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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Alaska Trustee, LLC v. Ambridge (3/4/2016) sp-7084

Alaska Trustee, LLC v. Ambridge (3/4/2016) sp-7084

           Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  REPORTER.  

           Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,  

                                                                                                                        

           303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  

                                                                                                                           

           corrections@appellate.courts.state.ak.us.  



                       THE SUPREME COURT OF THE STATE OF ALASKA                                       



ALASKA  TRUSTEE,  LLC  and                                       )  

STEPHEN  ROUTH,                                                  )          Supreme  Court  No.  S-14915  

                                                                 )  

                                Appellant,                                                                                            

                                                                 )         Superior Court No. 3AN-10-06356 CI  

                                                                 )  

                      v.                                                                        

                                                                 )         O P I N I O N  

                                                                 )  

                                     

BRETT AMBRIDGE and                                                                                            

                                                                 )         No. 7084 - March 4, 2016  

                       

JOSEPHINE AMBRIDGE,                                              )  

                                                                 )  

                                Appellees.                       )  

                                                                 )  



                                                                

                                                                                                              

                      Appeal from the Superior Court of the State of Alaska, Third  

                                                                                               

                      Judicial District, Anchorage, Mark Rindner, Judge.  



                                                                                                                

                      Appearances:  Richard Ullstrom, RCO Legal-Alaska, Inc.,  

                                                                                                                    

                      Anchorage, for Appellants. James J. Davis, Jr. and Daniel C.  

                                                                                                                 

                      Coons, Alaska Legal Services Corporation, Anchorage, and  

                                                                                                            

                      Deepak Gupta and Jonathan E. Taylor, Gupta Beck PLLC,  

                                                            

                      Washington, D.C., for Appellees.  



                                                                                                                  

                      Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and  

                                                   

                      Bolger, Justices.  



                                            

                      MAASSEN, Justice.
  

                                                                                                                       

                      WINFREE, Justice, with whom STOWERS, Justice, joins, dissenting.
  



I.         INTRODUCTION  



                                                                                                                                  

                      Brett  and  Josephine  Ambridge  defaulted  on  their  home  loan.   Alaska  



                                                                                                                           

Trustee, LLC, in the business of pursuing nonjudicial foreclosures, sent the Ambridges  


----------------------- Page 2-----------------------

a notice of default that failed to state the full amount due as required by the federal Fair  

                                                                                                                              



Debt Collection  Practices Act (FDCPA).   The Ambridges filed suit against Alaska  

                                                                                                                         



Trustee and its owner, Stephen Routh, seeking damages under the FDCPA and the  

                                                                                                                               



Alaska  Unfair  Trade  Practices  and  Consumer  Protection  Act  (UTPA),  as  well  as  

                                                                                                                                



injunctive and declaratory relief.  The superior court held that both Alaska Trustee and  

                                                                                                                              



Routh were "debt collectors" subject to liability under the FDCPA, awarded damages  

                                                                                                                      



under that Act, and awarded injunctive relief under the UTPA.   Alaska Trustee and  

                                                                                                                              



Routh appeal, arguing that neither of them is a debt collector as defined by federal law  

                                                                                                                              



and that injunctive relief was improperly awarded.  

                                                                



                    We conclude that the superior court's decision that Alaska Trustee was a  

                                                                                                                                  



debt  collector  and  liable  for  the  violation  of  the  FDCPA  accords  with  the  more  

                                                                                                                           



persuasive authority, and we therefore affirm it.  But while we agree with the superior  

                                                                                                 



court's decision that Routh was a debt collector as well, we conclude that the evidence  

                                                                                                                      



did not support finding him liable for the violation, and we reverse the superior court's  

                                                                                                                         



decision on this issue.  Finally, we affirm the superior court's award of injunctive relief  

                                                                                                                            



under the UTPA.  

                



II.       FACTS AND PROCEEDINGS  

                                  



          A.        Alaska Trustee's Notices Of Default To The Ambridges  

                                                                                             



                    The Ambridges bought their first home in 2006. They took out a home loan  

                                                                                                                              



from  Alaska  Housing  Finance  Corporation,  secured  by  a  deed  of  trust  against  the  

                                                                                                                               



property; the loan was serviced by Wells Fargo Bank, N.A.  The Ambridges fell behind  

                                                                                                                          



on their payments in late 2007 and received a letter from Alaska Trustee, LLC, notifying  

                                                                                                                      



them that they were in default and that a foreclosure sale would take place in January  

                                                                                                                    



2008.  

           



                                                             -2-                                                           7084
  


----------------------- Page 3-----------------------

                       The Ambridges were able to cure the default.                                     But they fell behind again            



                                                                                                                                   1  

and received another notice of default from Alaska Trustee in August 2009.                                                                      

                                                                                                                                      This time  



                                                                                                                                      

they were unable to cure the default, and their property was sold at auction in December  



            

2009.  



                       The 2009 notices of default are at the center of this appeal.  The first one  



                                                                                                                                                  

described the deed of trust and the property, and it stated that "[t]he amount of the  



                                                                                                                                            

obligation  secured  is  $196,712.28,  plus  interest,  late  charges,  costs  and  any  future  



                                                                                                                                                    

advances."  It also had a statement at the top that read:  "The purpose of this letter is to  



                                                                                                                                          

collect a debt.  Any information obtained will be used for that purpose."  At the bottom,  



                                                                                                                                                

the  notice  had  a  lengthy  paragraph  entitled  "Fair  Debt  Collection  Practices  Act  



                    2  

Statement."    



                                                                                                                                          

                       The amended notice, sent later, contained the same provisions and attached  



            1          As  before,  the  Ambridges  first  received  a  letter  from  Wells  Fargo  in  April  



2009   informing  them   of  the   default,   stating  the  total   delinquency,   and   offering  them  

another  chance  to  reinstate  the  loan.   



            2          The  statement provided  information required  by  15 U.S.C.  §  1692g(a)  

                                                                                                                                       

(2012).  It read:  

                    



                       The  principal  balance  of  the  debt  is  $196,712.28,  plus  

                                                                                                                        

                       interest,  late  charges,  attorney  fees  and  costs  and  other  

                                                                                                                      

                       advances.  The creditor to whom the debt is owed is Alaska  

                                                                                                     

                       Housing Finance Corporation.  Unless within 30 days after  

                                                                                                                        

                       receipt of this notice you dispute the debt or any portion of it,  

                                                                                                                             

                       we will assume the debt to be valid.  If you notify us within  

                                                                                                                     

                       30 days after receipt of this notice that you dispute the debt  

                                                                                                                         

                       or  any  part  of  it  and  do  so  in  writing,  we  will  obtain  

                                                                                                                    

                       verification of the debt and mail it to you.  If you request it in  

                                                                                                                             

                       writing within  30 days after receipt  of this notice, we will  

                                                                                                                         

                       provide  you  with  the  name  and  address  of  the  original  

                                                                                                                 

                       creditor,  if  different  from  the  current  creditor.                                   Address  

                                                                                                                 

                       requests to Alaska Trustee, LLC . . . .  

                                                                                           



                                                                      -3-                                                                     7084
  


----------------------- Page 4-----------------------

an    additional    page    that    stated    at    the    bottom:       "THE    PURPOSE    OF    THIS  



COMMUNICATION    IS    TO    COLLECT    THE    DEBT.      ANY    INFORMATION  



OBTAINED   WILL   BE   USED   FOR   THAT   PURPOSE."     It   also   provided   this  



information for the recipient: "Your rights will clearly be affected by the foreclosure and                                                                                         



you   may   wish   to   seek   legal   advice.     If   you   have   been   discharged   of   this   debt   in  



Bankruptcy, you are not to regard this message as a demand for payment or an assertion                                                                                  



of personal liability."                         



                             Federal law requires, among other things, that a consumer be informed of                                                                                  



"the amount of the debt" in the initial communication about the debt or within five days                                                                                          

                      3    Alaska Trustee's notices to the Ambridges each stated the principal amount  

thereafter.                                                                                                                                                                



due, but neither stated the full amount due, as they failed to specify what was owed for  

                                                                                                                                                                                     



"interest, late charges, costs and any future advances."  Alaska Trustee conceded in the  

                                                                                                                                                                                     



superior court that, if it is subject to the FDCPA, its notices violated that law by failing  

                                                                                                                                                                             



to state the full amounts due.  

                                                                



              B.             Alaska Trustee  

                                               



                             Alaska Trustee is a limited liability company, formed in 2005 by Routh, an  

                                                                                                                                                                                       



attorney, who continues to be the company's owner and managing member.  Alaska  

                                                                                                                                                                           



Trustee's activities consist of "processing non-judicial foreclosures of deeds of trust on  

                                                                                                                                                                                      



real property."  This includes "ordering the title report, recording the Notice of Default  

                                                                                                                                                                           



in the real property records, providing notice of the foreclosure as required by statute,  

                                                                                                                                                                            



responding to requests from the borrower . . . for reinstatement or payoff quotes," and  

                                                                                                                                                                



handling  formalities  before  and  after  foreclosure  sales.                                                                       If  a  borrower  asks  for  

                                                                                                                                                                                   



information about reinstating a loan in order to avoid foreclosure, Alaska Trustee sends  

                                                                                                                                                                               



a reinstatement letter that gives the reinstatement amount and allows payment to the  

                                                                                                                                                                                    



              3              15  U.S.C.  §   1692g(a).  



                                                                                      -4-                                                                                       7084
  


----------------------- Page 5-----------------------

                                                                                                                            

mortgage servicer or sometimes to Alaska Trustee itself.  Alaska Trustee does not bring  



                                                                                                            

suit to recover on an underlying note, nor does it write demand letters.  



                                                                                                                     

                    The details of Routh's involvement with Alaska Trustee are also important  



                                                                                                       

to the resolution of this appeal; they are discussed below in section IV.B.  



                                                                                  

          C.        Proceedings In The Superior Court  



                                                                                                                        

                    TheAmbridges filed acomplaint againstAlaskaTrusteeandRouth alleging  



                                                                                                                      

violations of the federal Fair Debt Collection Practices Act (FDCPA) and Alaska's  



                                                                                                                     

Unfair Trade Practices and Consumer ProtectionAct(UTPA). They asked for injunctive  



                                                                                                                             

and declaratory relief, requiring the defendants to include the actual amount of the debt  



                                                                                                                           

owed in their first communications with consumers; they also requested damages, costs,  



                                                                                                                                     

and full attorney's fees.  The superior court ruled on a number of dispositive motions.  



                                                                                                                          

As relevant to this appeal, the superior court held that both Alaska Trustee and Routh  



                                                                                                                               

were "debt collectors" subject to 15 U.S.C. § 1692g(a).  It held that a violation of the  



                                                                                                                                     

FDCPA translates into an "unfair or deceptive" act or practice prohibited by the UTPA.  



                                                                                                                         

It   also   held   that   the   Ambridges   were   entitled   to   a   private   injunction   under  



                                                                                                                               

AS  45.50.535(a),  requiring  Alaska  Trustee  to  include  in  its  notices  of  default  the  



                                                                                                                           

information required by federal law. However, it dismissed the claim for damages under  



                                                                                                                                     

the UTPA, on grounds that the Ambridges failed to demonstrate any ascertainable loss.  



                                                                                                                                

The court also dismissed the UTPA injunction claims against Routh on grounds that he  



                                                                                                                               

was  never  provided  with  pre-suit  notice  of  his  potential  violations  as  required  by  



                        

AS 45.50.535.  



                                                                                                                  

                    The  superior  court  entered  a  final  judgment  awarding  the  Ambridges  



                                                                                                                       

$4,000 in damages under the FDCPA.  Alaska Trustee and Routh appeal the superior  



                                                                                                                    

court's adverse decisions, arguing that (1) Alaska Trustee is not a "debt collector"  



                                                                                                                               

subject to the FDCPA; (2) Routh is not a "debt collector" subject to the FDCPA; and (3)  



                                                                                                           

the Ambridges were not entitled to injunctive relief under the UTPA.  



                                                             -5-                                                           7084
  


----------------------- Page 6-----------------------

III.	         STANDARDS OF REVIEW                       



                            "We review a grant of summary judgment 'de novo, affirming if the record                                                                   



presents no genuine issue of material fact and if the movant is entitled to judgment as a                                                                                        



                                   4  

matter of law.' "                       We "view the facts in the light most favorable to the non-moving                                                  



                     5                                                                                                              6  

part[ies],"                                                                                                                                                     

                         drawing "all reasonable [] inferences" in their favor.                                                         We review questions  



                                                                                                                                                                            

of law de novo, "apply[ing] our independent judgment . . . , 'adopting the rule of law  



                                                                                                                          7  

                                                                                                                                                                             

most persuasive in light of precedent, reason, and policy.' "                                                                Similarly, "[w]e apply our  



                                                                                                                               8  

                                                                                                                                                                      

independent judgment in matters of statutory interpretation,"                                                                     interpreting "the statute  



                                                                                                                                                                    

in question by looking to the meaning of the statute's language, its legislative history,  



                                   9  

                                       

and its purpose." 



IV.	          DISCUSSION  



                                                                                                                                                                   

              A.	           The Superior Court Did Not Err In Determining That Alaska Trustee  

                                                                                                                                      

                            Is A "Debt Collector" Under § 1692a(6) Of The FDCPA.  



                                                                                                                                                               

                            The FDCPA was enacted in 1977 "to eliminate abusive debt collection  



                                                                                                                                                                        

practices by debt collectors, to insure that those debt collectors who refrain from using  



                                                                                                                                                             

abusive debt collection practices are not competitively disadvantaged, and to promote  



              4             Olson v. City of Hooper Bay                               , 251 P.3d 1024, 1030 (Alaska 2011) (quoting                                



Beegan v. State, Dep't of Transp. & Pub. Facilities                                                      , 195 P.3d 134, 138 (Alaska 2008)).                         

              5             Id. (quoting McCormick v. Reliance Ins. Co., 46 P.3d 1009, 1011 (Alaska  

                                                                                                                                                                    

2002)).  

              6	            Id. (quoting McCormick, 46 P.3d at 1013).  

                                                                                                       

              7             Id. (first alteration in original) (quoting Jacob v. State, Dep't of Health &  

                                                                                                                                                                                

Soc. Servs., Office of Children's Servs., 177 P.3d 1181, 1184 (Alaska 2008)).  

                                                                                                                                                  

              8             McLeod v. Parnell, 286 P.3d 509, 512 (Alaska 2012) (citing Hageland  

                                                                                                                                                               

Aviation Servs., Inc. v. Harms , 210 P.3d 444, 448 (Alaska 2009)).  

                                                                                                                          

              9             Id. (quoting State, Dep't of Commerce, Cmty. & Econ. Dev., Div. of Ins. v.  

                                                                                                                                                                                

Progressive Cas. Ins. Co., 165 P.3d 624, 628 (Alaska 2007)).  

                                                                                                                                  



                                                                                   -6-	                                                                                  7084
  


----------------------- Page 7-----------------------

                                                                                                                       10  

consistent   State   action   to   protect consumers   against   debt   collection   abuses."                               The  



FDCPA   defines   a   "debt"   as  a   consumer   obligation   to   pay   money,   arising   out   of   a  



transaction  the   subject   of   which   is   "primarily   for   personal,   family,   or   household  



                11  

purposes."          "Debt  collector"  is  defined,  in  relevant  part,  as  "any  person  who  uses  any  



instrumentality  of  interstate  commerce  or  the  mails  in  any  business  the  principal  purpose  



of  which  is  the  collection  of  any  debts,  or  who  regularly  collects  or  attempts  to  collect,  



                                                                                                                        12  

directly  or  indirectly,  debts  owed  or  due  or  asserted  to  be  owed  or  due  another."                             The  



definition  has  one  other  sentence  relevant  here:   "For  the  purpose  of  section  1692f(6)  of  



this  title,   ['debt   collector']   also includes   any  person  who  uses   any   instrumentality   of  



interstate  commerce  or the  mails  in  any  business  the  principal  purpose  of  which  is  the  

                                                    13   Section 1692f(6), in turn, describes violations of  

enforcement  of security  interests."                                                                                           



the FDCPA to include  

                                    



                    [t]aking or threatening to take any nonjudicial action to effect  

                                                                                                       

                    dispossession or disablement of property if . . . (A) there is no  

                                                                                                           

                    present  right  to  possession  of  the  property  claimed  as  

                                                                                                           

                    collateral through an enforceable security interest; (B) there  

                                                                                                       

                    is no present intention to take possession of the property; or  

                                                                                                            

                    (C) the property is exempt by law from such dispossession or  

                                                                                                            

                    disablement.  



                    The superior court noted a split in the way  courts apply these  sections:  

                                                                                                                                    



          10        15   U.S.C.   §   1692(e)   (2012);   see   also   15   U.S.C.   §   1692(a)   ("There   is  



abundant  evidence  of  the  use  of  abusive,  deceptive,  and  unfair  debt  collection  practices  

by  many  debt  collectors.   Abusive  debt  collection  practices  contribute  to  the  number  of  

personal   bankruptcies,   to   marital   instability,   to   the   loss of  jobs,   and   to   invasions   of  

individual  privacy.").    

          11        15 U.S.C. § 1692a(5).  

                                        

          12        15 U.S.C. § 1692a(6).  

                                        

          13        Id.  The statute also lists six categories that Congress explicitly excluded  

                                                                                                                     

from  the  definition  of  "debt  collector,"  none  of  which  applies  to  Alaska  Trustee.  

                                                                                                                                    

15 U.S.C. § 1692a(6)(A)-(F).  

                    



                                                            -7-                                                           7084
  


----------------------- Page 8-----------------------

 some hold that enforcers of security interests are debt collectors as long as they meet the                                                                                                                                                       



                                                                                               14  

 general definition of § 1692a(6),                                                                                                                                                                                                  

                                                                                                     while others hold that enforcers of security interests  

                                                                                                                                                     15      Recognizing that the FDCPA, as  

                                                                                                                                                                                                                                                      

                                                                                                                       

 are debt collectors only for purposes of § 1692f(6). 



 a remedial statute, should be liberally construed, the superior court followed the first line  

                                                                                                                                                                                                                                                 



 of  authority,  determining  that  an  entity  pursuing  nonjudicial  foreclosure  is  a  debt  

                                                                                                                                                                                                                                              



 collector subject to the FDCPA.  

                                                                                               



                    14                  Supporting this position are cases from four federal circuit courts of appeal                                                                                                                    



 and one state supreme court:                                                       Kaymark v. Bank of Am., N.A.                                                            , 783 F.3d 168, 179 (3d Cir.                                                       

 2015);  Glazer v. Chase Home Fin. LLC                                                                            , 704 F.3d 453, 463-64 (6th Cir. 2013);                                                                          Reese v.   

Ellis, Painter, Ratterree & Adams, LLP                                                                                  , 678 F.3d 1211, 1218-19 (11th Cir. 2012);                                                                     

 Wilson v. Draper & Goldberg, P.L.L.C.                                                                              , 443 F.3d 373, 378 (4th Cir. 2006);                                                                     Shapiro &   

Meinhold v. Zartman                                           , 823 P.2d 120, 123-24 (Colo. 1992).                                                                        See also Kabir v. Freedman                          

Anselmo Lindberg LLC                                                 , No. 14 C 1131, 2015 WL 4730053, at *2-3 (E.D. Ill. Aug. 10,                                                                                                                 

 2015)   (noting   that   "[t]he   Seventh   Circuit   has   not   determined   whether   mortgage  

 foreclosure actions qualify as debt collection activities under the FDCPA, but those                                                                                                                                                       

 courts of appeals to consider the issue have all held that communications related to                                                                                                                                                                

mortgage   foreclosures   are   covered   by   the   FDCPA,"   and   following   that   authority);  

Paulsen v. Blommer Peterman, S.C.                                                                         , No. 14-cv-106-wmc, 2015 WL 1486546, at *2-4  

 (W.D.  Wis. Mar. 31, 2015) (same);                                                                       Muldrow v. EMC Mortg. Corp.                                                                    , 657 F. Supp. 2d                          

 171,   175-76   (D.D.C.  2009)  (noting   that   "this   Circuit   has   not   determined   whether  

 § 1692a(6) of the FDCPA excludes substitute trustees from liability under the general                                                                                                                                                

provisions of the FDCPA" and following                                                                                     Wilson); Porada v. Monroe                                                        , No. A13-1615,   

 2014 WL 3700820, at *4 (Minn. App. July 28, 2014) (unpublished) (noting that "the                                                                                                                                                             

weight   of   persuasive   authority   lies   heavily   in   favor   of   the   conclusion   that   a   lien  

 foreclosure constitutes a debt collection under the FDCPA").                                                                                                                       

                    15                 A number of federal district courts have reached this conclusion, including  

                                                                                                                                                                                                                                 

many within the Ninth Circuit.  See, e.g., Doughty v. Holder, Nos. 2:13-cv-00295-LRS,  

                                                                                                                                                                                               

 2:13-cv-00296-LRS,  2:13-cv-00297-LRS,  2014  WL  220832,  at  *3-5  (E.D.  Wash.  

