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Palisades Collection trying to sue on SOL account

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(Very long and detailed but I wanted to be completely clear of the situation)

My hubby had a Household Bank credit card back in 2000.

According to his current Equifax report from July 2007, it states:

HSBC Bank NV FKA Hhlb

Date Opened: 10/2000

High Credit: $3158

Date of Last Payment: 11/2002

Date of Last Activity: 12/2002

Date Maj. Del 1st Rptd 02/2006 (Have no idea what this even is!)

Current Status: Charge Off

Also on same report is a Palisades Collection which shows:

Palisades

Date Opened: 12/2005

High Credit $3157

Creditor Classification: Banking (?!?!?!?!?!?!)

Balance Amount: $3157

Amount Past Due: $3157

Date Of Last Activity: 12/2002

Type Of Account: Open

Type Of Loan: Factoring Company Account

I received a collection notice from Palisades back in July. I sent them a DV request. No response from them. In August I received from Zarzaur & Schwartz (Attorney At Law) a collection notice as well as a paper that looks to the AVERAGE consumer to be a legal court paper. I sent the lawyer a letter, as well as Palisades a copy of this letter, stating that this could be construed by the Average consumer to be a legal court document, and this violated my rights as a consumer. I also reiterated my DV request.

A few months go by, nothing from anybody.

Last Friday, I got served with a summons from the local sheriff.

The summons looks only half filled out. The sheriff deputy did not fill out the front of the paperwork. (Paperwork consisted of 4 pages) It shows it was stamped as "Filed In Office Nov 16, 2007" but I wasn't served with it til Nov 23. An entire week went by before they gave me the paperwork.

Page 1 consists of "Instructions To Sheriff or Process server" and all the spaces that should have been filled out by them are empty, including "Date Received ________", "By ______", "served on the Defendant Named _____" "______ County" "Date Served _______" "Process Server Signature _________".

Page 2 consists of "Alias Statement Of Claim"

Plaintiff Address as "Palisades" with thier address

Plaintiffs Attorney as Zarzaur & Schwartz with their address

Defendant as my hubbys name and address.

Their are only two complaints listed and those are not what you would normally think it would list. (I've been through this before and they normally use lots of 'legalize' to try to intimidate defendants.)

Complaint count 1 states:

I claim that the defendant(s) XXXXXX XXXXXXX (hubbys name) owes the plaintiff the sum of $3157.99 because: ACCOUNT STATED, plus $71.11 for interest, Total $3229.10. Wherefore, Plaintiff claims the sum of $3229.10 from each defendant plus court costs.

Complaint 2 states:

I claim that the defendant(s) XXXXXX XXXXXXX (hubbys name) owes the plaintiff the sum of $3157.99 because: CONTRACT, plus $71.11 for interest, PLUS $0.00 FOR LAWYERS FEES. Total $3229.10. Wherefore, Plaintiff claims the sum of $3229.10 from each defendant plus court costs.

Page 3 and Page 4 are identical and state "Defendants Answer District Civil". Then I'm given the 4 choices of either (1) I do not live in this county, blah blah blah (2) I admit everything and since I'm dumb enough to admit this, then please slap me with a voluntary judgement yaday yada yada (yeah right!) (3) I admit I owe some money but not amount stated, (4) I deny that I am responsible. I'm assuming each paper is for each individual complaint listed.

This item is clearly listed as being out of SOL. Alabama has a 3 year SOL for CC debt, and the date of last activity was 12/2002.

I'm including in the summons response a copy of part of my hubbys credit report from July 2007 showing this information. I'm only including the first page of credit report with hubbys name, address, etc on it to verify whose report this is, as well as the page that lists Household account and Palisades account. (They're on the same page, so it made it easy.)

My question is, how do I word my response to this summons? My main response will be the SOL, but I can actually list several others since they only gave "Account Stated" and "Contract" as charges. Should I check off choice #4, and then on separate piece of paper, list it this way:

1-Defendant claims a Failure of Consideration, as there has never been any exchange of any money or item of value between the plaintiff and the Defendant.

2-Plaintiff has failed to name all necessary parties.

3-Defendant claims Lack of Privity as Defendant has never entered into any contractual or debtor/creditor arrangements with the Plaintiff.

4-Plaintiff’s Complaint fails to allege a valid assignment and there are no averments as to the nature of the purported assignment or evidence of valuable consideration.

