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COURT OF APPEALSDIVISION I1

OF THE STATE OF WASHINGTON

TIMOTHY KWENK E and BROOK KRIENKE,Appellants,VS .

CHASE H OME FINA NCE, LLC; and NORTH WEST TRU STEE SERVICES, INC.Respondents

APPELLAN TS' REVISED OPENING BRIEFPierce County Cause N o. 05-2- 10 102-0

KELLY DELAAT-MAHER, WSBA # 26201Attorneys for Petitioner1015 Pacific Ave., Suite # 30 0Tacoma, Washington 98402(253)722-1700

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TABLE OF CONTENTS

I. ASSIGNMENTS OF ERROR

A. Assignment of ErrorB. Issues o n Appeal

11. STATEMENT OF THE CASEA. BRIEF SUMMARY OF THE CASEB. CHRONOLOGY OF RELEVANT EVENTS

111. ARGUMENTA. STANDARD OF REVIEW

I. The Krienke's Motion for ReconsiderationShould Have Been Grantedii. Summary Judgment in Favor of Chase and

Northwest Trustee was Not ProperB. TH E KRIENKE'S CLAIMS FOR WRONGFULFORECLOSURE SHOULD NOT HAVE BEEN

DISMISSED.C. THE KRIENKE'S CLAIMS FOR SLANDER OFTITLE SHOULD NOT HAVE BEEN DISMISSEDD. THE KRIENKE'S CLAIMS UNDER THE FAIR CREDITREPORTING ACT SHOULD NOT HAVE BEEN

DISMISSED 15E. THE KRIENKE'S CLAIMS UNDER THE CONSUMERPROTECTION ACT SHOULD NOT HAVE BEEN

DISMISSED 18F. THE KRIENKE'S CLAIMS FOR BREACH OFCONTRACT SHOULD NOT HAVE BEEN DISMISSED 20G. THE KRIENKE'S CLAIMS FOR EMOTIONALDISTRESS SHOULD NOT BE DISMISSED 22

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H. T H E KRIENKES ARE ENTITLED TO THEIRATTOR NEYS FEES ON APPEAL

IV . CONCLUSION

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TABLE O F AUTHORITIES

I. Table of CasesBraegelmann v. Snohom ish County, 53 W n.A pp . 38 1,3 83 ,766 P.2d 1 137, review d enied, 1 12 Wn.2d 1020 (1989)Brown v. Safeway Stores, Inc., 94 Wash.2d 35 9,3 75 ,617 P.2d 704 (1 98 0)Carboneau v. Peterson, 1 Wn .2d 34 7,3 74 ,95 P.2d 1043 (19 39)Celotex Corp. v. Catrett, 477 U . S . 3 17,322, 106 S.Ct. 2548,91 L.Ed.2d 265 ( 1 986)Dickenson v. Edwards, 105 W n.2d 45 7,46 1, 716 P.2d 8 14 ( 1986)Gaglidari v. Denn y's Restaurants, Inc., 1 17 Wn.2d 426,448,815 P.2d 1362 (1 99 1)Han gma n Ridge Training Stables, Inc. v. Safeco Title Ins. Co .,105 W n.2d 778 , 78 0, 719 P.2d 53 1 (1986)Hisle v. Todd Pac. Shipyards C or p., 1 5 1 Wash.2d 853 , 860,93 P.3d 108 (2 00 4)Iwai v. State, 129 Wn .2d 8 4 ,9 15 P.2d 1089 ( 1 996)Jackson v. Peoples Federal Cred it Union, 25 W ash .App . 81 , 84,604 P.2d 1025 ( 1979)Kruse v. Hemp, 121 Wash.2d 715,722,853 P.2d 1373 ( 1 993)Lord v. Northern Automotive C orp., 75 Wn .Ap p. 589, 596,881 P.2d 256 (1994)Mackay v. Acorn C ustom Cabinetry, Inc., 127 Wn .2d 3 02,898 P.2d 284 (1995)Rice v. Janovich, 109 Wa sh.2d 4 8, 6 1 , 74 2 P.2d 1230 (19 87 )Rorvig v. Douglas, 123 Wn.2 d 85 4, 859, 873 P.2d 492 (1 99 4)Ru ffv. County ofK ing , 125 Wn .2d 697 ,703 ,88 7 P.2d 886 (199 5)

