Zakia Mashiri v. Epsten Grinnell & Howell

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

ZAKIA MASHIRI, No. 14-56927
Plaintiff-Appellant,
D.C. No.
v. 3:14-cv-00839-
JLS-RBB
EPSTEN GRINNELL & HOWELL;
DEBORA M. ZUMWALT; DOES 1–25,
Defendants-Appellees. OPINION

Appeal from the United States District Court
for the Southern District of California
Janis L. Sammartino, District Judge, Presiding

Argued and Submitted October 4, 2016
Pasadena, California

Filed January 13, 2017

Before: Dorothy W. Nelson and Richard A. Paez, Circuit
Judges, and Elaine E. Bucklo,* District Judge.

Opinion by Judge Paez

*
The Honorable Elaine E. Bucklo, United States District Judge for
the Northern District of Illinois, sitting by designation.
2 MASHIRI V. EPSTEN GRINNELL & HOWELL

SUMMARY**

Fair Debt Collection Practices Act

The panel reversed the district court’s dismissal for
failure to state a claim of an action under the Fair Debt
Collection Practices Act.

The plaintiff alleged that the defendant sent her a debt
collection letter demanding payment of an assessment fee
from her homeowners’ association. The panel held that the
plaintiff stated plausible claims for relief because the
collection letter contained language that overshadowed and
conflicted with her FDCPA debt validation rights under
15 U.S.C. § 1692g when reviewed under the “least
sophisticated debtor” standard.

The panel rejected the defendant’s argument that in
sending the collection letter, it merely sought to perfect a
security interest and was therefore subject only to the
limitations in 15 U.S.C. § 1692f(6).

COUNSEL

Asil Marhiri (argued), Mashiri Law Firm, San Diego,
California, for Plaintiff-Appellant.

**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
 MASHIRI V. EPSTEN GRINNELL & HOWELL 3

Anne Lorentzen Rauch (argued), Mandy D. Hexom, and Rian
W. Jones, Epsten Grinnell & Howell APC, San Diego,
California, for Defendants-Appellees.

OPINION

PAEZ, Circuit Judge:

Zakia Mashiri (“Mashiri”) appeals the dismissal of her
complaint alleging that the law firm of Epsten Grinnell &
Howell and attorney Debora M. Zumwalt (collectively,
“Epsten”) committed unlawful debt collection practices in
violation of the Fair Debt Collection Practices Act
(“FDCPA”), 15 U.S.C. §§ 1692 et seq., the Rosenthal Fair
Debt Collection Practices Act (“Rosenthal Act”), Cal. Civ.
Code §§ 1788 et seq., and the California Unfair Competition
Law, Cal. Bus. & Prof. Code §§ 17200, et seq. Mashiri
alleges that Epsten sent her a debt collection letter in May
2013 demanding payment of an assessment fee from her
homeowners’ association. She alleges that the letter
contained language that overshadowed and conflicted with
her FDCPA right to thirty days in which to dispute the debt.
On a motion to dismiss under Federal Rule of Civil Procedure
12(b)(6), the district court dismissed Mashiri’s FDCPA
claims, concluding that the collection letter satisfactorily
explained her right to dispute the debt and therefore did not
improperly threaten to record a lien. Because Mashiri’s state
law claims were dependant on her FDCPA claims, the court
also dismissed Mashiri’s Rosenthal Act and Unfair
Competition Law claims.

We hold that the district court erred. Mashiri has alleged
a plausible claim for relief because the collection letter
4 MASHIRI V. EPSTEN GRINNELL & HOWELL

contains language that overshadows and conflicts with her
FDCPA debt validation rights when reviewed under the “least
sophisticated debtor” standard. We also reject Epsten’s
argument, raised for the first time on appeal, that in sending
the collection letter, it merely sought to perfect a security
interest and is therefore subject only to the limitations in
§ 1692f(6). We hold that Epsten is subject to the full scope
of the FDCPA. We reverse and remand for further
proceedings consistent with this Opinion.

I.

Mashiri alleges that she owns a home in San Diego,
California and is a member of the Westwood Club
homeowners’ association (“HOA”).1 As a member, Mashiri
incurs annual assessment fees. Mashiri failed to pay in a
timely manner the $385 fee assessed in July 2012.

