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MF motion to strike my defenses... help?


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Hi all.  At the end of December I was served by the ever popular and much hated MF LLC group.  I'm using abbreviations, but it should be obvious who I am speaking of.

 

The complaint was very simple with just four points to answer, and one of their BS affidavits.  

 

I filed an appearance and also filed an answer with affirmative defenses.  Separately I filed a motion to strike affidavit, but I don't know if I did that right because it hasn't come up since then.  This was all done Jan 15th.  Three days ago, Jan 28th, I had my appearance.  The lawyer asked the judge for a leave to file a motion to strike my affirmative defenses.  The next court date is in four weeks.

 

Now what?

 

I am being sued for $1500 plus legal fees, in the state of IL, Cook County.  It is within SOL, and served correctly.  From the complaint itself, it seems like it would be easy enough to win this.  They did not attach anything to the complaint as in paperwork or agreements.  Just that I entered into an agreement with the OC, defaulted, and now owe $1500 to them, MF.  The affidavit included an account number.  

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The complaint:  

 

NOW COMES the Plaintiff, by and through its attorneys, B and G, PC., and complaining of the Defendant, states as follows:

1. The Defendant opened an account with GE Money Bank, whereby Defendent could charge good and services to their account and/or receive cash advances.

2. The Defendant subsequently defaulted by failing to pay for the indebtedness incurred resulting in the balance due Plaintiff of $1459.00

3. Plaintiff is the successor in interest of said account having purchased said account in the regular course of business and in good faith and for valuable consideration.

4. Due demand has been made on the Defendant to pay this amount and the Defendant has failed to do so.

WHEREFORE, Plaintiff prays for judgement against the Defendant in the amount of $1459.00 plus interest and court costs.


This was accompanied by an affidavit from one of the junk debt companies employees, not the OC's employees. My account number is included in this as well as the date the account was opened, last payment received (2008), and then charged off (2009).

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My answer:

 

 

Dated this January 14th, 2013

 

1. DENIED. Defendant is without knowledge or information sufficient to form a belief as to the truth of the averment and strict proof to the contrary is demanded.

 

2. DENIED. Defendant is without knowledge or information sufficient to form a belief as to the truth of the averment and strict proof to the contrary is demanded.

 

3. Plaintiff's averment is conclusory and offered without evidence, Defendant is without information or knowledge sufficient to admit, and therefore must deny.

 

4. Denied, Plaintiff or agents has not previously contacted defendant.

 

DEFENDANT'S AFFRIMATIVE DEFENSES;

 

1) Failure to state a claim for which relief can be granted. A complaint that consists of conclusory allegations is substantively defective. A conclusory statement is one that does not provide the underlying facts to support the conclusion. A complaint is substantively defective when the absence of the original account creditor and names of the predecessors in interest leaves the complaint conclusory. Plaintiff has failed to allege sufficient ultimate facts to assert all essential elements of this claim.

 

2) Plaintiff lacks standing to sue; As to assigned claims, it is essential that an assignee show its standing, which "doctrine embraces several judicially self-imposed limits on the exercise of … jurisdiction, such as the general prohibition on a litigant's raising another person's legal rights" . . . A lack of standing renders the litigation a nullity, subject to dismissal without prejudice. It is the assignee's burden to prove the assignment. Given that courts are reluctant to credit a naked conclusory COMPLAINT on a matter exclusively within a moving party's knowledge an assignee must tender proof of assignment of a particular account or, if there were an oral assignment, evidence of consideration paid and delivery of the assignment.

 

3. Defendant claims Lack of Privity as Defendant has never entered into any contractual or debtor/creditor arrangements with Plaintiff.

 

4.  The plaintiff has not proven the debt is valid or the amount of the debt is accurate. The plaintiff must prove that the principal, interest, collection costs, and attorney’s fees are all correct, agreed to in the defendant’s contract, and lawfully charged. Defendant also insists that the plaintiff come up with the contract, account statements and purchase receipts to prove the amount of the debt. See Section 735 ILCS 5/2-606 of the Illinois Code of Civil Procedure, no contract is attached to the complaint, nor does the complaint state that no contract is available and explain its absence.

