Court Opinion

ID: 3200403
Source: CourtListenerOpinion
Date Created: 2016-05-04 17:09:15.766536+00
Date Added: 2024-06-11T14:28:14.174541
License: Public Domain

May 4 2016

                                           DA 15-0108
                                                                                         Case Number: DA 15-0108

                  IN THE SUPREME COURT OF THE STATE OF MONTANA

                                           2016 MT 101

ROBIN C. JACOBSON and
KATHLEEN S. JACOBSON,

              Plaintiffs and Appellees,

         v.

BAYVIEW LOAN SERVICING, LLC,
and CHARLES J. PETERSON, Trustee,

              Defendants and Appellants.

APPEAL FROM:            District Court of the Twenty-Second Judicial District,
                        In and For the County of Carbon, Cause No. DV 10-58
                        Honorable Blair Jones, Presiding Judge

COUNSEL OF RECORD:

                For Appellants:

                        Maxon R. Davis, Derek J. Oestreicher, Davis, Hatley, Haffeman
                        & Tighe, P.C., Great Falls, Montana

                For Appellees:

                        Raymond G. Kuntz, Attorney at Law, Red Lodge, Montana

                                                     Submitted on Briefs: December 9, 2015

                                                                 Decided: May 4, 2016

Filed:

                        __________________________________________
                                          Clerk
Justice Michael E Wheat delivered the Opinion of the Court.

¶1    Bayview Loan Servicing, LLC, (“Bayview”) and Charles J. Peterson, Trustee,

(“Peterson”) appeal from the Order of the Montana Twenty-Second Judicial District

granting judgment for Robin C. Jacobson and Kathleen S. Jacobson (“Jacobsons”). The

District Court determined that Bayview violated the Fair Debt Collections Practices Act

(“FDCPA”), 15 U.S.C. § 1692a-p, and the Montana Consumer Protection Act

(“MCPA”), Title 30, Chapter 14, part 1, MCA. The District Court also awarded damages

in the amount of $226,408.14 and attorney fees in the amount of $109,108.50 to the

Jacobsons. The Jacobsons also prevailed on two post-trial motions for additional relief

and the District Court awarded the Jacobsons an additional $60,000.00 in damages and

$31,020.00 in attorney fees. We affirm.

                                          ISSUES

¶2    Appellant raises several issues on appeal, which we address as follows:

      1. Whether the District Court erred in determining that Bayview violated the
         FDCPA.

      2. Whether the District Court erred in determining that Bayview violated the
         MCPA.

      3. Whether the District Court erred in awarding damages to the Jacobsons.

      4. Whether this Court should award costs and fees to the Jacobsons on appeal.

                FACTUAL AND PROCEDURAL BACKGROUND

¶3    In October 2007, the Jacobsons borrowed money and purchased a home and land

on Elbow Creek Road in Carbon County, Montana. They executed a Promissory Note

                                            2
and Trust Indenture in the amount of $391,400.00 to secure the loan. The original lender

and servicer on the loan was CitiMortgage, Inc. and the “nominee” beneficiary of the

Trust Indenture was Mortgage Electronic Registration Systems, Inc. (“MERS”). The

2008 economic crisis brought negative financial impacts to Robin’s business as a home

builder. As a result, the Jacobsons missed at least one mortgage payment in December

2008. CitiMortgage worked with the Jacobsons by entering into an extension agreement

to defer the delinquent payment and interest to the end of the loan. On March 7, 2009,

CitiMortgage transferred the loan servicing duties to Bayview Loan Servicing, LLC.

¶4     On March 24, 2009, Bayview sent the Jacobsons a default letter demanding

payment of all past due amounts within 30 days or the loan would be accelerated with the

entire obligation due and payable, along with the commencement of foreclosure

proceedings. The letter further advised that once the loan was accelerated, it could be

reinstated if all past due installments and late charges were paid at least 5 days before the

scheduled foreclosure sale.

¶5     Both the Trust Indenture and the Promissory Note signed by the Jacobsons provide

rules for notice when the borrower is delinquent on payments or in default. Section 22(c)

of the Trust Indenture provides:

       Acceleration; Remedies. Lender shall give notice to Borrower prior to
       acceleration following Borrower’s breach of any covenant or agreement in
       this Security Instrument (but not prior to acceleration under Section 18
       [transfer of property] unless Applicable law provides otherwise). The
       notice shall specify: (a) the default; (b) the action required to cure the
       default; (c) a date, not less than 30 days from the date the notice is given to
       Borrower, by which the default must be cured; and (d) that failure to cure

                                             3
       the default on or before the date specified in the notice may result in
       acceleration. . . .
              If the default is not cured on or before the date specified in the
       notice, Lender at its option may require immediate payment in full of all
       sums secured by this Security Instrument without further demand and may
       invoke the power of sale and any other remedies permitted by Applicable
       Law. (Emphasis added).

With regard to the Promissory Note, Section 6(c) states:

       Notice of Default
              If I am in default, the Note Holder may send a written notice telling
       me that if I do not pay the overdue amount by a certain date, the note
       holder may require me to pay immediately the full amount of Principal
       which has not been paid and all the interest that I owe on that amount. That
       date must be at least 30 days after the date on which the notice is mailed to
       me or delivered by other means. (Emphasis added.)

¶6     As part of its efforts to collect payment from the Jacobsons, Bayview sent the

aforementioned default letter but did not send a notice of acceleration with a “date

specified” or “certain date” by “which the default must be cured” subsequent to the

default letter of March 24 as required by the Promissory Note. (If the default letter was

meant to be the notice, it did not conform to the requirements of the Promissory Note

because it failed to give the full 30 days and failed to specify the “certain date.”)

¶7     The Jacobsons made a payment on their loan on April 30, but Bayview resisted

acceptance of that payment. A Bayview representative told the Jacobsons to stop making

payments on their loan in May 2009, advising them that this would help them qualify for

a loan modification. Bayview represented to the Jacobsons in May 2009 that it would

                                              4
process a loan modification for them, but did not forward an application for the HAMP1

program until January 2011.        Instead, Bayview reinitiated foreclosure proceedings,

sending a second default letter on May 4, 2009, containing language identical to the

March foreclosure letter. Similar to the March foreclosure letter, Bayview failed to send

a notice of acceleration and provide a “certain date” for cure.

¶8     On July 21, 2009, as part of the first foreclosure proceeding, Bayview filed,

through Peterson, three documents with the clerk and recorder. The documents were an

“Assignment of Deed of Trust,” the “Substitution of Trustee,” and a “Notice of Trustee’s

Sale.” The “Assignment of Deed of Trust” assigned the deed of trust from MERS to

CitiMortgage. The “Substitution of Trustee” substituted Peterson as trustee in the place

of the original trustee, First American Title. Bayview also filed a “Notice of Trustee’s

Sale,” seeking to exercise the power of sale under the trust and setting a sale of the

Jacobsons property for November 23, 2009. In the Notice of Trustee’s Sale, Bayview

and Peterson identified Bayview as the beneficiary under the Trust Indenture, when

Bayview has never been the beneficiary of the Trust Indenture. The Notice of Trustee’s

Sale states in bold letters at the bottom of page 2 “THIS IS AN ATTEMPT TO

COLLECT A DEBT.”

