Case 3:15-cv-05375-BHS Document 34 Filed 09/03/15 Page 1 of 11

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UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF WASHINGTON (TACOMA)

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)
PAMELA S. OWEN
)
Plaintiff, )
vs.
)
)
FEDERAL HOUSING FINANCE AGENCY; )
FEDERAL HOME LOAN MORTGAGE
)
CORPORATION; MTC FINANCIAL, INC., )
D/B/A TRUSTEE CORPS; BISHOP,
)
MARSHALL & WEIBEL, P.S.; CHUCK E. )
ATKINS, in his official capacity as Clark
)
County Sheriff,
)
Defendants.)
)
)
)
)
)
)
)

Civil Action No. 15-cv-05375-BHS

(Formerly in the Superior Court of the State of
Washington, in and for the County of Clark,
Case No. 15-2-01264-2, filed on May 7, 2015)
PLAINTIFFS RESPONSE TO
DEFENDANT MTC FINANCIAL,
INC. OPPOSITION TO
PLAINTIFFS MOTION TO STAY
PROCEEDINGS PENDING
OUTCOME OF STATE COURT
OF APPEALS

Judge: Honorable Benjamin J. Settle

Noted: September 4, 2015

Comes now Plaintiff Pamela S. Owen for her response to the above captioned document
and state:

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Defendants MTC Financial Inc. (MTC) and Bishop, Marshall & Weibel, P.S.s

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(BMW), opposes the Plaintiffs Motion To Stay this Courts proceedings pending the outcome

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of the State Court of Appeals. The remaining Defendants have not responded.
Defendants BMW and MTC have asked the Court to abstain from staying its proceedings
by arguing, among other things, that they are not parties to the case before the State Court of
Appeals.
By their opposition, Defendants MTC and BMW are attempting to avoid a settled rule of

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law more than 311 years old: When the actions of one party hinder the rights of another, that party

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may be found liable. Nixon v. Herndon, 273 U.S. 536 (1927), citing Ashby v. White, 92 E.R. 126

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(1703); Wiley v. Sinkler, 179 U.S. 58, 64, 65 (1900); Giles v. Harris, 189 U.S. 475, 485 (1903).

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PLAINTIFFS RESPONSE TO DEFENDANT MTC FINANCIAL, INC. OPPOSITION TO PLAINTIFFS

MOTION TO STAY PROCEEDINGS PENDING OUTCOME OF STATE COURT OF APPEALS

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The Court should reject these arguments under Lugar v. Edmondson Oil Co., 457 U.S.

922, 934 (1982) and the Colorado River doctrine. See Colorado River Water Conservation

Dist. v. United States, 424 U.S. 800, 817 (1976) and Moses H. Cone Memorial Hosp. v. Mercury

Constr. Corp., 460 U.S. 1, 19 (1983).

In Lugar v. Edmondson Oil Co., 457 U.S. 922, 934 (1982), the Supreme Court held:

If a defendant debtor in state-court debt collection proceedings can successfully

challenge, on federal due process grounds, the plaintiff creditors resort to the
procedures authorized by a state statute, it is difficult to understand why that same
behavior by the state-court plaintiff should not provide a cause of action under
1983. If the creditor-plaintiff violates the debtor-defendants due process rights by
seizing his property in accordance with statutory procedures, there is little or no
reason to deny to the latter a cause of action under the federal statute, 1983,
designed to provide judicial redress for just such constitutional violations.

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Under Lugar, the federal portion of this case concerns the relationship between the 1983

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requirement of action under color of state law and the Fourteenth Amendment requirement of

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state action. The Supreme Courts two-part approach to a 1983 cause of action was derived from

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Adickes v. S. H. Kress & Co., 398 U. S. 144, 150 (1970).

Cases of the U. S. Supreme Court have insisted that the conduct allegedly causing the

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deprivation of a federal right be fairly attributable to the State. Lugar v. Edmondson Oil Co., at
937.
To be fairly attributable to the State, a two-part approach is utilized: First, the
deprivation must be caused by the exercise of some right or privilege created by the State or by a

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rule of conduct imposed by the State or by a person for whom the State is responsible. Second, the

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party charged with the deprivation must be a person who may fairly be said to be a state actor.

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This may be because he is a state official, because he has acted together with or has obtained

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significant aid from state officials, or because his conduct is otherwise chargeable to the State.

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Lugar v. Edmondson Oil Co., at 937.

