant put 

Quality's authority in question by filing suit to resist the foreclosure, and the question 

remains unanswered.  Dismissal of this claim on a CR 12(b)(6) or CR 12(e) motion was 

therefore improper.

       Grant also alleged Quality violated the DTA because it issued the notice of 

default as an agent of BNYM before BNYM had acquired any interest in the deed of 

trust.  The notice of default was issued on July 15, 2010.  The assignment by MERS to 

BNYM did not occur until July 20, 2010.  

       In a somewhat similar scenario, the Massachusetts high court held that 

foreclosures were invalid.  In U.S. Bank National Association v. Ibanez, the court 

addressed two cases in which banks foreclosed on properties and purchased them 
back at the foreclosure sales.21 The banks then filed complaints to clear title, requiring 

them to establish the validity of the foreclosure sales.22 The banks were not the original 

       19 Clerk's Papers at 655.

       20 We note, however, that subsequent amendments to the DTA include such a 
requirement as part of the foreclosure mediation program.  See RCW 61.24.163 
(8)(b)(iii).

       21 458 Mass. 637, 941 N.E.2d 40 (2011).

       22 Id. at 645.

                                               9 

No. 66721-1-I/10

mortgagees, but claimed they had been assigned the mortgages though a complex 

                                              10 

No. 66721-1-I/11

securitization process.  But the only evidence available indicated the banks acquired 

the mortgages by assignment only after the foreclosure sales occurred, and thus had 
no interest at the time of the foreclosure sale.23 Accordingly, the banks were not 

permitted to quiet title.  Likewise here, the only evidence indicates that BNYM acquired 

an interest in the deed of trust only after commencing the foreclosure process.

       Quality distinguishes Ibanez on the basis that it applies Massachusetts, not 

Washington, law.  But the court's principal holding was that "the foreclosing entity must 

hold the mortgage at the time of the notice and sale in order to accurately identify itself 

as the present holder in the notice and in order to have the authority to foreclose under 
the power of sale."24 This proposition is consistent with Washington law.25

       Quality also characterizes Grant's argument as a challenge to the timing of the 

recordation of MERS' assignment to BNYM of the deed of trust.  Quality argues there is 

no requirement under Washington law for a deed of trust assignment to be recorded 

before a foreclosure can be initiated.  But recordation is not the issue.  The question 

here is whether BNYM was entitled to foreclose.  This requires a determination of 

whether MERS had any interest in the note it purported to assign to BNYM (or whether 

BNYM obtained the note through some other means), and whether this transfer 

occurred before the notice of default was issued.

       23 Id. at 640-45.

       24 Id. at 651.

       25 See, e.g., RCW 61.24.030(7)(a) (requiring that "before the notice of trustee's 
sale is recorded . . . the trustee shall have proof that the beneficiary is the owner of any 
promissory note or other obligation secured by the deed of trust").

                                              11 

No. 66721-1-I/12

       If Quality lacked authority to act because its principal BNYM had no interest in 
the note, then the foreclosure proceedings were contrary to the DTA.26 Thus, Grant's 

complaint contains allegations sufficient to survive CR 12 motions to dismiss.  We 
therefore reverse the dismissal of this claim and remand for further proceedings.27

                                    Wrongful Foreclosure

       Grant next argues the court should not have dismissed his damages claim for 

wrongful foreclosure under the DTA.  He cites no provision of the DTA and no case law 

recognizing such a cause of action.  In Vawter v. Quality Loan Service Corp., a federal 
district court concluded that none exists under Washington law.28 We agree.