1
   The federal Home Affordable Modification Program (“HAMP”) “is intended to help
homeowners in default or at immediate risk of default on their home loans by modifying their
monthly payments to affordable levels. The program requires participating loan servicers to
execute a servicer participation agreement and service eligible loans according to a uniform
modification process. The process begins with a Trial Period Plan, under which the homeowner
makes reduced payments for three months, while the loan servicer verifies income and other
eligibility information. At the end of the trial period, if the homeowner has successfully made
the trial payments and if eligibility has been verified, the modification is made permanent.”
Morrow v. Bank of Am., N.A., 2014 MT 117, ¶ 11, 375 Mont. 38, 324 P.3d 1167.
                                                 5
¶9     In September 2009, Bayview informed the Jacobsons that they were not qualified

for HAMP, even though the Jacobsons were never given an application for modification

under the program. At this point, according to the record, the Jacobsons complained to

the Better Business Bureau because Bayview was “offering” modification while

simultaneously pursuing foreclosure against them.          The Better Business Bureau

apparently contacted Bayview, because Bayview responded by cancelling the trustee’s

sale scheduled for November 2009 and offering a loan modification. Bayview then

offered to lower the interest rate from 9.5% to 7.5% and extend the term of the loan out to

480 months. The Jacobsons rejected the offer. The Jacobsons then complained about

Bayview’s practices to U.S. Senator Jon Tester. In a conference call with the Senator’s

office, Bayview, and the Jacobsons, Bayview made a second offer: offering to dismiss

the foreclosure action, waive the late charges, remove the negative credit reporting,

dismiss legal fees and costs, and reduce the interest rate to 7.5%, if the loan was brought

current. The Jacobsons accepted this offer, but Bayview refused to put the offer in

writing. As a result, no agreement was finalized between the parties.

¶10    In December 2009, Bayview once again sent the Jacobsons “notice of default”

letters. These letters again failed to provide a date for cure under § 22 of the Trust

Indenture and failed to grant the Jacobsons the ability to cure within the 5 days prior to

the date set for sale.    Bayview also failed to send the required acceleration notice

subsequent to the default letter.

                                            6
¶11   In January 2010, CitiMortgage, the true beneficiary of the loan, executed a power

of attorney, effective January 14, 2010, naming Bayview as its attorney-in-fact, but the

document did not ratify the past actions of Bayview. On February 5, 2010, Peterson

executed a second Notice of Trustee’s Sale setting a sale date of June 15, 2010. This

second notice also erroneously identified Bayview Loan Servicing as the beneficiary. On

March 9, 2010, Bayview assigned the Trust Indenture to U.S. Bank as trustee, and then

assigned it again to another entity identified as “CBO-6 REO Corp.”             Bayview

represented that it was acting as attorney-in-fact for U.S. Bank for the purposes of this

second assignment when it had no such authority. Bayview subsequently executed a

false notarization of the assignment of the Trust Indenture to CBO-6 REO. Corp. CBO-6

REO Corp. did not exist on March 9 when Bayview purported to assign the Jacobsons’

Trust Indenture to that entity.   Bayview claimed that it meant to assign the Trust

Indenture to “CBO-6 Corp.” and that the “REO” was a typographical error.

Nevertheless, CBO-6 Corp. was not formed until June 3, 2010, three months after the

alleged “typographical error” assignment on March 9.

¶12   On March 23, 2010, Bayview informed the Jacobsons that it was now servicing

their loan on behalf of U.S. Bank, with knowledge that U.S. Bank was not the

beneficiary. Bayview falsely represented that CBO-6 REO Corp. existed and that the

Jacobsons’ loan was transferred to the entity on June 10, 2010.           Bayview also

misrepresented that it was servicing the loan on behalf of CBO-6 REO Corp. and that the

non-existent entity was the Jacobsons’ creditor. Bayview did not record the March 9,

                                           7
2010 assignment of the Trust Indenture until September 21, 2010. When it did record,

the assignment from U.S. Bank to CBO-6 Corp. was still an assignment to a nonexistent

entity. As a result of these assignments, Bayview acted from March 9, 2010, to July 26,

2012, on behalf of beneficiaries that did not exist and had no interest in the Jacobsons’

loan.

¶13     The Jacobsons filed this action on June 9, 2010, to enjoin the sale of their house at

the June 15, 2010 trustee’s sale. The District Court issued an Order to cancel the

trustee’s sale set for June 15, 2010.        Subsequently, the Jacobsons amended their

complaint to add FDCPA and MCPA claims.                Bayview answered the Jacobsons’

complaint on November 8, 2010.         After the case was filed, Bayview contacted the

Jacobsons, instead of their counsel, in June 2011, January 2011, February 2011, and July

2013.

¶14     Bayview moved for summary judgment in June 2012, asserting that it was the

current beneficiary of the deed of trust, and had the authority to foreclose. The court set a

hearing for September 19, 2012, on the motion for summary judgment. After changes in

counsel and numerous motions, including a second summary judgment motion by

Bayview, the court held a summary judgment hearing on August 7, 2013. The court

denied Bayview’s motion for summary judgment at the hearing. A bench trial was held

on November 21 and 22, 2013, at which both parties presented exhibits and witness

testimony.    On March 10, 2014, the District Court issued its Findings of Fact,

Conclusions of Law, and Order. The court determined that Bayview engaged in deceit,

                                              8
negligent misrepresentation, and intentional violations of the FDCPA and the MCPA.

The court awarded money damages under the FDCPA and the MCPA to the Jacobsons

including emotional distress damages and statutory damages totaling $226,408.14. The

court awarded the Jacobsons their costs and attorney fees in the case of $109,108.50.

¶15    After the trial, the Jacobsons filed a Motion for Additional Damages, Equitable

Relief and Sanctions because Bayview contacted them while they were still represented

by counsel, to notify them that Bayview was adding $33,696.00 to their loan for attorney

fees and expenses related to the November trial. On August 20, 2014, the court held a

hearing and determined that Bayview’s attempts to collect their trial-related attorney fees

and costs from the Jacobsons were in violation of the FDCPA, the MCPA, and the

District Court’s Order in the case prohibiting debt collection by Bayview during the

pendency of the action. Accordingly, the court imposed an additional $50,000.00 of

damages under § 30-14-133(1), MCA, to “further the remedial purposes of the Act.”