In a collection letter dated May 1, 2013 (the “May
Notice”), Epsten, on behalf of the HOA, sought to collect
Mashiri’s overdue assessment fee, as well as corresponding
late, administrative, and legal fees. The May Notice also
included a warning that failure to pay the assessment fee
would result in the HOA recording a lien against Mashiri’s
property. This notice is required by section 5660 of the
Davis-Stirling Common Interest Development Act, Cal. Civ.
Code §§ 4000 et seq., which governs the collection of

1
The facts are derived from the complaint and its accompanying
exhibits, as well as documents that the district court judicially noticed.
 MASHIRI V. EPSTEN GRINNELL & HOWELL 5

overdue homeowners’ association assessments.2 The May
Notice stated, in pertinent part:

This letter is to advise you that $598.00 is
currently owing on your Association
assessment account. Failure to pay your
assessment account in full within thirty-five
(35) days from the date of this letter will
result in a lien being recorded against your
property upon authorization of the Board of
Directors. All collection costs incurred will
be charged to your account.

Unless you notify this office within 30
days of receiving this notice that you
dispute the validity of the debt or any
portion thereof, this office will assume this
debt is valid. If you notify this office in
writing within thirty (30) days of receiving
this notice that the debt, or any portion
thereof, is disputed, we will obtain
verification of the debt or a copy of the
judgment against you (if applicable) and a
copy of [] such verification or judgment
will be mailed to you.

2
The Davis-Stirling Act “consolidated the statutory law governing
condominiums and other common interest developments.” Berryman v.
Merit Prop. Mgmt., Inc., 62 Cal. Rptr. 3d 177, 183 (Cal. Ct. App. 2007)
(internal quotation marks omitted). In enacting the Davis-Stirling Act, the
California legislature “intended to protect homeowners from being
foreclosed upon for small sums of delinquent assessments.” Huntington
Cont’l Town House Ass’n v. Miner, 167 Cal. Rptr. 3d 609, 612 (Cal. App.
Dep’t Super. Ct. 2014).
6 MASHIRI V. EPSTEN GRINNELL & HOWELL

....

You have the right to inspect the
association records pursuant to Corporations
Code Section 8333. You may submit a
written request to meet with the Board to
discuss a payment plan for this debt. You
shall not be liable to pay the charges, interest
and costs of collection if it is determined the
assessment was paid on time to the
Association. You have the right to dispute the
assessment debt by submitting a written
request for dispute resolution to the
association pursuant to the association’s
“meet and confer” program required in Civil
Code Section [5900] et seq., and the Board
offers to participate in dispute resolution.
You have the right to request alternative
dispute resolution with a neutral third party
pursuant to Civil Code Section [5925] et seq.
before the association may initiate foreclosure
against your separate interest, except that
binding arbitration shall not be available if the
association intends to initiate a judicial
foreclosure.

....

IMPORTANT NOTICE: IF YOUR
SEPARATE INTEREST IS PLACED IN
FORECLOSURE BECAUSE YOU ARE
BEHIND IN YOUR ASSESSMENTS, IT
MAY BE SOLD WITHOUT COURT
ACTION.
 MASHIRI V. EPSTEN GRINNELL & HOWELL 7

....

This is a communication from a debt
collector attempting to collect a debt and
any information obtained will be used for
that purpose.

Accompanying the May Notice, Epsten included copies of
Mashiri’s account statement and the HOA’s assessment
collection policy.

On or about May 20, 2013, in a letter to Epsten, Mashiri
disputed the debt and requested that Epsten validate it.
Mashiri also stated that she never received a bill for the July
2012 assessment fee. Approximately two weeks later, on
June 5, Epsten responded with another copy of Mashiri’s
account statement.

On June 18, 2013, Epsten, on behalf of the HOA,
recorded a lien on Mashiri’s property in the amount of $928,
reflecting the $598 she previously owed and $330 in
additional legal fees. Three days later, on June 21, Mashiri
sent the HOA a check for $385. In a letter accompanying the
check, Mashiri disputed the balance of the debt. As required
by the Davis-Stirling Act, on June 24, Epsten notified Mashiri
of the lien. Cal. Civ. Code § 5675(e).

