In Re Sanchez
Edward A. Treder, Robert E. Weiss Inc., Covina, CA, for appellees.
ORDER REVERSING BANKRUPTCY COURT‘S DISMISSAL OF COMPLAINT FOR FAILURE TO STATE A CLAIM
HAMILTON, District Judge.
Before the court is an appeal from a judgment entered in the United States Bankruptcy Court for the Northern District of California dismissing appellant‘s adversary complaint for failure to state a claim. Having read the parties’ papers and carefully considered their arguments and the relevant legal authority, the court hereby REVERSES the bankruptcy court for the following reasons
INTRODUCTION
Appellant Charae Sanchez (“Sanchez“), debtor in a bankruptcy proceeding pending before Chief Bankruptcy Judge Edward J. Jellen of this district, filed an adversary complaint in the United States Bankruptcy Court whеre her Chapter 13 bankruptcy case was pending. Sanchez alleged that the attorneys who represented her mortgage lender had violated certain provisions of the Fair Debt Collection Practices Act,
Appellees filed a motion to dismiss for failure to state a claim. On October 30, 2000, Judge Jellen granted the motion and issued оral findings and conclusions on the record. Sanchez appeals the order dismissing the adversary complaint, raising the following issue for review: Whether appellees’ validation notice violated
BACKGROUND
Sanchez owns a single family residence located in San Pablo, California. She financed the purchase of the home with a mortgage loan from Community Lending, Inc. The mortgage loan was thereafter assigned to Norwest Mortgage, Inc., which is now known as Wells Fargo Home Mortgage, Inc.
Appellee Robert E. Weiss, Inc. is a professional law corporation with its principle
In September, 1999, Norwest Mortgage, Inc. substituted appellee Robert E. Weiss, Inc. as trustee under the first priority deed of trust. A notice of default was recorded on September 27, 1999 based on Sanchez‘s failure to pay monthly principle and interest installments. On or about September 23, 1999, appellee sent a “Debt Validation Notice” to Sanchez to advise her of her rights under
You may dispute the validity of this debt, or any portion thereof, by sending our office written notice within thirty (30) days after receiving this notice. In that event, we will obtain and mail to you written verification of the debt. Otherwise, we will assume that the debt is valid. (emphasis added).
Sanchez argues that consumers are not required to dispute a debt in writing under
Appellees argue that consumers are required to dispute debts in writing under
DISCUSSION
A. Standard of Review
On appeal, the factual findings of a bankruptcy court are reviewed under a clearly erroneous standard, and its legal conclusions are reviewed de novo. See In re Pizza of Haw., Inc., 761 F.2d 1374, 1377 (9th Cir.1985); a dismissal for failure to state a claim pursuant to
The bankruptcy court‘s oral findings and conclusions were not designated as part of the record on appeal. Furthermore, the order dismissing the appellant‘s complaint did not disclose the court‘s findings and conclusions. Therefore, this court, in its de novo review of the bankruptcy court‘s dismissal оf the complaint, has not had the benefit of the bankruptcy court‘s analysis of the issue presented.
B. Legal Standard for Rule 12(b)(6) Motions
A motion under
C. Debt Validation Provisions of the FDCPA
Title 15 section 1692g provides in pertinent part:
(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid
the debt, send the consumer a written notice containing — (1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) a statement that unless the consumer, within thirty days after rеceipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
(5) a statement that, upon the consumer‘s written request within the thirty-day period, the debt collector will provide the сonsumer with the name and address of the original creditor, if different from the current creditor.
(b) If the consumer fails to notify the debt collector in writing within the thirty-day period described in subsection (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the dеbt collector shall cease the collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verifiсation or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector. (emphasis added).
In interpreting a statute, “[w]e begin, as we must, with the express language of the statute .... Where, as here, the language of the statute is plain and unambiguous, rеsort to legislative history is unnecessary.” Rucker v. Davis, 203 F.3d 627, 636 (9th Cir.2000); see Citizens Action League v. Kizer, 887 F.2d 1003, 1006 (9th Cir. 1989) (“In construing a statute, we look first to its plain meaning“). In rare cases where “the literal application of a statute will produce a result demonstrably at odds with the intention of its drafters,” an exception should be made to the general plain language rule. United States v. Ron Pair Enters., 489 U.S. 235, 242, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989). However, the Supreme Court has cautioned against inserting words into a statute when the same words are present in other sections of the same statute. The Supreme Court has stated:
“[Where] Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion.” United States v. Wong Kim Bo, 472 F.2d 720, 722 (5th Cir.1972); See United States v. Wooten, 688 F.2d 941, 950 (4th Cir.1982). Had Congress intended to restrict § 1963(a)(1) ... it presumably would have done so expressly as it did in the immediately following subsection (a)(2). See North Haven Board of Education v. Bell, 456 U.S. 512, 521, 102 S.Ct. 1912, 72 L.Ed.2d 299 (1982); United States v. Naftalin, 441 U.S. 768, 773-774, 99 S.Ct. 2077, 60 L.Ed.2d 624 (1979). In the latter case, id., at 773, 99 S.Ct. 2077, the Court said: “The short answer is that Congress did not write the statute that way.” We refrain from concluding here that the differing language in the two subsections has the same meaning in each. We would not presume to ascribe this difference to a simple mistake in draftsmanship.
The plain language of
Appellees argue that interpreting
In Graziano, plaintiff/debtor Graziano claimed that the notice sent by the debt collector attorneys violated
Subsection (b) states that if the debtor disputes the debt in writing within thirty days, the debt collector must cease collection efforts until the debt collector has verified the debt. Adopting Graziano‘s reading of the statute would thus create a situation in which, upon the dеbtor‘s non-written dispute, the debt collector would be without any statutory ground for assuming that the debt was valid, but nevertheless would not be required to verify the debt or to advise the debtor of the identity of the original creditor and would be permitted to continue debt collection efforts. We see no reason to attribute to Congress an intent to create so incoherent a system.
Id. at 112 (emphasis added). Thus, the Graziano court assumed that if
According to
One possibility is that Congress intended that the debt collector find some evidence of the validity of the debt beyond a
The first purpose of a non-written
The second purpose of a
I respectfully disagree with the view that the failure to impose [a writing] requirement creates an “incoherent system.” It is not unreasonable to believe that some consumers who wish to dispute an alleged debt may lack the ability or wherewithal to do so in writing, and that Congress chose to accord these oral debt-disputers some, but not all, of the protections accorded those who dispute their debts in writing.
Ong v. American Collections Enterprise, Inc., 1999 WL 51816 at *3. Thus, a consumer that is unable to communicate in writing, or simply wishes to quickly and informally clear up the matter, is afforded limited protеction under
Additional support for interpreting
A non-written dispute under
The court declines to find as a matter of law that despite its clear language to the contrary,
IT IS SO ORDERED.