Beth E. Terrell

Laura Zamora Jordan bought her house in Wenatchee in 2007 for $172,000 and secured the loan with a deed of trust. In January 2011 she fell behind on the payments. One evening that March she came home from work and could not get in. A vendor working for Nationstar Mortgage, the company that serviced her loan, had changed the lock on the front door, the only door with a key. A notice said the property had been found unsecure or vacant and had been secured against entry by unauthorized persons, and it gave a telephone number to call for the code to a lockbox. Jordan called, got the key, moved her belongings out the next day and did not come back. Nationstar had sent no notice of default and had begun no foreclosure.

Terrell, a founding member of Terrell Marshall Law Group in Seattle, had by then spent more than a decade bringing class actions for consumers and workers. She came to the law through the Northwest, at Gonzaga University and then at the University of California, Davis, and her docket ran from collection letters and defective car parts to unpaid wages. On April 3, 2012, Jordan sued Nationstar in Washington state court, for herself and for every Washington homeowner whose locks Nationstar had changed before a foreclosure sale. Terrell and her firm, with Clay Gatens's firm in Wenatchee, represented the class.

Nothing More Than a Lien

Nationstar's answer was in the deed of trust. Section 9, headed "Protection of Lender's Interest in the Property," said that if the borrower failed to perform her covenants or abandoned the property, the lender could do whatever was reasonable or appropriate to protect its interest, and that securing the property included "entering the Property to make repairs, change locks, replace or board up doors and windows." The same paragraph appears in the standard deed of trust used for residential loans, which is why Jordan's case was a class action: the vendor instructions, the inspection codes, the posted notices and the fees charged for "property preservation" work ran the same way on roughly 3,600 Washington homes.

Washington answered the deed with a statute. Under RCW 7.28.230, a mortgage of real property "shall not be deemed a conveyance so as to enable the owner of the mortgage to recover possession of the real property, without a foreclosure and sale according to law." Washington is a lien-theory state: the mortgage is security for a debt, and until a foreclosure and sale the borrower keeps possession. The federal court hearing the case asked the Washington Supreme Court whether a borrower and lender could contract around that rule, and whether the receivership statutes were a lender's only lawful way onto the property before foreclosure. On July 7, 2016, in an opinion by Justice Susan Owens, the court answered no to both questions. Changing the locks was taking possession. Rekeying the house "had the effect of communicating to Jordan that Nationstar now controlled the property," and a lockbox code available by telephone did not change who controlled the door. The entry provisions conflicted with Washington law and could not be enforced.

Seven Years, Four Courts

The ruling arrived four years into the case, which had already passed through three courts. The state court certified the class on May 9, 2014. On June 3, Jordan's lawyers answered an interrogatory by putting the class's damages above $25 million, and two days later Nationstar removed the case to federal court under the Class Action Fairness Act. The district court sent it back and awarded Jordan $16,886.76 in fees for the detour. On April 1, 2015, the Ninth Circuit reversed, holding that the time to remove under that Act runs from the day the ground for removal is first disclosed. The case came to rest in the Eastern District of Washington before Judge Thomas O. Rice, and it was from that court that the questions went to the state's high court.

In January 2018, with the Supreme Court's answer in hand, Judge Rice granted summary judgment for the class. The lock changes were trespasses and violated the Washington Consumer Protection Act, and each homeowner could recover the value of the destroyed lock and the fair rental value of the home for the time the servicer had kept them out of it. With liability decided, the parties settled in March 2019 for $17 million. Judge Rice gave final approval on May 3, 2019, calling the settlement an excellent result for the class, and payments ranging from $75 to $52,000 were set to go out to the homeowners that July.

Thirty-Nine Dollars and Sixty-Six Cents

Jordan's class held about 3,600 people. The Capital One class held about 17.5 million, and a class that size sets a different problem. Between January 18, 2008 and June 20, 2014, Capital One and the collection vendors working for it had called customers' cell phones with automatic dialers and prerecorded voices to collect credit-card debt, without the prior express consent the Telephone Consumer Protection Act requires. The suits were consolidated in the Northern District of Illinois, and in February 2013 the court appointed Terrell and Jonathan Selbin of Lieff Cabraser interim co-lead counsel.

The statute sets damages at $500 a call, and Judge James Holderman later calculated the minimum statutory damages on the calls at issue at more than $950 billion. Against that number stood Capital One's consent defenses and the Federal Communications Commission's unsettled rules on what an automatic dialer was. The settlement reached in June 2014 was $75,455,099. Judge Holderman approved it on February 12, 2015; of 17.5 million class members, fourteen had objected. More than 1.37 million people filed claims, and each received $39.66. Capital One also changed how it dialed. It agreed to autodial a customer's cell phone only when the customer had given that number on a credit application, and to leave a number alone unless it was linked to the customer's name or the customer had been reached at it within the past ninety days.

Terrell has chaired the Northwest Consumer Law Center and the Washington Employment Lawyers Association, served as president of the Public Justice Foundation's board, and co-chairs the Practising Law Institute's Consumer Financial Services Institute. In 2023 the National Consumer Law Center gave her its Vern Countryman Award.

Five Officers

In 2021, five Black officers of the University of Washington Police Department, Russell Ellis Jr., Gabriel Golden, Hamani Nowlen, Damien Taylor and Karinn Young, the only Black woman on the force, brought claims against the university for a hostile work environment and for retaliation. Terrell and her partner Toby Marshall represented them. The evidence included slurs used by supervisors and colleagues, a banana with a note left at Young's locker, and an officer's remark in 2020 that George Floyd had gotten what he deserved. After the suit was filed, a window at Nowlen's home was shot out, and Taylor reported that the brake lines on his car had been cut. The trial before Judge Wyman Yip in King County Superior Court began on October 23, 2023 and ran into December. On December 22 the jury returned a verdict of $16.7 million for the five officers, and post-trial relief brought the judgment to $25.5 million. Four of the five have left police work.

What a Lock Is Worth

The measure of damages Judge Rice set in January 2018 stated in two items what the Nationstar case had been about: the price of a lock, and the rent on a home for the weeks its owner was kept out of it. The notice on Laura Jordan's door had said the house was secured against unauthorized persons. Under the deed, the statute and the Supreme Court's reading of both, the only person entitled to hold that door before a foreclosure and sale was Jordan. She did not move back. The rule her case produced binds every servicer in Washington, and the 3,600 people it was brought for were paid.