Prince Eric Luv. V. West Coast Servicing Inc.

• Court: Court of Appeals of Washington
• Decided: April 1, 2024
• Docket: 83959-4
• Status: Unpublished

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

PRINCE ERIC LUV, No. 83959-4-I Respondent, DIVISION ONE v.

WEST COAST SERVICING, INC., UNPUBLISHED OPINION

Appellant.

CHUNG, J. — Luv opened a home equity line of credit secured by a deed

of trust against his home, and after Luv stopped making payments, West Coast

Servicing, Inc. (WCS) sought to foreclose on the deed of trust. We affirmed an

order quieting title in Luv because WCS’s claims were precluded on statute of

limitations grounds. WSC then filed a CR 60(b)(11) motion, which was denied.

On appeal, we held that the trial court did not abuse its discretion in denying

WCS’s CR 60 motion to vacate an order quieting title in Luv. Specifically, we

reasoned that our decision in Copper Creek (Marysville) Homeowners Ass’n v.

Kurtz, 21 Wn. App. 2d 605, 508 P.3d 179 (2022), holding that the statute of

limitations to foreclose on a deed of trust securing an installment loan accrued

with each unpaid installment, even after a bankruptcy discharge, was not a

change in law warranting relief under CR 60(b)(11). No. 83959-4-I/2

After the Supreme Court affirmed our decision in Copper Creek, 1 it

granted WSC’s petition for review and remanded the case to this court for

reconsideration in light of that decision. Having reconsidered our decision,

because we conclude Copper Creek affirmed principles that our Supreme Court

first stated in 1945, 2 it was not a change in the law. Because there are no

extraordinary circumstances justifying relief from the trial court’s order quieting

title in Luv, we again affirm the trial court’s denial of WSC’s attempt to relitigate

the issue through a CR 60(b)(11) motion to vacate.

BACKGROUND 3

WSC, which holds a lien against Prince Eric Luv’s real property in security

for repayment of a home equity loan, initiated a nonjudicial foreclosure

proceeding against Luv. See Luv v. W. Coast Servicing, Inc., No. 81991-7-I at 1

(Wash. Ct. App. Aug. 2, 2021) (unpublished),

https://www.courts.wa.gov/opinions/pdf/819917.pdf., review denied, 198 Wn.2d

1035, 501 P.3d 135 (2022). Luv filed a quiet title action, asserting that the statute

of limitations expired before WSC initiated foreclosure. Luv, slip op. at 2. The trial

court agreed with Luv and entered an order that extinguished the deed of trust

1 Copper Creek (Marysville) Homeowners Ass’n v. Kurtz, 1 Wn.3d 711, 532 P.3d 601

(2023); see also Merritt v. USAA Federal Savings Bank, 1 Wn.3d 692, 532 P.3d 1024 (2023) (companion case). 2 Herzog v. Herzog, 23 Wn.2d 382, 161 P.2d 142 (1945). 3 The underlying facts of this case are set forth in two prior appellate decisions and will be

repeated here only as necessary. See Luv v. W. Coast Servicing, Inc., No. 81991-7-I (Wash. Ct. App. Aug. 2, 2021) (unpublished), https://www.courts.wa.gov/opinions/pdf/819917.pdf, review denied, 198 Wn.2d 1035, 501 P.3d 135 (2022); West Coast Servicing, Inc., v. Luv, No. 83959-4-I (Wash. Ct. App. Nov. 28, 2022) (unpublished), https://www.courts.wa.gov/opinions/pdf/839594.pdf.

2 No. 83959-4-I/3

and quieted title in Luv. Id. Relying on a prior decision of this court, Edmundson

v. Bank of Am., N.A., 194 Wn. App. 920, 378 P.3d 272 (2016), we upheld the trial

court’s decision on appeal, and the Washington State Supreme Court denied

review. Luv, slip op. at 1.

Shortly after our decision in the direct appeal in this case, this court issued

a published decision in Copper Creek and held that, contrary to the unpublished

decision of this court in Luv and other state and federal decisions, bankruptcy

discharge of personal liability on a promissory note does not affect the statutory

limitation period to enforce a deed of trust. Copper Creek, 21 Wn. App. 2d at

617-18. In doing so, we explained that courts reaching contrary conclusions had

misinterpreted Edmundson. Id. at 620-24.

WSC then filed a CR 60(b) motion in the trial court seeking to vacate the

order extinguishing the deed of trust and quieting title in Luv. WSC claimed it was

entitled to relief because Copper Creek was an “intervening change of law.” The

trial court disagreed and denied the motion, concluding that “the defect in the trial

court’s original judgment was, according to Copper Creek, an error in law, and

Copper Creek did not change the law but correctly applied the already existing

law.”

