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Bund v. Safeguard Props.

LLC
United States District Court for the Western District of Washington
January 12, 2018, Decided; January 12, 2018, Filed
CASE NO. C16-920 MJP
Reporter
2018 U.S. Dist. LEXIS 6217 *
JOHN R. BUND II, et al., and on behalf For Safeguard Properties LLC, a
of others similarly situated, Plaintiffs, v. Delaware corporation, Defendant: Marc
SAFEGUARD PROPERTIES LLC, Rosenberg, Pamela J DeVet, LEE
Defendant. SMART PS INC, SEATTLE, WA.

Prior History: Bund v. Safeguard Judges: Marsha J. Pechman, United


Props., LLC, 2016 U.S. Dist. LEXIS States District Judge.
186625 (W.D. Wash., Dec. 30, 2016)
Opinion by: Marsha J. Pechman
Core Terms
Opinion
vendors, class member, locks,
damages, personal property, ORDER ON: (1) MOTION TO CERTIFY
foreclosure, certification, injunctive CLASS AND MOTION TO STRIKE (2)
relief, pre-foreclosure, predominate, MOTION TO DISMISS INJUNCTIVE
sub-class, certify, class certification, RELIEF CLAIMS
proposed class, completion, inspection,
requires, removal, motion to strike, The above-entitled Court, having
class action, default, argues, issues, received and reviewed:
named plaintiff, question of law, 1. Plaintiffs' Motion to Certify Class
activities, numerosity, properties, (Dkt. No. 86), Defendant's Response
practices, questions (Dkt. No. 97), Plaintiffs' Reply (Dkt.
No. 123), Plaintiffs' Notices of
Counsel: [*1] For John R. Bund, II, Supplemental Authority (Dkt. Nos.
personally, as Executor of the Estate of 166 and 187), and Defendant's
Richard C. Bund, deceased, and on Motion to Strike Material in Plaintiffs'
behalf of others similarly situated, Reply Brief (Dkt. No. 128);
Plaintiff: Clay M Gatens, Honea Lee 2. Defendant's Motion to Dismiss
Lewis, IV, Sally F White, LEAD Claims for Injunctive Relief (Dkt. No.
ATTORNEYS, JEFFERS DANIELSON 149), Plaintiffs' Response (Dkt. No.
SONN & AYLWARD, WENATCHEE, 163), and Defendant's Reply (Dkt.
WA. No. 169);
all attached declarations, exhibits, and
2018 U.S. Dist. LEXIS 6217, *1

relevant portions of the record; and IT IS FURTHER ORDERED that


having heard oral argument thereon, Defendant's motion to dismiss Plaintiffs'
rules as follows: claims for injunctive relief is DENIED as
premature.
IT IS ORDERED that Plaintiffs' [*2]
motion to certify a class is GRANTED
IN PART; to wit, the Court certifies a Background
class which is defined as:
Defendant Safeguard Properties LLC
All current and former citizens of ("Safeguard") [*3] provides property-
Washington State who own or related services on defaulted, pre-and
owned residential property in post-foreclosure properties to lending
Washington State subject to a loan institutions and loan servicers
that was in default, which residence throughout Washington State; its
was entered by Safeguard or its services include determining the
agents and the lock(s) changed prior occupancy status of the properties,
to completion of a foreclosure and securing those considered to be
within the applicable statute of vacated, and removing debris/personal
limitations. property. Dkt. No. 82, Third Amended
Complaint ("TAC"), ¶¶ 1.1, 1.2.
IT IS FURTHER ORDERED that
Safeguard provides these services
Plaintiffs' motion to certify a sub-class
through a wide network of vendors. Dkt.
defined as
No. 87, Gatens Decl. at ¶ 10, Ex. 4.
All current and former citizens of
Plaintiffs allege that information
Washington State who own or
obtained through discovery reveals pre-
owned real property in Washington
foreclosure activity (including interior
State subject to a loan that was in
occupancy inspection, property
default, which property was, at any
preservation actions — e.g., changing
time within the applicable statute of
the locks on the doors, winterizing,
limitations entered upon by
and/or boarding up the windows -- or
Safeguard or its agents prior to the
removal of personal property) by
completion of a foreclosure, and
vendors employed by Safeguard in over
during which entry personal property
18,000 homes during the class period.
located on the property was
Id. at ¶ 18, Ex. 11. Plaintiffs maintain
removed by Safeguard or its agents.
that the information obtained from
is DENIED.
Safeguard "readily identifies each
IT IS FURTHER ORDERED that member of the Class and their property
Defendant's motion to strike the address." Dkt. No. 86, Motion at 14.
material associated with Plaintiffs' reply
brief is DENIED. Safeguard has developed a system of

