1 The Honorable Christopher M.

Alston
Hearing Date: March 15, 2018
2 Hearing Location: Seattle
Hearing Time: 1:30 p.m.
3 Response date: March 8, 2018
Chapter 11
4

8 UNITED STATES BANKRUPTCY COURT

WESTERN DISTRICT OF WASHINGTON AT SEATTLE
9
In re:
10 Bankruptcy No. 17-15200
MICHAEL DEAN LEVITZ, Chapter 11
11
Debtor.
12 Adversary No. 18-01000

13 MICHAEL DEAN LEVITZ and INESA LEVITZ,

MOTION FOR IMPOSITION OF
14 Plaintiffs, PRELIMINARY INJUNCTION
RESTRAINING DEFENDANTS FROM
15 v. FORECLOSURING NON-JUDICIALLY

16 CAPITAL ONE NA, CHEVY CHASE BANK

FSB, US BANK NA, as Trustee for CCB Libor
17
Series 2005-1 Trust and As Trustee for Chevy
18 Chase Funding LLC Mortgage Backed
Certificates Series 2005-1, MORTGAGE
19 ELECTRONIC REGISTRATION SYSTEMS
INC, MERSCORP INC, QUALITY LOAN
20 SERVICE OF WASHINGTON INC,
21 SPECIALIZED LOAN SERVICING LLC, JOHN
DOES 1-1000,
22
Defendants.
23

24 COMES NOW Plaintiff Michael Dean Levitz (on behalf of himself individually and

25 through his power attorney for Inesa Levitz), by and through his attorneys of record, Wells and

26 Jarvis, P.S., and moves the Court for entry of an order imposing a preliminary injunction that

MOTION TO IMPOSE INJUNCTION – Page 1 WELLS AND JARVIS, P.S.

502 LOGAN BUILDING
500 UNION STREET
SEATTLE, W A 98101
PHONE (206) 624-0088 FAX (206) 624 -0086

Case 18-01000-CMA Doc 13 Filed 02/22/18 Ent. 02/22/18 18:17:13 Pg. 1 of 14

1
enjoins the Defendants from foreclosing non-judicially on his real property pending further
2
order of this Court. There is currently pending a non-judicial foreclosure sale by Quality Loan
3
Service Corporation of Washington (“Quality Loan”) as trustee. The sale date has been
4
continued to March 30, 2018. Therefore Mr. Levitz requests that the injunction be imposed prior
5
to that date, so that this Court may have time to rule on his various causes of action.
6
I. Legal Basis for Imposition of a Preliminary Injunction
7
Federal Rule of Bankruptcy Procedure 7065 states that a debtor-in-possession in a
8

9 bankruptcy proceeding may seek imposition of an injunction pursuant to Federal Rule of Civil

10 Procedure 65 and the provisions of that rule shall apply to the request, with the exception that

11 the moving debtor-in-possession need not give security as he or she would otherwise be

12 required to do outside of a bankruptcy proceeding. Under Rule 65, the court may issue a

13 preliminary injunction on notice to the adversary party.

14 To obtain the preliminary injunction, the Ninth Circuit has held that the moving party
15 must demonstrate either (1) a likelihood of success on the merits and the possibility of
16 irreparable injury, or (2) that serious questions going to the merits were raised and the balance
17 of hardships tips sharply in the plaintiff’s favor. These two scenarios “represent extremes on a
18 single continuum: the less certain the district court is of the likelihood of success on the merits,
19
the more plaintiffs must convince the district court that the public interest and balance of
20
hardships tip in their favor.” See e.g. Lands Council v. Martin, 479 F.3d 636, 639 (9th Cir.
21
2007).
22
As set forth in detail below, the legal and factual bases for Mr. Levitz’s claims
23
demonstrate a likelihood of success on the merits in this adversary action. Further, it is clear that
24
if an injunction restraining non-judicial foreclosure is not imposed by the court before the
25
currently pending sale date of March 30, 2018, Mr. Levitz will suffer irreparable injury through
26

MOTION TO IMPOSE INJUNCTION – Page 2 WELLS AND JARVIS, P.S.

