Cap One Suing for 2 Accounts, Working on Defenses

[BraveToaster]

I originally posted about my sad myriad of lawsuits in this thread:

http://www.debt-consolidation-credit-repair-service.com/forums/showthread.php?t=262218

I'm splitting up the suits so as not to confuse people. I'm going to include both Cap One suits here, because the way I Answer them is going to be similar.

1. Who is suing you? Capital One, two separate suits (one in my name, one jointly against me and my SO)

2. For how much? $3700 (me), $3300 (us)

3. Who is the original creditor? Capital One Bank

4. How do you know you are being sued? Was served summons for both

5. How were you served? Personally served

6. What was your correspondence (if any) with the people suing you before you think you were being sued?

My Cap One: Was sent ITS letter in May '06, I tried to settle, they rejected first offer, ignored second. I received no other communication until I received summons last week (Jan '07).

Our Cap One: Sent ITS letter in Dec '06. They immediately sued us.

7. Where do you live? Michigan

8. When is the last time you paid on this account? I believe in 2001 for both accounts.

9. What is the status of your case (if anything has been opened)? Both suits have been filed and are awaiting our Answers which are due in 2 weeks.

10. Have you disputed the debt with the credit bureaus (both the original creditor and the collection agency?) No

11. Did you request debt validation before the suit was filed? No

12. Does your summons require a response?

Complaints (my Cap One)

1. My name and states I'm under the courts juridiction

2. The amount of controversy in this action is within the subject matter jurisdiction of the court under MCL 600.8301 and the venue is proper, blah, blah.

Count I - Breach of Contract

3. Defendant entered into a credit card agreement with Plaintiff or Plaintiff's assignor for a credit card bearing account number *********.

4. Plaintiff or Plaintiff's assignor issued the subject credit card and extended credit to Defendant in accordance with card member agreement sent to Defendant.

5. Defendant accepted the terms and conditions of the card member agreement by using the account to purchase goods and services and/or to take cash advnces and/or make balance transfers, and under the terms and conditions of the card member agreement, was thereby contractually obligated to make timely monthly payments.

6. Plaintiff or Plaintiff's assignor fully complied with terms and conditions of card member agreement.

7. Defendant defaulted under the terms and conditions of the card member agreement by failing to pay the monthly payments when due.

8. Per the default provisions of the card member agreement, the entire account balance is now due and although Plaintiff has requested payment of the balance, Defendant has failed to pay it.

Count II - Account Stated

9. For this count Plaintiff incorporates by reference all assertions of fact contained in paragraphs one through eight.

10. Defendant received and accepted account monthly billing statements from both Plaintiff and Plaintiff's assignor and did not object to their accuracy, nor has Defendant raised a legally recognized objection in this matter.

11. The account has become stated between the parties and, consequently, Defendant is now justly indebted to Plaintiff for the account balance.

Wherefore Plaintiff respectfully requests, blah, blah in the amount of $3,7xx.xx as well as interest, costs and a statutory attorney fee.

*Evidence attached is an affadavit signed by someone from Capital One. There is nothing else.

Complaints (our Cap One)

1. The Defendants are the holder of a credit card issued by Plaintiff pursuant to the terms and conditions for said card. The existance of this debt is established in the exhibit attached hereto as Exhibit A. (Exhibit A is an unsigned cc agreement with a 2005 date).

2. That Plaintiff, upon Defendants promise to pay, advanced monies on Defendants behalf and on open account.

3. That there is now due and owing to Plaintiff, by Defendants the amount of $1,7xx.xx on said account.

4. That further, Defendant's account has accrued interest in the amount of $1,5xx.xx through December xx, 2006.

5. That although often requested to do so, the Defendants have failed, refused or neglected to remit said sums to Plaintiff.

Wherefore, Plaintiff prays that this Honorable Court enter Judgment in favor of Plaintiff and against Defendants in the amount of $3,3xx.xx plus costs, interest and attorney fees.

*Evidence attached is an unsigned credit card agreement which appears to have a 2005 date (hard to tell the way it is printed) There is nothing else.

14. What is the SOL on the debt? To find out: Michigan SOL is 6 years, both of these accounts are within SOL by around 8 to 10 months.

Okay, I hope listing both suits doesn't prove to be too confusing, but I didn't want to hog the board with a bunch of threads (I have to post another thread for my SO's Asset suit as it is).

I expected Cap One to attach more evidence since they are the OC, but I know they very well have everything they need if I push them. Perhaps not, but probably. My plan is to answer these suits denying their complaints and then try to settle.

I know how to answer their specific complaints, but I've searched the board a lot and haven't come up with a lot of affirmative defenses that people use against an OC, most of them seem to apply to only CAs/JDBs. I'm sure I've probably missed obvious threads, if so, I'm sorry. I've been reading here until my eyes throbbed. Also, while I believe I'm still in SOL for both accounts, I've read that I should use the SOL defense anyway, just in case they can't prove it? Again, Hail Mary defense there.