                                                                                                                                                                                                                                        

 Jan. 21, 2014); Natividad v. Wells Fargo Bank, N.A., 3:12-cv-03646 JSC, 2013 WL  

                                                                                                                                                                                                                                                

 2299601, at *5-8, *5 n.4 (N.D. Cal. May 24, 2013) (collecting cases); Hulse v. Ocwen  

                                                                                                                                                                                                                                       

Fed. Bank, FSB, 195 F. Supp. 2d 1188, 1204 (D. Or. 2002); see also Boyd v. J.E. Robert  

                                                                                                                                                                                                                                        

 Co., No. 05-CV-2455 (KAM)(RER), 2013 WL 5436969, at *8-12 (E.D.N.Y. Sept. 27,  

                                                                                                                                                                                                                                                   

 2013); Derisme v. Hunt Leibert Jacobson P.C., 880 F. Supp. 2d 311, 323-25 (D. Conn.  

                                                                                                                                                                                                                                          

 2012); Gray v. Four Oak Court Ass'n, 580 F. Supp. 2d 883, 887-88 (D. Minn. 2008);  

                                                                                                                                                                                                                                         

Rosado v. Taylor, 324 F. Supp. 2d 917, 924 & n.3 (N.D. Ind. 2004).  

                                                                                                                                                                                                         



                                                                                                                     -8-                                                                                                                     7084
  


----------------------- Page 9-----------------------

                                             Alaska Trustee disputes this conclusion.                                                                                                   It argues first that recovering                                   



 collateral is a fundamentally different activity than seeking the payment of money, and                                                                                                                                                                                           



 that the FDCPA is concerned only with the latter.                                                                                                                    It highlights the distinction between                                                        



judicial foreclosures - which may result in a deficiency judgment for the payment of   

                                                                                                                                                                                                                                                                                 16       It  

 money - and nonjudicial foreclosures, which result only in loss of the property.                                                                                                                                                                                                       



 cites cases holding that the processing of nonjudicial foreclosures does not constitute  

                                                                                                                                                                                                                                                              

 debt  collection  for  purposes  of  the  FDCPA.17                                                                                                                   And  it  contends  that  its  position  is  

                                                                                                                                                                                                                                                                                        



 supported by the FDCPA's definition of "debt collector," which it interprets to mean that  

                                                                                                                                                                                                                                                                                   



 an entity that enforces security interests can only be a debt collector for purposes of  

                                                                                                                                                                                                                                                                                       



 § 1692f(6) - which prohibits conduct "[t]aking or threatening to take any nonjudicial  

                                                                                                                                                                                                                                                         



 action to effect dispossession . . . of property" when there is no present right or intention  

                                                                                                                                                                                                                                                                  



 to do so - a category that does not include Alaska Trustee.  

                                                                                                                                                                                                         



                                             1.	                   The FDCPA does not exclude nonjudicial foreclosure from the  

                                                                                                                                                                                                                                                                                    

                                                                   debt-collection activities it addresses.  

                                                                                                                                                                 



                                             Interpreting the FDCPA liberally to effectuate its remedial purposes, as the  

                                                                                                                                                                                                                                                                                      



                       16                    See Stamper v. Wilson & Assocs., P.L.L.C.                                                                                                      , No. 3:09-CV-270, 2010 WL                                         



  1408585, at *7 (E.D. Tenn. Mar. 31, 2010) ("In contrast to judicial foreclosures, non-                                                                                                                                                                                       

judicialforeclosures                                                do not involvepersonal                                                       ('deficiency') judgments againstthedebtor.                                                                                                       

 This is important to recognize because the FDCPA defines 'debt' as an 'obligation to pay                                                                                                                                                                                           

 money,' and there is no enforcement of that obligation in non-judicial foreclosures.");   

 see also Derisme                                         , 880 F. Supp. 2d at 326 ("[C]ourts have drawn a distinction between                                                                                                

 non judicial foreclosures which are intended to only enforce the mortgagee's security                                                                                                                                                                              

 interest and judicial foreclosure which also seeks a personal judgment against the debtor                                                                                                                                                                                

 for a deficiency which would amount to a debt collection.").                                                                                                

                       17                    See, e.g., Brown v. Morris, 243 F. App'x 31, 35 (5th Cir. 2007) (holding  

                                                                             

 that defendant'sinvolvement "primarily in non-judicial foreclosures"doesnotmakehim  

                                                                                                                                                                                                                                                                                   

 a per se FDCPA debt collector); Santoro v. CTC Foreclosure Serv., 12 F. App'x 476,  

                                                                                                                                                                                                                                    

 480 (9th Cir. 2001) ("[Defendant's] foreclosure sale notice also did not seek to collect  

                                                                                                                                                                                                                                               

 the debt, the conduct forbidden under the [FDCPA]."); Hulse, 195 F. Supp. 2d at 1204  

                                                                                                                                                                                                                                                                              

 ("[T]he activity of foreclosing on the property pursuant to a deed of trust is not the  

                                                                                                                                                                                                                                                                                    

 collection of a debt within the meaning of the FDCPA.").  

                                                                                                                                                         



                                                                                                                                     -9-	                                                                                                                                      7084
  


----------------------- Page 10-----------------------

                                           18  

 superior court did,                            we join those courts holding that mortgage foreclosure, whether                                                                    



judicial or nonjudicial, is debt collection covered by the Act.                                                                            Our holding relies first on                           

                                                                                                                            19  plainly  encompasses a home  

 the Act's broad                        language.     The definition                                  of "debt"                                                                          



mortgage, which is usually the most significant of a consumer's debts, and the definition  

                                                                                                                                                                                



 does not differentiate between consumer debts that are secured and those that are not.  

                                                                                                                                                                                                        



 The Act's definition of "debt collector" is similarly broad, covering regular collection  

                                                                                                                                                                               

 efforts that are either direct or indirect.20                                                 As to the first question raised by this case -  

                                                                                                                                                                                                



whether the nonjudicial foreclosure of a security interest is a method of "collect[ing] or  

                                                                                                                                                                                                 



 attempt[ing] to collect, directly or indirectly," a "debt," that is, a consumer's "obligation  

                                                                                                                                                                             



 . . . to pay money" - we agree with the Sixth Circuit's common-sense answer: "In fact,  

                                                                                                                                                                                             



 every mortgage foreclosure, judicial or otherwise, is undertaken for the very purpose of  

                                                                                                                                                                                                  



 obtaining  payment  on  the  underlying  debt,  either  by  persuasion  (i.e.,  forcing  a  

                                                                                                                                                                                                  



 settlement) or compulsion (i.e., obtaining a judgment of foreclosure, selling the home at  

                                                                                                                                                                                                  



                18             See Tourgeman v. Collins Fin. Servs., Inc.                                                      , 755 F.3d 1109, 1118 (9th Cir.                                



 2014) ("[B]ecause the FDCPA . . . is a remedial statute, it should be construed liberally                                                                                         

 in favor of the consumer." (quoting                                            Clark v. Capital Credit &Collection Servs., Inc                                                           ., 460   

 F.3d 1162, 1176 (9th Cir. 2006) (alteration in original)));                                                                    see also Johnson v. Riddle                                 , 305   

 F.3d 1107, 1117 (10th Cir. 2002).                              

                19              15 U.S.C. § 1692a(5) (2012) (defining "debt" as "any obligation or alleged  

                                                                                                                                                                                      

 obligation of a consumer to pay money arising out of a transaction in which the money,  

                                                                                                                                                                                     

property, insurance, or services which are the subject of the transaction are primarily for  

                                                                                                                                                                                                

personal,  family,  or  household  purposes,  whether  or  not  such  obligation  has  been  

                                                                                                                                                                                          

reduced to judgment" (emphasis added)).  

                                                                             

                20              15 U.S.C. § 1692a(6) (defining "debt collector" as "any person who uses  

                                                                                                                                                                                            

 any instrumentality of interstate commerce or the mails in any business the principal  

                                                                                                                                                                                 

purpose of which is the collection of any debts, or who regularly collects or attempts to  

                                                                                                                                                                                                  

 collect, directly or indirectly, debts owed or due or asserted to be owed or due another"  

                                                                                                                                                                                   

 (emphasis added)).  

                          



                                                                                            -10-                                                                                          7084
  


----------------------- Page 11-----------------------

auction, and applying the proceeds from the sale to pay down the outstanding debt)."                                                 21  



                                                                                                                             

                     That Congress intended the FDCPA to apply to home mortgages is evident  



                                                                                                                              

not just from the Act's broad language but also from its legislative history.  The Senate  



                                                                                                                                    

Report  on  the  bill  observed,  for  example,  that  "[t]he  collection  of  debts,  such  as  



                                                                                                                                 

mortgages  and  student  loans,  by  persons  who  originated  such  loans"  is  not  debt  



collection, implying that the collection of mortgages by persons who did not originate  

                                              22   The Senate Report further stated that the activities of  

                                                                                                                                     

such loans is debt collection. 



"mortgage service companies" are not covered by the law "so long as the debts were not  

                                                                                                                                    



in default when taken for servicing," implying, again, that the activities of mortgage  

                                                                                                                          

service companies are covered if they otherwise meet the statutory definition.23   And as  

                                                                                                                                     



originally enacted in 15 U.S.C. § 1692l, the FDCPA's "Administrative enforcement"  

                                                                                                                   



section assigned enforcement of the FDCPA not only to the Federal Trade Commission,  

                                                                                                                    



but also to the Federal Home Loan Bank Board under "section 5(d) of the Home Owners  

                                                                                                                             



Loan Act of 1933, section 407 of the National Housing Act, and sections 6(i) and 17 of  

                                                                                                                                     



the Federal Home Loan Bank Act, . . . in the case of any institution subject to any of  

                                                                                                                                     

those provisions."24             The Federal Home Loan Bank Board was created by the Federal  

                                                                                                                             



Home Loan Bank Act of 1932 to oversee Federal Home Loan Banks, which in turn were  

                                                                                                                                 



           21        Glazer  v.  Chase  Home  Fin.  LLC,  704  F.3d  453,  461  (6th  Cir.  2013).  



           22        See   Eric   M.   Marshall,  Note,   The   Protective   Scope   of   the   Fair   Debt  



Collection  Practices  Act:   Providing Mortgagors   The  Protection   They  Deserve  From  

Abusive  Foreclosure  Practices,  94  MINN.  L.  REV.  1269,  1291  (2010)   (emphasis  added)  

(quoting  S.  REP.  NO.  95-382,  at  3  (1977)).  

           23        S.  REP.  NO.  95-382,  at  3-4  (1977).  



           24        Fair  Debt  Collections  Practices  Act,  Pub.  L.  No.  95-109,  91  Stat.  874,  882  



(1977).  In the   1976 United States Code,  "section 5(d) of the Home Owners Loan Act  

of   1933"  was codified  as 12  U.S.C.  §  464;  "section 407  of the  National  Housing  Act"  

was  codified  as   12  U.S.C.  §   1730;  and  "sections  6(i)  and   17  of  the  Federal  Home  Loan  

Bank  Act"  were  codified  as   12  U.S.C.  §§   1426  and   1427.  



                                                               -11-                                                             7084
  


----------------------- Page 12-----------------------

                                                                                                                                                                                25  

created  to  ensure  that local  lenders  had  funds  available  to  finance  home  mortgages.                                                                                       



Although  none  of  the  cited  laws  are  concerned  exclusively  with  home  mortgages,  that  is  



                                          26  

their  primary  focus;                        their  specific  mention  in  the  FDCPA  shows  at  least  Congress's  



awareness  that  unfair  debt  collection  practices  occurred  in  the  same  regulated  arena.  



                            The FDCPA's  list  of  enforcement agencies  was  most recently  modified  and  



simplified  under  the  Dodd-Frank  Act;  it  now  charges  "the  appropriate  Federal  banking  



agency"   with   enforcement   with   respect   to   FDIC-insured   banks   and   "State   savings  



associations,"  and  it  charges  the  newly-created  Consumer  Financial  Protection  Bureau  



                                                                                                                                                                                27  

(the  Bureau)  with  enforcement  "with  respect  to  any  person  subject  to  this  subchapter."                                                                                   



It   is  the  Bureau's   statutory   duty  to   "regulate  the   offering   and  provision   of   consumer  



              25            The   Federal   Home   Loan   Bank   Board   was   superceded   in   1989   by   the  



Federal Housing Finance Board, which in turn was superceded in 2008 by the Federal                                                        

Housing    Finance    Agency.       See    Financial    Institutions    Reform,    Recovery,    and  

Enforcement Act of 1989, Pub. L. No. 101-73, secs. 401(a)(2), 702-703, 12 U.S.C.                                                                                     

§§ 1422a, 1437(a), 103 Stat. 183, 354, 413, 415; Housing and Economic Recovery Act                                                                                          

of 2008, Pub. L. No. 110-289, secs. 1101, 1311, 12 U.S.C. §§ 4511, 4512, 122 Stat.                                                                                        

2654, 2661.   

              26            The primary purpose of the Home Owners' Loan Act of 1933 is "[t]o  

                                                                                                                                                                         

provideemergency reliefwithrespect to homemortgageindebtedness, to refinancehome  

                                                                                                                                                                         

mortgages, [and] to extend relief to the owners of homes occupied by them and who are  

                                                                                                                                                                             

unable to amortize their debt elsewhere." Home Owners' Loan Act of 1933, ch. 63, § 1,  

                                                                                                                                                                               

48  Stat.  128.                   The  National  Housing  Act's  full  title  is  "An  Act:  To  encourage  

                                                                                                                                                             

improvement  in  housing  standards  and  conditions,  to  provide  a  system  of  mutual  

                                                                                                                                                                    

mortgage insurance, and for other purposes."  National Housing Act, ch. 847, 48 Stat.  

                                                                                                                                       

 1246 (1934).  The Home Loan Bank Act, as its name implies, focused on increasing the  

                                                                                                                                                                             

nationwide availability of loans secured by home mortgages. See Home Loan Bank Act,  

                                                                                                                                                                           

ch. 522, § 10(a), 47 Stat. 725, 731 (1932) ("Each Federal Home Loan Bank is authorized  

                                                                                                                                                              

to make advances to members and nonmember borrowers, upon the security of home  

                                                                                                                                                                        

mortgages.").  

                              

              27            See  Dodd-Frank  Wall  Street  Reform  and  Consumer  Protection  Act,  

                                                                                                                                                                         

Pub. L. No. 111-203, sec. 1089, § 1692l, 124 Stat. 1376, 2092-93 (2010) (amending the  

                                                                                                                                                                             

FDCPA).  



                                                                                   -12-                                                                                  7084
  


----------------------- Page 13-----------------------

                                                                                                                                   28  

financial products or services under the Federal consumer protection laws,"                                                            and Dodd-  



Frank   requires  that courts defer                          to   the Bureau's interpretation                        of federal consumer     



financial laws "as if the Bureau were the only agency authorized to apply, enforce,                                                        

                                                               29  And as is described further below, the Bureau is  

interpret, or administer" such laws.                                                                                                                   



adamant in its view that home mortgage foreclosures are subject to the FDCPA.  

                                                                                                                                                



                        In Glazer v.Chase Home Finance, the Sixth Circuit found further support  

                                                                                                                                             

for  this interpretation  of the Act in  §  1692i.30                                     That provision requires that a debt  

                                                                                                                                                  



collector who is bringing "an action to enforce an interest in real property securing the  

                                                                                                                                                     



consumer's obligation" shall "bring such action only in a judicial district . . . in which  

                                                                                                                                      

such real property is located."31                         As the court noted in Glazer, § 1692i, limited to "debt  

                                                                                                                                                 



collectors,"  "suggests that filing any type of mortgage foreclosure action, even one not  

                                                                                                                                                     



                                                                                                                                               32  

seeking a money judgment on the unpaid debt, is debt collection under the Act."                                                                    

                                                                                                                                      



                        2.	        We are persuaded by the rationale of those courts holding that  

                                                                                                                                                   

                                    the FDCPA applies to mortgage foreclosures.  

                                                                                                                            



                        The Sixth Circuit in Glazer found persuasive the decision of the Fourth  

                                                                                                                                              



                                                                                            33  

Circuit in  Wilson v. Draper & Goldberg, P.L.L.C.,  

                                                                                                                                             

                                                                                                 as do we.   Wilson has a factual  



                                                                                                                                                        

background similar to that presented here.  The defendant law firm was retained by a  



            28          12  U.S.C.  §  5491(a)  (2012)  (a  Dodd-Frank  provision).  



            29          12  U.S.C.  §  5512(b)(4)(B).  



            30          704  F.3d  453,  461-62  (6th  Cir.  2013).  



            31          15 U.S.C. § 1692i(a)(1) (2012); see also S.  REP.  NO.  95-382, at 5 (1977)  

                                                                                                  

(noting  that  to  prevent  "forum  abuse,"  "[w]hen  an  action  is  against  real  property,  it  must  

be  brought  where  such  property  is  located").  

            32          704  F.3d  at  462   (emphasis  in  original).  



            33         Id. at 462-63 (citing Wilson v. Draper & Goldberg, P.L.L.C., 443 F.3d 373,  

                                                                                                                                                            

376, 378 (4th Cir. 2006)).  