502 LOGAN BUILDING
500 UNION STREET
SEATTLE, W A 98101
PHONE (206) 624-0088 FAX (206) 624 -0086

Case 18-01000-CMA Doc 13 Filed 02/22/18 Ent. 02/22/18 18:17:13 Pg. 2 of 14

1
the loss of his home, before he has had the chance to litigate his claims. Likewise,
2
considerations of both the equities involved and public policy concerns weigh in Mr. Levitz’s
3
favor. As revealed through multiple case citations below, Washington courts have repeatedly
4
stressed that non-judicial foreclosure laws should be carefully construed in favor of the
5
borrower, since that process does not provide for court oversight.
6
Finally, Mr. Levitz has proposed mechanisms to ensure that the Defendants are not
7
prejudiced by the imposition of the preliminary injunction, such as adequate protection
8

9 payments and a proposed mechanism to catch up the arrears. The injunction which Mr. Levitz

10 seeks is limited in scope and has been crafted to be consistent with how Washington State

11 courts have dealt with these issues (i.e. by restraining only non-judicial foreclosures and thereby

12 leaving open the possibility of judicial foreclosure).

13 II. Facts and Law Support Mr. Levitz’s Likelihood of Success on the Merits

14 A. Background
15 As detailed on Michael Dean Levitz’s proposed First Amended Complaint, a copy of
16 which is attached to his accompanying declaration as Exhibit A, Defendant Chevy Chase Bank
17 FSB (“Chevy Chase”) lent $560,000 for the purpose of refinancing real property (“the Levitz
18 Property”). That obligation was memorialized by a promissory note dated September 1, 2004
19
(“the Note”), which was signed by Inesa Levitz as borrower (the now ex-wife of
20
Debtor/Plaintiff Michael Dean Levitz). A deed of trust was then recorded in connection with the
21
Note on September 20, 2004 (“the Deed of Trust”). The Deed of Trust acknowledged Chevy
22
Chase as the Lender, and named Defendant MERS as the beneficiary under the security
23
instrument through its role “acting solely as a nominee for Lender and Lender’s successors and
24
assigns.” Copies of the Note (Exhibit B) and the Deed of Trust (Exhibit C) are attached to the
25
accompanying declaration of Michael Dean Levitz.
26

MOTION TO IMPOSE INJUNCTION – Page 3 WELLS AND JARVIS, P.S.

502 LOGAN BUILDING
500 UNION STREET
SEATTLE, W A 98101
PHONE (206) 624-0088 FAX (206) 624 -0086

Case 18-01000-CMA Doc 13 Filed 02/22/18 Ent. 02/22/18 18:17:13 Pg. 3 of 14

1
On March 25, 2011, an Assignment of Deed of Trust was recorded under King County
2
Auditor’s Office recording number 2011325000960 (hereinafter “March 2011 Assignment of
3
Deed of Trust”) which purported to grant all beneficial interest under the deed of trust to U.S.
4
Bank NA as trustee relating to Chevy the Chase Funding LLC Mortgage-Backed Certificates,
5
Series 2005-1. The March 2011 Assignment of Deed of Trust was signed by Monica Hadley,
6
who purported to be an Assistant Secretary of MERS signing on behalf of transferor Mortgage
7
Electronic Registration Systems Inc. as “Beneficiary.” A copy of the March 2011 Assignment
8

9 of Deed of Trust is attached to the accompanying declaration of Michael Dean Levitz as

10 Exhibit D.

11 Michael Dean Levitz’s accompanying declaration and First Amended Complaint detail

12 the subsequent history surrounding the loan, including his ignored attempts to both rescind and

13 refinance the loan and the non-judicial foreclosure sales set by the successor trustees (which as

14 discussed further below, were presumably faulty).

