FILED MARCH 19, 2026 In the Office of the Clerk of Court WA State Court of Appeals, Division III
IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON DIVISION THREE
SHAUNA SOULE and SHELDON ) No. 40941-4-III SOULE and their marital community, ) ) Appellants, ) ) v. ) ) ROBERT FERGUSON, individually and ) in his official capacity as Washington ) State Attorney General; DAVID HUEY, ) individually and in his official capacity as ) Washington State Assistant Attorney ) General; SHANNON SMITH, ) individually and in her official capacity as ) Washington State Assistant Attorney ) UNPUBLISHED OPINION General, Consumer Protection Division; ) MICHELLE FERAZZA, individually and ) in her official capacity as a Legal ) Assistant for the State Attorney General’s ) Office; RICH ZWICKER, individually ) and in his official capacity as Foreclosure ) Compliance Coordinator for the ) Washington State Attorney General; ) TODD BOWERS, individually and in his ) official capacity as Washington State ) Deputy Attorney General; THE ) ATTORNEY GENERAL’S OFFICE ) FOR THE STATE OF WASHINGTON; ) and JOHN and JANE DOES 1-10, ) ) Respondents. ) No. 40941-4-III Soule v. Ferguson
MURPHY, J. — Shauna and Sheldon Soule (the Soules) appeal the trial court’s
dismissal of their complaint against then Attorney General Robert Ferguson and other
employees of the Attorney General’s Office (collectively the AGO) under CR 12(b)(6). The
trial court ruled the claims were barred by the statute of limitations. On appeal, the Soules
contend the trial court erred by refusing to apply the discovery rule or equitable tolling and
by not expressly ruling on their request for judicial notice of materials submitted in response
to the AGO’s motion to dismiss.
We conclude the claims are time-barred as a matter of law. Neither the discovery rule
nor equitable tolling applies. We therefore affirm.
FACTS
The facts are taken from the Soules’ complaint and the materials presented to the trial
court on the AGO’s CR 12(b)(6) motion.
Allegations from the complaint filed on March 5, 2024
The Soules refinanced their home in 2003 with what they allege was a World Savings
Pick a Pay loan. The loan was ultimately acquired by Wells Fargo in 2008. In late 2009, the
Soules applied for a HAMP (Home Affordable Modification Program) mortgage
modification. In October 2010, they learned of a statewide settlement between the AGO and
Wells Fargo concerning Pick a Pay loans and an associated Assurance of Discontinuance
(AOD) that established a hotline for borrower relief.
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Believing their loan qualified, the Soules contacted the AGO after the number for the
hotline proved inoperable. In response, an AGO staff member provided the Soules with the
same non-functioning number and suggested they contact a housing counselor. 1 The Soules
wrote a series of letters to Wells Fargo stating they had a Pick a Pay loan and Wells Fargo’s
net present value (NVP) calculations were incorrect, but Wells Fargo never responded. In
2011, the Soules complained to the AGO, but claim the AGO did not initially respond.
During this time, the Soules continued to apply for a loan modification under HAMP and
were under threat of foreclosure by Wells Fargo. In 2013, the Soules and Wells Fargo
attended a Foreclosure Fairness Mediation required by state law. According to the Soules, at
the mediation, Wells Fargo presented a redacted version of the Soules’ mortgage note and
told the Soules they did not have a Pick a Pay loan. At a second mediation in 2013, the
Soules presented an unredacted version of their mortgage note and Pick a Pay mortgage
statement. The Soules claim these documents were ignored by Wells Fargo and the
mediator. After the failed mediations, the Soules contacted the AGO in 2013 to complain
that Wells Fargo was perpetrating mortgage fraud, and provided documents from the
1 The Soules claimed in their lawsuit that the settlement agreement entered into was “the first of its kind [and] there were very few, if any, housing counselors in Washington state with experience in Pick a Pay loans.” Clerk’s Papers at 207. The Soules further claimed that a housing counselor would not have authority to enforce the settlement agreement.
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mediations to show Wells Fargo illegally redacted their mortgage note. The AGO responded
in May 2013 stating, “Your complaint has been added to our ongoing investigation of the
mortgage and servicing industries and we thank you for sharing it with us. However, it is
important to note that our office is prohibited from representing individuals so we cannot
intervene in your case.” Clerk’s Papers (CP) at 208.
