Bank Of New York Mellon, V. Gwen S. Bartol

• Court: Court of Appeals of Washington
• Decided: August 19, 2024
• Docket: 85773-8
• Status: Unpublished

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

BANK OF NEW YORK MELLON, as No. 85773-8-I Trustee for CWABS Inc., Asset-Backed Certificates, Series 2007-2, DIVISION ONE

Appellant, UNPUBLISHED OPINION

v.

GWEN S. BARTOL,

Respondent.

FELDMAN, J. — The central issue in this appeal is whether Bank of New York

Mellon, as Trustee for CWABS Inc., Asset-Backed Certificates, Series 2007-2

(BNY Mellon), can pursue claims to reform the legal description of encumbered

property for a loan made to Gwen S. Bartol when it asserted claims seeking the

same relief, unsuccessfully, in a prior lawsuit. Because BNY Mellon’s claims are

barred by claim preclusion, we affirm the trial court’s ruling dismissing the claims

on summary judgment and affirm the trial court’s ruling awarding attorney fees and

costs in Bartol’s favor.

I

Bartol is the owner of the property commonly known as 26867 156th Place

SE, Covington, WA, King County (the Property). The Property is comprised of four

Parcels: (1) King County parcel #2622059034 (Parcel 9034); (2) King County No. 86176-0-I

parcel #2622059047 (Parcel 9047); (3) King County parcel #2622059054 (Parcel

9054); and (4) King County parcel #2622059140 (Parcel 9140). Parcel 9047 is

made up of two tracts: Tract A and Tract B. Bartol’s house is located on Parcel

9054 and Tract B of Parcel 9047. No portion of Bartol’s house is located on Tract

A.

In March 2007, Bartol obtained a loan from America’s Wholesale Lender

and signed a Deed of Trust encumbering Parcel 9054 (where roughly half of her

house is located) and Parcel 9034 (which does not include any portion of her

house) as security for the loan. At closing, Bartol also signed a document

correction agreement whereby she agreed to “comply with Lender’s request to

execute, acknowledge, initial and deliver to Lender any documentation Lender

deems necessary to replace or correct the lost, misplaced, misstated, inaccurate

or otherwise missing documents.”

On June 30, 2011, BNY Mellon became the beneficiary of the Deed of Trust.

On February 25, 2015, Bartol received a document titled “Notice of Trustee’s Sale”

from MTC Financial Inc., a successor trustee. The document notified Bartol that

she had a number of “delinquent payment[s]” and that the Property encumbered

by the Deed of Trust (Parcels 9034 and 9054) “will be sold to satisfy the expense

of sale and obligation secured by the Deed of Trust.” In response, Bartol notified

MTC Financial that “[o]nly half of the house is being foreclosed on and a vacant

lot. The other half of my home has been left out. I own four parcels here and you

have them confused.” On December 10, 2018, Bartol received a notice of default

from Select Portfolio Servicing. Bartol and BNY Mellon agreed to mediation where

Bartol again explained that the Deed of Trust encumbered property that included

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only a portion of her residence.

On March 13, 2020, BNY Mellon issued another notice of default notifying

Bartol that if she does not “cure said alleged default . . . the property . . . may be

sold at public auction . . . .” In July 2020, BNY Mellon filed a complaint (the First

Lawsuit) against Bartol. On October 27, 2020 BNY Mellon sent an email to Bartol’s

counsel requesting that “Bartol sign . . . a corrected Deed of Trust . . . correcting

the legal description of the Property in the Deed of Trust.” Bartol’s counsel replied

on November 5, 2020 indicating that Bartol would not sign a corrective document.

On January 15, 2021, BNY Mellon filed an amended complaint alleging two

causes of action. First, BNY Mellon alleged that Bartol breached the document

correction agreement by “refusing to sign a corrective document to correct the error

in the legal description of the Property in the Deed of Trust.” Second, BNY Mellon

alleged a cause of action for reformation, which sought to reform the Deed of Trust

“to include the legal descriptions of the two missing tax parcels [(Parcels 9047 and

9140)].” In other words, BNY Mellon asserted that all four parcels (9034, 9047,

9054, and 9140) should be encumbered as security for the loan.

