LAU, J.
¶ 1 Developer Roger Gardner defaulted on loans secured by deeds of trust on three contiguous parcels of real property. First Heritage Bank conducted nonjudicial foreclosures in succession on each parcel. We hold the deed of trust act's (chapter 61.24 RCW) antideficiency provisions do not restrict the bank's ability to exhaust multiple items of collateral in a series of nonjudicial foreclosure proceedings. And because no disputed material facts remain as to the properties' nonagricultural use on the deed of trust grant date under RCW 61.24.030(2), we affirm the trial court's summary judgment order in the bank's favor and its award of attorney fees.
¶ 2 In 2004, through an entity then called "Younggardner LLC," developers Roger Gardner and Stuart Young purchased approximately 153 acres of undeveloped land in Snohomish County to subdivide as a residential development they later named Sky River Estates. They platted this land into ten 10-acre lots and three contiguous lots varying in acreage and commonly referred to as lots 10, 11, and 12. As declarants. Gardner and Young also formed the Sky River Estates Home Owners Association. Sometime in 2006, Younggardner recorded covenants on all 13 lots, which restricted the property's use to "single family residence" and expressly limited any commercial activity on the property to "a cottage business." Gardner chose lot 10 to build his new single-family residence.
¶ 3 On February 27, 2007, Gardner and Sinclair obtained a construction loan from the bank secured by a construction deed of trust on lot 10 in the principal amount of $750,000. Gardner and Sinclair used the proceeds to finance construction of Gardner's lot 10 residence and to "pay down various personal debts [and] miscellaneous other expenses." The deed of trust also contained a statement that lot 10 "is not used principally for agricultural purposes." SEL Inc. served as successor trustee on the February 2007 deed of trust and on all deeds of trust relevant to this appeal. On October 31, 2007, Gardner obtained a second loan from the bank in the principal amount of $212,160.26, secured by a deed of trust on separate Snohomish property owned by Gardner.
¶ 4 In November 2007, Gardner obtained a $100,000 extension of credit from the bank on the construction loan to cover construction cost overruns and to pay down other debt, resulting in a modified deed of trust.
¶ 5 On April 22, 2008, Gardner refinanced the February 27, 2007 loan by executing a new $869,688.17 promissory note, secured principally by lots 10 and 12, with a maturity date of April 20, 2009. By the terms of the deeds of trust, the loans were all cross collateralized, such that any indebtedness that had been secured by one property was also secured by each other property.
¶ 6 Due to a general economic downturn, the horse boarding and training business suffered a significant loss of customers and earnings in the third quarter of 2008. When Gardner's three loans matured in April 2009, Gardner defaulted due to nonpayment, and the bank issued a statutory notice of default.
¶ 7 On May 14, 2010, the trustee's sale occurred on lots 11 and 12 and the Snohomish property.
¶ 8 In the meantime, on October 19, 2010, Gardner and Sinclair sued the bank, the foreclosing trustee, and various unnamed defendants, seeking a restraining order, injunctive relief, declaratory relief, and an order quieting title in lot 10. They also sought damages for intentional trespass to land and consumer protection act (CPA) violations, chapter 19.86 RCW. Gardner filed a separate motion to enjoin the trustee's sale of lot 10. The CPA claim alleged that the bank deceptively conducted a sale of "agricultural property" and then unlawfully sought a "deficiency judgment." Their main claims alleged that the sale of lot 10 would violate the deed of trust act's antideficiency provision under RCW 61.24.100(1) and that the sale would violate the deed of trust act's prohibition on nonjudicial foreclosure of land "used principally for agricultural purposes," found at RCW 61.24.030(2).
¶ 9 The bank opposed the restraining order and the injunctive relief motion, claiming that it never sought a deficiency judgment as a matter of law and that the property was not "used in an operation that produces crops, livestock, or aquatic goods." RCW 61.24.030(2). On October 27, 2010, the trial court denied the motion, premised mainly on Gardner and Sinclair's failure to present sufficient evidence of the property's use for agricultural purposes. The court explained, "Plaintiffs' request for injunctive relief rests entirely on the conclusory statement in their Complaint that the property at issue is used for agricultural purposes. This statement remains unsupported by factual evidence...."
