News & Events

News & Events

4.28.2014

Lane Powell Receives Appellate Victory Affirming Dismissal of Wrongful Foreclosure Suit As a Contempt Sanction

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Lane Powell scored another appellate victory for Wells Fargo with a decision affirming the dismissal of a suit as a sanction for contempt. The case was Ortega v. NW Trustee Servs., Inc., No. 69652-1-I, 2014 WL 646347 (Wash. Ct. App. 2014).

The plaintiff borrowers sued to enjoin a trustee’s sale and to recover damages for the alleged violation of the Deed of Trust Act and Consumer Protection Act in December 2009. Nearly two years later, the trial court held the borrowers in contempt for failing to make monthly payments as required under a pay-to-stay order.

Several months later, the trial court stayed the case, while the Washington Supreme Court was deciding the enforceability of MERS (Mortgage Electronic Registration Systems, Inc.) deeds of trust in Bain. After the Supreme Court decided Bain, the trial court declined to vacate the contempt finding and dismissed the case in November 2012. The borrowers appealed the dismissal of their wrongful foreclosure suit. The court of appeals unanimously affirmed, rejecting claims that the dismissal was punitive and that our lender client lacked authority to foreclose. The court held: “[D]ismissal here was a coercive sanction within the sound discretion of the trial court.”

Lane Powell attorneys Ron Beard, David Spellman and Abe Lorber were on the appellate brief.

Lane Powell’s Mortgage and Consumer Finance team and Appellate team represent lenders and interested parties in alternative dispute resolution proceedings and in trial and appellate courts.