Bank Of New York, Respondent V. Scott C. Townley, Appellant

IN THE COURT OF APPEALS FOR THE STATE OF WASHINGTON
THE BANK OF NEW YORK MELLON
F/K/A THE BANK OF NEW YORK AS
TRUSTEE FOR THE
CERTIFICATEHOLDERS CWABS, INC.
ASSET-BACKED CERTIFICATES,
SERIES 2005-10,
Respondents,
v.
STEPHANIE TASHIRO-TOWNLEY
AND SCOTT C. TOWNLEY,
Appellants.
No. 69194-5-1
DIVISION ONE
UNPUBLISHED OPINION
FILED: 	March 2, 2015
Leach, 	J. 	— 	Before 	the 	nonjudicial 	foreclosure 	sale 	of 	their 	home,
Stephanie Tashiro-Townley and Scott Townley filed suit in federal court against
entities associated with 	the foreclosure, 	including 	Bank of 	New York 	Mellon
("BNYM"). 	BNYM later purchased the property at the sale. 	When it filed an
unlawful 	detainer 	action 	in 	King County Superior Court, 	the Townleys 	filed
counterclaims and other pleadings asserting claims similar to those they raised in
their federal court complaint. 	The superior court dismissed or denied all of the
Townleys' claims because they exceeded the scope of the unlawful detainer
proceedings. 	It then granted BNYM a writ of restitution.

No. 69194-5-1/2
The Townleys appeal, arguing that their counterclaims and other requests
for relief came within the scope of unlawful detainer proceedings. 	Because we
conclude that the doctrine of res judicata bars the Townleys' claims, we affirm.
FACTS
On 	July 	26, 	2005, 	the 	Townleys 	obtained 	a 	mortgage 	loan 	from
Countrywide Home Loans Inc. 	They executed a promissory note in the amount
of $297,000 secured with a deed of trust. 	The deed of trust identified Mortgage
Electronic Registration Systems Inc. (MERS) as the beneficiary.
In January 2009, the Townleys stopped making monthly payments on the
loan. 	Six months later, the Townleys received a notice of default.
On 	July 17, 	2009, 	MERS assigned 	its interest in the deed of trust to
BNYM, 	as Trustee. 	BNYM then appointed 	Northwest Trustee Services Inc.
(NTS) as its successor trustee.1
On September 14, 2010, NTS issued a notice of trustee's sale, scheduling
the sale for October 29, 2010. 	NTS later postponed the sale to December 3,
2010.
1 In 	November 	2009, 	the 	Townleys 	filed for 	bankruptcy 	in the 	U.S.
Bankruptcy Court for the Western District of Washington. 	In May 2010, BNYM
moved for relief from the bankruptcy stay. 	The Townleys opposed the motion,
arguing that BNYM lacked proof that it was the noteholder on the loan and thus
lacked standing. 	The bankruptcy court denied confirmation of the Townleys'
bankruptcy plan and dismissed the case.
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No. 69194-5-1/3
On 	November 16, 2010, the Townleys filed a complaint against BNYM,
MERS, and others in federal district court. 	The complaint alleged irregularities in
the foreclosure sale, wrongful foreclosure, and violations of the deed of trust act2
and Consumer Protection Act (CPA).3 The complaint alleged in part that the NTS
lacked authority to foreclose because it acquired its interest in the property from
BNYM, who in turn acquired its interest by assignment from MERS. 	Because
MERS did not hold the note at the time of its assignment, the Townleys claimed
that neither BNYM nor its assignee received any interest in the property, making
the foreclosure sale void. 	The complaint further alleged noncompliance with
statutory notice requirements and unlawful actions designed to manufacture "an
alleged waiver by the [Townleys] of their rights to challenge the sale." 	They
sought declaratory relief and damages. 	They did not move to restrain the sale.
On December 3, 2010, BNYM purchased the Townleys' property at the
foreclosure sale.
In March 2011, the Townleys filed an amended complaint in federal district
court, again alleging that the foreclosure sale was unlawful and void.
In June 2011, the federal district court dismissed the Townleys' complaint.
The court ruled 	that the Townleys waived 	most of their claims by failing to
restrain the foreclosure sale. 	The court further ruled that the Townleys failed to
2Ch. 61.24RCW.
3Ch. 19.86 RCW.