¶16    On the same day as the August 20, 2014 hearing, Bayview once again sent

additional correspondence to the Jacobsons. The letter was a mortgage statement which

included a $13,565.84 bill for attorney fees added to their mortgage. The Jacobsons filed

a Motion for Contempt and Bayview responded that it was deliberately charging the

Jacobsons for Bayview’s attorney fees and adding those to their mortgage. The District

Court held a hearing on the motion on October 28, 2014, at which Bayview continued to

assert its claims for attorney fees and other costs even while it could not produce any

authority for this claim.     The District Court issued additional Findings of Fact,

                                            9
Conclusions of Law, and Order on December 10, 2014, regarding the second violation of

the Order in the case. The court held:

       1. Bayview is in contempt of the District Court, but may purge its
          contempt by strict future compliance with the Court’s orders.

       2. Bayview should pay Jacobsons attorney fees and costs incurred in
          bringing the motions. Bayview should pay $10,000.00 to aid in
          deterring Bayview’s unlawful conduct.

¶17    Two more Orders were entered in the case in regard to the attorney fees and costs.

The District Court determined:

       1. Jacobsons are awarded $17,580.00 against Bayview and Peterson for the
          first violation of the Order as determined by the District Court on
          August 20, 2014.

       2. Jacobsons are awarded $13,440.00 against Bayview and Peterson for the
          second violation of the Order as determined by the District Court on
          December 10, 2014.

¶18    Bayview appeals from the District Court’s Orders in this case, including the

subsequent orders related to Bayview’s violations of the original order. Bayview does

not appeal the attorney fees awarded pursuant to the Orders.

                               STANDARD OF REVIEW

¶19    This Court will affirm the factual findings of a district court sitting without a jury

unless those findings are clearly erroneous. Pedersen v. Ziehl, 2013 MT 306, ¶ 10, 372
Mont. 223, 311 P.3d 765 (citing M. R. Civ. P. 52(a)(6); Steiger v. Brown, 2007 MT 29,

¶ 16, 336 Mont. 29, 152 P.3d 705). “A district court’s findings are clearly erroneous if

they are not supported by substantial evidence, if the district court has misapprehended

the effect of the evidence, or if a review of the record leaves this Court with the definite
                                             10
and firm conviction that a mistake has been committed.” Pedersen, ¶ 10 (citations

omitted). To determine whether substantial credible evidence supports the district court’s

findings, we review the evidence in the light most favorable to the prevailing party.

Pedersen, ¶ 10 (citation omitted). We review a district court’s conclusions of law for

correctness. Public Lands Access Ass’n v. Bd. of Co. Comm’rs, 2014 MT 10, ¶ 14, 373
Mont. 277, 321 P.3d 38.

                                      DISCUSSION

¶20    1. Whether the District Court erred in determining that Bayview violated the
       FDCPA.

¶21    The District Court made numerous determinations under the FDCPA, all of which

are contested by Bayview on appeal. The court found that Bayview was in violation of

the FDCPA for the following reasons: it engaged in FDCPA collection activity; it told

the Jacobsons to stop making payments and then commenced foreclosure; it informed the

Jacobsons it could not reinstate their loan within 5 days prior to the foreclosure sale; it

failed to provide a date for cure of the default; it wrongfully (under § 71-1-306(2), MCA)

appointed Peterson as trustee; it attempted to foreclose the property with a defective

trustee; it falsely represented that it held the beneficial interest as servicer; it falsely

promised to modify the loan in the Jacobsons favor; it falsely informed the Jacobsons

they were not qualified for the HAMP program; it falsely notarized the assignment of the

Trust Indenture to a corporation that did not exist; and falsely recorded the assignment to

a fictitious creditor without authority; it made false representations in discovery by

providing false answers and withholding documents; it contacted the Jacobsons while

                                            11
they were represented by counsel; and it failed to comply with the requirements for

default procedure in the Trust Indenture.

¶22    On appeal, Bayview argues that its conduct and communications with the

Jacobsons do not constitute violations of the FDCPA or the MCPA and are insufficient to

justify the damages awarded to the Jacobsons. Bayview’s counsel argues that because no

foreclosure sale took place, no harm has been done, and regardless, conduct related to

foreclosure proceedings is not an attempt to collect a debt and is outside the scope of the

FDCPA and MCPA.

¶23    The Jacobsons argue that Bayview is a debt collector subject to the FDCPA. They

assert that Bayview’s claim to be exempt from the FDCPA is raised for the first time on

appeal. They further contend that Bayview and Peterson’s practices are the type of

abusive conduct the FDCPA and MCPA were enacted to remedy. They support the

District Court’s conclusions that Bayview’s actions were serious, material violations of

the law. Because the District Court made specific findings and conclusions regarding

Bayview’s violations of the FDCPA and MCPA, we consolidate and review the

conclusions with the parties’ arguments below.         First, we address the Jacobsons’

argument that Bayview is changing its legal theory on appeal.              Next, we review

Bayview’s violations of the FDCPA including the loan modification misrepresentations,

foreclosure rights misrepresentations, beneficiary status misrepresentations, improper

contact with a represented party, and the false assignments of the loan.

                                            12
Change in Legal Theory on Appeal

¶24    On appeal, Bayview reframes its argument regarding the FDCPA. It argues the

FDCPA is inapplicable to Bayview because its actions—conduct related to foreclosure

proceedings by the originator of the loan—are not debt collection activity under the

FDCPA. This Court generally does not “address issues raised for the first time on appeal,

or a party’s change in legal theory” from that argued at the district court. Vader v.

Fleetwood Enterprises, Inc., 2009 MT 6, ¶ 37, 348 Mont. 344, 201 P.3d 139. The

District Court determined that “Bayview and Peterson are debt collectors” and supported

the conclusion by detailing Bayview’s debt collection efforts against the Jacobsons. The

District Court also noted in its Order that “[n]either Bayview nor Peterson has alleged

any affirmative defenses under the FDCPA, and neither has argued that they are not debt

collectors as defined by the FDCPA.”       Bayview seeks to avoid the effect of these

conclusions by arguing a new theory on appeal. This theory was not offered to the

District Court, the District Court was not given the opportunity to weigh these arguments,

and we decline to address them on appeal. Instead, this Court will address the merits of

the arguments as they were made to the District Court.

Fair Debt Collection Practices Act (FDCPA)

¶25    The FDCPA is a strict liability statute which specifically prohibits “[t]he use of

any false representation or deceptive means to collect or attempt to collect any debt or to

obtain information regarding a consumer.” 15 U.S.C. § 1692e(10). The FDCPA was

enacted “to eliminate abusive debt collection practices by debt collectors, to ensure that

                                            13
those debts collectors who refrain from using abusive debt collection practices are not

competitively disadvantaged, and to promote consistent State action to protect consumers

against debt collection abuses.” Miller v. Javitch, Block & Rathbone, 561 F.3d 588, 591

(6th Cir. 2009) (quoting 15 U.S.C. § 1692(e)).

