Stewart v. Bierman
2012 U.S. Dist. LEXIS 64355
| D. Maryland | 2012Background
- Plaintiffs Stewart, Nachbar, and the Lembachs filed a putative class action on Oct. 13, 2010 against BGWW law firm and its attorneys over foreclosure practices in Maryland.
- Amended complaint asserts FDCPA violations, Maryland real property notice/tailored procedures, negligence, Maryland consumer protection and debt collection statutes, and respondeat superior.
- Only the Lembachs’ claims remain before the court; Stewart’s claims are precluded, and Nachbar’s claim was dismissed due to death and lack of substitution.
- Defendants allegedly acted as substitute trustees, docketed foreclosure actions, and supervised BGWW employees who signed documents to expedite foreclosures.
- The alleged misconduct includes signing orders to docket, affidavits, and appointments with forged notaries and signatures, which allegedly created counterfeit trustee’s deeds after foreclosures.
- Court grants Defendants’ motion to dismiss and dismisses the remaining state-law and FDCPA-related claims, with no foreclosure action pending against the Lembachs.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| FDCPA accrual and timeliness | Stewart/Nachbar argue discovery rule tolls limitations; violations occurred within one year of discovery. | Timeliness measured from violation or discovery; notices/foreclosure filings predate suit; claims time-barred. | FDCPA claims not barred; accrual tied to discovery of violations within limitations period. |
| Whether defendants are debt collectors under FDCPA | Defendants, as substitute trustees, collect debts and thus fall within FDCPA §1692a(6). | Foreclosing as trustees is not debt collection; not subject to FDCPA. | Court holds defendants are debt collectors under FDCPA. |
| Materiality under §1692e and §1692f | Misrepresentations are material and actionable; robo-signings misled least sophisticated debtor. | Signatures were immaterial to the debt; no misstatement of debt amount or terms; not actionable. | Materiality required for §1692e/1692f claims; plaintiffs fail to plead materiality. |
| MCPA and MCDCA claims viability | Defendants’ acts violated Maryland consumer protection and debt collection statutes. | Statutory exemptions for professional services; even if not exempt, failure to plead reliance and injury. | MCPA and MCDCA claims dismissed; exemptions or lack of pleaded elements. |
| Negligence and duty of care | Defendants owed a duty in the foreclosure process and breached it via improper procedures. | No cognizable duty as to the claimed procedural issues; claims premature given no sale/ratification. | Negligence claim dismissed for lack of a duty and causation under Maryland law. |
Key Cases Cited
- Wilson v. Draper & Goldberg, 443 F.3d 373 (4th Cir.2006) (foreclosing attorney can be a debt collector under the FDCPA)
- Heintz v. Jenkins, 514 U.S. 291 (U.S. 1995) (FDCPA applies to lawyers engaging in debt collection activity)
- Donohue v. Quick Collect, Inc., 592 F.3d 1027 (9th Cir.2010) (materiality requirement for false representations under FDCPA)
- Miller v. Javitch, Block & Rathbone, 561 F.3d 588 (6th Cir.2009) (adopts materiality requirement for FDCPA claims)
- Hahn v. Triumph P’ships, 557 F.3d 755 (7th Cir.2009) (materiality necessary for false/misleading statements under FDCPA)
- Warren v. Sessoms & Rogers, 676 F.3d 365 (4th Cir.2012) (materiality concept discussed; §1692e largely requires material misrepresentation to be actionable)