We affirmed the trial court’s order. We noted that while a change in the

law may, in rare instances, amount to extraordinary circumstances to warrant

vacating a judgment or order under CR 60(b)(11), the decision in Copper Creek

clarified precedent, but did not change the law. See West Coast Servicing, Inc. v.

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Luv, No. 83959-4-I (Wash. Ct. App. Nov. 28, 2022) (unpublished),

https://www.courts.wa.gov/opinions/pdf/839594.pdf.

The Supreme Court accepted review in Copper Creek and a related

companion case, Merritt v. USAA Fed. Sav. Bank, No. 82162-8-I, (Wash. Ct.

App. Mar. 28, 2022) (unpublished),

https://www.courts.wa.gov/opinions/pdf/821628.pdf. While those cases were

pending, WSC petitioned for review of our decision affirming the denial of the CR

60(b)(11) motion. The Supreme Court stayed the matter pending the decisions in

Copper Creek and Merritt.

In July 2023, the Supreme Court issued its decisions in Copper Creek and

Merritt. Subsequently, in October 2023, the Supreme Court ordered “[t]hat the

petition for review is granted and the case is remanded to the Court of Appeals

Division I for reconsideration in light of [Copper Creek].” Thus, we reconsider the

question raised previously, whether the trial court’s denial of relief CR 60(b)(11)

was an abuse of discretion.

DISCUSSION

“The finality of judgments is an important value of the legal system,” and

“CR 60 is the mechanism to guide the balancing between finality and fairness.”

Suburban Janitorial Servs. v. Clarke Am., 72 Wn. App. 302, 313, 863 P.2d 1377

(1993). While we previously set out the applicable CR 60(b) standards in our

prior opinion, we reiterate that CR 60(b)(11), the catchall provision on which

WSC relies, is “intended to serve the ends of justice in extreme, unexpected

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situations and when no other subsection of CR 60(b) applies.” Shandola v.

Henry, 198 Wn. App. 889, 895, 396 P.3d 395 (2017). See also Shum v. Dep’t of

Labor & Indus., 63 Wn. App. 405, 408, 819 P.2d 399 (1991) (CR 60(b)(11)

motions are “confined to situations involving extraordinary circumstances not

covered by any other section of CR 60(b)”). “Errors of law may not be corrected

by a motion pursuant to CR 60(b), but must be raised on appeal.” In re Marriage

of Tang, 57 Wn. App. 648, 654, 789 P.2d 118 (1990) (citing Burlingame v.

Consolidated Mines & Smelting Co., 106 Wn.2d 328, 336, 722 P.2d 67 (1986)).

The decision to grant or deny a motion to vacate a judgment under CR

60(b) is within the trial court’s discretion. Jones v. City of Seattle, 179 Wn.2d 322,

360, 314 P.3d 380 (2013). We review CR 60(b) orders for abuse of discretion,

and a trial court abuses its discretion when its decision is based on untenable

grounds or is made for untenable reasons. Shandola, 198 Wn. App. at 896.

In its initial briefing in this appeal, WSC argued that this court’s decision in

Copper Creek constituted a change in the law, rather than an error in the law. We

disagreed and affirmed the trial court’s denial of the CR 60(b)(11) motion to

vacate, holding that Copper Creek was not a change in the law justifying relief.

WSC argues in supplemental briefing that the Supreme Court’s decision in

Copper Creek “rejected the rule[] relied-upon by the superior court.” WSC makes

no additional argument regarding CR 60(b)(11), and, indeed, does not even cite

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to it. 4 Nevertheless, in keeping with our charge on remand, we will reconsider our

prior decision in light of the Supreme Court’s decision in Copper Creek.

In Copper Creek, the Supreme Court affirmed this court’s decision and

held that “a new foreclosure action on the deed of trust accrues with each missed

installment payment, even after the borrower’s personal liability is discharged.”

Copper Creek (Marysville) Homeowners Ass’n v. Kurtz, 1 Wn.3d 711, 718, 532

P.3d 601 (2023); see also Merritt v. USAA Federal Savings Bank, 1 Wn.3d 692,

702, 532 P.3d 1024 (2023) (bankruptcy discharge “does not trigger the statute of

limitations to enforce the related deed of trust”). The Supreme Court’s decisions

in Copper Creek and Merritt are consistent with our analysis in Copper Creek. In

our Copper Creek decision, we noted that the Edmundson court reached its

decision on the limited issues before it by applying settled law to the facts.

Copper Creek, 21 Wn. App. 2d at 620, 624. We observed that other courts’

subsequent interpretation of additional language in Edmundson was unsupported

by bankruptcy law, and the interpretation was inconsistent with Edmundson’s

express rejection of the claim that bankruptcy discharge in and of itself

accelerates the maturity of the debt. Copper Creek, 21 Wn. App. 2d at 623.

