With over 50 million users, DocuSign is the most widely used eSIgnature and Digital Transaction Management platform globally. It allows users to complete and sign documents, and then send them to others for signature. Commercial users create personalized signatures on their tablets and other devices to facilitate the easy exchange of virtual “paperwork” such as health care documents, sales contracts, lease agreements, and any other financial documentation.
Bankruptcy debtors are required to declare under penalty of perjury that the information in the required documentation that they file with the U.S. Bankruptcy Court is true and correct to the best of their knowledge.
Most bankruptcy courts and bankruptcy attorneys require that debtors sign some original declaration verifying this fact. In this same declaration, debtors also permit the electronic filing of their documentation, which means that their bankruptcy schedules and statements may be filed online with signatures generated by a computer program. At some point, a document with a genuine signature must also be filed with or acknowledged before the court, and this is first and foremost what this declaration accomplishes.
Recently, The Eastern District OF California affirmed this in a California bankruptcy case, In re Mayfield, No. 16-22134-D-7, 2016 WL 3958982, at *3 (Bankr. E.D. Cal. July 15, 2016).
In Mayfield, debtor’s counsel for the debtor filed the petition, schedules, statement of financial affairs, statement of current monthly income, statement of intention, verification of master address list, and statement of social security number, all with signatures that had been created electronically with DocuSign. But the debtor never executed any document or “declaration” with a true, original signature permitting the electronic filing of these documents.
Pursuant to Bankruptcy Rule 9004–1(c) (1) (C) and (D), federal law requires original signatures, or that counsel has copies of the documents with the original signatures. During the first meeting of creditors, counsel could not produce the original signatures when requested to do so by the bankruptcy trustee for review as required by Rule 9004–1(c) (1) (D), since, in this case, the documents never existed. Counsel for the debtor unsuccessfully argued that documents with signatures generated by DocuSign are original signatures, mainly because such signatures are accepted in a commercial context for all types of business transactions.
The court rejected this argument and held the DocuSign affixation is only a software generated signature. Because counsel could not produce some originally signed copy of the required documents and represent that they were in his possession at the time of filing, he failed to meet the requirements of Bankruptcy Rule 9004-1. Thus, while the Court noted that Bankruptcy Rule 9004-1 made a distinction between an “originally signed document” and a “software–generated electronic signature”, the latter is acceptable provided that counsel has and retains possession of any document containing an “original signature.”
Part of the court’s reluctance to accept the signatures generated by DocuSign was based on its belief that documents could be easily manipulated or forged if some other party like the debtor’s spouse, child, or roommate had access to his computer and the button to electronically sign any document signature pages.
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