Mashiri ultimately filed her complaint alleging violations
of the FDCPA, the Rosenthal Act, and the Unfair
Competition Law based on the contents of the May Notice.
Epsten subsequently moved to dismiss the complaint pursuant
to Federal Rule of Civil Procedure 12(b)(6) for failure to state
a claim. The district court granted Epsten’s motion to
dismiss, concluding, inter alia, that the May Notice
8 MASHIRI V. EPSTEN GRINNELL & HOWELL

“complied with the clarity and accuracy requirements” of the
FDCPA and therefore “did not threaten to take action that
could not legally be taken” as prohibited by the FDCPA. The
district court dismissed Mashiri’s state law claims as
dependant on her FDCPA claims. Mashiri timely appealed.

II.

We review de novo a dismissal under Rule 12(b)(6). Ariz.
Students’ Ass’n v. Ariz. Bd. of Regents, 824 F.3d 858, 864
(9th Cir. 2016). For purposes of our review, we accept the
complaint’s well-pleaded factual allegations as true and
construe all inferences in favor of Mashiri. Id. The
“complaint must contain sufficient factual matter, accepted as
true, to state a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal
quotation marks omitted). “The plausibility standard is not
akin to a ‘probability requirement,’ but it asks for more than
a sheer possibility that a defendant has acted unlawfully.” Id.
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556
(2007)).

III.

Congress enacted the FDCPA “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
consistent State action to protect consumers against debt
collection abuses.” 15 U.S.C. § 1692(e). In furtherance of
these stated goals, “[t]he FDCPA subjects ‘debt collectors’ to
civil damages for engaging in certain abusive practices while
attempting to collect debts.” Ho v. ReconTrust Co., NA,
840 F.3d 618, 620 (9th Cir. 2016).
 MASHIRI V. EPSTEN GRINNELL & HOWELL 9

Mashiri challenges the district court’s ruling that she did
not allege a plausible violation of § 1692g of the FDCPA, and
its corresponding dismissal of the § 1692e(5) and state law
claims that depended on her § 1692g claim. See 15 U.S.C.
§ 1692g. She argues that the May Notice violated § 1692g
for two reasons. First, she contends that the May Notice
demanded payment sooner than the expiration of the debtor’s
thirty-day dispute period. Second, she claims that by
threatening to record a lien within thirty-five days,
irrespective of whether she disputed the debt, Epsten failed to
explain effectively a debtor’s right to dispute the debt.
Epsten counters that it was not attempting to collect a debt
and therefore the May Notice needed to comply only with the
obligations in § 1692f(6) of the FDCPA relating to
enforcement of security interests. Epsten further argues that
even if it is subject to § 1692g, it complied with the statutory
requirements. We turn first to whether Epsten is subject
solely to § 1692f(6), and then discuss whether Mashiri has
sufficiently alleged a violation of § 1692g and related claims.

A.

For the first time in its answering brief, Epsten argues that
it is subject only to § 1692f(6)3 because it sent the May

3
Section 1692f(6) prohibits:

Taking 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;
10 MASHIRI V. EPSTEN GRINNELL & HOWELL

Notice to perfect the HOA’s right to record an assessment
lien against Mashiri’s property under California Civil Code
section 5660. “Ordinarily, we decline to consider arguments
raised for the first time on appeal.” Dream Palace v. Cty. of
Maricopa, 384 F.3d 990, 1005 (9th Cir. 2003). We have,
however, recognized an exception where “the issue presented
is purely one of law and either does not depend on the factual
record developed below, or the pertinent record has been fully
developed.” Cold Mountain v. Garber, 375 F.3d 884, 891
(9th Cir. 2004) (quoting Bolker v. Comm’r, 760 F.2d 1039,
1042 (9th Cir. 1985)). Here, Epsten presents a legal issue
concerning the applicability of FDCPA provisions when a
debt collector seeks, in part, to perfect a security interest and
preserve the creditor’s right to record a lien. The pertinent
facts, including the communications between Epsten and
Mashiri, are not disputed. In addition, Mashiri responded to
Epsten’s argument in her reply brief and therefore suffers no
prejudice if we consider the argument. See Dream Palace,
384 F.3d at 1005. Accordingly, we address the issue.

The FDCPA defines “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.” 15 U.S.C.
§ 1692a(5) (emphasis supplied); see also Ho, 840 F.3d at 621
(“For the purposes of the FDCPA, the word ‘debt’ is

(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.
 MASHIRI V. EPSTEN GRINNELL & HOWELL 11

synonymous with ‘money.’”). “The FDCPA imposes liability
only when an entity is attempting to collect debt.” Ho,
840 F.3d at 621.

