Court Opinion

ID: 4229418
Source: CourtListenerOpinion
Date Created: 2017-12-15 21:00:30.392075+00
Date Added: 2024-06-11T14:43:09.847228
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            DEC 15 2017
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

VICTOR P. GIOTTA and LORALEE                     No.   16-16665
GIOTTA, On Behalf of Themselves and
All Others Similarly Situated,                   D.C. No. 5:15-cv-00620-BLF

              Plaintiffs-Appellants,
                                                 MEMORANDUM*
 v.

OCWEN LOAN SERVICING, LLC,

              Defendant-Appellee.

                   Appeal from the United States District Court
                       for the Northern District of California
                  Beth Labson Freeman, District Judge, Presiding

                     Argued and Submitted December 8, 2017
                            San Francisco, California

Before: GRABER and N.R. SMITH, Circuit Judges, and SIMON,** District Judge.

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
             The Honorable Michael H. Simon, United States District Judge for the
District of Oregon, sitting by designation.
       Victor and Loralee Giotta appeal the district court’s dismissal of their Fair

Debt Collection Practices Act (FDCPA) claim against Ocwen Loan Servicing, LLC

(Ocwen). We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.

       The district court did not err in dismissing the Giottas’ FDCPA claim for

failure to comply with the Deed of Trust’s “Notice Provision.” It is undisputed that

the Giottas did not provide notice. Therefore, the question is whether the Notice

Provision applies to this case; it does.

       1. The Notice Provision’s text covers this action. The Notice Provision

clearly applies to: (1) “any judicial action . . . that arises from the other party’s

actions pursuant to this Security Instrument;” or (2) “any judicial action . . . that

alleges that the other party has breached any provision of, or any duty owed by

reason of, this Security Instrument.” The Giottas were in default on their mortgage.

Therefore, the Deed of Trust authorized property inspections and valuations to

protect the Lender’s interest in the property and to pass the fees for those services

on to the borrower: “Lender may charge Borrower fees for services performed in

connection with Borrower’s default, for the purpose of protecting Lender’s interest

in the Property and rights under this Security Instrument, including, but not limited

to, attorneys’ fees, property inspection and valuation fees.” In this case, the Giottas

allege that Ocwen violated the FDCPA when it billed the Giottas for those fees

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without disclosing the profit structure of the third-party entity that conducted the

services. Accordingly, the instant suit is a “judicial action . . . that arises from the

other party’s actions pursuant to this Security Instrument.”

      2. The Notice Provision requires notice to Ocwen. Per its text, the Notice

Provision applies only to the “Lender.” However, the Deed of Trust explicitly

provides that “[t]he covenants and agreements of this Security Instrument shall

bind (except as provided in Section 20) and benefit the successors and assigns of

Lender.” Further, it specifically notified the Giottas that the note may be sold.

Although Ocwen is not the “Lender” as defined in the Deed of Trust, it is an

assign. Per the record, OneWestBank assigned the servicing rights on the Giottas’

mortgage to Ocwen: “[Ocwen] and [OneWestBank] desire to set forth the terms

and conditions pursuant to which [OneWestBank] will sell, transfer and assign, to

[Ocwen], all of [OneWestBank’s] right, title and interest in and to such Mortgage

Servicing Rights.” Providing notice before filing an action is a benefit (as opposed

to a binding covenant or agreement), because it gives the Lender prior notice and

an opportunity to take corrective action before litigation is formally commenced.

Therefore, as an assign of the Lender, the Notice Provision is a “benefit” of the

“covenants and agreements” in the Deed of Trust, inuring to Ocwen.

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      3. The Notice provision does not abrogate the provisions of the FDCPA.

“The purpose of the FDCPA is to protect vulnerable and unsophisticated debtors

from abuse, harassment, and deceptive collection practices.” Guerrero v. RJM

Acquisitions LLC, 499 F.3d 926, 938 (9th Cir. 2007) (per curiam). Although a

consumer may not waive such protections, Clark v. Capital Credit & Collection

Servs., Inc., 460 F.3d 1162, 1171 n.5 (9th Cir. 2006), the Notice Provision does not

contravene the statute’s purposes and, thus, does not impermissibly abrogate the

FDCPA.

      Because the Giottas failed to provide pre-suit notice to Ocwen in accordance

with the Deed of Trust, the district court properly dismissed the case. We therefore

need not decide whether Ocwen violated the FDCPA.

      AFFIRMED.

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