Defendant MTC admits the actions it took to deprive Plaintiff of her title to real property
flowed from State law, Chapter 61.24 RCW in its capacity as a Trustee.
Defendant BMW admits aiding and abetting Defendant in his state statutory rights
codified under RCW 61.24.060 and Chapter 59.12 RCW.

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PLAINTIFFS RESPONSE TO DEFENDANT MTC FINANCIAL, INC. OPPOSITION TO PLAINTIFFS

MOTION TO STAY PROCEEDINGS PENDING OUTCOME OF STATE COURT OF APPEALS

Case 3:15-cv-05375-BHS Document 34 Filed 09/03/15 Page 3 of 11

A private Trustee conducting a foreclosure sale of real property exercises State power in

the stead of a State judicial officer and is responsible to the State of Washington for her or his

conduct in carrying out the foreclosure sale as set forth in 61.24.010(1)(a):

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(1) The trustee of a deed of trust under this chapter shall be:
(a) Any domestic corporation or domestic limited liability corporation incorporated
under Title 23B, 25, *30, 31, 32, or 33 RCW of which at least one officer is a
Washington resident.

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The State Legislature codified the mandatory requisites to a private trustees sale under

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RCW 61.24.030. The Legislature provided in RCW 61.24.030(7)(a) and (b) that:
(a) That, for residential real property, before the notice of trustees sale is
recorded, transmitted, or served, the trustee shall have proof that the beneficiary is
the owner of any promissory note or other obligation secured by the deed of trust.
A declaration by the beneficiary made under the penalty of perjury stating that the
beneficiary is the actual holder of the promissory note or other obligation secured
by the deed of trust shall be sufficient proof as required under this subsection.
(b) Unless the trustee has violated his or her duty under RCW 61.24.010(4), the
trustee is entitled to rely on the beneficiarys declaration as evidence of proof
required under this subsection.

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The Legislature did not require Defendant MTC to conduct due diligence designed to

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uncover whether other persons claimed to be the owner of any promissory note or other
obligation secured by the deed of trust.
At the time Defendant MTC conducted the foreclosure sale, both Defendant Freddie Mac

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and Bank of America National Association claimed to be the owner of the promissory note or

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other obligation secured by Plaintiffs deed of trust, both of which were drafted by Defendant

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Freddie Mac. Plaintiffs Complaint at paragraphs 1.28; 1.28; 5.12; 5.13 and 5.15.
In its analysis of the case presented in Bain v. Metropolitan Mortgage Group, Inc., 175
Wn.2d 83, 285 P.3d 34 (2012), the Supreme Court stated that it was whoever drafted the forms
used in these cases that manipulated the terms of the [Deed of Trust] act. Plaintiffs Complaint
at paragraphs 1.27; 5.12-5.13.
The Legislature, in relevant part, granted Defendant Freddie Mac special rights and
remedies as a RCW 61.24.060 trustees sale purchaser:
(1) The purchaser at the trustees sale shall be entitled to possession of the
property on the twentieth day following the sale, as against the borrower and
grantor under the deed of trust and anyone having an interest junior to the deed of
PLAINTIFFS RESPONSE TO DEFENDANT MTC FINANCIAL, INC. OPPOSITION TO PLAINTIFFS
MOTION TO STAY PROCEEDINGS PENDING OUTCOME OF STATE COURT OF APPEALS

Case 3:15-cv-05375-BHS Document 34 Filed 09/03/15 Page 4 of 11

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trust, including occupants who are not tenants, who were given all of the notices to
which they were entitled under this chapter. The purchaser shall also have a right to
the summary proceedings to obtain possession of real property provided in chapter
59.12 RCW.
In enacting RCW 61.24.060(1), the State was guaranteeing to Defendant Freddie Mac the
corporation would have the authority of state officials to put the weight of the State behind
Defendant Freddie Macs decision.
Under RCW 59.12.100, the State was guaranteeing to Defendant Freddie Mac the power

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of Defendant Sheriff Atkins to summarily evict Plaintiff and place Defendant Freddie Mac in
physical possession of Plaintiffs real property.
The Legislature did not require Defendant Freddie Mac to file a declaration made under
the penalty of perjury that it was a bona fide purchaser (BFP).
The statutory scheme set forth under Chapters 59.12 and 61.24 are the products of state
action as was held in Lugar v. Edmondson Oil Co.
Lugar held that a private partys joint participation with state officials in the seizure of

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disputed property is sufficient to characterize that party as a state actor for purposes of the

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Fourteenth Amendment. Respondents were, therefore, acting under color of state law in

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participating in the deprivation of Plaintiffs real property.