The Soules contacted the AGO in June 2013 to again inform the AGO of the
impending home foreclosure. The AGO responded with a statement similar to the May 2013
response, including that the AGO cannot represent individuals. In their complaint, the
Soules allege “[t]hese statements were both legally and factually untrue.” CP at 209. In
support of this allegation, the Soules cited documents received through a later public records
request that they claimed showed the AGO “regularly, and selectively, did intervene and
negotiate to stop foreclosures . . . on behalf of Pick a Pay borrowers” but did not intervene
for the Soules. CP at 209.
Wells Fargo foreclosed on the Soules’ home in December 2013.
The Soules continued to complain to the AGO. In 2014, the AGO responded to the
Soules stating the AGO was still investigating the Soules’ complaints, with a follow up
letter stating the AGO communicated with Wells Fargo and were told that the Soules
(1) did not have a Pick a Pay loan, (2) already received a modification, and (3) did not
qualify for any further modification. The Soules maintain their allegation that they did have
4 No. 40941-4-III Soule v. Ferguson
a Pick a Pay loan, they did not receive a loan modification, and they did qualify for a
modification.
In 2015, the Soules called and e-mailed the AGO for a status update. The Soules
allege they did not receive a response.
In 2016, the Soules sued Wells Fargo but lost at trial.
In January 2019, the Soules learned of class action litigation against Wells Fargo
based on claimed errors in Wells Fargo’s NPV calculation software that caused wrongful
foreclosures. The Soules hired a consultant who advised the Soules to submit a public
records request to the AGO to determine whether their loan was a Pick a Pay loan “based on
the mortgage statement and loan documents that were provided to the AGO,” and whether
“the NPV calculations utilized to deny the Soule’s loan modification were accurate.” CP
211-12. The Soules assert their expert opined they did have a Pick a Pay loan, the
calculations used by Wells Fargo “were deeply flawed,” and they did qualify for a
modification. CP at 212.
The Soules made a series of public records requests of the AGO between July 2019
and January 2020. The Soules claimed that they “did not suspect any misconduct,
wrongdoing or negligence on part of the [AGO]” prior to filing the requests. CP at 212.
They requested records regarding how the AGO conducted the investigation of their
complaints. They also asked for the documents “used or presented by Wells Fargo or the
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[AGO] that caused the [AGO] to reach [its] investigative conclusions,” among other
documents. CP at 212. The Soules contend that no record produced by the AGO
demonstrated the AGO made any effort to verify the accuracy of calculations provided by
Wells Fargo.
The Soules claimed the AGO produced small batches of records in response to their
series of public records requests. In one batch of records received in 2020, the Soules
discovered a letter an AGO employee “allegedly wrote” in 2015. CP at 213. The 2015 letter
was sent via e-mail and United States mail, but the Soules claimed they did not receive it.
They reached out to the AGO employee who authored the letter in 2020. The employee
responded on February 25, 2020, and provided a “sample Pick a Pay mortgage note that she
had used to conclude that the Soules did not have a Pick a Pay loan.” CP at 213.
In their complaint, the Soules alleged the AGO knew the AGO employee working
with them on their investigation was negligent and other employees covered up that
negligence. Further, the Soules alleged another AGO employee commented that the Soules’
mortgage statement “sure looks like a Pick a Pay loan” and further investigation was
discussed but never pursued. CP at 214.
The Soules culminated their recitation of alleged facts in their complaint by claiming
the AGO “failed to hold Wells Fargo accountable to the terms of the AOD and failed to
utilize any accountants, mortgage experts or control processes to verify what Wells Fargo
6 No. 40941-4-III Soule v. Ferguson
did, said or reported throughout the Pick a Pay Settlement” and “failed to hold Wells Fargo
accountable for what they were doing to the Soules.” CP at 214. The Soules asserted that
“[a]fter careful review and analysis of the public record they had received between October
2019 and March 2021,” they filed a tort claim notice on March 24, 2021, that was later
denied by the AGO. CP at 215. They claimed that with the AGO failing to timely respond to
their complaints and failing to “conduct[] a reasonable and careful investigation, the
foreclosure of the Soules’ home would have been prevented and the Soules would have been
included in the relief intended for Pick a Pay mortgage holders.” CP at 215.