¶26    To assess whether particular conduct violates the FDCPA, courts use the “least

sophisticated debtor” standard. See Swanson v. Southern Oregon Credit Service, Inc.,

869 F.2d 1222, 1227 (9th Cir. 1988). This objective standard “ensure[s] that the FDCPA

protects all consumers, the gullible as well as the shrewd.” Clomon v. Jackson, 988 F.2d
1314, 1318-19 (2nd Cir. 1993).

¶27    When applying the “least sophisticated consumer” standard, the misleading

statement must also be materially false or misleading to violate FDCPA 15 U.S.C.

§ 1692e. Miller at 596-97. “The materiality standard simply means that in addition to

being technically false, a statement would tend to mislead or confuse the reasonable

unsophisticated consumer.” Wallace v. Washington Mut. Bank, F.A., 683 F.3d 323,

326-27 (6th Cir. 2012).

¶28    The District Court concluded that Bayview committed numerous violations using

false representations and unfair and deceptive practices to collect against the Jacobsons.

Loan Modification

¶29    The District Court found that Bayview’s authorized representatives told the

Jacobsons to stop making payments on their loan in May 2009 under the premise that it

would help them get a loan modification. Bayview also advised the Jacobsons that they

                                            14
would not qualify for a HAMP modification without actually reviewing a HAMP

application submitted by the Jacobsons.          Then, instead of assisting with a loan

modification, Bayview commenced foreclosure proceedings against the Jacobsons.

When the Jacobsons subsequently sought outside help, first from the Better Business

Bureau and then from Senator Tester’s office, Bayview finally engaged in “in-house”

loan modification negotiations. Bayview offered the first loan modification and the

Jacobsons rejected it because the terms were onerous. In the second negotiation (with

assistance from Senator Tester’s office), Bayview offered an acceptable loan

modification but refused to provide the offer in writing, resulting in its rejection by the

Jacobsons. The District Court found that Bayview’s false offers and promises to modify

constituted a false representation in connection with the collection of a debt and a

deceptive practice in the conduct of trade or commerce in violation of 15 U.S.C. § 1692e

and § 30-14-103, MCA.

¶30   Bayview argues that the District Court “completely misstates” the record

regarding negotiations between the parties, and that loan modification procedures were

online for the Jacobsons to access. In other words, Bayview did not fail to send a HAMP

application to the Jacobsons; the Jacobsons failed to pursue the option. Bayview asserts

that the loan modification negotiations were fair and the Jacobsons rejected the offer out

of hand. Finally, however, Bayview admits that its representative advised the Jacobsons

not to make mortgage payments.

                                            15
¶31    The Jacobsons support the District Court’s findings regarding the loan

modification citing substantial evidence relied upon by the court.       They argue that

evidence regarding the loan modifications was offered at trial, and the court made a

proper determination that Bayview made false representations that misled them in regard

to their modification options.

¶32    From the outset, we see no clear error in the District Court’s conclusions regarding

the loan modifications; the court relies on credible evidence. Bayview’s arguments

offered here were thoroughly weighed by the District Court. The court found Robin

Jacobson’s testimony regarding Bayview’s questionable HAMP application procedures

and subsequent negotiations for modification to be reliable, and gave it the greater weight

in light of the false statements made by Bayview’s witnesses to the court. The District

Court gave proper weight to testimony based on its evaluation of the witnesses and

supported its conclusions with substantial evidence. Furthermore, Bayview advised the

Jacobsons to stop making payments on their home while beginning foreclosure and

negotiating in bad faith regarding in-house loan modification. These false representations

caused the Jacobsons to question how they could modify or cure their default, and

whether they could trust any representation by Bayview regarding their loan.           We

conclude the District Court relied on substantial evidence and properly found the false

representations regarding the loan modification were materially misleading and violations

of 15 U.S.C. § 1692(e) and § 30-14-103, MCA.

                                            16
Foreclosure—False Representation of Debtor’s Rights

¶33    The District Court found that Bayview misrepresented the Jacobsons’ rights

regarding the reinstatement of their loan when it misinformed the Jacobsons regarding

their ability to cure and reinstate their loan within 5 days preceding the foreclosure sale in

its letters to the Jacobsons. The court determined that this was an unfair or deceptive

practice in violation of A.R.M. § 23.19.101(1)(l) and was a false representation of the

debtor’s rights in violation of 15 U.S.C. § 1692e(10). The District Court also found that

Bayview improperly advised the Jacobsons regarding their contractual rights by

demanding cure of the default in less than 30 days instead of the full 30 days, and failed

to give a specific date for cure provided by the Trust Indenture § 22(c). The District

Court determined these violations were false representations of the Jacobsons’ rights in

violation of 15 U.S.C. § 1692e(10) and constituted unfair practices in violation of

15 U.S.C. § 1692f and § 30-14-103, MCA.

¶34    Bayview does not deny these errors. Instead, it argues the errors are immaterial

because there was never a sale or foreclosure, and that the violations are only technical

and not the type of violation that the FDCPA intends to punish. The Jacobsons argue that

these are exactly the type of violations the FDCPA intends to prevent.

¶35    We find no error in the District Court’s interpretation or perception of the

evidence. Bayview failed to properly notify the Jacobsons regarding the timing of their

right to cure. Bayview’s argument does not hold up when compared to the statute. The

FDCPA provides that false representations connected to debt collection and “attempts to

                                             17
collect any debt” are violations of the law. 15 U.S.C. § 1692e(10) (emphasis added).

Bayview’s misrepresentations of the Jacobsons’ rights to cure the default pertained to

“attempts” to collect on the loan. Bayview’s misrepresentations regarding the time for

cure changed the contractual and statutory rights provided to the Jacobsons by cutting

short the time available for cure. Further, no specific date for cure was provided to the

Jacobsons, materially affecting their rights.    The District Court correctly concluded

Bayview’s false representations about the Jacobsons’ legal rights are a violation of 15

U.S.C. § 1692e(10) and under 15 U.S.C. § 1692f are an unfair practice; the FDCPA

violations also constitute violations of § 30-14-103, MCA.

Beneficiary Status

¶36    The District Court found that Bayview was never the beneficiary on the

Jacobsons’ loan. Accordingly, the court concluded that Bayview misrepresented itself as

the beneficiary in both notices of trustee’s sale when Bayview stated: “[t]he beneficial

interest is currently held by Bayview Loan Servicing, LLC” as servicer for CitiMortgage.

The District Court held this constituted a false representation in connection with the

collection of a debt and a deceptive practice in the conduct of trade or commerce in

violation of 15 U.S.C. § 1692e and § 30-14-103, MCA.                Bayview admits the

misrepresentation but argues the District Court erred in its conclusion because the

misrepresentation is irrelevant and immaterial to the Jacobsons’ default.

