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The Hon. Judge Michael Trickey
Noting Date: Apri| 29, 2014
Without Oral Argument
IN THE SUPERIOR COURT OF'THE STATE OF'WASHINGTON
IN AND F'OR THE COUNTY OF'KING
GORDON L. BRONSON and KIMBERLY A.
BRONSON, a married couple,
Plaintiffs,
v.
NORTHWEST TRUSTEE SERVICES, INC.,
SUCCESSOR BY MERGER TO
DEFENDANTS NORTHWEST TRUSTEE
SERVICES,INC.'S AND RCO LEGAL, P.S.'
MOTION FOR CR 1I SANCTIONS
_
PAGE I OF 4
No. 13-2-42868-7 SEA
DEF'ENDANTS NORTFTWEST
TRUSTEE SERVICES, INC.'S AND
RCO LEGAL, P.S.' MOTION FOR
CR 11 SANCTIONS AGAINST
PLAINTIFFS
NORTHWEST TRUSTEE SERVICES, LLC, A
)
Washingfon corporation; RCO LEGAL, P.S., a
)
Washington Professional Services Organization;
)
J.P. MORGAN CHASE BANK, N.4., A
)
national banking association; J.P. MORGAN
)
ALTERNATIVE LOAN TRUST 2006-42;
)
MORTGAGE ELECTRONIC
)
REGISTRATION SYSTEMS, INC., a foreign
)
corporation; MERSCORP HOLDINGS, a
)
foreign corporation; and JOHN DOES l-99,
)
unknown investors in J.P. Morgan Alternative
)
Loan Trust 2006-A2,
)
)
Defendants.
)
)
I. RELIEF REQTJESTED
Defendants Northwest Trustee Services, Inc. ("NWTS") and RCO Legal, P.S. ("RCO"),
collectively Defendants for purposes of this briefing, move the Court for CR 11 sanctions based
on the refusal of Plaintiffs' counsel to amend portions of their Complaint after being shown the
falsity of certain statements therein, and after being sent two "safe harbor" letters affording
Plaintiffs' counsel an opportunity to cure their factual misrepresentations.
RCO
L rcnL, P.S.
1 3555 SE 36th St., Ste. 300
Bellevue, WA 98006
Telephone: 425.458.21 21
Facsimile: 425.458.2'131
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II. STATEMENT OF'F'ACTS
On December 31, 2013, Plaintiffs filed their Complaint in this case. Dkt. No. 1. On
January 8,2014, Defendants sent a leffer to Plaintiffs' counsel seeking the voluntary withdrawal
of specific allegations pertaining to Defendants. Ex. A. In that letter, Defendants provided
Plaintif' counsel with corporate governance information from the Washington Secretary of
State's website showing, among other things, that RCO itself does not own, operate, or have a
substantial interest in NV/TS, despite Plaintiffs' verment otherwise. Id., cf, Compl.,
tf
7.
On January 21,2014, Defendants each answered Plaintiffs' Complaint. Dkt. Nos. 9, 10.
On January 3I,20I4, NWTS proffered requests for admission on Plaintiffs; in their responses,
Plaintiffs denied that RCO was not appointed as the successor trustee under the subject Deed of
Trust despite clesr evidence to the contrary. Ex. B (Appointment).
On March 27,2014, Defendants sent another letter to Plaintiffs' counsel, reiterating their
call for Plaintiffs to voluntarily withdraw certin allegations concerning Defendants. Ex. C.
Despite the stated deadline for compliace, no response to that letter has been provided as of this
Motion.
ilI. ARGUMENT
For all pleadings filed with the Court:
[t]he
signature of aparty or of an attorney constitutes a certificate by the party or attorney
that the parfy or attomey has read the pleading, motion, or legal memorandum, andthat to
the best of the party's or attorney's lcnowledge, nformation, and belief,
formed
after an
inquiry reasonable under the circumstances: (I) it is well grounded in
fact;
(2) is
warranted by existing law or a good faith argument for the extension, modification, or
reversal of existing law or the establishment of new law; (3) it is not interposed for any
improper pu{pose, such as to harass or to cause unnecessary delay or needless increase in
the cost of litigation; and (4) the denials of factual contentions are wananted on the
evidence or, if specifically so identified, are reasonably based on a lack of information or
belief.