       In Vawter, homeowners filed suit under the DTA to enjoin a foreclosure.  They 

alleged many of the same deficiencies in the foreclosure process that Grant alleges 

here.  Like Grant, the Vawters also alleged a number of tort claims, wrongful 
foreclosure, and violations of the TILA and CPA.29 Because, like Grant, the Vawters

       26 A related issue is whether MERS can serve as a lawful beneficiary of the deed 
of trust under these circumstances.  The DTA defines "beneficiary" as "the holder of the 
instrument or document evidencing the obligations secured by the deed of trust, 
excluding persons holding the same as security for a different obligation."  
RCW 61.24.005(2).  The documents here establish that MERS did not hold the note; 
First Horizon did.  Whether MERS can act as a beneficiary without holding the note is a 
question currently pending before the Washington Supreme Court.  See Bain v. Mortg. 
Elec. Registration Sys., et al., No. 86206-1; Selkowitz v. Litton Loan Servicing, LP, et 
al., No. 86207-9.

       27 At oral argument, Quality's counsel faulted Grant's failure to identify the 
specific statutory provision he claimed had been violated.  Unlike its federal 
counterpart, CR 12 does not require such detail.  CR 12 does not permit dismissal of a 
claim as long as there is some hypothetical set of facts that could justify relief.  See
McCurry v. Chevy Chase Bank, FSB, 169 Wn.2d 96, 101-03, 233 P.3d 861 (2010).

       28 707 F.Supp.2d 1115 (2010).

       29 Id. at 1120.

                                              12 

No. 66721-1-I/13

were successful in halting the trustee's sale, at least temporarily, the court considered 
their claim one for "wrongful institution of nonjudicial foreclosure proceedings."30 The 

court identified four reasons the claim failed as a matter of law.

       First, no provision of the DTA establishes a cause of action for wrongful 

institution of foreclosure proceedings.  "Standing alone, the fact that the DTA 

establishes procedures and requisites for the nonjudicial foreclosure process does not 
necessarily give rise to a cause of action."31

       Second, the DTA provides a comprehensive scheme for the nonjudicial 

foreclosure process, including specific remedies.  "Interjecting a cause of action for 

damages for wrongful institution of nonjudicial foreclosure proceedings into the DTA's 
scheme would potentially upset the balance struck by the legislature."32 Further, the 

court reasoned, if the legislature wished to permit a cause of action for damages, it 
could easily have done so.33

       Third, recognizing a cause of action for damages for wrongful institution of 

foreclosure proceedings would undermine one of the goals of the DTA, "that the 

       30 Id. at 1123.

       31 Id.

       32 Id. (citing Udall v. T.D. Escrow Servs., Inc., 132 Wn. App. 130, 190 P.3d 908 
(2006)).

       33 Id.  We note that the legislature amended the DTA in 2009 to provide that a 
borrower/grantor does not waive certain claims for damages by failing to bring a civil 
action to enjoin a foreclosure sale. RCW 61.24.127; Laws of 2009, ch. 292 § 6.  
However, the provision contemplates that such an action would arise only after a 
foreclosure sale has occurred.  RCW 61.24.127(2)(a) ("The claim must be asserted or 
brought within two years from the date of the foreclosure sale."); RCW 61.24.127(2)(c) 
("The claim may not affect in any way the validity or finality of the foreclosure sale.").

                                              13 

No. 66721-1-I/14

nonjudicial foreclosure process should be efficient and inexpensive."34 Allowing 

grantor/borrowers to sue for damages for attempted wrongful foreclosure would 

increase the expense and inconvenience of the nonjudicial foreclosure process "while 

at the same time failing to address directly the propriety of the foreclosure or advancing 
the opportunity of interested parties to prevent wrongful foreclosure."35

       Finally, the Vawter court observed that even if such a cause of action existed, 

"this court is not persuaded that it could be maintained without a showing of 
prejudice."36 The Vawters failed to allege in their complaint that they suffered prejudice 

as a result of the defendants' actions.

       Grant asks this court to distinguish Vawter because it was decided by a federal 

court that relied to some extent on unpublished opinions by Washington courts.  But 

the Vawter court's reference to unpublished decisions does not undermine its 

reasoning, which is sound and pertinent to this case.

