Let's have a discussion on affirmative defenses

[admin]

There's been lots of discussion on affirmative defenses recently. Let's talk about a couple.

#1

Let's say it's a JDB suing and you have no idea who these people are, you never entered into a contract with an OC who sold to this JDB.

Aren't Lack of Privity and Failure of Consideration valid defenses in this case?

#2

Let's say you have a JDB who has no documentation proving they purchased the debt. Isn't Lack of Standing a valid defense? (You can't prove a negative, in the case of the Defendant).

Edited November 23, 2011 by admin

[usagi555]

For #1, I'd say that the part in the chard holder agreement that allows the account to be assigned to another entity will shoot down lack of privity right off of the bat. Failure of consideration could be a valid defense if they are suing you for unjust enrichment or some other doctrine that is retarded when applied to a CC case, but you wouldn't need to use it as an affirmative defense. They need to show that you were enriched at their expense for that claim anyway.

For #2, why make it so that you have to prove they don't have standing? Shoot down all of their bogus evidence. That they own the debt will or should be one of their allegations. Deny that and deny it hard.

[nascar]

Rule 8© of the Federal Rules list a few contentions which are considered to be affirmative defenses. However, any number of contentions can be an "affirmative defense." What is or is not recognized as an affirmative defense is a matter of state law. See, e.g., Troxler v Owens-Illinois, Inc., 717 F2d 530 (1983, CA11 Ga) (determining whether contention is affirmative defense for purposes of Rule 8© is matter of state law).

That being the case, there are really only a few things you need to know to determine whether a certain defense is an affirmative defense. First, if the defense is one of the enumerated affirmative defenses in your state's rules of civil procedure, it is an affirmative defense. Secondly, if it merely rebuts an allegation in the complaint (I don't owe the debt), it probably is not an affirmative defense. Finally, finish the sentence, "Even if the allegations in the complaint are true, the plaintiff is not entitled to recover anything from me because . . . . ."

Using the finish the sentence approach, it's pretty easy to realize that, if you say, "even if I do owe the money, the plaintiff isn't entitled to recover because the statute of limitations has expired," statute of limitations is an affirmative defense.

On the other hand, "even if I do owe the money, the plaintiff isn't entitled to recover because he violated the FDCPA," you can tell pretty quickly that violating the FDCPA is not an affirmative defense.

Here is a partial list of defenses that have been recognized at one time or another as affirmative defenses:

Particular Defenses

120. Accord and satisfaction

121. After-acquired evidence

122. Anti-Assignment Act

123. Arbitration and award

124. Assumption of risk

125. Breach of contract or warranty

126. Buyer in ordinary course of business

127. Changed circumstances

128. Circuitous action

129. Contributory negligence

131. Custom

132. Duress

133. Ellerth and Faragher defense

134. Equitable recoupment

135. Estoppel

136.--Judicial estoppel

137. Failure of consideration

138. Failure to exhaust state or administrative remedies

139. Fraud or lack of good faith

140. Good faith

141. Hindrance of performance of contract

142. Illegality

143. Immunity

144.--Qualified immunity

145. Impossibility

146. Imputed negligence

147. Insurance policy exclusion

148. Invalidity of patent

149. Joint venture

150. Laches

151. Lack of standing

152. Lack of venue

153. Liability of phantom party

154. License

155. Merger

156. Mitigation and set-off

157. Mixed motive discrimination

158. Nonmanufacture

159. Novation

160. Partial contract

162. Payment

163. Pre-emption

164. Provocation

165. Rescission or abandonment of contract

166. Res judicata and collateral estoppel

168.--Failure to plead

169.----Raised for first time on appeal

170. Release or discharge of contractual obligation

171.--Bankruptcy

172. State automobile injury reparations law

173. Statute of frauds

174. Statute of limitations

175.--Failure to plead

178.----Bar appearing on face of complaint

179. Statutory employer

180. Statutory limitation on damages

181. Termination agreement

182. Timeliness of removal petition

183. Unclean hands

184. Usury

185. Violation of law or regulations

186. Waiver

187. Wrong party

[admin]

So using your criteria, I'm going to talk about failure of consideration. It's my understanding that even if a contract was signed by both parties and the defendant is one of those parties, if no consideration was received, the contract is void.

failure of consideration - True statement?

"Even if contract was signed by Defendant, the case is not valid because no consideration was received by Defendant under terms of the contract."

Lack of standing - True Statement?

"Even if Defendant owes the money, the lawsuit cannot be won because the Plaintiff lacks the standing to bring the suit."