Page 2 of 17
2018 U.S. Dist. LEXIS 6217, *3

uniform policies and practices for class members prior to foreclosure


conducting property-related activities amounts to conversion. Id. at § X.
(Id. at Exs. 2, 13, 14) which are utilized
by all its vendors [*4] on their Safeguard indicates that their practices
assignments for the company. Id., Ex. 3, have changed since Jordan. See Dkt.
Depo of Meyer at 23:18-24:20, 34:25- No. 107, Meyer Depo. at 86:2-87:17.
While Defendant claims in its
35:9. In 2016, the Washington Supreme
responsive briefing that presently
Court declared that provisions in a trust
"Safeguard and its Clients generally do
deed permitting entry onto an
not order or permit removal of personal
encumbered property after default but
property until after foreclosure" (Dkt.
prior to foreclosure (including activities
No. 97, Response at 11), testimony of
like changing the locks) were an invalid
Safeguard's 30(b)(6) representative
interference with a homeowner's
indicates that, if a client directs that
exclusive right to possession. Jordan v.
personal property be removed from a
Nationstar Mortgage, LLC, 185 Wn.2d
876, 374 P.3d 1195 (2016). The property, Safeguard will order its
Washington Supreme Court further vendors to do so. Dkt. No. 107, Meyer
Depo. at 78:23-79:1.
found that entry onto an encumbered
property prior to the completion of
foreclosure constituted "possession" in Discussion
violation of state law. Id. at 888.
Plaintiffs allege that Safeguard orders Motion for Class Certification
its vendors to enter the properties of its
class members and change the locks There are four prerequisites to the
prior to completion of foreclosure, in certification of any class: numerosity,
violation of Jordan as well as common commonality, typicality and adequacy of
law and statutory prohibitions against representation. FRCP 23(a);
trespass. TAC, §§ VII and VIII. Plaintiffs
Wal-Mart Stores, Inc. v. Dukes, 564
further allege that Safeguard's practices
U.S. 338, 346, 131 S. Ct. 2541, 180 L.
(including forcible non-consensual entry
Ed. 2d 374 (2011)("Dukes").
into homes, destruction of locks, and
Additionally, at least one of the sections
conversion of personal property),
of FRCP 23(b) must be satisfied —
combined with generating revenues
Plaintiffs indicate from the outset that
from the practices at the homeowners'
they seek certification under FRCP
expense constitute "unfair and
deceptive acts" in contravention of the 23(b)(3), requiring proof that (1)
CPA. Id. at § IX. Finally, Plaintiffs allege questions of law or fact common to
that the removal of personal property class member predominate over
from [*5] the home of the potential questions affecting only individual
members, and (2) class litigation is the

Page 3 of 17
2018 U.S. Dist. LEXIS 6217, *5

superior method [*6] of adjudication. might not have been completed1 and
that it would require a time-intensive
manual search — file by file — to
FRCP 23(a) determine which jobs belonged within
the class [*7] qualification. While the
Court is not entirely convinced that
1. Numerosity
class members cannot be identified
Plaintiffs initially cited to the through a refined cross-matching of
spreadsheet created from the data data which Defendant has in its
supplied by Defendant during discovery possession2, it is not necessary at this
for their claim that there are over 18,000 point.
homes which were entered and locks
Plaintiffs have produced evidence of a
changed. Gatens Decl. at ¶ 18; Ex. 11.
"Complaint Log" supplied by Defendant
They cite to case law finding numerosity
(Dkt. No. 87-2, Ex. 26) which "identifies
in proposed classes of forty or more
a number of complaints submitted by
members; e.g., Toering v. EAN
consumers regarding various property-
Holdings, LLC, 2016 U.S. Dist. LEXIS
related activities." (Dkt. No. 87,
124274, 2016 WL 4765850, *2 (W.D.
Declaration of Gatens, ¶ 35.) While not
Wa. Sept. 13, 2016).
all of the complaints concern activities
Defendant objects on two grounds. First which fall within parameters of the
(citing to the class definition regarding proposed class definition, the Court is
properties "entered upon by Safeguard satisfied that there are well in excess of
or its agents" [emphasis supplied]), it forty (the number found minimally
argues that (1) Safeguard itself does not sufficient in Toering to satisfy the class
enter anyone's property and (2) the numerosity requirement) involving
vendors which performed services on its complaints concerning entry into the
behalf were independent contractors, residence related to the changing of
not agents. The second point will be locks within the statutory time limits for
analyzed in greater depth in the FRCP this proposed class. In addition to listing
23(b)(3) section infra; suffice it to say at the date and nature of the complained-
this point that the Court is not
persuaded. Under either an actual or 1 Atoral argument, Defendant explained in greater detail that,
apparent agency analysis, the vendors while a work order might indicate that it was "completed," such
a designation did not establish the nature of the work which
are Defendant's agents. had been done; i.e., "completed" could mean that a vendor
had visited the property, found it occupied, and on that basis
Second, Safeguard argues that the not done the work which had been requested by Safeguard.
spreadsheet data which it provided 2 For example, cross-matching "closed" work orders with
Plaintiffs is "inconclusive," that they invoices of fee payments to identify fee amounts which
have a list of work orders that might or correspond to the fees habitually charged for changing locks
would yield a list of residences where the homes had actually
been entered and re-keyed pursuant to orders by Safeguard.