The contents of the May Notice plainly belie Epsten’s
contention that it did not attempt to collect a debt. The May
Notice requested payment of Mashiri’s homeowner’s
assessment fee, stating: “This letter is to advise you that
$598.00 is currently owing on your Association assessment
account. Failure to pay your assessment account in full
within thirty-five (35) days from the date of this letter will
result in a lien being recorded against your property.” See
supra at 5 (emphasis added). Mashiri’s obligation to pay the
assessment fee relates to her household and arises from her
membership in the HOA. The overdue assessment fee is a
debt under § 1692a(5).

Epsten nonetheless argues that, based on the definition of
a “debt collector” under § 1692a(6),4 entities engaged in the
enforcement of security interests are subject only to
§ 1692f(6). There was, however, no existing security interest
for Epsten to enforce at the time it sent the May Notice

4
Section 1692a(6) provides, in pertinent part:

The term “debt collector” means 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. . . . 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 interests.
12 MASHIRI V. EPSTEN GRINNELL & HOWELL

because a lien had yet to be recorded against Mashiri’s
property. Rather than seeking to enforce an existing security
interest or lien, the May Notice sought to collect Mashiri’s
overdue assessment fee and to make necessary disclosures
that would perfect the HOA’s security interest and permit it
to record a lien at a later date. See Cal. Civ. Code § 5660
(providing that “[a]t least 30 days prior to recording a lien
upon the separate interest of the owner of record to collect a
debt that is past due under Section 5650, the association shall
notify the owner of record in writing by certified mail” of
specified information).5

In addition, Epsten’s interpretation of § 1692a(6) is
incorrect. As we recently observed in Ho, “[i]f entities that
enforce security interests engage in activities that constitute
debt collection, they are debt collectors.” 840 F.3d at 622.
Ho addressed whether a trustee’s communications—limited
solely to pursuing non-judicial foreclosure—were debt
collection activities for purposes of the FDCPA. Id. at
619–20, 623. In contrast to this case, the trustee sought to
enforce a secured loan and sent a notice of default that did not
request payment but instead “merely informed Ho that the
foreclosure process had begun, explained the foreclosure
timeline, apprised her of her rights and stated that she could
contact [the lender] (not [the trustee]) if she wished to make
a payment.” Id. at 623. We held that where an entity is
engaged solely in the enforcement of a security interest and
not in debt collection, like the trustee and unlike Epsten, it is

5
We also note that the Rosenthal Act, which functions as “the state
analogue of the FDCPA,” does not exempt homeowners’ associations
attempting to collect overdue assessment fees pursuant to California Civil
Code § 5660. See Ho v. ReconTrust Co., NA, 840 F.3d 618, 623 n.8 (9th
Cir. 2016).
 MASHIRI V. EPSTEN GRINNELL & HOWELL 13

subject only to § 1692f(6) rather than the full scope of the
FDCPA. See id. at 622 (“We do not hold that the FDCPA
intended to exclude all entities whose principal purpose is to
enforce security interests. . . . We hold only that the
enforcement of security interests is not always debt
collection.”).

Because Epsten sent the May Notice as a debt collector
attempting to collect payment of a debt—irrespective of
whether it also sought to perfect the HOA’s security interest
and preserve its right to record a lien in the future—it is
subject to the full scope of the FDCPA, including § 1692g
and § 1692e. See id. Epsten’s attempt to escape liability
under § 1692g and § 1692e therefore fails.

B.

As noted above, Mashiri argues that she alleged a
violation of § 1692g on two grounds. First, she argues that
the May Notice requested payment by a date that was
inconsistent with a debtor’s right to dispute the debt within
thirty days from receipt of the notice. Second, she argues that
Epsten’s threat to record a lien within thirty-five days of the
date of the letter overshadowed her right to dispute the debt.
We address each of these arguments below, and hold that
Mashiri has alleged a plausible § 1692g violation on both
grounds.