On March 5, 2024, the Soules filed a lawsuit against the AGO alleging breach of
common law negligence, outrage, and negligent infliction of emotional distress.
The AGO’s CR 12(b)(6) motion to dismiss
On March 27, 2024, the AGO filed a motion to dismiss pursuant to CR 12(b)(6) in
lieu of an answer. The AGO identified the Soules’ lawsuit was barred by the statute of
limitations. The AGO argued the claimed negligent acts occurred between 2010 and 2015.
The AGO anticipated the Soules would claim the discovery rule excused their failure to
meet the statute of limitations. The AGO argued the Soules did not diligently pursue their
claim, and “[t]here [was] no reason to believe that whatever facts [the Soules] claimed to
have learned with their public records request beginning in 2019, could not have also been
learned through even minimal diligence five years earlier when they allege they were
7 No. 40941-4-III Soule v. Ferguson
getting no responses.” CP at 199-200. Alternatively, even if some relief under the discovery
rule was granted, the Soules’ claim remained barred by the statute of limitations. The letter
sent by the AGO on February 25, 2020, which stated the basis for the AGO’s investigative
conclusions including that the Soules did not have a Pick a Pay loan, was sent in response to
the Soules alleging they did not receive the 2015 final investigation letter. Even if February
25, 2020 was accepted as the last date the AGO investigated the Soules’ complaints, and in
allowing for the 90-day tolling period permitted by filing the tort claim notice, the last date
the Soules could have filed their lawsuit within the statute of limitations was May 26, 2023.
The Soules opposed the AGO’s motion to dismiss and provided a declaration from
Sheldon Soule requesting that judicial notice be taken of information within the attachments
to the declaration “in order to corroborate what is pled in the [Soules’] Complaint.” 2 CP at
10. In his declaration, Sheldon Soule declared it took two years for the AGO to provide all
the records without redactions. The Soules assert they did not know of the elements of a
claim for negligent investigation against the AGO until the tort claim notice was filed on
March 24, 2021. The Soules argued they had no reason to know of the negligent
investigation because the “[d]efendants redacted the records, produced the records in a
2 Both documents were filed on May 24, 2024, after the trial court heard the motion to dismiss. Both documents, however, were signed and dated on April 15, 2024. Although not filed until May 24, 2024, the AGO’s reply brief, dated April 19, 2024, discussed the Soules’ response and declaration.
8 No. 40941-4-III Soule v. Ferguson
confusing way, misnumbered Public Records Requests, asked the Plaintiffs to stop or
combine their records requests and have slow-walked the production of those records for
nearly five years.” CP at 12. Therefore, in light of the discovery rule and equitable tolling,
the Soules claimed the statute of limitations did not begin to run until March 24, 2021.
The AGO argued in reply that the Soules had the burden to show the applicability of
the discovery rule or equitable tolling and this burden was not met.
On April 30, 2024, the trial court granted the AGO’s motion to dismiss. 3 The order
identified that “[t]he Court has considered the parties’ briefing and the relevant portions of
the record” and granted dismissal without prejudice. CP at 180.
The Soules now appeal.
ANALYSIS
Standard of review
We review de novo a trial court’s order granting or denying dismissal under CR
12(b)(6) for failure to state a claim. Wash. Food Indus. Ass’n v. City of Seattle, 1 Wn.3d 1,
17, 524 P.3d 181 (2023). Dismissal is appropriate only if “‘it appears beyond doubt that the
plaintiff can prove no set of facts, consistent with the complaint, which would entitle the
plaintiff to relief.’” Orwick v. City of Seattle, 103 Wn.2d 249, 254, 692 P.2d 793 (1984)
3 A report of proceeding from this hearing is not part of the record on review.
9 No. 40941-4-III Soule v. Ferguson
(quoting Corrigal v. Ball & Dodd Funeral Home, Inc., 89 Wn.2d 959, 961, 577 P.2d 580
(1978)). In conducting our review, we accept as true all factual allegations in the complaint
and consider any reasonable inferences therefrom in the light most favorable to the plaintiff.
