No. 28214-3-IIThe Court of Appeals of Washington, Division Two.
Filed: April 29, 2003 DO NOT CITE. SEE RAP 10.4(h). UNPUBLISHED OPINION
Appeal from Superior Court of Pierce County Docket No: 00-2-13161-1 Judgment or order under review Date filed: 11/30/2001
Counsel for Appellant(s), Harry R Boesche Jr, Luce Lombino Riggio PS, 4505 Pacific Hwy E Ste a, Tacoma, WA 98424-2638.
Christopher Marti Constantine, of Counsel Inc PS, P.O. Box 7125, Tacoma, WA 98406-0125.
Counsel for Respondent(s), Ann T. Marshall, Attorney at Law, 720 Olive Way Ste 1301, Seattle, WA 98101-1834.
ARMSTRONG, J.
Apex Engineering appeals a summary judgment quieting Southern Pacific Funding Corporation’s title to property in which Apex claimed a security interest. Stohr Capital Group, doing business as Source Financial, had loaned money to the property owner and, in the loan process, paid off what it thought was Apex’s secured debt. Stohr then assigned its interest to Southern Pacific. Apex, however, claimed that Stohr actually paid off another unsecured debt the property owner owed it. The question is whether Apex presented sufficient evidence to create an issue of material fact as to whether Stohr paid off the unsecured debt. If so, Apex still has a security interest in the property, which may be prior to Southern Pacific’s security interest that it received from Stohr, and the court erred in granting Southern Pacific summary judgment. We hold that the evidence establishes as a matter of law that Stohr paid off Apex’s secured debt. Accordingly, Apex had no continuing security interest in the property and, thus, we affirm.
FACTS
Apex Engineering performed land use planning services for Greencrest Financial Investment, Inc. When Greencrest failed to pay Apex’s bills, Michael Torrance, a principal in Greencrest, promised to pay Apex $30,000. Torrance agreed to sign a promissory note for $15,000 of the total sum, secured by a deed of trust on property Greencrest transferred to Torrance. Torrance also executed a deed of trust on the property at 3702 166th Avenue Court East, Sumner, Washington.
Ten months later, Torrance refinanced the Sumner property, which was now encumbered by four liens: (1) C C by the Sea, $148,374.15 (including interest); (2) Apex Engineering, $15,000; (3) Gary Johnson Floor Co., $7,982.73; (4) Summit Overhead Door, $2,149.78. There were also school and park impact fees on the property totaling $1,625.00. Stohr Capital Group, doing business as Source Financial, agreed to refinance Torrance’s debt on the Sumner property and pay off all liens; Stohr’s loan was to be secured by a deed of trust, which would then be in first lien position.
As part of the refinance transaction, Stohr contacted Apex to determine a payoff amount for Apex’s deed of trust. Apex wrote back that ‘$15,000 is owed to Apex Engineering PLLC on 3702 166th Avenue Court — Sumner, Washington.’ Clerk’s Papers (CP) at 98. Apex principal, Dennis Hanberg, signed the letter.
First American, the escrow agent, wrote Apex on August 25, 1998, stating that it was paying off the Greencrest Investment debt; it requested the cancelled note and a full reconveyance of the deed of trust. First American also issued a $15,000 check to Apex dated August 25, 1998, for `Payoff Charges’ and listed a property address of 3702 166th Ave. Ct. E., Sumner Washington. CP at 387. Apex cashed the check on September 1, 1998. On the same day, Apex executed a Request for Full Reconveyance, which it sent to the trustee. The request stated that Apex was the legal owner of the note and the debt secured by the deed of trust and that the note had been fully paid; it also directed the trustee to cancel the note and reconvey the property to the borrower. Hanberg claimed that he received no other documentation or correspondence accompanying the check. He also explained that he was not familiar with the Sumner property street address as it appeared on the First American check. The street address for the Sumner property was not on Apex’s deed of trust. Hanberg did not tie the First American payment to Stohr’s payoff inquiry. He assumed the payment was for Torrance’s unsecured $15,000 debt. Less than one week later, Stohr assigned its interest in the Greencrest note and deed of trust to Southern Pacific. Southern Pacific did not record the deed of trust. One year later, Apex’s attorneys, who also acted as trustees of the deed of trust, began nonjudicial foreclosure proceedings on the Sumner property and issued a Notice of Trustee’s Sale to Torrance. Apex’s attorneys also had in their possession the instructions to reconvey the Apex deed of trust.
Southern Pacific filed a quiet title complaint, alleging that Apex’s nonjudicial foreclosure sale was invalid. Apex moved for summary judgment, which the trial court denied, ruling that Apex had not given proper statutory notice.
Southern Pacific then moved for summary judgment, claiming that it had a first place lien on the Sumner property. The trial court granted Southern Pacific’s motion.
ANALYSIS I. Standard of Review
In reviewing a summary judgment ruling, we engage in the same inquiry as the trial court. Mountain Park Homeowners Ass’n, Inc. v. Tydings, 125 Wn.2d 337, 341, 883 P.2d 1383 (1994). Thus, we consider the facts and reasonable inferences in the light most favorable to the nonmoving party and whether the evidence shows that genuine issues of material fact exist that preclude judgment as a matter of law. Mountain Park Homeowners, 125 Wn.2d at 341.