¶37    We conclude the misrepresentation was material because the Jacobsons were

misled regarding the identity of the beneficiary, which directly affected their ability to

                                            18
resolve the debt. In addition, Bayview created a false corporation to hold the note, made

false representations regarding the note, and made an improper beneficiary designation;

the result is materially misleading to the consumer.           Given the wide range of

misrepresentations, the “least sophisticated consumer” would clearly have difficulty

ascertaining who owns the loan, and who can foreclose or resolve the loan. Bayview’s

misrepresentation regarding the beneficiary of the Trust Indenture was a material

misrepresentation and the District Court properly concluded it was a deceptive practice in

violation of the FDCPA and the MCPA.

Bayview’s Improper Communications

¶38    The FDCPA prohibits a debt collector from communicating with a consumer in

connection with the collection of any debt “if the debt collector knows the consumer is

represented by an attorney . . . .”      15 U.S.C. § 1692c(a)(2).       The District Court

determined that Bayview knew the Jacobsons were represented by counsel on June 9,

2010. The District Court found that at least four letters (June 28, 2010, January 18, 2011,

February 1, 2011, and July 1, 2013) sent to the Jacobsons after that date were direct

communications to collect a debt in violation of the statute. Bayview argues that these

communications were not violations of 15 U.S.C. § 1692c because they were not attempts

to collect a debt. However, the argument fails because the letters state “[t]his letter is an

attempt to collect a debt . . . .” Bayview knew the Jacobsons were represented by counsel

but persisted in sending debt collection notices in violation of the statute. The District

Court’s conclusions regarding Bayview’s direct communications with the Jacobsons are

                                             19
properly based on substantial evidence. The District Court did not err when it determined

Bayview improperly contacted the Jacobsons.

False Assignments

¶39    The District Court found numerous FDCPA violations pertaining to Bayview’s

assignments of the Jacobsons’ Trust Indenture. The court sifted through a confusing

series of assignments finding the following: Bayview falsely told the Jacobsons that

U.S. Bank was the “current” beneficiary of the Trust Indenture and Bayview was

servicing on U.S. Bank’s behalf; Bayview then falsely represented that CBO-6 REO

Corp. existed and that the loan was transferred to the entity on June 10, 2010; Bayview

also falsely represented that it was servicing the loan on behalf of the non-existent entity;

Bayview recorded the false assignment without authority (because it was not the

beneficiary and was not attorney-in-fact for the beneficiary), to a non-existent entity,

CBO-6 REO Corp. It did not stop there. Bayview then misinformed the District Court

that Bayview was the current beneficiary of the loan when it was not. Bayview also

provided false discovery answers claiming to have no communications with either U.S.

Bank or CBO-6 REO Corp. and Bayview representative Gerardo Trueba admitted at trial

that he prepared false discovery responses regarding the misrepresentations. The District

Court concluded that this long series of Bayview’s actions was in violation of 15 U.S.C.

§ 1692e and § 30-14-103, MCA.

¶40    Bayview argues that the District Court’s conclusions regarding Bayview’s false

assignments are erroneous. It argues that Bayview’s foreclosure activity is not debt

                                             20
collection, that the false assignments do not give rise to an actionable FDCPA claim, and

that it is not a violation of the FDCPA to initiate foreclosure before a note and mortgage

assignment is completed so long as it occurs prior to final judgment. The Jacobsons

argue that Bayview’s misrepresentations of the identity of the original creditor are

materially misleading and violations of the FDCPA.

¶41    The core of Bayview’s argument is that it can assign the note and mortgage so

long as it occurs prior to final judgment on the foreclosure. To support this argument,

Bayview cites Whittiker v. Deutsche Bank Nat’l Trust Co., 605 F. Supp. 2d 914, 931

(N.D. Ohio 2009), a case in which the court found no violation of the FDCPA when the

bank (DBNTC) falsely asserted it was the owner and holder of the notes and mortgages.

There, the court determined the claim failed because it was not misleading or deceptive

because the bank, which was properly the mortgage holder, could assign the loan so long

as the process was complete prior to final judgment in the foreclosure. Bayview relies on

the court’s conclusion that “simple inability to prove present debt ownership at the time a

collection is filed does not constitute a FDCPA violation.” Whittiker at 929.

¶42    Bayview’s actions here are easily distinguished from the actions in Whittiker.

Bayview’s misdeeds go far beyond a “simple inability to prove ownership” of the debt.

Whittiker at 929.    Bayview made numerous misrepresentations as part of the false

assignments of the loan. It falsely represented that it was “attorney-in-fact” for U.S.

Bank when it assigned the Trust Indenture to “CBO-6 REO Corp.” when it did not exist.

The assignment to the non-existent entity was made with a false notarization by Bayview

                                            21
and its employee. From there, Bayview falsely told the Jacobsons that U.S. Bank was the

current beneficiary, and falsely stated that it was servicing the loan for U.S. Bank. U.S.

Bank was never the beneficiary. Bayview never had authority to assign the loan because

it never was the beneficiary. Bayview misinformed the court that it was the beneficiary

of the loan. Bayview also admitted to providing false discovery answers. Finally,

Bayview recorded the assignment under false authority to a fictitious creditor.

¶43    Bayview’s arguments fall short because the sum of its misrepresentations is not

“simple.” Instead, Bayview’s activities are seriously misleading misrepresentations

regarding the Jacobsons’ loan and its status. The misrepresentations are material because

they would mislead the “least sophisticated consumer” due to the confusion regarding

who owns the loan and who possesses authority to impose requirements on the Jacobsons

regarding payment of the loan.        Individually, and taken as a whole, the false

misrepresentations and conduct misled the Jacobsons regarding the status of their loan

and its true owner. The District Court did not err; it properly concluded that Bayview’s

false assignments and surrounding misrepresentations and conduct were unfair and

deceptive practices in violation of 15 U.S.C. § 1692e, f, and the MCPA.

¶44    The District Court’s factual findings pertaining to Bayview’s violations of the

FDCPA are supported by substantial evidence. Bayview repeatedly violated the FDCPA

and MCPA, and violated the contractual requirements of the Trust Indenture. Bayview’s

arguments that the violations are immaterial and irrelevant fail to account for intentional

violations of the law. Bayview’s unfair and deceptive practices against the Jacobsons

                                            22
cannot be tolerated as they are clear violations of the FDCPA and the MCPA. We

conclude that the District Court made detailed and accurate conclusions of law under the

FDCPA and accordingly, we affirm its decision with respect to the FDCPA claims.

¶45   2. Whether the District Court erred in determining that Bayview violated the
      MCPA.

¶46   The Montana Consumer Protection Act declares “[u]nfair methods of competition

and unfair or deceptive acts or practices in the conduct of any trade or commerce are

unlawful.” Section 30-14-103, MCA. In Baird v. Norwest Bank, we determined that the

Montana Consumer Protection Act applies to “consumer loans by banks in the lending

and collecting of such loans.” 255 Mont. 317, 328, 843 P.2d 327, 334 (1992). This

Court further determined that under the Montana Consumer Protection Act, “an unfair act

or practice is one which offends established public policy and . . . is either immoral,

unethical, oppressive, unscrupulous or substantially injurious to consumers.” Rohrer v.