5-Plaintiff failed to state a claim upon which relief can be granted. Plaintiff's Complaint and each cause of action therein fails to state facts sufficient to constitute a cause of action against the Defendant for which relief can be granted.

6-The Plaintiff has failed to provide any contract or agreement bearing the signature of the Defendant, nor any itemized statements or billing of said debts.

7-Plaintiff has failed to provide a detailed list of the debts to the Defendant in the initial debt collection notice as require by the FDCPA and as evidence by case law. Coppola v. Arrow Financial Services, 302CV577, 2002 WL 32173704(D.Conn., Oct. 29, 2002) – Information relating to the purchase of a bad debt is not proprietary or burdensome. Debtor must phrase their request clearly to obtain: The source of a debt and the amount a bad debt buyer paid for plaintiff’s debt, how amount sought was calculated, where in issue a list of reports to credit bureaus, and documents conferring authority on defendant to collect debt.

8-The Plaintiff has failed to provide any proof of a relationship between themselves and the alleged original creditor, specifically the authority of the Plaintiff to collect the debt on behalf of the original creditor.

9-Plaintiff's Complaint fails to allege that the Assignor even has knowledge of this action or that the Assignor has conveyed all rights and control to the Plaintiff. The record does not disclose this information and it cannot be assumed without creating an unfair prejudice against the Defendant.

10-Defendant alleges that this action is time-barred under § 6-2-37 under Alabama’s civil code (statute of limitations for open accounts is 3 years). Per the Plaintiff’s own reporting to Equifax Credit Reporting Agency, they voluntarily listed the date of last activity for this account as 12/2002. They verified this information (“Items as of date reported’) with Equifax 07/2007. The date of summons from them was 11/16/2007 which is almost 2 years past maximum date allowed for Statute of Limitations.

OR, should I just list #10 (out of SOL) as the only defense so it doesn’t get lost in the responses or watered down with an overkill from all the other defenses. All the other defenses they can figure we’ll fight it out in court. Defense #10 (SOL) should cause them to throw it out completely without having to take a day off from work to fight this in court. SOL is an absolute defense, so I’m hoping this will keep me from having to take time off work to go to court. I still think I’ll win this regardless, but it seems like a huge waste of the court’s time when it clearly lists this as out of SOL.

Can I counter sue them for violations of not answering DV as requested. Filing in court which would be considered continued debt collection activity without verifying debt.

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It appears that they will try to argue written contract with the longer SOL (6years).

Can u cite ALA state law that shows CC's as open ended?

If not...

Make sure you keep and raise other affirmative defenses, ie valid assignment, chain of title and ownership and such.

Hopefully you will scare them off by answering...normally these CA lawyer bottomfeeders have 15-20 cases on the docket and a properly filed answer gets u a dismissal.

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It appears that they will try to argue written contract with the longer SOL (6years).

Can u cite ALA state law that shows CC's a open ended?

If not...

Make sure you keep and raise other affirmative defenses, ie valid assignment, chain of title and ownership and such.

Hopefully you will scare them off by answering...normally these CA lawyer bottomfeeders have 15-20 cases on the docket and a properly filed answer gets u a dismissal.

Alabama §6-2-37

Commencement of actions - Three years.

The following must be commenced within three years:

(1) Actions to recover money due by open or unliquidated account, the time to be computed from the date of the last item of the account or from the time when, by contract or usage, the account is due;

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Not sure how well this will fly with the court, but on my hubbys credit report, for Palisades, under "Type Of Account" they have listed "Open". Same report for "HSBc Bank" show type of account as "Revolving". This is what THEY voluntarily listed this account as (which is the correct term to use for credit cards) I CAN use a copy of his credit report in court can't I?

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The first problem I see with the credit report is that the 1st delinquency date is 4 years after the date of last activity. That is simply impossible. It looks like the OC fudged the reporting right before they sold/assigned it to a collector to try and make it look like it was still collectable.

I would argue the date of 1st delinquency as a scrivners error in court since the date of last activity is accurate, complete, and representative of the true last actionable date on the account. Then once established as such, claim the SoL of 3 years has expired and ask for a dismissal with prejudice. The reason for asking for prejudice is that it is clear that records were altered in an attempt to extend the actionable life on the account and that they should not be given additional chances to alter the records further in an attempt to collect the stale account.

Edit: Oh, and file a counterclaim for FDCPA violations for use of deceptive means to collect (altering records to attempt to extend the actionable life of the acocunt).

