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75 limitation period during which a creditor may enforce the deed of trust." However, these two statements are incongruous. e triggering of the statutory limitation period on an entire debt is done through maturity or acceleration, and as the court in Edmundson noted, "(u) nder the plain terms of the deed of trust, (acceleration) is an option to be exercised by the lender, not something triggered by events in bankruptcy proceedings." is "it is not an acceleration" but "does start the six-year statute of limitations clock" rationale is what was so baffling to those watching these cases unfold. Even if one argued that it was not an acceleration of the debt, but instead an early maturity, that argument fails to cure the fault in the logic. An early maturity, under well settled law, only occurs through acceleration … by the lender. e lender in Luv petitioned the Washington State Supreme Court for review, but on January 5, 2022, they refused to review the issue. With this denial, we thought the Edmundson dicta was solidified as law, at least for a little while. DIVISION I REVERSES COURSE: COPPER CREEK V. WILMINGTON SAVINGS FUND SOCIETY In an unexpected move, Division I issued a published opinion in Copper Creek Homeowners Association v. Wilmington Savings Fund Society. Authoring the decision, the presiding Chief Judge Marlin J. Appelwick, effectively overturned all of the decisions stemming from Edmundson that relied upon the misinterpretation creating the bankruptcy discharge acceleration. Referring to the lower court's reliance upon Edmundson to determine that the statute of limitations runs from the last payment due prior to discharge, the court states "[t] his was error. Edmundson did not establish such rule. No Washington Supreme Court has established such a rule. It is not the law in Washington. e federal cases, which are the source of that interpretation of Edmundson, are in error. To the extent that unpublished state appellate cases have repeated the federal interpretation, they are also in error." e court reiterated multiple times that Edmundson did not create new law. ey bolster this by pointing to the fact that the court in Edmundson did not discuss or review the policy implications of creating such a broad rule. "e important point is that we undertook no such policy analysis in Edmundson as would have been expected when announcing a new rule." With this decision, it seems as though lenders in Washington can breathe a sigh of relief. However, there is still the possibility that either the Court of Appeals or the Washington State Supreme Court could review the issue again. OTHER STATES, TAKE NOTE In the wake of Edmundson and Jarvis, borrowers in other states have taken the opportunity to use the now overturned bankruptcy discharge acceleration theory to their advantage. So far, some courts in Colorado and Nevada have accepted the theory to the detriment of lenders. Colorado: In Silvernagel v. U.S. Bank, the Colorado Court of Appeals unequivocally accepted Jarvis. Relying entirely on Edmundson and Jarvis, the court stated that "(t)he division concludes that the discharge in bankruptcy of a borrower's personal liability on a debt commences the six-year limitations period during which the bank may foreclose on the deed given as security for the debt." Nevada: In Ramanathan v. Bank of N.Y. Mellon, the United States District Court of Nevada considered the effect of a bankruptcy discharge on both judicial and non-judicial options for recovery and split their opinion, relying on Jarvis for one. In the context of judicial foreclosure only, the court accepted Jarvis in reasoning that the ability to commence a judicial foreclosure accrued when the debtor was discharged or the court lifted the bankruptcy stay because "(a)t that point, BONY knew or should have known that it had six years to pursue a judicial foreclosure based on the breach of the note and deed of trust." While this is not precedential, as we have learned from Silvers and Jarvis, a district court ruling can take on a life of its own. Arizona: In Diaz v. BBVA, Division II of the Arizona Court of Appeals refused to follow Jarvis based upon the lack of bankruptcy code authority modifying the effect of the discharge, and Jarvis' non-precedential value in light of already established Arizona case law. Quoting its decision in Stewart v. Underwood, the court in Diaz stated, "there is (no) indication that Congress intended the bankruptcy discharge to interfere with state statute of limitation. In fact, … the intent was to recognize the continued existence of the debt for purposes not inconsistent with the discharge of personal liability." A similar matter, Luu v. Rez, is pending before Division I. As of this writing, Luu has not been decided but is fully briefed and under advisement as of November 10, 2021. Hopefully, a supplemental briefing apprising the court of the decision in Copper Creek will be submitted so that the issue can be resolved quickly. WHAT NEXT? e takeaway of Edmundson, Luv, and ultimately Copper Creek is that the law is never certain. To limit future issues that could arise from aged loans, lenders should enforce defaults as soon as possible where practical. If there is an issue preventing the loan from being placed into the standard foreclosure process, escalate! Whether it is a lost note, title issue, tribal land, deceased borrower, etc., discussing your options with counsel well before the statute of limitations becomes an issue will reduce exposure stemming from aged loans. Disclaimer: e above information is intended for information purposes alone and is not intended as legal advice. Please consult with counsel before taking any steps in reliance on any of the information contained herein. Laura N. Coughlin is the Managing Attorney of Wright, Finlay & Zak, LLP's Pacific Northwest Operations. She may be reached by e-mail at lcoughlin@wrightlegal.net. Robert Finlay is one of the three founding partners of Wright, Finlay & Zak. Since 1994, Finlay has focused his legal career on consumer credit, business, and real estate litigation and has extensive experience with trials, mediations, arbitrations, and appeals. Finlay is at the forefront of the mortgage banking industry, handling all aspects of the ever-changing default servicing and mortgage banking litigation arena, including compliance issues for servicers, lenders, investors, title companies, and foreclosure trustees.

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