Wash. Food Indus. Ass’n, 1 Wn.3d at 17. We may also consider hypothetical facts not
included in the record that are consistent with the complaint to determine whether the claim
is legally sufficient. Id. We do not, however, accept legal conclusions or conclusory
statements as true. Jackson v. Quality Loan Serv. Corp., 186 Wn. App. 838, 843, 347 P.3d
478 (2015). If, even under the most favorable reading of the complaint and any consistent
hypothetical facts, the claim remains legally insufficient, dismissal is proper. Wash. Food
Indus. Ass’n, 1 Wn.3d at 17 (citing Trujillo v. Nw. Tr. Servs., Inc., 183 Wn.2d 820, 830, 355
P.3d 1100 (2015)). Dismissal under CR 12(b)(6) is to be granted sparingly and with care.
Tavaglione v. Dehkhoda & Qadri, PC, 34 Wn. App. 2d 515, 519-20, 568 P.3d 1158 (2025).
Statute of limitations
Claims for negligence are governed by a three-year statute of limitations. RCW
4.16.080(2). A limitation period begins to run when the plaintiff’s cause of action accrues.
Malnar v. Carlson, 128 Wn.2d 521, 529, 910 P.2d 455 (1996). A cause of action accrues,
and the limitation period begins to run, when the plaintiff has a right to apply to a court for
relief, which is typically when the plaintiff suffers injury or damage. In re Ests. of Hibbard,
118 Wn.2d 737, 744, 826 P.2d 690 (1992).
10 No. 40941-4-III Soule v. Ferguson
Here, the Soules allege that the AGO’s negligent handling of their complaints, failure
to properly investigate, and refusal to intervene caused or contributed to the loss of their
home in the December 2013 foreclosure. The alleged acts and omissions occurred primarily
between 2010 and 2015, with the last substantive communication from the AGO occurring
on February 25, 2020. The complaint was not filed until March 5, 2024—well over three
years after any of these events. The claims are therefore facially time-barred unless saved by
the discovery rule or equitable tolling.
1. Discovery rule
The discovery rule is a narrow exception that postpones accrual of a cause of action
until the plaintiff knew or, in the exercise of reasonable diligence, should have known of the
essential facts supporting the claim. Crisman v. Crisman, 85 Wn. App. 15, 20, 931 P.2d 163
(1997). “The key consideration under the discovery rule is the factual, not the legal, basis
for the cause of action.” Allen v. State, 118 Wn.2d 753, 758, 826 P.2d 200 (1992). The
discovery rule operates to toll the date of accrual. Id. To invoke the discovery rule, a
plaintiff must show they could not have discovered the facts earlier through reasonable
diligence. G.W. Constr. Corp. v. Pro. Serv. Indus. Inc., 70 Wn. App. 360, 367, 853 P.2d 484
(1993). The plaintiff bears the burden to prove this. Clare v. Saberhagen Holdings, Inc., 129
Wn. App. 599, 603, 123 P.3d 465 (2005). The discovery rule is disfavored because it
11 No. 40941-4-III Soule v. Ferguson
undermines the statute’s purpose of preventing stale claims. 1519-1525 Lakeview Blvd.
Condo. Ass’n v. Apartment Sale Corp., 144 Wn.2d 570, 578, 29 P.3d 1249 (2001).
Under the CR 12(b)(6) standard articulated in Washington Food Industry
Association, we confine our review to the complaint’s allegations, accepting all factual
assertions as true—including any hypothetical scenarios pled—and draw all reasonable
inferences in the Soules’ favor. The Soules allege they only discovered the AGO’s alleged
negligence—such as failures to verify loan documents or follow up adequately—through
public records requests made between 2019 and 2020, and that the AGO’s redactions and
delayed production concealed these facts until March 24, 2021. They explicitly pleaded that
prior to these requests, they “did not suspect any misconduct, wrongdoing or negligence on
the part of the [AGO],” and hypothesize that the AGO’s actions (e.g., unlawful redactions
and slow-walking production) prevented earlier discovery. CP at 212.
