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Evidence of indebtedness


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Looking over an affidavit for a friend of mine that came from Household.

Here's a phrase I never heard before:

"The note or other written evidence of indebtedness in this matter has been destroyed, lost or is inaccessible".

The line under it says:

"The account balance of $xxx is justly due and owing and there are no offests or counterclaims against this balance".

What the heck does "note or other written evidence of indebtedness has been destroyed, lost or is inaccessible" mean? They claim the debt is valid but can't provide proof???


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It means that in order to save costs, they threw out the one piece of evidence needed to validate the debt i.e. the written contract (to store these requires a climate controlled, moisture controlled setting, which is prohibitively expensive).

In laman's terms, it means they can't validate, and they're up crap creek with no paddle but don't want to admit it.

Nail em.

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I've seen that line about the original being 'lost or destroyed' posted by many people, so its fairly common. These ridiculous affidavits have to be slapped down, they mean nothing and are nothing but some pencil-pusher 'swearing' they know you owe the debt. Its unsupportable in court and if they're swearing to something they really know nothing about, that's perjury !

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when you see this, your antenna should be up. IN any answer, you plead as an affirmative defense: this action is barred by the statute of frauds.

Now, even collection attorneys are smart, and if they plead properly, they will plead quantum meruit, money had and received, account stated, and other quasi-contractual causes of action.

In other words, they allege you owe the money because credit was advanced in one form or another. The lost agreement does not vitiate your balance if it can be proved otherwise.

So, if the plaibntiff cannot produce the note or the agreement, you may win. Or, you may have to defend differently. Either way, the lost note is an opportunity to defend and craft the best deal you can.

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Thank you sir, that's a good head's up, and a good start.

To top it off, the summons was crammed in their door. According to the rules:

As a matter of public policy, courts want to avoid overuse of substitute service and default judgment it can cause. Sechler v. Van Hoey, 83 Mich.App. 252, 268 N.W.2d 364 (1978).

A truly diligent search for an absentee defendant is absolutely necessary to supply a fair foundation for and legitimacy to ordering of substituted service. Kreuger v. Williams, 300 N.W.2d 910 (Mich. 1981); appeal dismissed 101 S.Ct. 3102, 452 U.S. 956.

On a showing that service of process cannot reasonably be made as provided by this rule, the court may by order permit service of process to be made in any other manner reasonably calculated to give the defendant actual notice of the proceedings and an opportunity to be heard.

A request for an order under the rule must be made in a verified motion dated not more than 14 days before it is filed. The motion must set forth sufficient facts to show that process cannot be served under this rule and must state the defendant's address or last known address, or that no address of the defendant is known. If the name or present address of the defendant is unknown, the moving party must set forth facts showing diligent inquiry to ascertain it. A hearing on the motion is not required unless the court so directs.

Service of process may not be made under this subrule before entry of the court's order permitting it.

I don't think "crammed in the door" is proper service. Lazy, but not proper.

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the state may have a "leave, mail and file" procedure as a viable service option. it is necessary, sometimes, when people are never home or fail to answer the door. You can alsways raise the improper service as an affirmative defense. In my expereince, though, for every written decision throwing process out there are 99 judges saying " Well, yeah, service wasn't perfect, but the two of you are here now, so let's reselove this matter while you are."

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Now, even collection attorneys are smart, and if they plead properly, they will plead quantum meruit, money had and received, account stated, and other quasi-contractual causes of action.

True. And if they do plead these alternate forms of relief, go running to research the applicable SOL. In most states, the SOL is longer for written contracts that any of these other causes of action.

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I hope CaLawyer agrees, but it seems to me there are some core defenses people hee should be aware of.

Statute of limitations - becasue nothing stops a creditor, particularly bottom fishers like unifund, from suing

Statute of Frauds - to make them prove a wirtten contract. I fanyhting, you can avoid atty fees and other contractual gouges by bringin this defense up

Lack of Legal Capacity - test the plaintiff's ability to use your state court to sue you. Especially useful with an out of state plainitff. Great when it applies.

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Accounts stated and such are used because the JDBs purchase a stream of data, not the actual paperwork. The rules of evidence for many states requires a copy of the contract to be attached to the complaint when it is the basis of a complaint. If a copy of the contract cannot be attached, then an explanation of why must be attached. If not then you can motion to dismiss pursuant to those rules.

Anytime the JDB "claims" that the original documents are destroyed, you can attack it through a number of different angles. First, the JDB never had the original documents, so they do not know if they have been destroyed or not and at the very least, they could not possibly have first-hand knowledge of the destruction nor could they have ordered or oversaw the destruction. Therefore their claim is hearsay and you can include that argument in your motion to dismiss.

Since a state judge in MI has no personal jurisdiction over anyone outside the state of MI, a subpoena duces tecum served on an out-of-state OC may not be honored (if they have an office in state or a registered agent or are registered as a foreign corporation they will respond). You could write and ask for the info from the OC and any info you obtained by writing or if they honored the subpoena could be used to impeach the JDBs testimony and strike the affidavit.


Docket No. 26

Supreme Court of Michigan

345 Mich. 500; 76 N.W.2d 835; 1956 Mich. LEXIS 405

Submitted January 4, 1956. Calendar No. 46,648

Decided May 14, 1956.



The conversion of an open account into an account stated is an operation by which the parties assent to a sum as the correct balance due from one to the other, and although it may still be impeached for fraud or mistake, in the absence of such impeachment, it serves in place of the original account as the foundation of an action. [emphasis mine]

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God. GDL that case is as old as I am!!!!!

