Court Opinion

ID: 2802772
Source: CourtListenerOpinion
Date Created: 2015-05-21 20:02:40.957009+00
Date Added: 2024-06-11T15:29:49.343491
License: Public Domain

FILED
                            NOT FOR PUBLICATION                                MAY 21 2015

                                                                            MOLLY C. DWYER, CLERK
                     UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

JEFFREY KUNS, an individual, on his               No. 13-55562
own behalf and on behalf of all others
similarly situated,                               D.C. No. 2:12-cv-07118-DMG-
                                                  PLA
              Plaintiff - Appellant,

  v.                                              MEMORANDUM*

OCWEN LOAN SERVICING, LLC, a
Delaware limited liability company,

              Defendant - Appellee.

                    Appeal from the United States District Court
                       for the Central District of California
                      Dolly M. Gee, District Judge, Presiding

                        Argued and Submitted April 10, 2015
                               Pasadena, California

Before: SILVERMAN and BEA, Circuit Judges and QUIST,** Senior District
Judge.

       Plaintiff Jeffrey Kuns appeals the district court’s dismissal with prejudice of

his putative class action complaint against Defendant Ocwen Loan Servicing, LLC.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The Honorable Gordon J. Quist, Senior District Judge for the U.S.
District Court for the Western District of Michigan, sitting by designation.
                                         -2-
We have jurisdiction under 28 U.S.C. § 1291, and we review the district court’s

decision de novo, construing the facts alleged in the complaint in the light most

favorable to the plaintiff. Schlegel v. Wells Fargo Bank, NA, 720 F.3d 1204, 1207

(9th Cir. 2013). We affirm in part and reverse in part the district court’s decision.

      Kuns alleges that because his former home was bought with a purchase

money mortgage and sold through a nonjudicial foreclosure, he had no personal

liability for the deficiency that resulted from the foreclosure sale. Cal. Code Civ.

Proc. §§ 580b, 580d. Ocwen was nonetheless reporting the deficiency amount to

credit reporting agencies such as Equifax. After Kuns filed for bankruptcy, Ocwen

reported that the deficiency was discharged via the bankruptcy. Kuns alleges that

Ocwen’s reporting of the deficiency, without being accompanied by additional

information to indicate Kuns’ lack of personal liability, violated Ocwen’s

obligation under California’s Consumer Credit Reporting Agencies Act

(“CCRAA”) to not report information that Ocwen “knows or should know . . . is

incomplete or inaccurate.” Cal. Civ. Code § 1785.25(a). The district court

concluded that Ocwen had no “affirmative duty” under the CCRAA to indicate that

the deficiency could not be collected from Kuns, and dismissed the complaint.

      The CCRAA does not define what constitutes “incomplete or inaccurate”

reporting. Nevertheless, in interpreting the Fair Credit Reporting Act (the
                                          -3-
CCRAA’s federal analogue) and other provisions of the CCRAA, we have held

that “an item on a credit report can be ‘incomplete or inaccurate’ . . . because it is

misleading in such a way and to such an extent that it can be expected to adversely

affect credit decisions.’” Carvalho v. Equifax Info. Servs., 629 F.3d 876, 890 (9th

Cir. 2010) (quoting Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1163

(9th Cir. 2009)). In general, “similar terms appearing in different sections of a

statute should receive the same interpretation,” and this court also “operate[s]

under the assumption that California courts would interpret the FCRA and CCRAA

consistently.” Carvalho, 629 F.3d at 890. On this basis, we interpret the phrase

“incomplete or inaccurate” in CCRAA § 1785.25(a) as requiring that furnishers of

credit information such as Ocwen not only refrain from making any reports that are

obviously wrong or missing crucial data, but also that the reports not contain

information that is materially misleading.

      In light of this discussion, Kuns’s allegation that Ocwen’s reporting was

“incomplete or inaccurate” regarding his personal liability for the foreclosure

deficiency stated a claim under CCRAA § 1785.25. We note that unlike the

company in Wang v. Asset Acceptance, LLC, which faced only the potential of the

debtor raising a statute of limitations defense, Ocwen itself had made an election of

remedies when it sold Kuns’s home in a non-judicial foreclosure, thereby changing
                                         -4-
the collectibility of the debt. 681 F. Supp. 2d 1143 (N.D. Cal. 2010). The anti-

deficiency laws’ protection against post-foreclosure personal liability is complete

and nonwaivable, in contrast to the affirmative defense of the statute of limitations

that the debtor in Wang could raise. See DeBerard Props. v. Lim, 976 P.2d 843

(Cal. 1999) (holding that anti-deficiency laws’ protection is nonwaivable).

Because Kuns’ complaint stated a claim under CCRAA § 1785.25, the district

court should not have granted Ocwen’s motion to dismiss that component of the

complaint.

      However, the district court correctly concluded that, after Kuns filed for

bankruptcy and Ocwen reported the deficiency as discharged in the bankruptcy,

this reporting could not have been “incomplete or inaccurate” within the meaning

of CCRAA § 1785.25. There is no allegation that Ocwen did anything other than

accurately report the action taken by the bankruptcy court. Therefore, we AFFIRM

IN PART, REVERSE IN PART, and REMAND for proceedings consistent with

this Memorandum.

             Each party shall bear its own costs.