Sued by Cap1, Considering Arbitration

[JoJoZ]

I was served yesterday by a law firm on behalf of Capital One, plaintiff, for $1700 + fees. I am so incredibly stressed out right now and have not slept all night. Thankfully, I've found this forum and have been spending the past few hours searching and learning. Someone here suggested the arbitration route, and after doing some reading, I think it may be the best option for me, if only to buy me time. Only thing is, I have NO idea where to begin.

The summons states that I "have 21 days after receiving this summons to file a written answer with the court and serve a copy on the other party or take advantage of lawful action with the court". It does not state that I'm required to answer, so must I? Or do I simply answer stating that I'm electing arbitration? Or should I file a Motion to Compel Arbitration?

There was nothing attached to the summons. It is 2 pages...first was the actual Summons and Complaint, and stapled to it is a one-page Complaint. I don't have the cardholder agreement, so how can I answer this without knowing my exact rights per such agreement (re: arbitration)?

There is no court date listed. Is this only to be scheduled if/when I file an answer?

I have another Cap1 account also in default (both accounts defaulted at same time), but have not been sued yet. Should I DV it now with intent to exercise my right to arbitration?

I'm a single girl who's laid off and can't find a job to save my life...not even at McD's. So this lawsuit has really done a number on me this past day...I've seen my credit rating plummet from prime to crap in less than a year and this lawsuit is the icing on my cake of poo. Any advice and answers to my questions would be immensely appreciated as it'll help me not feel so hopeless!

Edited April 17, 2010 by JoJoZ

[jkg3]

First, you don't DV an original creditor's account. You only DV a collection account. Forget about that.

For the other (not yet sued) account, send Capital One a certified/return receipt letter as soon as possible. Indicate that you elect arbitration to resolve disputes related to the account. Keep copies of all the mail receipts, and a copy of the letter. You will need them later.

As for the current lawsuit, read this topic: http://www.debt-consolidation-credit-repair-service.com/forums/showthread.php?t=299152 start at post #3

You need to respond to the lawsuit and deny everything. You also need to send the attorney suing you a letter. Tell them you have elected arbitration, and that they need to dismiss the lawsuit and initiate arbitration.

Edited April 13, 2010 by jkg3

[chuckygee]

Arbitration would be a great strategy in your case. Listen to jkg3.

Answer the summons. You have time so learn what you need to say in your answer for affirmative defenses. Deny all of the lines of allegations, even if there is one that says "The defendant is a resident of xxxx and subject to this courts jurisdiction" or something along that line. By denying this and electing arbitration, you have a better chance at having the case dismissed once arbitration is elected.

Definitely elect arbitration before the second suit is filed. They will file the second suit so beat them to it.

You definitely need to answer the summons or they will get a default judgement against you. Since the lawsuit is filed, the burden is now yours to start the arbitration and remove it from the local court.

[JoJoZ]

Thanks so much.

You said to deny everything, and I'm willing to do so, but do I have to state why I'm denying or give reasons? Here's the complaint:

1. Jurisdiction and venue are proper in this court.

2. Defendant(s) entered into a credit card agreement with Plaintiff on XXXXX for a credit card account with account number XXXXXX.

3. Upon information and belief, Defendant(s) has possession of the agreement upon which this claim is based.

4. Defendant(s) agreed to the terms and conditions of the credit card agreement by making purchases or taking cash advances on the credit card account.

5. Plaintiff has fully complied with the terms and conditions of the credit card agreement.

6. Defendant(s) has defaulted under the terms and conditions of the credit card agreement by failing to pay as promised.

7. There is presently due and owing the sum of $1,700.

WHEREFORE, Plaintiff prays for judgment in the amount of $1,700 plus costs, interest and attorney fees.

So how exactly do I deny the above? I guess I'm supposed to respond to each of the above-numbered claims, but I'm lost as to what to say when I'm submitting my answer .

As for the sending the attorney a letter stating that I'm electing arbitration...do I also send a copy to the court and Cap1?

Edited April 17, 2010 by JoJoZ

[JoJoZ]

Arbitration would be a great strategy in your case. Listen to jkg3.

Answer the summons. You have time so learn what you need to say in your answer for affirmative defenses. Deny all of the lines of allegations, even if there is one that says "The defendant is a resident of xxxx and subject to this courts jurisdiction" or something along that line. By denying this and electing arbitration, you have a better chance at having the case dismissed once arbitration is elected.