Page 4 of 17
2018 U.S. Dist. LEXIS 6217, *7

of activity, the log lists the names and agents in pre-foreclosure seizures?
contact numbers of the complaining
5. Did Safeguard take possession of
parties.
member homes prior to foreclosure?
For purposes of class certification, the
6. Is Safeguard liable for reasonable
numerosity requirement has been
rents to class members for the time it
established.
possessed their home pre-
foreclosure?
2. Commonality
7. Did Safeguard wrongfully commit
Plaintiffs must demonstrate that the waste or injury to the class members'
claims of their proposed [*8] class property pre-foreclosure?
"depend on a common contention" such 8. Is Safeguard liable for treble
that "determination of its truth or falsity damages and attorneys' fees under
will resolve an issue that is central to the CPA?
the validity of each claim in one stroke."
Toering, supra, 2016 U.S. Dist. LEXIS See Motion at 24-25.
124274, [WL] at *3 (quoting Mazza v.
Amer. Honda Motor Co., Inc., 666 F.3d Defendant argues that Questions 2, 3,
581, 588 (9th Cir. 2012), and Dukes, 4, 6, and 8 all pose variations of the
564 U.S. at 349-50). question "what remedies should
Plaintiffs get?" and that [*9] such
Plaintiffs provide a series of question questions cannot constitute "common
which they contend present "common questions of law." See Dukes, 564 U.S.
questions of law and fact:" at 359. The Court agrees: questions
which assume that a common question
1. Were Safeguard's common
of liability has been satisfactorily asked
practices/procedures unfair and
and answered for a class cannot qualify
deceptive?
as common questions of law.
2. Must Safeguard compensate
class members for damage resulting Nevertheless, the Court finds that the
from forcible entries and lock questions concerning whether the
changes? actions of the vendors employed by
Safeguard (specifically, the entry into
3. Is Safeguard liable to the class for the homes of class members for the
restitution of the fees it received from purpose of changing the locks)
its clients for the pre-foreclosure constituted a form of trespass and/or
activities? "unfair or deceptive acts" as defined by
the CPA are questions of law common
4. Is Safeguard liable for the
to all members of the class and
personal property converted by its
susceptible of a common answer. There
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2018 U.S. Dist. LEXIS 6217, *9

is no requirement that the proposed FRCP 23(a)(3) requires that "the claims
class members "share every fact in or defenses of the representative
common or completely identical legal parties are typical of the claims or
issues" (Rodriguez v. Hayes, 591 F.3d defenses of the class."
1105, 1122 (9th Cir. 2009) - Rule
23(a)(2) requires only "a single The test of typicality is whether other
significant question of law or fact." members have the same or similar
injury whether the action is based on
Abdullah v. U.S. Sec. Assocs., Inc., 731
conduct which is not unique to the
F.3d 952, 957 (9th Cir. 2013).
named plaintiffs and whether other
Defendant argues that the damages class members have been injured in
which Plaintiffs seek for the class will the same course of conduct.
entail individualized assessments (locks
are worth varying amounts, different Ellis v. Costco Wholesale Corp., 657
amounts and values of property may F.3d 970, 984 (9th Cir. 2011)(citation
have been damaged, rents vary, etc.). omitted). It is not a requirement in the
Ninth Circuit that the members' injuries
In the Ninth Circuit, a variable amount of
be identical: claims are considered
damages between class members will
"typical" "if they are reasonably co-
not defeat certification if they are bound
extensive with those of absent class
by a common question of liability. [*10]
members; they need not be
("The amount of damages is invariably
substantially identical." Hanlon v.
an individual question and does not
Chrysler Corp., 150 F.3d 1011, 1020
defeat class action treatment;" Blackie
(9th Cir. 1998).
v. Barrack, 524 F.2d 891, 905 (9th Cir.
1975).) Furthermore, if the issue of Plaintiffs' allegations arise out of a
whether Defendant is liable for the course of conduct which is similar to
damages can be resolved on a common that contained in the class
basis, then the matter of amount of description; [*11] i.e., the pre-
damages can if necessary be bifurcated foreclosure inspections of defaulted
into a separate, non-class proceeding. properties. Safeguard does not contest
Jimenez v. Allstate Ins. Co., 765 F.3d the similarity of its actions as regards
1161, 1168 (9th Cir. 2017). the potential members of the class (i.e.,
The Court is satisfied that Plaintiffs have that it routinely sent its vendors onto
meet their burden of establishing pre-foreclosure properties to perform
commonality for purposes of class inspections), but instead asserts that
certification. the named Plaintiffs have unique
challenges and defenses which are not
applicable to all the members of the
3. Typicality class, and thus they are not typical.