II. Southern Pacific Funding Corporation — Standing
Apex first argues that Southern Pacific lacks standing because it failed to record its assignment of Stohr’s deed of trust. Apex also argues that Southern Pacific lacks standing under the Washington Deed of Trust Act, chapter RCW 61.24. Apex’s standing argument turns on whether Apex followed the proper statutory procedures to foreclose and whether Southern Pacific was entitled to notice. Because we hold that Apex had no security interest to foreclose, we need not address its standing argument in detail. Clearly, Southern Pacific had standing on the question of whether its security interest had any value because a party has standing to raise an issue if it has a distinct and personal interest in the outcome of a case. Erection Co. v. Dept. of Labor and Indus., 65 Wn. App. 461, 467, 828 P.2d 657 (1992).
III. First American’s Payoff and the Request for Reconveyance
Southern Pacific argues that Apex lost any security interest in the property when it accepted First American’s check for $15,000 and executed a request for reconveyance to the trustee. We agree.
In Washington, a trustee must reconvey all or any part of a property encumbered by a `deed of trust to the person entitled thereto on written request of the beneficiary, or upon satisfaction of the obligation secured and written request for reconveyance made by the beneficiary or the person entitled thereto.’ RCW 61.24.110. In addition:
Whenever the amount due on any mortgage is paid, the mortgagee or the mortgagee’s legal representatives or assigns shall, at the request of any person interested in the property mortgaged, execute an instrument in writing referring to the mortgage by the volume and page of the record or otherwise sufficiently describing it and acknowledging satisfaction in full thereof.
RCW 61.16.020; see also RCW 61.24.020 (except as otherwise provided, a deed of trust is subject to all laws relating to mortgages on real property).
A debtor has the right to instruct the creditor how payments are to be credited. Warren v. Washington Trust Bank, 92 Wn.2d 381, 384-85, 598 P.2d 701 (1979). Here, First American, on behalf of Stohr and Greencrest, directed that its $15,000 payment be applied to the Greencrest-Torrance debt that was secured by a deed of trust on the Sumner property. And no reasonable fact finder could conclude that Apex was unaware that it was to apply the First American funds to the secured debt.
Stohr initially contacted Apex for the payoff amount on Apex’s deed of trust. Apex responded that ‘$15,000 is owed to Apex Engineering PLLC on 3702 166th Avenue Court — Sumner, Washington.’ CP at 98. First American then requested a payoff statement from Apex and sent Apex its check in the amount requested. First American’s check stub contained the same Sumner address: 3702 166th Ave. Ct., Sumner, Washington. Apex cashed the check and sent the trustee a request to reconvey the deed of trust. In doing so, Apex accepted payment in full of its secured debt and, as required, released its security interest in the Sumner property. Apex responds that it accepted First American’s $15,000 check on the assumption it represented payment of the unsecured $15,000 debt. Apex contends that the check was noted `payoff charges,’ but it made no reference to Apex’s deed of trust on the Sumner property. Hanberg said he received no other documentation or correspondence with the check; he was not familiar with the Sumner property street address as it appeared on the First American check; and the Apex deed of trust contained no street address for the Sumner property. Thus, Apex argues it could apply the $15,000 from First American to Torrance’s unsecured $15,000 debt. But the documents Apex exchanged with First American are clear and definitive. Apex referred to the Sumner address when it provided the written payoff figure to Stohr. The same address was on First American’s check to Apex. Finally, and most importantly, Apex cashed the check and executed a request for reconveyance. Hanberg’s explanation of his subjective intent or understanding is legally insufficient to overcome this objective record of the transaction. Hollis v. Garwall, Inc., 137 Wn.2d 683, 695, 974 P.2d 836 (1999); Wilson Court Ltd. P’ship v. Tony Maroni’s Inc., 134 Wn.2d 692, 699, 953 P.2d 590 (1998) (court considers a party’s objective manifestations, not unexpressed subjective intentions). We conclude that when Apex cashed the check and executed the request for reconveyance, it lost any security interest in the Sumner property. Thus, the trial court properly granted Southern Pacific summary judgment.
IV. Southern Pacific — Attorney Fees
Southern Pacific requests attorney fees and costs under RAP 18.1. We have the power to award attorney fees when there is a contract, statute, or recognized ground of equity providing for fee recovery. Dayton v. Farmers Ins. Group, 124 Wn.2d 277, 280, 876 P.2d 896 (1994).
RCW 61.16.030 provides, if the mortgagee fails to acknowledge satisfaction of the mortgage as provided in RCW 61.16.020 sixty days from the date of such request or demand, the mortgagee shall forfeit and pay to the mortgagor damages and a reasonable attorneys’ fee, to be recovered in any court having competent jurisdiction.
And a deed of trust is subject to all laws relating to mortgages. RCW 61.24.020.
Because Apex refused to acknowledge that it had given up its security interest in the Sumner property, Southern Pacific is entitled to an award of attorney fees and costs in an amount to be set by a commissioner of this court upon compliance with RAP 18.1.
Affirmed.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
HUNT, C.J. and MORGAN, J., concur.