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Hi Methuss. Household has the 4 year time period error (Date of last payment 11/2002, date of last activity 12/2002, date maj. del. 1st rptd 2/2006) I'm assuming this is the 4 year gap you were speaking of correct? If so, It is Palisades taking me to court, and they don't have that listed. Could I hold them responsible for what Household has listed on the report?

Or were you meaning something totally different?

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I'm still stunned that I have to clarify that Credit Card Debt is an Open Ended Account. In all the reading and studying I have ever done (and I've done lots) this was not a topic even discussed as being unclear, until I posted this.

I went to the website:

http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml and it states:

-------------------------------------------

Open-ended Accounts: These are revolving lines of credit with varying balances. The best example is a credit card account. Please note: a credit card is ALWAYS an open account. This is established under the Truth-in-Lending Act:

TITLE 15 > CHAPTER 41 > SUBCHAPTER I > Part A > § 1602

§ 1602. Definitions and rules of construction(i) The term “open end credit plan” means a plan under which the creditor reasonably contemplates repeated transactions, which prescribes the terms of such transactions, and which provides for a finance charge which may be computed from time to time on the outstanding unpaid balance. A credit plan which is an open end credit plan within the meaning of the preceding sentence is an open end credit plan even if credit information is verified from time to time.

------------------------------------------

Now, I know that isn't a government sponsored website or anything, but they are knowledgable about the laws, so this would make them 100% wrong on this issue which I find hard tyo believe. Am I mistaken in this believe?

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hate to tell you -

this website DOES have some innaccurate information...and that page is one of them. CC's are NOT always open ended accounts. It's a state by state thing. Some states specifically have a SOL for CC debt, some don't. Of the ones that dont - it seems like "written agreement" is the verdict. Why? When you sign the CC slip after you make a purchase - the fine print says something to the effect of "signee agrees to abide by the terms and conditions of the card agreement blah blah blah..."

So...the best way is to do what hopelesscred suggested...find some caselaw to support your position. I guarantee they'll try and to for the "written agreement" SOL.

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I need to have my reply done and in the mail by tomorrow. (I didn't get it til last Friday, but the date on the Summons is for the previous Friday. I have to have my answer in to court within 14 days. Not sure why it took a week to get it to me.)

Please critique my response below and let me know your opinions asap. I was also thinking about including a partial copy of hubbys report to show the Household Bank account and Paisades account on it. Page 1 will verify who the report is for (name, address, etc.) and page 5 will list both Palisades and Household, so those would be the only two pages I would include.

I would include a copy of the letter they sent me August 20 2007 with a Statement of Claim (looks like a copy of my summons without all the info filled out completely and the old E-911 address we had years ago.

I would also include a copy of a DV and limited Cease and Desist letter sent to them, BY ME after August 20, 2007. I did not date the letter though. They never answered my DV request to this either!

I would also include a copy of Alabama SOL for Open ended Accounts with parts highlighted that may directly impact my case such as:

Alabama SOL for Open Ended Debts Section 6-2-37

Title 6 CIVIL PRACTICE./Chapter 2 LIMITATION OF ACTIONS./Section 6-2-37 Commencement of actions - Three years.

Commencement of actions - Three years.

The following must be commenced within three years:

(1) Actions to recover money due by open or unliquidated account, the time to be computed from the date of the last item of the account or from the time when, by contract or usage, the account is due; and

(2) Proceedings in any court of this state to disbar any attorney authorized to practice law in this state.

(Code 1852, §2480; Code 1867, §2904; Code 1876, §3229; Code 1886, §2618; Code 1896, §2799; Code 1907, §4838; Acts 1915, No. 814, p. 928; Code 1923, §8947; Code 1940, T. 7, §24.)

My response would be computer typed on a separate Word document and I would list it this way (am copying and pasting)

RESPONSE TO CHARGES, AND MY DEFENSE

1- Defendant alleges that this action is time-barred under § 6-2-37 under Alabama’s civil code (statute of limitations for open accounts is 3 years). Per the Plaintiff’s own reporting to Equifax Credit Reporting Agency, they voluntarily listed the date of last activity for this account as 12/2002. They verified this information (“Items as of date reported’) with Equifax 07/2007. The date of summons from them was 11/16/2007 which is almost 2 years past maximum date allowed for Statute of Limitations.

2- Plaintiff has failed to name all necessary parties.

3- Defendant claims Lack of Privity as Defendant has never entered into any contractual or debtor/creditor arrangements with the Plaintiff.