¶ 10 In December 2010, the bank and SEL moved for summary judgment or, alternatively, for dismissal of Gardner and Sinclair's claims. In January 2011, Gardner and Sinclair moved for summary judgment. Due to the Sinclair bankruptcy proceedings, the
¶ 11 After the bankruptcy court lifted the automatic stay, the trustee's sale of lot 10 occurred on April 1, 2011. The bank purchased lot 10 by credit bid. On the same day, Gardner and Sinclair unsuccessfully moved for reconsideration of the order denying their summary judgment motion.
¶ 12 On April 15, 2011, the bank and SEL moved for summary judgment, arguing that "[n]othing remains of Plaintiffs' claims after the completion of the foreclosure sales." Just before the summary judgment hearing, Gardner requested leave to remove Sinclair as a party and to add a new claim based on a fraudulent boundary line adjustment allegedly committed by the bank before the April 1, 2011 trustee's sale. The court granted Gardner's motion to remove Sinclair but denied his motion to amend to add the fraud claim.
¶ 13 On May 25, 2011, the court granted the defendants' motion for summary judgment in an oral ruling.
¶ 14 Gardner appeals the trial court's (1) March 22, 2011 order denying his motion for summary judgment; (2) April 12, 2011 order denying his motion for reconsideration;
¶ 15 We review a grant or denial of summary judgment de novo. Tiffany Family Trust Corp. v. City of Kent, 155 Wn.2d 225, 230, 119 P.3d 325 (2005). Summary judgment is proper only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. CR 56(c); Jones v. Allstate Ins. Co., 146 Wn.2d 291, 300-01, 45 P.3d 1068 (2002).
¶ 16 Gardner claims that the April 2011 trustee's sale of lot 10 constituted an unlawful attempt by the bank to seek a "deficiency judgment" on the obligation outstanding after the May 2010 trustee's sale of lots 11 and 12. He claims that successive or "serial" trustee's sales of multiple items of collateral securing the same obligation violate the deed of trust act's antideficiency judgment provision. That provision states, "Except to the extent permitted in this section for deeds of trust securing commercial loans, a deficiency judgment shall not be obtained on the obligations secured by a deed of trust against any borrower, grantor, or guarantor after a trustee's sale under that deed of trust."
¶ 17 Relying on this provision, Gardner claims, "[i]f there is more than one deed of trust and multiple collateral securing the same obligation, it is incumbent upon the party using nonjudicial foreclosure to take them all at a single sale, rather than spreading out the foreclosures in a piecemeal fashion." Reply Br. of Appellant at 10. The bank responds that the trustee's sale of lot 10 does not implicate RCW 61.24.100's antideficiency provision because "no such judgment was sought in this case."
¶ 18 The deed of trust act provides no express definition for "deficiency judgment." However, "the difference between the sale price and debt is commonly referred to as a `deficiency.'" Executive Summary of 1998 Proposed Amendments to the Washington Deed of Trust Act Prepared by the Deed of Trust Act Working Group Members.
Boeing, 167 Wash.App. at 272, 272 P.3d 908 (alterations in original) (emphasis added) (footnotes and boldface omitted) (quoting Rustad Heating & Plumbing Co. v. Waldt, 91 Wn.2d 372, 376-77, 588 P.2d 1153 (1979)). Under chapter 61.12 RCW governing foreclosure of mortgages and personal property liens, a deficiency judgment "arises if the amount of a judgment in a judicial foreclosure exceeds the value of the security at the foreclosure sale."
