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The Hon. Judge Michael TrickeyNoting Date: Apri| 29, 2014

Without Oral Argument

IN THE SUPERIOR COURT OF'THE STATE OF'WASHINGTONIN AND F'OR THE COUNTY OF'KING

GORDON L. BRONSON and KIMBERLY A.BRONSON, a married couple,

Plaintiffs,v.

NORTHWEST TRUSTEE SERVICES, INC.,SUCCESSOR BY MERGER TO

DEFENDANTS NORTHWEST TRUSTEESERVICES,INC.'S AND RCO LEGAL, P.S.'MOTION FOR CR 1I SANCTIONS _ PAGE I OF 4

No. 13-2-42868-7 SEA

DEF'ENDANTS NORTFTWESTTRUSTEE SERVICES, INC.'S ANDRCO LEGAL, P.S.' MOTION FORCR 11 SANCTIONS AGAINSTPLAINTIFFS

NORTHWEST TRUSTEE SERVICES, LLC, A )Washingfon corporation; RCO LEGAL, P.S., a )Washington Professional Services Organization; )J.P. MORGAN CHASE BANK, N.4., A )national banking association; J.P. MORGAN )ALTERNATIVE LOAN TRUST 2006-42; )MORTGAGE ELECTRONIC )REGISTRATION SYSTEMS, INC., a foreign )corporation; MERSCORP HOLDINGS, a )foreign corporation; and JOHN DOES l-99, )unknown investors in J.P. Morgan Alternative )Loan Trust 2006-A2, )

)Defendants. ))I. RELIEF REQTJESTED

Defendants Northwest Trustee Services, Inc. ("NWTS") and RCO Legal, P.S. ("RCO"),collectively Defendants for purposes of this briefing, move the Court for CR 11 sanctions based

on the refusal of Plaintiffs' counsel to amend portions of their Complaint after being shown the

falsity of certain statements therein, and after being sent two "safe harbor" letters affording

Plaintiffs' counsel an opportunity to cure their factual misrepresentations.

RCOL rcnL, P.S.

1 3555 SE 36th St., Ste. 300Bellevue, WA 98006Telephone: 425.458.21 21Facsimile: 425.458.2'131

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II. STATEMENT OF'F'ACTSOn December 31, 2013, Plaintiffs filed their Complaint in this case. Dkt. No. 1. On

January 8,2014, Defendants sent a leffer to Plaintiffs' counsel seeking the voluntary withdrawal

of specific allegations pertaining to Defendants. Ex. A. In that letter, Defendants providedPlaintif' counsel with corporate governance information from the Washington Secretary ofState's website showing, among other things, that RCO itself does not own, operate, or have a

substantial interest in NV/TS, despite Plaintiffs' verment otherwise. Id., cf, Compl., tf 7.

On January 21,2014, Defendants each answered Plaintiffs' Complaint. Dkt. Nos. 9, 10.

On January 3I,20I4, NWTS proffered requests for admission on Plaintiffs; in their responses,Plaintiffs denied that RCO was not appointed as the successor trustee under the subject Deed ofTrust despite clesr evidence to the contrary. Ex. B (Appointment).

On March 27,2014, Defendants sent another letter to Plaintiffs' counsel, reiterating their

call for Plaintiffs to voluntarily withdraw certin allegations concerning Defendants. Ex. C.

Despite the stated deadline for compliace, no response to that letter has been provided as of this

Motion.

ilI. ARGUMENTFor all pleadings filed with the Court:

[t]he signature of aparty or of an attorney constitutes a certificate by the party or attorneythat the parfy or attomey has read the pleading, motion, or legal memorandum, andthat tothe best of the party's or attorney's lcnowledge, nformation, and belief, formed after aninquiry reasonable under the circumstances: (I) it is well grounded in fact; (2) iswarranted by existing law or a good faith argument for the extension, modification, orreversal of existing law or the establishment of new law; (3) it is not interposed for anyimproper pu{pose, such as to harass or to cause unnecessary delay or needless increase inthe cost of litigation; and (4) the denials of factual contentions are wananted on theevidence or, if specifically so identified, are reasonably based on a lack of information orbelief.

CR 11(a) (emphasis added).