On July 26, 2021, after a two-day trial, the trial court entered findings of fact

and conclusions of law concluding that Bartol did not breach the document

correction agreement because “the requested amendment would not have

corrected the mutual mistake made in the Deed of Trust.” As for BNY Mellon’s

request to reform the Deed of Trust, the court found that a “mutual mistake was

made by Bartol and America’s Wholesale Lender in executing the Deed of Trust

to encumber only parcel 9054 and 9034.” The court reasoned:

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The Court finds that Plaintiff’s claim to reform the Deed of Trust to encumber all four parcels owned by Bartol is not an appropriate remedy for the mutual mistake. Instead, the Court finds that reformation to amend the Deed of Trust to reflect the parties’ original intent to encumber Parcel 9054 and Parcel 9047 is an appropriate remedy. BNY Mellon is entitled to reformation of the Deed of Trust to include the legal descriptions of the Parcel 9054 and Parcel 9047.

Thus, while the court rejected BNY Mellon’s argument that all four parcels should

be encumbered, it agreed that the two parcels that included portions of Bartol’s

house (9047 and 9054) should be encumbered.

To effectuate its ruling, the trial court entered a final judgment on September

23, 2021 wherein the court struck the original legal descriptions in the Deed of

Trust and replaced them with a revised legal description. While the revised

description of Parcel 9054 is generally correct (missing only two words), the

revised description of Parcel 9047 includes only Tract A of Parcel 9047 despite the

fact that two tracts make up Parcel 9047—Tract A and Tract B—and the only

portion of Bartol’s home that is located on Parcel 9047 is located on Tract B and

not on Tract A.

To correct these mistakes, BNY Mellon filed a CR 60 motion titled “Plaintiff’s

Motion to Correct Final Judgment.” Regarding Parcel 9054, BNY Mellon requested

that the court amend the legal description to add the two missing words, which are

“218 feet.” Regarding Parcel 9047, BNY Mellon sought to replace the legal

description of Tract A with a legal description of Tract B so that the Deed of Trust

would encumber the portion of Parcel 9047 that includes Bartol’s house.

On January 10, 2022, the court entered an order granting in part and

denying in part BNY Mellon’s CR 60 motion. The court granted BNY Mellon’s

motion with regard to Parcel 9054 to read as BNY Mellon requested. But the court

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denied BNY Mellon’s motion with regard to the proposed legal description for

Parcel 9047. The court reasoned that:

. . . no legal basis exists nor does this court have the authority to grant Plaintiffs Motion to "correct" the language describing Parcel [9047]. The Final Judgment entered by the Trial Court (Judge Cahan), is consistent with the language contained within the admitted Trial Exhibit No. 2. Judge Cahan, the finder of fact and law, adopted that language when she executed the Final Judgment. As such, outside of an agreement of the parties, no legal basis for this judicial officer to disturb Judge Cahan’s orders.

Thereafter, the court entered its amended final judgment on March 16, 2023,

reforming the Deed of Trust. Consistent with the court’s order granting in part and

denying in part BNY Mellon’s motion to correct the final judgment, the amended

final judgment includes the modified legal description of Parcel 9054 but continues

to include the legal description for the portion of Parcel 9047 that does not include

Bartol’s residence.

BNY Mellon commenced this lawsuit (the Second Lawsuit) on March 21,

2023. It asserts two causes of action for reformation. The first cause of action

seeks reformation of the final judgment in the First Lawsuit. In this first cause of

action, BNY Mellon alleges that by “mutual mistake or scrivener’s error, the legal

description of Parcel 9047 in the Final Judgment . . . is incorrect” and “should be

reformed to the correct legal description of Parcel 9047.” The second cause of

action alleges that by “mutual mistake or scrivener’s error, the legal description of

Parcel 9047 in the [2023] Deed of Trust is incorrect” and “should be reformed to

the correct legal description of Parcel 9047.”

BNY Mellon and Bartol each filed a motion for summary judgment. In its

summary judgment motion, BNY Mellon argued that because the trial court in the

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First Lawsuit relied on a void deed, the 2023 Deed of Trust and Judgment “must

be reformed to replace the legal description of Parcel 9047 with the legal

description in Bartol’s vesting deed, the 1993 Quit Claim Deed.” Bartol’s 1993

vesting deed includes substantially the same legal description of Parcel 9047 as

BNY Mellon requested in the CR 60 motion. At the conclusion of the hearing on

both parties’ motion for summary judgment, the trial court issued an oral ruling

denying BNY Mellon’s motion because issues of fact precluded the requested

relief.

Bartol’s motion for summary judgment, in contrast, sought to dismiss BNY

Mellon’s reformation claims based on preclusion principles (both issue preclusion

and/or claim preclusion) because those claims were, or could have been, litigated

in the First Lawsuit. At the conclusion of the summary judgment hearing, the trial

court reserved ruling on this motion. Three days after the hearing, the trial court

issued an order memorializing its decision to deny BNY Mellon’s motion for

summary judgment and granting Bartol’s motion for summary judgment. The trial

court did not specify whether it granted Bartol’s motion based on issue preclusion,

claim preclusion, or both.