¶ 19 Gardner acknowledges that "the Bank did not seek a `deficiency judgment' in the conventional sense." Appellant's Reply Br. at 1. He acknowledges that the bank did not attempt to obtain a money judgment against him. He relies on RCW 61.24.100(3)(b) to argue, "Because the statute only permits serial nonjudicial foreclosure on different collateral for the same obligation in the context of commercial loans, as a matter of law this second nonjudicial foreclosure violated RCW 61.24.100(3)(b)." Br. of Appellant at 22.
¶ 20 RCW 61.24.100(3)(b) provides an exception to RCW 61.24.100(1)'s antideficiency provision quoted above that allows commercial creditors to foreclose on multiple deeds of trust securing the same obligation:
According to Gardner:
Reply Br. of Appellant at 12-13 (formatting omitted).
¶ 21 Gardner cites no controlling authority or legislative history to support his interpretation of RCW 61.24.100(1) and (3)(b).
¶ 22 The available legislative history on the 1998 deed of trust act amendments does not support Gardner's statutory interpretation claim. In 1998, a set of comprehensive amendments to Washington's deed of trust act took effect.
H.B. BILL ANALYSIS, Engrossed Substitute S.B. 6191, at 3, 55th Leg., Reg. Sess. (Wash. 1998) (emphasis added). Under the prior version of that section, the borrower had no personal liability for a deficiency following a trustee's sale. The current act clarifies that if the underlying obligation is a "commercial loan"
¶ 23 The Executive Summary of 1998 Proposed Amendments to the Washington Deed of Trust Act prepared by the Deed of Trust Act Working Group Members and chaired by Gordon Tanner provides a brief section-by-section commentary on the bill. This summary repeats the essential features of the 1998 amendments to RCW 61.24.100(1) and (3)(b) found in the house bill summary discussed above. In sum, nowhere in the available legislative history materials is there support for Gardner's claim that the legislature intended to prohibit serial nonjudicial foreclosure proceedings against multiple items of collateral as an "equivalent to obtaining a [prohibited] `deficiency judgment.'" Reply Br. of Appellant at 12. Given the significant 1998 amendments to RCW 64.12.100's antideficiency provisions, if the legislature had intended to prohibit serial nonjudicial foreclosures in the manner proposed by Gardner, it could have expressly done so. Absent clear expression of legislative intent, we decline to read into the statute a prohibition against serial nonjudicial foreclosures.
¶ 24 Gardner also argues that even if the bank did not seek a deficiency judgment in the "conventional" sense, the April 2011 trustee's sale of lot 10 was in "substance" a deficiency judgment. Appellant's Reply Br. at 13 (emphasis added). In Dreyfuss v. Union Bank of California, 24 Cal.4th 400, 11 P.3d 383, 101 Cal.Rptr.2d 29 (2000), the California Supreme Court rejected a similar argument. There, a group of borrowers defaulted on a loan secured by separate deeds of trust on three parcels of real property. Dreyfuss, 101 Cal.Rptr.2d 29, 11 P.3d at 384. The creditor bank nonjudicially foreclosed on one property, then "proceeded with serial foreclosure sales of the remaining properties." Dreyfuss, 101 Cal.Rptr.2d 29, 11 P.3d at 384. The sales occurred within a five-month span. Dreyfuss, 101 Cal.Rptr.2d 29, 11 P.3d at 385-86. At no point did the bank attempt to obtain a money judgment against the borrower. Dreyfuss, 101 Cal.Rptr.2d 29, 11 P.3d at 386. The borrowers argued that the nonjudicial foreclosures of the second and third properties "constituted wrongful attempts to obtain a deficiency judgment after the foreclosure of the [first] property...." Dreyfuss, 101 Cal.Rptr.2d 29, 11 P.3d at 386. The borrowers contended that California law required the bank to credit the fair market value of the first property to the outstanding debt before foreclosing on the remaining properties. The court affirmed summary judgment in favor of the bank, holding that the antideficiency provisions of the California Code of Civil Procedure did not "restrict the ability of a creditor to exhaust multiple items of collateral in a series of nonjudicial foreclosure proceedings." Dreyfuss, 101 Cal.Rptr.2d 29, 11 P.3d at 386. The court explicitly rejected the borrowers' argument, similar to the one now made by Gardner, that "the antideficiency provisions preclude a creditor from obtaining not only a deficiency judgment, but what [the borrowers] characterize as the `functional equivalent of a deficiency judgment.'" Dreyfuss, 101 Cal.Rptr.2d 29, 11 P.3d at 389. Relying on well-settled decisional law, Dreyfuss reasoned:
Dreyfuss, 101 Cal.Rptr.2d 29, 11 P.3d at 387-88 (some alterations in original) (footnotes omitted).