No. 69194-5-1/4
state a claim for relief under the CPA and could not seek injunctive relief under
Title 59 RCW. 	The Townleys appealed to the Ninth Circuit Court of Appeals.
On February 24, 2012, BNYM filed this unlawful detainer action, seeking
possession of the foreclosed property. 	The Townleys filed "Counter and Cross
Complaints" against BNYM, 	MERS, 	and others. 	They sought damages and
declaratory and injunctive relief for misrepresentation, fraud, breach of contract,
unjust enrichment, violations of the CPA, 	and other causes of action. 	They
alleged that the foreclosure was accomplished via fraudulent business records
and practices.
On March 7, 2012, the Townleys moved to convert the unlawful detainer
proceeding to a proceeding for damages under the court's general jurisdiction.
The court denied the motion. 	On the same date, the Townleys filed a motion in
federal court seeking relief from the district court's dismissal of their complaint
under Fed. R. Civ. P. 60. 	The motion alleged newly discovered evidence of
fraudulent business records. 	The new evidence consisted of affidavits of alleged
experts regarding "robo-signed" documents and other irregularities in records
associated with the foreclosure. 	The federal court later denied the motion.
On March 8, 2012, the Townleys filed a petition for declaratory relief in the
unlawful detainer proceeding. 	The petition asserted the same claims raised in
the Townleys' Fed. R. Civ. P. 60 motion, including claims based on robo-signed

No. 69194-5-1/5
documents. 	In an attached affidavit, Stephanie Tashiro-Townley alleged that she
first learned of the evidence supporting these claims in December 2011, when
she contacted a "certified fraud examiner and expert." 	The petition sought a
declaration 	that 	BNYM's 	interest 	in 	the 	property 	was 	based 	on 	fraudulent
documents and a void foreclosure sale. 	In the alternative, the petition sought an
order for BNYM to cease and desist any actions "until the facts of new and
relevant evidence of the fraudulent foreclosure ... is properly reviewed by the
[federal] Court."
On April 25, 2012, BNYM moved to dismiss the Townleys' "Counter and
Cross Complaints" under CR 12(b), arguing that they exceeded the scope of
unlawful detainer proceedings. 	Shortly thereafter, BNYM filed a motion for writ of
restitution for possession of the property.
On May 11, 2012, the superior court denied the Townleys' petition for
declaratory 	relief. 	On 	May 	17, 	2012, 	a 	court commissioner dismissed 	the
Townleys' 	"Counter 	and 	Cross 	Complaints" 	and 	granted 	BNYM 	a 	writ of
restitution.4 	Following unsuccessful motions for revision and reconsideration, the
Townleys 	appealed.5 	We 	stayed 	the 	appeal 	pending 	the 	outcome 	of the
Townleys' appeal of the federal district court's decision.
4 	The 	May 	11 	and 	May 	17 	orders 	do 	not 	state 	whether 	the
dismissals/denials are with or without prejudice.
5 Contrary to BNYM's assertions, the Townleys' appeal was timely filed.
On May 21, 2012, the Townleys timely moved for reconsideration of the order