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Udall v. T.D. Escrow Services, Inc., 132 Wash.App. 290 ,296 ,130 P.3 d 908 (2006) 12Werlinger v. Cla ren don Nat. Ins. Co ., 129 Wash.App. 804,120 P.3d 593 (2005) 22Wilson v. Steinbach, 98 Wn2d 43 4,4 37 ,65 6 P.2d 1030 (1982) 9Young v. Key Pharm s., Inc., 112 Wn.2d 216 ,22 5,7 70 P.2d 182 (1989) 1011. TABLE OF STATUTES

A. Federal Statutes15 U.S.C. 5168 1 n)(a)(2)15 U.S.C. 1681(0)

B. Washington StatutesRCW 4.84.330RCW 19.86.020RCW 19.86.090RCW 61.24.130RulesRAP 18.1CR 56CR 59

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COMES NOW Appellants, TIMOTHY KRIENKE and BROOKKRIENKE, by and through their attorneys of record, MAHER INGELSSHAKOTKO CHRISTENSEN LLP, and Kelly DeLaat-Maher, andsubm its Appe llant's B rief on Appeal as follows:

I. ASSIGNMENTS OF ERRORA. Assignment of Error: The trial court erred in denying the

appellant's Motion for Reconsideration by Order dated June 9, 2006.Appellant requested that the court reconsider its grant of summaryjudgment in favor of the Respondent Chase, which was heard by the C ourton January 20,20 06, and confirmed by Order entered February 1 0,2 006 .

B. Issues on Appeal: Did the Court properly conclude thatthere were no material issues of fact preventing sum mary judgment as tothe claims contained in Plaintiffs Complaint for wrongful foreclosure,slander of title, damages under the Fair Credit Reporting Ac t, violation ofthe Consumer Protection Act, breach of contract, and infliction ofemotional distress?

11. STATEMENT OF THE CASEA. BRIEF SUMMARY OF THE CASE

This matter involves a dispute between residential homeowners,Appe llants Krienke (hereinafter "Krienke"), and their lenderlmortgageservicer, Respon dent Chase Home Finance (hereinafter "Chase"), as well

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as the trustee, Respondent Northwest Trustee Services. Th e Krienkes filedsuit on Ju ly 2 1, 2005 against C hase after it notified the Krienk es that theywere in default of their mortgag e, and proceeded to institute a non-judicialforeclosure with Northwest Trustee Services acting as the Trustee. SeeRequest for Preliminary or Permanent Injunction; Complaint for Fraudetc., CP 14 7-155. The institution of foreclosure proceeding followed along history of dispute with Chase, whereby Chase contended that theKrienkes continually made late payments on the mortgage, which theKrienkes vehemently contested.

The Krienkes purchased their home in 1 990. From 1990 to 1999,all mortgage payments were made and accepted without incident.Inexplicably, in 1999 and 2000, Chase began sending notices to theKrienkes that their payments were delinquent and thus incurring latecharges. The Krienkes responded to the claims that the payments weremade late. W hen their correspond ence wen t unnoticed, they begansending all paym ents by certified mail, return receipt requested. Thereturned receipts evidenced receipt of the payment by Chase prior to itsdue date, although the checks were not being cashed until after the duedate had come and gone. A copy of the records evidencing timelypayment was attached to the Declaration of Brook Krienke in Support ofthe Motion for Temporary Restraining Order, CP 15-146. Chase

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ultimately issued a Notice of Default on March 28, 2005. SubsequentlyChase set a Trustees sale for July 29, 2005. Upon filing of the action bythe Krienkes prior to the sale date on July 22, 2005, the sale wasdiscontinued, and apparently has not been reset to date.

In their Answer to the Krienke's amended Complaint, Chasealleged that the Krienkes were in default to the sum of $6,617.45 andfurther denied that the Krienke's payments were timely. CP 170-175.Indeed, evidence submitted to the court in support of the initial request fora preliminary injunction demonstrated that all payments were timely madeand that they should not be in default. See Declaration of Brook Krienkefiled July 22,2005, CP 15-146.

Subsequently, the Krienke's attorney withdrew, whch was grantedafter motion by an order entered December 8, 2005. CP 192. On thatsame date, Chase brought a Motion for Summary Judgment which washeard on January 20, 2006. Chase alleged in their motion that theKrienke's causes of action for wronghl foreclosure should be dismissedsince the foreclosure action was not pending. They also alleged that theKrienkes could not establish slander of title, violation of the Fair CreditReporting Act, or the Consumer Protection Act. Finally, they alleged thatbreach of contract claims should be dismissed as there was no breachedcontractual obligation, nor was there any basis for an emotional distress

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claim. At the hearing, the Court dismissed all claims against Defendan tsand entered summary judgment against the Krienkes by order entered onFebruary 10 , 2006. CP 22 1-222. Krienke moved for reconsideration,which was also denied after hearing on April 28, 2006, and confirmed byOrder entered June 9,20 06 . CP 241 -244.B. CHRONOLOGY OF RELEVANT EVENTS

The following outline is intended to serve as a guide for the courtto review the relevant events in the case, with reference to theircorresponding place in the record.

