U.s. Bank, V. Estate Of Bradley Hrutfjord

• Court: Court of Appeals of Washington
• Decided: July 22, 2024
• Docket: 85615-4
• Status: Unpublished

Opinion

IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

U.S. BANK, NATIONAL ASSOCIATION, AS SUCCESSOR No. 85615-4-I TRUSTEE TO BANK OF AMERICA, N.A., AS SUCCESSOR BY MERGER DIVISION ONE TO LASALLE BANK, N.A., AS TRUSTEE FOR THE CERTIFICATE UNPUBLISHED OPINION HOLDERS OF THE MLMI TRUST, MORTGAGE LOAN ASSET-BACKED CERTIFICATES, SERIES 2006-RM4,

Appellant,

v.

ESTATE OF BRADLEY HRUTFJORD,

Respondent,

DAVID HRUTFJORD AND STEVEN HRUTFJORD, INDIVIDUALLY AND AS CO-ADMINISTRATORS OF THE ESTATE OF BRADLEY HRUTFJORD; DIANA HRUTFJORD; BJORN HRUTFJORD; BOBBIE L. KENNEY; ALLIANCEONE RECEIVABLES INC.; A BAIL BOND SERVICE, INC.; STATE OF WASHINGTON, DEPARTMENT OF REVENUE; STATE OF WASHINGTON, DEPARTMENT OF SOCIAL AND HEALTH SERVICES, DIVISION OF CHILD SUPPORT; WASHINGTON STATE DEPARTMENT OF LABOR AND INDUSTRIES; LORI DEXTER; DENNIS DEXTER; UNKNOWN HEIRS, SPOUSE, LEGATEES, AND DEVISEES OF BRADLEY HRUTFJORD, DECEASED; UNKNOWN OCCUPANTS OF THE No. 85615-4-I/2

SUBJECT REAL PROPERTY; ALL OTHER UNKNOWN PERSONS OR PARTIES CLAIMING ANY RIGHT, TITLE, ESTATE, LIEN, OR INTEREST IN THE REAL ESTATE DESCRIBED IN THE COMPLAINT HEREIN; AND QUALITY LOAN SERVICE CORPORATION OF WASHINGTON,

Defendants.

CHUNG, J. — Bradley Hrutfjord signed a promissory note for a loan to

purchase real property that comprises two tax parcels. Hrutfjord granted the

lender a deed of trust as security for the note. The note included only a street

address for the property, and the deed of trust describes only one of the two tax

parcels. The lender’s successor-in-interest, U.S. Bank, sought to foreclose on its

deed and sued Hrutfjord’s estate. Because the deed fails to provide a complete

legal description of the legal lot sufficient to satisfy the statute of frauds, we affirm

the court’s order granting the Estate’s motion for summary judgment and

dismissing the complaint with prejudice.

FACTS

In 2006 Bradley Hrutfjord purchased the subject real property at 4415 Hall

Road in Blaine, Washington, from Kurt and Stephanie Thomas. The property he

purchased was a single lot created in 2001.

Before 2001, Kurt Thomas owned a 1.43-acre tract referred to as the

“Thomas tract.” In 2001, the owner of the adjoining property, the Westman

Estate, “for and in consideration of” a boundary line adjustment, granted to

Thomas 3.99 acres via a quitclaim deed. The quitclaim deed specified the 3.99

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acres “shall be attached to and become a part of” the “Thomas tract” that was

described as tax parcel 400108 107162. 1 The deed further specified that the

combined lot “shall not be sold or leased separately” unless such a subdivision

were exempt or approved. Such a restriction ensured that the conveyance of the

3.99 acres to Thomas was not a subdivision under chapter 58.17 RCW. 2 See

RCW 58.17.040(6) (boundary line adjustments are not subdivisions or short

subdivisions of land creating legal lots for sale, lease, or transfer); RCW

58.17.020(1) & (6) (subdivisions and short subdivisions are “for the purpose of

sale, lease, or transfer of ownership” of land).