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Title 42 U.S.C. 1983 provides a remedy for deprivations of rights secured by the

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Constitution and laws of the United States when that deprivation takes place under color of any

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statute, ordinance, regulation, custom, or usage, of any State or Territory. . . .

Under RCW 59.12.032, the Legislature mandated that: An unlawful detainer action,
commenced as a result of a trustees sale under chapter 61.24 RCW, must comply with the
requirements of RCW 61.24.040 and 61.24.060.
To prevail on a 1983 claim, a plaintiff must allege that the defendant acted under color

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of state law, in other words, that there was state action. Lugar v. Edmondson Oil Co., 457 U.S.

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922, 929.

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Defendant MTCs actions taken pursuant to Chapter 61.24 RCW directly facilitated the
actions of Defendant BMW under Chapters 59.12 RCW and 61.24 RCW. The issues before the
State Court of Appeals is whether the Superior Court and Defendants Freddie Mac and BMW
violated Chapter 59.12

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PLAINTIFFS RESPONSE TO DEFENDANT MTC FINANCIAL, INC. OPPOSITION TO PLAINTIFFS

MOTION TO STAY PROCEEDINGS PENDING OUTCOME OF STATE COURT OF APPEALS

Case 3:15-cv-05375-BHS Document 34 Filed 09/03/15 Page 5 of 11

Defendant BMW drafted and filed the complaint for unlawful detainer. Defendant BMW

knew its client, Defendant Freddie Mac, did not qualify as a bona fide purchaser under Chapter

61.24 RCW. Defendant BMW caused the Superior Court and Defendant Sheriff Atkins to take the

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actions each took in depriving Plaintiff of her property without due process of law.
Defendant BMWs arguments that Bishop took no action under color of state law; A
privately-retained attorney does not act under color of state law for the purposes of a 1983

claim; and Bishops representation of Freddie Mac does not make Bishop a state actor

because Freddie Mac is not a governmental actor, are arguments rejected by the Lugar Court.

The private party need not be a governmental actor. The deprivation must be caused by

the exercise of some right or privilege created by the State or by a rule of conduct imposed by the

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State or by a person for whom the State is responsible. The party charged with the deprivation
must be a person who may fairly be said to be a state actor. This may be because he is a state

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official, because he has acted together with or has obtained significant aid from state officials, or

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because his conduct is otherwise chargeable to the State. Lugar v. Edmondson Oil Co., at 937.

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Further:

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[W]e have consistently held that a private partys joint participation with state
officials in the seizure of disputed property is sufficient to characterize that party as
a state actor for purposes of the Fourteenth Amendment. Private persons,
jointly engaged with state officials in the prohibited action, are acting under color
of law for purposes of the statute. To act under color of law does not require that
the accused be an officer of the State. It is enough that he is a willful participant in
joint activity with the State or its agents. Lugar v. Edmondson Oil Co., at 941.

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Under Colorado River, considerations of wise judicial administration, giving regard to

conservation of judicial resources and comprehensive disposition of litigation may justify the
imposition of a stay. 424 U.S. at 817. Exact parallelism is not required; it is enough if the two

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proceedings are substantially similar. Holder v. Holder, 305 F.3d 854, 867 (9th Cir. 2002)

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(quoting Nakash, 882 F.2d at 1416).

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Following Colorado River and Moses Cone, the Court considers the following factors to
determine if a stay is appropriate: (1) whether either court has assumed jurisdiction over a res; (2)
the relative convenience of the forums; (3) the desirability of avoiding piecemeal litigation; (4) the
order in which the forums obtained jurisdiction; (5) whether state or federal law controls; and (6)

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PLAINTIFFS RESPONSE TO DEFENDANT MTC FINANCIAL, INC. OPPOSITION TO PLAINTIFFS

MOTION TO STAY PROCEEDINGS PENDING OUTCOME OF STATE COURT OF APPEALS

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whether the state proceeding is adequate to protect the parties rights. See Nakash, 882 F.2d at

1415 (citing Colorado River, 424 U.S. at 818 and Moses Cone, 460 U.S. at 25-26).