15 B. MERS Cannot Be Beneficiary Under Deed of Trust
16 In Washington State, the Deed of Trust Act under R.C.W. 61.24 governs transactions in
17 which a borrower secures a promissory note with a deed of trust. In that context, the
18 “beneficiary” is defined as the holder of the instrument (i.e. the promissory note) evidencing the
19
obligation secured by the deed of trust. R.C.W. 61.24.005(2).
20
In Bain v. Metropolitan Mortgage Group, Inc., 175 Wn.2d 83, 92-93, 285 P.3d 34
21
(2012), the Washington Supreme Court analyzed exactly the same deed of trust language that is
22
present in this case, specifically the language that purported to name MERS as the deed of trust
23
beneficiary based on its role “acting solely as a nominee for Lender and Lender’s successors
24
and assigns.” The court held that this language was insufficient to establish MERS as the note
25
holder’s agent. It further rejected the argument that MERS could become a Beneficiary by
26

MOTION TO IMPOSE INJUNCTION – Page 4 WELLS AND JARVIS, P.S.

502 LOGAN BUILDING
500 UNION STREET
SEATTLE, W A 98101
PHONE (206) 624-0088 FAX (206) 624 -0086

Case 18-01000-CMA Doc 13 Filed 02/22/18 Ent. 02/22/18 18:17:13 Pg. 4 of 14

1
contract, stating, “The legislature has set forth in great detail how nonjudicial foreclosures may
2
proceed. We find no indication the legislature intended to allow the parties to vary these
3
procedures by contract. We will not allow waiver of statutory protections lightly.” Id. at 108.
4
C. Attempted Assignment of Deed of Trust Was Ineffectual
5
Applying the above analysis to the facts of this case, it becomes clear that MERS was
6
never the holder of the Note, despite its implicit assertion on the Deed of Trust that it could
7
contract into such a role as a nominee of Lender Chevy Chase Bank. Thus the March 2011
8

9 Assignment of Deed of Trust in which MERS “as Beneficiary” purported to grant, convey,

10 assign, and transfer to “U.S. Bank NA as trustee relating to Chevy the Chase Funding LLC

11 Mortgage-Backed Certificates, Series 2005-1 … all beneficial interest under” the deed of trust

12 was invalid, since MERS did not hold the beneficial interest under the deed of trust and

13 therefore could not convey such.

14 Further, as detailed in Mr. Levitz’s proposed First Amended Complaint, upon

15 information and belief the party who signed the March 2011 Assignment of Deed of Trust did
16 not actually work for MERS but rather for Capital One (who at some point became a successor
17 by merger to the original lender, Chevy Chase). As such it is questionable whether she had
18 authority to effectuate any supposed transfer on behalf of MERS, even if such a transfer could
19
have been made.
20
For both of these reasons, it appears that the March 2011 Assignment of Deed of Trust
21
was invalid and without force and effect.
22
D. Factual History of Note and Deed of Trust in this Case Eliminate Possibility of Non-
23 Judicial Foreclosure
24 The current title situation cannot arguably be fixed in a way to support a non-judicial
25 foreclosure, such that judicial intervention is necessary. The Washington State Supreme Court
26

MOTION TO IMPOSE INJUNCTION – Page 5 WELLS AND JARVIS, P.S.

502 LOGAN BUILDING
500 UNION STREET
SEATTLE, W A 98101
PHONE (206) 624-0088 FAX (206) 624 -0086

Case 18-01000-CMA Doc 13 Filed 02/22/18 Ent. 02/22/18 18:17:13 Pg. 5 of 14

1
in Bain, supra, specifically rejected the idea that MERS could fix its unlawful beneficiary status
2
by assigning its interest in any deed of trust to the holder of the promissory note and recording
3
such assignment in the land title records in order to pursue a non-judicial foreclosure, noting
4
that “if MERS is not the beneficiary as contemplated by Washington law, it is unclear what
5
rights, if any, it has to convey.” Id. at 111.
6
It appears that the Defendant(s) may have been aware of this problem and tried to
7
remedy it through the later filing of a Corrective Assignment of Deed of Trust on February 5,
8

9 2015 (hereinafter “Corrective Assignment”). A copy of that document is attached to the

10 declaration of Mr. Levitz as Exhibit E. In it, MERS purports to “assign, and set over, without

11 recourse, to Chevy Chase Funding LLC, Mortgage-Backed Certificates, Series 2005-1, U.S.