As a map recorded with the quitclaim deed shows, as a result of the deed,

the property at 4415 Hall Road consisted of a single lot comprising Thomas’s

original lot of 1.43 acres (the Thomas tract) and 3.99 acres from the Westman

Estate:

1 For simplicity, four trailing zeroes, “0000,” are omitted from tax parcel numbers stated

herein. 2 Under RCW 58.17.040(3), divisions of property made by a testamentary provision or the

laws of descent are not subdivisions or short subdivisions subject to chapter 58.17 RCW. Respondent, the Estate of Bradley Hrutfjord, asserts the quitclaim deed was part of Thomas’s “inheritance.” But the record does not indicate whether the Westman Estate’s grant to Thomas was pursuant to a testamentary transfer. There is also nothing in the record that explains the relationships of the owners of the property at issue. Janet Hrutfjord was both trustee of the Westman Estate and, along with Thomas, a grantee of the Thomas tract, according to the quitclaim deed that added the 3.99 acres to the Thomas tract.

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In 2006, Thomas conveyed the combined single lot to Hrutfjord via

statutory warranty deed. This deed includes an abbreviated legal description of

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two divisions of land: lots and a portion of a section. The deed identifies two tax

parcel numbers, 400108 107162 and 400108 107098, and instructs its readers to

“See Attached Exhibit ‘A’ ” for a full legal description of the land. In turn, Exhibit A

provides the legal description of the two tax parcels, A & B, comprising the single

legal lot sold to Hrutfjord:

Tax parcel A is the original 1.43-acre lot, i.e., the Thomas tract, and tax parcel B

is the 3.99 acres conveyed by the Westman Estate to Thomas in 2001.

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Hrutfjord signed a $66,400 note to buy the property in 2006. That note

states only the property’s street address: 4415 Hall Road, Blaine, WA, 98230.

The deed of trust Hrutfjord granted to the lender as security for the note identifies

only tax parcel number 400108 107162 referring to the original 1.43-acre lot, i.e.,

tax parcel A. At the Whatcom County Assessor’s Office, that tax parcel number

corresponds to a different street address, a different abbreviated description, and

a different full legal description compared to the single lot composed of two tax

parcels Hrutfjord purchased. 3

The deed of trust also states the abbreviated legal description of only tax

parcel A and refers to a “full legal description” at page 16 of the deed. In turn,

page 16 of the deed, Exhibit A, provides the full legal description of only the

original 1.43-acre lot, tax parcel A:

This is the entirety of Exhibit A, and it makes no reference to the fact that the

property contains two tax parcels, A and B.

The lender’s title insurance report is consistent with the deed of trust. Its

policy covers the original 1.43-acre lot conveyed to Hrutfjord as tax parcel A, but

3 The record states the size of the original lot as both 1.43 acres and 1.34 acres. The

difference appears to be a scrivener’s error and is not legally significant to the issue in this appeal.

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specifically excludes coverage for the 3.99 acres added by the quitclaim deed

earlier.

Hrutfjord defaulted on the note in 2013 and passed away in 2014. His

estate was probated the following year. In 2016, the lender’s successor-in-

interest, U.S. Bank, sued Hrutfjord’s estate to foreclose on the property “covered”

by its deed of trust for a judgment in rem. According to the Estate, U.S. Bank’s

complaint against it was not timely. The Estate asserts the parties engaged in

protracted settlement negotiations but, when those negotiations could not be

concluded, the Estate answered the complaint and asserted its counterclaims in

2021.

In 2023, U.S. Bank and the Estate filed cross motions for summary

judgment. U.S. Bank requested an “in-rem money judgment on the deceased’s

unpaid debt” and a “decree of foreclosure of the encumbered real property.” The

Estate asked the court to “dismiss U.S. Bank’s lawsuit seeking foreclosure and

sale of the tax parcel in question.” The court denied U.S. Bank’s motion “because

the erroneous legal description in the Deed of Trust violates the Statute of

Frauds, and their foreclosure action seeking a sale of portion of the legal lot of

record, requires a violation of the Restrictive Covenant at issue.” Instead, the

court granted the Estate’s motion and dismissed U.S. Bank’s complaint with

prejudice, concluding, “The foreclosure sale of a portion of the legal lot of record

would constitute an illegal subdivision, which this court has no authority to

approve.” U.S. Bank filed a timely appeal.

