The Third Circuit Court of Appeals earlier this month reversed a lower court’s ruling in a case brought against Bank of America in which the plaintiff alleged FDCPA violations on the part of a law firm collecting on BofA’s behalf. The defendants argued that the FDCPA does not apply to attorneys engaged in the practice of law, which the Circuit panel rejected.

In Kaymark v. Bank of America, the consumer plaintiff defaulted on his mortgage. On behalf of BofA, Udren Law Offices, P.C. initiated foreclosure proceedings against Kaymark in state court. The body of the Foreclosure Complaint listed certain not-yet-incurred fees as due and owing, which the plaintiff alleges violated several state and federal fair debt collection laws and breached the mortgage contract.

Specifically, the body of the Foreclosure Complaint included an itemized list of the total debt, stating which items were due and owing as of July 12, 2012. Among that list was $1,650 in attorneys’ fees, $325 in title report fees, and $75 in property inspection fees (or $2,050 total) were not actually incurred as of July 12, two months before the foreclosure action was filed on September 13.

Alleging that on behalf of BofA, Urden had violated sections 1692e(2)(A),  (5),  (10),  and  1692f(1)  of  the  FDCPA in addition to a host of Pennsylvania-specific laws, Kaymark filed a class action lawsuit against Bank of America in February 2013.

A district court judge in the Western District of Pennsylvania dismissed all claims in the suit noting that the inclusion of not-yet-incurred fees was not prohibited by the mortgage contract or other state or federal laws. Kaymark appealed to the Third Circuit.

In a unanimous April 7 opinion, the three-judge panel reversed the lower court’s ruling with regard to the FDCPA claims. It left intact the dismissal of state law claims.

The panel found that the Foreclosure Complaint was, in fact, a false communication under the FDCPA. It then turned to the question of whether an FDCPA claim could be brought against an attorney for actions taken in the course of practicing law, the primary defense offered by Urden on behalf of BofA.

The circuit judges relied in large part on Heintz v. Jenkins, a pivotal Supreme Court decision from 1995 that is still being interpreted and digested with regard to the exact circumstances attorneys can be considered “debt collectors” under the FDCPA.

“We conclude that a communication cannot be uniquely exempted from the FDCPA because it is a formal pleading or, in particular, a complaint,” the panel wrote. “This principle is widely accepted by our sister Circuits.”


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