However, even accepting the complaint’s allegations as true, and drawing inferences
in the Soules’ favor, the detailed chronology pleaded by the Soules themselves,
demonstrates they knew or should have known the essential facts supporting their
negligence claim no later than 2015 (and certainly by February 25, 2020).
By 2013, the Soules knew the AGO had declined to intervene on their behalf, had
relied on Wells Fargo’s representations, and had stated repeatedly that it could not represent
individual borrowers. The Soules knew the foreclosure occurred despite their complaints to
12 No. 40941-4-III Soule v. Ferguson
the AGO. They knew no further investigation by the AGO appeared to be happening after
2015. These facts put the Soules on notice of the investigative shortcomings they now label
as “negligence.”
The Soules’ later assertion that they “did not suspect” negligence of the AGO until
March 2021, CP at 212, when they filed the tort claim notice is a conclusory legal statement
we do not accept. Jackson, 186 Wn. App. at 843. The discovery rule does not reward a
plaintiff who ignores known facts or fails to inquire diligently. See Beard v. King County, 76
Wn. App. 863, 867, 889 P.2d 501 (1995). The Soules waited until 2019—four years after
the last response from the AGO—to request public records, and another five years after that
to file suit. No set of facts consistent with the complaint can overcome lack of diligence.
The trial court correctly held that the discovery rule does not apply.
2. Equitable tolling
The doctrine of equitable tolling is “an exception to the statute of limitations that
should be used sparingly and does not extend broadly to allow claims to be raised except
under narrow circumstances.” In re Pers. Restraint of Bonds, 165 Wn.2d 135, 141, 196 P.3d
672 (2008). Our Washington Supreme Court identified four conditions that must be present
for a court to grant equitable tolling of an applicable statute of limitations in the context of
civil litigation: (1) when justice requires, (2) when the defendant engaged in bad faith,
deception, or false assurances and (3) the plaintiff exercised diligence, and
13 No. 40941-4-III Soule v. Ferguson
(4) when tolling is consistent with both the purpose of the statute providing the cause of
action and the purpose of the statute of limitations. Fowler v. Guerin, 200 Wn.2d 110, 119,
515 P.3d 502 (2022) (citing Millay v. Cam, 135 Wn.2d 193, 206, 955 P.2d 791 (1998)). We
focus on the second and third conditions, which are brought together through a coordinating
conjunction, as the absence of these conditions is dispositive.
In their complaint, the Soules allege the AGO engaged in “unlawful redactions,”
delayed record production over “nearly five years,” and gave “false assurances” of ongoing
investigation. CP at 12-13. Even taking these allegations as true, they fall short of the
affirmative bad faith, deception, or false assurances.
Rather, as confirmed in the complaint, the AGO did respond to the Soules’ inquiries,
albeit without the outcome or response the Soules desired. The AGO added the Soules’
complaint to an ongoing industry-wide investigation. The AGO communicated with Wells
Fargo multiple times. The AGO was explicit in its explanation to the Soules that it did not
represent individuals. These responses, while perhaps unsatisfactory to the Soules, do not
rise to the level of affirmative deception or false assurances that are required for equitable
tolling. See Fowler, 200 Wn.2d at 119; see also Millay, 135 Wn.2d at 206. Moreover, any
fact arguably related to bad faith, deception, or false assurance happened on or before 2015.
The Soules’ conclusion that there was concealment does not bind us. Jackson, 186
Wn. App. at 843. Redactions in public record responses, even if later deemed improper, do
14 No. 40941-4-III Soule v. Ferguson
not constitute affirmative concealment for a cause of action. Arguably, the alleged post-
2019 redactions are exclusively related to public records laws (Public Records Act, ch.
42.56 RCW), for which there are separate remedies, not tolling of a statute of limitations for
an unrelated tort.