CR 11(a) (emphasis added).
Sanctions can be imposed when there is no reasonable inquiry into the factual and legal
1 3555 SE 36th 5t., Ste. 300
Bellevue, WA 98006
Telephone: 425.458.21 21
Facsimile: 425.458.21 31
DEFENDANTS NORTHWEST TRUSTEE
SERVICES, INC.'S AND RCO LEGAL, P.S.'
MOTION FORCR 11 SANCTIONS_PAGE 2OF 4
RCO
L rcnl, P.S.
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basisofaclaim. Bryantv.JosephTree, lnc.,119Wn.2d210,220,829P.zd1099(1992). "The
court should inquire whether a reasonable attorney in like circumstances could believe his or her
actions to be factually and legally
justfted."
Id.
Here, Plaintif allege that RCO owns, operates, and has a "substantial interest in the
operations and working of NWTS." Compl. atl7. Plaintiffs further allege that "RCO and NWTS
commingle employees...
[etc.]...
and share the same physical location
[3555
S.E. 36d' St., Ste.
100, Bellevue, WA 98006]. Id. at\ 8. Plaintiffs state that "the commingling creates a situation
where RCO and NWTS are acting as a single entity." Id. atl9. Plaintiffs rely on these false claims
to plead that RCO owes them a duty because they believe RCO s somehow the subject foreclosure
trustee. Id.at\139,48,52,54,70,94,95,intera\ia;seealsol93("PlaintiffsallegethatNWTS
and RCO worked together os trustee.") (emphasis added).I Plaintif, however, lack any legitimate
factual basis for each of these statements.
First, the statement that RCO, as an entity, o\ryns or controls NWTS continues to be
espoused by Plaintiffs' counsel in this case and others despite its demonstrable falsity. Compare
Ex. A at 3, (RCO corporate information), Ex. Aat4 (NWTS corporate information). The
governing persons of RCO are Mr. Routh, Lance Olsen, Larry Johnson, and Joel Freedman. Id.
Neither Mr. Olsen, Mr. Johnson, nor Mr. Freedman have any interest whatsoever in NWTS. Id.
Thus, public records show RCO is a different corporation than NV/TS, and three of its governing
persons have no ownership in NWTS.2
Second, RCO does not have the same physical location and address as NWTS. Id.; cf,
Compl.,
tf
8. RCO's add,ress is 13555 S.E. 36th St., S/e. 300 nBellevue. See also
http://www.rcolegal.com/company/officelocations.aspx. NWTS'address is 13555 S.E. 36th St.,
'
In
1
53, Plaintiffs even lump together Chase, NWTS, and RCO as "servicer, trustee, and/or debt collector."
2
It is not to say that a law firm could never be a trustee, or actually own a trustee . ln Meyers Way Development LP
v. University Savings Bank, 80 Wn.App. 655, 910 P.2d 1308 (1996), the Washington Supreme Court found that a
trustee could even serve "simultaneously as the creditor's attornqt, agent, employee or subsidiary ." Id. at 1315-16,
n. 8 (emphasis added). But that is simply not the case here, despite Plaintiffs' false accusation otherwise.
13555 SE 36th St., Sre. 300
Bellevue, WA 98006
Telephone: 425.458.21 21
Facsimi le: 425.458.21 31
DEFENDANTS NORTHWEST TRUSTEE
SERVICES,INC.'S AND RCO LEGAL, P.S.'
MOTION FOR CR I I SANCTIONS
_
PAGE 3 OF 4
RCO
L rcnl, P.S.
