Clark County Washington Animal Control Hearings November

This is a video of the Clark County Washington Animal Control Hearings from November of 2013. I have served as the City of Vancouver and Clark County Hearings Examiner for animal control for about 15 years. The purpose of the hearings is to allow people to challenge animal control related citations from the City or County.

Rights after a Foreclosure Sale

A lot of foreclosure related cases are making their way through the courts right now,. The latest appellate decision concerns what rights a foreclosed upon borrower retains after a foreclosure sale. In general the right to stop the sale must be exercised prior to the sale taking place, and will often require the payment of a bond that the borrower may or may not be able to afford. However, rights to claim money damages generally survive the sale. The nature of the loan, residential or commercial, also affect these rights
The decision in Frizzell v. Murray was issued this week by the Supreme Court of Washington. The court decided that the borrower waived her right to have the sale enjoined by not filing the bond ordered by the court. However, the court left open the question of whether the Plaintiff retained a right to damages. This right was dependent on whether the loan was commercial or residential. The court did make clear that a lender merely labeling a loan “commercial”, when the borrower resides on the property, doesn’t necessarily make it so.

Is Your Loan Guaranty Worth the Paper it is Printed On?

Maybe not, under a case issued yesterday by the Washington Division II Court of Appeals. The case is First Citizens Bank v. Cornerstone Homes & Development and Daniel L. Allison and Jeanne Allison, No. 43619-1-II. Cornerstone Homes was a developer and had taken out several loans, secured by various parcels of real property. The Allisons were the principals of Cornerstone and had signed a blanket personal guaranty prior to the issuance of the loans. First Citizens Bank was the successor in interest to the original lender, who had been shut down by the FDIC.

It is very common in a commercial setting or when the borrower is a entity to have someone involved sign a personal guaranty. Since Washington is a non deficiency state, a borrower is not liable for any deficiency after a nonjudicial foreclosure. The idea of personal guaranties is to provide some recourse to a lender who nonjudicially forecloses, but does not receive the full amount of the loan at the foreclosure sale. The problem for the bank in the First Citizens case was that the Deeds of Trust contained language stating that they were “[g]iven to secure (A) Payment of the indebtedness and (B) performance of ANY AND ALL OBLIGATIONS under the note, THE RELATED DOCUMENTS, and the deeds of trust.” “Related Documents” was defined to include guaranties. The guaranty itself also included the “related documents” language, and defined the term to include deeds of trust.

The court held that because of this language, the anti deficiency statute (RCW 61.24.100) applied. This statue categorically prohibits a deficiency judgment against any borrower or guarantor following a nonjudicial foreclosure, except for certain exceptions in the case of commercial loans. One such exception is that a deficiency can be obtained against a guarantor if that obligation was not secured by the deed of trust. Because of the above noted language in both the guaranty and the Deed of Trust, the court found that the guaranty WAS secured by the deed of trust. Therefore, no deficiency was available.

The problematic language in this case, or very similar language, is not uncommon in commercial guaranties and deeds of trust that I have reviewed in my practice. The legislature has imposed a lot of new requirements for residential nonjudicial foreclosures in the last few years, but has not addressed commercial foreclosures. My guess is that after this case, we will be seeing a lot more judicial foreclosures on commercial loans, an added expense and burden to lenders. Since the deficiency in Cornerstone was over four million dollars, I also imagine the case will be appealed to the Washington Supreme Court.

Here is a link to the full decision: http://www.courts.wa.gov/opinions/pdf/D2%2043619-1-II%20Published%20Opinion.pdf

Caveat Venditor (Seller Beware)

I have had clients in similar situations. This is why I advise strongly against allowing buyers to move in prior to closing. “Carrying” the contract on a sale of real property (seller financing) can also be a problem, since a scammer with knowledge of the bankruptcy system can continue to occupy a property for a long time with little or no payment. This case is particularly tragic though, since the well meaning sellers lost personal possessions that were important to them also.

Vancouver couple victims of home scam
Detective: Prospective buyers make off with their possessions

By Patty Hastings, Columbian breaking news reporter

Published: December 3, 2013, 6:00 AM, Columbian

After living in Clark County’s Green Meadows neighborhood for decades, an elderly Vancouver couple decided to move to Phoenix, Ariz. They sold their home to a younger, charming couple and allowed them to lease the house before the sale was finalized.

But, the check bounced on the purchase of the property and the younger couple never paid their lease on the home. They scammed the homeowners, temporarily kept them out of their home and took their furnishings before eventually getting evicted.

The swindle was quite sophisticated, said Clark County sheriff’s Det. Kevin Harper.

The couple faces possible charges of first-degree theft, unlawful issuance of checks or drafts, and four counts of forgery. Harper said he hopes to find them in the next couple of days.

The names of those involved were not released.

Harper said the scammers approached the real estate agent for the home on Northwest Par Lane, which backs up to the Club Green Meadows golf course. They said they wanted to buy the home and move in right away. The couple falsified bank account and income statements, along with wire fund transactions, Harper said. One document said the woman earned $5,400 monthly. When Harper contacted the employer, he learned she had been fired in April and never earned that much income when she worked there.

According to Harper, he scammers convinced the homeowners to let them lease the home for a short period before the sale was official. This was done behind the agent’s back. When the elderly couple signed the lease agreement, the scammers scooped up all of the copies. Realizing he didn’t have a copy of the agreement, one of the homeowners asked for a copy of the lease he signed. He was emailed back an altered copy — one that said he would provide free rent for a year and pay all property taxes, Harper said.

Harper said the documents were clearly altered; the page numbers didn’t line up, the fonts were different and the footer was missing on one of the pages. Still, to get the lease invalidated took legal action

In the interim, the couple was living in the house for free and there was no immediate recourse the homeowners could take to get back their property.

Through the lease agreement, the homeowner couldn’t kick them out or even step on the property. Although the sale didn’t go through, they still had to overturn the lease, which cost thousands of dollars. A note on the front door read: “Go away. We’re not getting out till the eviction.”

The homeowners left their belongings in the home, some of which they planned to sell. But the new occupants brought in a PODS storage container and started hauling out the homeowners’ belongings.

Harper said one of the homeowners parked in a neighbor’s driveway and watched as about $5,000 worth of furnishings and belongings were dragged into a PODS storage container in front of the house. Among their most treasured possessions was crystal from Ireland, Harper said.

After thousands of dollars in legal fees, the younger couple was finally served an eviction notice. When Harper went to the house on the morning of Nov. 19 — the date of the eviction — the couple had already left with the storage container full of belongings of the older couple.

The younger couple has been evicted from two other properties, Harper said, and knows how to work the court system; when they were evicted from a home in 2012, they drug out the process for months, living rent-free the whole time.

Homeowners can take preventive measures and look for red flags before selling their home. If potential homebuyers are pushy and move the process along as quickly as possible, there’s probably a reason for it, Harper said.

“Don’t get rushed into anything,” he advised. “Don’t let anyone talk you into moving in before there’s an ironclad lease.”

Taking the time to run credit checks and verify financial information can prevent homeowners from getting swindled. It’s particularly important to get the buyer’s financial information if it’s a cash sale, rather than a financed sale.

The couple, after getting evicted, attempted to pull the same scam on another home seller, Harper said. However, the real estate agents for both houses happened to work in the same realty office, and stopped the scam before anything bad happened.