[usagi555]

Right, it is true that even if you owe the money, but the plaintiff cannot show that it has standing, that makes it look like an affirmative defense, but take a look at this from a JDB complaint:

III.

Plaintiff is informed and believes that within the last six years the defendant entered into a written credit account agreement bearing number XXXX XXXX XXXX **** or has made a payment pursuant to the terms of the written agreement. The plaintiff is the owner and holder of the account.

Notice that they are claiming that they have standing. The burden of proof is on them. Denying that averment is the same as claiming lack of standing, except it doesn't shift the burden of proof to you.

[Seadragon]

failure of consideration, failure to state a cause of action for which relief can be given, Collateral Estoppel, unclean hands, and others for common law are valid.

but the point of contention lately is the fact that many states require these to be plead in the answer and are estopped from adding them later.

Our real discussion would necessarily turn to the requirement to prove these defenses later, and many of the members here do not know how the defenses they list in their answer are later used to defend their case.

I am of the mind that they should be added initially because amending them later might be opposed by the other side who may necessarily win on the motion, get legal fees, and then Dismiss without Predjudice, and sell the "debt" down the line.

while recent discussions have include plaintiff's interrogatories requesting the information upon which the defenses are based, the newer members, and some of the more experienced members are at a loss for how to respond to those interrogatories because the plaintiff's deny us discovery.

So any discussion would have to expand on the affirmative defenses and their applicability and application to cases.

As and for a First Defense

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.

As and for a Second Defense

Defendant alleges that this action is time-barred under §<insert the law which states SOL> of the laws of <name of your state>.

As and for a Third Defense

Plaintiff admits to purchasing the defaulted debt allegedly owned by the Defendant, causing Plaintiff's injury to its own self, therefore Plaintiff is barred from seeking relief for damages.

As and for a Fourth Defense

Plaintiff's Complaint violates the statute of Frauds as the purported contract or agreement falls within a class of contracts or agreements required to be in writing. the purported contract or agreement alleged in the Complaint is not in writing and signed by the Defendant or by some other person authorized by the Defendant and who was to answer for the alleged debt, default or miscarriage of another person.

As and for a Fifth Defense

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.

As and for a Sixth Defense

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

As and for a Seventh Defense

Defendant alleges that the Complaint includes references to alleged agreements made outside of the alleged written contract, violating the Parole Evidence Rule.

As and for an Eighth Defense

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.

As and for a Ninth Defense

Plaintiff's complaint fails to allege whether or not the purported assignment was partial or complete and there is no evidence that the purported assignment was bona fide.

As and for a Tenth Defense

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.

As and for an Eleventh Defense

The Plaintiff is not an Assignee for the purported agreement and no evidence appears in the record to support any related assumptions.

As and for a Twelfth Defense

Defendant claims Accord and Satisfaction as Defendant alleges that the original creditor accepted payment from a third party for the alleged debt, or a portion of the alleged debt, or that the original creditor received other compensation in the form of monies and/or credits.

As and for an Thirteenth Defense

Defendant invokes the Doctrine of Unclean Hands as the Defendant alleges that the Plaintiff or the person or entity that assigned the alleged claim to Plaintiff acted in a dishonest or fraudulent manner with respect to the dispute at issue in this case.

As and for a Fourteenth Defense

Plaintiff is not authorized or licensed to advertise or solicit, either in print, by letter, in person or otherwise the right to collect or receive payment of a claim for another, nor to seek to make collection or obtain payment of a claim on behalf of another. The Complaint fails to allege any exception or exemption to these requirements. The Plaintiff is not any of the following: an attorney at law; a person regularly employed on a regular wage or salary in the capacity of credit men or a similar capacity, except as an independent contractor; a bank, including a trust department of a bank, a fiduciary or a financing and lending institution; a common carrier; a title insurer or abstract company while doing an escrow business; a licensed real estate broker; an employee of a licensee; nor a substation payment office employed by or serving as an independent contractor for public utilities.

As and for a Fifteenth Defense

Defendant alleges that Plaintiff's Complaint, and each cause of action therein is barred by the Doctrine of Estoppel, specifically Estoppel in Pais.

As and for a Sixteenth Defense

Defendant alleges that Plaintiff's actions are precluded, whereas Plaintiff's demands for interest are usurious and violate state and federal laws.

As and for a Seventeenth Defense

Defendant alleges that Plaintiff or the person or entity that assigned the alleged claim to the Plaintiff is not entitled to reimbursement of attorneys' fees because the alleged contract did not include such a provision, and there is no law that otherwise allows them.

