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The big debate on the issue of STANDING TO SUE


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This semester in law school we started consumer law. A big debate right now over standing to sue has been interesting.

I thought I would post the question here so other can learn this issue, as it is the most important issue in a suit over collections.

Scenario: A CA has been hired to collect a debt, Not a JDB, they are the first to try and collect the debt. Debts are with in SOL. Open accounts.

What does the CA need to show to the court to prove they have standing to sue? How would you challenge their standing, if they claim they have been assigned the debt for collections.

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I'm very curious about this too. I posted a question on an ask a lawyer type site and got this response today

"If they serve you and obtain a judgment they could attach a lien. You may or may not meet certain exemptions that would not allow them to do so.

In any event, be advised that Midland Funding is not a collector for the entity which issued your husband a credit card. They purchased the right of assignment from the credit card issuer and now own the account. They are a debt purchaser who paid probably 2 to 5 cents on the dollar for the account.

Moreover, they do not have proper standing to sue anyone in Tennessee. That isn't to say that they don't, rather than upon filing a motion to dismiss they lose for lack of proper filings with the secretary of state.

An aside, I am presuming that once you are served you will be dealing with a debt collection out of Little Rock, Arkansas. You can call the General Sessions Court Clerk - Civil Division in **** County to verify this.

You may want to seek an attorney who practices consumer litigation in the mid-state. If you want someone local, **** is good although I don't know if he represents people in actions such as these."

This made me wonder about their standing to sue. This was a TN attorney that replied.

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Scenario: A CA has been hired to collect a debt, Not a JDB, they are the first to try and collect the debt. Debts are with in SOL. Open accounts.

What does the CA need to show to the court to prove they have standing to sue? How would you challenge their standing, if they claim they have been assigned the debt for collections.

Collection agencies do not have standing to sue unless they own the account, then they are a "jdb." At that point they are a plaintiff who must prove ownership, therefore establishing standing to sue. Assignment is a legal term that indicates a legal transfer of the account and all rights associated therewith to the new party according to law. The assignee is now the legal owner of the account and can bring suit. The term "assignment" is bandied about and misused. It has a vague legal definiton in some cases that indicate legal ability to collect, but not to sue. I would push the leagl definition of the term.

Semper Fi, Gunny

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Considering you're referring to a collection agency and not a JDB:

I would think it would depend upon the laws of the forum state:

1. Is the CA required to be licensed in the forum state? If they are, are they licensed?

2. Is there a particular state statute that refers to CAs suing for or in the name of the OC?

Not all consumer law cases are credit card related. I would think a contract might come into play, as well. Does the contract mention collections or assignees?

If the contract makes no mention of a CA suing for or in the name of the OC, it would seem state law would have to dictate.

If state statute or the contract allows for a CA to sue, I would think it would then depend upon a valid assignment.

Then you have the laws of the "governing state" if different from the laws of the forum state...:shock:

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This semester in law school we started consumer law. A big debate right now over standing to sue has been interesting.

I thought I would post the question here so other can learn this issue, as it is the most important issue in a suit over collections.

Scenario: A CA has been hired to collect a debt, Not a JDB, they are the first to try and collect the debt. Debts are with in SOL. Open accounts.

What does the CA need to show to the court to prove they have standing to sue? How would you challenge their standing, if they claim they have been assigned the debt for collections.

A CA doing that here would be engaging in the unauthorized practice of law. The lawsuit has to be in the name of the OC, and the CA cannot have made the decision to sue.

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That's easy, counter sue their a$$ because a collection agency can't sue you. A junk debt buyer at least will swear to the court they own the debt, a collection agency can't even do that.

If it is a collection agency law firm, they would simply be retained to sue on their client's behalf, and if challenged would show a simple retainer agreement proving they are suing on behalf of their client.

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An aside, I am presuming that once you are served you will be dealing with a debt collection out of Little Rock, Arkansas.

And that my friend would be your lucky day, because I bet I know who they are referring. If it who I assume they are referring they have a sick fetish where they just enjoy getting the dog whipped out of them, over, and over, and over, and over, and over, again.

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And that my friend would be your lucky day, because I bet I know who they are referring. If it who I assume they are referring they have a sick fetish where they just enjoy getting the dog whipped out of them, over, and over, and over, and over, and over, again.