Page 6 of 17
2018 U.S. Dist. LEXIS 6217, *11

implications represented by the


Bund prosecution of multiple separate CPA
lawsuits against multiple defendants,
Safeguard argues that Bund is subject neither side has had an opportunity to
to unique defenses. One of them fully brief these issues, and their
concerns the fact that the allegedly resolution will await another day. At this
missing items are Bund's personal point, the Court will find that Bund
property, therefore "the Estate of
satisfies the "typicality" requirement for
Richard Bund" (whom John Bund
this class.
appears as a representative of) is not a
real party in interest to that claim.
Plaintiffs conceded this at oral Haynes
argument, but since the Court does not
intend to certify the "conversion" sub- Safeguard argues that this Plaintiff is
class, the point is a moot one. subject to unique defenses which
render her atypical of the proposed
The Court does find that, based on his class; namely, (1) she gave her consent
claims regarding entry into the home for to the inspection ordered for her home,
purposes of changing the locks, Bund and (2) "no work order for pre-
remains a typical class member as foreclosure property preservation
regards the trespass/CPA claims. services resulted in entry into her
Defendant argues in this regard that, home." Response at 21. The first
because Bund (presumably again in his objection [*13] appears to concern an
capacity as representative for the Estate incident about which Haynes is not
of Richard Bund) was a certified [*12] complaining (i.e., she does not contest
class member in the Jordan case, he is that, at some point following the conduct
at risk to lose both standing and of which she complains, there was a
incentive if that class is awarded consensual entry onto her property).
damages (which Defendant represents
has, in fact, recently occurred). It became apparent at oral argument,
however, that Haynes does not dispute
Defendant raised two possible issues in the truth of the second objection.
regard to Bund's "dual status" as a Instead, Plaintiffs take the position that
member of this class and the Jordan the cost and property injury associated
class: (1) the possibility of a double with the removal of the Safeguard
recovery of damages and (2) whether sticker which vendors employed by
pursuing claims against Nationstar and Defendant place on the homes they
Safeguard in separate lawsuits inspect is sufficient to satisfy the
represented an impermissible practice damage requirement of common law
of "claim splitting." While the Court is and statutory trespass. On this basis —
concerned with the public policy the argument goes — even defaulted

Page 7 of 17
2018 U.S. Dist. LEXIS 6217, *13

homeowners whose homes were not claims with prejudice. On that basis, the
forcibly entered and the locks changed Court has no need to analyze whether
(but were, instead, merely externally the Hanouseks are typical class
inspected) qualify as class members. members under FRCP 23(a)(3).
Plaintiffs presented no legal authority in In summary, while the claims of the
support of this theory and the Court is Hanouseks and Ms. Haynes are not
unconvinced that the de minimis nature typical of the proposed class, the Bund
of any injury to a house left by the claim relating to entry into the house for
Safeguard sticker is sufficient to satisfy purposes of changing locks is typical of
the damages requirement of a trespass the proposed class and the Court finds
cause of action.3 On this basis, the that Plaintiffs have satisfied that
Court finds that Haynes is not a typical element.
class member. The Court further finds,
based on the same rationale, that
Plaintiffs should [*14] not be permitted 4. Adequacy
to maintain a class whose membership This element of class certification
includes persons whose property was requires a finding that the named
entered upon without permission prior to plaintiffs and their counsel (1) have no
foreclosure but subject only to an
conflicts of interest with other class
external inspection (i.e., no home entry)
members [*15] and (2) will prosecute
and "damaged" only by the placing of a
the action vigorously on behalf of the
sticker on the exterior of the home. The
class. FRCP 23(a)(4); Ellis, 657 F.3d at
Court will modify the class definition
985; Hanlon, 150 F.3d at 1020. Since
accordingly.
the only remaining named Plaintiff is
Bund, this factor will be analyzed as
Hanouseks regards him alone.

These two named plaintiffs are the Specific to Bund, Safeguard asserts the
subject of a separate summary argument (similar to the one raised
judgment motion seeking dismissal of concerning his "typicality" supra) that
their claims. As evidenced by the his status as a member of the Jordan
Court's ruling on that motion (see Dkt. class creates a conflict with other
No. 203), the Court agrees with potential class members both in terms
Defendant that it is entitled to summary of its impact on his standing and his
judgment dismissing the Hanouseks' incentive to prosecute the action
vigorously. Concerning standing, the
Court has already made its position
3 In
fact, Plaintiffs conceded at oral argument that, if the Court clear. As regards his incentive to
were unwilling to accept the "Safeguard sticker = property
damage" theory, Haynes would not qualify as a typical class prosecute the matter vigorously,
member.

