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SOL in Texas


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Hi everyone,

Long time reader, first time poster. Wall of text incoming...

I've just been recently served on a lawsuit by Cap 1. The thing is that it's outside the SOL in Texas which is 4 years. My question is what is the best way to pursue this suit so that I can prevent the plaintiff from non-suing. I want to force the issue so that I can get a dismissal with prejudice. This lawyer for Cap 1 is notorious for non-suiting. I "think" that I need to counter-claim their complaint but not sure on what grounds. Is it possible to settle my counterclaim to have them strike the account from my credit report for good?

There is a very slight chance however that it is within SOL by 12 days. The last payment I made within the terms of the original agreement was 11/07. I made one more payment in January of 08 which would put it within SOL. That payment did not bring my account current though and from all the research I've done on the subject, a partial payment in Texas doesnt reset SOL, only a written agreement signed by both parties can reset it or a written acknowledge of the debtedness, I'll post some case law I've found on that tomorrow. I've done neither. I say slight chance becasue I'm not a lawyer and who knows what I've misinterpreted. What I don't want to do is stir up a hornet's nest for nothing and then lose my SOL argument because I didnt argue it correctly.I do have a credit report showing the account reported as 30 days past due starting Jan 08 and my bank statements showing the payments in question but none of my credit card invoices unfortunately.

I should add I can't afford a lawyer so I'm trying to do this pro se. I guess I could just let him non-suit, then if I were to get sued again ever it would undeniably be outside SOL but I'd like to put this to bed.

I've looked up every case in my County with this lawyer and as far back as the records will search there are zero cases where the result is not default judgement or non-suit. But I can't see the details of the cases just high level stuff.

What do you think?

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SOL in Texas needs to be analyzed in terms of the cause of action. For Breach of Contract, I believe SOL starts to run when the agreement goes into default (Page 10 per document / 12 per Adobe Reader):

http://www.txconsumerlawyers.org/papers/defending_credit_card_cases_2009_04.pdf

Texas AG, Greg Abbot indicated in his 9/2004 column: “An example of when the cause of action accrues is the date on which the debt is declared to be in default.”

To me, that means the day the first payment was missed. I mention that in case it impacts your analysis. If you read the document linked above, he supports your position that a subsequent payment does not reset SOL.

As SOL is an Affirmative Defense one has to plead, you are smart to think it through and get your dates straight.

In Texas, a non-suit or dismissal by the plaintiff does not cause the SOL to be tolled during the time the suit was filed.

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As these cases support, nonsuit does not generally toll limitations. So, if a suit is filed on the cusp of SOL, it generally is not going to extend it.

Respondents voluntary nonsuit of Memorial Hermann Hospital is treated as though the first lawsuit had never been filed, not as a bar to tolling limitations as to Dr. Illoh. Yanez v. Milburn, 932 S.W.2d 725, 728 (Tex. App.—Amarillo 1996, writ denied); Guar. County Hosp. Ins. Co. v. Reyna, 700 S.W.2d 325, 327 (Tex. App.—San Antonio 1985), writ ref’d n.r.e., 709 S.W.2d 647 (Tex. 1986) (per curiam). For the purposes of limitations, a nonsuit is equivalent to a suit never having been filed. Yanez, 932 S.W.2d at 728; Reyna, 700 S.W.2d at 327. Thus, the second lawsuit, filed on March 31, 2009, is not barred by limitations because it was filed before limitations expired. Illoh’s third point of error should be overruled.

Source: Texas Supreme Court:

http://www.supreme.courts.state.tx.us/ebriefs/10/10074802.pdf

In her second point of error, Cook contends the two year statute of limitations does not bar her claims because limitations were tolled during the pendency of her first lawsuit. However, Cook voluntarily nonsuited her claims against Withers after limitations had run. When a cause of action is nonsuited and later refiled, limitations are calculated to run from the time the cause of action accured until the date that claim is refiled. Yanez v. Milburn, 932 S.W.2d 725, 728 (Tex. App.CAmarillo 1996, writ denied); Guar. County Hosp. Ins. Co. v. Reyna, 700 S.W.2d 325, 327 (Tex. App.CSan Antonio 1985), writ ref=d n.r.e., 709 S.W.2d 647 (Tex. 1986) (per curiam); Irwin v. Basham, 507 S.W.2d 621, 625 (Tex. Civ. App.CDallas 1974, writ ref=d n.r.e.); see also Cunningham v. Fox, 879 S.W.2d 210, 212 (Tex. App.CHouston [14th Dist.] 1994, writ denied) (dismissal following grant of summary judgment); Delhomme v. Comm=n for Lawyer Discipline, 113 S.W.3d 616, 621 (Tex. App.CDallas 2003, no pet.) (voluntary dismissal of grievance complaint did not toll limitations); Clary Corp. v. Smith, 949 S.W.2d 452, 459 (Tex. App.CFort Worth 1997, pet. denied) (dismissal for want of jurisdiction); Milestone Props., Inc. v. Federated Metals Corp., 867 S.W.2d 113, 119 (Tex. App.CAustin 1994, no writ) (dismissal for want of prosecution). A nonsuit is equivalent to a suit never having been filed; thus, the statute of limitations is not tolled for any newly filed pleadings. Yanez, 932 S.W.2d at 728; Reyna, 700 S.W.2d at 327.

Source: Texas Fourteenth Court of Appeals

FindACase™ | Cook v. Withers

Edited by Tex_Tea
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Wow, that is some really good information. I had not found the first PDF document in my research and that has some very good information. My suit does say he is suing under Account Stated. So it sounds like I need to address that issue in my Answer as well as the SOL. If I can defeat the Account Stated part, which that PDF provides ample reasons why I can, there seems to be no question that I would be outside the 4 year SOL in Texas.

So that begs the question, should I counter claim for violation of FDCPA on suing for time-barred debt, force him to stay in the case, and get a dismissal with prejudice? I'm not really concerned about monetary rewards unless it led to the alleged account being removed from my credit report.

The funny thing is that not an ounce of evidence was delivered with the plaintiff's petition, even the alleged account number only contained the last 4 digits. Only the court's cover page, the petition, and a request for admissions were included.

When I submit my answer, should I rely on my sworn affidavit only to support my Statue of Limitations, or should I submit as evidence the bank statements and credit report showing this. I don't want to show my poker hand if I don't need to.

I may have him on another violation of the FDCPA. I sent this Attorney a debt validation letter in October of last year which he did respond to, but I don't think it was enough. Had I been smarter at the time I would have referenced Texas Finance Code Section 392.202 in my request, rather than FDCPA, 15 USC 1692g Sec. 809(B). The Texas code is much more stringent.

His response was that they only need determine that (1) the debt remains valid, (2) the amount was correct, and (3) I'm the correct party...."Based on our investigation, we have been able to answer these three inquiries in the affirmative" and referenced Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir. 1999).

He didn't provide anything to prove these claims however. Just that he checked. Is he not required to provide something back to me other than his word? And even though I didn't reference Texas Finance Code, is he not still bound to abide by it?

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I failed to mention a 3rd violation. In my debt validation letter I included Cease and Desist language and to only contact me by mail. After receiving his response, I received two phone calls. The first I didn't answer and the 2nd I did answer, they were calling to get me to settle. I notified them that I had written them to not call me anymore and they hung the phone up.

And I probably need to consider the cost of a counter-claim. Does that cost me money to counter-claim in Texas? I think it does, at least the filing fee. And while I would ultimately be able to recoup my costs if I was awarded judgement in my favor, I don't have the money to fund it in the interim.

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Doing some more research on this, I came across a blog post on the forums website stating that Debt Collectors are suing consumers naming Capital One as Plaintiff (I can't post links yet, I don't have enough posts).

The letters I received from this attorney match the details in this post. So now I'm wondering if the lawyer is correctly representing the Plaintiff in the petition. Would I still need to file FDCPA violations in a separate lawsuit if I could prove that the lawyer was the actual Plaintiff?

Would I be able to counter-sue this law firm for fraud by alleging the OC was still the correct Plaintiff if indeed I could prove that they were not and they knew it?

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I made one more payment in January of 08 which would put it within SOL.

That may be a problem, as it starts the SOL all over again. That means the next payment due would have been logically February 2008. When you failed to make that payment, the account went into default the day after. You could argue this technically. However, "it ain't February." You may not have an SOL claim. Cap One uses VA law, which has a 3 yr SOL. The agreement also states that they can use either one, whichever is longer.

I would take a shot at the SOL under VA law. Answer the complaint with / or a motion to dismiss in lieu of an answer. My reason is that all credit card companies use the same law firms that JDBs use. They are usually incompetent and have no clue as to the law or the contents of their own pleadings. They may not even know what the cardholder agreement says.