Account stated is a neat theory of recovery. And most debtor get caught because they ignore the statements when they are mailed. It pays to send at least one back saying you dispute the amount. Otherwise, there is little in the way of defense: AS is not a case of " You ower the money becasue I say so," as much as it is " You owe the money cuz I say so and you never disputed it when you had the chance."

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OK Doc, I finally found one of the documents I knew I'd read !!

Here's a link : http://www.narca.org/Newsletter/2003/1stquarter/challenges.asp

This is by a NARCA attorney - National Association of Retail Collection Attorneys, so its pretty good info. I think we might want to consider making this link a sticky or at least a copy of the text in case the web page disappears. There is lots of other great info on that site if you take the time to go thru their newsletter archives.

Attorneys , what do you think ??

I know I had something else, I'll post it when I find it.

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Great info Lady - thanks!

I talked to them again today, and this is HH (through a CA/ attorney) that's stating the original note has been lost, destroyed, etc. It's not a JDB, so I'm sure if that really applies.

I printed it out though to keep for future reference.

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  • 4 weeks later...

So I'm looking over the judgment and I see on the Default Application that they checked "A note or other written evidence of indebtedness has been filed with the clerk for cancellation". Which is interesting considering the person from HHB that signed the affidavit stated it "has been lost, destroyed, or is inaccessible".

Together with the Default App is the Default Judgment. Both docs were obviously done at the same time (they have the same time stamp). The judgment is signed by the court clerk (same individual that accepted the Default App) and there is no siggie by a judge or magistrate.

Color me stupid, but something doesn't smell right. Court clerks have the power to sign an enforceable judgment? Shouldn't a judge or magistrate be doing that, especially considering a clerk does not have the authority to "verify" the claims being made?

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Sorry, Doc.

In New York, court clerks can enter judgement on a default where the amount claimed is certain and liquidated ( a clerk can't award attorney's fees, but can enter judgemnt for the amount sued on). Clerks can and do issue many things, including subpoenaes and other process. Attorneys proffer the default as an officer of the court. Likewise, where there is a default that is regular on its face, the clerk can enter judgment on behalf of the court.

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Thanks Recovering. I'm searching to see if anything pops up for MI rules.

I did find this though:

"A clerk cannot enter a default judgment in an action requiring any sort of accounting. See Liberty Loan Corp. of North Park, 24 Cal. App. 3d at 918, 101 Cal. Rptr. at 396. Where a breach of contract claim is simply used as an alternative legal theory for recovery on a claim that otherwise would not qualify for a clerk's default judgment, the clerk lacks authority to enter a default judgment even on the contract claim. See Brown, 242 Cal. App. 2d at 525, 51 Cal. Rptr. at 636."

[pulling out my soapbox] The clerk, not able to cross over into the legal realm, took it upon herself to simply sign off on something that shouldn't have been signed by someone with no "qualifications". In this case, the attorney's signed the paperwork stating there was information attached (proof of indebtedness) when there wasn't. I would think this would open the liability door.

The "proof" they gave was admitting there was no proof of the debt. Unless the judge had just finished a spliff in chambers, I would be hard pressed (naive) to think the judge would sign off on something like that.

I say again, this is what makes our justice system the best in the world?

[putting soapbox away]

Thanks for letting me vent. :D

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When there is a default judgement, 101% of court clerks will enter it if teh paperwork is in regular form. Not on a tort claim, or an equitable claim, or a matrimonial seeking distribution of marital assets, but where the claim is one for money only and the offering attorney says the amount is certain or liquidated, the clerks enter judgement.

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That is contrary to what I just found in MI court rules:

(A) Signing; Statement; Date of Entry.

(1) Except as provided in this rule and in MCR 2.603, all judgments and orders must be in writing, signed by the court and dated with the date they are signed.

(2) The date of signing an order or judgment is the date of entry.

(3) Each judgment must state, immediately preceding the judge's signature, whether it resolves the last pending claim and closes the case. Such a statement must also appear on any other order that disposes of the last pending claim and closes the case.

(1) Notice of Request for Judgment.

(a) A party seeking a default judgment must give notice of the request for judgment to the defaulted party

(i) if the party against whom the judgment is sought has appeared in the action;

(ii) if the request for entry of judgment seeks relief different in kind from, or greater in amount than, that stated in the pleadings; or

(iii) if the pleadings do not state a specific amount demanded.

(B) The notice required by this subrule must be served at least 7 days before entry of the requested judgment.

© If the defaulted party has appeared, the notice may be given in the manner provided by MCR 2.107. If the defaulted party has not appeared, the notice may be served by personal service, by ordinary first-class mail at the defaulted party's last known address or the place of service, or as otherwise directed by the court.

(d) If the default is entered for failure to appear for a scheduled trial, notice under this subrule is not required.

(2) Default Judgment Entered by Clerk. On request of the plaintiff supported by an affidavit as to the amount due, the clerk may sign and enter judgment for that amount and costs against the defendant, if

(a) the plaintiff's claim against a defendant is for a sum certain or for a sum that can by computation be made certain,

(B) the default was entered because the defendant failed to appear, and

© the defaulted defendant is not an infant or incompetent person.

The clerk may not enter or record a judgment based on a note or other written evidence of indebtedness until the note or writing is filed with the clerk for cancellation, except by special order of the court.


So first, it states the judge's siggie must appear on the judgment.

Second, there was no scheduled court date, so the 7-day notification rule should apply.

Third, there is no note or written evidence of indebtedness (as admitted by the OC).

I think I'm going to have them take this up with the State Court Administrator and see what happens.

Thanks for your insight Recovering, it's always appreciated!

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