I misunderstood the original post as mine is a JDB (Midland) not a CA. But I'm still not understanding the Standing To Sue thing. I am encouraged by what you said though. :) Thanks!

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I misunderstood the original post as mine is a JDB (Midland) not a CA. But I'm still not understanding the Standing To Sue thing. I am encouraged by what you said though. :) Thanks!

I don't want to hijack this thread for the OP, so if you PM I'll send you the link where I wrote basically a term paper on standing. It is BV80 and myself going back and forth with different situations.

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Sorry I was in a bit of a hurry when I posted this. I had ribs on the grill, lol.

It is not a credit card is is an open account, the ca is a ca and has hired their own attorney, the bills they are suing for are for a different oc, the scenario did not say what kind of debt just that it was no contract and not credit cards.

The suit is filed against the defendant in the name of the ca not the original creditor.

No affidavit of indebtedness was filed from any OC, the ca provided no contract to show the were hired by the oc. There was no mention in the case whether or not a contract does exist between the Plaintiff and the OC, just that none was presented with the original case.

We will use Indiana law.

Edited by BTO429
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IC 25-11-1-13

Assignment of accounts to collection agent

Sec. 13. (a) A person who is licensed under this chapter may, for the purpose of acting as an agent for collection:

(1) receive another person's accounts, bills, or other evidence of indebtedness;

(2) be the assignee of another person's accounts, bills, or other evidence of indebtedness; and

(3) at the direction of an assignor or assignors:

(A) employ an attorney to represent an assignee in the filing

of an action to collect a debt in the county of preferred venue for the action as set forth in Rule 75 of the Indiana Rules of Trial Procedure; and

(B) advance court costs for the filing of an action to collect a debt.

(B) For purposes of filing one (1) action, an assignee may consolidate:

(1) assigned claims against an individual debtor; or

(2) assigned claims against joint debtors.

© An action in which claims are consolidated under subsection (B) must be filed in the county of preferred venue as to all alleged debtors for the action as set forth in Rule 75 of the Indiana Rules of Trial Procedure.

(d) If an assignee files an action in a county other than the county of preferred venue as to all alleged debtors, the court upon motion shall order:

(1) the action transferred to the county of preferred venue; and

(2) the assignee to reimburse the person or persons against whom the action is filed for attorney's fees necessitated for correction of the preferred venue.

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IC 25-11-1-13

Assignment of accounts to collection agent

Sec. 13. (a) A person who is licensed under this chapter may, for the purpose of acting as an agent for collection:

(1) receive another person's accounts, bills, or other evidence of indebtedness;

(2) be the assignee of another person's accounts, bills, or other evidence of indebtedness; and

(3) at the direction of an assignor or assignors:

(A) employ an attorney to represent an assignee in the filing

of an action to collect a debt in the county of preferred venue for the action as set forth in Rule 75 of the Indiana Rules of Trial Procedure; and

(B) advance court costs for the filing of an action to collect a debt.

(B) For purposes of filing one (1) action, an assignee may consolidate:

(1) assigned claims against an individual debtor; or

(2) assigned claims against joint debtors.

© An action in which claims are consolidated under subsection (B) must be filed in the county of preferred venue as to all alleged debtors for the action as set forth in Rule 75 of the Indiana Rules of Trial Procedure.

(d) If an assignee files an action in a county other than the county of preferred venue as to all alleged debtors, the court upon motion shall order:

(1) the action transferred to the county of preferred venue; and

(2) the assignee to reimburse the person or persons against whom the action is filed for attorney's fees necessitated for correction of the preferred venue.

We have a statute on our books that is even more permissive than (3)(A) in what you just posted. It says that CAs can pursue a claim in court under their own name so long as they are represented by an attorney. When that was tested in court, NM's Supreme Court effectively nixed it. They said that the act of making the decision themself and splitting the fees was practicing law, and as such put the actions squarely under the sole jurisdiction of the NM Supreme Court as per the NM Constitution. Of course, in the case where the SCONM ruled on the matter, the attorneys for the CA completeley misrepresented case law from other states;)

What is specified in (3)(A) might fly here because that pretty much requires that the CA be acting based on the direction of the OC/JDB rather than making the decisions for it. I may be dealing with something along these lines in the near future, where they're going to claim that they were directed by the OC when instead, they were just handed the account and told to do whatever they felt was necessary. If I find out that's true, :twisted::twisted::twisted:8-)

Edited by usagi555
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My biggest argument in class is if they can sue at the direction of the assignor I would argue they should sue under the name of the assignor not the name of the CA.