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This Court will be bound by the decision of the State Court of Appeals whether State laws
were violated resulting in a denial of due process of law. A ruling favorable to Plaintiff will
support the causes of action currently before the Court, while a ruling adverse to Plaintiff will
necessitate the dismissal of the causes of action before the Court with prejudice.
Whether Defendant MTC was a lawful Trustee under Chapter 61.24 RCW is an additional

matter supporting a stay. From June 30, 1992 and continuing to the present, Defendant MTC

Financial has represented to the public on the website of the California Secretary of State that it is

a legal entity incorporated in California:

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From May 18, 2006 to December 31, 2008, Defendant MTC represented to the public on

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the website of the Washington Secretary of State that it was a legal entity incorporated in

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California:

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From March 3, 2009 to February 23, 2010, Defendant MTC was registered with the
Washington Secretary of State as a foreign corporation incorporated in the State of California:
PLAINTIFFS RESPONSE TO DEFENDANT MTC FINANCIAL, INC. OPPOSITION TO PLAINTIFFS
MOTION TO STAY PROCEEDINGS PENDING OUTCOME OF STATE COURT OF APPEALS

Case 3:15-cv-05375-BHS Document 34 Filed 09/03/15 Page 7 of 11

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The State Legislature mandated under RCW 61.24.010(1)(a) that every corporation

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seeking to do business in the State as a trustee of a deed of trust be a domestic corporation or

domestic limited liability corporation incorporated under Title 23B, 25, *30, 31, 32, or 33 RCW
of which at least one officer is a Washington resident.

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From May 18, 2006 to February 22, 2010, Defendant MTC acted as a trustee of a deed of

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trust in violation of RCW 61.24.010(1)(a) because the corporation was incorporated in

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California.
In an attempt to correct its violation of state law, from February 23, 2010 to the present,

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Defendant MTC has represented to the public through the website of the Washington Secretary of
State that it is a Washington domestic corporation, while at the same time continuing to represent
to the public through the website of the California that it is a California corporation:
///
///

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///

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///

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///

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///

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///
PLAINTIFFS RESPONSE TO DEFENDANT MTC FINANCIAL, INC. OPPOSITION TO PLAINTIFFS
MOTION TO STAY PROCEEDINGS PENDING OUTCOME OF STATE COURT OF APPEALS

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Defendant MTCs Washington domestic corporation mailing address on file with the
Washington State Department of Revenue, 17100 Gillette Ave Irvine, CA 92614-5603, is the

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same address on file with the California Secretary of State for Defendant MTC as a California
domestic corporation.
However, a letter sent to Defendant MTCs Seattle address on file with the Washington
Department of Revenue was returned by the U.S. Post Office as undeliverable:

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PLAINTIFFS RESPONSE TO DEFENDANT MTC FINANCIAL, INC. OPPOSITION TO PLAINTIFFS

MOTION TO STAY PROCEEDINGS PENDING OUTCOME OF STATE COURT OF APPEALS

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Thus, Defendant MTCs claim that it is both a Washington domestic corporation and a
California domestic corporation raises due process concerns. Further, on June 8, 2015, Attorney
Michael S. DeLeo, WSBA # 22037, attorney for Defendant MTC, informed this Court in
Defendant MTCs Corporate Disclosure Statement, Doc. 5, that: Defendant MTC Financial Inc.
d/b/a Trustee Corps has no parent corporation and no publicly held corporation owns 10% or more
of its stock.

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RCW 2.44.030 provides that:

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The court, or a judge, may, on motion of either party, and on showing reasonable
grounds therefor, require the attorney for the adverse party, or for any one of
several adverse parties, to produce or prove the authority under which he or she
appears, and until he or she does so, may stay all proceedings by him or her on
behalf of the party for whom he or she assumes to appear.

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To protect its jurisdiction, this Court may be obliged to stay its proceedings until a
determination is made as to which legal entity of Defendant MTC is before this Court.
Plaintiff therefore prays this Court stay its proceedings pending outcome of the State Court
of Appeals.

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Respectfully submitted,
Dated: September 2, 2015

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PLAINTIFFS RESPONSE TO DEFENDANT MTC FINANCIAL, INC. OPPOSITION TO PLAINTIFFS

MOTION TO STAY PROCEEDINGS PENDING OUTCOME OF STATE COURT OF APPEALS

Case 3:15-cv-05375-BHS Document 34 Filed 09/03/15 Page 10 of 11

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/s/Pamela S. Owen
Pamela S. Owen
3912 NE 57th Avenue
Vancouver, WA 98661
Tel: (360) 991-4758
pamela.owen99@gmail.com

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PLAINTIFFS RESPONSE TO DEFENDANT MTC FINANCIAL, INC. OPPOSITION TO PLAINTIFFS

MOTION TO STAY PROCEEDINGS PENDING OUTCOME OF STATE COURT OF APPEALS

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