Just say that Cap 1 is located in VA, the agreement was formed in VA, and the SOL in VA is 3 years. The court should not set aside the agreement, as both parties willingly entered into it. It may work, it may not. The worst that can happen is they'll say no.

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From my first link above, this answers some of the questions in the thread:

The statute of limitations for breach of contract is 4 years. Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002). Most credit card contracts provide that failure to make the minimum payment when it is due is a default.11 While it may be possible to cure a default by bringing the account current, the mere fact of a post-default payment within the limitations period, without more, does not revive the period. Siegel v. McGavock Drilling Co., 530 SW2d 894, 896 (Tex.App.–Amarillo, 1975).

Even if a contract contains a choice of law provision selecting the law of another state, Texas will apply its own statute of limitations, notwithstanding the choice-of-law provision, because limitations statutes are procedural and

not substantive. Hill v. Perel, 923 S.W.2d 636, 639 (Tex. App.—Houston[1st Dist.] 1996, no writ); Boustany v. Monsanto Co., Inc., 6 S.W.3d 596, 601 (Tex. App.—Houston[1st Dist.] 1999, no writ).

Source (page 12 adobe / 10 of actual doc):

http://www.txconsumerlawyers.org/papers/defending_credit_card_cases_2009_04.pdf

To the OP, please read this as it has important info on Account Stated:

http://warybuyer.com/wp-content/uploads/2011/10/How-To-Defend-a-Credit-Card-Case.pdf

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From my first link above, this answers some of the questions in the thread:

The statute of limitations for breach of contract is 4 years. Stine v. Stewart, 80 S.W.3d 586, 592 (Tex. 2002). Most credit card contracts provide that failure to make the minimum payment when it is due is a default.11 While it may be possible to cure a default by bringing the account current, the mere fact of a post-default payment within the limitations period, without more, does not revive the period. Siegel v. McGavock Drilling Co., 530 SW2d 894, 896 (Tex.App.–Amarillo, 1975).

Even if a contract contains a choice of law provision selecting the law of another state, Texas will apply its own statute of limitations, notwithstanding the choice-of-law provision, because limitations statutes are procedural and

not substantive. Hill v. Perel, 923 S.W.2d 636, 639 (Tex. App.—Houston[1st Dist.] 1996, no writ); Boustany v. Monsanto Co., Inc., 6 S.W.3d 596, 601 (Tex. App.—Houston[1st Dist.] 1999, no writ).

I will definately read that PDF.

I think the Stine v. Stewart is key. Even though I made a payment in January, that did not bring my account current, as evidenced by a credit report showing my account past 30 as of January 08 and going downhill from there.

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Be Careful with the SOL Affirmative Defense

I was just reading the document at the last link I posted and noted on Adobe page 13 / document page 10 in the bottom right column at paragraph 2:

2. Rely on a limitations defense only if you are confident in prevailing on that defense. .... However, be aware that if you are wrong, you just might be doing the Plaintiff’s work for them by gathering evidence.

I suppose if one provides evidence of the account to establish it is out of SOL that same evidence could make the case for the plaintiff if SOL Calculations are off. So, be careful! (It sounds like you are)

With Prejudice

I am not sure, but I think that only holds with the plaintiff who filed the case getting that ruling. If the debt is sold, it may not apply to subsequent buyers. I am not sure of that though.

FDCPA Claims

You could always file that outside this action. There are a couple of firms that will file it for you in Federal Court with no money up front.

TDCPA - Texas Debt Collection Practices Act

Very similar to FDCPA, and it does apply to original creditors.

Motion to Show Authority

Check the Texas Rules of Civil Procedure:

http://www.supreme.courts.state.tx.us/rules/trcp/rcp_all.pdf

I think Rule 12 allows one to file a Motion to Show Authority. That would require the plaintiff to prove they are truly representing Cap1.

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Be Careful with the SOL Affirmative Defense

I was just reading the document at the last link I posted and noted on Adobe page 13 / document page 10 in the bottom right column at paragraph 2:

2. Rely on a limitations defense only if you are confident in prevailing on that defense. .... However, be aware that if you are wrong, you just might be doing the Plaintiff’s work for them by gathering evidence.

I suppose if one provides evidence of the account to establish it is out of SOL that same evidence could make the case for the plaintiff if SOL Calculations are off. So, be careful! (It sounds like you are)

That's why I was wondering if it would be better to submit a motion for dismissal/summary judgement with only an affidavit stating that it's outside SOL. I was thinking that by submitting bank statements or credit reports it basically admits that the account exists. Although I would think if my SOL argument failed, I could still argue that the amount was incorrect, forcing them to produce the original signed contract and statement of charges showing that I agreed to pay interest and how it was all calculated. Being an OC though, they could probably do that.