The FDCPA requires a debt collector to send the debtor
a written notice that informs the debtor of the amount of the
debt, to whom the debt is owed, her right to dispute the debt
within thirty days of receipt of the letter, and her right to
14 MASHIRI V. EPSTEN GRINNELL & HOWELL

obtain verification of the debt.6 Because the notice must
inform the debtor of her right to obtain verification of the
debt, the notice is commonly referred to as a “validation”
notice. However, “[t]he statute is not satisfied merely by
inclusion of the required debt validation notice; the notice
Congress required must be conveyed effectively to the
debtor.” Swanson v. S. Or. Credit Serv., Inc., 869 F.2d 1222,
1225 (9th Cir. 1988).

Importantly, notice of the debtor’s right to dispute the
debt and to request the name of the original creditor must not
be overshadowed or inconsistent with other messages

6
Section 1692g(a) provides that the debt collector must notify the
debtor of the following:

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty
days after receipt of the notice, disputes the validity of
the debt, or any portion thereof, the debt will be
assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt
collector in writing within the thirty-day period that the
debt, or any portion thereof, is disputed, the debt
collector will obtain verification of the debt or a copy
of a judgment against the consumer and a copy of such
verification or judgment will be mailed to the consumer
by the debt collector; and

(5) a statement that, upon the consumer’s written
request within the thirty-day period, the debt collector
will provide the consumer with the name and address of
the original creditor, if different from the current
creditor.
 MASHIRI V. EPSTEN GRINNELL & HOWELL 15

appearing in the communication.7 15 U.S.C. § 1692g(b).
Overshadowing or inconsistency may exist where language
in the notice would “confuse a least sophisticated debtor” as
to her validation rights. Terran v. Kaplan, 109 F.3d 1428,
1432 (9th Cir. 1997). In other words, “[u]nder the law of this
circuit, whether the initial communication violates the
FDCPA depends on whether it is likely to deceive or mislead
a hypothetical ‘least sophisticated debtor.’” Id. at 1431
(internal quotation marks omitted).

1.

Turning to Mashiri’s first basis for a § 1692g violation,
Mashiri claims that the May Notice did not provide a debtor
thirty days in which to dispute the debt. We have previously
observed that a § 1692g violation would result if a debt
collector demanded payment prior to the expiration of the
thirty-day dispute period to which debtors are entitled. As we
explained in Terran:

A demand for payment within less than the
thirty-day timeframe necessarily requires the
debtor to [forgo] the statutory right to
challenge the debt in writing within thirty
days, or suffer the consequences. For this
reason, requiring a payment that would
eliminate the debt before the debtor can

7
The terms “overshadowing” and “inconsistent” are often used
interchangeably. See, e.g., Pollard v. Law Office of Mandy L. Spaulding,
766 F.3d 98, 104 (1st Cir. 2014) (“We note at the outset that, in the section
1692g milieu, courts do not always distinguish between violations based
on the overshadowing of a validation notice and violations based on
inconsistencies.”).
16 MASHIRI V. EPSTEN GRINNELL & HOWELL

challenge the validity of that debt directly
conflicts with the protections for debtors set
forth in section 1692g.

Id. at 1434.

In this case, the May Notice demanded payment within
thirty-five days of the date of the letter, which is inconsistent
with a debtor’s right to dispute a debt within thirty days of
receipt of the letter. By the time a debtor receives such a
letter, there may be fewer than thirty days before payment is
due.8 Moreover, even if the debtor received the letter
promptly, in order for the payment to be received within
thirty-five days of the date of the letter, the debtor would
likely need to mail the payment prior to the thirtieth day of
the dispute period. See Chauncey v. JDR Recovery Corp.,
118 F.3d 516, 519 (7th Cir. 1997). The least sophisticated
debtor, when confronted with such a notice, would reasonably
forgo her right to thirty days in which to dispute the debt and
seek verification. The infringement of the debtor’s right to
thirty days in which to dispute the debt plausibly violates
§ 1692g. See Terran, 109 F.3d at 1434.

8
Although Epsten asks us to take judicial notice of a certified mail
receipt showing that Mashiri received the May Notice on May 2, 2013, the
district court did not consider the certified mail receipt, and we decline to
do so as well. The date on which Mashiri received the May Notice is
irrelevant because we undertake an “objective analysis that takes into
account whether the least sophisticated debtor would likely be misled by
a communication.” Evon v. Law Offices of Sidney Mickell, 688 F.3d 1015,
1017 (9th Cir. 2012) (emphasis added and internal quotation marks
omitted).
 MASHIRI V. EPSTEN GRINNELL & HOWELL 17

2.