 

5. Plaintiff's complaint further fails to allege that the Assignor even has knowledge of this action or that the Assignor has conveyed all rights and control to the Plaintiff. The record does not disclose this information and it cannot be assumed without creating an unfair prejudice against the Defendant.

 

6. Plaintiff is not an Assignee for the purported agreement and no evidence appears on the record to support any related assumptions.

 

7 Plaintiff voluntarily, with knowledge inherent, made an assumption of risk and is not entitled to judgment and not entitled to equitable, pecuniary or statutory damages under the doctrine of Volenti non fit injuria.

 

8. Plaintiff's prejudgment interest violates the standard of equity and there is no evidence of pecuniary loss.

 

9. Plaintiff's damages are limited to real or actual damages only.

 

10. Improper notice of breach – Defendant was never notified of any breach of any contract, or that a contact existed with Plaintiff.

 

11. Defendant reserves the right to plead further affirmative defenses at a later date, should more information become available.

 

Wherefore, Defendant requests that the court dismiss the Plaintiff’s complaints with prejudice and that the Plaintiff take nothing, or that the Plaintiff provide legally admissible proofs or assignments of whatever accounts Plaintiff has purchased that indicate that an account owed by the Defendant is now owned by the Plaintiff.

 

Prayer for relief - Wherefore, Defendant prays that this Honorable court dismisses the complaint and that Plaintiff take nothing for its complaint.

 

Signed this 14th day of January 2013 by my hand,

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My motion to strike:

 

 

Dated this January 14th, 2013

 

Comes now, Defendant, and respectfully states the following:

 

1. Plaintiff has submitted into evidence an affidavit in support of Plaintiff’s claim (hereinafter referred to as "Affidavit").

 

2. Plaintiff has no evidence to support that they are the owner of said debt. The record does not disclose this information and it cannot be assumed without creating an unfair prejudice against the Defendant.

 

3. Said Affidavit pertains to acts and events that allegedly occurred between Defendant and a third party, GE MONEY BANK/JC PENNEY CONSUMER.

 

4. At no time was the creator of the affidavits, or any of Plaintiff’s employees present to witness any alleged acts or creation of the records of transactions occurring between Defendant and OC.

 

5. As such said Affidavit falls under the hearsay rule and is inadmissible as evidence.

 

6. Defendant further states that the Affidavit is not subject to the Hearsay Business Records Exemption because it was not made at or near the time of the alleged acts or events, and;

 

7. The information contained in the Affidavit is merely an accumulation of hearsay, and;

 

8. Upon information and belief, the creator of the document is not currently and has never been employed with OC and therefore cannot have personal knowledge of how OC records were prepared and maintained, and;

 

9. Is unqualified to testify as to the truth of the information contained in the Affidavit.

 

10. It is the business records that constitute the evidence, not the testimony of the witness referring to them. There is no business record from the original creditor attached that shows that the defendant had an account or used an account that was transferred to the plaintiff,

 

11. Debt buyer "assignment" or "Bill of Sale" that does not refer to specific accounts does not establish ownership by the plaintiff, nor is testimony based on a computer screen sufficient.

 

12. If records are submitted, they must be properly authenticated.

 

13. An affidavit that is conclusory is substantively defective. A conclusory statement is one that does not provide the underlying facts to support the conclusion. An affidavit is substantively defective when the absence of the referenced papers from evidence leaves the affidavit conclusory

 

 

WHEREFORE, the Defendant prays this Honorable Court that Plaintiff's Affidavit is stricken from evidence in the above action.

 

I state under penalty of perjury that the foregoing is true and correct.

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Affirmative defense is bad, we have said it over and over again here. You shift the burden onto yourself to prove it. About the only time they should be used is in the case of SOL or ID Theft when you can prove it.