Here's the suit, truncated:

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Nature of Case

2. Plaintiff seeks recovery for damages arising from Defendant breach of credit account agreement entered into by Defendant, which Defendant utilized and for which Defendant became obligated to repay, Plaintiff sues herein for breach of contract and for monies owed pursuant to the account.....as well as it's attorney's fees.

Facts

6. In the usual course of business, Plaintiff advanced money on account,xxxxxx (all x'd out other than last 4 digits), which defendant utilized and for which became bound to repay.

7. Defendant ceased making payments, creating default

8.On or about, x/x/xxxx (about 4 months ago), plaintiff sent letter to defendant, demanding payment in full and despite delivery, no further payments have been made.

9. As of x/x/xxxx (about 1 month ago), there continues to be owed an unpaid balance of xxxx and accrued interest of xxxx. Interest continues to accrue at 0.0%. (why list 0%)

COUNT 1 - Suite on Debt/Account Stated

11. Plaintiff is owner and beneficiary of claims related to account opened by defendant with plaintiff. The amount that is due and owing is xxxxx, said amount being just and true after all lawful offsets, payments and credits have been allowed.

12. Plaintiff is entitled to recover on the account because (1) transactions between P and D gave rise to an indebtedness, (2) there existed an agreement between the P and D which established the amount that was due to P, and (3) the D promised to pay P on the debt which was incurred, but failed to do so.

13. P has presented its claim to Defendant for payment, but D has failed and refused to pay amount owed.

COUNT II - Breach of Contract

15. P is the owner and beneficiary of all right under account opened by D with P. The account is a contractual agreement under Texas law. D has breached the agreement by failing to pay all amounts due and owing in accordance with terms of agreement.

16. As of x/x/xxxx, xxx remained due and owing on the account.

17. P has presented it's claim to D for payment, but D has failed and refused to pay the amount owed.

COUNT III - Attorney's Fees

18. P has presented it's claims for the recovery of amounts herein sought to the D pursuant to 38.001 of the TCPRC, yet no amounts have been paid in response to the claim. P is entitled to recovery of its attorney's fees and costs incurred in the prosecution of these claims

Conditions Precedent

19. All conditions precedent to P's right of recovery have been fulfilled.

WHEREFORE P prays D be cited to appear and answer and that P have judgement against D for

a. damages of xxxx

b. prejudgement interest of 0.0% (again why list 0%)

c. reasonable and necessary attorney's fees of xxxx

d. costs of court

e. post-judgment interest at maximum allowed by law

f. such other relief as P may be entitled

Also admitted was Plaintiff's Request for Admissions, but no other evidence or information

I'm planning to submit the following 3 documents at the same time:

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

SWORN DENIAL ON ACCOUNT

Comes the Defendant, after being duly sworn according to law, and says that he does not owe the account on which the Plaintiff has sued him and that the same is not true, just, nor correct for the following reasons(s):

This is not a valid debt.

If I am responsible for this debt, the amount sued for is incorrect.

If I am responsible for this debt, it is barred by any applicable statute of limitations.

Signed and Notarized.

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

DEFENDANT’S ORIGINAL ANSWER

TO THE HONORABLE JUDGE OF THE COURT:

Comes the Defendant, xxxxxxxxx, Pro Se, and in answer to the Petition by the Plaintiff, xxxxxxxxxx, and any subsequent amendments thereto, files the following answer pursuant to the Texas Rules of Civil Procedure;

I.

As allowed by Rule 92 of the Texas Rules of Civil Procedure, the Defendant hereby enters a general denial of matters pleaded by Plaintiff.

II.

As allowed by Rule 93 of the Texas Rules of Civil Procedure, the Defendant specifically pleads that Plaintiff does not have the legal capacity to sue.

III.

As allowed by Rule 93 of the Texas Rules of Civil Procedure, the Defendant specifically pleads that Plaintiff is not entitled to recover in the capacity in which he sues.

IV.

Pleading affirmatively, the Defendant alleges the affirmative defense of the statute of limitations.

V.

Pleading affirmatively, the Defendant alleges the affirmative defense of laches.

VI.

