Vien-Phuong Thi Ho v. ReconTrust Co.

Partial Dissent and Partial Concurrence by Judge KORMAN

OPINION

The principal question in this appeal is whether the trustee of a California deed of trust is a “debt collector” under the Fair Debt Collection Practices Act (FDCPA).

FACTS

Vien-Phuong Thi Ho bought a house in Long Beach using funds she borrowed from Countrywide Bank. The loan was secured by a deed of trust. A deed of trust involves three parties. See Yvanova v. New Century Mortg. Corp., 62 Cal.4th 919, 926-27 , 199 Cal.Rptr.3d 66 , 365 P.3d 845 (Cal. 2016) (explaining California deeds of trust). The first party is the lender, who is the trust beneficiary. The second party is the borrower-trustor, who holds equitable title to the property. The third party is the trustee, an agent for both the lender and the borrower who holds legal title to the property and is authorized to sell the property if the debtor defaults. Id. at 927 , 199 Cal.Rptr.3d 66 , 365 P.3d 845 . In this case, the lender was Countrywide, the borrower was Ho and the trustee was ReconTrust.

After Ho began missing loan payments, ReconTrust initiated a non-judicial foreclosure. See id. at 926-27 , 199 Cal.Rptr.3d 66 , 365 P.3d 845 (detailing…

dissenting in part and concurring in part:

The majority opinion opens with the principal question presented by this case: “[Wjhether the trustee of a California deed of trust is a ‘debt collector’ under the Fair *578 Debt Collection Practices Act (FDCPA).” Maj. Op. at 570. After a discussion of the issue, the majority concludes by observing that the phrase “debt collector” is “notoriously ambiguous” and that, given this ambiguity, we should refuse to construe it in a manner that interferes with California’s arrangements for conducting nonjudicial foreclosures. Maj. Op. at 576-77.

My reading of the Fair Debt Collection Practices Act (“FDCPA”), consistent with the manner in which it has been construed by every other circuit that has addressed whether foreclosure procedures are debt collection subject to the FDCPA, suggests that the only reasonable reading is that a trustee pursuing a nonjudicial foreclosure proceeding is a debt collector. See Kaymark v. Bank of Am., N.A, 783 F.3d 168, 179 (3d Cir. 2015), cert. denied, —— U.S. -, 136 S.Ct. 794 , 193 L.Ed.2d 710 (2016); Glazer v. Chase Home Fin. LLC, 704 F.3d 453, 461-63 (6th Cir. 2013); Wilson v. Draper & Goldberg, P.L.L.C., 443…