EXHIBIT

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THE CIViL MOTIONS UPdg Hearing Date: November 1,2013 Heing Time: 9:30 a.m. With Oral Argument

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SUPERIOR COURT OF WASHINGTON

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COUNTY OF SNOHOMISH
JACOB D. BRADBURN, an individual,

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) ) NO. r t-2-08345-2

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Plainti

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MORTGACE ELECTROIC REGISTRATION SYSTEMS,INC., a foreign t corporation; ggr!91glr9!; BAC HOME LOANS i SERVICING, SERVICING,-LP 15 LP FKP COI.JNTRYWIDE COI.JNTRYWIDE BANK HOME LOANS SERVTCING LP, a foreignentity; L6 oF AMEzuCA, N.., a ) AliE natioal bank; BANK OF AMEzuCA' qry_qBIiON, a foreign co{porarion; COLINTRYWIDE FINACIA CORPORATION, A fgte_rgr corporarion; i q g$-q\{.f{_oll COLINTRYWIDE HO-ME LONS,IN., A fqryte::qryo3ation; FEDERALNATIONAL T MORTGAGE ASSOCIATION, a federa[y federa[y ' t z0 I chartered corporation, LINDA GREEN DOES ) l-10, l-lu, unKnown unknown persons; ancl and QUICKDRAW eUIUKDR ) 21 ll REAL ESTATE SERVICES, IES,INC NC d1bla blA ) HOMESTAR flrJtvl.E r ,r.K LtrNIJINU, LENDING, a domestic domestic ) lolpogtiory _I.{ATIONAL CITY MORTGAGE i Co. dlbla COMMONWEALTH UNITED ) MORTGAGE COMPANY, a foreign ) i corporation; STEWART TITLE, TTLE, a aomestic t corporation, 24ll corporation, ) )

p,urpose national trust bank; FIDELITY Py^rp_9.19_T?tional NATIONAL TITLE, a corporation;

RECONTRUST COMPANY, N.4., a limited-

FIQELITy

) ) DEFENDANTS' MOTION FOR ) SUMMARY JUDGMENT

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LOANS

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Defendants.

DEFENDANTS' MOTION FOR SUMM.ARY JUDGMENT - I

I t6589.04t l/5839482.1

LANEPOWELLPc
1420 FIFTH AVENUE, SUTTE 4t00

SEATTLE, WASHNGTON 98 l0t-2338 206 -223.7 oW F 206.223.7 t 07

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1987)''d876F'zd897 (9thCir. 1989)("Anassignmentof adeedof trust...isvalid

between the parties whether or not the assignment

is ever recorded. . . . Recording of the

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assignrnents is for the benefit of the parties.") (intemal citations omitted). For this reason

well, the MERS assignment is inelevant to BANA's authority to foreclosure through the
trustee.

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3.

Borrower asserts that "[a]ny assignment of trustee powers to ReconTrust did not
comply \vith RCW 61.24.010(2)" because the assignment was made

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by aparty other

than the

beneficiary or lender, suclt that ReconTrust was not authorized

to institute non-judicial

foreclosure or grant a trustee's deed to Fannie Mae. compl. 1[14.1g-4.21. However, as

discussed above, the evidence shows MERS acred as the agent of and at the direction of the

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beneficiary, BANA, when it appointed ReconTrust as successor trustee,

See

supra Section

V.D.2. Thus, ReconTrust was a valid successor trustee.

,Se

RCW 61.24.010(2) (.The trustee

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may resign at its own election or be replaced by the beneflreiary.,). 4.

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Borrower next asserts that "defendants Trustees Fidelity, Stewart and/or ReconTrust
breached their duties

of Good Faith to [Bonower] by permitting ReconTrust's non-judicial

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foreclosure

to occur on the [Borrower's] Property and not providing [Bonower] with

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information on one or more practices described in

2.3 of this complaint.,' Compl. n 4.26.