                                  



                                                                       -13-	                                                                     7084
  


----------------------- Page 14-----------------------

                                                                                     34  

bank to foreclose on the plaintiff's mortgage.                                            It sent a letter advising the plaintiff of her                         



default and its plan to commence foreclosure proceedings in the near future; the letter                                                                      



further advised that it was "written pursuant to the provisions of the [FDCPA]" and was                                                                         

                                                                                                                                                         35    In a  

"an attempt to collect a debt" but that the law firm was not a "debt collector[]."                                                                             



follow-up  letter,  the  law  firm  responded  to  the  plaintiff's  request  for  the  amount  

                                                                                                                                                       



necessary to reinstate the loan and explained how a reinstatement payment should be  

                                                                                                                                                                  

made.36  

                   



                          The plaintiff sued for violations of the FDCPA:  specifically, "failing to  

                                                                                                                                                                   



verify the debt, . . . continuing collection efforts after [the plaintiff] had contested the  

                                                                                                                                                                 



debt, and . . .  communicating directly with her when they knew she was represented by  

                                                                                                                                                                  

counsel."37             The district court granted summary judgment to the defendants, concluding  

                                                                                                                                                  



that  "[t]rustees  foreclosing  on  a  property  pursuant  to  a  deed  of  trust  are  not  'debt  

                                                                                                                                                            

collectors' under the [Act]."38  

                                          



                          But the Fourth Circuit reversed.  It first rejected the defendants' argument  

                                                                                                                                                     



that they had not acted in connection with a "debt":  

                                                                                      



                          Defendants notified [the plaintiff] that she was in "default in  

                                                                                                                                          

                          [her] Deed of Trust Note payable to the Lender . . . [and] that  

                                                                                                                                      

                          the Lender [had] accelerated the debt." Defendants informed  

                                                                                                                            

                          [the plaintiff] that her failure to make mortgage payments  

                                                                                                                          

                          entitled Chase to immediate payment of the balance of her  

                                                                                                                                       

                          loan,  as  well  as  fees,  penalties,  and  interest  due.                                            These  

                                                                                                                                 

                          amounts are all "debts" under the Act, because they were  

                                                                                                                                   

                          "obligation[s] . . . to pay money arising out of a transaction in  

                                                                                                                                          



             34           Wilson,  443  F.3d  at  374.  



             35          Id.  at  374-75.  



             36          Id.  at  375.  



             37          Id.  



             38          Id.  (alterations  in  original).  



                                                                             -14-                                                                            7084
  


----------------------- Page 15-----------------------

                     which the . . . property . . . which [is] the subject of the                                

                      transaction [is] primarily for personal, family, or household                   

                     purposes."[39]  



                      The court next rejected the defendants' argument that the " 'debt' ceased  

                                                                                      

to be a 'debt' once foreclosure proceedings began."40                                   It held that the debt remained a  

                                                                                                                                          



debt, and that the defendants' "actions surrounding the foreclosure proceeding were  

                                                                                                                                   

attempts to collect that debt."41                      It observed that accepting the defendants' contrary  

                                                                                                                              



argument "would create an enormous loophole in the Act immunizing any debt from  

                                                                                                                                    



coverage if the debt happened to be secured by a real property interest and foreclosure  

                                                                                                                          



proceedings were used to collect the debt," and it saw "no reason to make an exception  

                                                                                                                            

to the Act when the debt collector uses foreclosure instead of other methods."42   Finally,  

                                                                                                                                



the court noted the law firm's provision of a reinstatement amount, payable to the law  

                                                                                                              



firm directly by cashier's check, as additional evidence that the law firm was a debt  

                                                                                                                                    

collector attempting to collect a debt.43  

                                                     



                      The Colorado Supreme Court reached the same conclusion in Shapiro &  

                                                                                                                                             

Meinhold v. Zartman.44  Liberally construing the FDCPA's definition of "debt collector"  

                                                                                                                            



in light of the Act's remedial purposes, the court held that the defendants in that case -  

                                                                                                                                        



attorneys pursuing judicial foreclosure proceedings -were"not exempt [fromcoverage  

                                                                                                                             



under the Act] merely because their collection activities [were] primarily limited to  

                                                                                                                                        



           39         Wilson,  443  F.3d.  at  376  (alterations  in  original)  (citation  omitted)  (quoting  



 15  U.S.C.  §   1692a(5)).  

           40        Id.  



           41        Id.  (citing Romea  v. Heiberger  & Assocs. ,  163 F.3d  111,  116 (3d  Cir.  

                                                                                                                                     

 1998); Shapiro & Meinhold v. Zartman, 823 P.2d 120, 124 (Colo. 1992)).  

                                                                                                            

           42        Id.  



           43        Id. at 376-77.  

                                

           44         823 P.2d at 124.  

                                          



                                                                -15-                                                               7084
  


----------------------- Page 16-----------------------

                             45  

foreclosures."                    Noting that the FDCPA's definition of "debt collector includes one who                                                                 



'directly or indirectly' engages in debt collection activities on behalf of others," the court                                                                         



concluded: "Since a foreclosure is a method of collecting a debt by acquiring and selling                                                                           



secured property to satisfy a debt, those who engage in such foreclosures are included                        



                                                                                                                                                                            46  

within the definition of debt collectors if they otherwise fit the statutory definition."                                                                                        



                           We agree that foreclosing on property, selling it, and applying the proceeds  

                                                                                                                                                                



to the underlying indebtedness constitute one way of collecting a debt - if not directly  

                                                                                                                                                                  



at least indirectly. The language of the Amended Notice of Default at issue here supports  

                                                                                                                                                                 



this conclusion.  Besides its express declaration that "[t]he purpose of this letter is to  

                                                                                                                                                                             

collect a debt" and its inclusion of a "Fair Debt Collection Practices Act Statement,"47  

                                                                                                                                                                                   



the Notice states "[t]he amount of the obligation secured" ("$196,712.28, plus interest,  

                                                                                                                                                                 



late charges, costs and any future advances") and gives notice that the trustee has elected  

                                                                                                                                                                   



to sell the property "and apply the proceeds to the indebtedness." It asserts that "[i]f you  

                                                                                                                                                                           



have been discharged of this debt in Bankruptcy, you are not to regard this message as  

                                                                                                                                                                              



a demand for payment" (emphasis added), strongly implying that absent a discharge in  

                                                                                                                                                                              



              45           Id.   



              46           Id.  



              47           We recognize  the  potential  unfairness  of  relying  on such language alone,  



given  that  entities  that  may  or  may  not  be  subject  to  the  FDCPA  will  understandably  err  

on  the  side  of  caution  and  include  it.   See  Newman  v.  Trott  & Trott,  P.C.,  889  F.  Supp.  2d  

948,   959-61   (E.D.   Mich.   2012) (holding,  pre-Glazer,   that   law   firm   that  was   a   "debt  

collector"  only  for  the  limited  purposes  of  15  U.S.C.  §1692f(6)  was  not  made  subject  to  

the  entire  FDCPA  because  of  the  "debt  collector"  warnings  on  its  letters).   On  the  other  

hand,  especially  under  the  "least sophisticated  consumer"  standard  applied  by the  federal  

courts,  it  is  difficult  to  conclude  that  a  debtor  reading  the  disclosure  language  would  not  

believe  what  it   says  -  that Alaska  Trustee  is   attempting  to   collect   a   debt.   See,  e.g.,  

Currier  v.  First  Resolution  Inv.  Corp.,  762  F.3d  529,  535-36  (6th  Cir.  2014)  (discussing  

nature  of  creditor's  assertion  of  lien  in  light  of  how  it  would  be  perceived  by  the  "least  

sophisticated  consumer").   



                                                                                  -16-                                                                                 7084
  


----------------------- Page 17-----------------------

bankruptcy the letter             is  a demand for payment.                 And as in        Wilson, the follow-up letter        



states   the   amount   of   money   necessary   to   reinstate   the   loan   and  gives   payment  

                                               48   Whether through reinstatement or less directly through  

instructions for reinstatement.                                                                                             



foreclosure sale and recovery of the proceeds, "[t]here can be no serious doubt that the  

                                                                                                                                    

ultimate purpose of [this] foreclosure is the payment of money."49  

                                                                                                         



                                                                                                                                          

                     3.	       The  arguments  against  holding  that  the  FDCPA  applies  to  

                                                                                    

                               mortgage foreclosures are not persuasive.  



                                                                                                                                   

                     For its different interpretation of the FDCPA, Alaska Trustee relies in part  



                                                                                                                                 

on the reasoning of the federal district court in Hulse v. Ocwen Federal Bank, FSB,  



                                                                                                                          

which concluded that "[t]he FDCPA is intended to curtail objectionable acts occurring  



                                                                                                                      

in the process of collecting funds from a debtor," whereas "foreclosing on a trust deed  



                                             50  

                                                  

is an entirely different path." 



                                                                                                                                    

                     According to the court in Hulse, "[p]ayment of funds is not the object of the  



                                                                                                                                     51  

                                                                                                                                          

foreclosure action.                Rather, the lender is foreclosing its interest in the property." 



Alaska Trustee reasons further that the FDCPA is not meant to protect the possessor of  

                                                                                                                                     



secured property in the same way it protects other debtors:  while it may be futile to  

                                                                                                                                     



harass a debtor for the repayment of funds the debtor does not have, the possessor of  

                                                                                                                                     



secured property can avoid harassment by simply returning the property (and therefore  

                                                                                                                           



           48        See   Wilson  v.  Draper  &  Goldberg, P.L.L.C., 443 F.3d 373,  375 (4th  Cir.  



2006).   Here,  the  reinstatement  letter  states,  "Reinstatement  funds  must  be in the  form  

of   a   cashier's   check  made  payable  to"   and  provides  boxes  to  be   checked  beside  two  

choices:   "Alaska  Trustee,  LLC"  and  "Our  client:   Wells  Fargo  Bank,  N.A."   Only  the  

"Our  client" box is checked, but the letter also makes it clear that in order for the loan  

to  be  reinstated  the  check  must  be  received  by  Alaska  Trustee  ("in  our  office")  by  a  time  

certain.  

           49        Glazer v. Chase Home Fin. LLC, 704 F.3d 453, 463 (6th Cir. 2013).  

                                                                                                                       

           50        195 F. Supp. 2d 1188, 1204 (D. Or. 2002).  

                                                                               

           51        Id.  



                                                               -17-	                                                            7084
  


----------------------- Page 18-----------------------

                                                                          52  

needs less protection from harassment).                                       



                                                                                                                                                      

                         We do not find this rationale persuasive.  As the Ambridges point out, a  



                                                                                                                                                           

home mortgage is, for most individuals, their largest and most long-term debt and the  



                                                                                                                                                  

most likely to be affected at some point by unforeseen financial difficulties. The lender's  



                                                                                                                                                           

foreclosure on its security - the home - is likely to be a devastating prospect for the  



                                                                                                                                              

homeowner,  who  may  therefore  be  particularly  susceptible  to  abusive  collection  

                  53  If Congress had intended to exclude such a substantial segment of consumer  

practices.                                                                                                                                     

debt from the reach of the FDCPA, it could easily have said so explicitly.54                                                                Indeed, the  

                                                                                                                                                            



Act's definition of "debt collector" lists six specific exclusions from the definition, none  

                                                                                                                                                        

of which encompasses the enforcers of mortgages or other security interests.55                                                                           Had  

                                                                                                                                                        



Congress intended to exclude such a significant category from the Act's coverage, the  

                                                                                                                                                           



list of exclusions would have been the obvious place for it to do so.  

                                                                                                                         



                         The  dissent  finds  determinative  the  distinction  between  a  consumer's  

                                                                                                                                           



obligation to pay money and a deed of trust, which is not itself an obligation to pay  

                                                                                                                                



money but rather a mechanism by which property is transferred in the event the money  

                                                                                                                                                     



            52           See Jordan v. Kent Recovery Servs., Inc.                                   , 731 F. Supp. 652, 658 (D. Del.                     



 1990) ("[T]he evil sought to be regulated by the FDCPA,                                                        i.e., harassing attempts to                  

collect money which the debtor does not have due to misfortune, is not implicated by the                                                                    

actions   of   an   enforcer   of   a   security   interest   with   a   'present   right'   to   the   secured  

property.").  

            53           See Marshall, supra note 22, at 1287 ("The detrimental effect of losing  

                                                                                                                                                     

one's home makes mortgagors particularly susceptible to coercive settlement practice."  

                                                                                                                                               

(footnote omitted)).  

                                        

            54           See Shapiro & Meinhold v. Zartman,  823 P.2d 120, 124 (Colo. 1992) ("If  

                                                                                                                                                           

Congress had intended to exempt from the FDCPA one whose principal business is the  

                                                                                                                                                           

enforcement  of  security  interests,  it  would  have  provided  an  exception  in  plain  

                                                                                                                                                       

language.").  

            55           15 U.S.C. § 1692a(6)(A)-(F) (2012).  

                                                                                



                                                                          -18-                                                                         7084
  


----------------------- Page 19-----------------------

                  56  

is not paid.           But in the past we have taken a more functional approach.                                       In  Dworkin v.   



                                                         57  

First National Bank of Fairbanks                                                                                                            

                                                             we considered whether an action to foreclose a  



                                                                                                                                        

mortgage was governed by a ten-year statute of limitations for actions to enforce real  



                                                                                                                             

property liens or instead by the six-year statute of limitations for actions to collect the  



                                                                                                                                         

underlying debt.  We recognized two schools of thought on the issue but concluded that  



                                                                                                                                          

"[i]n our view the sounder result is reached by those authorities which hold that in the  



                                                                                                                                           

absence of a controlling statute the foreclosure action is subject to the same period of  

                                                          58  We relied on language the Washington Supreme  

                                                                                                                                

limitations as the underlying debt." 



Court had quoted with approval from a Colorado case:  

                                                                                  



                      In Colorado, whether the form of security be a mortgage or  

                                                                                                                     

                      a deed of trust, the debt is the principal thing.  The security is  

                                                                                                                      

                      a mere incident. . . . An action to foreclose a mortgage or  

                                                                                                                     

                      deed of trust is simply, in effect, an action to collect the debt,  

                                                                                                                 

                      to secure the payment of which was the sole purpose of its  

                                                                                                                     

                      execution; and, when the statute after the lapse of a certain  

                                                                                                             

                      time  bars  an  action  upon  the  debt  for  its  collection,  we  

                                                                                                                   

                      believe  it  includes  all  actions  seeking  to  effectuate  that  

                                                                                                                  

                                    [59]  

                      purpose. 



This description continues to reflect the real nature of a home mortgage foreclosure:  

                                                                                                                                                



"simply, in effect, an action to collect the debt."  

                                                                                        



                      We also disagree with the dissent's position that Alaska Trustee cannot be  

                                                                                                                                           



held liable under the FDCPA for sending the notice that commences a non-judicial  

                                                                                                                          



           56         Dissent  at   1-5.  



           57         444  P.2d  777,  780-82  (Alaska   1968).  



           58  

                                                     

                      Id. at 782 (citing 3 R.  POWELL,  THE  LAW  OF  REAL  PROPERTY  ¶  461,  at  682- 

83 (1967));  see  also  id.  at  782  n.24  (noting the  "undesirability  of  the  results" in                                       states  

that   allow   foreclosure   after   the   statute   of   limitations   has   run   on   collection   of   the  

underlying  debt).   

           59         Id. (emphasis added) (quoting Pratt v. Pratt, 209 P. 535, 536 (Wash. 1922)  

                                                                                                                                     

(quoting McGovney v. Gwillim, 65 P. 346, 347 (Colo. App.  1901))).  

                                                                                                                  



                                                                  -19-                                                                7084
  


----------------------- Page 20-----------------------

foreclosure under Alaska law because the notice "did not attempt to collect money" and                                                 



                                                     60  

because it is statutorily required.                                                                                         

                                                         As explained above, we conclude that a reasonable  



                                                                                                                                       

consumer would read the notice as a demand for payment; the debtor can avoid the  



                                                                                                                                         

threatened action only by paying the debt.   And that a notice is required in order to  



                                                                                

advance a state foreclosure proceeding does not mean it cannot at the same time be an  



                                                                                                                                         

attempt to collect a debt and thus subject to the FDCPA.   In Romea v. Heiberger &  



                                                                                                                                     

Associates , for example, a landlord's law firm pursuing evictions was required by New  



                                                                                                                                           

York law to give a three-day notice of the amount of past-due rent as the first step in a  

                                                                                                      61  The law firm argued  

                                                                                                                                 

"summary proceeding to recover possession of real property." 



that the purpose of the repossession process was "not debt collection, but rather 'a means  

                                                                                                                                  



of quickly adjudicating disputes over rights of possession of real property,' " to which  

                                                                                                                               

                                                                                              62    The court rejected these  

the amount owed by the tenant was merely "incidental."                                                                              

                                                                          



arguments in language equally relevant here: "Although [the law firm] is correct that the  

                                                                                                                                        



notice required by [the summary eviction law] is a statutory condition precedent to  

                                                                                                                                         



commencing a summary eviction proceeding that is possessory in nature, this does not  

                                                                                                                                       

mean  that the notice is mutually  exclusive with debt collection."63                                              The Consumer  

                                                                                                                           

Financial Protection Bureau takes the same position.64  

                                                                        



           60         Dissent  at   13-16.    



           61         163  F.3d   111,   116  (2d  Cir.   1998).  



           62         Id.  



           63         Id.  



           64         Brief  of  Amicus  Curiae  Consumer  Financial  Protection  Bureau  in  Support  



of Appellant and Reversal at 13,  Ho v.  ReconTrust  Co., No.   10-56884 (Aug. 7, 2015),  

http://files.consumerfinance.gov/f/201508_cfpb_  amicus-brief_ho-v-reconstruct-n.pdf.  

("That  such  a  misrepresentation  might  have  occurred  in  the  context  of  a  state-mandated  

notice  does  not  somehow  immunize  Appellees  from  abiding  by  §  1692e  in  the  course  of  

providing  such  notices.").  



                                                                 -20-                                                               7084
  


----------------------- Page 21-----------------------

                           Finally, we disagree with the dissent's warning that "making deed of trust                                                                  



trustees . . . 'debt collectors' will wreak havoc" on the non-judicial foreclosure process                                                                      



because the FDCPA allows consumers to ask debt collectors to cease contact and to                                                                                          



validate disputed debts, steps the dissent predicts "will grind non-judicial deed of trust                                                                             

                                             65   But the FDCPA specifically allows continued communication  

foreclosures to a halt."                                                                                                                        



with a consumer "where applicable, to notify the consumer that the debt collector or  

                                                                                                                                                                           

creditor intends to invoke a specified remedy,"66 an exception that applies to the types  



of notice provided during nonjudicial foreclosure proceedings.67  And the debt validation  

                                                                                                                                                            



procedure contemplated by the FDCPA can be as simple as mailing the consumer a copy  

                                                                                                                                                                     



of "verification of the debt or a copy of a judgment, or the name and address of the  

                                                                                                                                                                         



              65           Dissent  at  7-8  (citing   15  U.S.C.  §§   1692c(c)  and   1692g(b)  (2012)).  



              66            15  U.S.C.  §   1692c(c)(3).   



              67           See  Graveling  v.  Castle  Mortg.  Co.,  ___  F.  App'x  ___,  No.  14-15198,  2015  



WL  6847947  at *7 (11th Cir.  Nov.  9, 2015) ("[E]ven if the [debtors']  request that  the  

defendants  cease  communications  was  distinct  from  their  request  for  debt  validation,  the  

acceleration   notice   was   still   a   permissible   communication   because   it   notified   the  

[debtors]  of  [the  debt  collector's]  intent  to  invoke  the  specific  remedy  of  acceleration  and  

foreclosure.");   Cohen  v.  Beachside   Two-I  Homeowners'  Ass'n ,  No.  05-706  ADM/JS,  

2006  WL 1795140 at *14 (D. Minn. 2006) (holding that attorney's letter "falls within  

the  third  statutory  exception  to  15  U.S.C.  §  1692c(c)  because  [the  attorney]  was  further  

notifying [the  debtor]  of   [the  creditor's]  intent  to  invoke  a  specified  remedy,  namely,  

foreclosure"   (specifically   "foreclosure   by   advertisement,"   a   nonjudicial   foreclosure  

remedy  provided by  state law));  see also Vitullo  v. Mancini, 684 F. Supp.  2d 747, 758  

(E.D.   Va.   2010)   (dismissing   a   claim   that   notice   of   a   nonjudicial   foreclosure   notice  

violated  15  U.S.C.  §  1692c(a)(2)  because  "the  FDCPA  does  not  prohibit  debt  collectors  

from  foreclosing  on  debtors'  properties  pursuant  to  state  law,  and  nothing  in  the  FDCPA  

authorizes  debt  collectors  to  violate  or  fail  to  comply  with  state  foreclosure  laws");  Lewis  

v.  ACB  Bus. Servs., Inc.,  911  F.  Supp.  290,  293  (S.D.  Ohio   1996)  aff'd,   135  F.3d  389  

(6th  Cir.  1998)  (dismissing  a  claim  that  a  debt  collector  with  "notice  not  to  make  further  

contact"  violated   15  U.S.C. § 1692c(c)  because  the  letter  offered  payment  plans  that  

were  covered  under   §   1692c(c)(2)  as a     "standard  remedy   'ordinarily  invoked  by  such  

debt  collector'  ").    