Knudson, 2009 MT 35, ¶ 31, 349 Mont. 197, 203 P.3d 759. In Morrow, we noted it is

“an unfair or deceptive practice when a party ‘states that a transaction involves rights,

remedies or obligations that it does not involve.’” Morrow, ¶ 67 (citing Admin. R. M.

23.19.101(1)(l)). We further added that “[a] consumer may sue under the act if he or she

has suffered ‘any ascertainable loss of money or property’ as the result of an unfair

practice.” Morrow, ¶ 67 (citing § 30-14-133, MCA).

¶47   Bayview disputes the District Court’s determination that Bayview violated the

Montana Consumer Protection Act.        Bayview argues that MCPA claims must be

established on “independent grounds” and that neither the Jacobsons, “nor the District

                                           23
Court, cite any authority in the MCPA itself, or in any authority construing the MCPA,

for the proposition that purported violations of the FDCPA are also violations of the

MCPA.” For its “independent grounds” argument, Bayview cites Federal Home Loan

Mortgage Corp. v. Lamar, 503 F.3d 504, 513 (6th Cir. 2007).

¶48    In Lamar, the Sixth Circuit states, “the purpose of both acts [the FDCPA and

OCSPA [Ohio Consumer Sales Practices Act]] is to prohibit both unfair and deceptive

acts and this court holds that any violation of any one of the enumerated sections of the

FDCPA is necessarily an unfair and deceptive act or practice in violation of [Ohio’s

OCSPA] R.C. § 1345.02 and/or § 1345.03.” Lamar at 513 (emphasis added). A cursory

reading of the Lamar opinion establishes that Bayview misinterpreted the facts and law

of Lamar when it concluded that violations of the OCSPA (a law substantially similar to

Montana’s MCPA) require “independent grounds” from the FDCPA.                  The OCSPA

claims in the Lamar case failed because they relied entirely on the FDCPA claims, which

the court determined were not substantiated by the plaintiffs. In this case, the FDCPA

and MCPA claims rely on the same grounds, and we have determined that the FDCPA

claims are valid; thus, the MCPA claims succeed on the same basis. We reiterate here

and hold that it is well established that a violation of federal consumer law pursuant to the

FDCPA can also constitute grounds for violation of Montana law pursuant to the MCPA.

See Morrow, ¶¶ 67-69 (holding that HAMP claims under the FDCPA are violations

sufficient to state claims under the MCPA and, more generally, both the FDCPA and

MCPA apply to the “collection and servicing of loans”); see also, Lamar at 513.

                                             24
¶49   On the merits, the District Court provided substantial evidence that Bayview’s

Action violated the MCPA. In Morrow, we held that instructing a borrower to default on

a loan, giving conflicting representations regarding the borrower’s status, all while

causing the borrower’s default to grow constitutes a practice “substantially injurious to

consumers” in violation of the MCPA.       Morrow, ¶¶ 67-69. Here, the District Court

found that Bayview told the Jacobsons not to make payments, while at the same time

commencing foreclosure.     Bayview also violated provisions of the Trust Indenture

§ 22(c) and § 71-1-306(2), MCA. These violations are very similar to those addressed in

Morrow and clearly constitute violations of Montana law while also in violation of the

FDCPA.

¶50   In addition, Bayview violated Admin. R. M. 23.19.101(1)(l) when it failed to

provide an option for cure of the default in the five days preceding the Trustee’s sale.

The result of this violation would be “substantially injurious” to the Jacobsons and falls

well within unfair or deceptive practices prohibited by the MCPA. The District Court

also found specific grounds for Peterson’s liability, as he acted pursuant to an invalid

Trustee substitution when he twice initiated foreclosure proceedings against the

Jacobsons.   The District Court properly concluded the action was a violation of

§ 71-1-306(2), MCA, and § 30-14-103, MCA. Finally, the court correctly concluded that

Bayview’s attempt to collect attorney fees and expenses post-trial against the Jacobsons

was a clear violation of the FDCPA and the MCPA.

                                           25
¶51   We conclude that the District Court’s findings under the FDCPA regarding

Bayview’s actions establish state law grounds for violations of the MCPA. Further, we

find no error in the District Court’s conclusions because the findings are supported by

substantial evidence demonstrating Bayview and Peterson’s liability under the MCPA.

¶52   3. Whether the District Court erred in awarding damages to the Jacobsons.

¶53   Section 27-1-202, MCA, provides that “[e]very person who suffers detriment from

the unlawful act or omission of another may recover . . . [damages].”             Section

30-14-133(1), MCA, provides that “[t]he court may, in its discretion, award up to three

times the actual damages sustained and may provide any other equitable relief that it

considers necessary or proper.”     The MCPA provides this discretion to the courts

“without imposing any particular criteria, to grant an award of treble damages if it finds

that such an increase will further the purpose of the CPA.” Vader, ¶ 47. A district

court’s damage determination is a factual finding this Court will uphold if the finding is

supported by substantial evidence. Watson v. West, 2009 MT 342, ¶ 18, 353 Mont. 120,

218 P.3d 1227 (citing Tractor & Equipment Co. v. Zerbe Bros., 2008 MT 449, ¶ 12, 348
Mont. 30, 199 P.3d 222). This Court will not overturn a district court’s determination of

damages unless it is clearly erroneous. Watson, ¶ 18 (citation omitted).

¶54   The District Court awarded $226,408.14 on the FDCPA and MCPA claims, which

Bayview argues is not based on any injury sustained by the Jacobsons and is not

supported by evidence that could be construed as a violation of the FDCPA. Specifically,

the District Court awarded $172,615.20 of actual damages and $50,000.00 of additional

                                            26
damages “for emotional distress suffered by the Jacobsons together with the deception,

stonewalling, and utter disregard for their contractual and statutory rights that the

Jacobsons have been forced to endure as a result of [Bayview’s] conduct.” The court also

assessed statutory damages of $1,000.00 for each of the Jacobsons under 15 U.S.C.

§ 1692k(a)(2). The court awarded money damages, emotional distress damages, statutory

damages, and additional damages for Bayview’s post-trial actions under the MCPA,

which we review individually.

Damages

¶55    The District Court concluded that because Bayview resisted payment and

instructed the Jacobsons not to pay on their loan, the Jacobsons incurred damages

resulting from Bayview’s conduct, and those damages were the late charges and interest

that Bayview assessed to the Jacobsons. To determine damages, the District Court used

Bayview’s February 5, 2010 “Notice of Trustee’s Sale.” The court calculated damages

across a date range from the first defective notice of foreclosure on March 24, 2009, until

the second day of trial on November 22, 2013. Thus, per the notice, this included

$1,792.94 in late charges, plus the interest accrued since the first notice of default until

the second day of trial, which was $101.30 interest per day multiplied by 1,704 days or

$172,615.20.