¶ 25 California and Washington's antideficiency statutes are similar. California's antideficiency statute states in part:
CAL. CIV. PROC. § 580d (West). Under this provision, "a lender that chooses to sell property securing a debt through private nonjudicial foreclosure cannot pursue the borrower for any deficiency resulting from the difference between the net proceeds received from the foreclosure sale and the total amount of the debt." Michelson v. Camp, 72 Cal.App.4th 955, 85 Cal.Rptr.2d 539 (1999). By prohibiting deficiency judgments following nonjudicial foreclosures, the statute protects the borrower but provides the creditor "the certainty of a `quick, inexpensive and efficient remedy.'" Dreyfuss, 101 Cal.Rptr.2d 29, 11 P.3d at 390 (quoting Moeller v. Lien, 25 Cal.App.4th 822, 30 Cal.Rptr.2d 777, 782 (1994)). The prohibition appears to be categorical. Dreyfuss, 11 P.3d at 387 n. 2.
¶ 26 Washington's antideficiency statute also categorically prohibits a deficiency judgment following a nonjudicial foreclosure. Like California's provision, Washington's statute sacrifices a creditor's right to a deficiency judgment in favor of an "inexpensive and efficient" nonjudicial foreclosure procedure. Thompson v. Smith, 58 Wn.App. 361, 365, 793 P.2d 449 (1990). Dreyfuss's rationale is persuasive. We conclude that RCW 61.24.100(1)'s antideficiency provision does not restrict the creditor's ability to exhaust multiple items of collateral in a series of nonjudicial foreclosure proceedings. Specifically, these provisions are not implicated when a creditor merely exercises the right to exhaust all of the real property pledged to secure an obligation. Dreyfuss rejected the argument that such "serial" nonjudicial foreclosures were the "functional equivalent" of a deficiency judgment. We are unpersuaded by Gardner's argument that the trustee's sale of lot 10 was in "substance" a deficiency judgment.
¶ 27 Gardner contends that the April 2011 trustee's sale of lot 10 violated RCW 61.24.030(2), which forbids nonjudicial foreclosure of land "used principally for agricultural purposes." Br. of Appellant 32. Gardner contends that at the time of the trustee's sale, lot 10 was used principally for agricultural purposes. In his February 2011 cross motion for partial summary judgment, Gardner acknowledges that the loans related to lot 10 were personal, not commercial, because lot 10 "contains Plaintiff's primary residence, though it is also used as part of a livestock program...." The bank argues that even if lot 10 were used for "some agricultural activity," no genuine issue of material fact remains as to whether Gardner used lot 10 "principally for agricultural purposes." Br. of Resp'ts at 18.
¶ 28 RCW 61.24.030 provides:
In Schroeder v. Excelsior Management Group LLC, 177 Wn.2d 94, 105, 297 P.3d 677 (2013), the Court concluded:
(Quoting RCW 61.24.030(2).)
¶ 29 Under RCW 61.24.030(2), lot 10 is used for "agricultural purposes" if it is used principally in an operation that produces livestock, i.e., horses. In addition, this principal use must be established as of the date the deed of trust is granted and the date of the trustee's sale. Before the beneficiary can foreclose nonjudicially, the deed of trust act requires the deed of trust to include in its terms that the real property is not used principally for agricultural purposes. If the nonagricultural use statement is false as of both the date the deed of trust was granted and the date of the trustee's sale, the property must be foreclosed judicially.
