FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

RICHARD S. GALE, 

Plaintiff-Appellant,

v.

FIRST FRANKLIN LOAN SERVICES, No. 09-16498

subsidiary of First Franklin

D.C. No. Financial Corporation; FIRST  2:08-cv-01615- FRANKLIN FINANCIAL CORPORATION;

M RCJ-PAL ORTGAGE ELECTRONIC

REGISTRATION SYSTEMS, INC.; CAL- OPINION

WESTERN RECONVEYANCE

CORPORATION; LASALLE BANK

NATIONAL ASSOCIATION,

Defendants-Appellees. 

Appeal from the United States District Court

for the District of Nevada

Robert Clive Jones, Chief District Judge, Presiding

Argued and Submitted

May 14, 2012—San Francisco, California

Filed July 12, 2012

Before: Sidney R. Thomas, M. Margaret McKeown, and

William A. Fletcher, Circuit Judges.

Opinion by Judge McKeown

8053
COUNSEL

Michael Rubin, Jennifer Sung, ALTSHULER BERZON LLP,

San Francisco, California, for the plaintiff-appellant.

Peter Dunkley, WOLFE & WYMAN LLP, Las Vegas,

Nevada, for defendants-appellees.

OPINION

McKEOWN, Circuit Judge:

Failing to read and respond to letters may be impolite; however, “a breach of good manners” is not always “an invasion

of any legal right.” Spaulding v. Evenson, 149 F. 913, 920

(C.C.E.D. Wa. 1906). Richard Gale faults his lender, First

Franklin Loan Services (“Franklin”), for failing to respond to

his correspondence regarding ownership of his loan, and

alleges that this failure amounted to a violation of the Truth

in Lending Act (“TILA”), and Nevada’s covenant of good

faith and fair dealing. Because Franklin was not legally

required to respond in its capacity as loan servicer, we affirm

the district court’s dismissal of these claims. However, Gale

also alleges that after failing to respond to his letter, Franklin

and the other defendants engaged in illegal conduct by wrongGALE v. FIRST FRANKLIN LOAN SERVICES 8055
fully foreclosing on his property. We remand these remaining

state law claims to the district court.

BACKGROUND

In November 2006, Gale refinanced his home mortgage

loan with Franklin, and signed a promissory note. Franklin

was both the creditor and servicer for the loan. A deed of trust

on Gale’s residence in Las Vegas secured the loan. The deed

designated Mortgage Electronic Registration Systems, Inc.

(“MERS”) as the trust beneficiary, “acting solely as a nominee for [Franklin] . . . . ,” and Service Link as the trustee. 

By June 2008, Gale had lost his job, defaulted on the loan,

and was facing financial difficulties. In a bid to renegotiate

his loan, he sent a letter to Franklin in June, explaining his

predicament, his resolve to pay the amount due, and suggesting possible solutions. However, to ensure that he was courting the right audience, he also asked that Franklin, “in

accordance with [TILA,] 15 U.S.C. § 1641(f)(2) . . . provide

the name and address of the true owner of the obligation or

holder [of his promissory note]; the original note and indicate

[First Franklin’s] relationship to this entity,” to protect himself from collection efforts by a third party. Gale received no

response to his initial letter, and wrote again in August 2008.

Franklin remained resolutely silent, no renegotiations took

place, and Gale continued to fall behind on his loan payments.

As it turned out, Gale’s loan was the subject of much activity. In August 2008, beneficiary MERS substituted defendant

Cal-Western in place of Service Link as trustee of Gale’s deed

of trust, and together with Cal-Western initiated non-judicial

foreclosure proceedings on Gale’s residence. Later that

month, MERS assigned “all beneficial interest” to “LaSalle

Bank as trustee for the First Franklin Mortgage Loan Trust.”

Finally, in November 2008, Cal-Western recorded a Notice of

Trustee’s Sale of Gale’s home. 

