InTheDark

Capital One vs. me and my LLC in Arapahoe County, Colorado

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Capital One vs me and my LLC in Aprapahoe County Civil Court, Colorado.

I submitted my answer, that due to lack of information and documentation from the plaintiff, defendent can neither admit nor deny allegations.

The attorney (Machol & Johannes) sent me a package with some copies of statements and a letter to contact them and settle/pay the debt. I have not responded to their letter.

Approx. 1 year ago the same atty. sent a letter with an amount due (more than what they are now claiming I owe). I find that very odd. Shouldn't they have better records from Capital One? Will this letter from a year ago help me? I did not send them a DV letter.

Also, before this atty, I received a letter from a different attorney back east, which I did not respond to.

I feel that this debt may have been sold to Machol & Johannes. They say they are representing Capital One.

Regarding this summons, no supporting documentation was filed by the attorney. I called the court after I received copies of statements and asked if they had been filed. They said, no.

The attorney said time is of the essence and to contact them asap!.

My question, should I just wait to hear from the court when the trial is scheduled and let them provide whatever evidence they have?

I am so In The Dark and would appreciate any help.

Edited by InTheDark

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Sounds like Cap 1 is the plaintiff. How much is this for? What level of court? If it is small claims you may not be able to conduct discovery. We need this info.

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This forum is mostly about personal debt. If you've got an LLC involved, you may want to find a lawyer in your area to represent you. (Even though you probably personally guaranteed the debt, the FDCPA and FCRA may not apply. Advice you get here may not be appropriate).

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Correct, credit cards always have some sort of provision or the application had to be guaranteed by you personally. Supporting docs usually are not filed with a complaint, you have to ask for them in discovery. If you want what they have, send these:

Requests for Production of Documents

1. The original signed application establishing the account

2. Charge slips bearing defendant's signature which establish use of the account

3. The original written agreement in which defendant allegedly assented to the terms of the account

4. A complete history of the account from day one, establishing the legitemacy of the balance sought

5. Any document setting forth the choice of law provision

6. Any document plaintiff intends to introduce at trial which establishes the exact day the subject account went into default

7. Any document produced by plaintiff in the normal course of business which states and defines the exact statutes the choice of law provision seeks to enforce

8. Any recording, or transcript of any recording, of telephone calls in which defendant disputed the alleged amount owed

9. Any cancelled checks or copies of cancelled checks, or other verified payments on the account plaintiff intends to introduce as evidence at trial

10. Proof of mailing of monthly statements

11. Any documents evidencing that defendant retained monthly statements for an unreasonable amount of time

12. Any document produced by plaintiff in the normal course of business defining "unreasonable amount of time."

What is your defense to this suit?

Edited by legaleagle

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Do I want to ask for these before a trial date is set?

Won't Cap 1's attorney have to give me a copy of what they intend to bring to trial without me having to ask for it? If Cap 1 brings documents, don't they have to be certified to be true and correct by someone with personal knowledge of the account? Or will copies of some statements be enough legal proof to a court to enter a judgement against me?

I want the burden of proof to remain with Cap 1.

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The LLC consists of only 1 person, me. So I am solely responsible. From what I understand it is also considered personal debt.

Its just not that simple. If you can prove the card was used for personal purchases, maybe...but, if you used it for "business" related things, then maybe not.

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All these agreements say the same thing, doesn't matter whether or not it was personal or business, he's on the hook. If this worked, all anybody would have to do is file for an LLC, run up all the debt they want, then claim it was business related and flip off the lender. Never happens. They are wise to this, they can pierce the corporate veil, etc. and attach distribution of profits, assets, etc., if there are any. All credit card agreements for an LLC are based on the personal credit of the owner. He's the owner, he's the business. Personally, I don't see much hope here unless the OC doesn't have any records. Not too many Colorado posters here, I don't know how their courts treat these cases. Discovery can be conducted any time, I suggest you do it now to see what they have. Recent accounts are trouble, they have all the records.