DATE

0410111 990

1999-2000

2000

03128105

07/22/05

EVENTKrienkes purchase home and obtain aloan from Chemical Mortgage Co.whom assigns the loan to DefendantChase and Chase begins servicing theloanDefendant Chase begins sending noticesto Krienkes that payments aredelinquent. Krienkes dispute the noticesand contend that all payments are timelyand in the correct amount.Beginning in 2000, Krienkes beginsending confirmations of payments toDefendant Chase, documenting thatpayments are timely.Defendant Chase notifies Krienkes thatthey are in default in the amount of$6,617.45; and a non-judicial trustee'ssale is scheduled for July 29, 2005.Krienkes continually dispute they are indefault.Due to the pending trustee's sale and the

Exhibit No./Declaration

Decl. of BrookKrienke, CP 15-146.

Decl. of BrookKrienke, CP 1 5-146.Decl. Brookdated 712 1105,

Ex. A

Decl. of BrookKrienke, CP 15-146. Ex. ARequest for

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Preliminary orPermanentInjunction, C P1-8; Request forPreliminary orPermanentInjunction;AmendedCom plaint forFraud etc., CP147-155Motion toWithdraw, CP162-164;.Motion toDism iss or forsummaryJudgment, CP176-178; Notefor MotionDocket CP 293-294..Order onMotion toWithdraw, CP

19 2Note andMotion forContinuance,CP 195-196Note andMotion forContinuance,C P 200-201.Memorandum ofJournal Entry,C P 299-300.Request toStrike Motion,CP 206-208;Declaration of

11/14/05

12/06/05

12/08/05

12/29/05

12130105

0 1/06/05

01/19/05

parties' relentless dispute on the issue ofwhether the Krienkes are in default orhave made timely payments, theKrienkes file claims against DefendantChase and additionally seek preliminaryinjunction to stop foreclosure.

Krienke's prior attorney files motion towithdraw, which is granted by Order onDecember 8,200 5.Apparently seeing that Krienke'sattorney is seeking withdrawal,Defendant Chase's counsel sends viaU.S. mail a Note, For Motion Docket,Memorandum and Motion for SummaryJudgment to Krienkes.

Order is entered granting withdrawal ofKrienke's prior attorney.

Krienkes seek continuance onDefendant's Summ ary Judgment.

Krienkes again seek continuance onDefendant's summary judgment.Krienkes motion for continuance isdenied.Krienkes file Motion to Strike Motionfor Summary Judgment, andDeclarations for summary judgmenthearing.

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Based on the above outline, it is evident that the Krienkes wereunrepresented for a large part of their case. Notably, they wereunrepresented by counsel at the critical time of the summary judgmenthearing, despite have requested a continuance of the hearing to findcounsel. Indeed, at the January 6th hearing on the continuance, counselfor Chase agreed that a short continuance could be had of the summaryjudgment mo tion to allow the Krienkes to obtain counsel. Vol 2 RP,January 6, 2006 hearing 6:22-25; 7:l -2 . At Summary Judgment, Ms.Krienke was not given an opportunity to argue her case, despite having

Brook KrienkeC P 209-2 12.Order GrantingMotion toDism iss or forSummaryjudgment, CP22 1-222, alsosee Volume 1RP, January 20,2006 hearing.Motion forReconsideration,CP 223;

Declaration ofBrook Krienke,CP 189-191Vol 1 RP, April28 ,200 6 hearingOrder DenyingMotion forReconsideration,C P 24 1-244.

--

01120105

0212 1106

04/28/06

06/09/06

Defendants Motion for SummaryJudgment is Granted at hearing, andconfirmed by Order entered February10,2006.

Krienkes file a Motion forReconsideration

Krienke's Motion for Reconsiderationdenied at hearingOrder entered denying Motion forReconsideration

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filed voluminous records at the onset of the case supporting her claims.See Declaration of Brook Krienke in Support of Motion for TemporaryRestraining Order, CP 15 -146. Ms. Krienke's Motion for Reconsiderationwas also su mm arily dismissed, leading to this appeal.