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DISCUSSION

U.S. Bank assigns error to the court’s order granting summary judgment in

favor of the Estate and dismissing its complaint for foreclosure. It argues its deed

of trust is enforceable under the statute of frauds. 4 We disagree.

We review summary judgment orders de novo, engaging in the same

analysis as the trial court. Borton & Sons, Inc. v. Burbank Props., LLC, 196

Wn.2d 199, 205, 471 P.3d 871 (2020). Summary judgment is appropriate only

when “there is no genuine issue as to any material fact and . . . the moving party

is entitled to a judgment as a matter of law.” CR 56(c). Where, as here, a case is

“on cross motions for summary judgment, we take the facts in the light most

favorable to the nonmoving party with respect to the particular claim.” Anderson

v. Akzo Nobel Coatings, Inc., 172 Wn.2d 593, 597, 260 P.3d 857 (2011).

A lender can elect to judicially foreclose a deed of trust “in the same

manner as a real property mortgage,” as U.S. Bank chose to do here. RCW

61.24.100(8). The deed of trust to be foreclosed upon must “describe[ the] real

estate” encumbered by the deed. RCW 61.12.020. Every encumbrance on real

estate, such as a deed of trust, “shall be by deed.” RCW 61.12.010 (citing RCW

64.04.010). “The general rule in Washington, ‘subject to some exceptions and

qualifications . . . , is that a document that transfers an interest in land must

describe the land by its full legal description’ to satisfy the statute of frauds.”

4 U.S. Bank also argues the Estate is estopped from challenging its deed of trust because

Hrutfjord warranted the encumbrance complied with the law. This argument fails because the deed’s warranty is subject to any “encumbrances of record” and the bank’s own title report excludes the recorded quitclaim deed that added 3.99 acres and restricted subsequent subdivision of the property.

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Teklu v. Setayesh, 21 Wn. App. 2d 161, 165, 505 P.3d 151, review denied, 199

Wn.2d 1028 (2022) (quoting 18 W ILLIAM B. STOEBUCK & JOHN W. WEAVER,

WASHINGTON PRACTICE: REAL ESTATE: TRANSACTIONS § 13.3, at 78 (2d ed. 2004)).

“ ‘In a long line of decisions, we have held that, in order to comply with the statute

of frauds, a contract or deed for the conveyance of land must contain a

description of the land sufficiently definite to locate it without recourse to oral

testimony.’ ” Key Design, Inc., v. Moser, 138 Wn.2d 875, 881, 983 P.2d 653

(1999) (quoting Martinson v. Cruikshank, 3 Wn.2d 565, 567, 101 P.2d 604 (1940)

(citing cases beginning with Rochester v. Est. of Yesler, 6 Wash. 114, 32 P. 1057

(1893))).

In Washington, for 75 years now, it has been the law that describing

property by its street address is not sufficient to satisfy the statute of frauds. Key

Design, Inc., 138 Wn.2d at 882 (citing Martin v. Seigel, 35 Wn.2d 223, 229, 212

P.2d 107 (1949)). Our Supreme Court has “consistently passed up opportunities

to recognize” an exception for judicial admissions, i.e., when the party claiming

the statute of frauds protection admits to the legal description of the property at

issue in court documents. Key Design, Inc., 138 Wn.2d at 885.

Here, the deed of trust includes the following description:

LOTS 10 TO 16, INCLUSIVE, AND LOTS 17 TO 23, BLOCK 26, PLAT OF SOUTH BLAINE OF W.M., WHATCOM COUNTY, WASHINGTON, ACCORDING TO THE PLAT THEREOF, RECORDED IN VOLUME 2 OF PLATS, PAGE 76, RECORDS OF WHATCOM COUNTY, WASHINGTON, TOGETHER WITH THE NORTH ONE-HALF OF VACATED 5TH STREET ABUTTING, THE VACATED ALLEY ABUTTING; TOGETHER WITH THE WEST ONE-HALF OF VACATED "C" STREET ABUTTING.

