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I recently got a summons from Mapother and Mapother in reference to a Chase credit card I had back in 2008. I live in Kentucky. They sent me interrogatories to fill out and send back, in which I did. I did not admit to the debt. I sent interrogatories to them and on one of the questions I asked "What was the amount the Plaintiff purchased the original debt for?" Their reply was: "Objection: This interrogatory seeks information that is proprietary or confidential in nature, or which constitutes a trade secret. It is also not reasonably calculated to lead to the discovery of admissible evidence."

What is my next step?

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I think your interrogatory is based upon Kentucky Statute 371.050:

371.050. Assignee to aver consideration -- Amount recoverable.

In an action on any assignment of a writing, the consideration for the assignment shall be averred. The plaintiff shall recover no more than the consideration actually paid by him for the note or assignment.

I stumbled onto this a few years ago and though it would be a pretty cool thing to use in defense to a debt collection suit in Kentucky. It appears to apply only to installment contracts, and I recall reading somewhere that the statutory intent was that it apply on to actions by the assignee against the assignor. It sure doesn't read that way to me though. And I haven't seen anything to support that.

I have virtually no caselaw on the statute, save for the Rose case. I honestly don't know how a court would interpret this statute. I think, if you follow the plain reading of the statute, an assignee of an installment contract (like furniture from Rooms to Go, or a loan from a finance company) must, in a suit to recover the balance against the consumer, disclose what he paid for the assignment and may only recover that amount. Until a court says otherwise, I don't know why we should interpret this statute any differently. What do you guys think?

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I recently got a summons from Mapother and Mapother in reference to a Chase credit card I had back in 2008. I live in Kentucky. They sent me interrogatories to fill out and send back, in which I did. I did not admit to the debt. I sent interrogatories to them and on one of the questions I asked "What was the amount the Plaintiff purchased the original debt for?" Their reply was: "Objection: This interrogatory seeks information that is proprietary or confidential in nature, or which constitutes a trade secret. It is also not reasonably calculated to lead to the discovery of admissible evidence."

What is my next step?

You're being sued by Chase, the original creditor. They didn't purchase your debt. Your interrogatory was appropriate for a debt buyer, not an original creditor.

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I think your interrogatory is based upon Kentucky Statute 371.050:

I stumbled onto this a few years ago and though it would be a pretty cool thing to use in defense to a debt collection suit in Kentucky. It appears to apply only to installment contracts, and I recall reading somewhere that the statutory intent was that it apply on to actions by the assignee against the assignor. It sure doesn't read that way to me though. And I haven't seen anything to support that.

I have virtually no caselaw on the statute, save for the Rose case. I honestly don't know how a court would interpret this statute. I think, if you follow the plain reading of the statute, an assignee of an installment contract (like furniture from Rooms to Go, or a loan from a finance company) must, in a suit to recover the balance against the consumer, disclose what he paid for the assignment and may only recover that amount. Until a court says otherwise, I don't know why we should interpret this statute any differently. What do you guys think?

After reading your post, I looked up the statute. It's under the Statute of Frauds. KRS 371.010 states:

(9) Upon any promise, contract, agreement, undertaking, or commitment to loan money, to grant, extend, or renew credit, or make any financial accommodation to establish or assist a business enterprise or an existing business enterprise including, but not limited to the purchase of realty or real property, but this subsection shall not apply to agreements pursuant to which credit is extended by means of a credit card or similar device, or to consumer credit transactions;

So, it appears KRS 371.050 does not apply to credit card agreements and JDBs.

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DH Capital Management is Mapother and Mapother's client. Sorry about that, it was apparently purchased from Chase by them.

Did you request a bill of sale from Chase to Cap. Management? If so, did they provide it, and what did it say?

Also, did Cap. Man. include an affidavit? What did it say?

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Post the interrogatories here and we will give you our opinion as to how to respond. Good job wth that statute, BV80! Anybody notice half their characters missing when they type into the reply box? It's so bad I use notepad, then copy over.

Thank you. :) (But Nascar gave us the heads up)

I haven't had a problem with missing characters. I wish I had some words of wisdom, but my computer knowledge is limited to turning the computer on without blowing anything up.

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I didn't request a bill of sale, Mapother and Mapother sent me credit statements from Chase and then sent me their interrogatories. Any suggestions on what I need to do next? Thanks everyone!

Have you sent a Request for Production of Documents?

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Assuming the KY statute will not apply here, which it appears after BV80 post. Your question is irrelevant. Making or attempting to make an obscene profit is not illegal.

With that said they still have to prove standing (ownership) of the alleged debt and balance. However, what they allegedly paid for the account is irrelevant.

Also, I'd make sure I was always using alleged debt and alleged balance. You did not cross the line, but you came close with how you worded your request. It almost looks as if your conceding there is an account. Allegedly purchased the alleged account with an alleged balance, in my opinion, is the way you want to word it.

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No, I have not. Do you have a format or a link to one that I can use?

Just use the same format as they used for the Interrogatories except it's a Request for Production of Documents. You should ask for a bill of sale between Chase and Capital Management, all credit card statements showing charges, payments, interest, and fees and beginning with a -0- balance, and copies of any documents they intend to use and believe are relevant to this case.