Sanctions can be imposed when there is no reasonable inquiry into the factual and legal

1 3555 SE 36th 5t., Ste. 300Bellevue, WA 98006Telephone: 425.458.21 21Facsimile: 425.458.21 31

DEFENDANTS NORTHWEST TRUSTEESERVICES, INC.'S AND RCO LEGAL, P.S.'MOTION FORCR 11 SANCTIONS_PAGE 2OF 4

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basisofaclaim. Bryantv.JosephTree, lnc.,119Wn.2d210,220,829P.zd1099(1992). "Thecourt should inquire whether a reasonable attorney in like circumstances could believe his or her

actions to be factually and legally justfted." Id.Here, Plaintif allege that RCO owns, operates, and has a "substantial interest in the

operations and working of NWTS." Compl. atl7. Plaintiffs further allege that "RCO and NWTScommingle employees... [etc.]... and share the same physical location [3555 S.E. 36d' St., Ste.100, Bellevue, WA 98006]. Id. at\ 8. Plaintiffs state that "the commingling creates a situationwhere RCO and NWTS are acting as a single entity." Id. atl9. Plaintiffs rely on these false claimsto plead that RCO owes them a duty because they believe RCO s somehow the subject foreclosure

trustee. Id.at\139,48,52,54,70,94,95,intera\ia;seealsol93("PlaintiffsallegethatNWTSand RCO worked together os trustee.") (emphasis added).I Plaintif, however, lack any legitimatefactual basis for each of these statements.

First, the statement that RCO, as an entity, o\ryns or controls NWTS continues to be

espoused by Plaintiffs' counsel in this case and others despite its demonstrable falsity. Compare

Ex. A at 3, (RCO corporate information), Ex. Aat4 (NWTS corporate information). Thegoverning persons of RCO are Mr. Routh, Lance Olsen, Larry Johnson, and Joel Freedman. Id.

Neither Mr. Olsen, Mr. Johnson, nor Mr. Freedman have any interest whatsoever in NWTS. Id.

Thus, public records show RCO is a different corporation than NV/TS, and three of its governing

persons have no ownership in NWTS.2

Second, RCO does not have the same physical location and address as NWTS. Id.; cf,

Compl., tf 8. RCO's add,ress is 13555 S.E. 36th St., S/e. 300 nBellevue. See also

http://www.rcolegal.com/company/officelocations.aspx. NWTS'address is 13555 S.E. 36th St.,

' In 1 53, Plaintiffs even lump together Chase, NWTS, and RCO as "servicer, trustee, and/or debt collector."

2 It is not to say that a law firm could never be a trustee, or actually own a trustee . ln Meyers Way Development LPv. University Savings Bank, 80 Wn.App. 655, 910 P.2d 1308 (1996), the Washington Supreme Court found that atrustee could even serve "simultaneously as the creditor's attornqt, agent, employee or subsidiary ." Id. at 1315-16,n. 8 (emphasis added). But that is simply not the case here, despite Plaintiffs' false accusation otherwise.

13555 SE 36th St., Sre. 300Bellevue, WA 98006Telephone: 425.458.21 21Facsimi le: 425.458.21 31

DEFENDANTS NORTHWEST TRUSTEESERVICES,INC.'S AND RCO LEGAL, P.S.'MOTION FOR CR I I SANCTIONS _ PAGE 3 OF 4

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Ste. 100 in Bellevue. Ex. A. Clearly, RCO does not share the same office space as NWTS.3Third, U.S. Bank, N.A. as trustee for JPMorgan Altemative Loans Trust 2006-42, through

its attorney-in-fact JPMorgan Chase Bank, N.4., appointed NWTS as the successor trustee under the

subject Deed of Trust. See Ex. B; c/, Compl. I 54, inter alia. RCO is not even mentioned in thatdocument. Id. Asimple online check of recorded documents in the county can reveal this fact.S e e http: l l www.kingcounty. gov/business/Recorders/RecordsSearch. aspx.

In sum, Plaintiffs' allegations relating to the purported relationship between RCO and

NWTS -

other than to the extent that RCO is NWTS' legal counsel -

are not well-grounded in

fact. Plaintiffs' counsel was twice warned of the potential for CR 1l sanctions if their

misconduct was not corrected through amendment of the Complaint,but Plaintffi' counsel has

failed to comply or even respond, thus necessitating this Motion and the Court's intervention.

Defendants therefore request that the Court sanction Plaintiffs for the cost of preparing

and filing this Motion, in an amount to be determined at the conclusion of this litigation.

Defendants further request that the Court bar Plaintiffs' counsel from raising any argument with

respect to the falsehoods mentioned above. Lastly, Defendants request that the Court, act within

its discretion pursuant to CR 12(, to strike those portions of Plaintiffs' Complaint whichcontain references to RCO "owning" or "controlling" NWTS, sharing the same off,rce as NWTS,

or RCO being the trustee of the subject Deed of Trust.

DATED this 17th day of April,2}l4.RCO Lncar., P.S.

y,WJoshua Schaer, WSBA No. 31491Attorneys for Defendants RCO Legal,P.S. and Northwest Trustee Services, Inc.