       Grant also suggests that, unlike the Vawters, he can establish prejudice from 

wrongful institution of foreclosure proceedings.  He contends even the initiation of the 

foreclosure process diminishes his ability to preserve any of the equity in the home.  He 

relies on BFP v. Resolution Trust Corp., a fraudulent transfer case wherein the United 

States Supreme Court noted that "property sold within the time and manner strictures of 

state-prescribed foreclosure is simply worth less than property sold without such 

       34 Vawter, 707 F.Supp.2d at 1123; see also Plein v. Lackey, 149 Wn.2d 214, 
228, 67 P.3d 1061 (2003).

       35 Vawter, 707 F.Supp.2d at 1124.

       36 Id.

                                              14 

No. 66721-1-I/15

restrictions."37 But any damage in this case is wholly speculative, as the house has not 

yet been sold.  Further, whatever diminution of value is attributable to the home's 

appearance on foreclosure lists would have occurred after proper initiation of 

foreclosure proceedings as well.  Thus, Grant's own admitted default is the cause of his 

damages.

       Because there is no cause of action for wrongful initiation of foreclosure 

proceedings, the court properly dismissed that claim. 

                              Breach of the Duty of Good Faith

       Grant next contends that all parties owed him the duty of good faith and 
breached that duty.38 Under RCW 61.24.010(4), a trustee "has a duty of good faith to 

the borrower, beneficiary, and grantor." Grant relies on Albice v. Premier Mortgage 

Services to argue that a trustee's duty of good faith includes the duty to "take 

reasonable and appropriate steps to avoid sacrificing the debtor's interest in the 
property."39 He contends Stewart Title and Quality breached this duty because 

       37 511 U.S. 531, 114 S. Ct. 1757, 128 L. Ed. 2d 556 (1994).

       38 Grant also contends that Stewart Title and First Horizon owed him fiduciary 
duties and breached them.  But he expressly abandoned this claim below: 

       Plaintiff did not intend to suggest in the Complaint that any of the 
       Defendants owe him fiduciary duties. . . . [T]he word 'fiduciary' was 
       incorrectly used in paragraph 7.6 of the Complaint and is hereby 
       withdrawn.  However, as pointed out in the aforementioned prior Motion, 
       the law is clear that the Quality Loan owes the Plaintiff the duties of good 
       faith and fair dealing, the duty to act impartially, and the duty to avoid 
       sacrificing the Plaintiff's equity.

Clerk's Papers at 156.  Although Grant attempts to resurrect the claim on appeal, we 
are aware of no authority that would permit him to do so.  We therefore decline to 
address it.

                                              15 

No. 66721-1-I/16

"[n]either . . . obtained an appraisal of the Property."40 Presumably, Grant believes the 

failure to obtain an appraisal will result in the trustee accepting a low bid at auction.  

This possibility is too speculative to establish a claim of bad faith.  Dismissal was 

appropriate.

                                       Violation of CPA

       Grant contends his complaint was adequate to state a claim under the CPA, 

chapter19.86 RCW.  Although his complaint alleged CPA claims against First Horizon, 

Stewart Title, and "Defendants," his arguments on appeal pertain only to Quality.

       To prevail on a private CPA claim, a plaintiff must establish (1) an unfair or 

deceptive act or practice; (2) that occurs in trade or commerce; (3) a public interest; 

(4) injury to the plaintiff; and (5) a causal link between the unfair or deceptive act and 
the injury suffered.41 The failure to establish any of the five elements is fatal to a CPA 

claim.42

       "Unfair or deceptive act or practice" is not defined by the CPA.  It is a question of 
law whether an alleged act is unfair or deceptive.43 Consumers may establish an unfair 

or deceptive act by showing "either that an act or practice 'has a capacity to deceive a 

substantial portion of the public' or that 'the alleged act constitutes a per se unfair trade 

       39 157 Wn. App. 912, 934, 239 P.3d 1148 (2010), rev. granted, 170 Wn.2d 1029, 
249 P.3d 623 (2011).