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All these agreements say the same thing, doesn't matter whether or not it was personal or business, he's on the hook. If this worked, all anybody would have to do is file for an LLC, run up all the debt they want, then claim it was business related and flip off the lender. Never happens. They are wise to this, they can pierce the corporate veil, etc. and attach distribution of profits, assets, etc., if there are any. All credit card agreements for an LLC are based on the personal credit of the owner. He's the owner, he's the business. Personally, I don't see much hope here unless the OC doesn't have any records. Not too many Colorado posters here, I don't know how their courts treat these cases. Discovery can be conducted any time, I suggest you do it now to see what they have. Recent accounts are trouble, they have all the records.

Completely untrue. It matters greatly if this is personal or business debt.

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We're kind of all saying the same thing...because, for a 1 person LLC, the CC almost certainly had the owner siign a personal guarantee. If the business doesn't pay it, the owner will...but...

Any purchases made for business purposes DO NOT fall under the protection of the FDCPA or FCRA.

The owners on the hook, for sure, but he may not have any of the legal tools available to the consumer to fight in court.

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Got some case law for this? I've read 2500 credit card cases, I've never seen one where the single owner of an LLC can skate on a credit card debt by claiming it was business related. Every credit card application is dependant upon the personal credit of the applicant if it is an LLC. Also, every state has statutes to pierce the phony corporate veil these single owners try to hide behind. Owners of LLCs are responsible for the debt incurred by those LLCs.

Our CT Supreme Court disagrees with your position.

To determine whether piercing the corporate veil is proper, the Connecticut Supreme Court and previous commission decisions have endorsed two tests: the instrumentality rule and the identity rule. "The instrumentality rule requires, in any case but an express agency, proof of three elements:

(1) Control, not mere majority or complete stock control, but complete domination, not only of finances but of policy and business practice in respect to the transaction attacked so that the corporate entity as to this transaction had at the time no separate mind, will or existence of its own; (2) that such control must have been used by the defendant to commit fraud or wrong, to perpetuate the violation of a statutory or other positive legal duty, or a dishonest or unjust act in contravention of plaintiff's rights; and (3) that the aforesaid control and breach of duty must proximately cause the injury or unjust loss complained of." (Internal quotation marks omitted; citations omitted.) Tomasso v. Armor Construction & Paving, Inc., 187 Conn. 544, 553 (1982); Commission on Human Rights and Opportunities ex rel. Robert Henry v. Edwards Super Food Stores, CHRO No. 9510617, Ruling on Respondents' Motion to Dismiss and Commission's Motion for Stay, 3 (September 1, 1999).

"The identity rule has been stated as follows: If plaintiff can show that there was such a unity of interest and ownership that the independence of the corporations had in effect ceased or had never begun, an adherence to the fiction of separate identity would serve only to defeat justice and equity by permitting the economic entity to escape liability arising out of an operation conducted by one corporation for the benefit of the whole enterprise." (Internal quotation marks omitted; citations omitted.) Tomasso, 187 Conn. 554; CHRO ex rel. Robert Henry, 4.

If you have case law supporting your position, I would love to have it for personal reasons.

Edited by legaleagle

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Never said he could skate because its business related.

I said, because its business related he doesn't have the protection of the FDCPA or FCRA. He's on the hook...no doubt.

And...without the FDCPA, the OC and the CAs can play as nasty as they like...

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When you say they can be as nasty as they want to be, don't they still have to abide by the laws and prove all allegations made against me and the llc?

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When you say they can be as nasty as they want to be, don't they still have to abide by the laws and prove all allegations made against me and the llc?

Yes, they still have to do that. But they can make your life miserable while this is going on by calling you and not playing by consumer laws.

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I have not received any calls from them. I guess I am lucky. It appears they are playing by the FDCPA rules, at least for now. I will call the court tomorrow and see what the next steps are. I believe a court trial date will be set.

Thank You.