BNY Mellon appeals.

II

BNY Mellon argues that the trial court erred in dismissing its reformation

claims on summary judgment. We disagree.

“Summary judgment is proper where there is no genuine issue of material

fact and the moving party is entitled to judgment as a matter of law.” Weaver v.

City of Everett, 194 Wn.2d 464, 472, 450 P.3d 177 (2019) (citing CR 56(c)). “We

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review summary judgment orders de novo, viewing all facts and reasonable

inferences in the light most favorable to the nonmoving party.” Id. “The reviewing

court considers all facts submitted, engaging in the same inquiry as the trial court

. . . and may affirm on any basis supported by the record.” Redding v. Virginia

Mason Med. Ctr., 75 Wn. App. 424, 426, 878 P.2d 483 (1994). Bartol’s motion for

summary judgment raised two alternative grounds for dismissal: claim preclusion

and issue preclusion. Because we hold that BNY Mellon’s reformation claims are

barred by claim preclusion principles, we need not reach the remaining issues

raised by BNY Mellon.

Claim preclusion is an equitable doctrine “that preclude[s] the relitigation of

already determined causes.” Weaver, 194 Wn.2d at 472-73. Further, it is

“intended to curtail multiplicity of actions, prevent harassment in the courts, and

promote judicial economy.” Id. at 473. To that end, claim preclusion “bars the

relitigation of claims that were litigated, might have been litigated, or should have

been litigated in a prior action.” Weaver v. City of Everett, 4 Wn. App. 2d 303, 320,

421 P.3d 1013 (2018), aff’d, 194 Wn.2d 464, 450 P.3d 177 (2019). A party seeking

to apply claim preclusion must establish “concurrence of identity . . . (1) of subject-

matter; (2) of cause of action; (3) of persons and parties; and (4) in the quality of

the persons for or against whom the claim is made.” Weaver, 194 Wn.2d at 480

(quoting N. Pac. Ry. Co. v. Snohomish County, 101 Wash. 686, 688, 172 P.878

(1918)). “Because it is a question of law, we review a determination that claim

preclusion applies de novo.” Hassan v. GCA Prod. Servs., Inc., 17 Wn. App. 2d

625, 633, 487 P.3d 203 (2021).

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BNY Mellon concedes that the third and fourth elements above are satisfied,

but argues that the first two elements are not satisfied. As to the first element—

identity of subject matter—there is “limited case law defining when the subject

matter of related cases differs.” Weaver, 194 Wn.2d at 480. Courts generally

focus on the “asserted theory of recovery rather than simply the facts underlying

the dispute.” Marshall v. Thurston County., 165 Wn. App. 346, 353, 267 P.3d 491

(2011). In determining the identity of subject matter, “‘the critical factors seem to

be the nature of the claim or cause of action and the nature of the parties.’” Id.

(quoting Hayes v. City of Seattle, 131 Wn.2d 706, 712, 934 P.2d 1179 (1997)).

Here, the undisputed facts show that the prior action and current action share

concurrence of identity of subject matter. BNY Mellon asserts the same cause of

action (reformation) against the same party (Bartol) to reform the same document

(the Deed of Trust) in both lawsuits. As a result, both of BNY Mellon’s lawsuits

sought the same theory of recovery based on the same underlying facts. Thus,

the subject matter is identical and the first element of claim preclusion is satisfied.

Moving to the second element of claim preclusion—identity of cause of

action—Bartol correctly argues that the causes of action in the two lawsuits are

identical. There are four criteria to consider when determining whether the causes

of action are identical:

“(1) [w]hether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise out of the same transactional nucleus of facts.”

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Thompson v. King County., 163 Wn. App. 184, 196, 259 P.3d 1138 (2011) (quoting

Rains v. State, 100 Wn.2d 660, 664, 674 P.2d 165 (1983). All four criteria need

not be present to bar the second action. See Rains, 100 Wn.2d at 664. Also, the

fourth consideration “is the most important.” Deja Vu-Everett-Federal Way, Inc. v.

City Of Federal Way, 96 Wn. App. 255, 262, 979 P.2d 464 (1999).

While the third consideration (substantially the same evidence is presented

in the two actions) is not met, the other three are met, which is sufficient to bar

BNY Mellon’s claims. First, the rights established in the prior judgment would be

impaired if the legal description of Parcel 9047 in the Deed of Trust is reformed.