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Ste. 100 in Bellevue. Ex. A. Clearly, RCO does not share the same office space as NWTS.3
Third, U.S. Bank, N.A. as trustee for JPMorgan Altemative Loans Trust 2006-42, through
its attorney-in-fact JPMorgan Chase Bank, N.4., appointed NWTS as the successor trustee under the
subject Deed of Trust. See Ex. B; c/, Compl.
I
54, inter alia. RCO is not even mentioned in that
document. Id. Asimple online check of recorded documents in the county can reveal this fact.
S e e http: l l www.kingcounty. gov/business/Recorders/RecordsSearch. aspx.
In sum, Plaintiffs' allegations relating to the purported relationship between RCO and
NWTS
-
other than to the extent that RCO is NWTS' legal counsel
-
are not well-grounded in
fact. Plaintiffs' counsel was twice warned of the potential for CR 1l sanctions if their
misconduct was not corrected through amendment of the Complaint,but Plaintffi' counsel has
failed
to comply or even respond, thus necessitating this Motion and the Court's intervention.
Defendants therefore request that the Court sanction Plaintiffs for the cost of preparing
and filing this Motion, in an amount to be determined at the conclusion of this litigation.
Defendants further request that the Court bar Plaintiffs' counsel from raising any argument with
respect to the falsehoods mentioned above. Lastly, Defendants request that the Court, act within
its discretion pursuant to CR 12(, to strike those portions of Plaintiffs' Complaint which
contain references to RCO "owning" or "controlling" NWTS, sharing the same off,rce as NWTS,
or RCO being the trustee of the subject Deed of Trust.
DATED this 17th day of April,2}l4.
RCO Lncar., P.S.
y,W
Joshua Schaer, WSBA No. 31491
Attorneys for Defendants RCO Legal,
P.S. and Northwest Trustee Services, Inc.
3
By analogy, certainly no one suggests any of the multiple law firms in the 1001 4 Ave. Plaza own Safeco
Insurance, or share offrce space with that company, simply because they might obtain insurance from Safeco and are
located in the same building.
DEFENDANTS NORTHWEST TRUSTEE
SERVICES,INC.'S AND RCO LEGAL, P.S.'
MOTION FOR CR I 1 SANCTIONS
-
PAGE 4 OF 4
RCO
L ecnl, P.S.
13555 5E 36th St., Ste. 300
Bellevue, WA 98006
Telephone: 425.458.21 21
Facsimi le: 425.458.21 31
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trXHIBITA
RCO
L e cnl, P.S.
13555 sE 36th st., ste.3oo
Bellevue, WA 98006
Telephone: 425.458.21 21
Facsimile: 425.458.21 31
SRCO
RCO Lcnt, P.S.
13555 sE 36'n st., ste. 3oo
Bellevue, WA 98006
phone - 425.458.212L
f ax- 425.458.2L31
www.rcolegal.com
Ianuary 8,2014
Scott Stafne
Joshua Trumbull
Emily Harris
Matthew Link
Stafne Trumbull, LLC
239 N. Olympic Ave.
Arlington, WA98223
Dear Counsels:
Concerning your December 31,2013 Complaint filed under King County Superior Court Case
No. 13-242868-7, naming borh this law firm and our client, Northwest Trustee Services, Inc.
("NWTS"), we are providing this "safe harbor" letter to you pursuant to CR ll.t That ule
provides in relevant part:
[t]he
signature ofa party or ofan attorney constitutes a certificate by the party or attorney
that the party or attorney has read the pleading, motion, or legal memorandum, and that to
the best of the parfy's or attorney's knowledge, information, and belief, formed after an
inquiry reasonable under the circumstances: (l) it is well grounded in fact; (2) is
warranted by existing law or a good faith argument for the extension, modification, or
reversal of existing law or the establishment of new law; (3) it is not interposed for any
improper pulpose, such as to harass or to cause unnecessary delay or needless increase in
the cost of litigation; and (4) the denials of factual contentions are wananted on the
evidence or, if specifically so identifed, are reasonably based on a lack of information or
belief.
We are hereby requesting that you withdraw all allegations suggesting: l) that RCO Legal, P.S.