8056 GALE v. FIRST FRANKLIN LOAN SERVICES
Gale filed suit against all the actors involved—Franklin,

MERS, Cal-Western and LaSalle Bank—alleging violations

of TILA, seeking injunctive relief against foreclosure, and

claiming breach of contract, failure to act in good faith, and

wrongful foreclosure under Nevada law. The district court

dismissed Gale’s Nevada law claims with prejudice, but permitted Gale to amend his Complaint as to TILA. Gale’s First

Amended Complaint set out his TILA claims more specifically, and claimed a breach of the covenant of good faith and

fair dealing. Gale also alleged that Cal-Western violated its

duty under the Real Estate Settlement Procedures Act

(“RESPA”), 12 U.S.C. § 2605, to respond to his qualified

written request for information. The court dismissed the

amended complaint without leave to amend.1

ANALYSIS

Gale’s suit focuses on two alleged wrongs: Franklin’s failure to reply to his letter, and the foreclosure proceedings on

his home. His federal claims target only Franklin’s failure to

respond; his state claims target both the failure to respond and

the foreclosure. 

I. Federal Claims

[1] In his initial letter to Franklin and again in his amended

complaint, Gale claims that Franklin violated TILA, 15

U.S.C. § 1641(f)(2), which provides in relevant part: “Upon

written request by the obligor, the servicer shall provide the

obligor, to the best knowledge of the servicer, with the name,

address, and telephone number of the owner of the obligation

or the master servicer of the obligation.” Gale’s argument is

simple: Franklin was his loan servicer, and under the plain

language of the statute, was obliged to respond to his inquiry.

1Although the order did not specify whether the court was granting dismissal, summary judgment, or both, the final judgment reflects that the

district court granted “Defendants’ Motion to Dismiss.” 

GALE v. FIRST FRANKLIN LOAN SERVICES 8057
Gale’s argument has surface appeal if we take a blindered

view of the statute and read the language he highlights in isolation. However, “we start with the premise that ‘the words of

a statute must be read in their context and with a view to their

place in the overall statutory scheme.’ ” Am. Bankers Ass’n v.

Gould, 412 F.3d 1081, 1086 (9th Cir. 2005) (quoting Food &

Drug Admin. v. Brown & Williamson Tobacco Corp., 529

U.S. 120, 133 (2000)). Our goal is to “understand the statute

‘as a symmetrical and coherent regulatory scheme’ and to ‘fit,

if possible, all parts into a . . . harmonious whole.’ ” Id. (quoting Brown & Williamson, 529 U.S. at 133). Gale places

emphasis on the final sentence of § 1641(f)(2), but the context

of the sentence within subsection (f), and within § 1641 as a

whole, indicates that liability for failing to respond attaches

only to those servicers who are also assignees of the loan.

Because Franklin was not an assignee of the loan, but rather

the original creditor, Gale’s claim fails. 

[2] Consistent with basic principles of statutory interpretation, we step back to examine § 1641 as a whole before focusing on paragraph (f)(2). Section 1641 does not address the

liability of creditors in general; rather each of § 1641’s subsections address entities who are purchasers or assignees of

mortgages. See, e.g., § 1641(a) (A “civil action for a violation

. . . may be maintained against any assignee . . . only if the

violation . . . is apparent on the face of the disclosure statement, except where the assignment was involuntary.”);

§ 1641(b) (concerning statutory compliance by a “subsequent

assignee of the original creditor”); § 1641(c) (“Any consumer

who has the right to rescind a transaction . . . may rescind the

transaction as against any assignee of the obligation.”);

§ 1641(d)(1) (“Any person who purchases or is otherwise

assigned a mortgage . . . shall be subject to all claims and

defenses with respect to that mortgage.”). Subsection (f), the

final subsection of § 1641 at the time Gale’s action accrued,

is no exception.2 Although it concerns servicers in particular,

2

In 2009, Congress added subsection (g), which continues the pattern,

and requires that “not later than 30 days after the date on which a mort8058 GALE v. FIRST FRANKLIN LOAN SERVICES
these servicers, like the other entities regulated by § 1641, are

also assignees: 

(f) Treatment of servicer

(1) In general

A servicer of a consumer obligation arising from a

consumer credit transaction shall not be treated as an

assignee of such obligation for purposes of this section unless the servicer is or was the owner of the

obligation.