He further alleges that "ReconTrust willfully, knowingly, or intentionally initiated and

continued a non-judicial foreclosure for the servicer when ResonTrust knew or should have

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known that BAC Home Loans was not the beneficiary and/or that proof of the beneficiary

and/or a declaration

of the beneficiary had not been

provided as

is required by RCW
by
the

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64.21.AQ)." Id- n 4.27.

evidence.

These allegations are without merit and contradicted

DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

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I 16589.04r t/5E39482. r

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Borower's allegation that ReconTrust failed to provide Borrower information on the "ptactices described

in tf 2.3 of this complaint" is nonsensical.

paragraph 2.3

of

the

Complaint alleges that "[o]ne or more parties acquired certain rights, and/or legal or equitable

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in fBonower's] prior mortgage on one or more secondary markets," Id. nZ3. Howeve, there is nothing illegal or improper in securitizing a loan. Thus, it was not a
interests

violation of any duty of good faith not to inform Borrower of the securitization of his loan.
Moreover, this case.

if

any loan was securitized, t was Borower's prior loan, which is not at issue in

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Borrower's allegation that ReconTrust "knew or should have known that that BAC
Home Loans was not the beneficiary" is contradicted by the evidence confirming that BANA
was the holder of the Note and the beneficiary.

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BANA Decl. !f 10, 1g, 26.

In addition, the
Trustee's Sale,

evidence establishes that when ReconTrust issued the Notices of

it

had a Declaration

of Beneficiary that complied with the DTA.

RCW

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61.24.AQ)(a) provides "[tJhat, for residential real property, before the notice of trustee's
sale is recorded, transmitted, or served, the trustee shall have proof that the beneficiary is the

owner of any promissory note or other obligation secured by the deed of

trust."

Here, the

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Declaration of Beneficiary accurately identifies Fannie Mae as the owner of the Noie. Ex. C

to ReconTrust ecl.; see BANA Decl., nn

7,2s. while Borrower

may contend that the

Declaration does not identi$ BANA, the beneflrciary, as the owner of the Note, inaccurate for the Declaration to so state because BANA was the holder of the

it would

be

Note. Any

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claimed inconsistency is the result of ambiguity in the language of RCW 61.24.030(7)(a), i.e., that it fails to take into account the rather common scenario where the holder of the Note and the owner of the Note are not one and the same. As noted above, the Western District has recognized the reality that when Fannie Mae is the owner of the Note, the holder of the Note can foreclose

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in its own name.

See

Zalac,2013 WL 1gg0728, at

t3 (granting motion

to

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dismiss where "Defendant [] asserts that it is the true holder of the note, even if Fannie Mae is
DEFENDANTS' MOTION FOR SUMMARY JUDGMENT- I6

I 16589,04t t/5839482. I

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the owner of the note.") (emph. in original); corales, gzz F. supp. at ll07-0g (granting motion to dismiss in 'rnctionally identical circumstances where lender sold loan to Fannie Mae but then proceeded to foreclose in its own name - "Thus, even if Fapnie Mae has an
interest in Plaintiffs' loan, [Defendant] has the authority to enforce it.,,); see also In

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re

Veal,

B'R' 897, 912 (9th Cir' BAP 2011) ("[O]ne can be an owner of a note without being a 'person entitled to enforce.' The converse is also true: one can be a .person entitted to
450 enforce' without having any ownership interest in the negotiable instrurnent. This distinction
may not be an easy one to draw, but it is one the UCC clearly embraces, Wtrile in many cases

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the owner

of a note and the person entitled to enforce it are one and the same, this is not

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always the case.").

Indeed,

it is fairly typical for Fannie Mae to require,

under its servicing guidelines,

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that the servicer hold the Note and foreclose

in its own name. ReconTrust would certainly

have been famitiar with that accepted practice. In addition, Borrower did not know of the

Declaration of Beneficiary until after the sale, so he can hardly claim that he relied on was prejudiced by

it or
the

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it.