Page 8 of 17
2018 U.S. Dist. LEXIS 6217, *15

Defendant has presented no proof that


whatever award Bund might have FRCP 23(b)(3)
received pursuant to the resolution of
Jordan is of such a size that Bund will Plaintiffs must also satisfy one of the
be stripped of his need for further funds sections of FRCP 23(b) to qualify for
in perpetuity; i.e., the Court doubts that class certification. They have chosen
Bund will fail to seek further only to request certification under FRCP
compensation eagerly, and Defendant 23(b)(3), which dictates certification
has provided no evidence (outside of its upon proof that "questions of law or fact
theoretical speculation) to the contrary. common to the members of the class
predominate over any questions
Safeguard raises other arguments affecting only individual members, and...
concerning the general adequacy of all a class action is superior to other [*17]
the named plaintiffs. One is an available methods for the fair and
argument that, because the asserted efficient adjudication of the
damages of the proposed plaintiffs (and, controversy."4 The existence of
presumably, the class [*16] as a whole) individual issues, by itself, will not
will vary, the class representatives will defeat certification; those individual
have variable incentives to pursue relief issues must simply be less significant
according to how much they will be than the common issues and not so
compensated. The Court fails to see the unmanageable as to outweigh the
logic of this: before anyone is benefits of a class litigation approach.
compensated, liability has to be Eisenberg v. Gagnon, 766 F.2d 770,
established. As precedent establishes, 786 (3rd Cir. 1985).
a varying amount of damages will not
suffice to disqualify a class from
certification; nor will it operate to render 1. Predominance
an otherwise satisfactory class
"Predominance" exists where "a
representative somehow inadequate.
common nucleus of facts and potential
In summary, the Court finds that remedies dominate th[e] litigation."
Plaintiffs have satisfied the numerosity Chamberlan v. Ford Motor Co., 402
and commonality elements of FRCP F.3d 952, 962 (9th Cir. 2005). The
23(a) and that Bund qualifies as a predominance analysis is not a merit
typical and adequate representative of determination of claims or defenses, nor
the class. For the reasons stated in this an assessment of whether Plaintiffs are
order, however, the Court will certify a
class with a narrower definition than that 4
Plaintiffs' decision not to seek certification under FRCP
proposed by Plaintiffs, and will decline 23(b)(2) - class injunctive relief — has led Defendant to seek a
to certify the Plaintiffs' proposed sub- ruling dismissing all injunctive claims. See Dkt. No. 163. That
dispositive motion is analyzed in the section following the
class. class certification analysis.

Page 9 of 17
2018 U.S. Dist. LEXIS 6217, *17

likely to succeed. United Steel, Paper & However, as regards Plaintiffs'


Forestry, 593 F.3d 802, 809 (9th Cir. proposed sub-class (persons whose
2010). homes were "entered upon by
Safeguard or its agents prior to
Plaintiffs argue that the uniformity of the completion of a foreclosure, and during
procedures and practices enforced by which entry personal property located
Safeguard render this case particularly on the property was removed by
well-suited to class litigation; the
Safeguard or its agents"), the Court
common issue of whether Safeguard's
finds that FRCP 23(b)(3) requires that
uniform procedures and practices
certification be denied. For this sub-
violate Washington law and common
class, it is highly likely that individual
law, Plaintiffs contend, will predominate inquiries would predominate over
over any individual issues. common questions of fact or law.
Defendant's arguments to the contrary In those circumstances where personal
fall into two main categories: (1) property was removed from a premises,
predominance of individual inquiries, the explanations would tend to fall into
and (2) lack of agency. two categories: (1) the removal was
Plaintiffs' proposed class (persons authorized by Safeguard and (2) the
whose property was "entered upon by removal [*19] was not authorized by
Safeguard or its agents prior to Safeguard (i.e., the person has been
completion of a foreclosure") is not the victim of theft). While it appears that
subject to [*18] the criticism that authorized removals may have been
individual inquiries will predominate tracked in Safeguard's
over the class issues. The Court is records-keeping, the Court has no
6

convinced that, using Safeguard's own difficulty finding that a certain


records, Plaintiffs have identified percentage of the "missing personal
(through the "Complaint Logs" at Dkt. property" cases are going to come
No. 87-2) a sufficiently numerous group down to instances where there is no
of people who have been subject to a record of the removal being authorized
uniform practice of entry into their but the class member insists that their
homes prior to completion of foreclosure property was there before the inspection
for the purposes of changing the locks began and was gone after it concluded
and that (with further discovery) the
potential for locating an even greater "wrongfulness" of that activity pre-Jordan has not been
number of people subject to similar established. To the extent that is true, it is a class-wide — not
individual — defense and can be addressed in a class action
conduct under similar circumstances is just as effectively as in personal lawsuits.
strong.5
6 In fact, in Defendant's Field Manual there is a specific
instruction that no personal property is to be removed from a
premises without written authorization (Dkt. No. 88, Ex. 13 at
5 One of Safeguard's arguments against certification is that the 26).