The bill of sale is especially important. If they can't prove they own your account, they have no case.

Do some more research on this site. You might find more suggestions for documents you could request.

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After reading your post, I looked up the statute. It's under the Statute of Frauds. KRS 371.010 states:

(9) Upon any promise, contract, agreement, undertaking, or commitment to loan money, to grant, extend, or renew credit, or make any financial accommodation to establish or assist a business enterprise or an existing business enterprise including, but not limited to the purchase of realty or real property, but this subsection shall not apply to agreements pursuant to which credit is extended by means of a credit card or similar device, or to consumer credit transactions;

So, it appears KRS 371.050 does not apply to credit card agreements and JDBs.

Statutory contruction is somewhat an artform. Take for example, Kentucky Statutes, Chapter 371. It begins with Chapter 371. Chapter 371 is divided into Sections. The first Section is General Provisions, the second is Installment Sales Contracts, and so on. Each Section is divided into Subsections. The first Subsection of the Section entitled General Provisions is 371.010. The fifth Subsection of Section entitled General Provisions is 371.050.

Section 371.050 is not under 371.010 in the sense that it is subject to it. It merely follows it in order of appearance.

The paragraph (9) you refer to is a part of subsection 371.010, and indicates that "nothing in this subsection shall apply to agreements . . . "

Section 371.050 is not subject to 371.010 and therefore, 371.010(9) does not apply to 371.010.

Now, if 371.010(9) stated that that "nothing in this section shall appy ...." you might be correct.

And Coltfan, you know what happens when one assumes:

Assuming the KY statute will not apply here, which it appears after BV80 post. Your question is irrelevant.

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Statutory contruction is somewhat an artform. Take for example, Kentucky Statutes, Chapter 371. It begins with Chapter 371. Chapter 371 is divided into Sections. The first Section is General Provisions, the second is Installment Sales Contracts, and so on. Each Section is divided into Subsections. The first Subsection of the Section entitled General Provisions is 371.010. The fifth Subsection of Section entitled General Provisions is 371.050.

Section 371.050 is not under 371.010 in the sense that it is subject to it. It merely follows it in order of appearance.

The paragraph (9) you refer to is a part of subsection 371.010, and indicates that "nothing in this subsection shall apply to agreements . . . "

Section 371.050 is not subject to 371.010 and therefore, 371.010(9) does not apply to 371.010.

Now, if 371.010(9) stated that that "nothing in this section shall appy ...." you might be correct.

And Coltfan, you know what happens when one assumes:

Is it an art form, or do they just want to confuse people like me? :)

The title of chapter 371 is FORMALITY AND ASSIGNABILITY OF CONTRACTS --INSTALLMENT SALES CONTRACTS.

The beginning of 371.010 states:

371.010 Statute of frauds -- Contracts to be written.

No action shall be brought to charge any person:

(List 1 - 9)

unless the promise, contract, agreement, representation, assurance, or ratification, or some memorandum or note thereof, be in writing and signed by the party to be charged therewith, or by his authorized agent. It shall not be necessary to express the consideration in the writing, but it may be proved when necessary or disproved by parol or other evidence.

Since #9 states that "this subsection shall not apply to agreements pursuant to which credit is extended by means of a credit card or similar device, or to consumer credit transactions", credit card contracts are not required to be in writing.

KRS 371.050 states:

371.050 Assignee to aver consideration -- Amount recoverable.

In an action on any assignment of a writing, the consideration for the assignment shall be averred. The plaintiff shall recover no more than the consideration actually paid by him for the note or assignment.

It would seem to me that because Chapter 371 is entitled Installment Sales Contracts, and since credit contracts are not required to be in writing, KRS 371.050 would only apply to written installment contracts. Am I understanding this correctly?

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Interesting statute, but my first reaction is this: if this is a slam dunk against jdb cases, why is it that there is no case law or history of it being used as such? Surely (don't call me Shirley) some enterprising lawyer would have picked up on this since 1950, when the Rose case arose. Is not a rose a rose by any other name? I think this would end up in the state Supreme Court, it's so convoluted.

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It would seem to me that because Chapter 371 is entitled Installment Sales Contracts, and since credit contracts are not required to be in writing, KRS 371.050 would only apply to written installment contracts. Am I understanding this correctly?

That's sure what it looks like.

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Interesting statute, but my first reaction is this: if this is a slam dunk against jdb cases, why is it that there is no case law or history of it being used as such?

This is my thought exactly. You would think there would be lawyers camped out at the courthouse ready to file FDCPA suits against JDB if they sued for more than they paid for the debt. Plus could you imagine the class action lawsuit on this one.

Almost like a statute of limitations defense where a consumer can turn around and sue an atty for suing them on an out of statute debt because they misrepresented the legal status of the debt. Same here.

Also, other than atty fees, what would be the point of being in the junk debt business in Kentucky if you could get no more than you paid. The likely hood of a consumer that has an account go to junk status are usually not going to be in a position to check a check for atty fees.

Would seem like an all around lose, lose in Kentucky.