It is not as if a stranger to the Loan foreclosed on the property;

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holder of the Note and loan servicer did so, as expressly required by the servicing guidelines

of the owner of the Note. In the end, any claimed contradiction or claimed ambiguity in who
was the beneficiary is no more than a red
thus, was entitled to foreclose.
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hering. BANA

was the holder of the Note and,

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Borrower alleges that Defendants failed to follow non-judicial foreclosure procedures. Compl' n4.28-4'35. However, thee is simply no evidence to support Borrower's conclusory allegations. To the contrary, the evidence shows that Defendants followed proper foreclosure
procedures.

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Non-judicial foreclosures in Washington are governed by DTA chapter FICW 61.24 et

seq., which sets out the procedural requirements necessary before a notice of trustee sale can
DEFENDANTS' MOTION FOR SUMMARY JUDGMENT_
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r I 6589.041 l/5839482.

THE CiVIL MOTIONS JU Hearing Date: November 1, 2013 Hearing Time: 9:30 a.m. With Oral Argument

SUPERIOR COURT OF WASHINGTON

COUNTY OF SNOHOMISH

ll

JACOB D. BRADBURN, an individual,

Case

No.: 11-2-A$45-2

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Plaintiff
v.

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RECONTRUST COMPANY, N,4., limited-purpose national trust bank;

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FIDELITY NATIONAL TITLE, A corporation; MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., a foreign coqporation; BAC HOME LOANS SERVICING, LP FKP COUNTRYWIDE BANK HOME LOANS SERVICING LP, a foreign entity; BANK OF AMERICA, N.4., a national bank; BANK OF AMERICA CORPORATION, a foreign corporation; COUNTRYWIDE FINANCIAL CORPORATION, a foreign corporation, FEDERAL NATIONAL MORTGAGE ASSOCIATION, a federally chartered coqporation; LINDA GREEN DOES 110, unknown persons; and QUICI(DRAW REAL ESTATE SERVICES,INC b/d/A HOMESTAR LENDING, a domestic corporation; NATIONAL CITY MORTGAGE CO. d/b/a COMMONWEALTH UNITED MORTGACE COMPANY, a foreign corporation; STEWART TITLE, a
domestic corporation, Defendants.

DEFENDANTS' OPPOSITION TO BORROIVER'S SECOND MOTION FOR PARTIAL SUMMARY JUDGMENT

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LANE POWELLPC

DEFENDANTS' OPPOSITION TO BORROWER'S SECOND MOTION FOR PARTIAL SUMMARY JUDGMENT. I

I t6589.041 r/5856841.r

I42O

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St'TTE 42OO P.O. BOX 91302 SEATTLE, WA 981I l-9402

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FIFIH AVENUE, A
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AX: 206.223.7

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where lender sold loan to Fannie Mae but then proceeded "Thus, even
enforce

to foreclose in its own name

if Fannie Mae has an interest in Plaintiffs' loan, fDefendant]

has the authority to

it.').

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b.

ryfERSr as the Agent of the Beneficiary, was Authorized to Appoint ReconTrust

Borrower asserts that "ReconTrust was never lawfully appointed trustee as MERS was

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not a lawful beneficiay or acting on behalf of a lawful beneficiary and therefore had no
authority to appoint a successor trustee." Borrowers' Motion, at ignores the fact that MERS was acting as an agent
beneficiary.

However, this assertion

the

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of and at the direction of BANA,

n Bain, the Washington Supreme Court held that MERS cannot be a valid beneflrciary

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if it does not hold the Note. Ban,

175'Wn.2d at 110. However, the Court concluded that

it

could not decide the legal effect of MERS's acting as an unlawful beneficiary.

Id.at

110-14.

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In addition, the Court noted that "nothing in this opinion should be construed to suggest an
agent cannot represent the holder

of the note." Id. at 106. The Court further noted that Id.s The

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"Washington law, and the deed of trust act itsel{ approves of the use of agents."