Definitely elect arbitration before the second suit is filed. They will file the second suit so beat them to it.

You definitely need to answer the summons or they will get a default judgement against you. Since the lawsuit is filed, the burden is now yours to start the arbitration and remove it from the local court.

We must've been posting at the same time, so I didnt' see your response before I wrote mine. When you say "deny all of the lines of allegations", do I simply state "I deny this claim" after each line item? Or do I need to support my denial somehow?

You guys are so wonderful...I've learned so much already in less than 24 hours and you have no idea how much I appreciate your help!

[chuckygee]

Ok first. Do not just follow my advise. Continue to listen as other people chime in. I am not a lawyer, I am just someone else who has been sued.

That being said, I would recommend the following and encourage others the chime in.

1. Jurisdiction and venue are proper in this court.

Deny.

2. Defendant(s) entered into a credit card agreement with Plaintiff on XXXXX for a credit card account with account number XXXXXX.

Agree. (Should have been Admit)

3. Upon information and belief, Defendant(s) has possession of the agreement upon which this claim is based.

Deny.

4. Defendant(s) agreed to the terms and conditions of the credit card agreement by making purchases or taking cash advances on the credit card account.

Deny.

5. Plaintiff has fully complied with the terms and conditions of the credit card agreement.

Deny.

6. Defendant(s) has defaulted under the terms and conditions of the credit card agreement by failing to pay as promised.

Deny.

7. There is presently due and owing the sum of $1,704.77.

WHEREFORE, Plaintiff prays for judgment in the amount of $1,704.77 plus costs, interest and attorney fees.

Deny.

Depending on the rules of civil procedures in Michigan, you may have to make a brief statement after each denial.

I would deny all but number 2. By agreeing to number 2, you retain the right to arbitration per the contract. By denying all others, you force the plaintiff to produce the evidence to prove it.

If Michigan has a general denial, I would include that also.

You then need to follow with affirmative defenses. These will be based on the defense tactic you choose to use.

Continue to read other threads regarding Cap1. There is also an excellent book by Nolo, Represent Yourself in Court. See if your library has a copy of it, or buy a copy on amazon.

Edited April 13, 2010 by chuckygee

[maggie22]

Here's the link to the Rule Book: http://coa.courts.mi.gov/rules/

You would refer to the rules for civil procedure. Take a look at rule 2.111 general rules of Pleading, also see (f) Defenses...It includes the affirmative defense of the existence of an agreement to arbitrate...Lastly, don't hesitate to mail and fax the atty's Office letters etc...and be sure to keep fax confirmations

[maggie22]

Also, in answering the complaint, you're not allowed to simply put "deny" without indicating the substance. Instead we use this language:

Defendant neither admits nor denies being without sufficient information upon which to form a belief as to the truth or falsity thereof and leaves Plaintiff to its proofs.

[SeaStriper]

JoJo, remember to follow above advice. Always send a debt validation letters to any collection account. Do NOT file arbitration on BOTH accounts only the one that is in court. The one not in court just send a MG05 DV letter just Exercising your right to arbitration. The one in court your will INITIATE arbitration. Two different things. If you intiate both, it will be too much on your plate as you are just starting out. Capital One will contact you by mail (fedex) usually by a LIT Spec to work something out (Usually 5 to 20 %) make a deal that suits you because you will have them in the palm of your hands. When you finish the first one then work on the second (unless sued - Then you have to jump on it). I am dealing with Crappy, don't lose sleep --> But do read read read...

[chuckygee]

JoJo, remember to follow above advice. Always send a debt validation letters to any collection account. Do NOT file arbitration on BOTH accounts only the one that is in court. The one not in court just send a MG05 DV letter just Exercising your right to arbitration. The one in court your will INITIATE arbitration. Two different things. If you intiate both, it will be too much on your plate as you are just starting out.

I would respectfully disagree. Filing both now will prevent having to defend yet a second summons in court. You will still receive the contact from Cap1 Litigation Spec****, but it will be an attempt to resolve both cases. Although MG05 DV letter will allow a counterclaim for FDCPA violations, you would still have to compel arbitration to remove from local court.

Shermeta gets paid to sue, not to arbitrate. They will argue over the difference between elect and initiate. And they will do all of this after the suit is filed. Leaving the OP in the same position again. Chop off both heads now.

And since this truly is a respectful disagreement, SeaStriper, please chime back in so the OP can hear the advantages of both strategies.