¶56    Bayview argues that because the Jacobsons’ house was never foreclosed and sold,

its actions have not damaged the Jacobsons in any way, because no “actual damage” was

sustained under the provisions of 15 U.S.C. § 1692k(a)(1) (stating that a debt collector

                                            27
who fails to comply with the provisions of the FDCPA is liable to such person in an

amount equal to that persons actual damages).        Under Bayview’s reasoning, a loan

servicer could undertake any sort of action to collect debt so long as the loan does not

actually foreclose. This logic fails because the FDCPA and the MCPA were enacted to

stop unfair practices including false representations of the sort Bayview has used in this

case. Furthermore, Bayview does not have to be successful in its debt collection actions;

it is liable for false representations and unfair practices because it was “attempting” to

collect debt. 15 U.S.C. § 1692e(10).

¶57    Here, in addition to its deception and unfair practices, Bayview imposed late

charges and interest on the Jacobsons’ loan, increasing the amount of their default. In

Morrow, we determined that causing a consumer’s default to grow would “constitute a

practice substantially injurious to consumers.”     Morrow, ¶¶ 68-69.     Here, Bayview

instructed the Jacobsons to miss payments and default on their loan. That default led to

subsequent misrepresentations by Bayview regarding the Jacobsons’ rights, including

their ability to cure the default. While Bayview was making misrepresentations to the

Jacobsons and using unfair practices, it was simultaneously increasing the amount of

their liability on their loan through late charges and interest. Similar to Morrow, this

increase in the loan liability is substantially injurious to the Jacobsons. The District

Court correctly found that the Jacobsons suffered a financial detriment because their loan

liability was wrongfully increased as a result of Bayview’s actions.

                                            28
¶58    We find further support for this conclusion in Wigod v. Wells Fargo Bank, N.A.,

673 F.3d 547 (7th Cir. 2012). The U.S. Seventh Circuit Court of Appeals determined that

Wigod alleged recoverable pecuniary loss under the Illinois Consumer Protection Act as

a result of unfair HAMP procedures by Wells Fargo. Wigod, 673 F.3d at 575. The court

found Wigod’s allegations that “she incurred costs and fees, lost other opportunities to

save her home, suffered a negative impact to her credit, never received a Modification

Agreement, and lost her ability to receive incentive payments during the first five years

of the modification” were sufficient to establish pecuniary loss. Wigod, 673 F.3d at 575.2

The Jacobsons have suffered a pecuniary loss similar to that suffered by Wigod and

accordingly, we conclude that the damages suffered by the Jacobsons are a financial

detriment and the losses are properly considered actual damages by the District Court.

We reject Bayview’s contentions that the Jacobsons have suffered no financial detriment

as a result of Bayview’s conduct. There is no question that the Jacobsons suffered a

financial detriment as a result of Bayview’s unfair practices and conduct. We conclude

2
  We also note that the Seventh Circuit Court of Appeals included the following at endnote 14 of
their opinion for additional support of this conclusion: “In a number of third-generation HAMP
cases, district courts have found that plaintiffs successfully pled claims under other states’
analogous consumer fraud statutes.” See, e.g., Allen v. CitiMortgage, Inc., No. CCB-10-2740,
2011 U.S. Dist. LEXIS 86077, 2011 WL 3425665, at *10 (D. Md. Aug. 4, 2011) (“The plaintiffs
have alleged that CitiMortgage’s misleading letters led to the following damages: damage to
Mrs. Allen’s credit score, emotional damages, and forgone alternative legal remedies to save
their home. Accordingly, at this stage, the plaintiffs have stated sufficiently an actual injury or
loss as a result of a prohibited practice under [the Maryland Consumer Protection Act].”);
Stagikas v. Saxon Mortg. Services, Inc., 795 F. Supp. 2d 129, 137 (D. Mass. 2011) (“The
complaint also alleges several injuries resulting from defendant’s allegedly deceptive
representations about plaintiff’s HAMP eligibility, including increased interest on the debt, a
negative impact on plaintiff’s credit history, and the loss of other economic benefits of the loan
modification. That is enough to sustain a claim of injury under [the Massachusetts Consumer
Protection Act].) (internal citation omitted).” Wigod, 673 F.3d at 575, n.14.
                                                 29
that these injuries alleged under the FDCPA and MCPA find a proper remedy in actual

damages.

¶59    We do not find error with the District Court’s damage award because it is

reasonable compensation for the substantial injury and financial detriment suffered by the

Jacobsons. As noted above in ¶ 56, the court calculated damages from the date of the

first defective notice of foreclosure on March 24, 2009, through the second day of trial on

November 22, 2013. The interest charged totaled $172,615.20, and the late charges

totaled $1,792.94. If Bayview was the mortgage holder in this case, we would direct that

the late charges and interest that have accumulated on the mortgage balance since the

date of the first defective notice of foreclosure be subtracted from the present mortgage

balance. However, Bayview is merely the loan servicer; it does not hold the mortgage.

In order that the Jacobsons have the funds necessary to pay down the mortgage balance

by the amount of late charges and accumulated interest, we deem it appropriate to uphold

this aspect of the District Court’s damage award against Bayview. In addition, because

we are remanding to the District Court for a hearing to determine attorney fees on appeal,

the District Court should also take the opportunity on remand to assess any additional late

charges and interest that have accumulated on the debt from November 22, 2013, through

the date of the District Court’s final order following remand.

Emotional Distress Damages

¶60    Under § 30-14-133(1), MCA, the District Court awarded $50,000.00 to the

Jacobsons for emotional distress damages based on testimony from Robin Jacobson

                                            30
“together” with damages for the deceit, stonewalling, and disregard for the Jacobsons

rights. Bayview contests the award claiming the District Court speculated to obtain the

amount of damages without testimony or evidence. The Jacobsons argue that substantial

evidence establishes the damages inflicted by Bayview including the inability to

determine the holder of their Promissory Note or the beneficiary of their Trust Indenture,

and the consequent loss of ability to properly resolve the default.

¶61    Under § 30-14-133(1), MCA, the District Court is granted broad authority to

award, in its discretion, “up to three times the actual damages sustained and may provide

any other equitable relief that it considers necessary or proper.” (Emphasis added.)

Here, the District Court properly awarded damages under the MCPA based upon

testimony regarding the emotional distress of the Jacobsons and on the sum of the

damages “the Jacobsons were forced to endure” as a result of Bayview’s misconduct.

Robin Jacobson’s testimony and the extensive record of Bayview’s misdeeds are

substantial evidence offered by the court to support the damages. Further, we note that

under the FDCPA, witness testimony alone is sufficient to support an award for

emotional distress damages with no requirement for substantial evidence to support the

damages. Zhang v. American Gem Seafoods, Inc., 339 F.3d 1020, 1040 (9th Cir. 2003).

We conclude it was well within the District Court’s discretion to award these damages.