(2) Servicer not treated as owner on basis of assignment for administrative convenience

A servicer of a consumer obligation arising from a

consumer credit transaction shall not be treated as

the owner of the obligation for purposes of this section on the basis of an assignment of the obligation

from the creditor or another assignee to the servicer

solely for the administrative convenience of the servicer in servicing the obligation. Upon written

request by the obligor, the servicer shall provide the

obligor, to the best knowledge of the servicer, with

the name, address, and telephone number of the

owner of the obligation or the master servicer of the

obligation.

Subsection (f), in keeping with the theme of § 1641 as a

whole, and the other subsections of § 1641, addresses only the

assignee liability of a servicer, and sets out a general rule that

gage loan is sold or otherwise transferred or assigned to a third party, the

creditor that is the new owner or assignee of the debt shall notify the borrower in writing of such transfer . . . .” The Helping Families Save Their

Homes Act of 2009, Pub. L. No. 111-22, § 404(g), 123 Stat. 1632, 1658

(2009). 

GALE v. FIRST FRANKLIN LOAN SERVICES 8059
a servicer must be the assignee-owner of the obligation to

incur assignee liability. As the House Report for the TILA

amendments that added subsection (f) explained, “A number

of recent consumer lawsuits against mortgage loan servicers

have claimed the servicer is an assignee of the creditor who

made the loan and is therefore liable . . . . This provision clarifies that the loan servicer (the entity collecting payments from

the consumer and otherwise administering the loan) is not an

‘assignee’ under the TILA unless the servicer is the owner of

the loan obligation.” H. R. Rep. No. 104-193, at 99 (1995). 

However, Congress did not intend that all servicers who

owned loans would be liable as assignees. Paragraph (f)(2)

carves out an exception to the general rule of paragraph (f)(1),

so that servicers who are merely nominal assignees (that is,

when a servicer is assigned ownership of the loan solely for

“administrative convenience”) would not be liable on the

same basis as actual owners of the loan. The paragraph ends

with the sentence that is the basis of Gale’s claim, which

places on “the servicer” the duty to respond to correspondence from the consumer. 

Read in this context, our analysis of this last sentence is

straightforward. As a logical matter, it would be anomalous

for Congress to randomly impose a duty on servicers in general in a section otherwise completely devoted to describing

the duties of assignees, and more critically, in a subsection

that pertains only to servicer-assignees. 

Close scrutiny of paragraph f(2) supports the same reading.

The paragraph begins by addressing the duties of “[a] servicer

of a consumer obligation.” The next sentence, on which Gale

states his claim, imposes a duty to respond not upon “a” servicer, or “any” servicer, but rather, states that “the servicer

shall provide the obligor, to the best knowledge of the servicer, with the name, address, and telephone number of the

owner.” (Emphasis added.) “In construing [a] statute, [the]

definite article ‘the’ particularizes the subject which it pre8060 GALE v. FIRST FRANKLIN LOAN SERVICES
cedes and is [a] word of limitation as opposed to [the] indefinite or generalizing force [of] ‘a’ or ‘an.’ ” Onink v.

Cardelucci (In re Cardelucci), 285 F.3d 1231, 1234 (9th Cir.

2002) (quoting Black’s Law Dictionary 1477 (6th ed. 1990)).

The use of the definite article in referring to the servicer only

makes sense by reference to the preceding sentence of paragraph (f)(2), which relates to “[a] servicer of a consumer obligation” who is a nominal owner “on the basis of an

assignment of the obligation” for “administrative convenience.” (Emphases added.) Such a servicer escapes liability

because it is only a nominal owner of the note, but must still

respond to an obligor seeking information as to the true owner

of the note. 

[3] In short, reading the statute as a whole and with respect

to the subsection at issue brings us to the same conclusion: the

duty to provide notice under § 1641(f)(2) applies only to a

servicer-assignee, which in this case does not include Franklin. 

Gale argues for the first time on appeal that Franklin violated RESPA. Although pro se plaintiffs “need not plead specific legal theories in the complaint,” we require that “the

other side receive[ ] notice as to what is at issue in the case”

against it. Sagana v. Tenorio, 384 F.3d 731, 736-37 (9th Cir.