                                                                                 -21-                                                                                7084
  


----------------------- Page 22-----------------------

                               68                                                                                                              69  

original creditor,"               a step we doubt a trustee would have difficulty taking if asked.                                                     



                                                                                                                                       

                       4.  Mortgage foreclosure is not governed by section 1692f(6) alone.  



                                                                                                                                    

                       Finally, wenecessarily rejectAlaskaTrustee's otherdefinitional argument,  



                                                    70 

                                                                                                                                       

                                                       :    that  under  §  1692a(6),  entities  enforcing  security  

also  advanced  by  the  dissent 



                                                                                                                                      

interests are "debt collectors" only for purposes of § 1692f(6), i.e., if they are "[t]aking  



                                                                                                                                     

or threatening to take any nonjudicial action to effect dispossession . . . of property"  



                                                                                                                                                

when there is no present right or intention to do so.  We note again the structure of the  



                                                                                                                                              

definitional section, which defines "debt collector" to include a person in a business "the  



                                                                                                                                    

principal purpose of which is the collection of any debts" and a person who "regularly  



                                                                                    71  

                                                                                                                                     

collects or attempts to collect" debts due another.                                      This general definition is explicitly  



                                                                                                                                              

expanded, not qualified, by the phrase, "For the purpose of section 1692f(6) of this title,  



                                                                                                                                    

such term also includes any person who uses any instrumentality of interstate commerce  



                                                                                                                                        

or the mails in any business the principal purpose of which is the enforcement of security  



            68         15 U.S.C. § 1692g(b) (emphasis added).                    



            69         The  Ninth  Circuit  has  followed  other  federal  courts  to  hold  that  

                                                                                                                                             

"verification of a debt [for purposes of § 1692g(b)] involves nothing more than the debt  

                                                                                                                                              

collector confirming in writing that the amount being demanded is what the creditor is  

                                                                                                                                                   

claiming is owed."  Clark v. Capital Credit & Collection Servs., Inc., 460 F.3d 1162,  

                                                                                                                                            

 1173-74 (9th Cir. 2006) (quoting Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir.  

                                                                                                                                          

 1999)); see also Maynard v. Cannon, 401 F. App'x 389, 396 (10th Cir. 2010) ("This  

                                                                                                                                                       

provision is not intended to give a debtor a detailed accounting of debt to be collected.  

                                                                                                                                                 

Instead,  '[c]onsistent  with  the  legislative  history,  verification  is  only  intended  to  

                                                                                                                                                  

eliminate the problem of debt collectors dunning the wrong person or attempting to  

                                                                                                              

collect debts which the consumer has already paid.' " (quoting Chaudhry, 174 F.3d at  

            

406)).  

            70         Dissent at 3-5.  

                                          

            71         15 U.S.C. § 1692a(6).  

                                             



                                                                     -22-                                                                   7084
  


----------------------- Page 23-----------------------

                                 72  

interests."                            The phrase "also includes" cannot reasonably be read to eliminate persons                                                                                                                                     



who would otherwise be included in the Act's broad definition.                                                                                                                                          



                                          We do agree with the dissent's observation that, structurally, the definition                                                                                                                         



differentiates between businesses the principal purpose of which is "the collection of any                                                                                                                                                                         



debts"   and   those   the   principal   purpose   of   which   is   "the   enforcement   of   security  



interests."   We agree that a business cannot be both.                                                                                                                  But a business whose principal                                           



purpose is not "the collection of any debts" may still be a debt collector under the general                                                                                                                                                           



definition because, though its                                                            "principal purpose"is something                                                                       else, it "regularly collects   



or attempts to collect" debts due another.                                                                                            Such a business may have as its principal                                                                  



purpose the enforcement of security interests. On the other hand, a business may enforce                                                                                                                                                               



security interests as its principal purpose but                                                                                          not  regularly collect debts; such a business                                                           



does not satisfy the general definition and is a "debt collector" for purposes of section   



 1692f(6) only.   



                                          To say that mortgage foreclosures are debt collection is not to say, as the   



dissent would have it, that all enforcement of security interests is debt collection, thus                                                                                                                                                                      

                                                                                                                                                                                                       73   The FDCPA defines  

making the definition's reference to security interests redundant.                                                                                                                                                                                     

"debt" as a consumer's "obligation . . . to pay money."74                                                                                                                         The documents at the heart of  

                                                                                                                                                                                                                                                                       



this case, though they certainly serve notice purposes in the foreclosure process,  also  

                                                                                                                                                                                                                                                               



plainly reflect attempts to collect a debt.  They are replete with references to "the debt,"  

                                                                                                                                                                                                                                                           



"the indebtedness," and "the obligation." No reasonable consumer could read the Notice  

                                                                                                                                                                                                                                                         



of Default and not understand that, as the Notice plainly states, "The purpose of this  

                                                                                                                                                                                                                                                                 



letter is to collect a debt." But the enforcement of security interests will not always entail  

                                                                                                                                                                                                                                                             



these obvious debt-collection measures. A repossession agency, for example, may take  

                                                                                                                                                                                                                                                                 



                     72                  Id.   (emphasis  added).  



                     73                   Dissent  at  4-5,   12.  



                     74                   15  U.S.C.  §   1692a(6).  



                                                                                                                             -23-                                                                                                                             7084
  


----------------------- Page 24-----------------------

automobiles off the street and have no regular practice of communicating with debtors                                                                                 



in a way that a reasonable consumer would interpret as prompting the payment of money                                                                                   

                                                                                                                                              75   Such businesses  

-  indeed, such businesses may not communicate with debtors at all.                                                                                             



are brought into the "debt collector" definition for the narrow prohibitive purposes of  

                                                                                                                                                                                 



§ 1692f(6) only.  But unlike such entities, Alaska Trustee not only enforces security  

                                                                                                                                      



interests; it also attempts to collect debts under the ordinary meaning of those words.  

                                                                                                                                                                    



                            This was the conclusion of the Sixth Circuit in Glazer:  the third sentence  

                                                                                                                                                                    



of § 1692a(6) is a statement of inclusion, not exclusion.  That is, it does not operate to  

                                                                                                                                                                 



exclude an entire category of persons and entities who would otherwise be included in  

                                                                                                                                                                                 



the definition, but rather "simply 'make[s] clear that some persons who would be without  

                                                                                                                                                                      

the scope of the general definition are to be included where § 1692f(6) is concerned.' "76  

                                                                                                                                                                                       



The Sixth Circuit in Glazer concluded that the sentence probably brought into the "debt  

                                                                                                                                                                          



collector" definition only "repossession agencies and their agents," noting that "we can  

                                                                                                                                                                              



think of no others whose only role in the collection process is the enforcement of security  

                                                                                                                                                                     

                     77    But even the limited expansion of the definition to "repossession agencies  

interests."                                                                                                                                                         



and their agents" serves a real purpose.   A company in the business of repossessing  

                                                                                                                                                          



vehicles may well have no regular practice of communicating with debtors that would  

                                                                                            



subject the company to the myriad provisions of the Act governing the allowable content  

                                                                                                                                                                       



              75            Generally   speaking,   repossession   agencies   are   "businesses   which  are  



employed by the owner of collateral to dispossess the debtor of the collateral and return                                                                                

it to the owner."                   Ghartey v. Chrysler Credit Corp.                                      , 1992 WL 373479, at *4 (E.D.N.Y.                     

Nov. 23, 1992).                    

              76            Glazer  v.  Chase  Home  Fin.  LLC,  704  F.3d  453,  463  (6th  Cir.  2013)  

                                                                                                                                                              

(quoting Piper v. Portnoff Law Assocs., Ltd., 396 F.3d 227, 236 (3d Cir. 2005)); see also  

                                                                                                                                                                             

 Wilson v. Draper & Goldberg, P.L.L.C., 443 F.3d 373, 378 (4th Cir. 2006).  

                                                                                                                                                 

              77            Glazer, 704 F.3d at 463-64.  

                                                                       



                                                                                    -24-                                                                                   7084
  


----------------------- Page 25-----------------------

                                                    78  

of such communications;                                  but the definitional section clarifies that even such an entity                                                 



is prohibited by the Act from repossessing or threatening to repossess the property if                                                                                           



there is "no present right" or "present intention" to take it or if the property is exempt                                                                           



                                       79  

from repossession.                            



                            We recognize the split in authority regarding the effect of § 1692f(6) on the  

                                                                                                                                                                               



"debt collector" definition.  Alaska Trustee relies on Derisme v. Hunt Leibert Jacobson  

                                                                                                                                                                 



P.C., which adopted the conclusion of two federal courts of appeal and the Federal Trade  

                                                                                                                                                                         



Commission (FTC) that "the purposeful inclusion of enforcers of security interests for  

                                                                                                                



one section of the FDCPA [§ 1692f(6)] implies that the term debt collector does not  

                                                                                                                                                                              

include an enforcer of security interests for any other sections of the FDCPA."80                                                                                           But  

                                                                                                                                                                            



both of the cited federal circuits - the Sixth and the Eleventh - have more recently  

                                                                                                                                                                    



decided the issue the other way, holding that an enforcer of security interests may also  

                                                                                                                                                                            



be a debt collector subject to the broader provisions of the FDCPA so long as it meets  



              78            See   15  U.S.C.   §§   1692b   ("Acquisition   of   location   information"),   1692c  



("Communication   in   connection   with   debt   collection"),    1692d   ("Harassment   or  

abuse"),1692e   ("False   or  misleading representations"),   1692f(1)-(5),   (7)-(8)   ("Unfair  

practices"),   1692g   ("Validation   of   debts"),   1692h   ("Multiple   debts"),   1692i   ("Legal  

actions  by  debt  collectors"),   1692j  ("furnishing  certain  deceptive  forms").    

              79            15 U.S.C. §§1692a(6), 1692f(6).  

                                                                             

              80            880 F.  Supp. 2d 311, 324 (D. Conn. 2012).   The court in Derisme  also  

                                                                                                                                                                            

relied on the FTC "Commentary on the Fair Debt Collection Practices Act," as cited in  

                                                                                                                                                                                 

Jordan v. Kent Recovery Servs., Inc., 731 F. Supp. 652, 658 (D. Del. 1990), and Warren  

                                                                                                                                                                     

v. Countrywide Home Loans, Inc., 342 F. App'x 458, 460 (11th Cir. 2009) (referencing  

                                                                                                                                                           

the principle of expressio unius est exclusio alterius and concluding that "the statute  

                                                                                                                                                                       

specifically says that a person in the business of enforcing security interests is a 'debt  

                                                                                                                                                                         

collector' for the purposes of §1692f(6), which reasonably suggests that such a person  

                                                                                                                                                                      

is not a debt collector for purposes of the other sections of the Act").  See Derisme, 880  

                                                                                                                                                                             

F. Supp. 2d at 323-35.  

                               



                                                                                   -25-                                                                                   7084
  


----------------------- Page 26-----------------------

                                                                                          81                                                                                                                                                                                                                    82  

the general definition.                                                                            And  Derisme 's reliance on the FTC commentary                                                                                                                                                                      appears to   



have been misplaced.                                                                      The commentary provides, "Because the FDCPA's definition of                                                                                                                                                                                                     



 'debt collection' includes parties whose principal business is enforcing security interests                                                                                                                                                                                                                                     



only for . . . [§ 1692f(6)] purposes, such parties (                                                                                                                                                if they do not otherwise fall within the                                                                                                          



                                                                                                                                                                                                                                                                                                                                     83  

definition) are subject only to this provision and not to the rest of the FDCPA."                                                                                                                                                                                                                                                             



                                                       As  noted  above,  the  Dodd-Frank  Act  gave  primary  authority  for  

                                                                                                                                                                                                                                                                                                                                                  



enforcement of the FDCPA to the Consumer Financial Protection Bureau, which has  

                                                                                                                                                                                                                                                                                                                                                    



been forceful about the need to ensure that mortgage foreclosure proceedings are not  

                                                                                                                                                                                                                                                                                                                                                    



                            81                         See Glazer                                   , 704 F.3d at 463 (explicitly rejecting                                                                                                                      Montgomery, 346 F.3d                                                          



693, 699-701 (6th Cir. 2003) and stating that "the ['debt collector'] definition does not                                                                                                                                                                                                                                                            

except fromdebt collection theenforcement ofsecurity interests;                                                                                                                                                                                                     it simply 'make[s] clear   

that some persons who would be without the scope of the general definition are to be                                                                                                                                                                                                                                                                    

included where § 1692f(6) is concerned.' "(second alterationinoriginal) (quoting                                                                                                                                                                                                                                                         Piper,  

396 F.3d at 236));  see also Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d   

 1211, 1216-18 (11th Cir. 2012) (holding that an enforcer of security interests could have                                                                                                                                                                                                                                                      

"dual purposes," whereby it could act to enforce security interests and also attempt to                                                                                                                                                                                                                                                                   

collect on underlying debts);                                                                                         Birster v. Am. Home Mortg. Servicing, Inc.                                                                                                                                        , 481 F. App'x                  

 579, 582-83 (11th Cir. 2012) (following                                                                                                                             Reese 's reasoning and explicitly rejecting that                                                                                                                              

of   Warren).  



                                                       Both parties to this appeal cite                                                                                                Dunavant v. Sirote & Permutt, P.C.                                                                                                                     , 603   

F.  App'x 737 (11th Cir. 2015), as supporting their positions.                                                                                                                                                                                                  The court in                                            Dunavant   

affirmed a lower court's ruling that a defendant that only published foreclosure notices                                                                                                                                                                                                                                             

in the newspaper was an enforcer of security interests and not a debt collector, but in so                                                                                                                                                                                                                                                               

doing it reaffirmed that an entity could be both, and that it could be liable under the                                                                                                                                                                                                                                                              

FDCPA if its activities constituted the collection of a debt.                                                                                                                                                                                     Id.  at 740.                                   The newspaper   

notices at issue in                                                    Dunavant, unlike those in this case, were not attempts to collect a debt:                                                                                                                                                                                                                    

they "were not addressed to the debtors, and included no information relating to the                                                                                                                                                                                                                                                                 

collection of payments from them."                                                                                                                  Id.   

                            82                         880 F. Supp. 2d at 324 (stating that "the FTC expressed its view that  

                                                                                                                                                                                                                                                                                                                                                 

enforcers of security interests only fall within the ambit of § 1692f(6)").  

                                                                                                                                                                                                                                                    

                            83                        Jordan,  731  F.  Supp.  at  658  (alteration  in  original)  (emphasis  added)  

                                                                                                                                                                                                                                                                                                                                     

(quoting Statements of General Policy or Interpretation Staff Commentary On the Fair  

                                                                                                                                                                                                                                                                                                                                                  

Debt Collection Practices Act, 53 Fed. Reg. 50,097, 50,108 (Dec. 13, 1988)).  

                                                                                                                                                                                                                                                                                               



                                                                                                                                                                    -26-                                                                                                                                                                       7084
  


----------------------- Page 27-----------------------

exempted  from  the  FDCPA's  protections.   In  its  statutorily  mandated  annual  report  to  



Congress  on  the  Fair  Debt  Collections  Act  in  2013,  the  Bureau  explained  why  it  had  filed  



an   amicus  brief   in   support of  the   consumers   in  Birster  v.  American  Home  Mortgage  



                      84  

Servicing,  Inc.,   a  case  recently  decided  by  the  Eleventh  Circuit:  



                   Some  courts  have  unduly  restricted  the  FDCPA's  protections  

                   by  rejecting  challenges  to  harmful  practices  occurring  in  the  

                   context  of  foreclosure  proceedings.   In  particular,  courts  have  

                   concluded   that   businesses  involved   in   enforcing   security  

                   interests  are  not  "debt  collectors"  subject  to  most  of  the  Act's  

                   requirements,   and   that   activity   surrounding   foreclosure   or  

                   other  enforcement  of  security  interests  is  not  debt  collection  

                   covered   by   the   Act.    These   decisions   have   left   consumers  

                   vulnerable  to  harmful  collection  tactics  as  they fight  to  save  

                   their  homes  from  foreclosure.[85]  



The court in Birster held that a loan servicer that advised the debtors it would foreclose  

                                                                                                                 



on their home unless they cured their default by paying a certain sum within 30 days  

                                                                                                                       



"may be liable under the FDCPA beyond § 1692f(6) even though it was also enforcing  

                                                                                                                

                            86  The Bureau's amicus brief in Birster was followed by another in  

a security interest."                                                                                                      

                



          84       481  F. App'x  579  (11th  Cir.  2012);  see  Brief  of  The  Consumer  Financial  



Protection  Bureau  as  Amicus  Curiae  in  Support  of  Plaintiffs-Appellants  and  Reversal  at  

16,  Birster  v.  American  Home  Mortg.  Servicing,  Inc.,  481  F.  App'x  579  (11th  Cir.  2012)  

(No.   11-13574-G),  http://files.consumerfinance.gov/f/201112_CFPB_  Brister-amicus- 

brief.pdf  ("The  plain  language,  purposes,  and  prior  administrative  interpretations  of  the  

[FDCPA]  all  make  clear  -  and  the  great  weight  of  authority  confirms  -  that  an  entity  

meeting   the   general   definition   of   'debt   collector'   qualifies   as   a   'debt   collector'  for  

purposes  of  the  entire  Act,  even  if  its  principal  purpose  is  enforcing  security  interests  and  

even  if  it  is  enforcing  a  security  interest  in  the  particular  case.").  

          85       Consumer Fin. Protection Bureau, FAIR  DEBT  COLLECTION PRACTICES  ACT  

                                                                     

ANN . REP.,  27  (2013).  

          



          86       Birster,   481   F.   App'x   at  583.    The   dissent   questions   our   reliance   on  



Eleventh  Circuit  law,  stating  that  "Eleventh  Circuit  district  courts  continue  to  answer  this  

question  ['whether  a  party  enforcing  a  security  interest  without  demanding  payment  on  

                                                                                                          (continued...)  



                                                          -27-                                                        7084
  


----------------------- Page 28-----------------------

Ho  v.  ReconTrust  Co.,  in  which  the  Bureau  again  advanced  the  same  interpretations  of  



           87  

the  Act.      



                   Ultimately,  while  the  provisions  of  the  FDCPA  could  certainly  be  clearer  



on  the  question  presented  in  this  case,  we  conclude  that  the  meaning  we  find  in  them  is  



most consistent with their language, liberally interpreted in light  of the  Act's remedial  



purposes.    The   superior   court   was   correct in   ruling   that   Alaska   Trustee,   through   its  



processing   of   nonjudicial   foreclosures,   is   a   "person   who   uses   .   .   .   the   mails   in   any  



business the  principal  purpose  of  which  is  the  collection  of  any  debts,"  is  therefore  a  



"debt  collector"  as  defined  by  §  1692a(6),  and  is  subject  to  the  broader  provisions  of  the  

FDCPA.88  



         86(...continued)  



the  underlying  debt  is  attempting  to  collect  a  debt']  in  the  negative".   Dissent  at   15  and  

n.52  (citing  Beepot  v.  J.P.  Morgan  Chase  Nat'l  Corp.Servs.,  57  F.  Supp.  3d  1358,  1376  

(M.D. Fla. 2014)  (relying on   Warren v. Countrywide Home Loans,  Inc., 342 F. App'x  

458,  460-61  (11th  Cir.  2009),  and  Freire  v.  Aldridge   Connors,  LLP,  994  F.   Supp.  2d  

 1284,   1287-88  (S.D.  Fla.  2014).   Another  district  court  within  the  Eleventh  Circuit  has  

concluded   that  "the   Warren   rule   has   been   undermined,   if   not   overturned,   by   two  

subsequent Eleventh  Circuit  opinions,"  Reese  and  Birster,  and  "[i]f  nothing  else,  it  is  

now  clear  that  'the  enforcer  of  a  security  interest  [can]  be  held  liable  under  the  FDCPA  

beyond   §   1692f(6)'  because,  in  one  fell  swoop,   'an  entity  can  both  enforce  a  security  

interest   and   collect   a   debt.'   "     Deutsche   Bank   Trust   Co.   Americas   v.   Garst,   989  

F.  Supp.  2d   1194,   1200 (N.D.  Ala.  2013)  (emphasis  omitted).   As  for  Freire,  while  it  

perhaps  interpreted  Reese  too  narrowly  in  light  of  Birster,  the  court  nonetheless  reached  

a  result  consistent  with  it,  holding  that  a  foreclosure  complaint  that  attached  a  notice  of  

the amounts due could have  a "dual purpose" of both enforcing  a security interest and  

collecting  a  debt.   Freire,  994  F.  Supp.  2d  at   1288-89.       

         87        Brief of Amicus Curiae Consumer Financial Protection Bureau in Support  

                                                                                                               

of Appellant and Reversal at 6-20, Ho v. ReconTrust Co., No. 10-56884 (Aug. 7, 2015),  

                                                                                                                 

http://files.consumerfinance.gov/f/201508_cfpb_amicus-brief_ho-v-recontrust-n.pdf .  

