NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ALFREDO HERNANDEZ; GRACIELA HERNANDEZ,

Plaintiffs

- Appellants,

v.
SPECIALIZED LOAN SERVICING LLC; et al.,

Defendants

- Appellees,

and

EXPERIAN INFORMATION SOLUTIONS, INC.; et al.,

Defendants. No. 19

- 55163

D.C. No. 2:17

- cv

- 04294

- GW

- JEM

MEMORANDUM *

ALFREDO HERNANDEZ,

Plaintiff

- Appellant,

v.
BAYVIEW LOAN SERVICING, LLC; et al.,

Defendants

- Appellees. No. 19

- 56313

D.C. No. 2:19

- cv

- 01237

- GW

- JEM

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36

- 3. 

# FILED

NOV 17 2020

MOLLY C. DWYER, CLERK U.S. COURT OF APPEALSPage 2 of 6

Appeal from the United States District Court for the Central District of California George H. Wu, District Judge, Presiding

Submitted November 13, 2020 * * Pasadena, California
Before: CHRISTEN and WATFORD, Circuit Judges, and ROSENTHAL, ** * District Judge.
The district court properly granted summary judgment to defendants
Specialized Loan Servicing (SLS), Five Brothers, an d Standard Field Services
(SFS) on the plaintiffs’ Fair Debt Collection Practices Act (FDCPA) claims, and to

SLS on the plaintiffs’ Fair Credit Reporting Act (FCRA) claims. The district court
also properly dismissed the claims against Bayview Loan Servici ng and Bank of
New York Mellon (BoNYM) and granted judgment on the pleadings to Equifax
and Experian on claim and issue preclusion grounds.

1. The district court correctly held that the plaintiffs ’ FDCPA claim against

SLS was time

- barred. The FDCPA req uires that a plaintiff bring his action within

one year of the date on which the alleged violation occur red

. 15 U.S.C.

§ 1 6 92k( d ); Rotkiske v. Klemm , 140 S. Ct. 355, 358 (2019). The last time SLS

** The panel unanimously concludes this case is suitable for decision without oral argument. See Fed. R. App. P. 34(a)(2).

*** The Honorable Lee H. Rosenthal, Chief United States District Judge for the Southern District of Texas, sitting by designation.Page 3 of 6

reported the plaintiffs’ delinquent loan to the credit rep orting agencies was in
November 2013, after which point it stopped servicing the loan. Thus, the very

latest a violation could have occurred was November 2013. The plaintiffs did not
bring their claim until 2017.

2. The district court also correctly h eld that
, for purposes of all of plaintiffs’
FDCPA claims except their claim under § 1692f(6), Five Brothers and SFS are not

“debt collectors

. ” The statute defines “debt collector” as any person whose
“principal purpose

. . . is the collection of any debts, or who regularly collects or
attempts to collect

. . . debts owed or due.” 15 U.S.C. § 1692a (6). This court has
held that attempts to facili tate a non

- judicial foreclosure do not qualify as attempts

to collect debt. Ho v. ReconTrust Co., NA , 858 F.3d 568, 5 7 1

– 7 2 (9th Cir. 201 6 ).

Five Brothers is principally a property preservation company, an d its posting of
door hangers asking the plaintiff s to contact Ditech cannot be construed as
“regular []

. . . attempts to collect” debts. 15 U.S.C. § 1 6 92a(6). And SFS simply
uses software to broker inspections and send Five Brothers’ work orders to
independent contractor inspectors.

3. The FDCPA pro vides that
, for purposes of § 1692f(6), the term “debt
collector” also includes any person whose principal purpose is “the enforcement of
security interests.” 15 U.S.C. § 1692a (6) . It is debatable whether Five BrothersPage 4 of 6

and SFS qualify as debt collectors for purposes of § 1692f(6)
, but the district court
correctly concluded that
, even if they do, they did not violate the statute.
Under § 1692f(6), it is a violation of the Act to take or threaten to take “any
nonjudicial action to effect dispossession or disablement of property” if there is

“ no present right to possession of the property claimed as collateral through an
enforceable security interest.” 15 U.S.C. § 1692f(6). The di strict court correctly

determined that Five Brothers and SFS did not violate this provision because

Ditech

— on whose behalf Five Brothers and SFS were working

— had a “present
right to possession of the property.” The plaintiff s argue that Ditech had no righ t
to possess their home because they were current on their loan. But t his argument is
dependent on the plaintiff s’ contention that the Loan Modification Agreement they
entered into with Bank of America capitalized their escrow balance

. T he plain
language of the A greement establishes that the escrow balance was not capitalized.

The A greement stated that the new principal loan amount “may include

. . . escrow
payments,” but only if the parties so agreed. There was no such agreement. Other
portions of the Loan Modification Agreement and accompanying offer letter
confirm that the escrow balance was not capitalized. Thus, the plaintiffs had an
obligation to pay escrow as part of their monthly payments; they failed to do so

and became delinquent on their loa n , as admitted by their own expert. TheirPage 5 of 6

delinquency gave Ditech a “present right to possession of the property. ” 15 U.S.C.

§ 1692f(6).

4. As to the FCRA claims, plaintiffs failed to e stablish that SLS neglected

its duty to conduct reasonable investiga tion s of the dispute notices it received from
the credit reporting agencies (CRAs)

. SLS ha d standard procedures in place

— involving review of payment history, account status, etc.

— to ensure that all credit
disputes were investigated in accordance with the requirements of the FCRA.
Nothing in the record indicates that SLS neglected to apply those procedures to the
plaintiff s’ disputes

. The plaintiffs object that SLS should have con ducted an audit

of Bank of America’s ori ginal payment records and the Loan Modification
Agreement. But the reasonableness of SLS’s investigation s is evaluated in light of

“what it learned about the nature of the dispute from the description in the CRA’s
notice of dispute.” Gorman v. Wolpoff & Abramson, LLP , 584 F.3d 1147, 1157
(9th Cir. 2009). None of the dispute notices explained the plaintiff s’ theory that
the Loan Modification Agreement had capitalized their escrow balance

— rather,
they stated in generic terms that the plaintiff s were contes ting an “incorrectly
reported delinquent amount” or an “erroneous balance.” SLS’ s investigation s w ere
reasonable in light of the se generic dispute notices

.
5. Finally, with regard to Alfredo Hernandez’s second lawsuit, the district
court properly dismis sed the claims against Bayview and BoNYM on claim andPage 6 of 6

issue preclusion grounds. It also properly granted judgment on the pleadings to
Equifax and Experian on issue preclusion grounds. On appeal, Hernandez does not
challenge the district court’s application of these preclusion doctrines. He merely
argues that if this court were to reverse the district court’s judgment in the first

case, it should do so as well in the second case because preclusion would no longer
apply. Given that we affirm the judgment i n the first action, we affirm the
judgment in the second action as well.

AFFIRMED.