E-Alert Case Updates

“Robo-Signings” Did Not Amount to a Cause of Action Under the Fair Debt Collection Practices Act

Marjorie Stewart, et al. v. Howard Bierman, et al.
Civ. No.: RWT-10-2822, (D. Md. May 8, 2012)
by Gregory L. Arbogast, Associate
Semmes, Bowen & Semmes (www.semmes.com)

In Stewart v. Bierman, Judge Titus of the United States District Court for the District of Maryland held that Plaintiffs could not maintain the Fair Debt Collection Practices Act (“FDCPA”) action against the law firm of Bierman, Geesing, Ward & Wood, LLC for forging signatures on foreclosure documents, because the forgeries are not “material.”

In a highly publicized case, the attorneys at Bierman, Geesing, Ward & Wood, LLC, instructed their staff to forge their signatures on foreclosure documents, as well as to forge the notary stamp certifying that the attorneys signed the documents. While the contents of the documents were all correct and complete, the attorneys did not take the time, as required under the Maryland Rules, to actually sign the documents. This is significant because documents at issue were trustee’s deeds, which result in the transfer of legal title to third parties. Due to the legal significance of trustee’s deeds, they do not effectuate a transfer of interest in property until the attorney signs the documents. Therefore, the documents require the attorney’s actual signature as opposed to a member of the attorney’s staff signing on the attorney’s behalf. Additionally, a notary is required to certify that the actual attorney signed the trustee’s deed in order to convey legal title to the third party.

Upon learning that the attorneys at Bierman, Geesing, Ward & Wood had instructed their staff to forge their signatures, Plaintiffs filed suit under the FDCPA. Plaintiffs alleged that the forged documents were materially false and misleading, and harmed Plaintiffs.

Defendants filed a Motion to Dismiss Plaintiffs’ claims under the FDCPA, on the grounds that Plaintiffs failed to state a claim upon which relief could be granted. Specifically, Defendants claimed that Plaintiffs could only maintain an action under the FDCPA if the statement was “material.” Plaintiffs argued that the statements were material because the trustee’s deeds transferred legal title to a third party and, if they were forged, title would never be conveyed. Judge Titus of the United States District Court for the District of Maryland found Defendants’ argument to be more persuasive. Judge Titus found that, “A statement cannot mislead unless it is material, so a false but nonmaterial statement is not actionable.” As applied to this case, Judge Titus noted that the signatures only concerned undisputed accurate information concerning the mortgage debt owed by Plaintiffs; and the signatures did not materially relate to the actual debt at issue. Therefore, Judge Titus dismissed Plaintiffs’ FDCPA’s claims for failure to state a claim upon which relief could be granted.