As and for an Eighteenth Defense

Defendant invokes the Doctrine of Laches as the Plaintiff or the person or entity that assigned the claim to the Plaintiff waited too long to file this lawsuit, making if difficult or impossible for the Defendant to find witnesses or evidence or that evidence necessary to provide for Defendant's defense has been lost or destroyed.

As and for a Nineteenth Defense

Plaintiff has no Fiduciary Duty.

As and for a Twentieth Defense

Plaintiff has failed to name all necessary parties.

As and for a Twenty-first Defense

Plaintiff's alleged damages are the result of acts or omissions committed by non-parties to this action over whom the Defendant has no responsibility or control.

As and for a Twenty-second Defense

Plaintiff's alleged damages are the result of acts or omissions committed by the Plaintiff.

As and for a Twenty-third Defense

Defendant alleges that the granting of the Plaintiff's demand in the Complaint would result in Unjust Enrichment, as the Plaintiff would receive more money than plaintiff is entitled to receive.

As and for a Twenty-fourth Defense

Plaintiff's alleged damages are limited to real or actual damages only.

As and for a Twenty-fifth Defense

Defendant invokes the doctrines of Scienti et volenti non fit injuria (a person who knowledgeably consents to legal wrong has no legal right) and Damnum absque injuria (harm without injury).

As and for a Twenty-sixth Defense

<Have you sued these folks before and won? If so, include this defense>

Since under collateral estoppel, once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude relitigation of the issue in a suit on a different cause of action involving a party to the first case, plaintiff’s claims are barred. We cite case XXXX-XXXX September 2004.

As and for a Twenty-seventh Defense

Since a court will not grant a judgment or other legal relief to a party who has not acted fairly by having made false representations or concealing material facts from the other party, <insert others here>, we maintain that equitable estoppel bar plaintiff’s claims.

As and for a Twenty-eight Defense

Defendant reserves the right to amend and/or add additional Answers, Defenses and/or Counterclaims at a later date.

That pretty much sets the table so to speak.

[nascar]

failure of consideration - True statement?

"Even if contract was signed by Defendant, the case is not valid because no consideration was received by Defendant under terms of the contract."

Consideration (in a bilateral contract) is a bargained-for exchange; a promise in exchange for a promise. In the case of a simple two party credit agreement, the "promise" is "I, creditor, promise to provide goods and services now, in exchange for your promise to pay later." In the case of a typical bank credit card (tripartite) agreement. The bank agrees to pay the merchant, the merchant agrees to accept the bank's promise of payment, and the consumer promises to repay the bank.

A failure of consideration occurs when the subject of the bargain is lost or destroyed. Example: Fred, if you paint my house, I'll let you stay in my vacation home in for one month. Assume then, that before Fred begins to paint my house, my vacation home is destroyed by fire. The consideration offered to Fred to paint my house no longer exists. Because there has been a "failure of consideration," Fred is no longer contractually obligated to paint my house.

[Seadragon]

Right, it is true that even if you owe the money, but the plaintiff cannot show that it has standing, that makes it look like an affirmative defense, but take a look at this from a JDB complaint:

Notice that they are claiming that they have standing. The burden of proof is on them. Denying that averment is the same as claiming lack of standing, except it doesn't shift the burden of proof to you.

Especially the issue of standing. Where a sworn counter affidavit (required by many states) may be enough to satisfy the requirements necessary to "prove" the defense.

without the knowledge of the defenses, members are at the mercy of the court and plaintiff who will strike the defenses because they have no information or specificity.

"The distinction is significant because a plea in abatement such as lack of capacity to sue "must be raised by defendant at the earliest opportunity or it is waived…. The proper time to raise a plea in abatement is in the original answer or by demurrer at the time of the answer. [Citation.] It is a technical objection and must be pleaded specifically. Thus an affirmative defense or demurrer which contains a general assertion that plaintiff has not stated a cause of action does not suffice to raise a plea in abatement. [Citations]." ( Vitug v. Griffin (1989) 214 Cal. App. 3d 488, 493-494 [262 Cal. Rptr. 588]; Horsemen's Benevolent & Protective Assn. v. Valley Racing Assn. (1992) 4 Cal. Cal. App. 4th 1538, 1550, fn. 6 [6 Cal. Rptr. 2d 698].) n5 Lack of standing, by contrast, is not waived by failure to timely object. ( Parker v. Bowron, supra, 40 Cal. 2d at p. 351.) Indeed, lack of standing to sue can be raised at any time, even for the first time on appeal. (See Common Cause v. Board of Supervisors (1989) 49 Cal. 3d 432, 438-439 [261 Cal. Rptr. 574, 777 P.2d 610].)" Color-Vue, Inc. v. Abrams, 44 Cal. App. 4th 1599 (Cal. App. 2d Dist. 1996)

Edited November 21, 2011 by Seadragon
adding case cite

[usagi555]

I personally wouldn't add one if I didn't understand it well enough to articulate why I included it and how I was going to use it. The problem is that many people get served, cannot afford an attorney, have 20 or 30 days to respond and they have to put stuff into their response without having an opportunity to learn what it really means.