Pursuant to Rule 54 of the Texas Rules of Civil Procedure, the Defendant specifically denies that conditions precedent to recovery have been performed or have occurred

WHEREFORE, PREMISES CONSIDERED, Defendant, xxxxx, Pro Se, prays that upon trial hereof Plaintiff take nothing, that Defendant recover his costs, and for such other and further relief to which Defendant may be justly entitled, either in law or equity.

And finally.....

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

MOTION TO DISMISS - STATUE OF LIMITATIONS

Comes the Defendant, xxxxxx, and moves the Court to dismiss plaintiff’s complaint and would state unto court the following, to wit: Plaintiff, xxxxxxxxxx, has sued Defendant, xxxxxxxxxxx, for alleged breach of contract, open account and past due debt. The debt plaintiff has sued upon is barred by the Texas Civil Practice and Remedies Code Sec.16.004. The Statute of Limitations for this action in this jurisdiction is 4 years. The alleged default upon which this action is based occurred on xxxxxxx(date before citation issued). More than 4 years have passed since the alleged default.

WHEREFORE, premises considered, Defendant respectfully requests this court dismiss, with prejudice, this complaint as barred by the Statue of Limitations.

If I submit evidence with my motion, i'll also submit a "AFFIDAVIT IN SUPPORT OF MOTION FOR DISMISSAL containing the evidence.

What do ya'll think? Do I need to plead in my motion to recover my costs as well?

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

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SOL Affirmative Defense

The degree to which one asserts one's self in the SOL affirmative defense argument would be a function of his or her confidence in the computation of SOL period and the underlying evidence supporting it.One way of assessing that might be to review Adobe page 12 / Document page 10 of the paper in the very first link on this thread by Craig Jordan.

Jordan appears to indicate SOL for breach of contract starts upon failure to make the minimum payment when it is due while SOL for a suit on account accrues “on the day that the dealings in which the parties were interested together cease”. That sounds like the date of last activity.

These Texas attorneys appear to be supporting a similar start point for breach of contract:

Statute of limitations in Texas. When does it start?

Statute of limitations in Texas. When does it start? - Avvo.com

Also, Discovery could be used to obtain SOL evidence

Motion to Dismiss

I am not sure if this is common in the state court system. I thought of doing one several years ago and could not find anything in searches. Texas does have a no-evidence summary judgment (plenty of info via Google).

Complaint Counts

As Jessica Lesser points out in the second document, they have to prove the elements of each count. One could define the elements and point out the lack of evidence. If no discovery was done, that might be a challenging point to such an approach.

Sworn Denial

A sworn denial could lead to sanctions if the Judge thinks you perjured yourself.

TRCP 93

That rule looks like it is saying that if a pleading is going to deal with the matters that are listed in it, the pleading needs to be verified (sworn). I do not know if this rule fits the argument you are making with it.

Edited by Tex_Tea
punctuation
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See of you can file a motion to dismiss in lieu of an answer to the complaint. If this is beyond the SOL, why bother with an answer to a case that cannot be pursued?

Cap One specifies either or, your SOL or theirs, looks like they missed both if you can document the SOL expiration. You'll have to include some supporting evidence with your motion. SOL issues can be tricky for us to advise, as most posters don't give enough information.

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Texas House Bill 274 Passed into Law; Effective 9/1/2011

"The law also creates new procedural rule for Texas courts. For the first time, there will be a “motion to dismiss” for meritless claims before parties can go through the often expensive and time-consuming discovery process. Such a rule already exists in federal court. If a judge grants that motion to dismiss, the losing party will have to pay the other’s attorney’s fees."

Source:

Day 28: Tort Reform Bill Gives High Court New Powers — 82nd Legislative Session | The Texas Tribune

Edited by Tex_Tea
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So when does SOL begin?from the first month of reported 30 days late as shown on your credit report or in actual the month that they received their last payment. Which one to believe. The 30 days reporting to credit bureaus actually dont get reported until almost 60+ days have passed since their last billing statement was issued. even after having nearly 60 days passed, they still report is as though its 30 days late.

how does it change if its a Factoring Account bought by a company.

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I always hear that it goes into default the day after the last required payment was not made. Then again, they may have something in the cardholder agreement that defines the term, and they will rely upon that if it benefits them. You are into an area where the state statute may say one thing, but the agreement you entered into says something else. Most likely TX law will apply. Be advised, I've read close to 1000 account stated cases, Texas is one of the hardest states to win one. They seem to always rule in favor of the creditor if there is reasonable evidence.

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