Summary
In GMAC Mortg. Co v. Wynkoop, 2007 WL 2909651, at *2 (Wash.Ct.App. Oct. 8, 2007), the plaintiff argued that a deed of trust where a trustee had not been designated at the time of drafting, but was later appointed, was invalid because a "trustee is necessary to secure the performance of the grantor to the beneficiary."
Summary of this case from Weig v. Stanley (In re Sleestak, LLC)Opinion
No. 58949-1-I.
October 8, 2007.
Appeal from a judgment of the Superior Court for Snohomish County, No. 05-2-09739-4, Richard J. Thorpe, J., entered September 12, 2006.
Affirmed by unpublished per curiam opinion.
The Wynkoops, property owners, appeal the trial court's order granting summary judgment for GMAC Mortgage Corporation ("GMACM"), a mortgage company, in an action by GMACM seeking to foreclose on a deed of trust executed by the Wynkoops. The Wynkoops claimed that the deed of trust was invalid because it failed to name a trustee. The trial court ruled that GMACM may appoint a trustee and proceed with foreclosure. Because RCW 61.24.010 specifically authorizes a beneficiary to appoint a trustee when the deed of trust does not name a trustee, we affirm.
FACTS
In April 2002, John H. Wynkoop and Sandra L. Wynkoop executed a promissory note to GMACM in the amount of $167,000. To secure the note, the Wynkoops executed to GMACM a deed of trust on real property they owned. In April 2002, the Wynkoops executed a second deed of trust on the same property to Advantage Investors Mortgage Corporation, which was then assigned to another mortgage company, Rescomm Holdings No. 2, LLC ("Rescomm"). Rescomm acknowledged that the position of its lien was junior to that of GMACM.
In June 2004, the Wynkoops filed a chapter 7 bankruptcy petition. In October 2004, GMACM obtained an order granting relief from stay, which allowed GMACM to foreclose on its deed of trust. To proceed with nonjudicial foreclosure, GMACM obtained the title report and learned that the deed of trust was not recorded, and that it did not name a specific trustee.
The trial court found that all of the foregoing facts were undisputed, and neither party challenges this finding. Thus, they are verities on appeal. Davis v. Dep't of Labor Indus., 94 Wn.2d 119, 123, 615 P.2d 1279 (1980).
GMACM then brought an action in Snohomish County Superior Court seeking (1) a judicial declaration that GMACM has a viable security interest in the property, has first-priority lien position, and may foreclose judicially or nonjudicially on the property; (2) judicial reformation of the deed of trust to reflect the parties' intent to designate a valid Washington trustee; and (3) an order and judgment authorizing judicial foreclosure sale of the property. On August 11, 2006, the Superior Court granted GMACM's motion for summary judgment. In its order, the court held that (1) GMACM's deed of trust is a valid first-priority lien against the property, (2) GMACM may foreclose nonjudicially on the property, and (3) GMACM may appoint a trustee of its choosing pursuant to RCW 61.24.010.
On that same day, apparently before the court's ruling, the Wynkoops filed a separate motion for summary judgment requesting dismissal of GMACM's action, essentially rearguing their position in their opposition to GMACM's summary judgment motion and requesting dismissal of GMACM's claims. On August 21, the Wynkoops filed a motion to reconsider the trial court's order granting GMACM summary judgment. On September 12, 2006, the trial court denied both motions and entered judgment in conformity with its order granting GMACM's summary judgment motion.
DISCUSSION
The Wynkoops argue that the trial court erred by granting summary judgment for GMACM because (1) a factual issue exists about whether the parties intended to designate a trustee in the deed of trust; (2) appointment of a trustee is permitted only after a valid deed is drafted, and this deed was not valid as drafted because it did not designate a trustee; and (3) the trial court's order that GMACM may appoint a trustee exceeded the scope of relief GMACM requested. They further argue that the trial court erred by denying their summary judgment motion and failing to dismiss GMACM's action because the deed of trust could not be reformed and was therefore invalid.
The Wynkoops first argue that summary judgment was improper because there was an issue of fact about the parties' intent to designate a trustee. But the parties' intent is only relevant to reformation. While GMACM requested that the court reform the deed of trust to include a designated trustee, the court did not address or grant this relief in its order. Rather, the court held that GMACM may appoint a trustee of its choosing. Thus, this disputed issue of fact is not material and had no bearing on the court's ruling.
Keierleber v. Botting, 77 Wn.2d 711, 715-16, 466 P.2d 141 (1970) (party seeking reformation has burden of proving mutual mistake and must show clearly that parties had identical intent about terms to be embodied in deed or instrument).
The Wynkoops next argue that the trial court's order authorizing GMACM to appoint a trustee under RCW 61.24.010(2) was improper because the deed was not valid. They assert that that the statute "contemplates an important distinction between 'designation' and appointment," and that a beneficiary may only unilaterally appoint a trustee after the grantor executes a valid deed. They contend that designation occurs at the time the deed is drafted and must be with the grantor's consent, and that only after a valid deed is executed, may the beneficiary appoint another trustee. They reason that because only the grantors sign the instrument and can elect not to sign until a trustee of their choosing is designated, the grantors have control over the designation process and must agree to the designated trustee at the time the deed was drafted. They assert that if the deed of trust does not designate a trustee at the time it is drafted, it is invalid because the trustee is necessary to secure the performance of the grantor to the beneficiary. Thus, they conclude that because the deed of trust did not contain a designated trustee at the time it was drafted, the deed of trust was not valid and GMACM could not later appoint a trustee.
