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In Re the Trustee's Sale of the Real Property of Willard Brown and Holly Brown

In Re the Trustee's Sale of the Real Property of Willard Brown and Holly Brown



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Published by richdebt
How to blow a homestead exemption; premature move costs couple $116K+
How to blow a homestead exemption; premature move costs couple $116K+

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Published by: richdebt on Apr 22, 2011
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IN THE COURT OF APPEALS OF THE STATE OF WASHINGTONIn re the Trustees Sale of the Real)No. 28676-2-IIIProperty of WILLARD H. BROWN and)HOLLY M.BROWN,husband and wife.))WELLS FARGOBANK, N.A.,))Respondent,)Division Three)v.))WILLARD H. BROWN and HOLLY M.)BROWN, husband and wife,and WW)CEDAR COMPANY, an Idaho )corporation,))Appellants.)PUBLISHEDOPINION
Korsmo, J. —The trial court found that Willard and Holly Brown had abandonedtheir house in Clarkston and could no longer claim the homestead exemption insubsequent foreclosure proceedings. Because the record supports that determination, weaffirm.
 No. 28676-2-III
 Brown v. Wells Fargo Bank, N.A.
2FACTSThe Browns were the sole shareholders of WW Cedar Company, Inc. In August2006, they obtained a $200,000 Small Business Administration (SBA) commercial loanfor WW Cedar from Wells Fargo Bank. Wells Fargosought additional security for theloan in the forms of a personal guarantee by the Browns and adeed of trust secured bytheir Clarkston home. The residence was subject to a prior mortgage from Alaska USAMortgage Company.The Wells Fargo deed of trust contained a provision by which theBrowns waived their homestead exemption rights.By 2008the Browns and their company ran into financial difficulties. WW Cedar ceased operations and defaulted on its loan payments to Wells Fargo. In May or June,2008, the Browns terminated their utility services and left the Clarkston housefor Florida. There they entered into a one-year lease on an apartment and obtained Floridadriver’s licenses. The couple also registered their motor vehicles in Texas.The Browns defaulted on their mortgage with Alaska USAin September2008. Atrustee for Alaska USA performed a nonjudicial foreclosure on the property in January2009. The sale realized $116,377.85 more than was needed to cover the Alaska USAmortgage. That sum was deposited into the registry of the Asotin County Superior Court.Wells Fargo and the Browns filed crossclaims on the surplus. Wells Fargo
 No. 28676-2-III
 Brown v. Wells Fargo Bank, N.A.
3asserted its deed of trust, while the Browns claimed the funds under their homesteadexemption. The trial court initially directed the money be given to the Browns on the basis of the statutory homestead exemption. On reconsideration, the trial court ruledboththat the Browns had abandoned their homesteadand that the waiver of the homesteadexemption was valid. It ordered the surplus funds disbursed to Wells Fargo.The Browns timely appealed to this court. On the eve of oral argument, the partiesstipulated to four other documents being added to the record of this appeal: (1) a Floridadeclaration of domicile filed by the Brownson May 10, 2008; (2) Florida’s domicilestatute, section 222.17 Florida Statutes; (3) a Walgreens’prescription dated May 20,2008 that bore an Asotin post office box for Mr. Brown; and (4) a receipt dated May 20,2008 for a charitable donationin Clarkstonby Mrs. Brown that showed the Clarkstonhouse address.ANALYSISThe Browns present three issuesrelated to the trial court’s two rulings,but weneed only address two of them: (1) whether the trial court correctly determined that thehomestead had been abandoned and (2) whether Wells Fargo could claim the proceedsunder the lien priority statute. We do not address, and express no opinion about, theBrowns’argument thatWashington’spublic policy precludes a homeowner from waiving

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