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Chain Of Title, is it broke?


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A simple scenario that I would like to have opinions on if anyone is inclined;

Original Creditor sells charged Off credit card account To Collection Agency One, Collection Agency One then sells to Collection Agency Two.

Collection Agency Two takes it to court and provides:

A bill of sell to themselves (internal document issued from parent company)

A letter of assignment from Collection Agency One

And other documents that I'm sure you are all familiar with and need not be listed as they don't apply to the question of,

Isn't there a missing link in their chain of title?

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Neither did I. So then I asked myself "why, self, would they not have that?" and then I said, "A better question would be, can it be used against them?"

So I did a bit more digging into all of the public records on Collection Agency One and discovered that they are, hmm, I guess "sub company" fits the best, of the company that handled marketing for the Credit Card in question.

It's getting a bit more complicated.

So, what do you all think - does Collection Agency Two need that missing link to establish standing?

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As to the Assignment from Collection Agency One to Collection Agency Two; no specific account or name is listed just:

...'Collection Agency One ("seller"), for value received, without recourse, assigns, sells and delivers to Collection Agency Two ("Buyer"), all right, title and interest in and to the accounts which are described on the relevant computer file furnished by seller to buyer"...

It goes on a bit more formalizing the sell with a general statement of

"Each of the obligations of seller required of seller to be performed by seller has been duly performed"

The other, an internal document does have account numbers and lists the original creditor details.

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The Internal Bill (from the parent company of Collection Agency Two) does list an account number, dollar amount, etc.

The Letter of Assignment has only the

...'Collection Agency One ("seller"), for value received, without recourse, assigns, sells and delivers to Collection Agency Two ("Buyer"), all right, title and interest in and to the accounts which are described on the relevant computer file furnished by seller to buyer"...

wording.

Still, my primary thoughts float along the whole chain of title issue. I suppose my real question would be:

Is it possible that the relationship between the original creditor, it's marketing and servicing arm and their subsidiary company (Collection Agency One) preclude the need for a bill of sale and that's why Collection Agency Two didn't provide one, or...

Do I have a valid defense via this missing link alone?

Whew. Long question.

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I'm guessing (from reading many of your posts) that you didn't forewarn them ;)

I may have to, I'm reviewing as much as I can but I need a strong opposition and memorandum to ensure they do not get a summary judgment.

Anyone have some readily available links to Arizona Case Law on the subject of broken chain of title I can reference?

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I wish I could do the same, but the situation doesn't allow for it *sigh*

Oh, just as an additional note of interest, the letter of assignment from Collection Agency One is not a sworn statement (not notarized or under oath) and is not accompanied by an affidavit from any employee of that organization.

Edited by llamadown
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I wish I could do the same, but the situation doesn't allow for it *sigh*

Oh, just as an additional note of interest, the letter of assignment from Collection Agency One is not a sworn statement (not notarized or under oath) and is not accompanied by an affidavit from any employee of that organization.

What it boils down to is that they have no proof that the OC sold anything at all to CA #1. There's no evidence that CA #1 ever purchased any accounts from the OC in order to sell anything, much less your account, to CA #2.

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That's not hearsay, that's relevance. If it doesn't self-authenticate, it is a piece of paper saying that the JDB is in the business of buying junk debt, not that they bought your junk debt.

Even if it is authenticated, it still only proves the JDB bought some defaulted accounts. That's all and nothing else.

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I'm guessing (from reading many of your posts) that you didn't forewarn them ;)

I may have to, I'm reviewing as much as I can but I need a strong opposition and memorandum to ensure they do not get a summary judgment.

Anyone have some readily available links to Arizona Case Law on the subject of broken chain of title I can reference?

Not sure if there would be relevant case law because it is a matter of contract law. Relevant case law would require an appellate court overturn a superior court ruling base upon COT.

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TomnTex - I would rather not say until I have the paperwork filed, but if I can help you, or you can give me a nudge in the right direction, I will answer personal messages.

As far as relevance vs. hearsay? I don't think I would move to strike the letter of assignment as it introduces the break in the chain. Am I right? Your thoughts and comments are greatly appreciated.

I will move to strike the affidavit that accompanies the "bill of sale" and the account statements as hearsay because, well, they are.

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From the Arizona Supreme Court:

"It is, however, hornbook law that in order to effect a legal assignment of any kind there must be evidence of an intent to assign or transfer the whole or part of some specific thing, debt, or chose in action, and the subject matter of the assignment must be described sufficiently to make it capable of being readily identified." Certified Collectors, Inc. v. Lesnick, 116 Ariz. 601, 603, 570 P.2d 769, 771 (1977).

CA #2 has definitely failed to establish standing when there is no evidence that CA #1 owned your account in the first place in order to sell it to CA #2.

There is no legal assignment to CA #1 from the OC.

Edited by BV80
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TomnTex - I would rather not say until I have the paperwork filed, but if I can help you, or you can give me a nudge in the right direction, I will answer personal messages.

As far as relevance vs. hearsay? I don't think I would move to strike the letter of assignment as it introduces the break in the chain. Am I right? Your thoughts and comments are greatly appreciated.

I will move to strike the affidavit that accompanies the "bill of sale" and the account statements as hearsay because, well, they are.

Here is an important bit of (free) legal advice: Don't put all your legal arguments in one basket. Don't fail to challenge an element if it is potentially in-admissible.