       40 Appellant's Br. at 36.

       41 Indoor Billboard/Washington, Inc. v. Integra Telecom, 162 Wn.2d 59, 74, 170 
P.3d 10 (2007).

       42 Id.

       43 Holiday Resort Community Ass'n v. Echo Lake Assocs., LLC, 134 Wn. App. 
210, 226, 135 P.3d 499 (2006).

                                              16 

No. 66721-1-I/17

practice.'"44  "Implicit in the definition of 'deceptive' under the CPA is the understanding 

that the practice misleads or misrepresents something of material importance."45  

Whether an unfair act has the capacity to deceive a substantial portion of the public is 
a question of fact.46

       Grant contends Quality's conduct in issuing the notice of default before it had 

authority to do so and without proving or even investigating the requisite facts "is 
deception."47 He does not argue that this conduct had the capacity to deceive a 

substantial portion of the public.  Instead, Grant attempts to show a "per se" violation by 
reference to the 2011 "Foreclosure Fairness Act" amendments to the DTA.48 These 

amendments establish a mediation program and require lenders to mediate in good 

faith.  Among other things, lenders must provide "[p]roof that the entity claiming to be 

the beneficiary is the owner of any promissory note or obligation secured by the deed 
of trust."49 Failure to do so is a per se violation of the CPA.50

       Grant agues the 2011 amendments are retroactive.  A statute is presumed to 
operate prospectively unless the legislature indicates otherwise.51 This presumption 

       44 Saunders v. Lloyd's of London, 113 Wn.2d 330, 344, 779 P.2d 249 (1989) 
(quoting Hangman Ride Training Stables, Inc. v. Safeco Title Co., 105 Wn.2d 778, 785-
86, 719 P.2d 531 (1986)).

       45 Holiday Resort, 134 Wn. App. at 226.

       46 Id. at 226-27.

       47 Appellant's Br. at 38.

       48 Id. at 39-41.

       49 RCW 61.24.163(8)(b)(iii).

       50 RCW 61.24.135(2).

       51 Densley v. Dep't of Ret. Sys., 162 Wn.2d 210, 223, 173 P.3d 885 (2007).

                                              17 

No. 66721-1-I/18

can be overcome only if the legislature explicitly provides for retroactivity, the 
amendment is curative, or the statute is remedial.52 Grant contends the amendments 

apply retroactively because they are remedial.

       "'A remedial statute is one which relates to practice, procedures and 
remedies.'"53 Such a statute will be applied retroactively "unless it affects a substantive 

or vested right."54 But because the 2011 amendments provide a cause of action for the 

lender's failure to provide documentation that it was not previously required to provide, 

they affect a substantive right.  It would be inappropriate to apply the amendments 

retroactively.

       Because Grant has established neither a per se CPA violation nor the capacity 

of Quality's conduct to deceive a substantial portion of the public, the trial court 

properly dismissed the CPA cause of action.

                                     Truth in Lending Act

       Grant also argues the court improperly dismissed his claims under TILA and its 
regulations.55 Grant made no such claim in his complaint, though he made reference to 

TILA violations in his opposition to defendants' motions and in response to their 
replies.56 Although Grant attempted to amend his complaint to add a TILA claim, that 

       52 Id.

       53 Id. (quoting State v. McClendon, 131 Wn.2d 853, 861, 935 P.2d 1334 (1997)).

       54 Id.

       55 15 U.S.C. § 1635(b); 12 C.F.R. § 226.

       56 In the latter of these pleadings, Grant points out that the provision he contends 
has been violated "went into effect January 1, 2011," well after the notice of default was 
issued here.  Clerk's Papers at 102.

                                              18 

No. 66721-1-I/19

motion was denied.  The court did not dismiss any TILA claim because none was made.  

Accordingly, there was no error.

                                        UCC Defenses

       Grant contends he is entitled to defend against the foreclosure and pursue a 

claim in recoupment on the basis of the duress and undue influence he allegedly 

suffered at closing.  We disagree.