111. ARGUMENT

A. STANDARDOF REVIEWThis appeal deals with the court's denial of a Motion for

Reconsideration of an Order granting Chase's Motion for SummaryJudgm ent. As suc h, the court should apply the same standard of reviewthat it does for a review of a decision o n summ ary judgment. On reviewof an order for summ ary judgment, the court perform the same inquiry a sthe trial court. Hisle v. Todd Pac. Shipyards Corp., 151 Wash.2d 853,860, 93 P.3d 108 (2004) (citing Kruse v. Hemp, 121 Wash.2d 715, 722,853 P.2d 13 73 (1993)). As specifically stated in Kruse v. Hemp, inreviewing a summary judgment order, an appellate court evaluates thematter de novo, performing the same inquiry as the trial court. Kruse, at

I. The Krienke's Motion for Reconsideration Should HaveBeen Granted

The Krienkes contend that the sum mary judgment should not havebeen granted in Chase's favor, and their motion for reconsideration was

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appropriate. They were not able to properly defend the motion forsumm ary judgm ent d ue to their inability to find an attorney in such a shortperiod between their attorney's withdrawal and the motion, and werefurther not able to properly prepare and argue the motion forreconsideration. Add itionally, multiple issues of material fact wereevident in reviewing the earlier Declaration of Brook Krienke that hadbeen filed in support of the Krienke's Motion for a Tempo rary RestrainingOrder. CP 15-1 46. Civil Rule 59 provides for the reconsideration oforders andlor judgments made by the court under certain circumstances.That rule provides in pertinent part as follows:

(1) Irregularity in the proceedings of thecourt, jury or adverse party, or any order ofthe court, or abuse of discretion, by whichsuch party was prevented from having a fairtrial;. . .(4 ) Newly discovered evidence, material forthe party making the application. . .. . .(7) That there is no evidence or reasonableinference from the evidence to justify theverdict or the decision, or that it is contraryto law;- . .(9) That substantial justice has not beendone.

CR 59(a). Arguably, there was an irregularity in the proceedings due tothe absence of counsel for the Krienkes. Further, the evidence filed with

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the court presented enough material issues of fact sufficient to preventsumm ary judgment on all the issues at such an early juncture in the case.This conclusion is compounded by the fact that the parties had notengaged in any discovery or had opportunity to fully explore the claimsand d efen ses raised by each of the parties..11. Summary Judgment in Favor of Chase and NorthwestTrustee was N ot Proper

As the court knows, summ ary judgment is governed by the CivilRules o f Procedure, Rule 56(c). That rule provides as follows:

The judgment sought shall be rendered forthwith if thepleadings, depositions, answers to interrogatories,admissions on file, together with the affidavits, if any, showthat there is no genuine issue as to any material fact and thatthe m oving party is entitled to judgment as a m atter of law.In this case , summ ary judgment was not appropriate. Summ ary judgment,pursuant to CR 56 (c), is proper if the pleadings, affidavits and depositionsbefore the trial court establish that there is no genuine issue of materialfact. Ru ffv. County of King, 125 Wn.2d 697, 703, 887 P.2d 886 (1995)(quoting Dickenson v. Edwards, 105 Wn.2d 457, 461, 716 P.2d 814(1986); and Wilson v. Steinbach, 98 Wn2d 434, 437, 656 P.2d 1030(1982)). A material fact is one on which the outcome of the litigationdepends. Braegelmann v. Snohom ish County, 53 Wn.App. 38 1, 383, 766P.2d 1 137, review denied, 112 Wn.2d 1020 (1989). In a summary

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judgment motion, the moving party must first show absence of issue ofmaterial fact, with burden then shifting to nonmoving party to set forthspecific facts show ing genuine issu e for trial. Iwai v. State, 129 Wn.2d 84,

If the moving party is a defendant who meets the initial burden ofshowing the absence of an issue of m aterial fact:

. . .then the inquiry shifts to the party with the burden ofproof at trial, the Plaintiff. If, at this point, the plaintiff 'failsto make a showing sufficient to establish the existence of anelement essential to that party's case, and on which that partywill bear the burden of proof at trial', then the trial courtshould grant the motion.

Young v. Key Pharms., Inc., 112 Wn.2d 216, 225, 770 P.2d 182 (1989).(quoting Celotex Corp. v. Catre tt, 477 U.S. 317, 322, 106 S.Ct. 2548, 91L.Ed.2d 265 (1986)). Furthermore, the defendant cannot avoid summaryjudgment by m erely denying the allegations.

