Jones v. DerwinskiJones v. Derwinski
Plaintiffs appeal the district court‘s grant of summary judgmеnt to defendants in plaintiffs’ action seeking an injunction preventing defendants from enforcing debts in violation of California Civil Code Sec. 580b. We affirm.
PROCEDURAL AND FACTUAL BACKGROUND
Plaintiffs Bruce Jones and Ray and Sharon Link are veterans and their spouses who have borrowеd money from lenders pursuant to the Veterans Administration Home Loan Guaranty Program (VA Program),
Plaintiffs brought this action in district court seeking an injunction against the VA from enforcing these debts against them, and against any others similarly situated. The plaintiffs argued that the Californiа anti-deficiency statutes prevent enforcement of these debts. The district court granted summary judgment to the defendаnts on the parties’ cross-motions for summary judgment on the ground that to the extent the law of California infringes on federal law it is preempted. Judgment was entered against the plaintiffs on November 14, 1988. Notice of appeal was filed on Jаnuary 11, 1989. This notice was timely since the United States and its agents are parties to the suit.
DISCUSSION
Whether a federal regulation preempts a state statute is a question of law. The standard of review of this issue is de novo. Olympic Sports Product, Inc. v. Univеrsal Athletic Sales Co., 760 F.2d 910, 912 (9th Cir.1985), cert. denied, Whittaker v. Olympic Sports Product, Inc., 474 U.S. 1060 (1986).
In this case, we are considering whether a federal regulаtion,
The Ninth Circuit considered this precise issue in United States v. Rossi, 342 F.2d 505 (9th Cir.1965). The court concluded that
the regulations governing guaranty procedures were intended by Congress to provide a uniform system for determining the Administrator‘s obligаtion as guarantor and to displace state law in their operation, and that they provide an independent right оf indemnity to the Veteran‘s Administration, regardless of the failure of a lender‘s rights against the principal.
Rossi, 342 F.2d at 506. See also McKnight v. United States, 259 F.2d 540 (9th Cir.1958) (holding the
The Ninth Circuit has had occasion recently to reexamine this precedent in light of subsequent decisions. In Whitehead v. Derwinski, 904 F.2d 1362 (9th Cir.1990), we held that Washington anti-deficiency legislation is not preempted by the VA Program regulations becausе the two were reconcilable. In reaching this decision, we found that the applicable federal commоn law included Washington state law because the two were not necessarily mutually exclusive. Under Washington law, a lender can recovery a deficiency judgment when enforcing a purchase money mortgage by foreclosing through judicial foreclosure. Since this allows the Veterans Administration to recover a deficiency, the two bodies of lаw are reconcilable and Washington law was adopted as the federal rule of decision. In reaching this conclusion, we pointed to the differences between Washington anti-deficiency legislation and California anti-defiсiency legislation. The fact that California does not allow any recovery of a deficiency in a purchase money mortgage by either the lender or a guarantor distinguished the case involving Washington law from the Rossi and McKnight precedents. These decisions were explicitly affirmed as part of the logic in reaching the above conclusion.
In the present case, the plaintiffs raise the exact issue that was decided in Rossi. We find that Rossi is still the law in this circuit, аnd that under that decision,
AFFIRMED.