         88        We used broad language in Barber v. National Bank of Alaska, 815 P.2d  

                                                                                                             

857, 860-61 (Alaska 1991), to conclude that the FDCPA was not intended to encompass  

                                                                                                           

                                                                                                      (continued...)  



                                                        -28-                                                      7084
  


----------------------- Page 29-----------------------

                   B.	               The Superior Court Did Not Err In Determining That Routh Is A                                                                                                                                      

                                     "Debt   Collector"   Under   The   FDCPA,   But   The   Evidence   Did   Not  

                                     Support Its Conclusion That Routh Was Liable For The Violation At                                                                                                                                

                                     Issue.   



                                     We also affirm the superior court's decision that Steven Routh, Alaska                                                                                                               



Trustee's sole owner and shareholder, was a "debt collector" subject to liability under                                                                                   



the   FDCPA,   but   we   disagree   with   the   superior   court's   conclusion   that   Routh   was  



therefore necessarily liable for the violation at issue.                                                                         



                                     Alaska Trustee argues that Routh cannot be held liable under the FDCPA                                                                                                            



unless he personally participated in a specific violation of the Act.                                                                                                                            Alaska Trustee   



focuses on the statutory section Routh is alleged to have                                                                                            violated, which states in relevant                                 



part:   "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 . . . , send the consumer a written notice                                                                                                                                        

containing . . . the amount of the debt . . . ."                                                                  89  

                                                                                                                                                                                                                            

                                                                                                                         According to Alaska Trustee, "[t]he statute  



                                                                                                                                                                                                                                 

clearly places the burden of providing the amount of the debt on the debt collector who  



                                                                                                                                                                                                                                 

 sent the initial communication to the debtor[,] . . . the Alaska Trustee employee who  



                                                                                                                                                                                                                                     

mailed the Notice of Default, and Alaska Trustee itself."  Holding Routh liable for the  



                   88(...continued)  



                                                                                                                                                                                                                                     

mortgages or mortgage service companies.  But the issue before us in Barber, and the  

                                                                                                                                                                                                                    

authority on which we relied, were limited to "mortgage service companies servicing  

                                                                                                                                                                                                                    

debts which were not in default when service commenced," a category clearly excluded  

                                                                                                                                                                                                                                                

from the Act's definition of "debt collector."   Id.  at 860; 15 U.S.C. § 1692a(6)(F)  

(defining "debt collector" as not including a person engaged in collection activity that  

                                                                                                                                                                                                                  

"concerns a debt which was not in default at the time it was obtained by such person.");  

                                                                                                                                                                                                                                 

Perry  v.  Stewart  Title  Co.,  756  F.2d  1197,  1208  (5th  Cir.  1985)  (observing  that  

                                                                                                                                                                                                                                    

legislative history "indicates conclusively that a debt collector does not include the  

                                                                                                                                                     

consumer's creditors, a mortgage servicing company, or an assignee of a debt, as long  

                                                                                                                                  

as the debt was not in default at the time it was assigned.").  

                   89                15 U.S.C. § 1692g(a)(1).  

                                                                     



                                                                                                              -29-	                                                                                                             7084
  


----------------------- Page 30-----------------------

business's debt-collection practices, Alaska Trustee argues, is an assertion of vicarious                                             



liability,   contravening   state   law   intended   to   insulate   members   of   limited   liability  



                                                                                              90  

companies from individual liability for corporate acts.                                            



                                                                                                                                                   

                       Alaska Trustee urges that we instead apply the Ninth Circuit's analysis in  



                                                                                                                                        

Cruz  v.  International  Collection  Corp.,  in  which  the  court  considered  the  FDCPA  

                                                                                                                                 91  The court  

                                                                                                                                              

liability of the sole owner, officer, and director of a debt collecting company. 



observed  in  Cruz  that  merely  because  an  individual  meets  the  definition  of  "debt  

                                                                                                                                            



collector" does not mean he has violated the FDCPA:  "[T]he FDCPA does not prohibit  

                                                                                                                                         



merely qualifying as a debt collector but instead prohibits debt collectors from taking  

                                                                                                                                           

certain  specific  actions."92                      Determining  individual  liability  under  the  FDCPA  is  

                                                                                                                                                  



therefore a two-step analysis, in which courts ask "1) whether the individual qualifies as  

                                                                                                                                                   



a debt collector, and 2) whether that individual has taken an action that violates the  

                                                                                                                                                 

FDCPA."93              We agree that this two-step analysis is appropriate.  

                                                                                           



                       Again, "debt collector" is relevantly defined as "any person who uses . . .  

                                                                                                                                                     



the mails in any business the principal purpose of which is the collection of any debts,  

                                                                                                                                            



or who regularly collects or attempts to collect, directly or indirectly, debts owed . . . or  

                                                                                                                                                   

due  another."94              We  agree  that  a  person  with  a  mere  ownership  interest  in  a  debt  

                                                                                                                                              



            90         See   AS   10.50.265   ("A   person   who   is   a   member   of   a   limited   liability  



company  .  .  .  is  not  liable,  solely  by  reason  of  being  a  member,  .  .  .  for  a  liability  of  the  

company   to   a   third   party   .   .   .   for   the   acts  or  omissions   of   another   member   .   .   .   or  

employee  of  the  company  to  a  third  party.").  

            91         673 F.3d 991 (9th Cir. 2012).  

                                                                

            92         Id. at 999-1000.  

                                  

            93         Id.  at   1000.  



            94          15 U.S.C. § 1692a(6).  

                                             



                                                                     -30-                                                                    7084
  


----------------------- Page 31-----------------------

 collection business is unlikely to fall within this definition.                                                                                                                                                                                                                                                                                                        95  But the facts of this case   



 go beyond mere ownership.                                                                                                                                                   



                                                                                  The evidence showed that Routh was Alaska Trustee's sole owner and                                                                                                                                                                                                                                                                                                                     



managing   member   and   had   been   since   the   company's   creation  in  2005.     He   was  



ultimately in charge of the company's operations, though he attested that in recent years                                                                                                                                                                                                                                                                                                                                                                                                                     



his   management   was   "at   the   enterprise   level   of   client   relations,   staffing   decisions,  



 strategic planning and the like" and that he often spent "only a few hours a week, if any,"                                                                                                                                                                                                                                                                                                                                                                                                                 



 at Alaska Trustee's offices.                                                                                                                                           The day-to-day manager, Athena Vaughn, reported to him                                                                                                                                                                                                                                                                                        



 and in turn supervised the other managerial employee, Rose Santiago.  Routh testified   



that Vaughn and Santiago were "the operational piece" of the company's management,                                                                                                                                                                                                                                                                                                                                                                          



but they did not have access to the business's financial information.  As the managing   



member he was in "[f]requent contact with [Vaughn], both [by] phone and in person,"                                                                                                                                                                                                                                                                                                                                                                                                       



 and "[i]ssues that [were] important [got] elevated                                                                                                                                                                                                                                                              [to him] very quickly."                                                                                                                              He had the                                          



 final say on the language of forms and correspondence, though he was likely to get                                                                                                                                                                                                                                                                                                                                                                                                                                      



 involved only when "made aware that there are issues that go beyond just the mere                                                                                                                                                                                                                                                                                                                                                                                                                           



 formalities or issues that need counsel involved." But given what Routh perceived as the                                                                                                                                                                                                                                                                                                                                                                                                                                   



high-risk legal environment - in which "we need to be very careful on what is said and                                                                                                                                                                                                                                                                                                                                                                                                                                 



parse things very closely" in order to avoid litigation - he testified that "most changes                                                                                                                                                                                                                                                                                                                                                                                                   



 [to collection forms] would either be touched on by me and reviewed by me or . . . more                                                                                                                                                                                                                                                                                                                                                                                                       



typically, I think, counsel."                                                                                                                                            



                                                                                  In sum, Routh's involvement in the business, though usually distant, was                                                                                                                                                                                                                                                                                                                                                           



that of a high-level manager with real decisional authority, not an absentee owner or                                                                                                                                                                                                                                                                                                                                                                                                                                          



                                         95                                      See, e.g.                                           ,  Schwarm v. Craighead                                                                                                                              , 552 F. Supp. 2d 1056, 1073 (E.D. Cal.                                                                                                                                              



2008) ("[B]ecause the FDCPA imposes personal, not derivative, liability, serving as a                                                                                                                                                                                                                                                                                                                                                                                                                                                 

 shareholder, officer, or director of a debt collecting corporation is not, in itself, sufficient                                                                                                                                                                                                                                                                                                                                                                                   

to hold an individual liable as a 'debt collector.' ");  Moritz v. Daniel N. Gordon, P.C.                                                                                                                                                                                                                                                                                                                                                                                                                                                   ,  

 895 F. Supp. 2d 1097, 1109 (W.D. Wash. 2012) (following                                                                                                                                                                                                                                                                                                                    Schwarm).  



                                                                                                                                                                                                                                                    -31-                                                                                                                                                                                                                                                         7084
  


----------------------- Page 32-----------------------

shareholder whose only interest was financial.                                     These undisputed facts are sufficient to                          



establish that Routh is a person who "regularly collects or attempts to collect, directly or                                                         

                                                                              96   and is therefore a "debt collector" for  

indirectly, debts owed . . . or due another"                                                                                                       

purposes of the FDCPA.97  

                             



                        This does not answer the second question identified in Cruz - whether  

                                                                                                                                          

Routh, as a debt collector, "has taken an action that violates the FDCPA."98   The court  

                                                                                                                                               



in  Cruz  did  not  need  to  answer  this  question  at  length,  since  the  individual  under  

                                                                                                                                              



            96          15 U.S.C. § 1692a(6).        



            97         We acknowledge that there is again a range of views on when individual  



                                                                                                                                                          

owners,  officers,  or  employees  are  "debt  collectors"  for  purposes  of  the  FDCPA.  

                                                                                                                                                  

Compare Pettit v. Retrieval Masters Credit Bureau, Inc., 211 F.3d 1057, 1059 (7th Cir.  

                                                                                                                                                    

2000) ("Because [officers and shareholders] do not become 'debt collectors' simply by  

                                                                                                                                                    

working  for  or  owning  stock  in  debt  collection  companies,  we  held  [in  White  v.  

                                                                                                                                   

Goodman, 200 F.3d 1016, 1019 (7th Cir. 2000),] that the Act does not contemplate  

                                                                                                                                                    

personal liability for shareholders or employees of debt collection companies who act on  

                                                                                                                                                  

behalf of those companies, except  perhaps in limited instances where the corporate veil  

                                                                                                                                                 

is pierced."), with Kistner v. Law Offices of Michael P. Margelefsky, LLC, 518 F.3d 433,  

                                                                                                                                                    

437-38  (6th  Cir.  2008)  (holding  "that  subjecting  the  sole  member  of  an  LLC  to  

                                                                                                                                                     

individual liability for violations of the FDCPA will require proof that the individual is  

                                                                                                                                                     

a 'debt collector,' but does not require piercing of the corporate veil"); see also Brink v.  

                                                                                                                                                

First Credit Res., 57 F. Supp. 2d 848, 862 (D. Ariz. 1999) (holding that officers who  

                                                                                                                                      

"materially  participated  in  the  activities  of  [the  company]  alleged  to  be  collection  

                                                                                                                                                  

activities" may be "debt collectors under the statute"); Ditty v. CheckRite, Ltd ., Inc., 973  

                                                                                                                                                   

F. Supp. 1320, 1336-37 (D. Utah 1997) ("[A]s the firm's sole attorney, developer of the  

                                                                                                                                                 

 'covenant not to sue' practice, author of the generic letters utilized by the firm, and  

                                                                                                                                         

supervisor of all of the firm's collection activities, Mr. DeLoney was regularly engaged,  

                                                                                                                                                    

directly and indirectly, in the collection of debts.").  We agree with the view that an  

                                                                                                                                                    

individual  is  or  is  not  a  "debt  collector"  under  the  Act  based  on  his  own  level  of  

                                                                                                                                                   

involvement and his own activities, not those of the entity he owns or manages; the  

                                                                                                                                           

liability is not vicarious, nor does it depend on whether the corporate veil can be pierced.  

            98          Cruz, 673 F.3d at 1000.  

                                                        



                                                                      -32-                                                                     7084
  


----------------------- Page 33-----------------------

                                                                                                                                                                                                           99  

discussion "himself was personally involved in at least one violation of the FDCPA."                                                                                                                            



                                                                                                                                                                                                         

Here, the parties and the superior court did not address Routh's liability in terms of  



                                                                                                                                                                                                 

 Cruz's two-step analysis:   their apparent assumption was that if Routh was a "debt  



                                                                                                                                                                               

 collector" as defined in the Act, he was liable for the alleged violation.  Many courts  



                                                                                                                                                                                                           

 seem to follow a similar analysis.  The superior court in this case cited Del Campo v.  



                                                                                                                                                                                                

American Corrective Counseling Service, Inc. , which noted three measures other courts  



                                                                                                                                                                                       

have used to determine whether individuals should be held liable:  they "(1) materially  



                                                                                                                                                                                                    

participated  in  collecting  a  debt,  (2)  exercise[d]  control  over  the  affairs  of  [a  debt  



                                                                                                                                                                                                       

 collection]  business,  or  (3)  were  regularly  engaged,  directly  and  indirectly,  in  the  

                                                  100      The second and third of these tests seem to conflate the two  

                                                                                                                                                                                                     

 collection of debts." 



questions of (1) whether the individual is a "debt collector" and, (2) if so, whether he  

                                                                                                                                                                                                         



violated the FDCPA. We therefore find it most helpful to frame the issue - whether the  

                                                                                                                                                                                                        



individual has "taken an action that violates the FDCPA" - in terms of whether the  

                                                                                                                                                                                                       



                                                                                                                                                                   101  

individual "materially participated" in the specific violation alleged.                                                                                                   

                                                                                                                                                 



                                The violation at issue here is the debt collector's failure to include the full  

                                                                                                                                                                                                       



                99              Id.  



                100             Del Campo v. Am.                           CorrectiveCounseling Serv., Inc.                                               , 718 F. Supp. 2d 1116,                 



 1127 (N.D. Cal. 2010) (alterations in original) (footnotes omitted);                                                                                             see also Moritz v.   

Daniel N. Gordon, P.C.                                  , 895 F. Supp. 2d 1097, 1109 (W.D. Wash. 2012) ("[C]ourts have                                                                              

 found an individual personally liable if 'the individual 1) materially participated in                                                                                                                   

 collecting the debt at issue; 2) exercised control over the affairs of the business; 3) was                                                                                                          

personally involved in the collection of the debt at issue; or 4) was regularly engaged,   

 directly or indirectly, in the collection of debts.' " (quoting                                                                              Schwarm, 552 F. Supp. 2d   

 at 1073)).               

                101             See Del Campo v. Mealing, No. C 01-21151 SI, 2013 WL 4764975, at *10- 

                                                                                                                                                                                                    

 11 (N.D. Cal. Sept. 5, 2013) ("The Court concludes that under Cruz, plaintiffs must  

                                                                                                                                                                                                   

demonstrate that [the individual debt collector] materially participated not only in debt  

                                                                                                                                                                                                     

 collection but also in the specific FDCPA violations alleged by plaintiffs.").  

                                                                                                                                                         



                                                                                                -33-                                                                                               7084
  


----------------------- Page 34-----------------------

amount due in the initial communication to the debtor or within five days of it.                                                                                                           102  The  



                                                                                                                                                                                            103  

Act provides that it is the "debt collector" who "shall" provide this information.                                                                                                                       

                                                                                                                                                                                                    It is  



                                                                                                                          

undisputed that this information was not provided.  



                                                                                                                                                                                 

                                But the undisputed facts show that Routh did not "materially participate"  



                                                                                                                                                                                                     

in creating the notices of default that the Ambridges allege were in violation of the  



                                                                                                                                                                                              

FDCPA.  The superior court concluded, on Routh's undisputed testimony, that Routh  



                                                                                                                                                                                                       104  

                                                                                                                                                                                                               

"did not draft, review, approve or sign the Notice of Default" sent to the Ambridges. 



Routh  testified  that  while  "[t]he  creation  of  forms  and  so  forth  might  have  my  

                                                                                                                                                                                                    



involvement," most foreclosure documents were drafted without it, including the form  

                                                                                                                                                                                                 



at issue here.   He testified that the notices of default could be changed without his  

                                                                                                                                                                                                     



approval unless he was made aware that there were issues that "go beyond just the mere  

                                                                                                                                                                                                 



formalities or [were] issues that need counsel involved."  Routh testified that Alaska  

                                                                                                                                                                                            



Trustee did change its forms in response to the superior court's rulings on the violation  

                                                                                                                                                                                        



alleged in this case; he testified further that while he was "aware of" the changes made,  

                                                                                                                                                                                               



he  did  not  make  them  himself,  and  that  he  later  approved  them  based  on  the  

                                                                                                                                                                                                    



                102             15   U.S.C.   §   1692g(a)(1)   (2012)   ("Within   five   days   after   the   initial  



communication with a consumer in connection with the collection of any debt, a debt                                                                                                              

collector shall,unless                             thefollowing information is contained in theinitialcommunication                                                      

or the consumer has paid the debt, send the consumer a written notice containing . . . the                                                                                                          

amount of the debt . . . .");                                  see Miller v. McCalla                              , 214 F.3d 872, 875-76 (7th Cir. 2000)                                       

("What [the defendants] certainly could do was to state the total amount due - interest                                                                                                     

and other charges as well as principal - on the date the dunning letter was sent.                                                                                                                  We  

think the statute required this.").                          

                103             15 U.S.C. § 1692g(a)(1).  

                                                            

                104             See Mealing, 2013 WL 4764975, at *11 (stating that to establish liability  

                                                                                                                                                    

for specific FDCPA violations, plaintiffs were required to show evidence that defendant  

                                                                                                                                                                                      

"materially participated"ineach violation, "suchas, for example, that [defendant]played  

                                                                                                                                                                                              

a material role in developing, approving or ratifying the contents and format of the  

                                                                                                                                                                                                     

communications in use . . . that plaintiffs allege violate the FDCPA" (citing Musso v.  

                                                                                                                                                                                                         

Seiders, 194 F.R.D. 43, 47 (D. Conn. 1999))).  

                                                                                                               



                                                                                               -34-                                                                                              7084
  


----------------------- Page 35-----------------------

recommendation of counsel.                                       Routh also testified that any potential problem with the                                                               



notices of default that Alaska Trustee served on the Ambridges never "crossed [his]                                                                                                  



                                                                                            105  

radar" before the superior court's rulings.                                                         



                                                                                                                                                                         

                             We conclude that these facts are insufficient to show that Routh materially  



                                                                                                                                                                                                 

participated in the specific violation of the FDCPA that the Ambridges are pursuing.  



                                                                                                          

Under the two-step inquiry of Cruz, Routh is a "debt collector" but is not individually  



                                                                                                                                                                             

liable for the violation.  We therefore affirm in part, and reverse in part, the superior  



                                                     

court's decision of this issue.  



                                                                                                                                                                                 

               C.	            The Superior Court Did Not Err In Awarding Injunctive Relief Under  

                                         

                              The UTPA.  



                                                                                                                                                                         

                              The superior court held that the Ambridges were entitled to an injunction  



                                                                                                                                                                                       

under the Unfair Trade Practices and Consumer Protection Act (UTPA),  requiring that  



                                                                                                                                                                                       

Alaska               Trustee               conform                 its        notices              of        default              to        the         requirements                      of  



                                                      106  

                                                                                                                                                                                          

 15 U.S.C. § 1692g(a)(1).                                    The court concluded that injunctive relief was authorized by  



                                                                                                                                                                            

AS 45.50.535(a), which provides that "any person who was the victim of [an] unlawful  



                                                                                                                                                                                          

act, whether or not the person suffered actual damages, may bring an action to obtain an  



                                                                                                                                                                              

injunction prohibiting a seller or lessor from continuing to engage in an act or practice  



                                                                                                                                                                                       

declared unlawful under AS 45.50.471." We affirm the superior court's decision of this  



issue.  