Mashiri alleged a plausible § 1692g violation for the
additional reason that the least sophisticated debtor may not
understand, on the basis of the May Notice, that upon
notifying Epsten of a dispute, debt collection activities would
“cease . . . until the debt collector obtains verification of the
debt . . . and a copy of such verification . . . is mailed to the
consumer by the debt collector.” 15 U.S.C. § 1692g(b).
Rather, the May Notice stated that a lien “will” be recorded
if Mashiri “fail[ed] to pay.” The least sophisticated debtor
would likely (and incorrectly) believe that even if she
disputed the debt and Epsten had not yet mailed verification
of the debt to her, Epsten would record a lien on the thirty-
fifth day after the date of the letter. “In this manner, the letter
effectively overshadows the disclosed right to dispute by
conveying an inaccurate message that exercise of the right
does not have an effect that the statute itself says it has.”
Pollard v. Law Office of Mandy L. Spaulding, 766 F.3d 98,
105 (1st Cir. 2014).

Epsten relies on Shimek v. Weissman, Nowack, Curry &
Wilco, P.C., 374 F.3d 1011 (11th Cir. 2004) (per curiam) for
the proposition that, upon receipt of a request for debt
verification, the FDCPA does not require a debt collector to
take affirmative action to stop the recording of a lien that had
already been filed. That case, however, correctly recognizes
that “sending a lien to the clerk of the court [for filing] after
a verification of the debt was requested is clearly contrary to
§ 1692g(b)’s requirement that a debt collector shall ‘cease
collection of the debt’ once the verification is requested.” Id.
at 1014. In addition, Shimek is factually inapposite because
“[u]nder Georgia law, the filing of a lien by a creditor is a
necessary step for securing payment of a debt,” and the
18 MASHIRI V. EPSTEN GRINNELL & HOWELL

Eleventh Circuit “assum[ed] the propriety of filing the lien
with the Court Clerk contemporaneously with the demand
letter.” Id. at 1013–14. In California, pursuant to the Davis-
Stirling Act, a homeowners’ association may not record a lien
with a county recorder’s office contemporaneously with
mailing the demand letter, but instead must provide notice of
the debt at least thirty days prior to recording a lien, during
which time a debtor-homeowner may dispute the debt. Cal.
Civ. Code § 5660.

The obligations imposed on the HOA pursuant to the
FDCPA, including the provision requiring suspension of debt
collection activities pending debt verification, are thus
consistent with the requirements the HOA must satisfy
pursuant to the Davis-Stirling Act. The HOA’s right to
record a lien thirty days after providing notice under
section 5660 is not absolute, but instead is dependent on
whether the homeowner disputes the debt. Indeed, pursuant
to the Davis-Stirling Act, if the homeowner disputes the debt
and requests an informal dispute resolution proceeding, the
HOA must participate in dispute resolution “prior to
recording a lien.” Cal. Civ. Code § 5670.

In this context, the threat of recording of a lien is a debt
collection activity, which under the FDCPA must cease if the
debtor-homeowner disputes the debt and the debt collector
has not yet mailed verification of the debt to the debtor-
homeowner. The Davis-Stirling Act does not mandate
otherwise. Epsten was obligated to explain such debt
validation rights in an effective manner. See Swanson,
869 F.2d at 1225. In failing to do so, the threat of filing a lien
overshadowed Mashiri’s right to dispute the debt, in violation
of § 1692g. Because Mashiri has plausibly alleged a
violation of § 1692g on the basis of inconsistency and
 MASHIRI V. EPSTEN GRINNELL & HOWELL 19

overshadowing, we reverse the district court’s dismissal of
that claim.

IV. Conclusion

We hold that Mashiri has plausibly alleged a claim under
§ 1692g, and we reverse the district court’s dismissal of that
claim. Because we reverse the district court’s dismissal of
Mashiri’s § 1692g claim, we reverse the district court’s
dismissal of Mashiri’s claims that depended on § 1692g and
arose under § 1692e(5), the Rosenthal Act, and the Unfair
Competition Law.9

REVERSED and REMANDED.

9
To the extent Mashiri asserted claims under § 1692e, the Rosenthal
Act, or the Unfair Competition Law on grounds unrelated to her § 1692g
claim, Mashiri does not challenge the district court’s dismissal of those
claims.