[SeaStriper]

I hear what your saying chucky, depends on her situation and how much she knows to work it to her advantage. Two accounts and dealing with them seperately sets up more ways for crappy to screw up FDCPA violation giving her more ammo. I filed seperatly and one acct violated 807e and then some and the right to sue DC attorney while the other has no violations yet at all. Using violation gives u more power also. Crappy has a way of not knowing what its oher hand is doing. And being a newbie, it is scary to deal with 2 at the same time. I respect your call though, we all know many options are available, just choose which is best for your circumstance... Just my Opinion

O and remember, as your confidence grows on the first arbitration, you save for a bigger fight on the second account to each their own right!

Edited April 13, 2010 by SeaStriper

[chuckygee]

So it seems the difference is based on whether you want to aggressively fight and possible file counter claims or new lawsuits for FDCPA violations. Which is what SeaStriper is recommending.

Or just trying to settle and make it all go away, which is what I am recommending.

Neither is right or wrong, just a couple of options depending on what your temperament is for a fight.

Whichever you decide, I'm sure the two of us and the rest of the board will be glad to help you through the process.

Maggie22 is in your state and can help you with the rules in Michigan.

[JoJoZ]

These options do give me something to think about. Yes, I am very green and this is still Greek to me, but I know things today I didn't know last week so I'm moving in the right direction!

At this point I'm still uncertain as to whether I'll file for both accounts at once...I don't know if I'm prepared to tackle both at once, but I won't rule that out just yet. In the meantime, I'll continue to read and learn, and draw up my answer for the current suit. Which brings me to another question...when I file my answer with the court, should I send their atty a copy as well? BTW, not sure if this matters, but this suit was filed in the District Court.

[SeaStriper]

Exactly right Chucky - Let me add that she is unemployed and it is "only $1700" which would incline me to believe that a settlement % would be out of reach with the Lit Spec. Leaving her the option to fight for a mutual dismissal which will a little harder but also likely at a later date. Do NOT settle with the lit spec unless your willing and able to comply. I believe a little more sleepness nights (no pun intended will most likely lead to a walk away with deletion of tradelines if she pushes hard enough. In any case, the answer is the first priority and getting your feet wet with arbi is second ---> read read read.. Good Luck

[Bradly1]

These options do give me something to think about. Yes, I am very green and this is still Greek to me, but I know things today I didn't know last week so I'm moving in the right direction!

At this point I'm still uncertain as to whether I'll file for both accounts at once...I don't know if I'm prepared to tackle both at once, but I won't rule that out just yet. In the meantime, I'll continue to read and learn, and draw up my answer for the current suit. Which brings me to another question...when I file my answer with the court, should I send their atty a copy as well? BTW, not sure if this matters, but this suit was filed in the District Court.

Do what makes you the most comfortable. However, if you decide to wait on the second account make sure you DV them with an election of arbitration to resolve the dispute in the DV.

This will either insure they don't sue you or give you cause for FDCPA violations if they do sue you. It's the perfect agressive pre-suit move, while protecting your rights.

For right now make that fear you have work for youself. These attorneys called Creditor Rights Advocates don't actually want to go to court if they can avoid it. It cost money that they aren't 100% sure they are going to collect if you present you case right.

This doesn't mean they won't go to court, because, they will. You have to force them off that path, make it difficult and risky for them or with arbitration take it out of their hands completely. THIS IS WHAT TRUEQ HAS STATED, LEVERAGE!!!!

Right now you have to determin what your course of action is going to be. Remember you can always ditch out and just pay them or set up payment arrangements.

THEY WILL ASK YOU TO SIGN A JUDGEMENT AGAINST YOURSELF REFUSE! THEY WILL BACK DOWN. Make them earn any judgment and don't go signing anything your unsure of.

I am currently in negotiations for a pre-trial settlement and they have accepted my offer which I believe to be fair.

They did, however, in extremely tricky words try and slip a judgment against myself in the agreement. I told her flat out, I am in no way now or ever signing a Judgement against myself. If she wanted a Judgment she can earn one. She actually stumbled on her words and told me she would go work on the wording again to suit my request.

Be cautious in dealing with these lawyers period.

Lol.

Edited April 13, 2010 by Bradly1

[SeaStriper]

Well said Bradly

[chuckygee]

This was just posted in another thread by another person in Michigan.