¶ 30 Before the 1998 amendments to the deed of trust act, RCW 61.24.030(2) stated, "It shall be requisite, to foreclosure under this chapter ... (2) That the deed of trust provides in its terms that the real property conveyed is not used principally for agricultural or farming purposes...." LAWS OF 1998, ch. 295, § 1. Under the 1998 amendments, this requirement remains except the term "farming" was dropped as vague. The amendments now require that
Fielden, supra, at 7 (last emphasis added) (Washington State Bar Association article written in consultation with a principal drafter
¶ 32 Gardner contends that on both critical dates, lot 10 was used for agricultural purposes. Even assuming genuine fact disputes over lot 10's nonagricultural use on the trustee's sale date, Gardner demonstrates no material fact disputes involving lot 10's use on the date he granted the February 2007 deed of trust. Gardner argues that as of that date, "Lot 10 was used for no purpose other than pasturing horses...." Br. of Appellant at 33. Nothing in the record shows, as required under RCW 61.24.030(2), that Gardner used lot 10 principally for the operation of a horse training and breeding enterprise.
¶ 33 The undisputed facts show the following: Lots 10, 11, and 12 are situated within the residential development known as "Sky River Estates" and are subject to the Sky River Estates Home Owners Association declaration and covenants. Lot 10 was vacant land when Garnder purchased it sometime in January 2007. Four months later, in April 2008, Gardner and Sinclair — "because of our plans to develop a horse boarding and breeding facility [on lots 11 and 12]" — secured approval from the Snohomish County assessor to classify lots 10, 11, and 12 for tax purposes as farm and agricultural land under RCW 84.34.020(2). On February 27, 2007, Gardner obtained a construction loan from the bank, secured by a construction deed of trust on lot 10, to build "the house that I was building for my family." In the loan "Disbursement Request and Authorization" form Gardner signed, he represented and warranted that the primary purpose of the loan was "personal, family, or household purposes or personal investment." (Capitalization omitted.) The form shows he requested the loan funds to be disbursed to pay personal credit card debts and for residence construction. The residence was completed and his family moved in around November or December 2007.
He explains, "[B]ecause of the decline in the economy our business began to lose boarding customers and my personal earnings began... to decline. As a result of this we began to have both personal and professional difficulties in making payments on our obligations."
¶ 34 Although Gardner states, "we have had approximately 14 foals born to our
¶ 35 Gardner's evidence of lot 10's agricultural use on the deed of trust grant date consists of his bare statement that he used lot 10 "as part of a livestock program," and his attorney's assertion that "[i]mmediately following acquisition and continuing until the present day the Plaintiff began using the land for agricultural purposes, specifically as pasture solely for horses." Gardner may not rely on conclusory statements of facts unsupported by evidence to defeat summary judgment. Discover Bank v. Bridges, 154 Wn.App. 722, 727, 226 P.3d 191 (2010) ("Mere allegations or conclusory statements of facts unsupported by evidence do not sufficiently establish such a genuine issue."); Strong v. Terrell, 147 Wn.App. 376, 384, 195 P.3d 977 (2008) ("[S]tatements of ultimate fact and conclusory statements of fact will not defeat a summary judgment motion."). None of the voluminous documents he submitted on summary judgment indicates he used lot 10 principally for agricultural purposes. Some activity on the property does not establish that it is used "principally for agricultural purposes," as set forth in the statute.
¶ 36 The deed of trust's statement regarding nonagricultural use was true on the date Gardner granted the deed of trust. Because the deed of trust act permits a nonjudicial foreclosure if the statement regarding nonagricultural use is true on either of the relevant dates (assuming satisfaction of other statutory prerequisites), we hold that the April 1, 2011 trustee's sale did not violate the deed of trust act.
¶ 37 Gardner argues that his CPA claims should be remanded for trial.