Page 10 of 17
2018 U.S. Dist. LEXIS 6217, *19

(in fact, that is exactly the case with the orders were agents of Defendant.
Hanouseks). Safeguard relies on Washington case
law holding that "a principal who hires
Where theft on the part of the vendor an independent contractor is not liable
can be established, it breaks the chain for harm resulting from that contractor's
of agency by which Safeguard could be work. The crucial distinction is the right
held vicariously liable (see below); nor to control... Where there is no right to
could Defendant be held responsible for
control, then the subordinate party is an
thefts which occur outside the purview
independent contractor." Wilcox v.
of its involvement with the property, but
Basehore, 187 Wn.2d 772, 789-90, 389
during a period when the premises may P.3d 531 (2017).
have been unoccupied by the class
member (which evokes the third Defendant maintains that (1)
possibility of theft of the personal determination of agency is a factual
property by unknown third party). The question that must be decided on a
bottom line is that these varying case-by-case basis and (2) the facts of
permutations and combinations of its relationship [*21] with its vendors
possible occurrences set up a scenario (including contractual language
where inquiries into the individual specifically stating that its vendors are
circumstances of each class member's independent contractors) indicate that
loss threaten to overwhelm [*20] the the company does not retain control of
common questions of fact and law. On its vendors' work. The Court is not
that basis, the Court finds that common persuaded.
questions of fact and law will not
predominate over individualized Plaintiffs present an impressive array of
inquiries as regards the sub-class and it evidence establishing that Safeguard,
will not be certified. as a matter of uniform procedure,
retains the right to control every aspect
With the proposed sub-class eliminated, of its vendors' work. Using depositions
the Court still needs to address from Defendant's employees, Plaintiffs
Safeguard's argument that, as regards demonstrate that Safeguard controls
the proposed class, (1) the company each vendor's geographic area, the
itself entered no one's home and (2) it training of those vendors, the details of
cannot be held vicariously liable for the each work order (including what tools
actions of its vendors because of lack of are needed, what vendors can and
agency. Safeguard's position is that, cannot wear, and when the work must
since the company itself did not enter be completed), as well as how the
onto anyone's property, it can only be vendors respond to complaints and
held vicariously liable, which requires speak to homeowners or third parties.
proof that the network of vendors The evidence shows that Defendant
employed to execute the company's requires immediate submission of a
Page 11 of 17
2018 U.S. Dist. LEXIS 6217, *21

comprehensive report upon completion In fact (as Plaintiffs point out), following
of the work order; every report is a determination of vacancy, a vendor
reviewed and vendors who do not installs a Safeguard "first time vacancy
comply with Safeguard's expectations sticker" instructing the owner to contact
do not get paid. (See Dkt. No. 123, Safeguard immediately. Similarly, when
Reply at 6-7.) a lock is replaced, the vendors place
Safeguard's "securing sticker" [*23]
There is no doubt in the Court's mind and sign-in sheet on the door — both
that Defendant exercises a high level of state that "Safeguard" entered the
control over its vendors. As for the property. Plaintiffs' briefing contains
language inserted into Defendant's several other examples of procedures
vendor contracts [*22] identifying them which operate to create the impression
as "independent contractors:" it is the that it is Defendant which is responsible
case law in Washington that simply for the determinations and activities
calling a vendor an "independent taking place in regard to the
contractor" in the vendor's contract does homeowner's property. (See Reply at
not alter the nature of the relationship 8.)
where the hiring entity has the right to
exercise significant control. Wilcox, 187 This same sort of activity undermines
Wn.2d at 787. Such is the case here. Safeguard's second "apparent agency"
argument — that the fact that the
Additionally, while there is sufficient homeowners are rarely home when the
evidence to establish the status of the vendors visit the property renders it
vendors as Safeguard's actual agents, unlikely that the class members would
the facts also suffice to create the have relied on the apparent agency of
existence of an "apparent agency," the vendors. But the fact that all the
which exists where (1) the defendant's traces of activity which the vendors
conduct would lead a reasonable leave behind direct the owner to contact
person to believe that the acting party Safeguard leads to exactly the opposite
was an agent of the defendant and (2) conclusion: that whoever was on the
plaintiff relied upon the apparent agency property must have been an agent of
relationship. Wilson v. Grant, 162 Safeguard's.
Wn.App. 731, 744, 258 P.3d 689.
Safeguard argues that its prohibition The Court finds, in light of all this
against the vendors displaying the evidence, that the class will have no
Safeguard logo on their clothing, difficulty establishing Safeguard's
vehicles or business cards establishes vicarious liability regarding the proposed
that the first element is not true "as a class if the vendors' pre-foreclosure
matter of law." It is not a convincing conduct of entering the homes and
argument. replacing the locks is found to have
been tortious and/or a CPA violation.