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OK, here I am again. Did receive a call from the attorney's office along with a follow-up letter stating that on 8/24 at 10:00 am, the plaintiff's attorney will contact the court to set this matter for trial. They state they would like to resolve this case without going to trial, saving each time and money. They want me to contact thier office.

My next step is to fax and mail over the suggested questions (BOP).

Do you think this is the right approach at this time?

Thank you for all of your help.

InTheDark (but I'm beginning to see the light!)

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This will depend on how the creditor views what your defense states. Most likely they will claim some sort of fraud or chicanery on your part, claiming that you want to get out of this by putting the blame on the business, which esentially is yourself. The creditor will want to "pierce the corporate veil" and hold you liable.

The CO Supreme Court said this:

We have not previously considered whether reverse piercing is appropriate under Colorado law. Colorado does permit traditional piercing of the corporate veil, however, in extraordinary circumstances. Leonard v. McMorris, 63 P.3d 323, 330 (Colo.2003). Traditional piercing occurs when a trial court disregards the corporate form and attaches liability on individual shareholders for the obligations of the corporation. Contractors Heating & Supply Co. v. Scherb, 163 Colo. 584, 587-88, 432 P.2d 237, 239 (1967).

When there is only one shareholder, the chance of success with this defense diminishes somewhat. Was the business bankrupt? If so, the debt should have been included.

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I have not filed BK on the limited liability company, nor have a filed a personal BK. There are no assets for me or the company. I do know that I am personally liable for the company. The lawsuit from Cap 1 is against me and the llc.

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At this point, the "lawyer" is just another CA. They may or may not actually file suit. The time to send the BOP is when and if they do.

If you haven't got the money to pay Crap 1 in full...all you can do is either file personal BK, or wait and see what happens next.

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Hello everyone!

To follow-up, Cap 1's attorney set a trial date for early Nov. Since I am new to this, I decided to call the court clerk and ask them what the procedures are when the plaintiff set a court date. I asked about what happens. Does the plaintiff come to trial with their evidence, how do I go about getting their information. The clerk asked if they sent me a Form 9 along with any evidence they may have. I said, no, the only thing I received from them were some statements, but that was a long time ago. He asked me if a Form 9 was attached. No, it was not. He said they cannot give legal advice, but said the judges get very angry at surprises at trial. I asked if I should initiate asking for information (both sides can do this and when they do, it is at this time each side must disclose what they intend to bring to trial). I asked if he thought I should wait to hear from the plaintiff. He said that was up to me. I got the impression I should wait. (P.S. in the meantime the atty. sent over payment coupons and a court settlement stipulation that they would like me to sign so it can be filed with the court prior to the trial date).

Any thoughts?

Thank you for your help.

InTheDark

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CASE DISMISSED TODAY!

After all of the support and information available on this site, it gave me the courage to stand up to the original creditor, Cap 1, and their well-known collection attorneys.

It was interesting because I thought since the trial date was set for today that I would have to take the stand, etc. I felt rather confident knowing that Cap 1 (or their attorneys) only sent me copies of statements. I went into the court room, signed in, and the lady told me that the attorney would be here shortly and would want to talk to me. I told her I really don't know why I was here since the attys. did not send any proof. Enter attorney. He tells me that this court was very informal and that this Form 9 was not necessary, only if I had a pre-trial (which I did not). He asked if I wanted to settle and I told him I have no proof from Cap. 1 that this account is accurate, and with all do respect, just because you show me copies of statements does not mean they belong to me. I asked him if I mailed him a bill for $10,000 and told him to pay me, would he do it? He just looked at me and said he would dismiss the case!

I waited for a signed copy from him and the court.

I guess they can still come after me later. But who knows. For now I'm very happy. This was almost too easy.

I will be happy to share more detailed information, just let me know.

No Longer In the Dark! Thank you, thank you!

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Make sure you retain all the records in case they decide to file again at a later time. Also look into your court rules and see if they have a time limit to do so. It might also be in the state statutes.

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