12 Bank National Association, as Trustee c/o Specialized Loan Servicing LLC …. The described

13 Deed of Trust with all interest, all liens, any rights due or to become due thereon.” The

14 document goes on to state that it is being recorded “to correct the assignee” on the March 2011
15 Assignment of Deed of Trust.
16 Although the Corrective Assignment does reflect an improvement in that MERS no
17 longer purports to hold the beneficiary of the deed of trust, it still purports to be the holder of
18 the deed of trust and to transfer this bare interest to U.S. Bank.
19
Essentially, the problem the Defendants here face is that if their deed of trust and
20
assignments are taken at face value, then the note and deed of trust were originated to different
21
parties. Chevy Chase was the lender and thus the original note holder pursuant to Bain, supra.
22
MERS purported on the original deed of trust, and in the subsequent two assignments, to be the
23
holder of the deed of trust (whether originally as a beneficiary, or later as the mere holder of the
24
lien rights in the deed of trust).
25
26

MOTION TO IMPOSE INJUNCTION – Page 6 WELLS AND JARVIS, P.S.

502 LOGAN BUILDING
500 UNION STREET
SEATTLE, W A 98101
PHONE (206) 624-0088 FAX (206) 624 -0086

Case 18-01000-CMA Doc 13 Filed 02/22/18 Ent. 02/22/18 18:17:13 Pg. 6 of 14

1
As noted by the Washington State Supreme Court, as “recently as 2004, learned
2
commentators William Stoebuck and John Weaver could confidently write that ‘[a] general
3
axiom of mortgage law is that obligation and mortgage cannot be split, meaning that the person
4
who can foreclose the mortgage must be the one to whom the obligation is due … MERS
5
challenges that general axiom.’” Bain, supra at 96 (citing 18 William B. Stoebuck & John W.
6
Weaver, Washington Practice: Real Estate: Transactions § 18.18, at 334 (2d e. 2004)). As
7
detailed above, Chevy Chase lent the initial funds and later endorsed by stamp the Note; MERS
8

9 originally asserted a beneficiary interest under the Deed of Trust and subsequently attempted to

10 transfer such beneficial interest to US Bank (which Michael Dean Levitz asserts was

11 ineffectual). At no time were the Note and Deed of Trust held and/or transferred concurrently.

12 The alternative is to treat MERS as if it never held any interest in the Note or Deed of

13 Trust. Bain suggests that this may be the correct framework; the court in that case agreed with

14 the parties that MERS could not be the holder of the deeds of trust because “the ‘instrument’ [as
15 that term is used in defining a ‘beneficiary’ in the Act] obviously means the promissory note
16 because the only other document in the transaction is the deed of trust and it would be absurd to
17 read this definition as saying that ‘beneficiary means the holder of the deed of trust secured by
18 the deed of trust.’” Id. at 101. Under this framework, Defendants are still in violation of the
19
above-articulated axiom that the note and deed of trust should stay together because the Note
20
has now been purportedly transferred to U.S. Bank, whereas the Deed of Trust has never been
21
properly transferred away from Chevy Chase. This is because in both of the recorded
22
assignments of the Deed of Trust, MERS was named as the transferor. Thus at no time has the
23
Deed of Trust been properly transferred through a recorded assignment.
24
It is for this reason that the Levitz Property cannot be foreclosed upon non-judicially.
25
RCW 61.24.020 sets forth the requirements for a foreclosure by trustee sale as they relate to
26

MOTION TO IMPOSE INJUNCTION – Page 7 WELLS AND JARVIS, P.S.

