LEONARD BRUCE; BONNIE BRUCE, husband and wife v. RECONTRUST COMPANY, N.A., a Washington corporation

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
LEONARD BRUCE; BONNIE BRUCE,
husband and wife,
Plaintiffs-Appellants,
v.
RECONTRUST COMPANY, N.A., a
Washington corporation; MORTGAGE
ELECTRONIC REGISTRATION
SYSTEMS, INC., a Delaware corporation;
BANK OF AMERICA, N.A., a North
Carolina corporation; FEDERAL
NATIONAL MORTGAGE
ASSOCIATION,
Defendants-Appellees.
No. 16-35138
D.C. No. 3:15-cv-05866-RJB
MEMORANDUM*
Appeal from the United States District Court
for the Western District of Washington
Robert J. Bryan, District Judge, Presiding
Submitted and Submission Deferred February 9, 2018**
Resubmitted April 13, 2018
Seattle, Washington
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
FILED
APR 19 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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Before: M. SMITH and MURGUIA, Circuit Judges, and GORDON,*** District
Judge.
Leonard and Bonnie Bruce appeal from the dismissal of their claims arising
out of the allegedly unlawful foreclosure on their property in Clark County,
Washington. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.
Reviewing de novo, Cervantes v. Countrywide Home Loans, Inc., 656 F.3d
1034, 1040 (9th Cir. 2011), we see no error in the district court’s conclusion that
the Bruces waived their claim for breach of contract, as well as any request for
injunctive or declaratory relief. Under Wash. Rev. Code. § 61.24.130, a borrower
seeking to restrain or set aside a nonjudicial foreclosure sale must do so by filing a
restraining order or injunction in state court. Once the sale occurs, a court may find
that the borrower waived the right to challenge the foreclosure if the borrower “(1)
received notice of the right to enjoin the sale, (2) had actual or constructive
knowledge of a defense to foreclosure prior to the sale, and (3) failed to bring an
action to obtain a court order enjoining the sale.” Albice v. Premier Mortg. Servs.
of Wash., Inc., 276 P.3d 1277, 1282 (Wash. 2012). The district court properly
concluded that the Bruces had notice of the sale, which was properly recorded in
Clark County and at which the Bruces were present. The Bruces also had notice of
*** The Honorable Andrew P. Gordon, United States District Judge for
the District of Nevada, sitting by designation.

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possible defenses through the notice of trustee’s sale, which advised the Bruces of
their right to enjoin the foreclosure. Finally, there is no dispute that the Bruces did
not seek to enjoin the foreclosure prior to the date of sale. On the contrary, the
Bruces expressly allege that they did not challenge the foreclosure because they
were “helpless” and “thoroughly unfamiliar with the foreclosure process.”
The Bruces’ argument that waiver would be inequitable in this case in light
of Bain v. Metropolitan Mortgage Group, Inc., 285 P.3d 34 (Wash. 2012) (en
banc), is unavailing. The Bain court held that the Mortgage Electronic Registration
Systems, Inc. (MERS) could not be a lawful beneficiary within the meaning of
Washington’s Deeds of Trust Act because it was not the holder of the promissory
note. Here, the appointment of MERS as a beneficiary, however, was properly
characterized by the district as a technical, nonprejudicial violation of the Deeds of
Trust Act, where it is undisputed that the underlying debt remains unpaid and the
Bruces failed to seek to enjoin the sale in a timely fashion. See Merry v. Nw. Tr.
Servs., 352 P.3d 830, 837–40 (Wash. 2015) (holding that the waiver doctrine
remained a valid defense to a violation of the Deeds of Trust Act if its application
would not be inequitable or inconsistent with the purposes of the Act).
Accordingly, the district court properly concluded that the Bruces’ claims for
breach of contract and declaratory and injunctive relief are waived. See also Wash.
Rev. Code § 61.24.127(1)(a)–(c), (2)(c).

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The district court also correctly found the Bruces’ remaining claims to be
barred by the two-year statute of limitations contained in Wash. Rev. Code
§ 61.24.127(2)(a). The Bruces’ claims for fraud and for violations of the Consumer
Protection Act and Deeds of Trust Act must be brought within two years of the
date of the foreclosure, or within the applicable statute of limitations, whichever is
earlier. Id. The Bruces point to no claim for which the statute of limitation is less
than two years. Because the Bruces did not bring their claims until approximately
four years after the date of foreclosure, the Bruces’ remaining claims are time-
barred.
Finally, the Bruces’ argument under Washington’s Commercial Code that
Bank of America never gave value for the promissory note and accordingly never
had an enforceable interest in the deed of trust does not revive the Bruces’
untimely claims, which under Washington law, are properly analyzed under the
Deeds of Trust Act. See Bain, 285 P.3d at 47.
AFFIRMED.

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