[nascar]

... the issue of standing ...

is very nicely explained in this 1992 Supreme Court opinion:

Over the years, our cases have established that the irreducible constitutional minimum of standing contains three elements. First, the plaintiff must have suffered an "injury in fact" -- an invasion of a legally protected interest which is (a) concrete and particularized, and ( "actual or imminent, not "conjectural" or "hypothetical."

Second, there must be a causal connection between the injury and the conduct complained of -- the injury has to be "fairly . . . traceable to the challenged action of the defendant, and not . . . the result of the independent action of some third party not before the court."

Third, it must be "likely," as opposed to merely "speculative," that the injury will be "redressed by a favorable decision."

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-561 (U.S. 1992)

[legaleagle]

So using your criteria, I'm going to talk about failure of consideration. It's my understanding that even if a contract was signed by both parties and the defendant is one of those parties, if no consideration was received, the contract is void.

failure of consideration - True statement?

"Even if contract was signed by Defendant, the case is not valid because no consideration was received by Defendant under terms of the contract."

Lack of standing - True Statement?

"Even if Defendant owes the money, the lawsuit cannot be won because the Plaintiff lacks the standing to bring the suit."

As applied to contracts, this term does not necessarily mean a want of consideration, but implies that a consideration, originally existing and good, has since become worthless or has ceased to exist or been extinguished, partially or entirely. It means that sufficient consideration was contemplated by the parties at the time the contract was entered into, but either on account of some innate defect in the thing to be given, or nonperformance in whole or in part of that which the promisee agreed to do, nothing of value can be or is received by the promisee.

[admin]

As applied to contracts, this term does not necessarily mean a want of consideration, but implies that a consideration, originally existing and good, has since become worthless or has ceased to exist or been extinguished, partially or entirely. It means that sufficient consideration was contemplated by the parties at the time the contract was entered into, but either on account of some innate defect in the thing to be given, or nonperformance in whole or in part of that which the promisee agreed to do, nothing of value can be or is received by the promisee.

Can you explain this more in layman's terms. I couldn't quite follow it.

[admin]

As applied to contracts, this term does not necessarily mean a want of consideration, but implies that a consideration, originally existing and good, has since become worthless or has ceased to exist or been extinguished, partially or entirely. It means that sufficient consideration was contemplated by the parties at the time the contract was entered into, but either on account of some innate defect in the thing to be given, or nonperformance in whole or in part of that which the promisee agreed to do, nothing of value can be or is received by the promisee.

Another point: So in the example I gave (you never entered into an agreement with either the OC or JDB), if failure of consideration isn't the question, wouldn't lack of privity be the affirmative defense since there was no contract to begin with?

[legaleagle]

failure of consideration, failure to state a cause of action for which relief can be given, Collateral Estoppel, unclean hands, and others for common law are valid.

but the point of contention lately is the fact that many states require these to be plead in the answer and are estopped from adding them later.

Our real discussion would necessarily turn to the requirement to prove these defenses later, and many of the members here do not know how the defenses they list in their answer are later used to defend their case.

I am of the mind that they should be added initially because amending them later might be opposed by the other side who may necessarily win on the motion, get legal fees, and then Dismiss without Predjudice, and sell the "debt" down the line.

while recent discussions have include plaintiff's interrogatories requesting the information upon which the defenses are based, the newer members, and some of the more experienced members are at a loss for how to respond to those interrogatories because the plaintiff's deny us discovery.

So any discussion would have to expand on the affirmative defenses and their applicability and application to cases.

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

In the states that do not have this requirement, such as mine, adding affirmative defenses leads to a motion to strike and a court appearance to argue the defenses. Judges here usually allow whatever you put in unless it is completely out of bounds as a matter of law. For instance, I don't think the insanity defense would work in a CC case, although appearing in court strapped to a hand truck might get you a little sympathy from the jury. I objected to a few, and the judge told me that although my argument was good, he would allow them to go forward because, as he said, "the side claiming the defense still has to prove it and convince a jury that it works."