("RCO")
"owns, operates, or has a substantial interest in" NWTS, 2) that RCO is a trustee or acts
in that capacity in non-judicial foreclosures, 3) that RCO acted as a servicer, trustee, or debt
collector in the foreclosure that you are challenging, and 4) that RCO and its client NWTS "share
the same physieal [ocation and address-"
'
This lefter in no way serves to waive a challenge to either improper service of process or any claim presented in the
Complaint, and should nol be construed as limiting our remedies, and our client's remedies, to any extent.
Joshua Schaer
Attorney at Law
direct - 425.457.7810
fax - 425.974.8680
jschaer@rcolegal.com
Page2
January 8,2014
Attached to this letter are copies of the corporte govemance information from the Secretary of
State's website showing that RCO and NWTS are not the same company, and RCO itself does
not own, operate, or have a substantial interest in NIVTS, nor does RCO have the same address
as NWTS. The blatant falsity of yoru assertions in this regard should now be apparent.
We believe the frivolous averments made in the Complaint against both RCO and N'WTS are
designed to obfuscate the issues, harass our firm and its client, and delay a defense to this
litigation.
Accordingly, we are now offering you the opportunity to voluntarily withdraw the claims and
statements referenced above. Please notify us of your remedial steps within l0 days of receiving
this lefter, or else RCO reserves the right to seek sanctions with the Court and/or appropriate
state licensing authority. You have been warned and given notice of the factual erors in your
arguments; proceed otherwise at the peril of yourself and your clients.
Sincerely,
RCO LEGAL, P.S.
By: Joshua Schaer
Of Attorneys for RCO Legal, P.S. and
Northwest Trustee Services, Inc.
Corporations: Registration Detail
Corporations Division - Registration Data Search
RCO LEGAL, P.S.
I'u rc hst'..[)-rr-c'
!-1.L1!:.I-b-iff-il,('
o rplr!i11^.i
UBI Numbcr 601 840737
Category PRO
Profit/Nonprofit Protit
Active/lnactivc Activc
State Of lncorporation WA
WA l:iling Date l2t24t't997
Expiration Date t2/3ltz0t4
Inaclive Date
Duration Perpetual
Rcgistercd Agent Inf'ormation
Agent Nante
CORPORATION SERVICE
COMPANY
Address
3OO DESCHUI'ES WAY SW
STE 304
ci- TUMWATER
Stte WA
ZIP 9850 I
Special Address lnformation
Address
Cty
State
'Lip
l' rr rc ha :c I )cc u rlrcr ls l{
!hit-(1ry!l-r-*!lJ:I.l
Page 1 of I
Governing Persons
Title Name Address
Prcsident,Secretary,Treas urer,Chairman ROUTH, STEPHEN
I 3555 SE 36 #350
BELLT VUE, WA 98006
Vice Presidenl OI.SF,N,I,ANCE
13555 SD 36#200
BELLEVUE, WA 98006
Vicc President JOHNSON, LARRY
IJ87 NE EXPRESSWAY
ATLANTA. GA 30329
Vice President FREEDMAN. JOEL
I587 NE EXPRESSWAY
ATLAN'IA ,GA34329
http://www.sos.wa. gov/corps/search_detail.aspx?ubi:60 I 8407 37 t/8/2014
Corporations: Registration Detail
Page I of 1
Corporations Division - Registration I)ata Search
NORTHWEST TRUSTEE SERVICES, INC.
l)r r r.t'!i-c-l )octr rrlcl
!",.!'qr-,th
i s.
(
tl!l,illj-..U.