When a motion for summary judgment is made andsupported as provided in this rule, an adverse party may notrest upon the mere allegations or denials of his pleading, buthis response, by affidavits or as otherwise provided in thisrule, must set forth specific facts showing that there is agenuine issue for trial. If he does not so respond, summaryjudgm ent, if approp riate, shall be entered against him.CR 56(e) (emphasis added).

Here, Ms. Krienke's Declaration contained multiple issuescertainly showing there was an ongoing dispute with Chase. CP 15-146.

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For example, she submitted an extensive Exhibit outlining paymentsaccepted by C hase, but not credited until after the due date. She furtheroutlined that improper information regarding her credit was reported tothe credit reporting agencies, thereby damaging her credit score. Chase'sstatement that the foreclosure sale had been discontinued was notadequate to defeat the obviously ongoing dispute, which continues to thisday. The Krienke's claims should not have been dismissed. Indeed,Chase's act in discontinuance of the sale without filing of a bond or anorder for injunctive relief filed raises the question of the propriety ofChase's proceedings.B. THE KRIENKE'S CLAIMS FOR WRONGFUL

FORECLOSURE SHOU LD NOT HAVE BEEN DISMISSED.In their Motion for Summary Judgment, Chase argued that the

Krienke's claims for wrongful foreclosure must fail since they had calledoff the trustee's sale after the ac tion was filed, and therefore the cause ofaction was moot. This argument is without merit - namely because theonly reason the sale was called off was because of the suit filed by theKrienkes to halt the sale. It goes without saying that Chase undoubtedlyfeels that they are still owed the monies they claimed in the foreclosureaction, and once this appeal is resolved, will once again commenceforeclosure for recovery of the monies allegedly owed by sale of the

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Krienke's home. Further, issues remain as to whether the Krienkessuffered any damage due to the wrongful institution of the foreclosureproce ss. Simply halting the sale will not have resolved those issues.

Courts have determined that the purpose of the Deed of Trust Acti s threefold. First, the statutory non-judicial foreclo sure process shou ldremain efficient and inexpensive. lidall v. T.D. Escrow Services, Inc.,132 Wash.App. 29 0,29 6, 130 P.3d 908 (2006). Second , it should providean adequate opportunity for interested parties to prevent wrongfiulforeclosure. Id. Third, it should promote the stability of land titles. Id.

Here, the institution of the foreclosure was wrongful, whichcaused the Krienkes damages. Chase's assertion that a party can onlyma ke a claim for wrongful foreclosure after a sale has been accomplishedis erroneous. This position is strengthened by the Deed of Trust Actprovisions providing a grantor an avenue to seek an injunction to halt asale they feel is wrongful. The act includes a specific procedure forstopping a trustee's sale so that an action contesting default can take place.RCW 61.24.130(1) provides in pertinent part that "[nlothing contained inthis chapter shall prejudice the right of the borrower, grantor, anyguarantor, or any person who has an interest in, lien, or claim of lienagainst the property or some part thereof, to restrain, on any properground, a trustee's sale." The statute does not require immediate

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dismissal of a suit once the action has been halted due to compliance withthe proced ures ou tlined therein.

The causes of action contained in the Krienke's pleadings areproper grounds to enjoin the sale. The Krienke's should have beenafforded an opportunity to explore how the institution of wronghlforeclosure proceedings damaged them, regardless of whether the actualsale had been called off in accordance with RCW 61.24. Halting the salepursuant to the provisions of RCW 61.24 does not negate the cause ofaction. Further, sufficient evidence was contained in the Declaration ofBrook Krienke which should have defeated the motion for SummaryJudgment. See CP 15-146.C. THE KRIENKE'S CLAIMS FOR SLANDER OF TITLESHOULD NOT HAVE BEEN DISMISSED

The court summarily dismissed the Krienke's claims for slander oftitle. The Krienke's action for slander of title should not have beendismissed because the Declaration of Brook Krienke contained materialsissues o f fact as to each of the Krienke's claims, including slander of title.

In Rorvig v. Douglas, 123 Wn.2d 854, 859, 873 P.2d 492 (1994),the Co urt defined slander of title as follows:

Slander of title is defined as: (I) false words; (2)maliciously published; (3) with reference to some pendingsale or purchase of property; (4) which go to defeatplaintiffs title; and (5) result in plain tiffs pecuniary loss.