502 LOGAN BUILDING
500 UNION STREET
SEATTLE, W A 98101
PHONE (206) 624-0088 FAX (206) 624 -0086

Case 18-01000-CMA Doc 13 Filed 02/22/18 Ent. 02/22/18 18:17:13 Pg. 7 of 14

1
recording. All deeds of trust under this Act must be recorded with the county auditor, and the
2
county auditor must record the deed as a mortgage and index the name of the grantor and the
3
names of the trustee and beneficiary. This is why the form template for giving notice of a
4
trustee’s sale as set forth in R.C.W. 61.24.040 provides for the disclosure of the recording of
5
any assignment of the note and deed of trust.
6
In the present case, as detailed above, the King County records are still incorrect as they
7
relate to the holder of the deed of trust; they reflect only MERS’ improper and ineffective
8

9 attempts to assign the Deed of Trust.

10 Essentially, extrapolating from the above comments of the Bain court that MERS likely

11 cannot convey any interest, this may be a problem which cannot be resolved in such a way as to

12 allow a non-judicial foreclosure, but rather can only be sorted out by a court. Therefore the

13 requested injunction enjoining non-judicial foreclosure is appropriate and consistent with state

14 law remedies.
15 E. Ineffectual Assignment of Deed of Trust Results in Faulty Foreclosure Sale Notice
16 Finally, the notice of trustee sale itself is faulty. Quality Loan Servicing Corporation of
17 Washington (“Quality Loan”) relies upon the ineffectual March 2011 Assignment of Deed of
18 Trust in establishing its basis for a non-judicial foreclosure in all three of the notices of trustee
19
sale that it issued. This remains true even in the Amended Notice of Trustee Sale which was
20
issued by Quality Loan on September 29, 2017, and which initiated the presently-set foreclosure
21
sale of March 30, 2018. A copy of the Amended Notice of Trustee Sale is attached to Mr.
22
Levitz’s declaration as Exhibit I.
23
R.C.W. 61.24.030 spells out in great detail the requirements which a foreclosure trustee
24
must meet in order to foreclose non-judicially pursuant to that statute. Among these provisions
25
is a specific template with which the notice of sale must substantially comply. See R.C.W.
26

MOTION TO IMPOSE INJUNCTION – Page 8 WELLS AND JARVIS, P.S.

502 LOGAN BUILDING
500 UNION STREET
SEATTLE, W A 98101
PHONE (206) 624-0088 FAX (206) 624 -0086

Case 18-01000-CMA Doc 13 Filed 02/22/18 Ent. 02/22/18 18:17:13 Pg. 8 of 14

1
61.24.040. A part of the required template is the reference to the deed of trust and any
2
assignment which support the trustee’s basis for conducting the non-judicial foreclosure. Here,
3
there has been no valid assignment that has been recorded. Therefore, the Amended Notice of
4
Sale violates the statutorily required template.
5
F. Mr. Levitz is Likely to Prevail in Reducing Amount Owed on Deed of Trust
6
As set forth in the Mr. Levitz’s accompanying declaration, he has not made a payment
7
on the Note or Deed of Trust since October of 2008.
8

9 Pursuant to R.C.W. 4.16.040, an action upon a contract in writing (such as, in this case,

10 the Note) shall be commenced within six years. Under RCW 4.16.270, this six year time period

11 commences from the time the last payment was made, or in this case, October of 2008

12 Where the obligation in question is an installment note, the actions “accrue from the

13 time that each installment comes due.” Herzog v. Herzog, 23 Wn. 2d 382, 388, 161 P.2d 142

