4th Circuit Says Allegedly Forged Declarations Not Actionable under FDCPA Because Substance was Accurate Anyway; Finds that Conduct that Passes Muster on Specific FDCPA Provisions Can Not Be Challenged as Generally “Unfair”

In Lembach v. Bierman, — Fed.Appx. —-, 2013 WL 2501752 (4th Cir. 2013), the 4th Circuit Court of Appeals held that allegedly falsely executed foreclosure documents were not actionable under the FDCPA because the documents were accurate, even if improperly executed.  The Court of Appeals also held that the general catch-all ‘unfair’ practices provision of the FDCPA did not apply when a specific FDCPA provision was sued under, but the conduct passed muster under such specific provision.

Although we do not look favorably upon improper behavior by attorneys, we ultimately cannot find that the misrepresentations BGWW made are material because they have no connection to the debt at issue in this case. The Lembachs were unquestionably in default, and the documents correctly stated the debt. The Lembachs fail to allege how they, or any consumer, would be misled by a signature by someone other than the trustee that is affixed to a document that was substantively correct. See Harvey v. Great Seneca Corp., 453 F.3d 324, 332 (6th Cir.2006) (dismissing plaintiff’s allegation that defendant violated the FDCPA when she “never denied in her complaint that she owed [defendant] a debt, nor did she claim [defendant] misstated or misrepresented the amount that she owed”). We recognize the fact that the trustee’s signature was required under the Maryland rules to file a foreclosure action. However, the fact that Maryland has adopted foreclosure regulations that address the particularities of filing a foreclosure action has no bearing on whether a signature is material under federal law. Because the signatures have no connection to the debt, and the Lembachs fail to show how the fraudulent signatures would mislead even the least sophisticated consumer, their claim fails. ¶  The Lembachs next argue that the use of false signatures by BGWW violates 15 U.S.C. § 1692f because it constitutes unfair or unconscionable means of collecting debt. The “Unfair Practices” section of the FDCPA prohibits debt collectors from using “unfair or unconscionable means to collect or attempt to collect any debt.” 15 U.S.C. § 1692f. Although not exhaustive, the statute does provide a list of conduct that violates the section. Id. Additionally, the section allows the court to punish any other unfair or uncon-scionable conduct not covered by the FDCPA. Id. The district court dismissed the § 1692f claims because there were no allegations of any unfair or unconscionable conduct distinct from the § 1692e allegations, and for the same reasons the allegations could not be material to the Lembachs. ¶  In Donohue, the Ninth Circuit, relying on Hahn and Miller, held that “false but non-material representations are not likely to mislead the least sophisticated consumer and therefore are not actionable under §§ 1692e or 1692f.” 592 F.3d at 1033. This Court has also recognized “that violations grounded in ‘false representations’ must rest on material misrepresentations.”   Warren, 676 F.3d at 374. Because the Lembachs’ claim undoubtedly rests on “false misrepresentations,” the Lembachs must, once again, show that this misrepresentation was material to support their § 1692f claim. As we have already concluded, the Lembachs have failed to plead any material violations. Necessarily, their § 1692f claim fails as well. Further, the Lembachs fail to demonstrate any conduct that would be violative of § 1692f. Instead, the Lembachs rely on fraudulent signatures, the same alleged misconduct that undergirds their § 1692e claim. As noted above, the courts use § 1692f to punish conduct that FDCPA does not specifically cover. Because the Lembachs rely on conduct that is covered by § 1692e and do not allege any separate or distinct conduct to support a § 1692f violation, their claim fails for this reason as well.