GRAY v. OCWEN MORTGAGE SERVICING INC (2021)

United States Court of Appeals, Ninth Circuit.2021-03-12No. No. 20-15793

Summary · law.co

Holding. The district court's dismissal with prejudice was affirmed because the credit report was not misleading or inaccurate under federal and state credit reporting laws, and the Grays' claims presented no genuine factual disputes for a jury.

Richard and Kimberly Gray challenged the dismissal of their complaint alleging that a mortgage servicer's credit report violated federal and state credit reporting laws. The court found that the credit report accurately reflected overdue loan payments and was relevant to assess creditworthiness, even though the lender's only remedy for non-payment was foreclosure. Richard's bankruptcy discharge and California's anti-deficiency statute did not shield Kimberly from responsibility to pay the loan or from having accurate payment delinquencies reported.

The court rejected the Grays' reliance on a prior case involving post-foreclosure deficiency reporting, noting that case involved different circumstances and would not apply to the pre-foreclosure report at issue. The court also found no genuine factual dispute requiring jury consideration. The Grays' related claim under California's unfair business practices statute failed for the same reasons. Additionally, the Grays forfeited a secondary argument by failing to raise it in their opening brief on appeal.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

Whether a credit report showing overdue mortgage payments violates the Fair Credit Reporting Act or California's Consumer Credit Reporting Agencies Act
Whether a co-borrower's spouse's bankruptcy discharge affects the spouse's loan payment obligations or credit reporting
Whether California's anti-deficiency statute (section 580b) affects a borrower's liability for overdue payments before foreclosure
Whether accurate reporting of pre-foreclosure delinquencies is permissible under credit reporting laws

Procedural posture

The Grays appealed the district court's dismissal with prejudice of their operative complaint challenging a credit report's accuracy.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion · public domain

MEMORANDUM **

Richard and Kimberly Gray appeal from the district courts dismissal with prejudice of their operative complaint. We have jurisdiction under 28 U.S.C. § 1291, and we affirm.

The operative complaint failed to state a claim for relief because the credit report was not misleading or inaccurate in violation of the federal Fair Credit Reporting Act or Californias Consumer Credit Reporting Agencies Act. First, neither Richard Grays bankruptcy discharge nor section 580b of the California Code of Civil Procedure affected Kimberly Grays responsibility to make the loan payments before a foreclosure of the property. See Blixseth v. Credit Suisse, 961 F.3d 1074, 1082 (9th Cir. 2020); Cal. Civ. Proc. Code § 580b (2005). Second, the report of the overdue payments is accurate and relevant to Kimberly Grays creditworthiness, notwithstanding the fact that the only recourse the lender had for Kimberlys failure to pay the overdue amount would be to foreclose on the property. See Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 891 (9th Cir. 2010). Because Kuns v. Ocwen Loan Servicing, LLC, considered a postforeclosure credit report that included the amount of the uncollectible deficiency resulting from the foreclosure sale, 611 F. Appx 398, 400 (9th Cir. 2015), even were it binding on us, it would have no bearing on the pre-foreclosure credit report at issue in this case. Contrary to the Grays’ argument, there is no factual dispute for the jury. Cf. Drew v. Equifax Info. Servs., LLC, 690 F.3d 1100, 1108 (9th Cir. 2012). The Grays’ claim under Californias Unfair Business Practices Act is predicated on the same credit reporting allegations and therefore fails for the reasons we have stated. We therefore affirm the district courts dismissal.

Further, the Grays’ opening brief on appeal failed to raise a challenge to the district courts dismissal of the operative complaint on the ground that it was an improper request for reconsideration of the courts dismissal of their second amended complaint. Therefore, the Grays forfeited this claim, and we also affirm the district courts dismissal on that basis. Padgett v. Wright, 587 F.3d 983, 985–86 & n.2 (9th Cir. 2009) (per curiam).

AFFIRMED.