SITUATE IN WHATCOM COUNTY, WASHINGTON.

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This language describes only tax parcel A. It does not mention or provide any

description, whether full or abbreviated, of tax parcel B.

U.S. Bank does not claim its deed of trust’s description is a full legal

description of its interest sufficient to satisfy the statute of frauds. Instead, it

argues an exception applies, citing Bingham v. Sherfey, 38 Wn.2d 886, 234 P.2d

489 (1951). In Bingham, the court recognized that “a reference to [the tax rolls of

the county assessor] furnishes the legal description of the real property involved

with sufficient definiteness and certainty to meet the requirements of the statute

of frauds.” 38 Wn.2d at 889. In Bingham, the metes and bounds5 legal

description of the land was incomplete, and the trial court found the description

“indefinite and uncertain.” Id. at 887 (“Such a description would call for a location

in the Pacific [O]cean.”). However, the option also described the land with

reference to “Tax No. 3 . . . as at present designated on the tax rolls in the office

of the County Assessor . . . , being all of that part of the following described tract

of land.” Id. The court agreed that the description of the land via the tax rolls was

“a full, complete, and legally sufficient description of the property, and that the

[metes and bounds description] is an attempt to duplicate the same description in

different words and is, in fact, surplusage.” Id. at 887-88. The tax roll exception in

Bingham has subsequently been recognized as, “ ‘in effect,’ ” incorporation by

reference of the “ ‘recorded instruments of a county auditor.’ ” Teklu, 21 Wn. App.

5 “A metes and bounds description, which must of course start at some agreed point,

reaches the land to be described and then circumscribes it by a series of ‘calls,’ each of which describes a line by the direction (‘bearing’ or ‘course’) and the ‘distance’ between that line’s beginning and ending points.” 18 STOEBUCK & W EAVER, supra, § 13.2, at 75.

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2d at 168 (quoting 18 STOEBUCK & W EAVER, supra, § 13.3, at 83). Thus, the tax

roll exception in Bingham satisfies the rule that a deed of trust “must contain a

description of the land sufficiently definite to locate it without recourse to oral

testimony.” Key Design, Inc., 138 Wn.2d at 881.

U.S. Bank argues its deed of trust “also identified a unique Whatcom

County Assessor & Treasurer Parcel ID Number 400108 107162” and that tax

parcel number “corresponds to a specific parcel of identifiable real property,” so

“it is clear that the legal description set forth in U.S. Bank’s Deed of Trust fully

satisfies the applicable statute of frauds.” But correspondence to “a specific

parcel of identifiable real property” is not what the Bingham tax roll exception

requires. Unlike “Tax No. 3” in Bingham, which incorporated by reference a

description to all, “being all,” of the land the option in that case described, in the

present case tax parcel number 400108 107162 describes only a portion of the

legal property at issue, i.e., only one of two tax lots. The fact that the tax parcel

number “corresponds to a specific parcel of identifiable real property” is not

sufficient to satisfy the statute of frauds when it describes only tax parcel A and

makes no mention of tax parcel B, and both tax parcels A and B together

constitute the single legal lot of record at issue.

Moreover, in Bingham, the tax roll exception the court recognized saved a

metes and bounds description that was inconsistent. 6 38 Wn.2d at 887. In the

6 “[A] ‘mistaken’ description describes no land at all if read literally; the instrument fails

unless a court takes liberties with the literal language. And a description that is ‘inconsistent’ describes some land, but there are internal inconsistencies that make that land’s location more or less unclear.” 18 STOEBUCK & W EAVER, supra, § 13.6, at 105. The Willamette Meridian is the “principal reference,” adopted in 1851, running north and south from which all property in Washington State is located by “ranges” east or west of the meridian. 18 STOEBUCK & W EAVER, supra, § 13.2, at 74-75. The legal description in Bingham was inconsistent because it did not

11 No. 85615-4-I/12

present case, there is no inconsistency in U.S. Bank’s deed of trust; rather, the

deed describes only tax parcel A. Thus, unlike in Bingham, the tax roll adds

nothing to the description in the deed of trust.

