HUNT, J.
¶ 1 Kitsap Community Federal Credit Union (KCU)
¶ 2 We cannot conclude as a matter of law that KCU committed an unfair or deceptive act or practice under the CPA without (1)
¶ 3 In May 2004, Joanne Peterson obtained a $35,000 Home Equity Credit Line loan from KCU. She signed a preprinted promissory note (Credit Agreement) and a preprinted Deed of Trust; her residential property secured the loan. The Credit Agreement set forth the general terms of the loan and its repayment requirements. Section One provided that Peterson promised to pay KCU
CP at 482. The Credit Agreement did not mention the words "release fee" or "reconveyance fee," that such fees were security for Peterson's loan, or that such fees were a condition on repayment of her loan.
¶ 4 The Deed of Trust, however, gave KCU a security interest in Peterson's residential property and secured Peterson's repayment of all sums advanced under the Credit Agreement and her performance of all "covenants" and "agreements" set forth in the Deed of Trust and the Credit Agreement.
CP at 489 (emphasis added). The Deed of Trust did not define "recordation costs" or "reconveyance fee."
¶ 5 In September 2006, Peterson refinanced her loan and sought to pay off her existing KCU loan secured by the Deed of Trust. Peterson completed a written "Authorization and Instructions to Close PLC"
¶ 6 This payoff statement itemized three charges, totaling $34,162.49, which Peterson needed to pay KCU to satisfy her loan obligation and to obtain a "release" of the Deed of Trust on her residential property: $33,810.71 principal, $266.78 interest, and an $85.00 "Release Fee (Reconveyance)."
¶ 7 KCU provided Peterson's Deed of Trust information to Trustee Services, which processed the "reconveyance" of Peterson's residential property. CP at 190. Thereafter, KCU corresponded with Trustee Services to obtain a copy of the reconveyance, and KCU checked the county website to ensure that the reconveyance was promptly recorded. When this reconveyance was recorded, KCU released its security interest in Peterson's residential property.
¶ 8 The following year, Peterson sued KCU, alleging breach of contract, unjust enrichment, and violation of Washington's CPA. She also sought class certification to bring her lawsuit on behalf of herself and similarly situated class members. She alleged that (1) KCU had breached its contract with her and with other class members by charging them a general "Release Fee (Reconveyance)" that was not specifically named or authorized in their Deeds of Trust
¶ 9 KCU moved for summary judgment dismissal of Peterson's claims, arguing that (1) federal law preempted her state law claims because KCU was a "[f]ederally[-c]hartered [c]redit [u]nion" under the Federal Credit Union Act and the National Credit Union Administration regulations; (2) KCU's $85 "Release Fee (Reconveyance)," which comprised the three charges, including the "reconveyance fee" specified in the Deed of
¶ 10 KCU further argued that, even if state law applied here, (1) Peterson's breach of contract claim still failed because the Deed of Trust expressly provided that she would pay KCU a "reconveyance fee"; (2) her unjust enrichment claim failed for the same reason and also because KCU provided reconveyance "service[s]" for this fee; and (3) her CPA claim failed because KCU did not engage in an unfair or deceptive act or practice under Washington's CPA. CP at 94. In support of this latter argument, KCU asserts that the Deed of Trust expressly allowed KCU to charge reconveyance fees, such fees are permitted by law, and Peterson had notice from the beginning of her loan transaction with KCU that a reconveyance fee was included in the total amount that the Deed of Trust secured.
¶ 11 Initially, the superior court granted KCU summary judgment on all of Peterson's claims, dismissing her breach of contract, unjust enrichment, and CPA claims. CP at 231. Later, however, the superior court granted Peterson's motion for reconsideration and reinstated her CPA claim as it related to "imposition ... of the $26 [processing fee] charge" when she paid off her loan. CP at 288. KCU again moved for summary judgment on Peterson's CPA claim. Again, the superior court concluded that federal law did not preempt Peterson's CPA claim, and it denied KCU's summary judgment motion a second time.