4- Plaintiff’s Complaint fails to allege a valid assignment and there are no averments as to the nature of the purported assignment or evidence of valuable consideration.

5- Plaintiff failed to state a claim upon which relief can be granted. Plaintiff's Complaint and each cause of action therein fails to state facts sufficient to constitute a cause of action against the Defendant for which relief can be granted.

6- The Plaintiff has failed to provide any contract or agreement bearing the signature of the Defendant, nor any itemized statements of said debts.

7- Plaintiff has failed to provide a detailed list of the debts to the Defendant in the initial debt collection notice as require by the FDCPA and as evidence by case law. Coppola v. Arrow Financial Services, 302CV577, 2002 WL 32173704(D.Conn., Oct. 29, 2002) – Information relating to the purchase of a bad debt is not proprietary or burdensome. Debtor must phrase their request clearly to obtain: The source of a debt and the amount a bad debt buyer paid for plaintiff’s debt, how amount sought was calculated, where in issue a list of reports to credit bureaus, and documents conferring authority on defendant to collect debt.

8- The Plaintiff has failed to provide any proof of a relationship between themselves and the alleged original creditor, specifically the authority of the Plaintiff to collect the debt on behalf of the original creditor.

9- Plaintiff's Complaint fails to allege that the Assignor even has knowledge of this action or that the Assignor has conveyed all rights and control to the Plaintiff. The record does not disclose this information and it cannot be assumed without creating an unfair prejudice against the Defendant.

10- Defendant claims a Failure of Consideration, as there has never been any exchange of any money or item of value between the plaintiff and the Defendant.

--------------------------------

PLEASE give me your ideas on whether to send all this, and if my wording is okay for the defense.

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Got something from the court today saying we have our day in court on January 22, 2008 at 9:00 AM. So now, I need to get some serious research done to see how Alabama leans on SOL of Credit Cards. Anybody out there have some direction to point me into to find this case law?

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After some quick reading on Alabama law regarding this subject, it would initially appear, to me, that this type of suit in Alabama relies heavily (almost entirely) on the plaintiffs allegation of an account stated.

From your earlier posts, it looks like you have included SOL in your defense, which is good. Alabama statutes place the burden of proof on the plaintiff to prove the debt is within SOL if that defense is raised by the defendant.

As to the account stated, you'll definitely want to go to your local law library and read up on 51 A.L.R.2d 331, Limitation of actions as applied to account stated. This discussion seems to me to indicate that in the absence of proof of account stated by the plaintiff, the court may well agree that the SOL is three years.

If that's the case, your task would be to defend against the plaintiff's account stated claim. There are required elements of proof to account stated, one of them being that the parties involved had prior financial dealings and an open account. This requirement alone is generally enough to defeat account stated claims in debt collection suits, since the debt collector and the defendant never had the required financial dealings. For more info on this subject, read Corpus Juris Secundum, 1A CJS Account Stated s.62. You'll also want to read 6 A.L.R.2d 113, Previous debtor and creditor relationship as condition for account stated. It will point you in the right direction.

Good luck with this. :)%

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You do know that Wolpoff owns Palisades, correct?

Have you considered sending them a Christmas summons?

No, I wasn't aware that Wolpoff owns Palisades, but I DVed Wolpoff last year on this same account and they in turn sent me a piece of paper basically saying they had a right to collect the accountm but not any actual proof that they did. I sent them a new DV request letting them know that they did NOT send me what was needed to Validate the account and details they were currently claiming (amount, etc.). I never heard back from them after that.

What do you mean by sending them a "Christmas Summons"?

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After some quick reading on Alabama law regarding this subject, it would initially appear, to me, that this type of suit in Alabama relies heavily (almost entirely) on the plaintiffs allegation of an account stated.

From your earlier posts, it looks like you have included SOL in your defense, which is good. Alabama statutes place the burden of proof on the plaintiff to prove the debt is within SOL if that defense is raised by the defendant.

I have copies of the credit reports showing when activity was last done, last payment (11-2002), etc. So if we can go with the SOL being 3 years, I'm guaranteed to win as Alabama is 3 yrs on open-ended accounts. But if they go with the 6 years claiming "Account Stated", then it would fall under Written debt which is 6 years. (Oral Contract won't help me none either since that is also a 6 years SOL in AL.)

So, if AL. relies heavily on plaintiffs allegation that this is an "Account Stated", how do I prove otherwise, especially if I don't have access to a law library? Is there someplace online that will also have this information?

