Discover Card Problem Louisiana

[ServicePeasant]

I had posted this on another already existing thread and BrokeBob suggested making it its own...so here we go.

Hello,

My significant other was mostly served sometime Friday we think with a lawsuit from D*sc#ver. I say mostly because we have the papers but they were not served according to state law here. Service here must be personal or domicilary only and these were left by our delivery box outside our gate (400 feet from our house or more) on a parish road....in a rain storm. Anyway, while researching procedural rules, case law, etc to prepare his answer, we have 15 days, I ran across this forum and subsequently your threads on arbitration.

Anyway, I have been trying to speed-read all the arbitration threads, but have a very short time limit, so thought I should ask for help. Now that he has been served, is it too late to initiate arbitration? He has till May 8th, which is a Saturday, or technically Friday May 7th to make sure he is safe to answer. The attorney must wait those 15 days plus two before motioning for default or summary judgment. If we answer, he cannot win his motion and must wait. I had read something about the need to have a claim against the creditor for violations of the FDCPA or other federal statues for credit reporting etc, is that absolutely necessary? We are dealing with the OC through a local debt collection attorney, who I understand is considered a third party debt collector and bound by the FDCPA.

Discover attached a copy of their 2009 contract to the lawsuit that states under Arbitration, "the arbitation shall be conducted, at the option of whoever files the arbitration claim, by either the American Arbitration Association (AAA) or the National Arbitration Forum (NAF) in accordance with their procedures in effect when the claim is filed.....No other arbitration forum will be perimtted , except as agreed to pursuant to either the changes to this agreement section or a writing signed by both parties."

Now, since the card was charged off in 09 and the only way to consent to any changes in terms in to use the card once the new contract/agreement has been issued (according to the way the OC's play the game)....the way I see it, this is the only contract/agreement that governs our accounts with them. Hence, they will be forced to abide by the terms...meaning that since neither of these arbitration companies will hear their claims, they are pretty much finished? Or am I missing something like those companies will not let consumers initiate artibtration with them against these companies either?

I looked into any laws/rules regarding arbitration in Louisiana and found the ones from the Revised Code that are pasted below. I also looked up case law and the Supreme Court upheld contractual arbitration clauses in a recent decision.

CHAPTER 2. LOUISIANA BINDING ARBITRATION LAW

§4201. Validity of arbitration agreements

A provision in any written contract to settle by arbitration a controversy thereafter arising out of the contract, or out of the refusal to perform the whole or any part thereof, or an agreement in writing between two or more persons to submit to arbitration any controversy existing between them at the time of the agreement to submit, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

Acts 1997, No. 1451, §2.

§4202. Stay of proceedings brought in violation of arbitration agreement

If any suit or proceedings be brought upon any issue referable to arbitration under an agreement in writing for arbitration, the court in which suit is pending, upon being satisfied that the issue involved in the suit or proceedings is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until an arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with the arbitration.

§4203. Remedy in case of default; petition and notice; hearing and proceedings

The party aggrieved by the alleged failure or refusal of another to perform under a written agreement for arbitration, may petition any court of record having jurisdiction of the parties, or of the property, for an order directing that the arbitration proceed in the manner provided for in the agreement. Five days' written notice of the application shall be served upon the party in default. Service shall be made in the manner provided by law for the service of a summons.

The court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not an issue, the court shall issue an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. If the making of the arbitration agreement or the failure or refusal to perform is an issue, the court shall proceed summarily to the trial thereof.

If no jury trial is demanded, the court shall hear and determine the issue. Where such an issue is raised, either party may, on or before the return day of the notice of application, demand a jury trial of the issue, and upon such demand the court shall issue an order referring the issue or issues to a jury called and empanelled in the manner provided by law.

If the jury finds that no agreement in writing for arbitration was made or that there is no default in proceeding thereunder, the proceeding shall be dismissed. If the jury finds that an agreement for arbitration was made in writing and that there is a default in proceeding thereunder, the court shall issue an order summarily directing the parties to proceed with the arbitration in accordance with the terms thereof.