¶ 12 Peterson then moved for summary judgment on her reinstated CPA claim, arguing that KCU had violated the CPA by charging her a "marked-up `Release' or `Reconveyance' Fee, in excess of the actual expenses KCU incurred to obtain and [to] record the [r]econveyance, when she paid off [the] loan secured by [her] Deed of Trust." CP at 463 (emphasis added). The superior court granted summary judgment on Peterson's CPA claim,
¶ 13 KCU appeals the superior court's reinstatement of Peterson's CPA claim, its granting Peterson summary judgment on her CPA claim, and its final judgment on this CPA claim. Peterson cross-appeals the superior court's summary judgment dismissal of her breach of contract and her unjust enrichment claims, the superior court's having denied reconsideration of dismissal of her breach of contract claim, and its denial of her class representative incentive award.
¶ 14 KCU argues that the superior court erred in reconsidering its original summary judgment order dismissing Peterson's CPA claim, in reinstating Peterson's CPA claim, and in ultimately granting Peterson summary judgment on her CPA claim because (1) federal law preempts Peterson's state law CPA claim; and (2) it (KCU) did not commit an unfair or deceptive act or practice by charging Peterson the $26 component of its "Release Fee (Reconveyance)," which component reflected charges for KCU's own reconveyance-related services independent of those performed by its agent Trustee Services, Inc. We hold that KCU fails to show that federal preemption bars Peterson's state CPA claim but that there are genuine issues of material fact about what charges comprised
¶ 15 We review summary judgment orders de novo, performing the same inquiry as the superior court. Hisle v. Todd Pac. Shipyards Corp., 151 Wn.2d 853, 860, 93 P.3d 108 (2004). Summary judgment is appropriate only if the pleadings, affidavits, depositions, interrogatories, and admissions on file demonstrate an absence of any "genuine issue [of] material fact and ... the moving party is entitled to a judgment as a matter of law." CR 56(c); see also Davis v. W. One Auto. Grp., 140 Wn.App. 449, 456, 166 P.3d 807 (2007). We consider all facts submitted and all reasonable inferences from them in the light most favorable to the non-moving party. Marquis v. City of Spokane, 130 Wn.2d 97, 105, 922 P.2d 43 (1996). If reasonable persons could reach but one conclusion after reviewing all of the evidence, summary judgment is proper. Vallandigham v. Clover Park Sch. Dist. No. 400, 154 Wn.2d 16, 26, 109 P.3d 805 (2005).
¶ 16 We will not reverse a superior court's ruling on a motion to reconsider absent a "`clear or manifest abuse of ... discretion.'" Meridian Minerals Co. v. King County, 61 Wn.App. 195, 203, 810 P.2d 31 (1991) (quoting Holaday v. Merceri, 49 Wn.App. 321, 324, 742 P.2d 127 (1987)). An abuse of discretion exists only if no reasonable person would have taken the view the superior court adopted. Meridian Minerals Co., 61 Wash. App. at 203-04, 810 P.2d 31. We review de novo questions of law, including federal preemption issues. McCurry v. Chevy Chase Bank, FSB, 169 Wn.2d 96, 100, 233 P.3d 861 (2010).
¶ 17 KCU argues that federal law preempts Peterson's state law CPA claim because (1) KCU is a "federally chartered credit union" under the Federal Credit Union Act and the National Credit Union Administration regulations; (2) its "Release Fee (Reconveyance)" is a loan-required "term[] of repayment" that is associated with "closing costs, application, origination, or other fees" under these laws; and (3) the Federal Credit Union Act and the National Credit Union Administration "expressly preempt" any state laws "purporting to limit or affect [f]ederal credit union [terms of repayment]" in these areas. Br. of Appellant/Cross-Resp't at 27, 29, 31. Peterson responds that federal preemption does not apply because (1) KCU has not sufficiently explained why its "Release Fee (Reconveyance)," or any portion considered the "[r]econveyance [f]ee" in her Deed of Trust, is a "term of repayment" under these federal regulations or that such fee falls within the category of laws affecting "[c]losing costs, application, origination[,] or other fees"; and (2) her CPA claim falls within a category of laws "related to the transfer of security interests in real property," which the National Credit Union Administration regulations expressly do not preempt. Br. of Resp't/Cross. Appellant at 38, 40. We agree with Peterson.