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Interesting statute, but my first reaction is this: if this is a slam dunk against jdb cases, why is it that there is no case law or history of it being used as such? Surely (don't call me Shirley) some enterprising lawyer would have picked up on this since 1950, when the Rose case arose. Is not a rose a rose by any other name? I think this would end up in the state Supreme Court, it's so convoluted.

I tried to find case law, as well, and could find none. Now that doesn't mean the statute wouldn't apply. Not all cases are published case law. BUT, I don't believe the statute applies to cc assignments.

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Assuming the KY statute will not apply here, which it appears after BV80 post. Your question is irrelevant. Making or attempting to make an obscene profit is not illegal.

With that said they still have to prove standing (ownership) of the alleged debt and balance. However, what they allegedly paid for the account is irrelevant.

Also, I'd make sure I was always using alleged debt and alleged balance. You did not cross the line, but you came close with how you worded your request. It almost looks as if your conceding there is an account. Allegedly purchased the alleged account with an alleged balance, in my opinion, is the way you want to word it.

If you purchase a damaged refridgerator you cannot sue the manufacturer for a defect because you bought the refridgerator fully knowing it was damaged.

now the debt collectors buy defaulted debt, they are sold the debts as-is no warranty as to collectability, and claim they are damaged by assignment. Doesn't the law prevent assignment of damage claims?

It is analgous to a lawyer buying a lawsuit from a client. Isn't the failure of the plaintiff's to give the amount they paid for the account necessary to evaluate the amount of actual damage to the plaintiff?

and can the courts force them to disclose that info even if they cite the trade secret priviledge. If you buy a car on the bill of sale you are required to list the purchase price. Similarly the price of recievables have to be disclosed.

how can we use the litigation priviledge to pierce the priviledge and show that they are not actually damaged.

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Here ya go, Coltfan, I just got an idea. I know, treat it kindly in a strange place. The mortgage lenders who securitized sub primes had to issue a 300 page guarantee (I have one, it's "confidential" hahahaha) to the dummies who bought them. Do you think the JDBs have any such agreements with the CC companies? You know, "all contracts loans etc contained herein were conformed according to all federal and state laws." Considering my favorite theory, which is that none of these cardholder agreements constitue a valid contract under any state laws, this could be a very interesting area to probe into. Could make a lot of trouble for the CC companies. Gee, we wouldn't want that to happen, now would we?

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now the debt collectors buy defaulted debt, they are sold the debts as-is no warranty as to collectability,

Right, but when they can't collect they don't sue the creditor that sold them the "bad debt." They bought that risk from the creditor, accept that risk, and then try to turn a profit. When they get zero out of it, they don't sue the creditor.

It is analgous to a lawyer buying a lawsuit from a client. Isn't the failure of the plaintiff's to give the amount they paid for the account necessary to evaluate the amount of actual damage to the plaintiff?

If you go to a car dealership and work a great deal, let's say you get a 30K car for 20K. Then on the way home some idiot, being there fault, totals your car, how is the conversation going to go with their adjuster. Are you going to produce the bills of sale and tell them they only owe you 20K. Of course not. They will owe you the actual cash value of the vehicle and how much you paid for that vehicle is totally irrelevant.

I had that argument with people all the time. They would tell me how much they paid for the car or how much they owed on the loan. I usually would cut them off and tell them the actual value does not take into account how much you paid or how much you owe. For example, if you owe 1K on your car and it is worth 10K are you going to accept 1K from me because that is all you owe.

Same thing here. A 5K credit card account has a 5K balance on it. It does not matter if you pay a dollar or five thousand for the account. The amount owed on that account (allegedly of course) is 5K. You want to roll the dice and pay whatever for the account, fine, it's America that's what we do, try to make obscene profits.

There is assumption of risk on the part of junk debt buyers. That is why, by law, they can't be a holder in due course. They take on that risk and their risk, no matter how little or how much, is irrelevant to the central issue. That is, does the consumer owe the debt and if so can the junk debt buyer prove it. Unless there is fraud with the sale, I've never heard a junk debt buyer suing Chase because all the accounts they were sold, not a one of them turned profit for the junk debt buyer.

The consumer is not a party to the transcation of the alleged account being sold. In fact, it says in the contract the creditor can make such sales, without the consumers premission. The courts have also upheld that clause.

So it is a legally binding sale and the sales price is irrelevant.

Not that it would ever happen but using your theory of all that is possibly owed is what was paid. What would happen if you owed 4K on a card and the junk debt buyer proved they paid 6K for the account. Would you owe 6K because they got ripped off beyond belief. Of course not. Your response would be, too bad fool, go get your money from whoever ripped you a new one, not my fault your stupid.

So legally they don't have to disclose what they paid, but I don't care anyway. I've never asked the question as it is irrelevant in the lawsuit. I hope they paid less than a cent. That way they can hurt more and feel even more like an idiot when they have to cut me a check or spend 10K in legal fees and still lose.

and can the courts force them to disclose that info even if they cite the trade secret priviledge. If you buy a car on the bill of sale you are required to list the purchase price. Similarly the price of recievables have to be disclosed.

how can we use the litigation priviledge to pierce the priviledge and show that they are not actually damaged.

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