As and for a First Defense

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.

I never liked this one, but I used it myself against account stated just to see what would happen. Haven't gotten the result yet. I expect to lose this one, but I wanted it on the record. I used it because there is no such cause of action mentioned in any state law, banking law, Regulation Z, or jury instructions. It is simply a theory of litigation. Generally, if the cause of action you have claimed can lead to a judgment against the other side if proved, you're in. However, using incorrect or improper statutes, such as a criminal statute in a civil case or a statute which only the state has the right to enforce, will get the cause kicked. In CC cases, it is usually filed under contracts or collections of some type, which is a valid cause of action.

As and for a Second Defense

Defendant alleges that this action is time-barred under §<insert the law which states SOL> of the laws of <name of your state>.

Good, just about foolproof, but I should think this would be better used in a Motion to dismiss the case rather than wait until some later date to use it.

As and for a Third Defense

Plaintiff admits to purchasing the defaulted debt allegedly owned by the Defendant, causing Plaintiff's injury to its own self, therefore Plaintiff is barred from seeking relief for damages.

This one is legally insufficient, I've never seen it work. What you are saying here is "I'm a deadbeat, you should have known better, and if you were stupid enough to buy a credit card in default, you have no right to collect the money." The underlying theory is absolutely incorrect and would never work. If it did, why can't you use the same type of argument against an OC? After all, they took the risk as well. LEGALLY, key word, the JDB DOES have a right to collect the money, if he can. If he did not, there would be no credit cards cases allowed in courts.

As and for a Fourth Defense

Plaintiff's Complaint violates the statute of Frauds as the purported contract or agreement falls within a class of contracts or agreements required to be in writing. the purported contract or agreement alleged in the Complaint is not in writing and signed by the Defendant or by some other person authorized by the Defendant and who was to answer for the alleged debt, default or miscarriage of another person.

I've read a lot of statutes of frauds, and not one of them includes credit cards. It simply won't work.

As and for a Fifth Defense

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.

This was discussed above. Since the plaintiff has a legal right to collect the money as the owner of the account, and it is a credit arrangement, this consideration jive won't fly. Usually this is under contract law, not consumer debt law.

As and for a Sixth Defense

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

I think we can all agree this is a waste of time. The JDB has the same rights as the OC. Again, if this worked, there would be no JDB law suits allowed.

As and for a Seventh Defense

Defendant alleges that the Complaint includes references to alleged agreements made outside of the alleged written contract, violating the Parole Evidence Rule.

A bit confusing. I've never seen a CC complaint that mentioned anything other than we lent you money, you agreed to pay us, but you didn't. I don't know what these other agreements are. You'd have to be more specific.

As and for an Eighth Defense

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.

I think this one would be struck as legally insufficient. The purpose of the complaint is to put the defendant on notice as to what the plaintiff intends to prove, nothing more. It also mixes two theories together, mentioning consideration again. The "valid assignment" is something that would be cleared up in discovery.

As and for a Ninth Defense

Plaintiff's complaint fails to allege whether or not the purported assignment was partial or complete and there is no evidence that the purported assignment was bona fide.

This would be the same as the one above. The Complaint does not have to set forth evidence. You have to ask for it in discovery.

As and for a Tenth Defense

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.

The complaint alleges assignment by virtue of the fact that the plaintiff is who he claims to be. The assignor would be the OC, completely out of the picture unless there is fraud going on and the plaintiff does not own the account. Again, a discovery issue.

As and for an Eleventh Defense

The Plaintiff is not an Assignee for the purported agreement and no evidence appears in the record to support any related assumptions.

Same as the one above

As and for a Twelfth Defense

Defendant claims Accord and Satisfaction as Defendant alleges that the original creditor accepted payment from a third party for the alleged debt, or a portion of the alleged debt, or that the original creditor received other compensation in the form of monies and/or credits.

Doesn't matter, and is privileged and confidential. The amount the OC sold the account for does not get subtracted from the total amount of the debt, it just gets transferred to a different party, the JDB. Kind of like having someone buy your mortgage and you claim you no longer have to make the payments. Try that one and see what happens. Call a moving truck first!

[legaleagle]

As and for an Thirteenth Defense

Defendant invokes the Doctrine of Unclean Hands as the Defendant alleges that the Plaintiff or the person or entity that assigned the alleged claim to Plaintiff acted in a dishonest or fraudulent manner with respect to the dispute at issue in this case.