Edited August 10, 2011 by ServicePeasant

[BrokeBob]

I am not sure what the implications of the 'agreement in writing' means. However, they sent you the agreement, and it is in writing, and has an arbitration clause.

I am NOT a lawyer, and even if I were, I would still be confused by Louisiana.

HOWEVER

My layman's guess upon reading the code appears to be that you could motion for a stay for arbitration.

I would STRONGLY suggest you contact your local parish courthouse, or where ever this is filed, and find out their procedures. In my county, for example, there are different procedures for motions than in any other county in the state of Wisconsin. So, I can't tell you how that is done. The good civil servants at the courthouse CANNOT give you legal advice, but if you are nice and friendly towards them, as a good Louisianan should be, they will probably give you very good advice about how to file a motion. And, they will probably be friendly and helpful. We all know that some of the friendliest people on the planet can be found in Louisiana, and some of them may work in your local courthouse.

The question is: do you (a) file the answers and THEN file the motion or ( file the motion and NOT the answers or © file both at the same time?

I don't have a clue. If you can find a good consumer lawyer in your neck of the woods, a small consultation fee may be enough to get the info.

I forgot to mention before: You are REALLY doing your homework FAST on this. Good for you. Keep it up!

Edited April 27, 2010 by BrokeBob
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[chuckygee]

What is the ballpark figure for the debt? $2k, $8k, $20k? The amount makes a difference whether arbitration through what would have to be AAA makes sense.

[ServicePeasant]

As to the local rules, I have them bookmarked and also in Word doc form thanks to the local law school putting it online for their students.

I am thinking that I need to send a letter to initiate first and then include a copy with my answer along with a motion to compel arbitration.

I definetly want to stay out of court as much as possible. Of all the debt collection attornies in the area, the one after my hubby is the only one who consistently wins even when folks hire an attorney. He also is watching his paycheck, because half the complaint is dedicated to Louisiana law governing the recovery of attorney fees: His fee is 25% (state max allowable) of the entire balance recovered...right now 17,400+ (about 5,000 is interest and fees). I really don't want to see him get the money. He rolls over so many people with defaults and garnishes their wages. We aren't very worried about garnishment...our only income is a guaranteed payment to my hubby as manager of a multi-member LLC (taxed as partnership). The only remedy they have their is a charging order or to attack the validity of the company (call it an alter-ego), which won't happen: I make sure everything is done by the books; insurance, employees, money handling, taxes, etc. I just dont want the stress anymore since judgments can last forever if renewed on time. If not, ten years down the road I could get rid of it if they miss the deadline by so much as a day (found case law).

[ServicePeasant]

We all know that some of the friendliest people on the planet can be found in Louisiana, and some of them may work in your local courthouse.

Have you ever been here...lol. The only reason most folks seem really friendly is because they are probably drunk. They find every and any reason to party and drink in this state; If you've never lived anywhere else you wouldn't know anything was up....but I'm from Ohio and have landed on planet Mardi Gras...lol.

Oh, and the unfortunately the people at my courthouse are NOT NICE, except for one lady in the map office. After my husband bought our current house (put it in his name and used seperate funds since bulk of debt is mine) I found a tax sale that the title company had missed. It took me forever and a dozen maps and all the sales agreements on record to show them that they had forgotten to record a sale of 3 acres nearly 20 years ago to the state Department of Transportation. They basically sold the state's property and part of a vacant 3 acres next door at a tax sale and attached the whole mess to our house description and address. I got it fixed about a week before the folks who bought the tax deed tried to get a quiet title to the property: No help from the title company either...they kept saying that we had title insurance. I was like, yes, but will that help when they come throw my stuff out on the lawn? And that, is Louisiana in a nutshell........

[ServicePeasant]

What is the ballpark figure for the debt? $2k, $8k, $20k? The amount makes a difference whether arbitration through what would have to be AAA makes sense.

Original debt was about 13,000...they now want 17,938.14 according to the paperwork.

Also found this in arbitration section of revised code....

§4205. Application heard as motion

Any application to the court under this Chapter shall be made and heard in the manner provided by law for the making and hearing of motions, except as otherwise herein expressly provided

Edited April 27, 2010 by ServicePeasant

[chuckygee]

At that dollar amount, they are likely to pay the arbitration fee. I don't know what your plan is for arbitration, but likely you are going to have to defend yourself in either court or in arbitration, so I would start planning a strategy with that in mind.