14 (1945). In November 2008, when Mr. Levitz did not make that month’s installment payment,
15 the Note holder’s claim for that installment accrued, “and simultaneously commenced the
16 statute of limitations for a claim to recover that installment only … each subsequent default
17 triggered commencement of a new statute of limitations for that payment.” Heintz v. U.S. Bank
18 Trust, N.A., 2018 Wash. App. Lexis97, 5 (2018).
19
In the present case, absent any applicable tolling (which Mr. Levitz maintains would not
20
apply because all of the foreclosure actions have been improper based on the foregoing), all
21
unpaid installment payments that came due more than six years ago that are not subject to
22
tolling would be stale and unenforceable.
23
G. Mr. Levitz is Likely to Prevail in His Claim for Damages under the Consumer
24 Protection Act, Deed of Trust Act, and Fair Debt Collection Practices Act
25
26

MOTION TO IMPOSE INJUNCTION – Page 9 WELLS AND JARVIS, P.S.

502 LOGAN BUILDING
500 UNION STREET
SEATTLE, W A 98101
PHONE (206) 624-0088 FAX (206) 624 -0086

Case 18-01000-CMA Doc 13 Filed 02/22/18 Ent. 02/22/18 18:17:13 Pg. 9 of 14

1 In Walker v. Quality Loan Service Corp. of Wash., 176 Wn. App. 294 (2013), the Court
2 of Appeals under circumstances similar to the present case held that the homeowner had stated
3
viable claims under the CPA, DTA, and FDCPA statutes. Michael Dean Levitz’s claims, if
4
upheld following trial, will reduce the amount owed on the underlying note.
5
III. Injunction Will Not Prejudice Defendants
6

7 To date only one party, Defendant Quality Loan, has filed a responsive pleading to the

8 complaint (specifically, a motion seeking dismissal of Quality Loan as a party from this action

9 pursuant to FRCP 56, which is set for hearing on March 15, 2018). An attorney for Defendants
10 U.S. Bank N.A., Specialized Loan Servicing LLC, Mortgage Electronic Registration Systems,
11
Inc., and Merscorp Inc., contacted Plaintiff Michael Dean Levitz prior to the appearance of
12
Wells and Jarvis, P.S. in this action to request an extension of the time in which to file an
13
answer or responsive pleading. Wells and Jarvis, P.S. agreed to such an extension on behalf of
14

15 Mr. Levitz on February 6, 2018. The following day, those parties also filed a motion with the

16 court formally requesting a two week extension of the complaint deadline. A subsequent

17 extension was granted (based on the anticipated filing of a first amended complaint), and a
18
second motion for extension has been filed (which is set for hearing on the same day as the
19
present motion).
20
Counsel for Defendant Capital One N.A., as successor by merger to Chevy Chase Bank,
21
contacted Wells and Jarvis, P.S. on February 7, 2018, to also request a two week extension of
22

23 the deadline to answer the complaint, and Wells and Jarvis, P.S. on behalf of Mr. Levitz, agreed.

24 A subsequent extension, based on the proposed filing of a first amended complaint, was also
25 granted.
26

MOTION TO IMPOSE INJUNCTION – Page 10 WELLS AND JARVIS, P.S.

502 LOGAN BUILDING
500 UNION STREET
SEATTLE, W A 98101
PHONE (206) 624-0088 FAX (206) 624 -0086

Case 18-01000-CMA Doc 13 Filed 02/22/18 Ent. 02/22/18 18:17:13 Pg. 10 of 14

1 Because all of the Defendants save Quality Loan have requested additional time to
2 organize and file responsive pleadings, imposition of an injunction against non-judicial
3
foreclosure pending further order of this court presumably will not wreak any hardship, and is
4
consistent with these requests for time to sort out the elements of the case. And Quality Loan
5
does not seek dismissal of the entire action, merely dismissal of itself as a party. It is worth
6

7 noting that, as the asserted successor trustee under the Deed of Trust Act, Quality Loan has a

8 duty of good faith to the borrower, beneficiary, and grantor. See 61.24.010(4).