Fraud usually has to be "specially pleaded." It is a rather serious charge, has 4 elements which must be proven, and can theoretically lead to a contract being void ab initio. (from the start) This defense is also convoluted because it mentions the assignor as having somethng to do with the case, which they do not.

As and for a Fourteenth Defense

Plaintiff is not authorized or licensed to advertise or solicit, either in print, by letter, in person or otherwise the right to collect or receive payment of a claim for another, nor to seek to make collection or obtain payment of a claim on behalf of another. The Complaint fails to allege any exception or exemption to these requirements. The Plaintiff is not any of the following: an attorney at law; a person regularly employed on a regular wage or salary in the capacity of credit men or a similar capacity, except as an independent contractor; a bank, including a trust department of a bank, a fiduciary or a financing and lending institution; a common carrier; a title insurer or abstract company while doing an escrow business; a licensed real estate broker; an employee of a licensee; nor a substation payment office employed by or serving as an independent contractor for public utilities.

No, they are an investor who owns your debt. They are acting on behalf of themselves, not "another." Right out the window with this one.

As and for a Fifteenth Defense

Defendant alleges that Plaintiff's Complaint, and each cause of action therein is barred by the Doctrine of Estoppel, specifically Estoppel in Pais.

Too much like unclean hands. The conduct would have to be specific and proven to a jury.

As and for a Sixteenth Defense

Defendant alleges that Plaintiff's actions are precluded, whereas Plaintiff's demands for interest are usurious and violate state and federal laws.

Usury does not apply to credit card cases. Virtually all of these issuers are exempt from any state law concerning usury, and they are all incorporated in states where there is no limit on interest rates for credit cards. Individual state laws concerning the manner in which that "no limit" must be achieved, choice of law provisions, and the validity of the so called cardholder agreement binding you to the laws of another state are factors. I like this theory, but as a counterclaim for all the excess interest rather than as a usury charge.

As and for a Seventeenth Defense

Defendant alleges that Plaintiff or the person or entity that assigned the alleged claim to the Plaintiff is not entitled to reimbursement of attorneys' fees because the alleged contract did not include such a provision, and there is no law that otherwise allows them.

This may work in post judgment arguments. At any rate, just be sure the law is as you state. Cite the state statute if you use this, and attach the agreement as proof.

As and for an Eighteenth Defense

Defendant invokes the Doctrine of Laches as the Plaintiff or the person or entity that assigned the claim to the Plaintiff waited too long to file this lawsuit, making if difficult or impossible for the Defendant to find witnesses or evidence or that evidence necessary to provide for Defendant's defense has been lost or destroyed.

Equitable defense, not good here. As long as the case was filed within the SOL this one won't fly. Besides, what evidence or witnesses can't you find? What would that evidence have proven? The factual basis must be included in the defense.

As and for a Nineteenth Defense

Plaintiff has no Fiduciary Duty.

Lenders have no fiduciary duty to borrowers. They act in their own interest. You didn't hire them. This is what the defense states, which makes no sense.

As and for a Twentieth Defense

Plaintiff has failed to name all necessary parties.

You are the only party named. Does anybody else owe part of the money? If so, file a motion to join interested parties or sue them as a third party defendant.

As and for a Twenty-first Defense

Plaintiff's alleged damages are the result of acts or omissions committed by non-parties to this action over whom the Defendant has no responsibility or control.

Plaintiff's damages are the result of defendant's failure to pay, as stated in the complaint. The acts and omissions have to be plead in a manner that shows some material fact. How does a non-party cause damages?

As and for a Twenty-second Defense

Plaintiff's alleged damages are the result of acts or omissions committed by the Plaintiff.

Same as one of the ones above.

As and for a Twenty-third Defense

Defendant alleges that the granting of the Plaintiff's demand in the Complaint would result in Unjust Enrichment, as the Plaintiff would receive more money than plaintiff is entitled to receive.

UE is to be used when somebody already has your money, not in this contect. If you win on the merits, you won't have to pay the plaintiff.

As and for a Twenty-fourth Defense

Plaintiff's alleged damages are limited to real or actual damages only.

Doubtful they are suing you for anything else. This is a statement of fact, not a defense.

As and for a Twenty-fifth Defense

Defendant invokes the doctrines of Scienti et volenti non fit injuria (a person who knowledgeably consents to legal wrong has no legal right) and Damnum absque injuria (harm without injury).

This makes no sense to me. Conjures up visions of Doc Holliday twirling his drink cup in Tombstone. I'd skip this one, and the Latin.