I'
LJBI Number 602376725
Category
REG
Profit/Nonproft Profit
Active/lnactive Active
State Of Incorporation
rwA
WA Filing Date 03il6t2004
Expiration Date t3t3u20t4
Inactive Date
Duration Perpetual
Registered Agent lnformation
z\gent Name Corporation Service Cornpany
Address
300 Deschutes Way SW
ST'E 304
City TT'MWATER
State WA
ZIP 9850r
Speciaf Address lnformation
ddress
City
State
zip
ll.i.r..c.,.s
IJg L1
lsul.:Jililh.h-Lt..rr:p-rati0Lri
Governing Persons
Tirle Namc ddress
Prcsidcnt.'l'reasurer,Chairma ROUI'TI, S1'EPIIEN
I3555 SE 36TI{ ST
SI,'ITE IOO
BELLEVUE. WA 98006
Vice Presidcnt,Sccrctary STENMAN, JNFFRIIY
r3555 SE 36TH S'I'
SUTI'E IOO
BEI.I,EVUE, WA 98006
http://www. sos.wa. gov/corps/search_detail.asp x?ubi=60237 67 75 U8/2014
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EXHIBIT B
RCO
L rcnl, P.S.
13555 sE 36th st., ste.3oo
Bellevue, WA 98006
Telephone: 425.458.21 21
Facsimi le: 425.458.21 31
t
o,
l'+
t
'.
.
!
AfterRecording Mail to:
Northwest Trustee Services, Inc.
Becky Baker
P.O. Box 997
Bellevue,
t/A
98009-0997
\uw[lul'[W'^.}'1wuuruWlulfrffi
(1-
Document Ttle(s): (or transactions contained therein)
l. Appointment of Successor Trustee
Reference Number(s) of Documents assigned or released:
20050930002t21
Grantor(s): (Last nme lirst, then first and initials)
l. Bronson, Gordon L.
.
2. Bronson, Kimberly A.
3. U.S Bank National Associatior as rstee forJ.P. MORGAN Alternative LoanTrust 20A6-A2
Grantee(s): (Last nam first, then first snd initials)
l. Mortgage Elechonic Registration Systems, lnc. solely as nominee for M & T Mortgage Corporation
2. Lawyers Title Company
Abbreviated Legal Description as follows: (i.e. tor/blocvptat or secton/ownship/rangcJquarter/quarra)
Horseshoe Acre Tracts To Ken! Ptn Lot 26
X Complete legal description is on page
..
2 ofdocument
Assessor's Property Tax ParceUAccount Number(s):
3462804220
AND V/HEN RECORDED MAILTO:
Routh Cnrbtrcc Olscr. P.S.
P.O. Bo 997
Bcllo'uc. WA 98006{}997
Appointmcnt of Succcssor Trustcc
Filc No. 19271l4l0l
GORDON L. BRONSON AND KIIVBERLY A. BRONSON isiarc tlregrantor(s)- LAWYERS TITLE COMPANY
is thc lrustce and MORTGACE ELECTRONIC RECISTRATION SYSTEMS. INC. AS NOMINEE FOR M & T
MORTCACE CORPORATION is thc bencliciary under llmt crlain decd of trust dated SeptcrnUcr( zOos rd rccordcd
on Scptcrnbcr 30. 2005 under King Counl,, Wasirington Auditor's File No. 20050930002 f 2 L
"'r..n.
Tlrc prcscnt benclciary undcr said deed of trust appoints Nofhncst Truslee Sen'iccs. Inc.. a Washinglon
corporalion. n'lo addrcss is P.O. Box 99?. Bclloue. WA 9tt006-.0997. as suessor trustcc undcr tlrc dced oltnst rvitlt all
polrcrs of thc original lnstec.
Said deed o[trust Encumbers thc rcal propertl deribcd as:
Sce nttachcd
STATE OF Ohio
)
)ss
COUNTY OF Frarrllin
)
*JPMoryun
Chrsc Bank' N'
as Attornr:Y-in'!t
lr
*U.S
gank
Nationat Association,:s trustec for J.P. MORCAN
Alternatirc LoanTrust 2006- M
Bv #--
.
lrlo.*do$t
I certilj, that I knorv or harc srtisluctory evidcnce rhat Sokha-v.ary
Voeuh
is lhc pcrson rvlro appcarcd
bcforc nrc. and srid pcrson acknoruledgcd lhat (he/shc)
signcd this instrument. on oath satcd th.nt (hdshc) $'ts authorizcd
to c.\ccutc tlc instruirrcnt and acknorvl-edged it s thc
' -
Vlo Prceldsnt
of JPMorgnn Clsc Bank. Ntional
Associalion to bc tlrc free and roluntaq'act of such party for thc uscs and purposcs mcntioned in thc instruurcnt.