Yes, I listed SOL as a defense, but if they go with "Account Stated" being a written contract, then I'm SOL (and I don't mean Statute of Limitations either! I have copies of credit reports to proof dates.

As to the account stated, you'll definitely want to go to your local law library and read up on 51 A.L.R.2d 331, Limitation of actions as applied to account stated. This discussion seems to me to indicate that in the absence of proof of account stated by the plaintiff, the court may well agree that the SOL is three years.

Local Law Library: I don't think we have one in our county. I live in Rural Alabama, so the most we can hope for is a local public library. Would this also have this information?

If that's the case, your task would be to defend against the plaintiff's account stated claim. There are required elements of proof to account stated, one of them being that the parties involved had prior financial dealings and an open account. This requirement alone is generally enough to defeat account stated claims in debt collection suits, since the debt collector and the defendant never had the required financial dealings. For more info on this subject, read Corpus Juris Secundum, 1A CJS Account Stated s.62. You'll also want to read 6 A.L.R.2d 113, Previous debtor and creditor relationship as condition for account stated. It will point you in the right direction.

I'm kinda hopefull now over this with requirements not being met for a "Account Stated." So, if I state that the qualifications needed to full under "Contract Stated" has not been met, then it should instead go under the more correct classification of an open ended account, then in this case, the SOL HAS been reached.

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I did a bit of online research, and found Florida clarification of Account Stated.

Account Stated –

[1] Elements and Case Citations

(1) Plaintiff and defendant made a previous transaction; Us and Palisades never had ANY transaction with each other. only household and my hubby. Just because they bought the account doesn't count does it?

(2) The parties’ agreement that the balance is correct and due; and

(3) Defendant made an express or implicit promise to pay balance. Defendant disputed (as shown on credit report for HH Bank and Palisades) balacne therefore did NOT agree to pay them, and did not agree on owing balance stated. Since requirement number 2 ends with 'and', does that mean ALL requirements must be done to list this as a Account Stated Account, or just one? If it means all 3 then I should'nt have any trouble winning this.

____________________________________

Florida State Courts

First District: Myrick v. St. Catherine Laboure Manor, Inc., 529 So. 2d 369, 371 (Fla. 1st

DCA 1988)

Third District: F.D.I.C. v. Brodie, 602 So. 2d 1358, 1361 (Fla. 3d DCA 1992)

Fourth District: Carpenter Contractors of America v. Fastener Corp. of America Inc.,

611 So. 2d 564, 565 (Fla. 4th DCA 1992)

Florida Federal Courts

Eleventh Circuit: First Union Discount Brokerage Servs., Inc. v. Milos, 997 F.2d 835,

841 (11th Cir. 1993)

Southern District: Nants v. F.D.I.C., 864 F. Supp. 1211, 1220 (S.D. Fla. 1994)

[2] Defenses to Claim for Account Stated

(1) Fla. R. Civ. P. 1.110(d) (pleading affirmative defenses), and other standard defenses.

See § 60.

(2) Statute of Limitations: § 95.11(3)(k), Fla. Stat. (four years).

(3) Failure to object to an account stated creates a presumption of correctness in the

creditor’s favor absent proof of fraud, mistake or error. See First Union Discount Brokerage

Servs., Inc. v. Milos, 997 F.2d 835, 841-42 (11th Cir. 1994).

(4) Failure to respond to demand for payment does not create obligation for account stated

absent contractual agreement creating such liability. See Page Avjet Corp. v. Cosgrove

Aircraft Servs., Inc., 546 So. 2d 16, 18 (Fla. 3d DCA 1989).

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I did a bit of online research, and found Florida clarification of Account Stated.

You're not going to want to build your defense around Florida law. Even though you live in a rural area, your county courthouse should have a law library. Another suggestion might be to find a local law firm - many of them have their own libraries; they may allow you access to it. It's worth a shot.

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Hmmm. I'm not getting very far with trying to get this information. Our courthouse doesn't seem inclined to let people use their law area unless they're a lawyer. No local lawyer is willing to let me have access to their VERY EXPENSIVE books to look things up. Does NO ONE here have access to this information somewhere? I need to look up "51.A.L.R.2d.331 under Limitations of Actions as applied to account stated", as well as "Statute of Limitation" for Written Debt, Contract debt, Credit Card debt. I really need this information, but don't seem to have local access to it.

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