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Id. The element of malice is met when the slanderous statement is notmade in good faith or is not prompted by a reasonable belief in itsveracity. Brown v. Safeway Stores, Inc., 94 W ash.2d 359, 375, 617 P.2d704 (1980).

The Krienkes allege that they were not in default, which they hadlaboriously detailed to Chase on more that one occasion, and which wasfurther detailed in the Declaration of Brook Krienke filed at the inceptionof the action. CP 15-146. As such, material issues of fact existed as towhether recording of the Notice of Trustee's Sale alleging mortgagedelinquency was a false statement, thereby satisfying the first elementrequired for sland er of title. Rowig at 859. There is also a material issueof fact as to whether publication of the Notice of Trustee's Sale byrecordation and publication in a legal periodical was m alicious publicationas required by the second element of slander of title. Id . If Chase andtheir trustee had reason to know that the information was erroneous, thenpublication thereof was not in good faith. Because a Notice of Tru stee'sSale and subsequent foreclosure seeks to defeat a borrower's title, thereare material issues of fact as to whether or not the fourth element ofslander of title wa s met, requ iring that the false statements seek to defeat aplaintiffs title. Id . Finally, the fifth element requires that a person suffer

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pecuniary loss. Id . Material issues of fact were presented by the damageto the Krienke's credit, as well as the potential loss of their property andany conseque ntial damage s arising by the foreclosu re action.

The only real issue is whether the Krienkes could allege sufficientfacts to meet the third element requiring reference to a pending sale orpurchase. Id . Chase argues that there was no pending sale for theproperty at the time the Notice of Default was filed. The fact of the matteris that the Krienke's would essentially have great difficulty in finding abona fide purchaser at an appropriate price once the foreclosure processhad begun. Indeed, they would be prevented from even refinancing theirproperty due to the damage to their credit scores. Whether or not therewas or could have been a pending sale is an issue of fact that was notbefore the court. The sum mary dismissal of the claim w as simply in error.D. THE KRIENKE'S CLAIMS UNDER THE FAIR CREDIT

REPORTING ACT SHOULD NOT HAVE BEENDISMISSEDSimilarly, the trial court should not have summ arily dismissed the

Krienke's claims under the Fair Credit Reporting Act ("FCRA"). In herdeclaration, Brook Krienke alleges that Chase transmitted informationrelating to their alleged default to credit reporting agencies, which causedtheir credit to be greatly impaired. CP 15-146. Indeed, their credit still

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rem ains imp aired. This material issue of fact should have been sufficientto overcome Chase's Motion for Summary Judgment on that issue.

15 U.S.C. 1681(0) provides for civil liability for negligentnoncom pliance. It provides as follows:

(a) In generalAny person who is negligent in failing to comply with anyrequirement imposed under this subchapter with respect toany consumer is liable to that consumer in an amount equalto the sum of-(1) any actual damages sustained by the consumeras a result of the failure; and(2) in the case of any successful action to enforceany liability under this section, the costs of theaction together with reasonable attorney's fees asdetermined by the court.

(b ) Attorney's feesOn a finding by the court that an unsuccessful pleading,motion, or other paper filed in connection with an actionunder this section was filed in bad faith or for purposes ofharassment, the court shall award to the prevailing partyattorney's fees reasonable in relation to the work expendedin responding to the pleading, motion, o r other paper.

In their Complaint, the Krienke's also requested damages under 15 U.S.C.5 16 81 n)(a)(2), which provides dam ages for willful non comp liance. Itprovides in pertinent part as follows:

(a) In generalAny person who willfully fails to comply with anyrequirement imposed under this subchapter with respect toany consumer is liable to that consumer in an amount equalto the sum of-

(1)

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(A ) any actual damages sustained by the consumeras a result of the failure or damages of notless than $100 and not more than $1,000; or(B ) in the case of liability of a natural person forobtaining a consumer report under falsepretenses or knowingly without apermissible purpose, actual damagessustained by the consumer as a result of thefailure or $1,000 , whichever is greater;(2) such amount of punitive damages as the courtmay allow; and(3) in the case of any successful action to enforceany liability under this section, the costs of theaction together with reasonable attorney's fees asdetermined by the court.

The Respondent alleged at Summary Judgment that the cause ofaction shou ld be dismissed since the Krienkes did not lodge a complaint inregard to inaccurate information with their credit reporting agency. TheStatute provides that a consumer reporting agency reinvestigate theaccuracy of the information or delete it, and within a certain time period,notify the persons who fu rnished the information of the dispute.