Dcd, l tltfll
,OTTNM.BURON
PIIIC,SATEOF
[ty C@0"
Eqrn ]uc ll, 1016
Notry Public in and for lhc
,.
kT Nnmber:
]nZa
Date: SEPTEDTBER
2?, 2005
proFtyAddrrs:
1419 S l,lA.PtE IJN, [(ENT, WASHINGTON 98031
EXHIB'T "4"
I."EGAL DESCRIPTION
Ttrat
porthnof Lot 26, Horshoc AssTraca toKGil,;cordinqto-rhe
plat rcof rcded inYohmo
ii of
pf.S,
prgc t0, rcordg of King Cornty, Whinga dctsribod s follows:
Bcgioning u a Sordtcsst corncr of said lnt26;,
Ttrco N-orr atrg thc right of wey of Maplc lnc a dimco of I ?3 fcsc
Thcncc Wcst a distacc of I 15 fcc
Tticnco Sortb a dirarco of l?1 fccq
Thcnco st a disarcc of I 15 fccq
Exccpto followin
Beginng al thc Southcast corncr ofsad lat26,
rco on long Maplc to, a disupo of 73 fect
Thpnco $rc$ a disrcc of I 15 fecq
Ttcrco Soutb a dlstarc c o 7? q,
1tpc Ess I tS foct to t Pont of Bcginning
346280A22002
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EXHIBIT C
RCO
L e cnl, P.S.
13555 sE 36th st., ste.3oo
Bellevue, WA 98006
Telephone: 425.458.21 21
Facsimi le: 425.458.21 31
SRCO
RCO Lec,1, P.S.
13555 SE EO" St., Ste. 300..
Bellevue, WA 98006
phone - 425.458.272L
fax - 425.458.2131
www.rcolegal.com
March 21,2014
Scott Stafne
Joshua Trumbull
Emily Harris
Matthew Link
Stare Trumbull, LLC
239 N. Olympic Ave.
Arlington, WA98223
pe:
Bronsonv. NorthwestTrustee Services, /nc. ("NWTS") ef al.,CaseNo. 13-242868-7 SEA
Dear Counsels:
On January 8,2014, we sent your office a safe harbor letter pursuant to CR ll, and have
received no response or action taken as a result. With that letter, we provided documentation
showing that RCO and NWTS are not the same company, and RCO itself does not own, operate,
or have a substantial interest inNWTS, nordoes RCO have the same address asNWTS'
Consequentll, you are ethicafly obtigated to amend your Complaint to remove the materially
false statements suggesting: 1) that RCO Legal, P.S. ("RCO") "owns, operates, or has a
substantial interest in" NWTS, 2) that RCO is a trustee or acts in that capacity in non-judicial
foreclosures, 3) that RCO acted as a servicer, trustee, or debt collector in the foreclosure that you
are challenging, and 4) that RCO and its client NWTS "share the same physical location and
address."
If this remedial step is not taken and a copy of your proposed Amended Complaint served on this
offlice by March 31,2014, we will move to strike those aforementioned impertinent portions of
the Complaint, and at a minimum, seek sanctions under CR I t. This is your final notification
and opportunity to cure.
In addition,
please find enclosed a First Set of Interrogatories and Requests for Production on
behalf ofNWTS. lVe expect timely responses to these demands.
Sincerely,
By: Joshua Schaer, WSBA No. 31491
Of Attorneys for RCO Legal, P.S. and
Northwest Trustee Services, Inc.
Joshua Schaer
AttorneY at Law
dect- 425.457.7810
fax - 425.974.8680
jschaer@ rcolegal.com
RCO LEG,L, P.S.
a)
-i