 

Let's just look at one of those. Lack of Standing: You may have now shifted the burden to you to prove they do not have standing, where as it is a critical element of their case to prove.

 

You can not speculate on any actions to take until you get their motion and see what they are doing.

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Last payment was in 2008 ? When in 2008 ?

 

Striking affirmative defense is what I see these JDBs do so stick it to them this way :

 

 if I was in your situation: I would then file a motion to compel arbitration indicate " JAMS" as forum (GE money has arbitration in its agreement). I would file it ASAP before the hearing I would ask the clerk to schedule the motion for the same date, In that motion I would also ask for dismissal as court  lacks jurisdiction and case must be ordered to PRIVATE CONTRACTUAL arbitration per TERMS OF THE CONTRACT .

 

Go to Linda7's posts in arbitration look for a card agreement with JAMS and then draft the motion as she suggests. File it with an affidavit (notary is on 12th floor of Cook county for $1) make a few copies and file.

 

See how fast they'll run !

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Affirmative defense is bad, we have said it over and over again here. You shift the burden onto yourself to prove it. About the only time they should be used is in the case of SOL or ID Theft when you can prove it.

 

Let's just look at one of those. Lack of Standing: You may have now shifted the burden to you to prove they do not have standing, where as it is a critical element of their case to prove.

 

You can not speculate on any actions to take until you get their motion and see what they are doing.

If affirmative defenses are so bad then why would the plaintiff want to strike them for the defendant? That would be helping the defendant to win the case. Just because something is said over and over here does not make it so. Whether or not lack of standing was used as an affirmative defense, the plaintiff still has to prove standing, if the plaintiff does not prove standing then the court will not have subject matter jurisdiction (and yes I know everyone here disagrees with that). The burden of proof does shift with affirmative defenses but you are not going to loose a case because you used lack of standing (or any other AD for that matter) I do believe badluckduck used too many affirmative defenses, but if they were as bad as people here believe you most certainly would not see plaintiff's going thru the effort to strike them (as we have also seen here from time to time)

 

I do agree about the motion. Badluckduck should have the motion soon and then can see what AD's they are trying to strike and then he can file an opposition to the motion.

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Badluckduck,

is the court date you have in 4 weeks a case management hearing? I don't believe you have a trial date that soon, correct? As howucan2 points out you may have a way out with the SOL so I would look into that. I am not a fan of arbitration myself, but some here are in favor of it. And you should receive the motion soon so you can see what affirmative defenses they are trying to strike (and then you can file an opposition to it). Don't beat yourself up about the affirmative defenses, they are probably the most misunderstood item in the law.

Your abbreviation of MF fits them well (in more ways than one)

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Anon, This is what lawyers do is try to harass you with papers and hope you screw up. In this case there are some defenses in there that are not even applicable, such as lack of privity. 4-10 are not even defenses.

Agreed, I did say that he used too many AD's (people usually do). And I do hear what you are saying. But I do see how a FEW AD's can be useful, as long as the defendant has good reason to believe that they can prove them. Lawyers do have their minions harass people, but if they are going to the trouble to strike an AD it is because they feel it can damage them, otherwise they would just let you hang yourself. That's just my opinion, it will be interesting to see what defenses they are trying to strike. I am not trying to attack your post, and I am not one of those people who submit a whole laundry  list of AD'S that they do not understand and can't prove. Most of the time if you can't prove an affirmative defense it has the same effect as if you did not assert it in the first place. 

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Well, I read through the affirmative defenses, and thought I understood them ok, and saw how they fit, or so I thought.  There were more I was told to use, but I dropped those because I did not understand how they fit my case.

 

I will look into the arbitration thing, but that sounds scary lol.  When I filed my motion to strike affidavit, the clerk didn't know what I was doing so we "free filed" it, as he put it.  It has my case number on it, but since then I have not heard anything.  What should I do about that part?

 

This is so complicated.  It's intimidating enough, but all the procedures just to clear your name are crazy.  