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2018 U.S. Dist. LEXIS 6217, *23

of their problems.7 A class action offers


2. Superiority of a class action them their only realistic opportunity for
redress of any wrongs done to them.
The class must still establish [*24] that
a class action is superior to any other
means of adjudicating this controversy. Conclusion
The Court finds the threshold for that
determination is cleared with little The main class proposed by Plaintiffs
difficulty. satisfies both the requirements of FRCP
23(a) (numerosity, commonality,
Two factors mitigate in favor of the typicality and adequacy) and the
superiority of a class action. One is the requirements of FRCP 23(b)(3) -
size of the potential class. Defendant common questions of fact and law
disputes Plaintiffs' declaration of a class predominate over individual questions
of 18,000+, but even if the class is a and a class action is the best way to
fraction of that size, it is still an unwieldy attain a legal remedy for any wrong
number of lawsuits to prosecute potentially done to the class members.
individually. And, because gathering the
evidence of the pre-foreclosure work The subclass does not fare as well,
ordered, the pre-foreclosure work primarily because the wrong it is
completed, and which of those work attempting to redress — personal
orders represented a lock change property missing from the premises of
ordered and completed seems at this the proposed class members — is not
point to be an achievable goal, large- amenable to proof on a mass scale and
scale proof of Defendant's activities is subject to a variety of individual
falling within the (revised) class defenses. The Court declines to certify
definition does not appear to be overly the sub-class.
burdensome or complex.
Finally, the fact is that the potential Motion to strike
class members are uniformly financially Defendant filed a supplemental motion
distressed (which is why most of them to strike material contained in Plaintiffs'
found their homes to be the objects of
reply brief. (See Dkt. No. 128.) The
Defendant's services) and are unlikely material falls into two categories:
to be able to pursue a legal remedy on
their own. The Court is far from 1. Declarations from nine fact
persuaded by Defendant's argument witnesses not previously disclosed.
that its response time to complaints is
so swift and efficient [*25] that affected
7 Defendant's motion to strike (discussed infra) seeks to render
members of the potential class would be inadmissible Plaintiffs' evidence of the difficulty of achieving
better off pursuing non-legal resolution resolution through Safeguard's administrative channels, but
the motion will be denied.

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2018 U.S. Dist. LEXIS 6217, *25

Plaintiffs responded to a single them (Reply at 10:10-11.))


sentence in Defendant's brief, aimed
at Plaintiffs' argument [*26] that a Defendant moves that the argument
class action was superior to and evidence regarding damages for
individual actions ("Because restitution and recovery of
Safeguard strives to timely respond reasonable rents be stricken
to and resolve claims [citation because those remedies had not
omitted], individuals have an interest previously been identified by
in direct resolution;" Response at 29) Plaintiffs. This is not an appropriate
by filing nine affidavits attesting to subject for a motion to strike. FRCP
Safeguard's non-responsiveness to 12(f), which governs motions to
complaints about their "foreclosure strike, grants the Court authority to
service" tactics. (See Dkt. No. 125-1, strike "an insufficient defense, or any
Exs. K — S.) redundant, immaterial, impertinent,
Defendant protests that these or scandalous matter." The
witnesses were previously rent/restitution material in Plaintiffs'
undisclosed, but provides no legal reply does not fit any of those
authority that Plaintiffs are not categories. The case Defendant
entitled to use otherwise admissible cites in support of its request
testimony of witnesses (previously (Hoffman v. Constr'n Prot. Svcs.,
disclosed or not) to controvert 541 F.3d 1175, 1179 (9th Cir. 2008))
arguments raised by Defendant in its involves a motion in limine to
responsive briefing. exclude evidence and argument, not
a motion to strike.
2. Previously undisclosed damages:
Plaintiffs have indicated they will Defendant's motion to strike the
seek damages in the form of rents material contained in Plaintiffs' reply
paid by class members while brief is DENIED.
wrongfully excluded (pre-
foreclosure) from their homes, as
Defendant's Motion to Dismiss
well as restitution for "fees"
Claims for Injunctive Relief
(Defendant identifies them in their
motion to strike as "bank fees," but
Plaintiffs indicate they are intending Background
to seek restitution for "standard fees
and charges for 'allowables' such as When this matter was originally before
lock changes, winterizations, and the Court in 2015, the class allegations
utility shut-offs" which they maintain were struck and the matter remanded
were charged to Defendant's clients back to state court. (See C15-1773-
and then passed along to [*27] MJP, Order Granting Motion to Dismiss
Class Allegations, Remanding Case to
Page 14 of 17
2018 U.S. Dist. LEXIS 6217, *27