For example, you let the bill of sale in without challenge because you want to fight on chain of title. Maybe you lose on the chain of title argument, but you failed to contest the bill of sale, making their case on prima facie. However, could contest the bill of sale as irrelevant, win on that point, and then COT isn't an issue at all because they don't have a bill of sale to establish a COT for. Make them prove every element of their case. Also by contesting it at trial, you get your objection on the record should you lose at trial and appeal.

Here is what I argued when my JDB attorney tucked his tail and ran after reading it...

From my motion to Dismiss:

The Plaintiff has failed to disclose any documented validation of the alleged debt, or of a relationship between themselves and the

alleged original creditor, Chase Bank, specifically the authority of the Plaintiff to collect the debt on behalf of the original creditor, or the

reassignment of the debt to the Plaintiff. (Fields v. Wilber Law Firm, P.C., et al., U.S. App. Ct. 7th Dist., 2004)

And from my trial brief (which started it's life as Seadragon's trial brief):

Plaintiff lacks standing to proceed in this matter.

Plaintiff has entered into Evidence, Exhibit 2, a Bill of Sale detailing the sale of 38,062 accounts from Chase Bank USA to Hilco Receivables LLC. The Bill of sale is purported to prove assignment of the alleged account listed in the claim from Chase Bank to Equable Ascent Financial, LLC. The Bill of Sale is insufficient to establish standing in this matter for the following reasons any one of which is sufficient to prove lack of standing.

1. The Bill of Sale is not self-authenticating. The parties named in the bill of sale are Chase Bank USA and Hilco Receivables, LLC. The signatures of the executors of the Bill of Sale are illegible and no printed name appears to validate the identity of the signers. Plaintiff has provided no witness to authenticate the contract. The Bill Of Sale does not include the name of the defendant, the alleged account number or the amount alleged to be owed. If this document is sufficient to prevail in this action, then the Plaintiff would be able use this document to sue every adult person in the United States.

2. Equable Ascent Financial is not party to the Bill of Sale. Hilco Receivables LLC is located at at 5 REVERE DR STE 510 NORTHBROOK,*IL*. Equable Ascent Financial LLC is a located at 1120 W LAKE COOK RD STE B, BUFFALO GROVE,*IL There is no evidence of reassignment of these 38,062 accounts to Equable Ascent Financial LLC.

3. Proof of assignment of the alleged account is absent from this document. Nothing contained within the document would lead to the conclusion that this document assigned an account for the Defendant any more than it would prove the assignment of an account for Barack Obama. There is no evidence to support any relevance between the Bill of Sale, the Plaintiff, The Defendant, or the the alleged account.

The Defendant avers that if the Plaintiff's alleged seller had transferred an assigned the account to the Plaintiff, they would have provided support documentation to confer standing.

You have to go after each element. Win on one, you likely win the case because they will lack standing. If you only attack one element and lose only one, you lose the whole enchilada. Get it?

Edited by First Timer
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Here is a list of case law and contract law I included in my brief. Just make sure the bullet you choose matches the game you are shooting.

In Bristol Co., LP v. Osman, 190 P.3d 752 (Colo. App. 2007), Motion to dismiss was properly granted as a matter of law when the allegations in the complaint were too vague, insubstantial, and attenuated to support the claim.

In Kreft v. Adolph Coors Co., 170 P.3d 854 (Colo. App. 2007). Motion to dismiss is properly granted when plaintiffs lack standing because the complaint does not show actual injury to a legally protected right.

“The existence of a valid obligation is necessary as the basis of an account stated.” Law of Contracts, Vol. 4, section 2523, William Herbert Page

“In order that an account may be stated, it is necessary in the first instance that there should be a presentation of what the law recognizes as an account.” Law of Contracts, Vol. 4, section 2518, William Herbert Page

Plaintiff has failed to provide to the Court, or the Defendant any evidence of the existence of a valid account, thus does not constitute an “Account Stated”. Pudas v. Mattola, 173 Mich. 189, 45 L. R. A. (N.S.) 634, 138 N. W. 1052; Johnson v. Stilwell, - Or. - , 176 Pac. 123

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The Internal Bill (from the parent company of Collection Agency Two) does list an account number, dollar amount, etc.

The Letter of Assignment has only the

wording.

Still, my primary thoughts float along the whole chain of title issue. I suppose my real question would be:

Is it possible that the relationship between the original creditor, it's marketing and servicing arm and their subsidiary company (Collection Agency One) preclude the need for a bill of sale and that's why Collection Agency Two didn't provide one, or...

Do I have a valid defense via this missing link alone?

Whew. Long question.

They need a witness with personal knowledge. This is gonna play out first now that you know they don't have any standing, you want to lead them away from the standing issue till trial. They are gonna object like crazy to discovery SO "The only winning move is not to play" you can do a little to see who is showing up for trial. Maybe some written depositions. Some thing to guide them away from the case. Make a low settlement offer during the 30 days prior to trial to throw them off the track. Kinda hint(ambiguosly) that you might not be at trial. Then subpoena their witness and crush them.

If you make them believe you are about to cave(emotional crying that kind of thing) they will think they can bully you and won't prepare then you gut em like a fish on the day of trial. Try emulating this:

You can play possumn.

Edited by Seadragon
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