¶ 18 Congress may preempt state law in three manners, only one of which, express preemption,
¶ 19 KCU argues that the presumption against preemption does not apply here because there has been a "`history of significant federal presence' in national banking." Br. of Appellant/Cross-Resp't at 27 (emphasis added) (internal quotation marks omitted) (quoting Bank of America v. City and County of San Francisco, 309 F.3d 551, 559 (9th Cir.2002)). But unlike the federally-chartered bank at issue in Bank of America, KCU does not argue that there has been a comparable history of significant federal presence and preemption in the area of federal credit union regulation, which is at issue here.
¶ 20 Congress enacted the Federal Credit Union Act to regulate federal credit union activities. American Bankers Ass'n v. Lockyer, 239 F.Supp.2d 1000, 1018 (E.D.Cal.2002). This Act authorizes federal credit unions to make contracts and loans and to issue lines of credit to its members. 12 U.S.C. § 1757(1), (5); 12 C.F.R. § 701.21. The congressional findings section of the Act does not include express preemption language. 12 U.S.C. § 1751. Instead, the express preemption language on which KCU relies for its preemption argument derives from the National Credit Union Administration's regulations. These regulations provide that National Credit Union Administration has the "exclusive authority" to "regulate the rates, terms of repayment and other conditions of [f]ederal credit union loans and lines of credit." 12 C.F.R. § 701.21(b)(1) (emphasis added). 12 C.F.R. § 701.21(b)(1)(i)(C) also expressly preempts any state law purporting to limit or affect: "[c]losing costs, application, origination, or other fees." (Emphasis added).
¶ 21 This does not, however, end our federal preemption inquiry because NCUA's regulations also expressly provide that "it is not [the National Credit Union Administration's] intent to preempt state laws that do not affect rates, terms of repayment and other conditions." 12 C.F.R. § 701.21(b)(2) (emphasis added). Matters falling within this category of non-preempted state laws include: "[l]aws related to transfer of and security interests in real and personal property"; insurance laws; and conditions related to the collection of attorneys fees, requirements that consumer lending documents be in "`plain language,'" and the circumstances under which a borrower may be declared in default or may cure a default.
¶ 22 Against this backdrop, KCU argues that 12 C.F.R. § 701.21(b)(1) expressly preempts Peterson's CPA claim because (1) its "Release Fee (Reconveyance)," including its component parts that comprised the Deed of Trust's "reconveyance fee," was a loan-required "term of repayment"; and (2) Peterson's CPA claim purports to limit or affect "closing costs, application, origination, or other fees." Br. of Appellant/Cross-Resp't at 27, 32. These arguments fail.
¶ 23 First, the National Credit Union Administration's regulations do not define the phrases "term of repayment" or "closing costs, application, origination, and other fees" that KCU relies on here. And KCU does
¶ 24 KCU relies primarily on American Bankers and argues that its "Release Fee (Reconveyance)" falls within the National Credit Union Administration's broad power to regulate the terms of repayment of credit unit loans and lines of credit because it "addresses the manner (lack of disclosure) in which KCU charged a reconveyance fee." Br. of Appellant/Cross-Resp't at 32. But American Bankers did not involve "reconveyance fees" or a "Release Fee (Reconveyance)" similar to the fee KCU charged its customers; and the California law at issue in American Bankers more clearly affected the "terms of repayment" of credit unions' loans than does any Washington law that applies here.