Arbitration is normally a deterrent to collectors for much smaller amounts.

[ServicePeasant]

At that dollar amount, they are likely to pay the arbitration fee. I don't know what your plan is for arbitration, but likely you are going to have to defend yourself in either court or in arbitration, so I would start planning a strategy with that in mind.

Arbitration is normally a deterrent to collectors for much smaller amounts.

Okay, I see your point and appreciate your response. I guess my bigger question is are they going to be able to arbitrate with? The contract specifies either AAA of NAF only and that any substitutes must be agreed to in writing by both parties or by changes to the card agreement. I do not believe they can change the agreement legally since the card has not been used since Jan. 2009 and charged-off last fall. The companies usually say that use of the card signifies acceptance of the contract, but since the card was not used that would make this an adhesionary contract by definition. So,if they can't arbitrate with AAA or NAF and I won't consent to JAMS, then what....or did I miss something from Trueq's posts? I am not trying to be smart or sarcastic....just thoroughly explore all the options available to us and their pitfalls.

[chuckygee]

So,if they can't arbitrate with AAA or NAF and I won't consent to JAMS, then what....or did I miss something from Trueq's posts? I am not trying to be smart or sarcastic....just thoroughly explore all the options available to us and their pitfalls.

You missed that Trueq is in Wisconsin where the consumer protection laws are very pro consumer and the arbitration laws also favor the consumer.

The two hurdles you face trying to get the same results are:

1. You would have to successfully motion the court to force Discover card to initiate the arbitration. This has been hit or miss for many persons. Sometimes the judge says if you want arbitration, you need to initiate.

If 1. is successful then:

2. If AAA declines the case, you would have to convince the court that no other venue is acceptable per contract. That is no easy task unless the law is very specific in LA.

If you are going to try to attempt this, I would recommend at least consulting an attorney to get a professional opinion on this option in your jurisdiction.

[Guest usctrojanalum]

This is where the problem lies, if you won't agree to any arbitration forum - you are being unreasonable.

If the Plaintiff keeps showing the judge in good faith they have been proposing alternative arbitration forums but you keep rejecting every single one of them, you better have a damn good reason as to why you do not want that particular forum.

If a judge is seeing that you are trying to be spiteful and uncooperative, and not putting in a good fairth to attempt to come to a resolution of the dispute setforth he is likely to rule against you and he does have the power to completely strike the arbitration clause.

[ServicePeasant]

I wouldn't say that Louisiana law favors the consumer, but it isn't against them either. All we have on the books under arbitration is the Louisiana Arbitration Law, which pretty much mirrors the Federal laws. I copied sections in my original posts. This state is pretty, um, unique so even if they would have a law, you'd have to know what they are calling it to find it. They do everything pretty strangely here and word it even weirder.

Last year before the two arbitration companies collapsed, creditors were having a horrible time confirming their arbitration awards in Louisiana. One opinion from either the appellate or supreme court (forget which one...have it saved somewhere) basically says that the creditors made a bunch of meritless arguements that Louisiana courts should basically rubber stamp their awards without one shred of proof that the consumers in question were even bound by a valid arbitration agreement, let alone owed the debt. Their was an open hostility between the courts here and creditors in regard to this at the end of last year. I don't know how that would weigh in our factor.

The other option that had been mentioned to me outside this forum, was just to let the default judgment happen. Then it can be nullified before one year for insufficiency of service. The afternoon the papers were left on the ground we were having 25 mph sustained winds and gusts over 40. Had we not checked our fenceline to find a short in our electric line the next morning we would never have even found the papers. The server must have put them on top of our delivery tote outside our locked gate and they blew off in the storm. Here he has to leave them with a person; either the person to be served or a person of reasonable age and understanding who resides at the household-no other legal options are available. He did neither and will have to lie about the service, which should be easy to prove since we were all at work that day till 7pm (do construction work and were installing tile in a person's home...they were there the whole day). We also participate in a prisoner rehabilitation program and employ guys from the local parish prision who are minor offenders. We had one checked out and signed him in and out that day, so the sheriff has a log of that.