Although the Krienkes did complain to Chase, they also providedevidence through their Declaration that their credit had been harmed byChase's provision of erroneous information to the consumer reportingagency. Although a consumer reporting agency has a requirement tocomply with the requirements of the Fair C redit Reporting Act, so to doesthe provider of such information carry a requirement that the informationprovided to the agency be truthful. In this case, there can be no doubt that

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amount not to exceed three times the actual damagessustained: PROVIDED, That such increased damage awardfor violation of RCW 19.86.020 may not exceed tenthousand dollars: PROVIDED FURTHER, That suchperson may bring a civil action in the district court torecover his or her actual damages, except for damageswhich exceed the amount specified in RCW 3.66.020, andthe costs of the suit, including reasonable attorney's fees.The district court may, in its discretion, increase the aw ardof damages to an amount not more than three times theactual damages sustained, but such increased damageaward shall not exceed the amount specified in RCW3.66.020. For the purpose of this section "person" shallinclude the counties, municipalities, and all politicalsubdivisions of this state.

RCW 18.86.090.To support a claim under the CPA, a plaintiff must present

evidence of (1) an unfair or deceptive act (2) committed in trade orcom merc e (3) that impacts the public interest and (4) injures the plaintiffsbusiness or property, as well as (5) causation. Hangman Ridge TrainingStables, Inc. v. Safeco Title Ins. C o., 1 05 Wn.2d 778, 780, 719 P.2d 5 31

Here, the Krienke's have alleged facts which meet all of theelements under the CPA. They have met the first requirement with theircontention and abundant exhibits demonstrating that Chase has unfairlyand erroneously begun foreclosure proceedings under the assumption thattheir mortgage payments were delinquent when in fact they were not.They second element is met in that Chase is in the business of servicing

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mortgages, an activity conducted in trade or comm erce. Certainly, thepublic is impacted by a mortgage servicer's institution of an unjustifiedforeclosure, when the consumer has produced evidence to the contrary,thus meeting the third element. They further meet the fourth element inthat a successful foreclosure results in the damage and actual loss of theirproperty. Finally, the fifth element requiring causation is amp ly met. Butfor the wrongful insistence that the Krienkes were delinquent with theirmortgage, their property and their credit would not have been placed injeopardy.

As such, sufficient evidence existed to defeat the Defendant'smotion for Summ ary Judgment on the issue of the CPA . The court erredin dismissing those claims.F. THE KRIENKE'S CLAIMS FOR BREACH OF CONTRACT

SHOULD NOT HAVE BEEN DISMISSEDChase argued before the trial court that the Krienke's claims for

breach of contract should be dismissed since Krienke failed to identify acontractual provision that was allegedly breached. Despite the extensiveDeclaration of Brook Krienke, CP 15-146, the trial court agreed anddismissed the claims. The court's action in doing so were in error.

There can be no doubt whatsoever that a contract existed betweenthe parties, in the form of a Promissory Note and Deed of Trust securing

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the note. As with any Promissory Note and Deed of Trust, the Krienkeswere expected to make payments in a certain amount by a stated time.Impliedly, the mortgage servicer was to accept the payment by that date,and credit it to the client's acco unt. Chase failed to do so. Attached toMs. Krienke's Declaration were several years of payment history showingcertified mail receipts of paym ents made by the appropriate date, althoug hthe checks were not cashed until after the due date. Desp ite the Krien ke'scompliance with the terms of the agreement, Chase failed to abide by itsrequirement of accepting timelypayments made in the appropriate amou nt.Their failure is a breach.

"[Tlhe essence of a con tract is that it binds the parties who enterinto it and, when made, obligates them to perform it, and any failure ofany of them to perform constitutes in law, a breach of contract."Carboneau v. Peterson, 1 Wn.2d 347, 374, 95 P.2d 1043 (1939). Thus, abreach can be defined as the failure without legal excuse to perform anypromise making up a contract and may be inferred from the refusal of aparty to recognize the existence of a contract, or when, in anticipation ofthe time for performance, one definitely and specifically refuses to dosomething which he is obligated to do.