As and for a Twenty-sixth Defense

<Have you sued these folks before and won? If so, include this defense>

Since under collateral estoppel, once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude relitigation of the issue in a suit on a different cause of action involving a party to the first case, plaintiff’s claims are barred. We cite case XXXX-XXXX September 2004.

This is res judicata. Kind of like been there, done that in court. Sorry, Doc. that's the name they use, I swear. I don't know the context, but if you have two CC with the same guy and he sues you twice, guess what, you get sued twice. Hope that he files them while they are both active and have them consolidated.

As and for a Twenty-seventh Defense

Since a court will not grant a judgment or other legal relief to a party who has not acted fairly by having made false representations or concealing material facts from the other party, <insert others here>, we maintain that equitable estoppel bar plaintiff’s claims.

You would have to prove this one like fraud.

As and for a Twenty-eight Defense

Defendant reserves the right to amend and/or add additional Answers, Defenses and/or Counterclaims at a later date.

That is a conclusion, not a defense.

That pretty much sets the table so to speak.

[Coltfan1972]

The problem is the original contract you entered into allows for the transfer or the selling of your account to another party. For example, you live in an apt complex and new management buys the complex. You keep the same lease, because it was written into the original lease that could be done.

It's in the contract they can sell or transfer your account and the new party steps into the shoes of the original creditor. However, and how we win most of the time, that also means they accept all the requirements in proving their case just as an original creditor would be required. So it works both ways.

However, the simple answer is you agreed to let them sell or transfer your account to a party that you had no contact with or possibly even knew exisisted when you entered into a contact with the original creditor.

[nascar]

... if failure of consideration isn't the question, wouldn't lack of privity be the affirmative defense since there was no contract to begin with?

Lack of privity necessarily implies that there is a contract. But, the third party seeking to enforce the contract is not entitled to do so.

In that regard, lack of privity is an affirmative defense if it is your position that you (1) had a contract with the creditor, and (2) the party seeking to enforce the terms of the contract is not the creditor, but some other third party not entitled to the benefit of the bargain.

[legaleagle]

Can you explain this more in layman's terms. I couldn't quite follow it.

It's just a legal definition. Nascar explained it perfectly. Here's my main gripe with this defense; it sounds like some kind of legal trickery designed on non-existent technicalities, the purpose of which is to avoid payment of a debt where you have no other valid defense.

They (the plaintiff) will argue that this, as described by Nascar, does not even apply. Consideration in their mind took place when you used the account and received goods or services. Now you owe the money. Prove you don't. Very simple.

If these JDBs ever get their stuff together, we're going to be discussing different topics here, like what to do after you lose your case.

[lheart]

I think "Lack of Standing" is the Achilles heal of JDB cases. They almost always have valid assignment of the debt, but choose not to reveal the full contract and details for public court records.

There are some states where they are only allowed the collect the amount they paid for the debt, so this becomes a problem for them in these states.

[notgoingdown1]

I think "Lack of Standing" is the Achilles heal of JDB cases. They almost always have valid assignment of the debt, but choose not to reveal the full contract and details for public court records.

There are some states where they are only allowed the collect the amount they paid for the debt, so this becomes a problem for them in these states.

In regards to the statement that I have put in bold, how would I find out if this applies to my state? Is this something that would be found in case law?

[jq26]

There are some states where they are only allowed the collect the amount they paid for the debt, so this becomes a problem for them in these states.

That would be new information to me if this is indeed true. That would eliminate purchase of these debts because the price of any account would have to be mjuch much smaller than the face value of the claim in order to heavily discount for future collection costs, risk of bk, and risk of lack of attachable assets.

If I were to set up shop and buy charged off credit card accounts, I'd probably pay $30,000 for a $1,000,000 worth of claims MAX. That's all they're worth. If that $1,000,000 now becomes $30,000 due to the statute, then the $30,000 in claims is only now worth $1,000. But then the $30,000 in claims is now only worth $1,000......I'm illustrating that a statute such as that would effectively shut down debt collection in whatever state you are referring to. My guess is, if this is true, that the industry response would be for original creditors to then collect internally, eliminating FDCPA and that ridiculous statute you are referring to.

[BV80]

I was one of those that used to believe you must include affirmative defenses in your answer. After reading some of Coltfan's posts, I've changed my mind, because he makes sense.

Lack of privity: You had no contract with the JDB. But what if the JDB provides a cc statement with the Complaint or during discovery. By raising this defense, you place the burden of proof upon yourself to show the JDB did not step into the shoes of the creditor. This goes back to ownership which goes back to standing.