               105            Cf. Musso             , 194 F.R.D. at 47 (denying motion to dismiss claims against "a                                                                        



stockholder and top executive" of a collection company where the plaintiff alleged "that                                                                                             

he is personally liable as a debt collector because he knew of the allegedly unlawful                                                                                      

procedures being used but nevertheless approved or ratified them").                                                                                     

               106           Alaska Trustee had already changed its challenged practices before the  

                                                                                                                                                                                        

superior court ruled on the Ambridges' request for an injunction.   But "[v]oluntary  

                                                                                                                                                                   

cessation does not moot a case or controversy unless 'subsequent events ma[ke] it  

                                                                                                                                                                                            

absolutely clear that the allegedly wrongful behavior could not reasonably be expected  

                                                                                                                                                                            

to recur.' " Parents Involved in Cmty. Sch. v. Seattle Sch. Dist. No. 1, 551 U.S. 701, 719  

                                                                                                                                                                                       

(2007) (citations omitted).  

                                       



                                                                                        -35-	                                                                                       7084
  


----------------------- Page 36-----------------------

                                       Alaska   Trustee   challenges   the   propriety   of   injunctive   relief   on   three  



 grounds.   First, it argues that an FDCPA violation is not necessarily a violation of the                                                                                                                                                      



UTPA, because Alaska law would not consider unfair or deceptive every conceivable                                                                                                                   



violation of the federal law.                                                           Alaska Trustee contends that the Ambridges were not                                                                                                    



harmed or misled in any way by what in this case was at most a technical violation of the                                                                                                                                                        



FDCPA,   because the Ambridges knew that the                                                                                                    notice of default included                                                     only   the  



principal amount due (it was explicitly described as such) and they could not have paid                                                                                                                                                      



 it anyway.                     



                                       We reject this argument. Alaska Statute 45.50.471(a) declares unlawful all                                                                                                                                 



 "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct                                                                                                                                         



 of trade or commerce."                                             The legislature has directed that in interpreting these words we                                                                                                             



 give "due consideration and great weight" to "the interpretations of 15 U.S.C. § 45(a)(1)                                                                                                                                      

                                                                                                              107  The words of Alaska's statute therefore "have  

 [the Federal Trade Commission Act]."                                                                                                                                                                                                    



 a fixed meaning . . . which has emerged from agency and judicial interpretation of the  

                                                                                                                                                                                                                                                



                                                                                                              108  

 identical words of the federal statute."                                                                              

                                                                                       



                                       Weappliedtheseprinciples in Statev. O'Neill Investigations, Inc., in which  

                                                                                                                                                                                                                                        



we held that the activities of independent debt collectors fall within the scope of the  

                                                                                                                                                                                                                                               

UTPA.109   We defined "unfairness" by reference to F.T.C. v. Sperry & Hutchinson Co.,  

                                                                                                                                                                                                                                             



 in which the United States Supreme Court set out these factors for consideration:  

                                                                                                                                                                                                 



                                       (1) whether the practice . . . offends public policy as it has  

                                                                                                                                                                                                         

                                       been established by statutes . . . , in other words, it is within  

                                                                                                                                                                                                

                                       at least the penumbra of some common-law, statutory, or  

                                                                                                                                                                                                            



                    107                AS 45.50.545.   



                    108  

                                                                                                                                                                                                                                          

                                      ASRC Energy Servs. Power & Commc'ns, LLC v. Golden Valley Elec.  

                                                                                                                                                                                                                                              

Ass'n , 267 P.3d 1151, 1158 (Alaska 2011) (quoting State v. O'Neill Investigations, 609  

                                                                   

P.2d 520, 532 (Alaska 1980)).  

                    109                609 P.2d at 528.  

                                                                         



                                                                                                                   -36-                                                                                                                    7084
  


----------------------- Page 37-----------------------

                          other   established   concept   of   unfairness;   (2)   whether  it   is  

                          immoral, unethical, oppressive, or unscrupulous; (3) whether                                        

                          it causes substantial injury to consumers (or competitors or                                                  

                          other businessmen).                   [110]  



To simplify matters here, the FDCPA expressly states that a violation of it "shall be  

                                                                                                                                                                 



deemed  an  unfair  or  deceptive  act  or  practice  in  violation  of  [the  Federal  Trade  

                                                                                                                                                          

Commission  Act],"111  the Act the legislature requires us to consider in interpreting  

                                                                                                                                               

AS 45.50.471.112                  Clearly, a violation of the FDCPA falls "within at least the penumbra  

                                                                                                                                                   

of some . . . statutory . . . concept of unfairness," thus satisfying the first Sperry factor.113  

                                                                                                                                                                        



Under O'Neill, a violation of the FDCPA is inescapably an "unfair or deceptive act[] or  

                                                                                                                                                                  



practice[]" under AS 45.50.471(a).  

                                          



                          Alaska Trustee's second argument is that holding the UTPA applicable to  

                                                                                                                                                                  



violations of the FDCPA that involve real property foreclosures conflicts with our line  

                                                                                                                                                               



of cases holding that "goods or services" for purposes of the UTPA do not include real  

                                                                                                                                                               

                                    114    We addressed this issue most recently in Alaska Trustee, LLC v.  

estate transactions.                                                                                                                                               

             



Bachmeier, in which we affirmed that "[f]or the past thirty years we have consistently  

                                                                                                                              



             110         Id.  at 535 (quoting                 F.T.C. v. Sperry & Hutchinson Co.                                  , 405 U.S. 233, 244           



n.5  (1972)).  

             111          15 U.S.C. § 1692l(a) (2012).  

                                                                   

             112          AS 45.50.545.  

                                  

             113          All three Sperry factors are not necessary to a finding of unfairness.  "A  

                                                                                                                                                                

practice may be unfair because of the degree to which it meets one of the criteria or  

                                                                                                                                                                  

because to a lesser degree it meets all three."  Robinson v. Toyota Motor Credit Corp.,  

                                                                                                                                                          

775 N.E.2d 951, 961 (Ill. 2002) (quoting Disclosure Requirements and Prohibitions  

                                                                                                                                              

Concerning Franchising & Business Opportunity Ventures, 43 Fed. Reg. 59,614, 59,635  

                                                                                                                                                         

(1978)).  

             114          See Roberson v. Southwood Manor Assocs., LLC, 249 P.3d 1059, 1061  

                                                                                                                                                            

(Alaska 2011); Barber v. Nat'l Bank of Alaska, 815 P.2d 857, 861 (Alaska 1991); State  

                                                                                                                                                            

v. First Nat'l Bank of Anchorage, 660 P.2d 406, 412-14 (Alaska 1982).  

                                                                                                                             



                                                                             -37-                                                                           7084
  


----------------------- Page 38-----------------------

                                                                                                                                                   115  

held that 'the sale of real property is not within the regulatory scope of the [UTPA].' "                                                                



                                                                                                                                            

At  issue  in  Bachmeier  were  two  statutory  amendments,  the  most  recent  of  which  



                                                                                                                                         

expanded the UTPA's definition of "goods or services" to include "goods or services  



                                                                                                                                                  

provided in connection with . . . a transaction involving an indebtedness secured by the  

                                        116   We concluded that the amendment "elaborated what types of  

                                                                                                                                                    

borrower's residence." 



goods and services are covered by the Act, but did not change the longstanding definition  

                                                                                                                                       



of goods and services itself - a definition that has never encompassed real property  

                                                                                                       

transactions."117  

                              



                                                                                                                 118  

                       There was no FDCPA claim before us in Bachmeier.                                               The plaintiff's sole  

                                                                                                                                                 



argument for coverage under the UTPA was based on the amendments to the definition  

                                                                                                                                      

                                                                                    119   The argument here is different: not  

of "goods or services," an argument we rejected.  

                                                                                                                                                  



that nonjudicial foreclosures are covered "goods or services," but that violations of the  

                                                                                                                                                  



FDCPA  in  the  course  of  nonjudicial  foreclosures  are  "unfair  or  deceptive  acts  or  

                                                                                                                                                   



practices" that are brought within the UTPA by O'Neill and the statutory command that  

                                                                                                                                                 



we align our interpretation of the UTPA with federal interpretations of the Federal Trade  

                                                                                                                                             



Commission Act.   There are different avenues to coverage under the UTPA, and a  

                                                                                                                                                     



violation of the FDCPA is one of them.  

                                                            



            115        332 P.3d 1, 5 (Alaska 2014) (quoting                              First Nat'l Bank             , 660 P.2d at 414).
         



            116  

                                                                                                                                            

                       Id. at 6-7 (quoting AS 45.50.561(a)(9)); see also ch. 55, § 9, SLA 2004.
  



            117  

                                                             

                       Id. at 7 (emphasis in original).
  



            118  

                                                                                                                                                    

                       Bachmeier arose out of a similar lawsuit against Alaska Trustee.  See id. at
  

                                                                                                                                         

2-4.  Although the plaintiff in Bachmeier alleged an FDCPA violation in the superior  

                                                                                         

court, it was not at issue on appeal.  Id . at 3-4 & 3 n.6.  

            119        Id. at 6-7.  

                                  



                                                                      -38-                                                                    7084
  


----------------------- Page 39-----------------------

                          Finally, we turn to Alaska Trustee's argument that the UTPA's injunctive                                                      



                                                                                                                                           120  

relief provision does not apply to it because it is not "a seller or lessor."                                                                                           

                                                                                                                                                  In support of  



                                                                                                                                                                      

this   argument,   Alaska   Trustee   contends   that   "[a]   non-judicial   foreclosure   is  



                                                                                                                                                                      

unquestionably a service related to real property and is not a consumer service, as the  



                                                                                                                                                      

person 'purchasing' the service is not a consumer, but generally a financial institution,  



                                                                                                                                                                      

mortgage servicer, or an individual who provided owner financing and for whom the  



                                                                                                                                                                     

foreclosure must be regarded as a business transaction." We have already explained that  



                                                                                                                                                            

application of the UTPA in this case follows from the claimed violations of the FDCPA  



                                                                                                                                                                     

and does not depend on whether the service is related to real property.  Nor did the  



                                                                                                                                                      

legislature intend to limit the UTPA to "consumer" services, as our prior cases have  

                                         121     And the UTPA injunction provision does not require that the  

                                                                                                                                                                      

repeatedly observed. 



person seeking the remedy be a "consumer" of the service; it allows a claim by "any  

                                                                                                                                                                  

person who was the victim of the unlawful act."122  

                                                                                       



                          For these reasons, we conclude that the superior court did not err when it  

                                                                                                                                                             



awarded injunctive relief to the Ambridges under AS 45.50.535(a).  

                                                                                                                                          



V.           CONCLUSION  



                          We REVERSE the decision of the superior court holding Routh liable for  

                                                                                                                                                                      



the violation at issue.  We otherwise AFFIRM the decisions of the superior court.  

                                                                                                                                                       



             120          AS 45.50.535(a) provides, in relevant part, that a person "may bring an                                                                      



action to obtain an injunction prohibiting                                       a seller or lessor                from continuing to engage in                         

an act or practice declared unlawful under AS 45.50.471"                                                            (emphasis added).   

             121          See Donahue v. Ledgends, Inc., 331 P.3d 342, 353 (Alaska 2014) (noting  

                                                                                                                                                              

that the UTPA was designed to protect both consumers and "honest businessmen from  

                                                                                                                                                                  

thedepredations ofthosepersons employingunfairordeceptivetradepractices"(quoting  

                                                                                                                                                           

 W. Star Trucks, Inc. v. Big Iron Equip. Serv., Inc., 101 P.3d 1047, 1052 (Alaska 2004))).  

                                                                                                                                                            

             122          AS 45.50.535(a).  

                                   



                                                                               -39-                                                                              7084
  


----------------------- Page 40-----------------------

WINFREE,  Justice,  with  whom  STOWERS,  Justice,  joins,  dissenting.  



                    The  primary  issue  in  this  appeal  is  whether  a  business  that  regularly  -  but  



only - acts  as  a  trustee  conducting  non-judicial deed  of  trust  foreclosures  falls  for  all  



purposes   under   the   Fair   Debt   Collection   Practices   Act's   (FDCPA)   "debt   collector"  



                1  

definition.    Because   the   court   collapses   the   FDCPA's   disparate   usage   of   the   terms  



                                               2  

"security interest"   and   "debt";   because   one   who   merely   enforces   a   security   interest  



should   not   be   subject   to   the   entire   FDCPA   but   only   to   its  illegal   dispossession  



                 3  

subsection;  and  because  the  Ambridges  brought  suit  under  a  FDCPA  section  requiring  



                                                                                                                       4  

an  "initial   communication   .   .   .   in connection  with  the   collection   of   any   debt"  before  



liability  attaches,  but  a  statutorily  required  notice  of  default  under  Alaska  law  is  not  such  



a  communication,  I  dissent.  



          I.        A  Deed  Of  Trust  Is  A  Security  Instrument,  Not  A  Debt.  

                    A  deed  of  trust  is  interdependent  yet  distinct  from  the  debt  it  secures.5  



          1          15  U.S.C.  §§   1692-1692p  (2012).  



          2         See  id.  §   1692a(6)  (defining  the  term  "debt  collector").  



          3         See  id.  §   1692f(6).   



          4         Id.  § 1692g(a).  

                             

          5         See Espeland  v.  OneWest Bank,  FSB, 323 P.3d  2,  9-10  (Alaska 2014)  

                                                                                                                          

(stating that trustors "signed a Promissory Note creating the obligation to repay their loan  

                                                                                                                              

and a Deed of Trust giving the lender, through the trustee, the right to sell the property  

                                                                                                                       

if they failed to repay the loan"); accord Jackson v. Mortg. Elec. Registration Sys., Inc.,  

                                                                                                                             

770 N.W.2d 487, 493-94 (Minn. 2009) ("Historically, promissory notes and security  

                                                                                                                       

instruments have been treated as two distinct documents that are legally intertwined.  A  

                                                                                                                                 

real property mortgage has  'two things, the personal obligation and the interest in the  

                                                                                                                               

realty securing that obligation.' " (citation omitted) (quoting 4 GEORGE   E.   OSBORNE,  

                                                                                                  

AMERICAN   LAW   OF   PROPERTY   §   16.107   (1952)));   GRANT  S.   NELSON   ET   AL.,   REAL  

ESTATE   TRANSFER, FINANCE,                           DEVELOPMENT   100   (8th   ed.   2009)   ("A   mortgage  

                                               AND   

involves  a  transfer  by  a  debtor-mortgagor  to  a  creditor-mortgagee  of  a  real  estate  interest,  

to  be  held  as  security  for  the  performance  of an  obligation,  normally  the  payment  of  a  

                                                                                                               (continued...)  



                                                             -40-                                                          7084
  


----------------------- Page 41-----------------------

                            The mortgage was created by the early English court as a                                                                

                            transfer   of   title   from   the   mortgagor   to   the   mortgagee,  

                            generally   as   security   for   a   loan   by   the   mortgagee   to   the  

                            mortgagor.    Once the mortgagor repaid the loan proceeds,                                            

                            title to the property would return to him.                                             If, however, the             

                            mortgagor failed to pay the mortgage by the due date, called                                                  

                                                                                                                                              [  ]  

                            the law day, he would forfeit all interest in the property.                                                        6 



Because of injustices surrounding law day forfeitures, a common law right of equitable  

                                                                                                                                                               



redemption developed allowing a mortgagor to repay the loan after law day and thus  

                                                                                                                                                                         

regain title to property.7   But the right of equitable redemption made title uncertain, and  

                                                                                                                                                                          



therefore the remedy of strict foreclosure arose:   "If the mortgagor failed to redeem  

                                                                                                                                                                  



within [a certain time], the redemption right was forever barred and both legal and  

                                                                                                                                                                          

equitable title to the real estate vested in the mortgagee."8  

                                                                                            



                            From this emerged the concept that a mortgage - or as is commonly used  

                                                                                                                                                                        

in Alaska, a deed of trust9  - should not be treated as a transfer of title but rather "as  

                                                                                                                                                                           



merely a security interest in the property" that " 'confers no right to possession of that  

                                                                                                                                                                    

                                                                                                                                                           10   In short,  

real estate on the mortgagee' . . . . 'until there has been a valid foreclosure.' "                                                                                                

                                                                                                                                                         



              5(...continued)  



debt  evidenced  by  a  promissory  note.").  

              6             Young   v.  Embley,   143   P.3d   936,   940   (Alaska   2006)   (footnote   omitted)  



(citing  1  GRANT  S.  NELSON  &  DALE  A.  WHITMAN,  REAL  ESTATE  FINANCE  LAW  §  1.2,  at  

6-7  (4th  ed.  2002)).  

              7             See  id.  



              8             RESTATEMENT  (THIRD) OF  PROP.:  MORTGS.   §  3.1  cmt.  a  (1997).  



              9             For  the  most  part  Alaska  law  does  not  differentiate  between  deeds  of  trust  



and  mortgages  because  both  "  'accomplish[]  the  same  purpose[]  [of]  creating  a  security  

interest  in  land.'  "   Young,  143  P.3d  at  941-42  (quoting  Brand  v.  First  Fed.  Sav.  &  Loan  

Ass'n  of  Fairbanks,  478  P.2d  829,  831  (Alaska   1970)).  

              10           Id.  at 940 (quoting RESTATEMENT   (THIRD)   OF   PROP.:   MORTGS.   §   4.1(a)  

                                                                     

                                                                                                                                                      (continued...)  



                                                                                  -41-                                                                                 7084
  


----------------------- Page 42-----------------------

non-judicial foreclosure - the process through which a security interest in property is                                                 



              11  

enforced                                                                                                                             

                 - does not in and of itself collect a debt, but rather " 'calls for the vesting and  



                                                                                                                           12  

                                                                                                          

divesting of title to real property' " according to the parties' prior agreement. 



                                                                                                                                 

                     Against  this  historical  backdrop  the  FDCPA  defines  the  term  "debt  



                                                                                                                                            

collector" differently depending on whether a debt or a security interest is at issue.  



                                                      

Relevant here, a "debt collector" is:  



                                                                                                      

                      [A]ny  person  who  uses  any  instrumentality  of  interstate  

                                                                                                         

                     commerce or the mails in any business the principal purpose  

                                                                                                      

                     of  which  is  the  collection  of  any  debts,  or  who  regularly  

                                                                                                             

                     collects or attempts to collect, directly or indirectly, debts  

                                                                                                                

                     owed or due or asserted to be owed or due another. . . .  For  

                                                                                         [13]  such term also  

                                                                                                               

                     the purpose of section 1692f(6) of this title, 

                     includes  any  person  who  uses   any  instrumentality  of  

                                                                                                                 

                     interstate commerce or the mails in any business the principal  

                                                                                                       



           10(...continued)  



                ELSON  & W        HITMAN,  supra  note 6, § 1.5, at 10).             

(1997); N 

           11        See generally AS 34.20.070.  

                                                   

           12        See Derisme v. Hunt Leibert Jacobson P.C., 880 F. Supp. 2d 311, 321 (D.  

                                                                                                                                     

Conn. 2012) (quoting City of New Haven v. God's Corner Church, Inc., 948 A.2d 1035,  

                                                                                                                                  

1040 (Conn. App. 2008)); see also AS 34.20.070(a) (permitting non-judicial foreclosure  

                                                                                                                         

sale if deed of trust "provides that in the case of default . . . trustee may sell the property  

                                                                                                                             

for condition broken"); AS 34.20.090(a) (stating non-judicial foreclosure sale "transfers  

                                                                                                                           

all title and interest that the party executing the deed of trust had in the property").  

                                                                                                                   

           13        Under 15 U.S.C. § 1692f(6) a security interest enforcer incurs liability only  

                                                                                                                                    

by:  



                     Taking or threatening to take any nonjudicial action to effect  

                                                                                                             

                     dispossession or disablement of property if . . . there is no  

                                                                                                                 

                     present  right  to  possession  of  the  property  claimed  as  

                                                                                                                 

                     collateral through an enforceable security interest; . . . there  

                                                                                                           

                     is no present intention to take possession of the property; or  

                                                                                                                  

                     . . . the property is exempt by law from such dispossession or  

                                                                                                                  

                     disablement.  