¶ 25 In American Bankers, the California legislature had passed a law providing that credit unions and other lending institutions must either (1) require minimum payments of 10 percent of its credit cardholders' outstanding balance or refrain from imposing finance charges, or (2) place specific warnings on their credit card statements informing cardholders about the length of time and the total cost that they would incur if they paid only the minimum amount due on each monthly bill. American Bankers Ass'n, 239 F.Supp.2d at 1002-003. California state law further regulated the placement, typeface, font size, and specific language that these disclosures needed to include, which the credit unions and lending institutions challenged as costly and burdensome. American Bankers Ass'n, 239 F.Supp.2d at 1002-003. The federal district court concluded that the California state law affected the "terms of repayment" of credit union loans and credit lines because it used the credit card statement disclosures as "sanctions" to coerce lenders into imposing a 10 percent minimum payment on credit card statements. American Bankers Ass'n, 239 F.Supp.2d at 1019.
¶ 26 Contrary to KCU's argument, American Bankers does not hold that any state law imposing disclosure requirements necessarily affects the "terms of repayment" of credit union loans and that such laws are automatically preempted by the National Credit Union Administration's regulations. Rather, American Bankers appears to hold that the California law affected the "terms of repayment" and was preempted by federal law because it used the credit card statement disclosure requirements as a means of regulating the amount or the rate under which the lending institutions' loans needed to be repaid, which was the exclusive province of Congress to regulate.
¶ 27 The Washington CPA disclosure requirements do not seek to regulate KCU's ability to charge reconveyance fees, the amounts of such fees, or the rate of Peterson's principal and interest repayments on her loan or any other fees secured under her Deed of Trust. On the contrary, unlike the facts in American Bankers, any disclosure requirements that the CPA may have imposed here related directly to Peterson's ability to enforce the contractual terms of her Deed of Trust with KCU. We also find enlightening, though not controlling, our Washington Supreme Court's recent decision in McCurry, which held that, under similar facts, the plaintiffs' breach of contract/CPA claim challenging a lender's payoff statement that included fax and notary fees not listed
¶ 28 KCU also fails to show that Peterson's CPA claim is preempted because it seeks to limit or to affect "[c]losing costs, application, origination, or other fees" under 12 C.F.R. § 701.21(b)(1)(i)(C). Other than two non-binding, unpersuasive National Credit Union Administration opinion letters,
¶ 29 KCU has not proven (1) that its reconveyance fee was a "term of repayment," or (2) that Peterson's CPA claim limits or affects "[c]losing costs, application, origination, or other fees" under 12 C.F.R. § 701.21(b). Therefore, its federal preemption argument fails. Accordingly, we hold that federal law does not preempt Peterson's state law CPA claim.
¶ 30 KCU argues that Peterson's CPA claim fails as a matter of law because it (KCU) did not commit an unfair or deceptive act or practice by charging its "Release Fee (Reconveyance)," which KCU refers to as its $85 "[r]econveyance [f]ee." Br. of Appellant/Cross-Resp't at 21-22, 24. More specifically, KCU contends that (1) its Deed of Trust did not have the capacity to deceive borrowers about its right to charge a reconveyance fee; (2) covenant 18 of the Deed of Trust established that Peterson would pay "recordation costs" and a "reconveyance fee" on paying off her loan; and (3) it was neither unfair nor deceptive to condition reconveyance on Peterson's payment of the reconveyance
¶ 31 Peterson responds that she proved all the elements of a private CPA claim based on KCU's charging her the $26 component of the "Release Fee (Reconveyance)" that KCU retained as a processing fee because (1) this fee was not secured by her Deed of Trust; (2) KCU "did nothing to justify the charge"; and (3) KCU did not "actually incur" the expense-instead, it retained this fee as a "profit" on the transaction. Br. of Resp't/ Cross-Appellant at 25, 29. Although KCU's argument assumes that Peterson is challenging the entire $85 "Release Fee (Reconveyance)," Peterson isolates and targets only the $26 portion of the fee that KCU retained for itself as a processing fee and profit for its reconveyance services; she argues that this $26 fee was not secured under her Deed of Trust and that KCU's conditioning her reconveyance on the payment of this fee violated the CPA.
¶ 32 Our state's CPA was enacted in 1961, in part, to protect the public from "`unfair or deceptive acts or practices in the conduct of any trade or commerce'" and to "`foster fair and honest competition.'" Indoor Billboard/Wash., Inc. v. Integra Telecom of Wash., Inc., 162 Wn.2d 59, 73, 170 P.3d 10 (2007) (quoting RCW 19.86.020 and RCW 19.86.920). We liberally construe CPA provisions so "`its beneficial purposes may be served.'" Indoor Billboard, 162 Wash.2d at 73, 170 P.3d 10 (quoting RCW 19.86.920).
