Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—WDWash: Trustee’s Allegedly Defective Notice of Sale Not a Deceptive Act , (May 7, 2013)

By Jody Coultas, J.D.

A homeowner was unable to state Washington Consumer Protection Act claims against a trustee for allegedly issuing defective notices of trustee sales, the federal district court in Seattle has held (Robertson v. GMAC Mortgage LLC, April 3, 2013, Pechman, M.).

The prior owner of the homeowner’s property executed an adjustable rate note. To secure the note, the prior owner executed a deed of trust against the property. When the prior owner defaulted on a third-party deed of trust, the homeowner foreclosed on the deed of trust and purchased the property.

The trustee was appointed as successor on the deed of trust. During its tenure as successor trustee, it issued three notices of trustee sales discontinuing the trustee sales before any sale. The homeowner notified the trustee of his ownership of the property and requested any pending sales be discontinued.

The homeowner was unable to show the trustee engaged in any deceptive acts, according to the court. A deceptive act must have the capacity to deceive a substantial portion of the population and misrepresent something of material importance. The homeowner’s claims were based on the trustee’s issuance of an allegedly defective notice of trustee sale. There was no authority for such claims. There was also no evidence of how the alleged violations were deceptive or constitute an unfair business practice.

There was also no evidence of any injury or damage on the part of the homeowner, according to the court. Personal injuries are not compensable and do not satisfy the injury requirement. Even if the homeowner had presented any evidence of an injury, the trustee’s actions did not proximately cause any damage. The alleged loss of use of the property, a loss of revenue, and other losses suffered from liquidating securities in anticipation of a settlement with the holder of the adjustable rate note. Nothing the trustee could do or had done would change the fact that the property was subject to the deed of trust or affect the homeowner’s ability to sell or develop the property.

The homeowner also failed to state "little RICO" claims against the trustee. The Washington Criminal Profiteering Act ("little RICO") requires an injury to a person, business, or property by an act of criminal profiteering, which requires a commission of specific enumerated felonies for financial gain, that is part of a pattern of criminal profiteering, and damages. The trustee’s only participation with the events of this case was to issue three notices of trustee sales. Even if the notices were defective, the acts were not listed as one of the specific enumerated felonies constituted indictable criminal acts under the Act.

The case is No. C12-2017-MJP.

Attorneys: Andrew John Krawczyk (Stafne Law Firm) for Duncan K. Robertson. William G. Fig (Sussman Shank) for GMAC Mortgage LLC.

Cases: StateUnfairTradePractices RICO WashingtonNews