2004) (internal quotation marks and citation omitted). Gale

did not merely fail to plead a RESPA claim against Franklin,

but advanced a RESPA claim against a different defendant,

Cal-Western. We therefore decline to consider the RESPA

claim. See In re Am. W. Airlines, Inc., 217 F.3d 1161, 1165

(9th Cir. 2000).

[4] We are not unsympathetic to the frustration that

resulted from Franklin’s failure to respond to Gale’s inquiry

regarding his home. The servicer is often the only entity that

the consumer is in contact with after the loan issues—unless

the servicer is forthcoming, the homeowner may not know

with whom to negotiate to stave off foreclosure and loss of his

GALE v. FIRST FRANKLIN LOAN SERVICES 8061
abode. Although Congress recognized the importance of such

information after Gale’s claim accrued, see Dodd-Frank Wall

Street Reform and Consumer Protection Act, Pub. L. No. 111-

203, § 1463, 124 Stat. 1376, 2182 (2010) (amending RESPA

to require all servicers to respond to requests for information),

Gale cannot claim liability under this provision and we affirm

dismissal of his claims arising from Franklin’s failure to

respond. 

II. Nevada State Law Claims

Gale also advances numerous state law claims. The first

claim again arises out of Franklin’s failure to respond, which,

Gale alleges, violated the covenant of good faith and fair dealing. The remaining claims arise out of the actual foreclosure

action against Gale. Gale argues that MERS and LaSalle

wrongfully began foreclosure proceedings, and Cal-Western

breached its duty to act in good faith and its fiduciary duties

in proceeding with the foreclosure. The district court dismissed these claims. 

[5] To state a claim for breach of the covenant of good

faith and fair dealing under Nevada law, Gale must show that

Franklin acted in an “arbitrary or unfair” way “to the disadvantage of the” plaintiff. Nelson v. Heer, 163 P.3d 420, 426-

27 (Nev. 2007). Failing to respond to correspondence in this

context hardly qualifies as “arbitrary or unfair.” The rule Gale

proposes would require contracting parties to respond to correspondence on the pain of legal penalty. In the absence of an

express contractual provision to the contrary, we cannot hold

Franklin to such a standard. 

Gale points us to Mitchell v. Bailey & Selover, Inc., which

involved a contract for transportation and storage of property

that gave the bailee “the right to sell [a customer’s] property

if, in the company’s opinion, such action was necessary to

protect its accrued charges.” 605 P.2d 1138, 1139 (Nev.

1980). Although Mitchell contacted the bailee and provided

8062 GALE v. FIRST FRANKLIN LOAN SERVICES
evidence that she was owed social security payments that

would allow her to pay the debt, the bailee sold her property

nonetheless. Because the bailee “knew that [Mitchell’s]

inability to pay her debt might soon be remedied, and in fact

was remedied,” an issue of fact remained as to whether it

could have, as provided by the contract, formed an “opinion”

“that a sale . . . was necessary to protect its accrued charges.”

Id. Without a good faith belief that a sale was necessary, the

bailee could not sell the property. 

[6] By contrast, under Gale’s contract, default automatically provides the right of foreclosure, whether or not the

holder of the note and mortgage believes that the default

might be remedied. The holder need form no opinion, in good

faith or otherwise, as to whether its investment is safe, before

it may proceed. Mitchell is therefore inapplicable, and we

affirm the district court’s dismissal of this claim. 

[7] Before the district court, Gale invoked Nev. Rev. Stat.

§ 104. That section does not pertain to non-judicial foreclosures, although Gale also claimed inadequacy in the actual

foreclosure process, including lack of ownership of the note.

With the benefit of appointed counsel, Gale’s wrongful foreclosure and related breach of fiduciary duty claims have been

refined on appeal. The district court did not have the opportunity to consider Nevada case law and statutory provisions that

Gale now uses to bolster the claims advanced below. Nonetheless, at this stage, Gale has no remaining federal claims.

We therefore vacate the district court’s dismissal of these

claims, so that the district court may consider Gale’s argument in the first instance, or exercise its discretion to remand

these claims to state court. 

AFFIRMED IN PART, VACATED IN PART, and

REMANDED. Each party shall bear its own costs on appeal.

GALE v. FIRST FRANKLIN LOAN SERVICES 8063