Statutory Damages

¶62    The District Court awarded statutory damages under 15 U.S.C. § 1692k(a)(2)(A)

of $1,000.00 for each of the Jacobsons as individual plaintiffs in the case. Bayview

                                             31
argues the damages are limited to $1,000.00 in any one action under the statute. The

language of subsection 1692k(a)(2)(A) on its face dictates that a debt collector is liable

for a single award of statutory damages per plaintiff per lawsuit. In this case, the District

Court awarded a single award of $1,000.00 for each plaintiff in their lawsuit against

Bayview. Each plaintiff has an individual stake in the lawsuit, and we conclude that the

District Court properly awarded statutory damages to each of the Jacobsons.

Post-Trial Communication Damages

¶63    After trial, the District Court awarded damages under the MCPA of $50,000.00 on

the first post-trial motion and $10,000.00 on the second post-trial motion when Bayview

improperly contacted the Jacobsons about collections and attorney fees on two separate

occasions.   Bayview argues that the damages are awarded in error as they are not

supported by “substantial credible” evidence. The Jacobsons accurately contend that

Bayview fails to discuss or analyze the District Court’s additional damage award as its

briefing only raises but does not analyze the issue. Nonetheless, we will briefly address

the issue on the merits.

¶64    Part of the inherent “remedial purpose” of the damage provisions of the MCPA is

to deter inappropriate action against consumers by debt collectors, or in this case, loan

servicing companies. Vader, ¶ 48. An award of damages may benefit the plaintiffs in a

case, but its remedial nature also serves as notice to all that violations of the MCPA are

consequential and will not be tolerated.

                                             32
¶65   Here, the District Court issued two additional orders in the case. The August 20,

2014 Order was on a Motion for Additional Damages, Equitable Relief, and Sanctions

sought by the Jacobsons because Bayview, after trial, directly contacted them to collect

on the loan and attorney fees in violation of the Judgment in the case, the MCPA, and the

FDCPA. The District Court found for the Jacobsons on the motion and ordered Bayview

to pay $50,000.00 “to further the remedial purposes of the [MCPA].” The second Order

was on a Motion for Contempt of Court by the Jacobsons after Bayview contacted them

again for collection purposes and to inform them that it intended to charge the Jacobsons

for Bayview’s attorney fees related to the case. The District Court found that Bayview’s

actions violated the Small Tract Financing Act, the FDCPA, the MCPA, and the court’s

judgment in the case. The District Court awarded the Jacobsons an additional $10,000.00

as equitable relief under the MCPA.

¶66   The two damage awards are well within the court’s discretion under

§ 30-14-133(1), MCA. The damages serve as a proper deterrent under the Act to stop

Bayview’s improper conduct and to “further the purpose of the [MCPA]” by providing

warning to Bayview and other loan servicers that improper debt collection conduct will

not be tolerated. Vader, ¶ 47. The damages are supported by substantial evidence and

demonstrate a thorough, well-reasoned remedy fashioned by the court. We conclude that

the District Court did not err in awarding damages to the Jacobsons.

                                           33
¶67    4. Whether this Court should award costs and fees to the Jacobsons on appeal.

¶68    The Jacobsons contend that attorney fees are available for consumers who

successfully defend a verdict in their favor under the MCPA. Vader ¶¶ 52-53. They also

argue that the Ninth Circuit Court of Appeals has held that a plaintiff who successfully

defends an FDCPA action is entitled to attorney fees and costs on appeal.         Joe v.

Payco-General Am. Credits., 34 F.3d 1072 (9th Cir. 1994). The Jacobsons request that

we remand this matter to the District Court for a determination of reasonable attorney

fees and costs incurred on appeal.

¶69    We have held that, under the MCPA, attorney fees and costs are allowed upon

successful defense of a verdict on appeal. Vader, ¶¶ 50-53. The MCPA states, “[i]n any

action brought under this [Act] the court may award the prevailing party reasonable

attorney fees incurred in prosecuting or defending the action.” Section 30-14-133(3),

MCA; Vader, ¶ 52. In this action, the Jacobsons are entitled to fees and costs because

they necessarily defended the verdict in their favor. Bayview has not objected to an

award of attorney fees and costs on appeal. Accordingly, we remand this matter to the

District Court to determine a reasonable award of attorney fees incurred by the Jacobsons

in the defense of their claims on appeal.

                                     CONCLUSION

¶70    The District Court did not err when it determined that Bayview violated the

FDCPA when it made false representations to the Jacobsons regarding the Trust

Indenture and engaged in unfair trade practices to collect the debt. Bayview violated

                                            34
§ 30-14-103, MCA, because any violation of the FDCPA corresponds with an unfair and

deceptive act or practice in violation of the Act. The District Court properly determined

damages incurred by the Jacobsons as a result of Bayview’s actions and supported those

conclusions with substantial evidence. We conclude that the Jacobsons are entitled to

their attorney fees and costs on appeal because they have necessarily defended the verdict

in their favor under § 30-14-133(3), MCA.

¶71    Affirmed.

                                                 /S/ MICHAEL E WHEAT

We Concur:

/S/ MIKE McGRATH
/S/ PATRICIA COTTER
/S/ JAMES JEREMIAH SHEA
/S/ JIM RICE

Justice Jim Rice, concurring.

¶72    I concur in the Court’s opinion.

¶73    The Court holds that Bayview committed numerous “clear violations of the

FDCPA,” Opinion, ¶ 44, and analyzes those violations extensively under Issue 1. I think

it bears repeating that, for procedural reasons, we have not undertaken consideration of

Bayview’s argument that the FDCPA does not apply, as a matter of law, to foreclosure of

secured interests. Thus, the Court’s holdings on that issue rest on the assumption that the

Act applies, which is how we have determined the matter was litigated before the District

Court. If properly raised and preserved, this would be a threshold issue about which, as

                                            35
the parties note, there has been spirited debate in the federal courts. See Gray v. Four

Oak Court Ass’n, Inc., 580 F. Supp. 2d 883, 887 (D. Minn. 2008) (FDCPA’s “definition

of ‘debt collector’ clearly reflects Congress’s intent to distinguish between ‘the collection

of any debts’ and ‘the enforcement of security interests.’”) (citation omitted); Derisme v.

Hunt Leibert Jacobson P.C., 880 F. Supp. 2d 339, 363 (D. Conn. 2012) (“a majority of

courts who have addressed this question have also concluded that foreclosing on a

mortgage does not qualify as debt collection activity for purposes of the FDCPA” and

collecting cases); cf. Kaymark v. Bank of Am., N.A., 783 F.3d 168, 179 (3d Cir. 2015)

(“Nowhere does the FDCPA exclude foreclosure actions from its reach. On the contrary,

foreclosure meets the broad definition of ‘debt collection’ under the FDCPA . . . .”)

(citation omitted). Consequently, resolution of this threshold issue is left for another day.

                                                  /S/ JIM RICE

                                             36