Dale Kaymark v. Bank of America NA
2015 U.S. App. LEXIS 5548
| 3rd Cir. | 2015Background
- Kaymark refinanced his home in 2006; he defaulted in 2011 and BOA (serviced under Fannie Mae rules) initiated foreclosure. Udren Law Offices filed a verified Foreclosure Complaint on BOA’s behalf in Sept. 2012.
- The Foreclosure Complaint itemized amounts "due and owing" as of July 12, 2012, and included $1,650 in attorney’s fees, $325 title report, and $75 property inspection — fees Kaymark alleges were not yet incurred as of that date.
- Kaymark never paid the disputed fees and contested the foreclosure; the state foreclosure action remains pending.
- Kaymark sued in Pennsylvania court (removed to federal court), asserting: FDCPA claims against Udren; FCEUA and UTPCPL claims against BOA and Udren; and breach of contract against BOA.
- The district court dismissed all claims for failure to state a claim (including lack of ascertainable loss for state-law claims). Kaymark appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether listing not-yet-incurred flat fees in a foreclosure complaint violates FDCPA §§ 1692e(2)(A), 1692e(10) (misrepresentation) | Kaymark: specific line items presented as amounts due misrepresent the debt because fees were not incurred as of the stated date | Udren: pleadings/complaints are not subject to FDCPA liability; fixed fees permitted by FNMA servicing rules | Reversed as to §1692e(2)(A) and (10): under McLaughlin, complaint can misrepresent amount; view from least sophisticated debtor supports claim |
| Whether attempting to collect flat not-yet-incurred fees violates FDCPA §1692f(1) (unauthorized collection) | Kaymark: mortgage authorized only fees "actually incurred"; listing unincurred fixed fees not authorized by contract | Defendants: mortgage and FNMA guides contemplate capped/fixed fees; listing anticipated fees is permissible | Reversed as to §1692f(1): complaint plausibly alleges fees were not "expressly authorized" because contract language refers to expenses "incurred" |
| Whether foreclosure complaints are exempt from FDCPA liability because they are formal pleadings or routed to the court | Kaymark: pleadings are communications to the debtor when served and fall within FDCPA's definition of "communication" | Udren: complaints are directed to the court and are protected; other procedural rules and remedies make FDCPA inapplicable here | Rejected: FDCPA covers litigating activities (Heintz); Congress’s narrow exemptions for certain formal pleadings indicate complaints otherwise remain within FDCPA scope |
| Whether Kaymark alleged ascertainable loss to state a UTPCPL/FCEUA claim or breach of contract damages | Kaymark: inflated lien/amount due (by $2,050) diminished his property interest and could have forced payment to avoid foreclosure — thus ascertainable loss and damages | Defendants: Kaymark did not pay the fees, suffered no concrete loss, and can (and did) defend the foreclosure; claims are speculative | Affirmed dismissal of UTPCPL, FCEUA, and breach of contract: no non-speculative ascertainable loss or resultant damages pleaded |
Key Cases Cited
- McLaughlin v. Phelan Hallinan & Schmieg, LLP, 756 F.3d 240 (3d Cir. 2014) (itemized demand that listed unincurred fees can misrepresent debt under FDCPA)
- Heintz v. Jenkins, 514 U.S. 291 (1995) (attorneys engaged in litigation-based debt collection are subject to the FDCPA)
- Jerman v. Carlisle, McNellie, Rini, Kramer & Ulrich LPA, 559 U.S. 573 (2010) (FDCPA issues arising from pleadings may be litigated; discussion of bona fide error defense)
- Donohue v. Quick Collect, Inc., 592 F.3d 1027 (9th Cir. 2010) (complaint served on debtor is a communication under the FDCPA)
- Grimes v. Enterprise Leasing Co., LLC, 105 A.3d 1188 (Pa. 2014) (plaintiff cannot manufacture ascertainable loss merely by hiring counsel or asserting unpaid-but-unpaid fees)
- Piper v. Portnoff Law Assocs., Ltd., 396 F.3d 227 (3d Cir. 2005) (FDCPA applies to litigating activities; allowing a forum loophole would undermine FDCPA purpose)