My goal here is to get the best settlement deal, because I doubt I can beat them (I'm, of course, filing my Answers just to test the waters, though). I desperately want to get this over with and put the horrible year that was 2001 behind me forever.

As always, thank you so much for your replies!

[Optimus_SubPrime]

The suit against you alone is going to be harder to defend against than the suit against both of you because of the "account stated" complaint. If it were me, I would look into filing a motion for dismissal of that complaint. Here is a link to a primer on account stated defenses which includes an example of what a motion for dismissal of an account stated complaint should look like. (Unfortunately, this link refers to Illinois state law. You will need to research Michigan's own "account stated" case law and write a new complaint citing that case law instead.)

If CapOne haven't produced statements yet, your motion for should essentially call their bluff. It's possible they may not retain copies of your statements on file. At the very least, it may take them a month or two to recover them, and that's a couple months longer you can save to pay them off and induce them to accept settlement by showing them that you won't roll over in court.

If they provide statements, you may want to think about disputing them as in violation of Michigan usury laws. Their right to preempt Michigan usury laws is based in their status as a national or state-chartered bank. (The National Bank Act of 1864, Section 85 and Section 27 of the Federal Deposit Insurance Act are the governing statutes.) They haven't shown the court they were chartered as either, yet. Make them.

One other element in an account stated defense is that the charges were unfair or unlawful on their face. Unless you specifically remember receiving the initial disclosures required by the Truth in Lending Act, Regulation Z, Section 226. 6, you may want to dispute ever having received them. If they cannot produce a terms and conditions document with those disclosures copyrighted the year you opened your account, they may not be able to use an account stated defense, even though you did not dispute the statements.

And yes, don't forget to claim statute of limitations, either. Even if you think you're still within it, make them prove you are.

I want to be clear that these are just ideas for you to explore. I'm not versed in Michigan law and am not an attorney, so don't consider anything in this post legal advice. Consider it inspiration for your own research.

I totally hear you about reading about credit law until your eyes throbbed, though. I've been there. It takes a long time to assimilate all the info you need to defend yourself. I'm still learning new things all the time. Hope this helps.

[BraveToaster]

Thanks very much for the reply Optimus_SubPrime. Some of that was a little over my head LOL, but I'm looking up all I can right now!

I'm pretty much just filing my Answers in order to prevent Default Judgment and then try to settle, but I'm still trying to make a decent defense.

I posted in my Asset thread that I'm not sure I understand the theory of Account Stated. In the Cap One suit against me alone, the complaint seems to be saying that I received statements from both the Plaintiff and the Assignor. I did not. I haven't received a statement from Cap One is YEARS and I've never gotten a statement from the lawfirm that is suing. The only thing I ever got from them was an ITS letter.

Also, I asked this in my Asset thread, but the answer may be different when an OC is involved as opposed to a JDB. Michigan law says that when an Affidavit is included with an Account Stated complaint, that the defendant must file their own Affidavit refuting it. There has been some argument on this board as to whether a counter Affidavit is necessary or advisable. I would be inclined to include one for the hell of it (particularly against a JDB), however, I obviously can't perjur myself.

Can any of the lawyers here suggest whether a counter Affidavit is a good idea in ANY circumstance (JDB or OC)? If it is a bad idea in any circumstance? What wording might be advisable if one provided an Affidavit?

In the Cap One case, the included Affidavit comes from a supposed Cap One employee, so I'm assuming, that unlike with a JDB, I can't claim hearsay in my defenses.

I'm just thinking out loud, sorry...

EDITED TO AD: Michigan law says that a Plaintiff's Affidavit must have been issued within 10 days of the filing of the Summons and Complaint. The Affidavit the attorney for Cap One has attached is from April 2006. I have just found a Michigan appeals case from 2005 that supports this. In the case, the court found that the affidavit included was 2 months old at the time the complaint was filed and, therefore, it was not valid. However, they ruled the lower court could still consider the other evidence (in that case, statements) in their ruling, so it still found the defendant liable. In my case, Cap One included a seven month old (at the time of filing) affidavit and no other evidence. Their affidavit is inadmissable per Michigan law.

Here's a link to the case:

http://www.lexisone.com/lx1/caselaw/freecaselaw?action=FCLRetrieveCaseDetail&caseID=2&format=FULL&resultHandle=a8187c7783c4b6dd42356e36fa23745a&pageLimit=10&xmlgTotalCount=2&combinedSearchTerm=capital%20one&juriName=Michigan&sourceFile=STATES;MICTS

So, I can argue that that Cap One's affidavit is not admissable. I can argue SOL just for the hell of it. That's two. Anything else? I'm at a bit of a loss since it's the OC.

Dumb question, do I need to file a motion to get the affidavit thrown out, or can I just argue that the affidavit is worthless in my Answer? Also, what is Cap One's reaction likely to be? Can they just start looking for statements to bolster their case or will the case be dismissed and they have to file again with a proper affidavit? I'm thinking my chances for a decent settlement just went up?