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Court declined to find that MERS vias acting as the agent of the beneficiary only because
there was no evidence in either of the cases it was reviewing showing that MERS was acting on behalf of identifiabie beneficiarie s. Id. at 107.

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In the

present case, by eontrast, the evidence estblishes both BANA as the

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beneficiary (as the holder of the Note) and MERS acting as BANA's agent when

it appointed

ReconTrust as the successor. BANA Decl.,'!f 21, Ex. F to BANA Decl. BANA, as the holder

of the Note, directed MERS to appoint ReconTrust. Id. tt did so in compliance with Fannie
Me's servicing guidelines which "grant[] servicers, acting in their own names, the authority

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to represent Fannie Mae's inteests in foreclosure proceedings as holder of the mortgage

note." Ex. E to BANA Decl., at l.
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See RCW

6l .24.031 (stating that benefrciary can act through an aurhorized agenr); RC1V

L24.050 (same).

DEFENDANTS' OPPOSITION TO BORROWER'S SECOND MOTION FOR PARTIAL SUMMARY JUDGMENT. S

II6589.04I1t585684t
1

LANEPOIilELLPc
I42O FITTH AVENUE, SUIE 42OO P.O. BOX91302 206.223.7000

SEATTLE, WA 98lu-9402 F AX: 246.223.7 I 07

ReconTrust as successor tnstee, were done

at BANA's direction and as its agent, in

owler of the Note"

accordance with the servicing guidelines of Fannie Mae, the J

a.

B.ANA lVas the Holder of the Note and Beneficiary

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Since 1998, the Deed of Trust Acthas defined a"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

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for a different obligation." Boin v. Metro. Mortg Grp.,

Inc., r75 wn.2d 83, 98-99, 2s5 p.3d 34 (2012) (quoting RC\M 6l.z4.0ase)) (emphasis
added). The Washington U.C.C. defines the "Holder" of a negotiable instrument in relevant part as "[t]he person in possession of a negotiable instrument that is payable . . . to bearer, RCW 624.1 -20I(21); Bain, !75 Wn.2d at 104. A negotiable instrument is payable to beaer

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if it is indorsed in blank.
becomes payable

,See

RCW 62.A3-2A5(b) ("When indorsed in blank, an instrument

possession alone until

to beaer and rnay be negotiated by transfer of

specially indorsed.").

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Applying the plain language of the statutes and case cited above, the evidence
establishes that

BANA was the holder of the Note. Following the Loan's origination, the

Note was endorsed 1o Counywide Bank, N.A, which endorsed the Note to Countrywide
Home Loans, Inc., which endorsed the Note in blank. BANA Decl.,

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llg,

9, Exs. A, B to

BANA Decl. Since January 3,2006, when Fannie Mae beeame the owner of the Note, the
original, endorsed-in-blank Note has been maintained by BANA and its predecessors in
interest on behalf of Fannie Mae, pursuant to Fanrie Mae's servicing guidelines. .Id.,1 10, 18,

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26,F;x. E to BANA Decl. Because

it

was the holder of the Note, BANA had the right to foreclose and to take

any necessary steps to foreclose. See Zlc v. CTX Mortg. Corp., Case No. C12-01474 MJP,

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2013

lVL 1990728, at t3 {W.D. Wn. May 13, 2013) (granting motion to dismiss where

"Defendant [] asserts that it is the true holder of the note, even if Fannie Mae is the owner of
the note.") (emph. in original); corales v. Flagstar Bank, FSB, g?z F. supp. 2d 1102, 1 107-

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08 (W.D. Wn. 2011) (granting motion to dismiss in functionally identical circumstances

DEFENDANTS' OPPOSITION TO BORROWER'S SECOND MOTION FOR PARTIAL SUMMARY JUDGMENT. T
r

LANE PO}VELLfC 420 FIFTH AVENUE SUTTE 42M P,O. BOX91302 sE'I'rLE, WA 98ll l-9402 206.223.7w0 F .X: 2A6223.1 107

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