Washington State Foreclosure Trustee Slammed For $98K+ Damages For "Extreme & Outrageous" Conduct In Jerking Around Financially Strapped Homeowner

A Federal Court of Appeals recently affirmed two lower court rulings slamming foreclosure trustee Jeff E. Jared for over $98,000 in damages for committing the tort of outrage in connection with his conduct in jerking around delinquent borrower/homeowner John P. Keahey when carrying his duties related to the Washington State public sale process.

From the ruling (footnotes appearing in the original text omitted; bold text is my emphasis; other emphasis and alterations are contained in the original text):

I. “Extreme and Outrageous” Conduct

• The tort of outrage requires the proof of three elements: (1) extreme and outrageous conduct, (2) intentional or reckless infliction of emotional distress, and (3) actual result to the plaintiff of severe emotional distress. See Kloepfel v. Bokor, 66 P.3d 630, 632 (Wash. 2003) (en banc).
  
  Jared contends that the first element was not established. He does not contest the underlying factual findings of the bankruptcy court, but argues that those facts do not support the court’s finding that Jared’s conduct was “extreme and outrageous.” We reject his contention.
  
  The bankruptcy court based its finding of outrageousness on numerous misdeeds committed by Jared in the attempted foreclosure proceedings, including the following:
  
  Jared “had no idea how to conduct a non-judicial foreclosure sale[,] . . . did just about everything wrong,” and “signaled to Mr. Keahey with each and every communication that Mr. Keahey would never be able to keep his house.”
  
  Jared stipulated to having breached his fiduciary duty to Keahey as a trustee under Washington’s Deed of Trust Act (the “DOTA”). See Wash. Rev. Code Ann. §§ 61.24.010(4).
  
  Although “there was no . . . interest due under the note,” Jared demanded a 10 percent interest charge, amounting at first to $36,000—a “huge amount[] to people like Keahey.” He likewise demanded payment for incorrect and excessive property tax, insurance, and utility charges.
  
  Jared arranged for the foreclosure sale to take place in the parking lot of his condominium, rather than a public place, as required by the DOTA. Jared later testified that he opted for the parking lot because he “was going to personalize it, make it nice for the bidders, . . . [to] boutiquify it.”
  
  Even “[w]hen the claimed defaults were cured, Mr. Jared immediately claimed new defaults entitling him to restart the foreclosure process and charge additional fees and costs for his own benefit.” By continually and unjustifiably varying the amount of debt owed, he unjustly prevented Keahey from exercising the right to cure for a period of three years.
  
  On this record, we conclude that “reasonable minds (such as the one exercised by the trial judge) could conclude that, in light of the severity and context of the conduct, [the defendant’s conduct] was beyond all possible bounds of decency, . . . atrocious and utterly intolerable in a civilized community.” Robel v. Roundup Corp., 59 P.3d 611, 620 (Wash. 2002) (emphasis original) (internal quotation marks and citations omitted). We therefore affirm the finding of outrageousness.

For the ruling, see Jared v. Keahey (in re Keahey), No. 09-60000 (9th Cir., Jan. 31, 2011) (unpublished).

Thanks to Deontos for the heads-up on this court ruling.