The problem for U.S. Bank is that the deed does not describe a legal

piece of real property. The lender’s own title insurance policy warned it of exactly

this problem by excluding tax parcel B from the policy. Tax parcel A alone is not

a legal subdivision of property that may be foreclosed on. See RCW 58.17.020(1)

(“ ‘Subdivision’ is the division . . . of land . . . for the purpose of sale, lease, or

transfer of ownership.”).

The same tax roll exception as in Bingham saved a purchase and sale

agreement containing an option to buy in Teklu. 21 Wn. App. 2d at 169. In Teklu,

the purchase and sale agreement was to have provided a legal description of the

property at issue in exhibit A, “but there was no Exhibit A attached.” Id. at 163.

The agreement thus, mistakenly, described no land at all. See 18 STOEBUCK &

WEAVER, supra, § 13.6, at 105 (“a ‘mistaken’ description describes no land at all if

read literally”). However, the agreement did provide a Snohomish County tax

parcel number. Teklu, 21 Wn. App. 2d at 163. The plaintiff seeking to enforce the

agreement filed a motion “explaining step-by-step how a person could enter the

tax parcel number into the assessor’s website and find . . . an abbreviated legal

description, together with . . . a complete legal description” of the property at

issue. Id. at 164. The trial court concluded the tax parcel number incorporated a

legal description of the property at issue sufficient to satisfy the statute of frauds.

mention the Willamette Meridian and whether the description’s range was east or west of that meridian.

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Id. This court affirmed because, “under the right circumstances, a reference to a

tax parcel number and county can satisfy the legal description requirement of the

statute of frauds,” although we also noted that “the best practice clearly remains

to expressly recite the complete legal description in the” deed. Id. at 171-72.

In the present case, the record shows the Whatcom County Assessor’s

Office, as of February 2023, had records showing that tax parcel number 400108

107162 has an abbreviated legal description of “SOUTH BLAINE LOTS 10

THRU 23 BLK 26-TOG WI VAC N ½ FIFTH ST ABTG-VAC ALLEY ABTG.” The

only full legal description associated with that tax parcel number corresponds to a

different street address than the one at issue here, 4405 Hall Road, not 4415 Hall

Road, and does not match either tax parcel A or B that together comprise the

legal lot at issue:

SOUTH BLAINE LOTS 1-2 BLK 27 TO WI ELY 1/ 2 OF C STREET LY SLY OF SLY R/ W LI OF HALL RD-NLY OF C/L OF ALLEY BISECTING BLK 27-NLY 1/ 2 OF ALLEY BISECTING BLK 27 ALL OF WHICH ADJOIN LOTS 1-2 BLK 27 SD PLAT AS DESC CVL 12-2-01742-1-TOG WI W 1/2 VAC C STREET

Unlike the “right circumstances” in Teklu that allowed the court to incorporate by

reference a complete legal description of the property at issue to satisfy the

statute of frauds despite the option’s absent, mistaken description, the tax parcel

number in the present case does not provide a complete legal description of the

property at issue.

Viewing the record in the light most favorable to U.S. Bank, there is no

genuine issue of fact requiring a trial. The statute of frauds requires a complete

legal description of the property at issue before U.S. Bank may foreclose. Neither

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the note nor the deed of trust provides a description of the single legal lot of

record comprised of two tax parcels, as required to satisfy the statute of frauds. 7

Affirmed.

WE CONCUR:

7 We need not reach the other arguments the parties raise regarding whether the

quitclaim deed’s covenant against subdivision prevents the application of chapter 61.24 RCW or a partial judicial foreclosure under chapter 61.12 RCW, or whether the statute of limitations bars subsequent U.S. Bank’s claims against the Estate.