       Grant obtained the loan to refinance an outstanding construction loan.  He 

contends he closed the loan under duress because he was required to sign a quitclaim

deed and documents reflecting that his wife would also be on title.  Grant objected, but 

decided to make these changes because he was afraid of "the threat of mortgage rates 
significantly rising" and had "other strains concurrently happening" in his life.57

       As the trial court accurately observed, "That's not duress.  That's a business 
decision."58 Grant responded, "[I]n hindsight, I agree."59 The court did not err by 

dismissing the duress defense.  With respect to dismissal of his remaining defenses, 

Grant presents no argument or authority that the court's decision was in error.  We 
therefore decline to address them.60

                                    Statute of Limitations

       Many of Grant's claims centered on the December 1, 2004 loan closing 

       57 Clerk's Papers at 229.

       58 RP (Jan. 14, 2011) at 24.

       59 Id.

       60 Grant likewise fails to provide any argument to support his claim that duress, 
undue influence, fraud and fraudulent concealment entitled him to quiet title.  We also 
do not address that issue.

                                              19 

No. 66721-1-I/20

transaction and the requirement that Grant execute a quitclaim deed and that his wife 

sign the loan documents.  These included intentional or negligent infliction of emotional 

distress, negligence, interference with contractual relations, breach of contract, bad 

faith and some components of his CPA claims. 
       The tort claims are subject to a three-year statute of limitations.61 The breach of 

contract claim against Stewart Title that was based on a purported oral agreement not 
to file the quitclaim deed is also subject to a three-year statute of limitations.62 The 

CPA claims are subject to a four-year limitations period.63

       The defendants moved to dismiss these claims for failure to file within the 

limitations period.  In response, Grant argued that the "interference causes of action 

arose and continued until Plaintiff was finally able (in 2009) to file a quitclaim deed after

the divorce to restore Plaintiff's title to the property" and that losses and damage 

caused by that interference, from emotional distress, and from the violations of the CPA 
"continue to this day."64  

       61 Sabey v. Howard Johnson & Co., 101 Wn. App. 575, 592, 5 P.3d 730 (2000) 
(negligence); Cox v. Oasis Physical Therapy, PLLC, 153 Wn. App. 176, 192, 222 P.3d 
119 (2009) (intentional infliction of emotional distress); City of Seattle v. Blume, 134 
Wn.2d 243, 251, 947 P.2d 223 (1997) (interference with business 
expectancy/contractual relations); 29 David K. DeWolf, Washington Practice: 
Washington Elements of an Action § 3:6, at 54 (2011-12 ed.); RCW 4.16.080(2).

       62 RCW 4.16.080(3).

       63 RCW 19.86.120.

       64 Clerk's Papers at 157.

                                              20 

No. 66721-1-I/21

       The court concluded that "the statute of limitations has run on the claims of 

intentional infliction of emotional distress, on the interference with contractual 
relationship, negligence, [and] Consumer Protection Act claim[s]."65 Immediately 

thereafter, without mentioning the statute of limitations, the court also dismissed 

Grant's breach of contract and bad faith claims against Stewart Title and First Horizon.

       After the court's oral ruling but before the hearing in which the court would 

consider the parties' draft orders, Grant filed a motion for reconsideration.  For the first 

time, Grant argued the statute of limitations did not bar his claims because the bad 

faith, intentional infliction of emotional distress, interference with contractual relations, 

negligence, and violation of statutory requirements claims involve ongoing tortious 

activity and that the continuing tort doctrine, equitable tolling, and discovery rule should 

apply.  The court did not consider or rule upon the motion for reconsideration because

"to the extent that there's been a motion for reconsideration before I've even entered 
the order, we are pulling the cart before the horse."66 Grant did not renew his motion 

once the court entered its order.

       Failure to raise an issue before the trial court precludes a party from raising the 
issue on appeal.67 Applicability of the discovery rule, equitable tolling, or the continuing 

tort doctrine was not properly raised below and is thus not properly before us.  As Grant 

offers no other challenge to the statute of limitations, we conclude the court properly 

       65 RP (Jan. 14, 2011) at 27.

       66 RP (Feb. 4, 2011) at 32.

       67 Mavis v. King County Pub. Hosp. Dist. No. 2, 159 Wn. App. 639, 651, 248 
P.3d 558 (2011); RAP 2.5.

                                              21 

No. 66721-1-I/22

dismissed the claims arising from the 2004 loan closure. 