No. 69194-5-1/6
On January 21, 2014, the Ninth Circuit affirmed the federal district court's
dismissal of most of the Townleys' claims for relief. 	The court ruled that the
Townleys' 	"waived those 	claims 	by failing 	to 	bring an 	action 	to enjoin the
foreclosure sale." 	The court vacated the dismissal of the Townleys' CPA claim,
however, and remanded for further proceedings. 	We then lifted the stay in this
appeal 	and 	requested 	and 	received 	supplemental 	briefing on the 	preclusive
effect of the federal courts' decisions.
DECISION
We must decide if the superior court erred in dismissing the Townleys'
counterclaims and denying their petition for declaratory relief. We review rulings
dismissing or denying claims as a matter of law de novo.6 	We may uphold such
rulings on any theory supported by the record.7
The superior court gave two reasons for dismissing the counterclaims and
denying declaratory relief: 	the Townleys waived the claims by not restraining the
denying their petition for declaratory relief. 	On May 27, 2012, the Townleys
moved 	to 	revise the 	May 17, 	2012, 	commissioner's 	rulings dismissing 	their
counterclaims and granting a writ of restitution. 	At the July 13, 2012, hearing on
the motion for revision, the superior court rejected arguments that the Townleys'
motion to revise was not filed on May 27, 2012. 	BNYM has not addressed or
challenged that 	ruling. 	On July 13, 2012, 	the court denied 	the 	motions for
revision and reconsideration. 	The notice of appeal filed on August 10, 2012, was
therefore timely. 	RAP 5.2(a).
6 In re Pet, of A.S., 	91 Wn. App. 	146, 	157 n.6, 	955 P.2d 836 (1998)
(motions to dismiss involving pure questions of law are reviewed de novo), aff'd
138 Wn.2d 898, 982 P.2d 1156 (1999).
7 Korslund v. DvnCorp Tri-Cities Servs., Inc., 121 Wn. App. 295, 317, 88
P.3d 966 (2004).
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No. 69194-5-1/7
foreclosure sale and the claims exceeded the scope of the unlawful detainer
proceeding.8 	But because the record includes some evidence that the Townleys
relied to their detriment on 	representations that the foreclosure sale was on
hold,9 their failure to restrain the sale arguably did not waive their claims.10 	And
to the extent their claims bore on their right to possession and damages incident
to the denial of that right, they arguably came within the scope of the unlawful
detainer proceedings.11 	We do not resolve those questions, however, because
we conclude that res judicata barred the claims.
8 Both the court and opposing counsel noted that the Townleys could bring
a claim for damages in a separate proceeding.
9 Stephanie Tashiro-Townley alleged that prior to the sale, she received
letters from the bank and the loan servicing agent stating that the sale was on
hold.
10 See Rucker v. NovaStar Mortq., Inc.. 177 Wn. App. 1, 18-19, 311 P.3d
31 	(2013) 	(waiver 	is 	applicable 	only 	where 	it 	is 	equitable 	under 	the
circumstances; no waiver for failure to restrain sale if foreclosed party relied on
misrepresentation that sale would not take place); Cox v. Helenius, 103 Wn.2d
383, 389-90, 693 P.2d 683 (1985) (where a "trustee undertakes a course of
conduct reasonably calculated to instill a sense of reliance" by the borrower and
then acts inconsistently therewith, the foreclosure sale is void); Albice v. Premier
Mortq. Servs. of Wash., 	Inc.. 	174 Wn.2d 560, 571-72, 276 P.3d 1277 (2012)
(where borrower reasonably believed sale would be canceled, purchaser had
constructive knowledge of the procedural defect, and borrower did not sleep on
rights, 	waiver did 	not 	apply). 	In addition, 	damage 	claims 	based 	on 	fraud,
misrepresentation, or the CPA are not waived by failure to 	restrain the sale.
RCW 61.24.127.
11 Savings Bank of Puqet Sound v. Mink, 49 Wn. App. 204, 208-10, 741
P.2d 1043 (1987) (party in unlawful detainer may raise counterclaim "that will
void the sale and thus destroy any right to possession in the purchaser at the
sale"); 	Kelly 	v. 	Powell. 	55 	Wn. 	App. 	143, 	150-52, 	776 	P.2d 	996 	(1989)
(counterclaim for specific performance of option to purchase could be heard in
unlawful detainer proceeding because its resolution was necessary to determine
the right of possession); Peoples Nat'l Bank of Wash, v. Ostrander, 6 Wn. App.