RCW 61.24.010(2) provides in part: "If a trustee is not appointed in the deed of trust, or upon the resignation, incapacity, disability, absence, or death of the trustee, or the election of the beneficiary to replace the trustee, the beneficiary shall appoint a trustee or a successor trustee." Thus, RCW 61.24.010(2) explicitly contemplates that a deed of trust may not name a trustee and specifically provides that in that situation, the beneficiary has the authority to name one. The statute does not distinguish between designation or appointment, and the Wynkoops cite no authority for making such a distinction. The other statute they cite, RCW 61.24.005(4), does not recognize this distinction: it simply defines a trustee as one who is either designated or appointed. Thus, we find no merit in Wynkoops' argument and hold that the trial court properly ruled that GMACM could appoint a trustee.
RCW 61.24.005(4) defines "trustee" as "the person designated as the trustee in the deed of trust or appointed under RCW 61.24.010(2)."
The Wynkoops next argue that because GMACM's complaint did not include a request to appoint a trustee, the trial court's order exceeded the scope of requested relief. They note that GMACM only requested reformation of the deed to include its designated trustee. Because the trial court did not grant reformation but ruled that GMACM may appoint a trustee, they contend that the court improperly exceeded the scope of relief requested.
The Wynkoops assert that "[u]nder Washington laws, the courts are not authorized to grant relief which exceeds the scope of the relief requested in the complaint." But they cite no legal authority to support this proposition. Indeed CR 54(c) provides to the contrary, stating: "Except as to a party against whom a judgment is entered by default, every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings." Thus, if the trial court finds merit in a claim, the court is obligated by CR 54(c) to grant that relief, even though the claim has not been included in the original pleadings. Additionally, if a party argued a claim to the trial court that was not included in the original pleadings, the court may treat that claim as if it had been pleaded.
See Allstot v. Edwards, 114 Wn. App. 625, 60 P.3d 601 (2002) (claim for special damages that was argued and ruled on in trial court treated as if it had been pleaded even though claim was not included in original pleadings; decision based on CR 54 rather than CR 15), review denied, 149 Wn.2d 1028 (2003).
State ex rel. A.N.C. v. Grenley, 91 Wn. App. 919, 930, 959 P.2d 1130, review denied, 136 Wn.2d 1031 (1998).
91 Wn. App. at 931 (citing Reichelt v. Johns-Manville Corp., 107 Wn.2d 761, 766, 733 P.2d 530 (1987)).
Here, GMACM argued in its reply to Wynkoops' opposition to its summary judgment that a beneficiary may unilaterally appoint a trustee under RCW 61.24.010. The trial court found merit in this claim and was therefore obligated to grant that relief under CR 54(c). The trial court's order was proper and did not impermissibly exceed the scope of relief requested.
The Wynkoops further argue that because there was a factual dispute about the validity of the deed, the trial court should not have granted summary judgment for GMACM. They contend that because the deed of trust did not contain an identifiable grantee it was not valid as a conveyance and was therefore void. In support of their argument, the Wynkoops do not cite to specific statutes, but refer to the statute that "contemplates designating an identifiable person/entity as trustee," and "describes who may serve as a trustee." They also cite an excerpt from a treatise on real property, which is essentially a string citation to cases holding that a valid deed must designate a grantee. They then conclude that the deed of trust was void because "no identifiable person/entity was designated as trustee; no trustee was named who could secure the performance of the grantor's obligations, and no grantee was named."
We disagree. The cases cited refer to the designation of a grantee, not a trustee. A "grantee" is the beneficiary, not the trustee. Here, a grantee was named: GMACM was the beneficiary. The deed of trust was therefore valid.
Finally, the Wynkoops argue that the trial court should have granted their summary judgment motion and dismissed GMACM's claims because the deed could not be reformed. They point to the trial court's failure to grant reformation, contending that the instrument purporting to be a deed of trust was not a valid deed of trust under Washington law. They argue that chapter 61.24 RCW, the Washington Trust Act, requires that a deed of trust be a three party instrument, including a grantor, beneficiary and trustee and that by the statute's definition, the trustee must be designated in the original instrument. They reiterate their perceived distinction between "designated" and "appointed" trustees, asserting that trustees must be designated at the time the deed of trust is drafted or the deed of trust is invalid.
Again, the Wynkoops' argument ignores the explicit language of RCW 61.24.010(2). As discussed above, this statute specifically contemplates the situation where no trustee has been designated in the deed of trust and permits the beneficiary to appoint one in that situation. In doing so, the statute recognizes that the absence of a trustee designation does not invalidate a deed of trust. The Wynkoops point to no contrary authority. The trial court therefore properly denied their summary judgment motion.
GMACM also requests costs, but fails to cite RAP 14 or any other basis for such an award. This court will not consider an issue absent argument and citation to legal authority. We therefore deny the request for costs.
State v. Dennison, 115 Wn.2d 609, 629, 801 P.2d 193 (1990).
We affirm.