¶ 33 To prevail in a private CPA claim, a plaintiff must prove an unfair or deceptive act or practice that occurs in trade or commerce, affects the public interest, and causes injury to a person's business or property. Panag v. Farmers Ins. Co. of Wash., 166 Wn.2d 27, 37, 204 P.3d 885 (2009) (citing Hangman Ridge Training Stables, Inc. v. Safeco Title Ins. Co., 105 Wn.2d 778, 784, 719 P.2d 531 (1986)). KCU challenges the superior court's grant of summary judgment to Peterson on her CPA claim on only the first element, unfair or deceptive act or practice; therefore, we limit our analysis to this issue.
¶ 34 When the issue is whether the parties committed a particular act, we review any contested facts under the substantial evidence test. Indoor Billboard, 162 Wash.2d at 74, 170 P.3d 10. But where there is no dispute about what the parties did, "`whether the conduct constitutes an unfair or deceptive act can be decided by this court as a question of law,'" which we review de novo. Indoor Billboard, 162 Wash.2d at 74, 170 P.3d 10 (quoting Leingang v. Pierce County Med. Bureau, Inc., 131 Wn.2d 133, 150, 930 P.2d 288 (1997)).
¶ 35 The parties agree that KCU charged Peterson an $85 "Release Fee (Reconveyance)" that comprised three expenses: a $32 charge for recording Peterson's reconveyed Deed of Trust, a $27 administrative charge for Trustee Services' preparing and processing her reconveyance, and a $26 processing charge for KCU's reconveyance services. Covenant 18 of the parties' Deed of Trust required Peterson to pay "recordation costs" and a "reconveyance fee" to KCU when she paid off her loan. The Deed of Trust did not, however, define the term "reconveyance fee," and the parties have offered different interpretations for this term. To resolve this issue, we address two questions: (1) What constituted the "reconveyance fee," the secured sum provided in the Deed of Trust; and (2) did KCU's bundling three discrete charges into one fee called a "Release Fee (Reconveyance)" and its conditioning reconveyance of Peterson's Deed of Trust upon her payment of the full "Release Fee (Reconveyance)" violate the Deed of Trust or constitute an unfair or deceptive act under the CPA?
¶ 36 To show that a party has engaged in an unfair or deceptive act or practice that violates the CPA, a plaintiff need not prove that the act in question was "`intended to deceive, but that the alleged act had the capacity to deceive a substantial
¶ 37 Division One of our court addressed a factually similar case in Dwyer v. J.I. Kislak Mortg. Corp., 103 Wn.App. 542, 13 P.3d 240 (2000), review denied, 143 Wn.2d 1024, 29 P.3d 717 (2001). The Dwyer plaintiffs purchased a home and financed it through Kislak, which secured the loan with a deed of trust. Dwyer, 103 Wash.App. at 544, 13 P.3d 240. The deed of trust provided that on payment of the principal, interest, and any late charges, Kislak would "reconvey the deed of trust" to the plaintiffs, without charge, except for recording costs. Dwyer, 103 Wash.App. at 544, 13 P.3d 240. When the Dwyer plaintiffs refinanced their home through another lender, Kislak provided them with a payoff statement that listed the principal and interest due on their loan, late charges, a recording fee, and a $50 "Misc Service Chgs" fee. Dwyer, 103 Wash.App. at 544, 13 P.3d 240. Division One held that Kislak's including the "nonsecured" $50 "`Misc Service Chgs'" fee on the payoff statement, along with the plaintiffs' secured obligations specified in the deed of trust (principal, interest, late fees, and recording fee), was a "deceptive" act under the CPA. Dwyer, 103 Wash.App. at 547-48, 13 P.3d 240. The court reasoned that inclusion of these additional $50 "`Misc Service Chgs'" could deceive reasonable consumers into believing that they needed to pay this extra fee before Kislak would release their mortgage or reconvey their deed of trust when, actually, Kislak could not refuse to release their mortgage or to reconvey their deed of trust based on their non-payment of this unsecured fee without violating the terms of their deed of trust. See Dwyer, 103 Wash.App. at 547, 13 P.3d 240.