                                 Motion to Amend Complaint

       Grant next challenges the court's denial of his motion for leave to amend his 

complaint to add parties and add fraud and fraudulent concealment claims.  A court has 

broad discretion to grant or deny such a motion; the decision "'will not be disturbed on 

review except on a clear showing of abuse of discretion, that is, discretion manifestly 
unreasonable, or exercised on untenable grounds, or for untenable reasons.'"68

       After a responsive pleading has been served, a party may amend a complaint 
"only by leave of court or by written consent of the adverse party."69 Leave to amend 

shall be freely given where justice so demands, but should not be granted where 
amendment would result in prejudice to the opposing party or be futile.70 The timing of 

a motion to amend is also relevant.71  

       The court did not articulate why it denied Grant's motion.  But none of the 

proposed amendments was based on new information, and there was no reason the 

new parties and claims could not have been included in the original complaint.  Grant 

waited until after the court's dispositive oral ruling to file the motion, so the court could 

reasonably have determined the motion was untimely or the delay was prejudicial to the 
defendants.72 We see no abuse of discretion.

       68 Wilson v. Horsley, 137 Wn.2d 500, 505, 974 P.2d 316 (1999) (quoting State 
ex rel. Carroll v. Junker, 79 Wn.2d 12, 26, 482 P.2d 775 (1971)).

       69 CR 15(a).

       70 Horsley, 137 Wn.2d at 505-06.

       71 See, e.g., Doyle v. Planned Parenthood of Seattle-King County, Inc., 31 Wn. 
App. 126, 639 P.2d 240 (1982)

                                              22 

No. 66721-1-I/23

                                        Judicial Notice

       Grant contends the court erred by refusing to accept the dissolution court's 

findings pertaining to the character of the property at issue.  He offers no authority to 

suggest a court abuses its discretion in this way.  Under ER 201(d), a court "shall take 

judicial notice if requested by a party and supplied with the necessary information."  

Grant does not assert that he was entitled to mandatory judicial notice or that he 

provided the court with the dissolution court's findings.  Further, he alleges no 

prejudice.  The court did not err.

                                      Procedural Issues

       Grant next contends neither First Horizon nor Quality have "standing" to bring a 

motion under CR 12(b)(6) or 12(c).  This is nonsense.  They were named defendants 

and as such were authorized to bring motions under CR 12.  

       Grant also argues that Quality's CR 12(c) motion was untimely when judged by 
the rule pertaining to motions for summary judgment.73 He provides no analysis or 

authority for the proposition that the motion should be so judged and asserts no 

prejudice even if the motion was untimely.  Whatcom County local rules direct that all 

motions other than ones for summary judgment shall be filed and served no later than 
nine court days prior to the hearing.74 Quality's motion was filed and served by 

       72 Id. at 130-31 ("When a motion to amend is made after the adverse granting of 
summary judgment, the normal course of proceedings is disrupted and the trial court 
should consider whether the motion could have been timely made earlier in the 
litigation.").

       73 See CR 56(c) (summary judgment motions must be filed at least 28 days 
before a hearing on the motion).

                                              23 

No. 66721-1-I/24

December 28, more than nine days before the January 14, 2011 hearing.  There was 

no error.

                                        CONCLUSION

       The court erred in dismissing Grant's claims with respect to the authority of First 

Horizon and/or Quality Loans to commence foreclosure proceedings under the DTA.  

We therefore reverse and remand for further proceedings on that issue.  In all other 
respects, we affirm.75

WE CONCUR:

       74 WCCR 77.2(d)(1).

       75 Grant's request for attorney fees and costs on appeal under RAP 18.1 and 
RCW 11.96A.150(1) is denied.  That statute, which pertains to trust and estate dispute 
resolution, does not apply here.

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