Br. of Appellant at 44. Under the test articulated in Hangman Ridge, Gardner must establish five elements to make a prima facie case of a CPA violation: "(1) [an] unfair or deceptive act or practice, (2) occurring in trade or commerce, (3) public interest impact, (4) injury to plaintiff in his or her business or property, [and] (5) causation." Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 780, 719 P.2d 531 (1986). Given our resolution discussed above, we need not address grounds 1 and 2. We need also not reach Gardner's third CPA allegation because Gardner failed to allege a CPA violation involving
¶ 38 Gardner argues that the trial court erred in denying his motion to add a new claim for fraudulent boundary line adjustment. Br. of Appellant at 2 (assignment of error 5). He brought the motion on May 9, 2011, contemporaneously with his response to the bank's motion for summary judgment. The court denied the motion in an oral ruling. VRP (May 25, 2011) at 36.
¶ 39 We review a denial of leave to amend for abuse of discretion. Wilson v. Horsley, 137 Wn.2d 500, 505, 974 P.2d 316 (1999). "The touchstone for the denial of a motion to amend is the prejudice such an amendment would cause to the nonmoving party." Wilson, 137 Wash.2d at 505, 974 P.2d 316. "Factors which may be considered in determining ... prejudice include undue delay, unfair surprise, and jury confusion." Wilson, 137 Wash.2d at 505-06, 974 P.2d 316 (citation omitted). In addition, "[a] trial court may consider whether the new claim is futile or untimely." Ino Ino, Inc. v. City of Bellevue, 132 Wn.2d 103, 142, 937 P.2d 154 (1997) (citations omitted).
¶ 40 Here, the trial court denied Gardner's motion for leave to amend after concluding that Gardner could not prove damages and that the motion was untimely because he filed it together with his summary judgment response. See VRP (May 25, 2011) at 36, 38. The court stated:
VRP (May 25, 2011) at 36, 38. The court determined the motion was untimely and futile. The court did not abuse its discretion.
¶ 41 Gardner argues that the court abused its discretion by awarding $47,537.23 in attorney fees to the bank and SEL. Br. of Appellant at 2 (assignment of error 6). We review an award of attorney fees for abuse of discretion. Bowers v. Transamerica Title Ins. Co., 100 Wn.2d 581, 597, 675 P.2d 193 (1983).
¶ 42 Gardner contends that the bank's lead counsel, Thomas Lerner, billed at an excessive rate. Lerner states in his fee declaration that he billed at a rate of $365 an hour in 2010 and $375 an hour in 2011. The trial court concluded that Lerner's rates were reasonable in light of his experience and knowledge and in light of the locality in which he practiced.
¶ 43 Gardner requests attorney fees under RAP 18.1 pursuant to a fee provision in the "Notes and [Deeds of Trust] in issue." Br. of Appellant at 48. We deny Gardner's fee request given our resolution discussed above. The bank also requests attorney fees under RAP 18.1. RAP 18.1(b) requires a party to "devote a section of its opening brief to the request for the fees or expenses." Here, the bank failed to devote a section of its response brief to its request. Its request appears only in the response briefs "Conclusion," and it merely states: "If the Bank prevails on appeal, it is entitled to additional attorney fees and costs under RAP 18.1." Br. of Resp'ts at 25. The bank provides no citation to authority or any argument in support of its fee request. We deny the bank's request for failure to comply with RAP 18.1(b). See Osborne v. Seymour, 164 Wn.App. 820, 866, 265 P.3d 917 (2011) (compliance with RAP 18.1(b) is mandatory); Thweatt v. Hommel, 67 Wn.App. 135, 148, 843 P.2d 1058 (1992) ("RAP 18.1(b) requires more than a bald request for attorney fees on appeal.").
¶ 44 For the reasons discussed above, we affirm the trial court's grant of summary judgment and its attorney fee award.
WE CONCUR: COX and BECKER, JJ.
"I'm also aware, however, that the billable rate for attorneys in Seattle, or more appropriately, King County, has historically been higher than that of the attorneys in Snohomish County." VRP (June 10, 2011) at 54-55.