9 Finally, the imposition of the requested preliminary injunction is consistent with the
10 remedies crafted by state courts in situations such as these. In Bain, supra, the Washington
11
Supreme Court stopped short of deciding the legal effect of MERS acting as an unlawful
12
beneficiary under the Deed of Trust Act. The court did, however, examine a few potential
13
resolutions. The remedy of automatically voiding the deed of trust upon any violation of the
14

15 Deed of Trust Act was rejected as being contrary to the law and public policy. Here, consistent

16 with that discussion, Mr. Levitz does not seek avoidance of the Deed of Trust from his property,

17 but rather has limited the scope of his first amended complaint to requests that this Court
18
determine (1) the actual amount owed on the claim, taking into account the stale, time-barred
19
installment payments, (2) who is the proper foreclosing beneficiary, and (3) what damages
20
and/or costs (if any) he may be entitled to under the Consumer Protection Act, Deed of Trust
21
Act, Fair Debt Collection Practices Act, and/or attorney fee clause of the Note and Deed of
22

23 Trust.

24 While the Bain court appeared to dismiss automatic voiding of the deed of trust as a
25 viable remedy, it did observe that, “if in fact MERS is not the beneficiary, then the equities of
26

MOTION TO IMPOSE INJUNCTION – Page 11 WELLS AND JARVIS, P.S.

502 LOGAN BUILDING
500 UNION STREET
SEATTLE, W A 98101
PHONE (206) 624-0088 FAX (206) 624 -0086

Case 18-01000-CMA Doc 13 Filed 02/22/18 Ent. 02/22/18 18:17:13 Pg. 11 of 14

1 the situation would likely (though not necessarily in every case) require the court to deem that
2 the real beneficiary is the lender whose interests were secured by the deed of trust or that
3
lender's successors.” Id. at 728-729 (emphasis added). While dicta, these statements reveal that
4
the state courts contemplate that a judicial proceeding, rather than a non-judicial one, is the
5
appropriate avenue to resolve problematic deeds of trust based on unlawful beneficiaries such as
6

7 MERS. Thus Mr. Levitz’s request that the Defendants be restrained from conducting a non-

8 judicial foreclosure while the present adversary case remains open so that this Court can resolve

9 the various issues raised in the complaint, is consistent with the path contemplated by the Bain
10 court. In fact, the court in Bain, supra, specifically stated that “although not considered in this
11
opinion, nothing herein should be interpreted as preventing the parties to proceed with judicial
12
foreclosures.” Id. at 109.
13
As noted by the Washington State Supreme Court in responding to MERS arguments
14

15 that public policy supports its allowance as the beneficiary of the deed of trust, fairness supports

16 a contrary result: for “it is not plaintiffs [i.e. the borrowers] that manipulated the terms of the

17 act: it was whoever drafted the forms used in these cases.” Bain, supra at 108-109.
18
The exercise of caution and imposition of restrictions by the court in the context of
19
disputed non-judicial foreclosures is consistent with Washington State law generally. “The
20
Washington Supreme Court has frequently emphasized that the deed of trust act ‘must be
21
construed in favor of borrowers because of the relative ease with which lenders can forfeit
22

23 borrowers’ interests and the lack of judicial oversight in conducting non-judicial foreclosure

24 sales.” Walker v. Quality Loan Serv. Corp. of Wash., 176 Wn. App. 294, 306 (2013)(citing
25 Klem v. Wash. Mut. Bank, 176 Wn.2d 771, 789, 295 P.3d 1179 (2013)).
26

MOTION TO IMPOSE INJUNCTION – Page 12 WELLS AND JARVIS, P.S.