The reason I am bringing up this argument is CA's in this area have a bad habit of suing under the name of the CA and not saying in their pleading that the suit is by and for the OC. But no one ever challenges that for standing.

But even if it were the courts here would just give them leave from court to amend the complaint.

I belong to a group that is planning to lobby for more stringent laws that govern collection agency's. Indiana has no laws on the book of any kind, like other states, that resemble or even make more stringent, the FDCPA.

Edited by BTO429
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My biggest argument in class is if they can sue at the direction of the assignor I would argue they should sue under the name of the assignor not the name of the CA.

The reason I am bringing up this argument is CA's in this area have a bad habit of suing under the name of the CA and not saying in their pleading that the suit is by and for the OC. But no one ever challenges that for standing.

But even if it were the courts here would just give them leave from court to amend the complaint.

I belong to a group that is planning to lobby for more stringent laws that govern collection agency's. Indiana has no laws on the book of any kind, like other states, that resemble or even make more stringent, the FDCPA.

I have a little bit of experience when it comes to lobbying on a budget. I plan on doing some myself if I can blow a few things wide open. I'll share notes if I ever get to that point.

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My biggest argument in class is if they can sue at the direction of the assignor I would argue they should sue under the name of the assignor not the name of the CA.

The reason I am bringing up this argument is CA's in this area have a bad habit of suing under the name of the CA and not saying in their pleading that the suit is by and for the OC. But no one ever challenges that for standing.

But even if it were the courts here would just give them leave from court to amend the complaint.

I belong to a group that is planning to lobby for more stringent laws that govern collection agency's. Indiana has no laws on the book of any kind, like other states, that resemble or even make more stringent, the FDCPA.

You are correct in your argument. In order to sue in their own name, the CA would have to show proper assignment of the debt, otherwise they would hire an attorney to file the suit on behalf of the OC.

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Yes I understand that First timer, but where I live they have a bad habit of hiring an attorney but still sue under their own name.

The is one particular agency that has been in business for so long, around 30 years that the judges know them all and very seldom ask or even listen to the other party.

I would still say they have no standing to sue in their name. They sue as if you owe them the debt and never mention the the assignors name.

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I would say that if I brought that up in a trial court and the judge ignored it, I would take it to appeal. Once the appeals court rules, that can be used in the lower courts all over the area that the appeals court serves (in this case, Indiana). The last think a CA would need it a ruling like this that can be used against them.

OTOH, I agree with you that the CA would need to sue in the name of the OC, not their own name. That would be how I would interpret the law.

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

Now here in Minnesota, if it were not for the confusion of the Pocket Docket process, 99% of CAs/JDBs (and even OCs) would be screwed. That is because:

1) The OC must be named in the suit as well as all the JDBs the debt was assigned to before it reached the current JDB.

2) If suing on contract, there MUST be a signed contract. The CC agreements do not count.

3) Is suing on account stated, statements must be provided from the time the account was a $0. No 3 statements and that is it for MN.

In fact, another board member from MN recently got a dismissal because he took the JDB attorney to the impasse of the Pocket Docket process and neither was willing to pay the court fee. The JDB attorney eventually sent a dismissal notice to end the process.

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I would say that if I brought that up in a trial court and the judge ignored it, I would take it to appeal. Once the appeals court rules, that can be used in the lower courts all over the area that the appeals court serves (in this case, Indiana). The last think a CA would need it a ruling like this that can be used against them.

OTOH, I agree with you that the CA would need to sue in the name of the OC, not their own name. That would be how I would interpret the law.

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

Now here in Minnesota, if it were not for the confusion of the Pocket Docket process, 99% of CAs/JDBs (and even OCs) would be screwed. That is because:

1) The OC must be named in the suit as well as all the JDBs the debt was assigned to before it reached the current JDB.

2) If suing on contract, there MUST be a signed contract. The CC agreements do not count.

3) Is suing on account stated, statements must be provided from the time the account was a $0. No 3 statements and that is it for MN.

