## Facts

- Paul Plein, Bruce White, and Lee Cameron formed Alpen Group, Inc. to buy and sell real estate.
- Alpen bought property using a $75,000 promissory note payable to Sunset Investments, secured by a deed of trust; Cameron and others signed the note both in corporate capacities and individually.
- Alpen also borrowed $136,500 from Columbia State Bank, secured by a separate deed of trust; Sunset subordinated its deed of trust to Columbia’s.
- Alpen incurred additional debts: Cameron advanced $30,000; trade creditors were owed about $45,000 and received deeds of trust securing their claims.
- After internal control shifted, Alpen issued a promissory note and deed of trust to secure Cameron’s $30,000 advance; Plein later became a junior judgment creditor after obtaining a $45,000 judgment against Alpen.
- When the Columbia note came due, Cameron paid it from personal funds and received an endorsed note and an assignment of Columbia’s deed of trust.
- Cameron later paid the Sunset note and received an endorsement of the note and an assignment of Sunset’s deed of trust, leaving him holding the senior security interests by assignment.
- Acting as assignee of the Sunset note, Cameron retained attorney Chester Lackey to commence a nonjudicial foreclosure under the assigned deed of trust due to Alpen’s default.
- Plein and trade creditors sued to stop the trustee’s sale and sought a declaration that the Sunset deed of trust was void on the theory that Cameron’s payment extinguished the underlying debt.
- Plein moved for summary judgment asserting Cameron paid on Alpen’s behalf and therefore could not foreclose; the superior court entered summary judgment for Cameron, the court of appeals reversed, and the state supreme court granted review.

## Issues

1. Whether Cameron qualified as an “accommodation party” on the Sunset note and, after paying it, could enforce the note and foreclose under the assigned deed of trust.
2. Whether failure to obtain a preliminary injunction or restraining order stopping the trustee’s sale before it occurred waived the right to later contest the foreclosure’s validity under the Deed of Trust Act.

## Decision

- The court reversed the court of appeals and reinstated summary judgment for Cameron.
- Cameron was an accommodation party on the Sunset note; after paying it, he was subrogated to the payee’s rights and could enforce the instrument and foreclose the assigned deed of trust.
- Plein and the trade creditors waived any right to contest the foreclosure’s validity by failing to obtain a pre-sale injunction or restraining order barring the nonjudicial sale.

## Legal Principles

- A signer who lends credit to the maker, receives no direct benefit from the instrument’s proceeds, and is necessary to obtain the loan may be treated as an accommodation party.
- When an accommodation party pays the instrument, the party is entitled to reimbursement and subrogation to the holder’s rights, and may enforce the note and related security interests obtained by endorsement and assignment.
- Under Washington’s Deed of Trust Act, a party with notice of a scheduled trustee’s sale must timely seek and obtain judicial restraint of the sale; failure to do so generally waives later challenges to the sale’s validity.

## Conclusion

The court held that an accommodation signer who pays a corporate note and takes an endorsement and assignment may enforce the note and foreclose the deed of trust, and that creditors who do not secure a pre-sale order stopping a trustee’s sale waive post-sale attacks on the foreclosure.


Plein v. Lackey, 149 Wash. 2d 214, 67 P.3d 1061 (Wash. 2003)