By this definition, Chase failed without legal excuse to performtheir part of the bargain 4rediting the payments upon the date of their

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receipt rather than the date that Chase got around to cashing the check.Sim ply put, the Krienke's performance should not be measured by the dateChase decides to perform their end of the bargain - omething over whichthe K rienkes had not control. The court's sum mary judgment on this issueshould be reversed and remanded for trial.G. THE KRIENKE'S CLA IMS FOR EMO TIONAL DISTRESS

SHOULD NOT BE DISMISSEDChase argued before the trial court that the Krienkes failed to

establish a statutory or comm on law basis fo r emotional distress damages,and thus their claim s should be dismissed. The Court agreed, despite theample eviden ce contained in Ms. Krienke's Declaration. The court was inerror, and the Krienke's should be allowed to pursue their claims.

Washington law does not support claims for emotional distressdam ages in breach of contract claims. See Ga gl ida ri v. Denny'sRestaurants, Inc., 117 Wn.2d 426, 448, 815 P.2d 1362 (1991); Lord v.Northern Automotive Corp., 75 Wn.App. 589, 596, 881 P.2d 256 (1994)overruled on unrelated grounds, Mac kay v. Acorn Custom Cabinetry, Inc.,127 Wn.2d 302, 898 P.2d 284 (1995). However, Washington will supporta claim for emotio n distress in light of a party's bad faith. In W erlinger v.CIurendon Nut. Ins. Co., 12 9 Wa sh.App. 804, 1 20 P.3d 59 3 (2005), theappellate court recognized th at "[b]ecause bad fa ith is a tort, a plaintiff

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may seek emotional damages." Here, the Krienke's have alleged thatChase has acted in bad faith, and therefore they should have been allowedto explore their claims against Chase on that basis.

Further, Washington case law supports a claim for outrage in asituation w here credit has erroneously been d amaged. In Rice v. Janovich ,109 Wash.2d 48, 61, 742 P.2d 1230 (1987), the court outlined theelemen ts of the tort of outrage as follows:

The elements of the tort of outrage are "(1) extreme andoutrageous conduct; (2) intentional or reckless infliction ofemotional distress; and (3) actual result to the plaintiff ofsevere em otional distress."Id. Whether certain conduct is sufficiently outrageous is generally aquestion for the trier of fact. Jack son v. Peo ples Fed era l Credit Union, 25Wash.App. 8 1, 84, 604 P.2d 1025 (1 979) . In this case, Chase has failed todemon strate that the Krienkes can prov e no set of fact consistent with theirclaims for emo tional distress and outrag e due to the consistent reporting ofbad credit to the appropriate agencies. Th e case should be remanded toallow them opportunity to explore their claims.H. THE KRIENKES ARE ENTITLED TO THEIR

ATTORNEYS FEES ON APPEAL

Several of the Krienke's claims con tain a basis for attorney's fees,including violation of the Consumer Protection Act, and violation of theFaire Credit Reporting Act. Furthermore, fees are appropriate under RCW

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4.84.330 pursuant to a contract provision in the Deed of Trust to aprevailing party in a dispute. The Krienke's action should not have beendismissed. Pursuant to RAP 18.1, they request fees incurred on review,and remand back to the Superior Court for trial.

IV. CONCLUSIONSummary Judgment was not appropriate. The action should be

remanded to the court for trial on the merits. Ms. Krienke's Declaration,submitted at the inception of the action, contained ample evidencesufficient to present material issues of fact preventing summary judgment.The court should have considered that Declaration, especially in light ofthe Krienke's weakened position without counsel. Furthermore, Chase'soverriding reasoning that the Krienke's action must fail solely becausethey discontinued the sale is without merit. The statute is designed to seekan injunction to prevent a foreclosure wrongfully commenced, which theKrienke's did when they filed their action. Despite Chase's assertion thatthe foreclosure was stopped shortly after the filing of the action, thesituation remains largely unresolved, and Chase still stands with theirbeliefs that monies are delinquent and owed. The matter should beresolved at trial.11

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RESPECTFULLY SUBMITTED thisA ay of January, 2007MAHER INGELS SHOKO TKOCHRISTENSEN LLP

(253)722-1700CERTIFICATION OF SERVICE

Under penalty of perjury of the laws o f the S tate of W ashington, Ihereby certify that I served the above Appellant's Revised Opening Briefto counsel of record as follows:Susan Wilder TroppmannEtter McMahon Lamberson & Clary PC421 W R iverside Ave Ste 1600Spokane, WA 9920 1-0406Lance E. OlsenRouth C rabtree Olsen PS3535 Factoria Blvd SE Ste 200Bellevue, WA 98006- 1263

Service was made by:First class mailFacsimileHand delivery

DATED this fl day of January, 2007.