State Court at Dkt. No. 27.) Plaintiff arguments it has already made as to
Bund amended his complaint in state why certification should not be
court to (1) reinsert the class granted at all.
allegations [*28] and (2) add
allegations related to injunctive relief 3. That injunctive relief is still
under FRCP 23(b)(2). Defendant again necessary: Plaintiffs allege (with no
removed the action to federal court, evidentiary support) that (a)
Defendant [*29] is continuing to
where it was eventually reassigned to
order pre-foreclosure inspections in
this Court.
violation of Jordan and (b)
The deadline to move for class Defendant has failed to remove any
certification was July 3, 2017. Plaintiffs of the new locks that it installed in
timely moved for certification, but under violation of Jordan.
FRCP 23(b)(3) only. Defendant now
moves for dismissal of the injunctive 4. That, assuming that their motion
relief claims. for class certification is granted,
Plaintiffs are entitled to move for
modification of that certification
Discussion order: While this is technically
correct, it does not mean that
Plaintiffs object to this request on Plaintiffs can successfully move for
several grounds: modification any time they want
1. The motion represents an (e.g., on the eve of trial) or that they
additional dispositive motion in can at any time advance a legal
violation of LCR 7(e)(3): Defendant remedy which they may have plead
justifies this on the grounds that but for which they have not laid the
there are four named plaintiffs and groundwork prior to trial.
multiple causes of action and that 5. That they will not know if
addressing them all in a single injunctive relief is necessary until
motion is not possible. Safeguard they have reviewed the results of a
has also attempted to address this pending RFP ("RFP #6"): In
issue with its pending Motion under response, Defendant asserts out that
LCR 7(e)(3) seeking permission to (1) the deadline for class-related
file more than a single dispositive discovery has long since passed and
motion. (2) RFP #6 concerns information
2. The motion represents an ill- related to their restitution theory of
disguised attempt to make additional damages (payments which
argument against class certification Safeguard made to vendors and
in general: In fact, Defendant's then charged to clients which may
motion does reiterate several of the have been passed along to class

Page 15 of 17
2018 U.S. Dist. LEXIS 6217, *29

members) and has nothing to do Washington State who own or


with the theories Plaintiffs have owned residential property in
advanced related to injunctive relief. Washington State subject to a loan
that was in default, which residence
Defendant also asserts some was entered by Safeguard or its
arguments against injunctive [*30] relief agents and the lock(s)
(e.g., there is no future harm at issue changed [*31] prior to completion of
here and Plaintiffs can be adequately —
a foreclosure and within the
and more appropriately — compensated
applicable statute of limitations.
by monetary damages). The Court will
not address those arguments at this The Court further finds that Plaintiffs'
time. proposed sub-class, defined as:
The entire motion is premature and All current and former citizens of
unwarranted at this stage of the Washington State who own or
proceedings. The Court is certifying a owned real property in Washington
class under FRCP 23(b)(3), as State subject to a loan that was in
requested by Plaintiffs. If there is to be default, which property was, at any
certification under FRCP 23(b)(2), time within the applicable statute of
Plaintiffs will have to move to amend the limitations entered upon by
existing order. Should they chose to do Safeguard or its agents prior to the
so, they can make their legal arguments completion of a foreclosure, and
as to why that should be permitted, during which entry personal property
Defendant can make its located on the property was
counterarguments and the Court can removed by Safeguard or its agents.
rule on the merits of the request. None does not satisfy the requirements of
of that has happened. The Court should FRCP 23 and declines to certify the
not and will not rule on the issue as a sub-class.
speculative matter at this time.
Defendant's motion to strike the
Defendant's motion to dismiss Plaintiffs' material contained in Plaintiffs' class
claims for injunctive relief is DENIED. certification reply brief is DENIED, as is
its motion to strike Plaintiffs' claims for
injunctive relief.
Conclusion
The clerk is ordered to provide copies of
The Court finds that Plaintiffs have this order to all counsel.
satisfied the elements of FRCP 23(a)
and FRCP 23(b)(3) for a class action Dated: January 12, 2018.
lawsuit as regards a class defined as:
/s/ Marsha J. Pechman
All current and former citizens of
Marsha J. Pechman

Page 16 of 17
2018 U.S. Dist. LEXIS 6217, *31

United States District Judge

End of Document

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