502 LOGAN BUILDING
500 UNION STREET
SEATTLE, W A 98101
PHONE (206) 624-0088 FAX (206) 624 -0086

Case 18-01000-CMA Doc 13 Filed 02/22/18 Ent. 02/22/18 18:17:13 Pg. 12 of 14

1 Finally, commentators have likewise observed that in the aftermath of Bain, supra, “the
2 enforceability of MERS deeds of trust in Washington is put into question—at least as far as
3
being able to foreclose on them nonjudicially goes.” MERS System Derailed in the State of
4
Washington, Article published August 23, 2012, by Magnus Andersson, Hanson Baker Ludlow
5
Drumheller P.S.
6

7 IV. Defendants Are Adequately Protected

8 Another reason that Mr. Levitz believes the Defendants will not be prejudiced by the

9 imposition of the requested injunction is that they are adequately protected by their security.
10 As detailed on the accompanying declaration, the Levitz Property actually consists of
11
two different parcels. The larger parcel contains the house where Mr. Levitz resides. As to the
12
other smaller lot, through Mr. Levitz’s ongoing efforts, the property has been cleared of all
13
structures and thus prepared for division into its own parcel.
14

15 Also attached to this motion is a declaration from realtor Sandy Eagon, prepared in

16 connection with an application to employ her in the underlying bankruptcy case. As set forth in

17 the declaration, she has completed comparative market analyses of both parcels. She believes
18
the total value for the two parcels is at least $1.1 million. Mr. Levitz has retained Sandy Eagon
19
to list the vacant parcel.
20
Mr. Levitz proposes to place the proceeds of this sale into the Court registry, counsel’s
21
trust account, or an interest-bearing account, pending withdrawal only upon order of the court.
22

23 Presumably these funds will be sufficient to cover the default on the Note; according to the

24 Amended Notice of Trustee Sale issued by Quality Loan on September 29, 2017, the arrears
25
26

MOTION TO IMPOSE INJUNCTION – Page 13 WELLS AND JARVIS, P.S.

502 LOGAN BUILDING
500 UNION STREET
SEATTLE, W A 98101
PHONE (206) 624-0088 FAX (206) 624 -0086

Case 18-01000-CMA Doc 13 Filed 02/22/18 Ent. 02/22/18 18:17:13 Pg. 13 of 14

1 totaled $414,681.62, and presumably this number will be reduced once the Court adjusts it to
2 account for the stale installment payments. See Exhibit I attached to Mr. Levitz’s declaration.
3
As set forth on his accompanying declaration, Mr. Levitz is in the process of seeking
4
employment, now that he has counsel to assist him with what had otherwise become the full-
5
time job of pursuing the pending litigation. Mr. Levitz intends to present shortly a plan of
6

7 reorganization in the underlying bankruptcy case which will propose treatment of the secured

8 claim in whatever amount is determined to be owing in this adversary proceeding.

9 Since actual closing dates on the sale of property often are continued from the original
10 contract dates, it is not known at this date exactly when the proposed sale of the second parcel
11
will close. Therefore, Mr. Levitz proposes to make adequate protection payments in the form of
12
the monthly payment otherwise due on the Note. This approach has actually been used by
13
Washington courts in connection with enjoining non-judicial foreclosures. See e.g. Bavand v.
14

15 OneWest Bank, F.S.B., 176 Wn. App. 475, 309 P.3d 626 (2013); see also R.C.W.

16 61.24.120(1)(a).

17 Based on the foregoing, Mr. Levitz respectfully requests entry of an injunction enjoining
18
non-judicial foreclosure of his real property.
19
Dated this 22nds day of February, 2018.
20
Wells and Jarvis, P.S.
21
By: /s/ Jeffrey B. Wells
22 Jeffrey B. Wells, WSBA #6317
Attorneys for Michael Dean Levitz
23

24
By: /s/ Emily Jarvis
25 Emily Jarvis, WSBA #41841
Attorneys for Michael Dean Levitz
26

MOTION TO IMPOSE INJUNCTION – Page 14 WELLS AND JARVIS, P.S.

502 LOGAN BUILDING
500 UNION STREET
SEATTLE, W A 98101
PHONE (206) 624-0088 FAX (206) 624 -0086

Case 18-01000-CMA Doc 13 Filed 02/22/18 Ent. 02/22/18 18:17:13 Pg. 14 of 14