                                                                -42-                                                              7084
  


----------------------- Page 43-----------------------

                     purpose of which is the enforcement of security interests                                 .[14]  



                                                                                                                             

                      The  FDCPA  defines  "debt"  in  terms  of  money  and  does  not  mention  

                                                                                                                               15   The  

                                                                                                                                    

                                                                                                                   

 security interests;  a "debt" is "any obligation . . . of a consumer to pay money." 



court states that this definition "plainly encompasses a home mortgage."  But a security  

                                                                                                                              



instrument is itself not an obligation to pay money; rather the obligation to pay money  

                                                                                                                                



is  created  by  the  underlying  loan  agreement.                              A  mortgage  secures  payment  of  a  

                                                                                                                                        



mortgagor's separate debt - without a separate debt or other obligation to secure, a  

                                                                                                                                         



mortgage has little effect - and a non-judicial foreclosure operates only to shift title  

                                                                                                                                    

from the mortgagor to the foreclosure sale purchaser.16                                   And nothing in the FDCPA's  

                                                                                                                           



definition suggests that a mortgage is somehow converted into a debt through the non- 

                                                                                                                                   



judicial foreclosure process.  

                                 



                      In construing the term "debt collector," courts have recognized that "if the  

                                                                                                                                      



enforcement of a security interest was synonymous with debt  collection," then  the  

                                                                                                                                     



definitional sentence referencing security interests "would be surplusage because any  

                                                                                                                                     



business with a principal purpose of enforcing security interests would also have the  

                                                                                                                                     

principal  purpose  of  collecting  debts."17                         This  result  is  avoided  if  security  interest  

                                                                                                                              



           14        Id.  §   1692a(6)  (emphases  added).  



           15        See  id.  §   1692a(5)  (emphasis  added).  



           16        See  supra  note  12  and  accompanying  text;  see  also  AS  34.20.100  

                                                                                                                         

(prohibiting an "action[,]  . . . proceeding[,]  . . . [or] judgment  . . . on the obligation  

                                                                                                                          

 secured by the deed of trust" after a non-judicial foreclosure sale).  

                                                                                                  

           17        E.g., Gray v. Four Oak Court Ass'n , 580 F. Supp. 2d 883, 888 (D. Minn.  

                                                                                                                                 

2008);  Natividad  v.  Wells Fargo  Bank,  N.A.,  No.  3:12-cv-03646  JSC,  2013  WL  

                                                                                                                                   

2299601, at *6 (N.D. Cal. May 24, 2013); see also Warren v. Countrywide Home Loans,  

                                                                                                                                

Inc., 342 F. App'x 458, 460-61 (11th Cir. 2009) (per curiam) ("[T]he statute specifically  

                                                                                                                         

 says that a person in the business of enforcing security interests is a 'debt collector' for  

                                                                                                                                      

the purposes of § 1692f(6), which reasonably suggests that such a person is not a debt  

                                                                                                                       

collector for purposes of the other sections of the Act."); Dunavant v. Sirote & Permutt,  

                                                                                                                             

                                                                                                                     (continued...)  



                                                                -43-                                                              7084
  


----------------------- Page 44-----------------------

enforcers are not subject to liability under the entire FDCPA but instead held liable only                                                                                                                                       



for violations of the illegal dispossession subsection, § 1692f(6).                                                                                   



                   II.	              Congress Did Not Intend The FDCPA To Impose Liability On Entities                                                                                                                 

                                     Only Pursuing Non-Judicial Deed Of Trust Foreclosures.                                                                          



                                     Congress passed the FDCPA in 1977 in response to "the use of abusive,                                                                                                            



                                                                                                                                18  

deceptive, and unfair debt collection practices"                                                                                                                                                                       

                                                                                                                                      such as:  "threats of violence; obscene  



                                                                                                                                                                                                                              

language; the publishing of 'shame lists[';] harassing or anonymous telephone calls;  



                                                                                                                                                                                                                                

impersonating a government official or attorney; misrepresenting the consumer's legal  



                                                                                                                                                                                                                   

rights; simulating court process; obtaining information under false pretenses; collecting  



                                                                                                                                                                            19  

                                                                                                                                                                                                                 

more than is legally owing; and misusing postdated checks."                                                                                                                         Given the FDCPA's  



                                                                                                                                                                                                               

legislativehistory,it ismorethan questionablewhether "[p]rosecutingastateforeclosure  



                                                                                                                                                                                                                    

action is . . . the type of abusive collecti[on] practice[] that the FDCPA is aimed at  

eliminating."20  



                                                                                                                                                                                                                     

                                     Indeed, "the purposes of the FDCPA would [not] be furthered by applying  



                                                                                                                                                                                                                                 

 [it]  to  state  foreclosure  proceedings  considering  the  panoply  of  protections  and  



                   17(...continued)  



                                                                                                                                                                                                                                  

P.C., 603 F. App'x 737, 739-40 & n.2 (11th Cir. 2015) (per curiam) (clarifying that  

                                                              

 Warren remains good law).  

                   18                15 U.S.C. § 1692(a); Fair Debt Collection Practices Act, Pub. L. No. 95- 

                                                                       

 109, 91 Stat. 874 (1977).  

                                                 

                   19                S. R       EP. N         O. 95-382, at 4 (1977),                                       as reprinted in                           1977 U.S.C.C.A.N. 1695,                                 



 1698;  see also                        15 U.S.C. § 1692d ("A debt collector may not engage in any conduct the                                                                                                                       

natural consequence of which is to harass, oppress, or abuse any person in connection                                                          

with the collection of a debt."); 15 U.S.C. § 1692f ("A debt collector may not use unfair                                                                                                                                    

or unconscionable means to collect or attempt to collect any debt.").                                                                                                  

                  20                Derisme v. Hunt Leibert Jacobson P.C., 880 F. Supp. 2d 311, 328 (D.  

                                                                                                                                                                                                                                   

Conn. 2012).  

                   



                                                                                                              -44-	                                                                                                             7084
  


----------------------- Page 45-----------------------

                                                                                                                             21  

safeguards available to parties of a foreclosure action under [state] law."                                                       In Alaska a       



trustor may invoke the personal defenses of fraud and misrepresentation to invalidate a                                                             

                              22  a  foreclosure  sale  contract  may  be  modified  based  on  mutual  

foreclosure   sale;                                                                                                                      

               23 procedural or substantive inequities surrounding the foreclosure process may  

mistake;                                                                                                                                       

invalidate the sale;24  a trustee may not act inimically to a trustor's interests;25  a trustor by  

                                                                                                                                                  

statute can "bring an action . . . to enjoin a foreclosure";26  and a trustor can twice prevent  

                                                                                                                                          



a foreclosure  sale  by paying the arrearages before the trustee "may elect to  refuse  

                                                                                                                                           

payment and continue the sale."27  

                                               



                       As one district court reasoned:  

                                                            



                       [The] statutes require the trustee to record a notice of default  

                                                                                                                    

                       as the first step in a non-judicial foreclosure proceeding. The  

                                                                                                                         

                       notice must contain a statement that a breach of an obligation  

                                                                                                              

                       has occurred and set forth the nature of the breach.   The  

                                                                                                                        

                       intent behind the FDCPA was to prohibit abusive collections  

                                                                                                             

                       practices, not to outlaw foreclosures when there is an express  

                                                                                                                   



            21         Id.  at 327.   



            22  

                                                                                                                                                  

                       See Bauman v. Day, 892 P.2d 817, 823-24 (Alaska 1995) ("We see no  

                                                                                                                                 

reason why the personal defenses of an owner cannot result in invalidating a non-judicial  

                                                                                                                                       

sale just as they can result in invalidating the obligation on which the sale was based.").  

            23         See Fireman's Fund Mortg. Corp. v. Allstate Ins. Co., 838 P.2d 790, 797  

                                                                                                                                                

(Alaska 1992).  

               

            24         See Cook Schuhmann & Groseclose, Inc. v. Brown & Root, Inc., 116 P.3d  

                                                                                                                                               

592, 596 (Alaska2005) (noting that procedurally "unfairand unreasonable" non-judicial  

                                                                                                                                  

foreclosure sales may be set aside); Baskurt v. Beal, 101 P.3d 1041, 1044, 1046 (Alaska  

                                                                                                                                         

2004).  

            25         See Baskurt, 101 P.3d at 1046 (noting that the trustee has "the duty to take  

                                                                                                                                               

reasonableandappropriatesteps to avoid sacrificeofthedebtor'sproperty and interest").  

                                                                                                                                      

            26         AS 34.20.070(l)(1).  

                               

            27         AS 34.20.070(b).  

                               



                                                                     -45-                                                                    7084
  


----------------------- Page 46-----------------------

                            security agreement and breach of an obligation.                                                 [28]  



                                                                                                                                                                      

                           Theevils the FDCPA was meant to remedy are not implicated during anon- 



                                                                                                                                                                     

judicial deed of trust foreclosure sale that fully complies with Alaska law.  On the other  



                                                                                                                                                         

hand, overlaying the FDCPA on a state's statutory non-judicial deed of trust foreclosure  



                                                                                                                                                          

 system by making deed of trust trustees - such as title companies - "debt collectors"  



                                                                                                                                                                             

will wreak havoc.  For example, the FDCPA bars a debt collector from contacting a  

                                                                                                                                                                    29  and  

                                                                                                                                                                         

 consumer with respect to a debt if the consumer has asked the debt collector to stop 



bars a debt collector from continuing collection of a disputed debt until the debt is  

                                                                                                                                                                            

verified.30   This will grind non-judicial deed of trust foreclosures to a halt, lead to missed  

                                                                                                                                                                  



 statutory deadlines, missed statutory notices to debtors and third-parties, and necessitate  

                                                                                                                                                          

re-starts of the process.31  

                                



              III.	        TheAssertionThat Non-JudicialDeedOfTrust Foreclosures AreDebt  

                                                                                                                                                                      

                           Collection Under The FDCPA Is Unpersuasive.  

                                                                                                   



                                                                                                                                                 32  

                           The court's reliance on Glazer v. Chase Home Finance LLC 

                                                                                                                                                                                 

                                                                                                                                                     is misplaced.  



                                                                                                                                                                       

 The court notes that Glazer held that all real estate foreclosure activities constitute debt  



                                                                                                                                                                      

 collection, in part because the FDCPA requires all debt collectors to "bring[] any legal  



              28           Maynard   v.   Cannon,   650   F.   Supp.   2d   1138,  1143-44   (D.   Utah   2008)  



 (citations omitted),                   aff'd, 401 F. App'x 389 (10th Cir. 2010);                                          see also Burnett v. Mortg.             

Elec. Registration Sys., Inc.                           , 706 F.3d 1231, 1239 (10th Cir. 2013) (" '[W]hen a debt has                                                     

yet to be reduced to a personal judgment against a mortgagor, a non-judicial foreclosure                                                                 

 does not result in a mortgagor's obligation to                                             pay money              - it merely results in the sale                      

 of property subject to a deed of trust.' " (emphasis in original) (quoting                                                                       Maynard, 401  

F.  App'x at 394)).       

              29            15 U.S.C. § 1692c(c).  

                                                    

              30           Id.  § 1692g(b).  

                                      

              31            Cf.  AS  34.20.070-.080  (providing  state  procedures  for  notification  of  

                                                                                                                                                                           

 default and conducting sale for non-judicial deed of trust foreclosures).  

                                                                                                                     

              32           704 F.3d 453 (6th Cir. 2013).  

                                                                           



                                                                                 -46-	                                                                               7084
  


----------------------- Page 47-----------------------

 action . . . to enforce an interest in real property . . . in a judicial district . . . in which such                                               

 real property is located."33                                                                            

                                                  But in Alaska - and in other states with similar laws - a  



                                                                                                                                        

judicial   foreclosure  proceeding  is  required  for  a  mortgagee  to  seek  a  deficiency  

                   34   The FDCPA clearly regulates a debt collector seeking to collect money  

judgment.                                                                                                                                      

 under  a judicial foreclosure deficiency judgment,35   but a non-judicial deed  of trust  

                                                                                                                                                   



 foreclosure in Alaska - and in other states with similar laws - cannot result in a  

                                                                                                                                                         

 deficiency judgment.36  

                     



             33          15 U.S.C. § 1692i(a)(1);                    see Glazer         , 704 F.3d at 461-62.         



             34         See AS 09.45.170; AS 09.45.180; AS 34.20.100; Kuretich v. Alaska Tr.,  

                                                                                                                                                     

 LLC, 287 P.3d 87, 91 (Alaska 2012) (explaining that after judicial foreclosure sale, "the  

                                                                                                                                                    

 lender can obtain a deficiency judgment against the borrower for amounts still owed");  

                                                                                                                                             

 see also, e.g., Wash. Fed. v. Harvey, 340 P.3d 846, 847 n.1 (Wash. 2015) (explaining  

                                                                                                                                       

 that in non-judicial foreclosures borrowers surrender their  rights to redemption "in  

                                                                                                                                                     

 exchange for protection from deficiency judgments" available in judicial foreclosures);  

                                                                                                                                   

 Garretson v. Post, 68 Cal. Rptr. 3d 230, 235 (Cal. App. 2007) (explaining deficiency  

                                                                                                                                         

judgments are available in judicial foreclosures but not in non-judicial foreclosures).  

                                                                                                                                



                         The court's reliance on Dworkin v. First National Bank of Fairbanks, 444  

                                                                                                                                                     

 P.2d 777 (Alaska 1968), is equally misplaced.  That case involved a judicial action to  

                                                                                                                                                        

 enforce an alleged equitable mortgage when no legal mortgage existed and the specific  

                                                                                                                                              

 question whether, for a judicial action, a security interest could survive beyond the  

                                                                                                                                                     

 statute of limitations for the underlying debt.  Id. at 780-82.  

                                                                                              

             35         See Doughty v. Holder, Nos. 2:13-cv-00295-LRSto 00297-LRS, 2014 WL  

                                                                                                                                                     

 220832, at *5 (E.D. Wash. Jan. 21, 2014) ("[A] deficiency judgment . . . is not for the  

                                                                                                                              

 purpose of enforcing the security interest, but for seeking payment of funds to make up  

                                                                                                                                                       

 a shortfall between the proceeds obtained from the foreclosure sale and the amount of  

                                                                                                                                                       

 the foreclosure judgment.  It is an action to collect a debt.").  

                                                                                               

             36         See AS 34.20.100 (prohibiting a deficiency "action[,] . . . proceeding[,] . . .  

                                                                                                                                                           

 [or] judgment . . . on the obligation secured by the deed of trust" after a non-judicial  

                                                                                                                                     

 foreclosure sale); see also, e.g., CAL. C                          IV. P   ROC. C      ODE  § 580d (West 2015); W                       ASH. R     EV.  

                                                         

    ODE ANN . § 61.24.100 (West 2015);                              see also       15 U.S.C. § 1692a(5) (defining "debt" as                             

 C                     

 "any obligation . . . to pay money").               



                                                                        -47-                                                                      7084
  


----------------------- Page 48-----------------------

                         And in Alaska and many other jurisdictions permitting non-judicial deed                                



of trust foreclosures, no legal action of any kind is required; rather, the trustee must only                                                           

                                                                                                              37  Therefore a deed of trust  

notify interested parties, including the trustor, of the default.                                                                                       



trustee, like Alaska Trustee, conducting only non-judicial deed of trust foreclosures not  

                                                                                                                                                          



permitting deficiency judgments, cannot be brought within the FDCPA's general debt  

                                                                                                                      



collector definition simply because one provision restricts where judicial  foreclosure  

                                                                                                                                           



actions permitting deficiency judgments may be brought. Only the illegal dispossession  

                                                                                                                                       

subsection explicitly regulating "nonjudicial action"38  should apply to Alaska Trustee.  

                                                                                                                                                 



                         After conflating the FDCPA's distinction between a debt and a security  

                                                                                                                                                 

interest, the Glazer court had to explain to whom the illegal dispossession subsection39  

                                                                                                                                          



was intended to apply, and it concluded that because "repossession agencies and their  

                                                                                                                                                        



agents" only enforce security interests, this subsection was meant to apply exclusively  

                                                                                                                                           

to them.40           But this logic hinges on the faulty premise that non-judicially enforcing a  

                                                                                                                                                              



security  interest  in  personal  property  is  meaningfully  different  from  non-judicially  

                                                                                                                                     



enforcing a security interest in real property. It is not. As with non-judicial deed of trust  

                                                                                                                                                        



foreclosures, UniformCommercialCoderepossessions underArticleNineallowsecured  

                                                                                                                                                  



            37           See  AS  34.20.070;  2  BAXTER  DUNAWAY,  THE  LAW  OF  DISTRESSED  REAL  



ESTATE    §    17.4  (2015)   ("State    [non-judicial   foreclosure]   statutes   specify   notice  

requirements,   such   as   recording,   posting   on  the   property,   mailing   of   notice   to   the  

borrower  and  other  specified  parties,  and  advertisement  in  newspapers.");  1  id.  app.  13A  

(listing   29   states   where   non-judicial   foreclosure   with   varying   notice   requirements   is  

"normal"  foreclosure  method);  REAL  ESTATE  TRANSFER,  FINANCE,  AND  DEVELOPMENT,  

supra  note  5,  at  641-43  (quoting  GRANT  S.  NELSON  ET  AL.,  REAL  ESTATE  FINANCE  LAW  

633-36  (5th  ed.  2007))  (explaining  that  roughly  60%  of  jurisdictions  allow  power  of  sale  

or  non-judicial  foreclosures  "[a]fter  varying  types  and  degrees  of  notice").  

            38           15  U.S.C.  §   1692f(6).  



            39          Id.  



            40           704  F.3d  453,  463-64  (6th  Cir.  2013).  



                                                                          -48-                                                                        7084
  


----------------------- Page 49-----------------------

            41  

parties         to   offset   their   losses   on   underlying  debt   by   retaining   or   selling   pledged  



                 42  

collateral.                                                                                                                                     

                     Without otherwise collecting or even attempting to collect a single cent from  



                                                                                                                                                     

the debtor, both lenders holding a deed of trust and lenders holding a security interest in  



                                                                                                                                         

personal property may, upon default, divest the debtor of title to the collateral property  

                                                                               43    Enforcing  a security  interest without  

                                                                                                                                          

simply  by  virtue  of  their  security  interests. 



otherwise  collecting on the underlying debt does not transform the enforcer of the  

                                                                                                                                                  



security interest - whether in personal property or real property - into a debt collector  

                                                                                                                                         



subject to the prohibitions of the entire FDCPA; rather, the security interest enforcer  

                                                                                                                                         



incurs liability only by violating the illegal dispossession subsection.  

                                                                                                      



                       The  Glazer court posited that the illegal dispossession subsection was  

                                                                                                                                                 



intended to apply to personal property repossession agencies, and the court adopts  

                                                                                                                                            



Glazer's  logic,  agreeing  that  such  entities  "may  well  have  no  regular  practice  of  

                                                                                                                                                    



            41         See   U.C.C.   §   9-102(a)(73)   (2010);   accord   AS   45.29.102(a)(91)(A)  



(defining "secured party" in part as "a person in whose favor a security interest is created                                                

or provided for under a security agreement").              

            42         See U.C.C. §§ 9-609, 9-610; accord AS 45.29.609(a)(1) ("After default, a  

                                                                                                                                                       

secured party . . . may take possession of the collateral . . . ."); AS 45.29.610(a) ("After  

                                                                                                                                            

default, a secured party may sell, lease, license, or otherwise dispose of any or all of the  

                                                                                                                                                   

collateral . . . .").  