Lack of consideration: You place the burden of proof upon yourself to show that you didn't have an agreement with anyone to pay money back in exchange for something else (purchases made on a credit card). If the JDB provides copies of cc statements, they've proven you made charges on an account and agreed to pay a credit card company for those purchases. You now have to prove you don't owe the JDB for those purchases. Again, it goes back to the JDB's standing to sue for that money.

Unless your court rules require a defense such as "Lack of Standing" to be raised in your answer, I believe it's better to use a statement such as "Defendant reserves the right to raise affirmative defenses as they become known to Defendant during discovery." It makes sense that if you deny knowledge of the account, and the JDB has provided no evidence with the Complaint, you don't know what defenses you can raise because you don't recognize the account and have never heard of the Plaintiff.

Just because a JDB claims in the Complaint or an affidavit that they have standing doesn't make it so. It doesn't matter if they prove you owe money to someone, they have to prove they have standing to sue for that money. Make THEM prove standing. Unless your court rules require you claim standing as an affirmative defense, don't put the burden of proof on yourself to show they don't have that standing.

Don't muddy the waters with defenses you can't prove or don't need. Don't put the burden of proof on yourself. Leave it on the JDB.

[admin]

I was one of those that used to believe you must include affirmative defenses in your answer. After reading some of Coltfan's posts, I've changed my mind, because he makes sense.

I think there's still disagreement between some of the legal minds here. I'm not throwing in the towel on these.

Lack of privity: You had no contract with the JDB. But what if the JDB provides a cc statement with the Complaint or during discovery. By raising this defense, you place the burden of proof upon yourself to show the JDB did not step into the shoes of the creditor. This goes back to ownership which goes back to standing.

I think the argument nascar put about this made lack of privity a valid offense. Lack of privity necessarily implies that there is a contract. But, the third party seeking to enforce the contract is not entitled to do so.

In that regard, lack of privity is an affirmative defense if it is your position that you (1) had a contract with the creditor, and (2) the party seeking to enforce the terms of the contract is not the creditor, but some other third party not entitled to the benefit of the bargain.

Lack of consideration: You place the burden of proof upon yourself to show that you didn't have an agreement with anyone to pay money back in exchange for something else (purchases made on a credit card).

I disagree - you don't put the burden of proof on yourself.

Unless your court rules require a defense such as "Lack of Standing" to be raised in your answer, I believe it's better to use a statement such as "Defendant reserves the right to raise affirmative defenses as they become known to Defendant during discovery." It makes sense that if you deny knowledge of the account, and the JDB has provided no evidence with the Complaint, you don't know what defenses you can raise because you don't recognize the account and have never heard of the Plaintiff.

I disagree - if the Plaintiff indeed has lack of standing, this renders a dismissal decision more likely. You can ask for proof in discovery.

Don't muddy the waters with defenses you can't prove or don't need. Don't put the burden of proof on yourself. Leave it on the JDB.

Agreed.

[BV80]

I think the argument nascar put about this made lack of privity a valid offense. Lack of privity necessarily implies that there is a contract. But, the third party seeking to enforce the contract is not entitled to do so.

In that regard, lack of privity is an affirmative defense if it is your position that you (1) had a contract with the creditor, and (2) the party seeking to enforce the terms of the contract is not the creditor, but some other third party not entitled to the benefit of the bargain.

My point is that if you deny knowledge of the account, you don't want to imply there was a contract with an original creditor. Even if the JDB proves there was an agreement with an OC, their claim that they (JDB) are owed the money goes right back to ownership and standing.

I disagree - you don't put the burden of proof on yourself.

Black's Law Dictionary:

affirmative defense.A defendant's assertion of facts and arguments that, if true, will defeat the plaintiff's or prosecution's claim, even if all the allegations in the complaint are true. • The defendant bears the burden of proving an affirmative defense.

I disagree - if the Plaintiff indeed has lack of standing, this renders a dismissal decision more likely. You can ask for proof in discovery.

There's no disagreement here. You make discovery requests, and when they don't provide proof of ownership, you point out they haven't proven THEIR claim of ownership and standing to sue. That's what I meant about keeping the burden of proof on them.

[nobk4me]

I think "Lack of Standing" is the Achilles heal of JDB cases. They almost always have valid assignment of the debt, but choose not to reveal the full contract and details for public court records.

There are some states where they are only allowed the collect the amount they paid for the debt, so this becomes a problem for them in these states.

I know this is the case for Kentucky. It's in statute, I think.