No. 69194-5-1/8
Res judicata prohibits the relitigation of claims that either were litigated or,
in the exercise of reasonable diligence, 	could 	have been 	litigated 	in a 	prior
action.12 	Courts developed the doctrine to 	prevent relitigation of previously
determined causes and to curtail harassment in the courts.13 	For the doctrine to
apply, there must be a final prior judgment14 and a current action that share an
identity of (1) subject matter, (2) causes of action, (3) persons and parties, and
(4) the quality of the persons for or against whom the claim is made.15 Whether
res judicata applies presents a question of law.16
BNYM 	argues, 	and 	we 	agree, 	that each 	of the 	prerequisites for 	res
judicata is present here. The federal district court's decision is a final judgment
on the merits.17 	The federal and superior court actions have the same subject
matter—i.e., the sale and right to possession of the Townleys' property. 	The
28, 31-32, 491 	P.2d 1058 (1971) (fraud in foreclosure process is an equitable
defense that can be heard in an unlawful detainer action); Mead v. Park Place
Props., 	37 	Wn. 	App. 	403, 	406, 	681 	P.2d 	256 	(1984) 	(unlawful 	detainer
proceeding "'is limited to 	the 	primary issue of the 	right of possession, 	plus
incidental issues such as restitution and rent, or damages'" (quoting Phillips v.
Hardwick, 29 Wn. App. 382, 386, 628 P.2d 506 (1981))).
12 King's Way Foursquare Church v. Clallam County, 128 Wn. App. 687,
693, 116 P.3d 1060 (2005).
13 Bordeaux v. Inqersoll Rand Co., 71 	Wn.2d 392, 395, 429 P.2d 207
(1967).
14 Pederson v. Potter, 103 Wn. App. 62, 67, 11 P.3d 833 (2000).
15 Rains v. State. 100 Wn.2d 660, 663, 674 P.2d 165 (1983).
16 Landry v. Luscher, 95 Wn. App. 779, 782-83, 976 P.2d 1274 (1999).
17 	For 	purposes 	of 	res 	judicata, 	a 	judgment 	becomes 	final 	at 	the
beginning, not the end, of the appellate process. 	City of Pes Moines v. Pers.
Prop. Identified as $81,231 in U.S. Currency, 87 Wn. App. 689, 702, 943 P.2d
669(1997).
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No. 69194-5-1/9
causes of action, 	or more specifically, the rights, evidence, and transactional
facts involved in the two proceedings, are substantially the same.18 The persons
and parties and the quality of the persons against whom the claims are made are
essentially the same.
The Townleys do not address the elements of res judicata. 	Nor do they
cite any relevant authority. 	Courts hold pro se litigants to the same standard as
attorneys and 	must 	comply with all procedural 	rules.19 	Under the 	Rules 	of
Appellate 	Procedure, 	an appellant must provide "argument in support of the
issues 	presented 	for 	review, 	together 	with 	citations 	to 	legal 	authority."20
Arguments not supported by meaningful analysis or citation to pertinent authority
need 	not be 	considered.21 	Virtually all of the Townleys' 	arguments 	in their
supplemental briefs do not comply with these requirements.
Furthermore, as briefed, the Townleys' arguments do not persuade us.
They contend the federal court decisions do not have preclusive effect because
they misapplied Washington law. 	But for purposes of issue or claim preclusion,
courts generally consider the correctness of the prior decision immaterial so long
18 See Rains, 100 Wn.2d at 664.
19 In re Marriage of Olson, 69 Wn. App. 621, 626, 850 P.2d 527 (1993).
20 RAP 10.3(a)(6).
21 	Cowiche Canyon Conservancy v. Boslev. 	118 Wn.2d 801, 809, 828
P.2d 549 (1992).

No. 69194-5-1/10
as the parties received a full and fair opportunity to litigate the issue or claim.22
The Townleys fail to cite any authority supporting an exception to this rule.
The 	Townleys 	also 	contend 	that 	they 	did 	not 	discover the 	evidence
supporting their fraud claim until after the federal district court's decision and
therefore the federal court decisions do not preclude their fraud 	claim in this
case. 	They concede, however, that they presented the new evidence to the
federal district court in their motion under Fed. 	R. 	Civ. 	P. 60 for relief from
judgment. 	The federal court addressed and denied that motion. 	The Townleys
nowhere explain why that opportunity to challenge the sale based on their new
evidence was insufficient. 	Nor do they demonstrate that they could not have
discovered the alleged 	experts and 	new evidence before the federal 	district
court's decision by the exercise of due diligence.
Finally, 	we 	note 	that 	the 	Townleys' 	claims 	based 	on 	alleged 	newly
discovered evidence of fraud were arguably properly dismissed on the ground
that they have no effect on the Townleys' right to possession.23
22 See Thompson v. Dep't of Licensing, 138 Wn.2d 783, 794-800, 982
P.2d 601 (1999) (where party had a full and fair hearing before prior judgment,
interests of finality, judicial economy, and the desirability of avoiding inconsistent
results favor giving preclusive effect to the prior judgment even if it appears
substantively erroneous).
23 See generally Mendoza v. JPMorgan Chase Bank, N.A., 228 Cal. App.
4th 1020, 175 Cal. Rptr. 3d 880 (2014).
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No. 69194-5-1/11
In summary, we conclude that on the briefing presented, the Townleys'
counterclaims and petition for declaratory relief were or could have been litigated
in the federal court proceedings and are therefore barred by the doctrine of res
judicata.24
The 	Townleys' 	remaining 	claims, 	including their arguments 	relating to
equal protection and their right to a jury trial, lack merit and/or are rendered moot
by our decision. 	We deny the parties' requests for attorney fees on appeal.
Affirmed.
WE CONCUR:
24 See Holman v. Tiosevio. 136 Wash. 261, 262-63, 239 P. 545 (1925)
(counterclaim in action to enforce judgment which could have been raised in
action resulting in prior judgment was barred by res judicata).
-11-