                        

            43         See  AS 34.20.080(b) (permitting "beneficiary" - the entity with "the  

                                                                                                                                                

ultimate right to be repaid on the loan," Espeland v. OneWest Bank, FSB, 323 P.3d 2, 5  

                                                                                                                                                      

n.4 (Alaska 2014) - to bid at a non-judicial foreclosure sale); U.C.C. § 9-610(c); see  

                                                                                                                                                   

also AS 45.29.610(c) (permitting secured party to bid on collateral at post-default sale);  

                                                                                                                                               

U.C.C. § 9-620(a)-(c) & cmt. 3; U.C.C. § 9-609(b)(2); AS 45.29.620(a)-(c) (permitting  

                                                                                                                                     

secured party to accept collateral in full satisfaction of debt upon notice to other parties  

                                                                                                                                             

with interest in collateral and if debtor consents, either explicitly or by failing to timely  

                                                                                                                                             

respond to a proposal to accept collateral, but requiring that consumer goods not be "in  

                                                                                                                                                   

the   possession   of   the   debtor   when   the   debtor   consents   to   the   acceptance");  

                                                                                                                               

AS 45.29.609(b)(2) (permitting secured party tonon-judicially repossess collateral upon  

                                                                                                                                                

default "if it proceeds without breach of the peace").  

                                                                               



                                                                      -49-                                                                     7084
  


----------------------- Page 50-----------------------

                                                                                                        44  

communicating with debtors" of the type the FDCPA prohibits.                                                 But in two cases the         



 Glazer   court cited to support this proposition, the debtor was contacted, sometimes                                       



                  45  

                                                                                                                                         

repeatedly.            And the illegal dispossession subsection prohibits not only "[t]aking" but  



                                                                               46  

                                                                                                                                       

                                                                                  which presumably entails some form  

also "threatening to take any nonjudicial action," 



                                                                                                                                 

of communication.  Assumed levels of communication between debtors and security  



                                                                                                                                    

interest  enforcers  are  therefore  not  a  reliable  justification  for  applying  the  illegal  



                                                                                                                                       

dispossession subsection to personal property repossession agencies but not to non- 



                                                                                             

judicial deed of trust foreclosure companies like Alaska Trustee.  



                                                                                                                                  

                      In short, Glazer's logic does not support treating every security interest  



                                                                                                                                 

enforcer as a debt collector.  If Congress meant for "any business the principal purpose  



                                                                                                                                 

of which is the collection of any debts" to mean exactly the same thing as "any business  



                                                                                                                     47  

                                                                                                                                    

                                                                                                                        then it would  

the principal purpose of which is the enforcement of security interests," 



                                                                                                                                  

not have used these two different phrases in defining "debt collector" while also creating  



                                                                                                                      48  

                                                                                                                                   

                                                                                                                           The court's  

the illegal dispossession subsection only for security interest enforcers. 



           44         See  also  704  F.3d  at  463-64.  



           45         In  Jordan  v.  Kent  Recovery  Services,  Inc.  the  repossession  agent  visited  the  



debtor's  home  and  communicated  with  her  no  less  than  five  times  in  an  attempt  to  locate  

the  car.   731  F.  Supp.  652,  654-55  (D.  Del.  1990),  cited  by  Glazer,  704  F.3d  at  464.   And  

in  James  v.  Ford  Motor  Credit  Co.  "Ford  Credit  notified  the  Jameses  of  their  default  and  

told  them  that  they  planned  to  repossess  the  Escort.   Ms.  James  told  Ford  Credit  that  she  

did not want her car repossessed and that Ford Credit could  not  take it."  47  F.3d 961,  

962  (8th  Cir.   1995),  cited  by  Glazer,  704  F.3d  at  464.  

           46          15 U.S.C. § 1692f(6) (emphasis added).  

                                                                            

           47         Id.  § 1692a(6) (emphases added).  

                                                                  

           48         See  id.  (stating  that  "[f]or  the  purpose  of"  the  illegal  dispossession  

                                                                                                                       

 subsection, the term debt collector "also includes" security interest enforcers); see also  

                                                                                                                                        

Jordan, 731 F. Supp. at 657-58 (concluding that security interest enforcers incur liability  

                                                                                                                                  

only under  the  illegal dispossession  subsection because  "  'where Congress includes  

                                                                                                                                

                                                                                                                        (continued...)  



                                                                  -50-                                                                7084
  


----------------------- Page 51-----------------------

reliance on              Glazer  is therefore misplaced.           



                             Finally, the court asserts that recent case law from the Eleventh Circuit                                                                    



Court of Appeals supports imposing FDCPA liability on Alaska Trustee.                                                                                        But in         Reese  



v.  Ellis, Painter, Ratterree &Adams, LLP                                               the Eleventh Circuit imposed FDCPA liability                                     



on a law firm initiating a non-judicial foreclosure sale when, although Georgia law                                                                                              



required that a notice of foreclosure be sent to the mortgagor but did "not require a                                                                                                  

                                                                                                                                                             49   That is not  

demand for payment of the debt[,] . . . the law firm included one anyway."                                                                                                         



the case here.  The Reese court explicitly refused to decide the question that this case  

                                                                                                                                                                                



presents:  "whether a party enforcing a security interest without demanding payment on  

                                                                                                                                                                                    

the underlying debt is attempting to collect a debt" under the FDCPA,50  and Eleventh  

                                                                                                                                                                      

Circuit district courts continue to answer this question in the negative.51  

                                                                                                                                   



              48(...continued)  



                                                                                                                                                                               

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.' " (quoting Russello v. United States, 464 U.S. 16, 23  

(1983))).  

              49             678 F.3d 1211, 1217 (11th Cir. 2012).  

                                                                                                 

              50            Id. at 1218 n.3. The Consumer Financial Protection Bureau brief on which  

                                                                                                                                                                             

the court also relies similarly states:  "The Court need not decide in this case whether  

                                                                                                                                                                        

foreclosure by itself constitutes debt collection activity covered by the Act." Brief of the  

                                                                                                                                                                                   

Consumer  Financial  Protection  Bureau  as Amicus  Curiae  in  Support  of  Plaintiffs- 

                                                                                                                                                                   

Appellants and Reversal at 32, Birster v. Am. Home Mortg. Servicing, Inc., 481 F. App'x  

                                                                                                                                                                            

579           (11th            Cir.          2012)             (No.           11-13574)                   (emphasis                   added),              available                 at  

                                                                                                                                                                                 

http://consumerfinance.gov/f/201112_CFPB_ Birster-amicus-brief.pdf.  

                                                                                                    

              51             See, e.g., Beepot v. J.P. Morgan Chase Nat'l Corporate Servs., 57 F. Supp.  

                                                                                                                                                                             

3d 1358, 1376 (M.D. Fla. 2014) (dismissing FDCPA claim "[b]ecause foreclosing on a  

                                                                                                                                                                                       

security interest is not debt collection activity under the provisions of the FDCPA"  

                                                                                                                                                                     

(citing Warren v. Countrywide Home Loans, Inc., 342 F. App'x 458, 460-61 (11th Cir.  

                                                                                                                                                                                 

2009))); Freire v. Aldridge Connors, LLP, 994 F. Supp. 2d 1284, 1287-88 (S.D. Fla.  

                                                                                                                                                                                 

2014)  ("[I]n  the  Eleventh  Circuit,  the  filing  of  a  mortgage  foreclosure  action  will  

                                                                                                                                                                                

                                                                                                                                                            (continued...)  



                                                                                      -51-                                                                                    7084
  


----------------------- Page 52-----------------------

                IV.	           The    Notice    Of    Default    Required    By    Alaska    Statute    Is    Not  A  

                               "Communication" Under The FDCPA                                                                  .  



                               The only                FDCPA provision                               under   which   the   Ambridges brought suit,                                              



 15    U.S.C.    §    1692g(a),    requires    in    relevant    part    that    a    debt    collector's    initial  



communication with the debtor state "the amount of the debt" or that the debt collector                                                                                               



inform the debtor of this amount "[w]ithin five days after the initial communication."                                                                                                                       



Under the Alaska law relevant here, trustees must send notices of default to trustors                                                                                                    



before holding non-judicial foreclosure sales, and the notices must state:                                                                                                "that a breach      



of the obligation for which the deed of trust is security has occurred"; "the nature of the                                                                                                         



breach"; "the sum owing on the obligation"; and that the trustee has elected "to sell the                                                                                                           

                                                                               52  In August 2009 Alaska Trustee sent the Ambridges  

property to satisfy the obligation."                                                                                                                                             



such a notice, and a few weeks later Alaska  Trustee sent them an amended notice  

                                                                                                                                                                                            



containing the same information.  Aside from these two statutorily required notices of  

                                                                                                                                                                                    



default  that  did  not  attempt  to  collect  money,  Alaska  Trustee  did  not  further  

                                                                                                                                                                                         



communicate  with  the  Ambridges  about  the  foreclosure,  and  it  never  sent  them  a  

                                                                                                                                                                                                       



reinstatement letter requesting money to bring their loan current and prevent foreclosure.  

                                                                                                                                                                                



                               On these facts, had Alaska Trustee instead initiated a judicial foreclosure  

                                                                                                                                                                                 



and served the Ambridges with a complaint, its non-liability under the FDCPA would  

                                                                                                                                                                        



not be debatable:  "A communication in the form of a formal pleading in a civil action  

                                                                                                                                                                                             

shall not be treated as an initial communication for purposes of [§ 1692g(a)]."53  

                                                                                                                                                                                           It is no  

                                                                                                                                                                                                     



                51(...continued)  



                                                                                                                                                                                                    

constitute debt collection activity only when the complaint seeks also to collect on the  

                                                                                        

note . . . ." (citing Reese, 678 F.3d at 1217)).  

                52             Former AS 34.20.070(b)(4)-(7), (c) (2003).  

                                                                                                                     

                53              15 U.S.C.  § 1692g(d); see Wood  v. Lerner Sampson  & Rothfuss,  No.  

                                                                                                                                                                         

 1:13CV1669, 2014 WL 4249785, at *6 (N.D. Ohio Aug. 27, 2014) ("Plaintiff's citation  

                                                                                                                                                                                          

to Glazer . . . for the proposition that 'mortgage foreclosure is debt collection under the  

                                                                                                                                                                                                    

                                                                                                                                                                           (continued...)  



                                                                                              -52-	                                                                                            7084
  


----------------------- Page 53-----------------------

different in           the non-judicial foreclosure process - according                                              to   the Federal            Trade  



Commission (FTC) the term communication "does not include a notice that is required                                                          



by law as a prerequisite to enforcing a contractual obligation between creditor and                                                                  

                                                                                     54   It is an unfair debt collection practice  

debtor, by judicial or                nonjudicial  legal process."                                                                            



to represent or imply "that nonpayment of any debt will result in the . . . sale of any  

                                                                                                                                                     



property . . . of any person unless such action is lawful and the debt collector . . . intends  

                                                                                                                                               

to take such action,"55  but in Alaska non-judicial deed of trust foreclosure sales are  

                                                                                                                                                      



            53(...continued)  



                                                                                                                                                         

Act[,]' is unavailing for purposes of the § 1692g(a) claim. . . .  [Section 1692g(d)] is  

                                                                                                                                                

perfectly clear that a legal pleading[, such as a foreclosure complaint,] is not an 'initial  

                                                                                                                                             

communication.' " (first alteration and emphasis in original) (citation omitted) (quoting  

                                                                                                                

Glazer v. Chase Home Fin. LLC, 704 F.3d 453, 455 (6th Cir. 2013))).  

            54          See Statements of General Policy or Interpretation Staff Commentary On  

                                                                                                                                                       

the Fair Debt Collection Practices Act, 53 Fed. Reg. 50,097-02, 50,101 (Dec. 13, 1988)  

                                                                                                                                                  

[hereinafter  FTC  Staff  Commentary]  (emphasis  added);  see  also  Montgomery  v.  

                                                                                                                                                        

Huntington  Bank,  346  F.3d  693,  699  (6th  Cir.  2003)  (noting  that  the  FTC's  

                                                                                                                                               

interpretations of the FDCPA can help "shed light on the statute's meaning"); Dietz v.  

                                                                                                                                              

Quality Loan Serv. Corp. of Wash., No. C13-5948 RJB, 2014 WL 5343774, at *2 (W.D.  

                                                                                                                                                 

Wash. Oct. 20, 2014) ("The Notice of Default and Notice of Sale(s) are statutorily  

                                                                                                                                         

required notices under [state law]. They are not 'debt collection' activities separate from  

                                                                                                                                                    

the non judicial process."); Fouché v. Shapiro & Massey L.L.P., 575 F. Supp. 2d 776,  

                                                                                                                                                    

787-88 (S.D. Miss. 2008) (stating notice that is "necessary to foreclose under the deed  

                                                                                                                                                    

of trust" with purpose of "satisfy[ing] conditions precedent to a foreclosure on the  

                                                                                                                                                      

mortgage" subjected law firm to liability only under illegal dispossession subsection).  

                                                                                                                                      



                        The  court  relies  on  the  Consumer  Finance  Protection  Bureau's  recent  

                                                                                                                              

amicus position to the contrary in a pending Ninth Circuit Court of Appeals case.  The  

                                                                                                                                                     

Bureau came into existence in 2010, after all of the events in this case took place.  It  

                                                                                                                                                         

apparently  supplants  the  FTC  as  the  "official"  FDCPA  agency,  but  has  not  yet  

                                                                                                                                                     

promulgated any formal interpretations.  It remains to be seen how the Bureau's amicus  

                                                                                                                                                

position will be treated by the Ninth Circuit panel.  

                                                                                 

            55           15 U.S.C. § 1692e(4) (emphasis added).  

                                                                                    



                                                                        -53-                                                                       7084
  


----------------------- Page 54-----------------------

            56  

lawful.         It also is an unfair debt collection practice to advertise "for sale any debt to                                            



                                               57  

coerce payment of the debt,"                                                                                                              

                                                   but the FTC commentary states that this provision is not  



                                                                                                                                            

violated  "by  providing  public  notices  that  are  required  by  law  as  a  prerequisite  to  



                                                                                                     58  

                                                                                                         

                                                                                            

enforcement of a security interest in connection with a debt." 



                      Although the FDCPA was intended "to eliminate abusive debt collection  

                                                                                                         



practices," it also was intended "to insure that those debt collectors who refrain from  

                                                                                                                                       

using abusive debt collection practices are not competitively disadvantaged."59                                                    Alaska  

                                                                                                                                    

Trustee complied with Alaska non-judicial foreclosure law,60  but the court nonetheless  

                                                                                                                            



wrongfully penalizes Alaska Trustee by affirming the superior court's FDCPA damages  

                                                                                                                                 



award to the Ambridges.  

                      



           V.         Conclusion  



                      Other courts repeatedly have refused to conflate the FDCPA's distinction  

                                                                                                                              



between security interest enforcers - to whom only the illegal dispossession subsection  

                                                                                                                              



           56         See  AS  34.20.070.  



           57         15  U.S.C.  §   1692d(4).  



           58         FTC  Staff  Commentary,  53  Fed.  Reg.  at  50,105;  see  also  AS  34.20.070(b)  



(requiring   that   notices   of   default  be   recorded);   AS   34.20.080(a)(2)   (requiring  public  

notice  before  non-judicial  foreclosure  sale).  

           59         15 U.S.C. § 1692(e); see also id. § 1692n ("This subchapter does not annul,  

                                                                                                                                      

alter, or affect, or exempt any person subject to [its] provisions . . . from complying with  

                                                                                                                                        

the laws of any State with respect to debt collection practices, except to the extent that  

                                                                                                                        

those laws are inconsistent with any provision of this subchapter, and then only to the  

                                                                                                                              

extent of the inconsistency.").  

                       

           60         As the court recognizes, it would be unfair to penalize Alaska Trustee for  

                                                                                                                                           

including FDCPA disclaimer language in its notices of default; the law in this area is far  

                                                                                                                                           

from clear, and Alaska Trustee asserted it was simply acting "out of an abundance of  

                                                                                                                                            

caution." See Golliday v. Chase Home Fin., LLC, 761 F. Supp. 2d 629, 636 (W.D. Mich.  

                                                                                                                                      

2011) (noting security interest enforcers are debt collectors "for the narrow purposes of  

                                                                                                                                            

[the illegal dispossession subsection]" and therefore should not be faulted for including  

                                                                                                                                

FDCPA disclaimer language in letters to mortgagors).  

                                                                     



                                                                  -54-                                                                7084
  


----------------------- Page 55-----------------------

           61                                                                                                                         62  

applies        - and debt collectors, to whom the prohibitions of the entire FDCPA apply.                                                  



                                                                                                                              

In respecting this distinction, these courts have not hesitated to subject security interest  



                                                                                                                             

enforcers to liability under the entire FDCPA if they attempt to collect money in addition  

                                                      63  In my view this is the correct FDCPA analysis, and  

                                                                                                                                    

                                          

to foreclosing on security interests. 



applying it here can lead only to the conclusion that under the facts of this case, Alaska  

                                                                                                                               



           61         15  U.S.C.  §   1692f(6).  



           62        See, e.g.,  Boyd v. J.E. Robert Co., No.  05-CV-2455(KAM)(RER), 2013 WL  



5436969,   at   *9-12 (E.D.N.Y.   Sept.  27,  2013),   (declining  to   follow   Glazer  because  it  

"overlooks  [a]  basic  statutory  distinction" "between the 'collection  of  any  debts'  and  'the  

enforcement of security interests' " (quoting 15 U.S.C. § 1692a(6)));  Derisme v. Hunt  

Leibert  Jacobson  P.C.,  880  F.  Supp.  2d  311,  323-26  (D.  Conn.  2012);  Gray  v.  Four  Oak  

Court  Ass'n ,  580  F.  Supp.  2d  883,  887-88  (D.  Minn.  2008).  

           63        See, e.g., Goodinv. Bank ofAm., N.A., No. 3:13-cv-102-J-32JRK, 2015 WL  

                                                                                                                                    

3866872, at  *7 (M.D. Fla. June 23, 2015)  ("As the  foreclosure complaint  sought to  

                                                                                                                                      

collect on the note and the security interest, it constituted debt collection activity and a  

                                                                                                                                        

violation of the FDCPA."); Doughty v.Holder, Nos. 2:13-cv-00295-LRS to 00297-LRS,  

                                                                                                                      

2014 WL 220832, at *3, 6 (E.D. Wash. Jan. 21, 2014) (holding that "[s]o long as the  

                                                                                                                                     

foreclosure proceedings, be they non-judicial or judicial,  involve no more than mere  

                                                                                                                                 

enforcement of security interests," only the illegal dispossession subsection applies).  

                                                                                                                                           

Natividad v. Wells Fargo Bank, N.A., No. 3:12-cv-03646 JSC, 2013 WL 2299601, at *8  

                                                                                                                                      

(N.D.  Cal.  May  24,  2013)  ("[P]ersons  who  regularly  or  principally  engage  in  

                                                                                                                                     

communications with  debtors concerning their  default that  go beyond the  statutorily  

                                                                                                                         

mandated communications required for  [non-judicial] foreclosure may be considered  

                                                                                                                        

debt collectors."); Calvert v. Alessi &Koenig, LLC,Nos. 2:11-CV-00333, 00411, 00442,  

                                                                                                                               

& 01004-LRH-PAL, 2013 WL 592906, at *4 (D. Nev. Feb. 12, 2013) (holding letters  

                                                                                                 

sent to debtor that were not part of Nevada's statutory "lien enforcement process" were  

                                                                                                                                  

"part of the debt collection process subject to the full battery of FDCPA provisions,"  

                                                                                                                      

whereas other letter required by statute was "subject to the lighter regulation of FDCPA  

                                                                                                                             

section 1692f(6)"); Beadle v. Haughey, No. Civ.04-272-SM, 2005 WL 300060, at *3-4  

                                                                                                                                  

(D.N.H. Feb. 9, 2005) ("Because defendants were executing a non-judicial foreclosure  

                                                                                                                        

proceeding rather than collecting a debt, their activities are . . . subject [only to the illegal  

                                                                                                                                

dispossession subsection].").  

                        



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                                                                                                                                                                                                    64  

Trustee   is   not   a   debt   collector   subject   to   the   entire   FDCPA.                                                                                                                          I   therefore   dissent.  



                       64                Accordingly, I do not address Stephen Routh's personal liability under the                                                                                                                                             



FDCPA or the superior court's injunction under the UTPA.                                                                                                         



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