In fact, another board member from MN recently got a dismissal because he took the JDB attorney to the impasse of the Pocket Docket process and neither was willing to pay the court fee. The JDB attorney eventually sent a dismissal notice to end the process.

is there something similar to this in FL statutes or civil procedure? I need it to send one last brief to these JDB clowns.

and I hope my filings arent "out of order" we havent gotten to discovery because Im still questioning their right to sue and their iffy affidavit, generic unsigned cc agreement (twice, the same photocopied pages), last monthly statement from OC (not going back to zero balance btw)..

i think it is very unethical to buy an old debt for 5 cents (funded by wall street), and then aggressively harass and drag some naive consumer thru court to try and collect the full amount. You would think the courts would have some way to remedy this instead of handing default judgements to jdbs by the dozens.

Edited by creditstudent38
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Because the CA becomes an agent of the OC, just like any Legal Spe******t, but it must be delineated in the contract between OC and the CA. As an agent the contract must specify that the OC gives the CA(agent) the right to engage legal counsel, and sue under their own name.

So in effect the CA becomes an employee of the OC but does not own the debt.

You would necessarily have to discover the scope of their agncy agreement. Now as far as standing the CA would have to show that the OC transferred right to collect via litigation because without assignment of that right then the "chain of standing is broken"

So why do the OC's operate that way, it is to shield them. I am sure that in these agreements the CA is to indemnify the OC, and the CA is shielded by the lawyers retained by the CA. This is a nice dodge for the OC to avoid having to list the various litigation on SEC forms which would drive investers away(and could show those lowest traunches are filled with crap accounts)

to fight it and defeat the standing you make them show the agency agreement. also the accounts forward flow purchase agreement delineates rights delegated to the agent. Corporations have to do it this way because their balance sheets would get out of balance.

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Completely different state, but for what it's worth I know a guy in Wyoming this happened to. He sued for an FDCPA violation for deception and other things that were all basically related to deception.

It went to trial and he won. I saw the case and the discovery. He pretty much painted them into a corner with discovery. They really thought they would win so pretty much admitted to everything he hit them with in discovery.

Not exactly apples to apples, but it's on topic with the discussion.

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:)

That's easy, counter sue their a$$ because a collection agency can't sue you. A junk debt buyer at least will swear to the court they own the debt, a collection agency can't even do that.

If it is a collection agency law firm, they would simply be retained to sue on their client's behalf, and if challenged would show a simple retainer agreement proving they are suing on behalf of their client.

I respectfully disagree that a collection agency can' sue you. In Ohio, for instance, according to Ohio law, they can.

1319.12 Taking assignment of debts.

(A)(1) As used in this section, “collection agency” means any person who, for compensation, contingent or otherwise, or for other valuable consideration, offers services to collect an alleged debt asserted to be owed to another.

© No collection agency shall commence litigation for the collection of an assigned account, bill, or other evidence of indebtedness unless it has taken the assignment in accordance with all of the following requirements:

(1) The assignment was voluntary, properly executed, and acknowledged by the person transferring title to the collection agency.

(2) The collection agency did not require the assignment as a condition to listing the account, bill, or other evidence of indebtedness with the collection agency for collection.

(3) The assignment was manifested by a written agreement separate from and in addition to any document intended for the purpose of listing the account, bill, or other evidence of indebtedness with the collection agency. The written agreement shall state the effective date of the assignment and the consideration paid or given, if any, for the assignment and shall expressly authorize the collection agency to refer the assigned account, bill, or other evidence of indebtedness to an attorney admitted to the practice of law in this state for the commencement of litigation. The written agreement also shall disclose that the collection agency may consolidate, for purposes of filing an action, the assigned account, bill, or other evidence of indebtedness with those of other creditors against an individual debtor or co-debtors.

I'm not trying to be difficult. :) I'm simply pointing out that, if state law allows, a CA can sue.

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I'm not trying to be difficult. :) I'm simply pointing out that, if state law allows, a CA can sue.

Right, I agree with you if state law allows. That is why I said my example was in Wyoming and not really apples to apples.

Why you trying to be so difficult BV80? Did you miss the rule that says you can't disagree with me?!!? :lol: I'm reporting you to the Mods. :lol:

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Right, I agree with you if state law allows. That is why I said my example was in Wyoming and not really apples to apples.

Why you trying to be so difficult BV80? Did you miss the rule that says you can't disagree with me?!!? :lol: I'm reporting you to the Mods. :lol:

Being just a TAD difficult makes life interesting. xangelx

Besides, we know you can make life difficult and unpleasant for a JDB. ::allhail::

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