Similarly, the Supreme Court noted that while language in Edmundson

implies that “the statute of limitations stops accruing on missed payments due

4 For his part, in his supplemental briefing, Luv also does not address the CR 60(b)(11)

standard or the effect of the Supreme Court’s decision in Copper Creek. Instead, he argues that this court lacks power to change or modify our decision because we issued a mandate and declined to review that decision under RAP 2.5(c)(2). Luv ignores the subsequent procedural history: the Supreme Court granted review and then remanded to this court for reconsideration.

6 No. 83959-4-I/7

under an installment contract following a bankruptcy discharge,” the discussion in

Edmundson of the application of the statute of limitations to subsequent

installment payments after discharge was unnecessary, as the court had already

“answered the only questions actually at issue in the case.” Merritt, 1 Wn.3d at

706-07. Thus, the Supreme Court disavowed this language in Edmundson,

characterizing it as “dicta” and as inconsistent with established principles related

to deeds of trust and bankruptcy. Copper Creek, 1 Wn.3d at 718; Merritt, 1

Wn.3d at 706-07. The court in Merritt also pointed out that Edmundson cited no

authority to support the “unstated premise” that installment payments cease to

become due following bankruptcy, “which runs counter to the well-established

principles of contract law and bankruptcy law[.]” Id. at 707.

Instead, as the Merritt court explained, while “it is correct that following a

discharge, a creditor can no longer sue a debtor personally to recover a debt,” in

the terms of a 1945 case, Herzog v. Herzog, “following a bankruptcy discharge,

an action can still be brought to recover on subsequent missed installments, but

that action is limited to an in rem action.” Merritt, 1 Wn.3d at 704-05 (citing

Herzog v. Herzog, 23 Wn.2d 382, 388, 161 P.2d 142 (1945)). Therefore, citing

our analysis in Copper Creek with approval, the Supreme Court noted that, to the

extent that a “rule” about the effect of bankruptcy discharge was attributed to

Edmundson, that rule was “incorrect because a lien survives bankruptcy

discharge; bankruptcy eliminates only the debtor’s personal liability on the note,

leaving ‘the debt, the note, and the payment schedule . . . unchanged’; and

7 No. 83959-4-I/8

‘[m]issing a payment in an installment note does not trigger the running of the

statute of limitations on the portions of the debt that are not yet due or mature.’ ”

Merritt, 1 Wn.3d at 707-08 (quoting Copper Creek, 21 Wn. App. 2d at 625).

The recent decisions affirming our holding in Copper Creek do not change

our analysis of the trial court’s resolution of WSC’s CR 60(b) motion or lead us to

conclude that the trial court abused its discretion. The identified basis for the

motion was our decision in Luv, which relied on Edmundson. This is a legal error

that is not correctable by a CR 60(b)(11) motion.

Moreover, the fact “[t]hat relief potentially is available under CR 60(b)(11)

based on a postjudgment court decision does not resolve [a] case. [The moving

party] must show that under the specific facts of [its] case extraordinary

circumstances exist that entitled [it] to CR 60(b)(11) relief.” Shandola, 198 Wn.

App. at 903. In Shandola, while there was a change in the law, the court also

identified five factors that supported a finding of extraordinary circumstances and

discussed each at length. 198 Wn. App. at 904-05. Similarly, as the court in

Shandola noted, in another case involving a CR 60(b)(11) motion based on a

change in the law, In re Marriage of Flannagan, 42 Wn. App. 214, 709 P.2d 1247

(1985), the court “focused on extraordinary circumstances other than the change

in the law,” and it was those extraordinary circumstances that allowed for the

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retroactive application of new legislation that changed the applicable law.

Shandola, 198 Wn. App. at 903 (citing Flannagan, 42 Wn. App. at 222). 5

As it is appropriate to grant relief under CR 60(b)(11) only in “extreme,

unexpected situations” and “extraordinary circumstances,” which have not been

demonstrated here, the trial court did not abuse its discretion in denying WSC’s

motion to vacate.

Affirmed.

WE CONCUR:

5 The court in Flannagan described the extraordinary circumstances there as follows:

[F]irst, the clear congressional desire of removing all ill effects of McCarty [a U.S. Supreme Court decision holding that military retirement benefits could not be distributed as community property]; second, the alacrity with which the Congress moved in passing the USFSPA [Uniformed Services Former Spouses Protection Act]; third, the anomaly of allowing division of the military retirement pay before McCarty and after USFSPA, but not during the 20-month period in between; and fourth, the limited number of [divorce] decrees that were final and not appealed during that period.

Flannagan, 42 Wn. App. at 222 (footnote omitted).