3 By analogy, certainly no one suggests any of the multiple law firms in the 1001 4 Ave. Plaza own SafecoInsurance, or share offrce space with that company, simply because they might obtain insurance from Safeco and arelocated in the same building.

DEFENDANTS NORTHWEST TRUSTEESERVICES,INC.'S AND RCO LEGAL, P.S.'MOTION FOR CR I 1 SANCTIONS

-

PAGE 4 OF 4RCOL ecnl, P.S.

13555 5E 36th St., Ste. 300Bellevue, WA 98006Telephone: 425.458.21 21Facsimi le: 425.458.21 31

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trXHIBITARCOL e cnl, P.S.

13555 sE 36th st., ste.3ooBellevue, WA 98006Telephone: 425.458.21 21Facsimile: 425.458.21 31

SRCORCO Lcnt, P.S.

13555 sE 36'n st., ste. 3ooBellevue, WA 98006

phone - 425.458.212Lf ax- 425.458.2L31www.rcolegal.com

Ianuary 8,2014

Scott StafneJoshua TrumbullEmily HarrisMatthew LinkStafne Trumbull, LLC239 N. Olympic Ave.Arlington, WA98223

Dear Counsels:

Concerning your December 31,2013 Complaint filed under King County Superior Court CaseNo. 13-242868-7, naming borh this law firm and our client, Northwest Trustee Services, Inc.("NWTS"), we are providing this "safe harbor" letter to you pursuant to CR ll.t That uleprovides in relevant part:

[t]he signature ofa party or ofan attorney constitutes a certificate by the party or attorneythat the party or attorney has read the pleading, motion, or legal memorandum, and that tothe best of the parfy's or attorney's knowledge, information, and belief, formed after aninquiry reasonable under the circumstances: (l) it is well grounded in fact; (2) iswarranted by existing law or a good faith argument for the extension, modification, orreversal of existing law or the establishment of new law; (3) it is not interposed for anyimproper pulpose, such as to harass or to cause unnecessary delay or needless increase inthe cost of litigation; and (4) the denials of factual contentions are wananted on theevidence or, if specifically so identifed, are reasonably based on a lack of information orbelief.

We are hereby requesting that you withdraw all allegations suggesting: l) that RCO Legal, P.S.("RCO") "owns, operates, or has a substantial interest in" NWTS, 2) that RCO is a trustee or actsin that capacity in non-judicial foreclosures, 3) that RCO acted as a servicer, trustee, or debtcollector in the foreclosure that you are challenging, and 4) that RCO and its client NWTS "sharethe same physieal [ocation and address-"

' This lefter in no way serves to waive a challenge to either improper service of process or any claim presented in theComplaint, and should nol be construed as limiting our remedies, and our client's remedies, to any extent.

Joshua SchaerAttorney at Law

direct - 425.457.7810fax - 425.974.8680

jschaer@rcolegal.com

Page2January 8,2014

Attached to this letter are copies of the corporte govemance information from the Secretary ofState's website showing that RCO and NWTS are not the same company, and RCO itself doesnot own, operate, or have a substantial interest in NIVTS, nor does RCO have the same addressas NWTS. The blatant falsity of yoru assertions in this regard should now be apparent.

We believe the frivolous averments made in the Complaint against both RCO and N'WTS aredesigned to obfuscate the issues, harass our firm and its client, and delay a defense to thislitigation.

Accordingly, we are now offering you the opportunity to voluntarily withdraw the claims andstatements referenced above. Please notify us of your remedial steps within l0 days of receivingthis lefter, or else RCO reserves the right to seek sanctions with the Court and/or appropriatestate licensing authority. You have been warned and given notice of the factual erors in yourarguments; proceed otherwise at the peril of yourself and your clients.

Sincerely,

RCO LEGAL, P.S.

By: Joshua SchaerOf Attorneys for RCO Legal, P.S. andNorthwest Trustee Services, Inc.

Corporations: Registration Detail

Corporations Division - Registration Data SearchRCO LEGAL, P.S.