Moreover, any conduct arguably amounting to bad faith, deception, or false
assurance ended no later than 2015 (or, at the absolute latest, with the February 25, 2020
letter that explicitly restated the basis for the AGO’s conclusions). Even if we assume bad
faith, false assurance, and deception, the Soules cannot demonstrate that they exercised
diligence. They had actual knowledge of the AGO’s position and inaction in 2013 through
2015, yet waited until 2019 to seek records, sued Wells Fargo in 2016 without naming the
AGO, and filed this action in 2024. This protracted inaction demonstrates a lack of
diligence. See Douchette v. Bethel Sch. Dist. No. 403, 117 Wn.2d 805, 812, 818 P.2d 1362
(1991). Equitable tolling is not a substitute for diligence. It exists to protect plaintiffs who
have been prevented from suing by the defendant’s misconduct, not to rescue those who
simply delayed. Because the Soules cannot satisfy the predicates of diligence and defendant
misconduct, equitable tolling does not apply. The trial court properly rejected it.
2. Request for judicial notice
The Soules argue the trial court erred by failing to make an express ruling on their
request for judicial notice of certain materials attached to the declaration of Sheldon Soule,
15 No. 40941-4-III Soule v. Ferguson
including redacted records received through public records requests. They assert that this
omission left them uncertain about what the trial court actually considered when it granted
the AGO’s motion to dismiss under CR 12(b)(6). We disagree.
ER 201(b) permits judicial notice only of facts that are not subject to reasonable
dispute because they are generally known or capable of accurate and ready determination by
resort to sources whose accuracy cannot reasonably be questioned. The materials offered
here were not such facts. They were evidentiary documents offered solely to “corroborate”
the allegations made in the complaint. CP at 10.
Under CR 12(b)(6), a court generally may not consider materials outside the
pleadings without converting the motion to one for summary judgment under CR 56 and
giving the parties notice and opportunity to present additional materials. Here, however, the
trial court did not treat the declaration and attachments as substantive evidence requiring
conversion to a CR 56 motion. In the CR 12(b)(6) context, a trial court may consider certain
materials without conversion to a CR 56 motion, including public records or facts properly
subject to judicial notice. See Pac. 5000, LLC v. Kitsap Bank, 22 Wn. App. 2d 334, 342, 511
P.3d 139 (2022). The Soules presented the declaration and attachments solely as
corroboration of the allegations pleaded in the complaint.
16 No. 40941-4-III Soule v. Ferguson
The trial court’s dismissal order expressly stated that it reviewed “the parties’
briefing and the relevant portions of the record” in connection with the motion. 4 CP at 180.
That necessarily included the declaration and attachments reflecting the alleged redactions
and the AGO’s communications with the Soules. Under a CR 12(b)(6) motion, the court
accepts as true all well-pleaded facts in the complaint and all reasonable inferences arising
therefrom, together with any hypothetical facts consistent with the complaint that could be
proved. Woodward v. Taylor, 184 Wn.2d 911, 917, 366 P.3d 432 (2016). The facts alleged
in the complaint establish that the causes of action accrued more than three years before
filing. The documents attached to Sheldon Soule’s declaration do not demonstrate facts
sufficient to trigger the discovery rule or equitable tolling so as to render the claims timely.
For these reasons, the trial court did not err in its handling of the judicial notice
request. No express ruling on the judicial notice request was required. The dismissal order
properly reflects the materials the court considered.
ATTORNEY FEES AND COSTS
The Soules ask for an award of fees and costs at the trial court level and on
appeal. As they are not the prevailing party on appeal, we deny this request. RAP 14.2;
4 At oral argument, counsel for the AGO represented that the trial court reviewed all submitted materials. Wash. Ct. of Appeals oral argument, Soule v. Ferguson, No. 40941-4- III (Sept. 4, 2025), at 10 min., 35 sec. through 10 min., 48 sec., audio recording by TVW, Washington State’s Public Affairs Network, http://www.tvw.org.
17 No. 40941-4-III Soule v. Ferguson
RCW 4.84.010.
Affirmed.
A majority of the panel has determined this opinion will not be printed in
the Washington Appellate Reports, but it will be filed for public record pursuant to
RCW 2.06.040.
Murphy, J.
WE CONCUR:
____________________________ Lawrence-Berrey, C.J.
____________________________ Fearing, J.P.T.†
† George B. Fearing, a retired judge of the Washington State Court of Appeals, is serving as a judge pro tempore of this court pursuant to RCW 2.06.150(1).