BNY Mellon’s proposed legal description of Parcel 9047 is different from the one

in the 2023 Deed of Trust. As a result, if BNY Mellon were to succeed in this

action, it would impair the rights and interests established in the first action.

Second, the two suits involve the infringement of the same right. BNY Mellon

argues that the Deed of Trust, even after its reformation, still does not encumber

the correct land and, therefore, it seeks to reform the Deed of Trust a second time.

Third, and finally, the two suits arise out of the same transactional nucleus of facts.

Both actions arise from Bartol’s transaction with America’s Wholesale Lender

where she signed the Deed of Trust encumbering her property as security for a

loan. As a result, the causes of action in the two lawsuits are identical and the

remaining element of claim preclusion is satisfied.

Because all of the elements of claim preclusion are satisfied here, BNY

Mellon’s reformation claims are barred by claim preclusion. We therefore need

not—and do not—reach BNY Mellon’s remaining arguments regarding the viability

and merits of its claims.

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III

BNY Mellon argues that the trial court erred when it awarded Bartol attorney

fees and costs below. We disagree.

The Deed of Trust includes an “Attorneys’ fees” provision. It states: “Lender

shall be entitled to recover its reasonable attorneys’ fees and costs in any action

or proceeding to construe or enforce any term of this Security Instrument.” Bartol

argues that the trial court properly awarded her attorney fees under RCW 4.84.330.

That statute states:

In any action on a contract or lease entered into after September 21, 1977, where such contract or lease specifically provides that attorneys’ fees and costs, which are incurred to enforce the provisions of such contract or lease, shall be awarded to one of the parties, the prevailing party, whether he or she is the party specified in the contract or lease or not, shall be entitled to reasonable attorneys’ fees in addition to costs and necessary disbursements.

RCW 4.84.330 (emphasis added). Applying this statute here, the trial court

correctly awarded Bartol attorney fees and costs below because the Deed of Trust

provides that attorney fees and costs shall be awarded to the prevailing party “in

any action to construe or enforce” the Deed of Trust. Thus, we affirm the trial

court’s award of attorney fees and costs.

Notwithstanding the above analysis, BNY Mellon argues that because “the

parties’ cross motions for summary judgment focused exclusively on the intent of

the trial court and the parties in the First Lawsuit,” the trial court only dismissed

BNY Mellon’s claim “to reform the Judgment and Amended Judgment and thus,

there was no basis for the trial court to award attorneys’ fees.” This argument is

unsupported by the record. The parties’ cross-motions for summary judgment

were not limited to BNY Mellon’s claim to reform the judgment in the First Lawsuit.

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As a result, we reject BNY Mellon’s argument and affirm the trial court’s decision

to award Bartol reasonable attorney fees and costs based on the attorney fees

provision in the Deed of Trust.

In the alternative, BNY Mellon argues that the trial court’s award of attorney

fees “should be reduced by half.” BNY Mellon reasons “if the Court determines

that Bartol is entitled to recover attorneys’ fees, those fees should be apportioned

given that the Complaint alleged two causes of action for reformation, one to

reform the final judgment in the First Lawsuit and one to reform the Deed of Trust.”

While BNY Mellon did allege two causes of action for reformation in its complaint,

the trial court found, and we agree, the two causes of action are “so intertwined

that fee and cost segregation limiting reformation to reformation of the judgment

entered [in the prior action] was not possible.” The trial court therefore did not

abuse its discretion in awarding the requested fees. See Simpson v. Thorslund,

151 Wn. App. 276, 289, 211 P.3d 469 (2009) (no abuse of discretion where trial

court did not segregate attorney fees based on its finding that “the facts underlying

the multiple claims are so intertwined that the related fees cannot feasibly be

segregated”). Accordingly, we reject this alternative argument.

Lastly, Bartol asks this court to award her attorney fees and costs on appeal

under RAP 18.1. RAP 18.1 states:

If applicable law grants to a party the right to recover reasonable attorney fees or expenses on review before either the Court of Appeals or Supreme Court, the party must request the fees or expenses as provided in this rule, unless a statute specifies that the request is to be directed to the trial court.

RAP 18.1. As discussed above, Bartol may recover attorney fees under RCW

4.84.330. Further, the statute does not specify that the request must be directed

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to a trial court rather than an appellate court. As a result, we grant Bartol’s request

for attorney fees and expenses on appeal.

Affirmed.

WE CONCUR:

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