I'u rc hst'..[)-rr-c' !-1.L1!:.I-b-iff-il,(' o rplr!i11^.i

UBI Numbcr 601 840737

Category PRO

Profit/Nonprofit Protit

Active/lnactivc Activc

State Of lncorporation WA

WA l:iling Date l2t24t't997

Expiration Date t2/3ltz0t4Inaclive Date

Duration Perpetual

Rcgistercd Agent Inf'ormation

Agent Nante CORPORATION SERVICECOMPANY

Address 3OO DESCHUI'ES WAY SWSTE 304

ci- TUMWATER

Stte WA

ZIP 9850 I

Special Address lnformation

Address

Cty

State

'Lip

l' rr rc ha :c I )cc u rlrcr ls l{ !hit-(1ry!l-r-*!lJ:I.l

Page 1 of I

Governing Persons

Title Name Address

Prcsident,Secretary,Treas urer,Chairman ROUTH, STEPHEN I 3555 SE 36 #350BELLT VUE, WA 98006

Vice Presidenl OI.SF,N,I,ANCE 13555 SD 36#200BELLEVUE, WA 98006

Vicc President JOHNSON, LARRY IJ87 NE EXPRESSWAYATLANTA. GA 30329

Vice President FREEDMAN. JOEL I587 NE EXPRESSWAYATLAN'IA ,GA34329

http://www.sos.wa. gov/corps/search_detail.aspx?ubi:60 I 8407 37 t/8/2014

Corporations: Registration Detail Page I of 1

Corporations Division - Registration I)ata SearchNORTHWEST TRUSTEE SERVICES, INC.

l)r r r.t'!i-c-l )octr rrlcl !",.!'qr-,th i s. ( tl!l,illj-..U. I'

LJBI Number 602376725

Category REG

Profit/Nonproft Profit

Active/lnactive Active

State Of Incorporation rwA

WA Filing Date 03il6t2004

Expiration Date t3t3u20t4

Inactive Date

Duration Perpetual

Registered Agent lnformation

z\gent Name Corporation Service Cornpany

Address 300 Deschutes Way SW

ST'E 304

City TT'MWATER

State WA

ZIP 9850r

Speciaf Address lnformation

ddress

City

State

zip

ll.i.r..c.,.s IJg L1 lsul.:Jililh.h-Lt..rr:p-rati0Lri

Governing Persons

Tirle Namc ddress

Prcsidcnt.'l'reasurer,Chairma ROUI'TI, S1'EPIIENI3555 SE 36TI{ STSI,'ITE IOOBELLEVUE. WA 98006

Vice Presidcnt,Sccrctary STENMAN, JNFFRIIYr3555 SE 36TH S'I'SUTI'E IOOBEI.I,EVUE, WA 98006

http://www. sos.wa. gov/corps/search_detail.asp x?ubi=60237 67 75 U8/2014

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EXHIBIT BRCOL rcnl, P.S.

13555 sE 36th st., ste.3ooBellevue, WA 98006Telephone: 425.458.21 21Facsimi le: 425.458.21 31

to, l'+

t '.

. !

AfterRecording Mail to:

Northwest Trustee Services, Inc.Becky BakerP.O. Box 997Bellevue, t/A 98009-0997

\uw[lul'[W'^.}'1wuuruWlulfrffi

(1-

Document Ttle(s): (or transactions contained therein)l. Appointment of Successor Trustee

Reference Number(s) of Documents assigned or released:20050930002t21

Grantor(s): (Last nme lirst, then first and initials)l. Bronson, Gordon L.

. 2. Bronson, Kimberly A.3. U.S Bank National Associatior as rstee forJ.P. MORGAN Alternative LoanTrust 20A6-A2

Grantee(s): (Last nam first, then first snd initials)l. Mortgage Elechonic Registration Systems, lnc. solely as nominee for M & T Mortgage Corporation2. Lawyers Title Company

Abbreviated Legal Description as follows: (i.e. tor/blocvptat or secton/ownship/rangcJquarter/quarra)Horseshoe Acre Tracts To Ken! Ptn Lot 26

X Complete legal description is on page ..

2 ofdocumentAssessor's Property Tax ParceUAccount Number(s):3462804220

AND V/HEN RECORDED MAILTO:

Routh Cnrbtrcc Olscr. P.S.P.O. Bo 997Bcllo'uc. WA 98006{}997

Appointmcnt of Succcssor Trustcc

Filc No. 19271l4l0l

GORDON L. BRONSON AND KIIVBERLY A. BRONSON isiarc tlregrantor(s)- LAWYERS TITLE COMPANYis thc lrustce and MORTGACE ELECTRONIC RECISTRATION SYSTEMS. INC. AS NOMINEE FOR M & TMORTCACE CORPORATION is thc bencliciary under llmt crlain decd of trust dated SeptcrnUcr( zOos rd rccordcdon Scptcrnbcr 30. 2005 under King Counl,, Wasirington Auditor's File No. 20050930002 f 2 L

"'r..n.

Tlrc prcscnt benclciary undcr said deed of trust appoints Nofhncst Truslee Sen'iccs. Inc.. a Washingloncorporalion. n'lo addrcss is P.O. Box 99?. Bclloue. WA 9tt006-.0997. as suessor trustcc undcr tlrc dced oltnst rvitlt allpolrcrs of thc original lnstec.