Otherwise, we will be fighting the judgment for the next billion years. Even though we more than qualify, I am afraid that bankruptcy would be a pain with the LLC involved. They can't get our house since a law was passed last year that protects the first 35,000 in equity and makes it illegal for it to be sold to satisfy a credit card debt. They would have to work really hard to undo our LLC. All they could initially do is raid our bank accounts, which I keep empty anyway. Otherwise, we really have no assets for them to take. Anything they may have gotten we have sold to pay my medical expenses, which is why we stopped paying them...I needed medical insurance before I got to the point where everything would have been a pre-existing condition. *end of whine*

[ServicePeasant]

This is where the problem lies, if you won't agree to any arbitration forum - you are being unreasonable.

If the Plaintiff keeps showing the judge in good faith they have been proposing alternative arbitration forums but you keep rejecting every single one of them, you better have a damn good reason as to why you do not want that particular forum.

If a judge is seeing that you are trying to be spiteful and uncooperative, and not putting in a good fairth to attempt to come to a resolution of the dispute setforth he is likely to rule against you and he does have the power to completely strike the arbitration clause.

Okay, that makes sense; thanks for breaking that down for me. Also, being you are a process server.....do we stand a chance of proving the dump and run service we experienced? I described it in the reply above as well as a brief view of Louisiana laws. Thanks for your expertise....I have called multiple attornies for their free consultation and gotten a bevy of different responses from them. I understand insufficiency of service can be used as a declinatory exception, but does not tend to defeat the suit. I figure if we use it, they will just send a better server out next time and do it correctly.

[Guest usctrojanalum]

I have read over Louisiana Process serving rules and regulations before, and from what I remember you can only serve defendants personally or someone who is of suitable age and discretion living at the abode of the defendant (I've read case law in LA that someone who is of suitable age is as young as 11 years old)

If you raised in your answer an affirmative defense of 'lack of personal jurisdiction' that could be enough to get your case dismissed and force the plaintiff to refile.

Obviously that should not be your only affirmative defense, I would also put the part about a binding contractual arbitration agreement.

[ServicePeasant]

I have read over Louisiana Process serving rules and regulations before, and from what I remember you can only serve defendants personally or someone who is of suitable age and discretion living at the abode of the defendant (I've read case law in LA that someone who is of suitable age is as young as 11 years old)

If you raised in your answer an affirmative defense of 'lack of personal jurisdiction' that could be enough to get your case dismissed and force the plaintiff to refile.

Obviously that should not be your only affirmative defense, I would also put the part about a binding contractual arbitration agreement.

Thanks, that is what I thought....nice to hear it from a pro though.

[ServicePeasant]

Massive,

Thanks for the PM....I don't have enough posts to answer you yet. Has anyone on here used this strategy successfully?

[BV80]

Service I also don't have enough posts to reply to a PM. No, my affidavit was signed by someone different. Also, I did find out that the certification of authentication for a notary's signature is only required for documents sent out of the country. So much for that. Thank you for the other information. I will definitely look into it. Good luck!

[BV80]

I received a PM, but cannot reply yet. No, my affadavit was not signed by Aaron Spain.

[rippedoff]

Don't skip any description of deceitful behavior on the part of the plaintiff. If there was anything wrong about the service, bring it up. Even if you don't get it dismissed for improper service, I've found the court is getting a little more friendly each time I point out another deceit or attempted fraud on the court. They keep piling up. Make the judge want to help you. And, it keeps the attorney mumbling.

[LUEser]

What if you can agree to do it in JAMS. At that point, you're not being unreasonable by suggesting another forum for ARB. If they decline, then they become the unreasonable party.

I'm not sure that JAMS would accept a claim if they're not listed, but if you made the petition to them that NAF and AAA aren't accepting the case but the contract does have a binding arbitration clause, and your state law requires that an alternative forum be agreed upon, then they may at least consider it.

I'm not sure if anyone has tried it before, but it couldn't hurt if ARB is the way you're looking to go.