Sean Park v. Lehman Brothers Bank , 694 F. App'x 602 ( 2017 )

FILED
NOT FOR PUBLICATION
AUG 03 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
SEAN MICHAEL PARK, pro se; No. 11-55473
MICHELLE PARK,
D.C. No.
Plaintiffs-Appellants, 3:10-cv-02692-IEG-WVG
v.
MEMORANDUM*
LEHMAN BROTHERS BANK, FSB;
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.;
AURORA LOAN SERVICES,
Defendants-Appellees.
SEAN MICHAEL PARK, pro se; No. 12-56450
MICHELLE PARK,
D.C. No.
Plaintiffs-Appellants, 3:10-cv-02692-IEG-RBB
v.
QUALITY LOAN SERVICE
CORPORATION,
Defendant-Appellee.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
page 2
Appeal from the United States District Court
for the Southern District of California
Irma E. Gonzalez, District Judge, Presiding
Argued and Submitted June 5, 2015
Pasadena, California
Before: KOZINSKI and CALLAHAN, Circuit Judges, and KORMAN,**
District Judge.
1. Res judicata “bars . . . any claims that were raised or could have been
raised in the prior action.” Owens v. Kaiser Found. Health Plan, Inc., 244 F.3d
708, 713 (9th Cir. 2001) (citation and internal quotation marks omitted).
Therefore, the Parks’ claim under the Fair Debt Collection Practices Act (FDCPA)
survives res judicata only to the extent it is based on allegations relating to the
October 2010 notice of sale, which couldn’t have been raised in the Parks’ August
2010 complaint.
2. Mortgage Electronic Registration Systems, Inc. (MERS), the nominal
beneficiary of the mortgage, is not in a “business the principal purpose of which is
the collection of any debts,” nor is it an entity that “regularly collects or attempts to
collect” debts “due [to] another.” 15 U.S.C. § 1692a(6). Therefore, MERS isn’t a
“debt collector” under the FDCPA.
**
The Honorable Edward R. Korman, United States District Judge for
the Eastern District of New York, sitting by designation.
page 3
3. According to the Parks’ complaint, Aurora Loan Services LLC (Aurora)
had been servicing the mortgage since its origination. Because the FDCPA
exempts from its definition of “debt collector” any person “collecting . . . a debt
which was not in default at the time it was obtained,” 15 U.S.C. § 1692a(6)(F)(iii),
Aurora cannot be held liable under the FDCPA.
4. A trustee of a California deed of trust is generally not a “debt collector”
under the FDCPA. See Ho v. ReconTrust Co., NA, 858 F.3d 568, 572–73 (9th Cir.
2016). Quality Loan Service Corporation (Quality) may be a debt collector for the
limited purpose of section 1692f(6), but the Parks didn’t allege that Quality
violated this section. See id. Thus, the district court properly dismissed the
FDCPA claim against Quality.
5. Although a creditor may constitute a “debt collector,” 15 U.S.C.
§ 1692a(6), Lehman Brothers Banks, FSB cannot be held liable under the FDCPA
because there is no allegation of debt collection, see id. § 1692e. The Parks allege
that defendants misrepresented the amount they owed in the October 2010 notice
of sale. But “actions taken to facilitate a non-judicial foreclosure, such as sending
the notice of default and notice of sale, are not attempts to collect ‘debt’ as that
term is defined by the FDCPA.” Ho, 858 F.3d at 572.
page 4
6. Although the Parks’ complaint makes passing references to the Real
Estate Settlement Procedure Act (RESPA), the Truth in Lending Act (TILA), the
Home Ownership and Equity Protection Act (HOEPA), it asserts only one cause of
action arising under federal law: a violation of the FDCPA. Even under a liberal
construction of the pro-se complaint, the complaint didn’t “give fair notice and
state the elements of the [RESPA, TILA and HOEPA] claim[s] plainly and
succinctly.” Jones v. Cmty. Redevelopment Agency, 733 F.2d 646, 649 (9th Cir.
1984) (internal quotation marks and alterations omitted); see Fed. R. Civ. P. 8(a).
7. Nor did the Parks’ complaint give “fair notice” of their claims under the
U.S. Constitution. Jones, 733 F.2d at 649. Even if it had, the Parks’ constitutional
claims would have failed because a non-judicial foreclosure conducted pursuant to
a deed of trust is not state action and therefore cannot give rise to due process
claims under the Fifth and Fourteenth Amendments. See Apao v. Bank of N.Y.,
324 F.3d 1091, 1095 (9th Cir. 2003).
8. Because the district court dismissed the Parks’ FDCPA claim, the only
claim over which the court had original jurisdiction, it properly declined to
exercise supplemental jurisdiction over the Parks’ state claims. See Gini v. Las
Vegas Metro. Police Dep’t, 40 F.3d 1041, 1046 (9th Cir. 1994).
page 5
AFFIRMED.