Said deed o[trust Encumbers thc rcal propertl deribcd as:Sce nttachcd

STATE OF Ohio ))ss

COUNTY OF Frarrllin )

*JPMoryun Chrsc Bank' N'as Attornr:Y-in'!t lr

*U.S gank Nationat Association,:s trustec for J.P. MORCANAlternatirc LoanTrust 2006- MBv #--

.

lrlo.*do$t

I certilj, that I knorv or harc srtisluctory evidcnce rhat Sokha-v.ary Voeuh is lhc pcrson rvlro appcarcdbcforc nrc. and srid pcrson acknoruledgcd lhat (he/shc) signcd this instrument. on oath satcd th.nt (hdshc) $'ts authorizcdto c.\ccutc tlc instruirrcnt and acknorvl-edged it s thc ' - Vlo Prceldsnt of JPMorgnn Clsc Bank. NtionalAssocialion to bc tlrc free and roluntaq'act of such party for thc uscs and purposcs mcntioned in thc instruurcnt.

Dcd, l tltfll

,OTTNM.BURONPIIIC,SATEOF

[ty C@0" Eqrn ]uc ll, 1016

Notry Public in and for lhc

,. kT Nnmber: ]nZaDate: SEPTEDTBER 2?, 2005proFtyAddrrs: 1419 S l,lA.PtE IJN, [(ENT, WASHINGTON 98031

EXHIB'T "4"

I."EGAL DESCRIPTION

Ttrat porthnof Lot 26, Horshoc AssTraca toKGil,;cordinqto-rhe plat rcof rcded inYohmoii of pf.S, prgc t0, rcordg of King Cornty, Whinga dctsribod s follows:

Bcgioning u a Sordtcsst corncr of said lnt26;,Ttrco N-orr atrg thc right of wey of Maplc lnc a dimco of I ?3 fcscThcncc Wcst a distacc of I 15 fccTticnco Sortb a dirarco of l?1 fccqThcnco st a disarcc of I 15 fccqExccpto followin

Beginng al thc Southcast corncr ofsad lat26,rco on long Maplc to, a disupo of 73 fectThpnco $rc$ a disrcc of I 15 fecqTtcrco Soutb a dlstarc c o 7? q,1tpc Ess I tS foct to t Pont of Bcginning

346280A22002

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EXHIBIT CRCOL e cnl, P.S.

13555 sE 36th st., ste.3ooBellevue, WA 98006Telephone: 425.458.21 21Facsimi le: 425.458.21 31

SRCORCO Lec,1, P.S.

13555 SE EO" St., Ste. 300..Bellevue, WA 98006

phone - 425.458.272Lfax - 425.458.2131www.rcolegal.com

March 21,2014

Scott StafneJoshua TrumbullEmily HarrisMatthew LinkStare Trumbull, LLC239 N. Olympic Ave.Arlington, WA98223pe: Bronsonv. NorthwestTrustee Services, /nc. ("NWTS") ef al.,CaseNo. 13-242868-7 SEA

Dear Counsels:

On January 8,2014, we sent your office a safe harbor letter pursuant to CR ll, and havereceived no response or action taken as a result. With that letter, we provided documentationshowing that RCO and NWTS are not the same company, and RCO itself does not own, operate,or have a substantial interest inNWTS, nordoes RCO have the same address asNWTS'

Consequentll, you are ethicafly obtigated to amend your Complaint to remove the materiallyfalse statements suggesting: 1) that RCO Legal, P.S. ("RCO") "owns, operates, or has asubstantial interest in" NWTS, 2) that RCO is a trustee or acts in that capacity in non-judicialforeclosures, 3) that RCO acted as a servicer, trustee, or debt collector in the foreclosure that youare challenging, and 4) that RCO and its client NWTS "share the same physical location andaddress."

If this remedial step is not taken and a copy of your proposed Amended Complaint served on thisofflice by March 31,2014, we will move to strike those aforementioned impertinent portions ofthe Complaint, and at a minimum, seek sanctions under CR I t. This is your final notificationand opportunity to cure.

In addition, please find enclosed a First Set of Interrogatories and Requests for Production onbehalf ofNWTS. lVe expect timely responses to these demands.Sincerely,

By: Joshua Schaer, WSBA No. 31491Of Attorneys for RCO Legal, P.S. andNorthwest Trustee Services, Inc.

Joshua SchaerAttorneY at Law

dect- 425.457.7810fax - 425.974.8680

jschaer@ rcolegal.com

RCO LEG,L, P.S.a)

-i