Click Here

Which continues to support the idea, there is a difference between election and initiation, and the court really only seems to care about initiation.

[JoJoZ]

Okay, so I'm attempting to prepare my answer and I noticed there's no case number. I also checked in the online court record system and there is no record for me on file. Does this mean that they haven't filed the complaint yet? If not, do I still file an answer with the court, or should I only submit it to the lawfirm?

I read elsewhere that if they haven't filed their complaint yet, I could quickly try to DV them as it'll prevent them from filing until they validate. Would this be worthwhile for me to try, especially since I'm planning on exercising my right to arbitration?

Aghhhh...so much to learn in so little time.

[JoJoZ]

Okay, so I'm attempting to prepare my answer and I noticed there's no case number. I also checked in the online court record system and there is no record for me on file. Does this mean that they haven't filed the complaint yet? If not, do I still file an answer with the court, or should I only submit it to the lawfirm?

I read elsewhere that if they haven't filed their complaint yet, I could quickly try to DV them as it'll prevent them from filing until they validate. Would this be worthwhile for me to try, especially since I'm planning on exercising my right to arbitration?

Aghhhh...so much to learn in so little time.

Hmmm, I may be mistaken. I really don't know...this is very confusing for me! On the "complaint", there is no case # listed, yet on the "summons", there IS a case #, yet according to the case finder online system it is not a proper format. It's supposed to be 14 digits long, but it is only 9 (in this format: X-##-####-XX). So I have no idea what this "case #" is, especially since there is no record of my name in their case finder.

[chuckygee]

They DV will only stop them if you tell them: (a variation on Trueq's)

I demand that we arbitrate this dispute as per the contractual obligation. The contract states "IF YOU OR WE ELECT ARBITRATION OF A CLAIM, NEITHER YOU NOR WE WILL HAVE THE RIGHT TO PURSUE THAT CLAIM BEFORE A JUDGE OR JURY..." (Emphasis Yours) Any further action in any court will be considered a breach of contract and possible violation of state and federal consumer credit collection protection laws. You can contact me my US Mail to discuss what forum we will use to resolve this matter.

Use your own language and laws specific to your jurisdiction. Maybe use Michigan instead of state.

The last sentence is to give them the opportunity to communicate with you via email and reinforce the fact that you are serious about arbitration. They will not want to arbitrate so selecting one will not be part of their dialog. This may allow for settlement negotiations by mail. I think for anyone new or nervous, mail negotiations make it less likely to be bullied or agree to something that you may not be comfortable with.

But a DV letter by itself does not stop litigation.

[chuckygee]

Hmmm, I may be mistaken. I really don't know...this is very confusing for me! On the "complaint", there is no case # listed, yet on the "summons", there IS a case #, yet according to the case finder online system it is not a proper format. It's supposed to be 14 digits long, but it is only 9 (in this format: X-##-####-XX). So I have no idea what this "case #" is, especially since there is no record of my name in their case finder.

Do you have a separate Common Pleas and Municipal court? Check the summons to ensure you are checking the right court. The court is listed at the top.

[JoJoZ]

Do you have a separate Common Pleas and Municipal court? Check the summons to ensure you are checking the right court. The court is listed at the top.

It is listed as "State of Michigan ##A District Court". And this is the site I've been searching online. In fact, there are numerous open cases filed by Cap1 c/o the same lawfirm that were recently filed there, so I'm fairly certain I'm looking in the right place. I will call the clerk tomorrow to inquire.

[chuckygee]

Definitely call. The summons should be from the court if it has a case number.

I don't think Shermeta would put its license at jeopardy by sending a false summons, so it is likely some type of mistake. Make note of who you talk to as you try to figure this out. That way if you need more time to answer you have documentation that you were trying to confirm the claim was legitimate.

[JoJoZ]

Definitely call. The summons should be from the court if it has a case number.

I don't think Shermeta would put its license at jeopardy by sending a false summons, so it is likely some type of mistake. Make note of who you talk to as you try to figure this out. That way if you need more time to answer you have documentation that you were trying to confirm the claim was legitimate.

Thanks chuckygee, will do.

.

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Here's another quick question...regarding this paragraph in the complaint:

1. Jurisdiction and venue are proper in this court.

Can I deny this, since I plan on arguing that the court has no jurisdiction due to the arbitration clause?

[chuckygee]

Deny. Per contract I have the right to Binding Private Arbitration of this claim.