¶ 38 Like the Dwyer plaintiffs, Peterson argues that (1) KCU's payoff statement included an $85 "Release Fee (Reconveyance)," the components of which were not fully disclosed to her; (2) it cost KCU only $59 to obtain and to record the full conveyance on her property, and KCU kept the remaining $26 as pure "profit"; (3) the $26 component of the "Release Fee (Reconveyance)" was not a "secured" sum under her Deed of Trust; but (4) KCU represented to her that she needed to pay this $26 fee in order for KCU to reconvey the Deed of Trust to her. Br. of Resp't/Cross-Appellant at 29, 32.
¶ 39 In granting summary judgment to Peterson on her CPA claim, the superior court appears to have agreed, as a matter of law, that the $26 component of the "Release Fee (Reconveyance)" was a "hidden fee ... [that was] not discoverable within the loan documents" and that it was an "undisclosed charge" in addition to the actual fees incurred by KCU in reconveying Peterson's Deed of Trust and recording the reconveyance. CP at 765, 939. It is not clear, however, on what evidence the superior court relied.
¶ 40 As we have already noted, in addition to satisfying the principal and interest amounts remaining on her loan, covenant 18 of Peterson's Deed of Trust expressly required her to satisfy two other secured amounts: "recordation costs" and a "reconveyance fee." When Peterson sought to pay off her loan, KCU sent her a payoff statement, which listed the principal and interest amounts remaining on her loan and, arguably, a "new fee" called a "Release Fee (Reconveyance)," which fee was not further broken down into components. This $85
¶ 41 Moreover, like the "Misc Services Chgs" fee in Dwyer, KCU's payoff statement listed the "Release Fee (Reconveyance)" with the other secured obligations from Peterson's Deed of Trust (i.e., the principal and interest remaining on her loan); and the full $85 "Release Fee (Reconveyance)" was included in the total amount that Peterson owed KCU to "payoff" her loan. As Division One held in Dwyer, we could hold here that KCU's payoff statement had the capacity to be "deceptive" under the CPA because a reasonable consumer could believe, like Peterson did, that the payoff statement meant she needed to pay the full "Release Fee (Reconveyance)," including KCU's previously undisclosed $26 in-house processing fee, before KCU would reconvey the Deed of Trust to her property. In Dwyer, however, it was clear that the "Misc Services Chgs" was not a secured obligation under those plaintiffs' deed of trust. In contrast, Peterson's Deed of Trust expressly specified that she would pay "recordation costs" and a "reconveyance fee" to KCU.
¶ 42 Construing the facts in the light most favorable to the nonmoving party, KCU, we hold that there remains a genuine issue of material fact about what constitutes the "reconveyance fee" in the parties' Deed of Trust, which factual issue precludes summary judgment on Peterson's CPA claim.
¶ 43 A majority of the panel having determined that only the foregoing portion of this opinion will be printed in the Washington Appellate Reports and that the remainder shall be filed for public record in accordance with RCW 2.06.040, it is so ordered.
We concur: WORSWICK, C.J., and JOHANSON, J.
CP at 485 (emphasis added).
CP at 544.
Peterson's legal arguments are not dispositive because her Deed of Trust also stated that, as permitted by law, she "shall pay lender a reconveyance fee"; this provision clearly obligated her to pay some amount of money to KCU as part of the Deed of Trust's undefined "reconveyance fee." CP at 489. But the Deed of Trust is not clear about whether the "reconveyance fee" was limited to reimbursing KCU for pass-through charges from Trustee Services or whether it also included additional expenses that KCU incurred in preparing the payoff statement and in corresponding with Land Title Escrow and Trustee Services to arrange for processing and recording the reconveyance.