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Well, I read through the affirmative defenses, and thought I understood them ok, and saw how they fit, or so I thought.  There were more I was told to use, but I dropped those because I did not understand how they fit my case.

 

I will look into the arbitration thing, but that sounds scary lol.  When I filed my motion to strike affidavit, the clerk didn't know what I was doing so we "free filed" it, as he put it.  It has my case number on it, but since then I have not heard anything.  What should I do about that part?

 

This is so complicated.  It's intimidating enough, but all the procedures just to clear your name are crazy.  

Completely understandable. I wouldn't worry about the AD's (whats done is done), you probably could prove most of them anyway (if you went through discovery). And if you can't prove them they will just move on with the case, you can lose parts of a case and still win, people do not win every single element of a case (unless it's by default) and you have managed to avoid that so far, so you have done better than many. I have never read a thing about arbitration that would make me want to be in it, and the lawyer I opposed wanted arbitration, I fought to keep it in court.

I would need to know if you have a trial date yet, and what type of hearing  you have in 4 weeks to have an opinion on what to do about the motion to strike affidavit and your case, if you are interested.

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My paper I was given that day from the recorder says that it is a set up for STATUS.  And that the attorney is to provide me with a copy of something... illegible, I am assuming their written motion?

 

I am definitely interested, I have no idea what I am doing because the procedures themselves seem so complicated. 

 

Also, 

 

It says on the affidavit that the last payment was received in late July of 2008, so I am assume July this year maybe is when SOL would apply.

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My paper I was given that day from the recorder says that it is a set up for STATUS.  And that the attorney is to provide me with a copy of something... illegible, I am assuming their written motion?

 

I am definitely interested, I have no idea what I am doing because the procedures themselves seem so complicated. 

 

Also, 

 

It says on the affidavit that the last payment was received in late July of 2008, so I am assume July this year maybe is when SOL would apply.

OK. So it looks like it just a case conference in 4 weeks and you do not yet have a trial date. I would assume it is the motion you are waiting for, and when you get it you can file an opposition to it (or whatever needs to be done at that time) You need to get the local court rules and learn about these motion hearings and other procedure issues so you don't get tripped up on technicalities. I would learn about that and discovery if it was my case and prepare to send discovery.

Almost forgot: I wouldn't even worry about that motion for now if I was you. Forget about it, start over and get things under control. For one: when you filed that motion it would have been easy for them to defeat, because at that time in your case it would have been premature, as it was not being introduced into evidence (at that time) and therefore there is nothing to strike.

Learn the rules, learn about discovery, prepare to send Request for Production of Documents. When you have the discovery you can file motions to strike that and the affidavit. If you are going to fight you will need to do a lot of study.

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Start here:

 

http://www.edcombs.com/CM/Custom/collection%20defense%20december%202012.pdf

 

This is specific for IL consumer, there is IL CAA (Collection agency act which must be complied with ) "Unifund partners LLC vs Shah , Feb 2011" is important because it emphasized  the three underlined paragraphs.

 

225 ILCS 425/8b) (from Ch. 111, par. 2011b)
(Section scheduled to be repealed on January 1, 2016)
Sec. 8b. Assignment for collection. An account may be assigned to a collection agency for collection with title passing to the collection agency to enable collection of the account in the agency's name as assignee for the creditor provided:
(a) The assignment is manifested by a written agreement, separate from and in addition to any document intended for the purpose of listing a debt with a collection agency. The document manifesting the assignment shall specifically state and include:
(i) the effective date of the assignment; and
(ii) the consideration for the assignment.

(B) The consideration for the assignment may be paid or given either before or after the effective date of the assignment. The consideration may be contingent upon the settlement or outcome of litigation and if the claim being assigned has been listed with the collection agency as an account for collection, the consideration for assignment may be the same as the fee for collection.
© All assignments shall be voluntary and properly executed and acknowledged by the corporate authority or individual transferring title to the collection agency before any action can be taken in the name of the collection agency.
(d) No assignment shall be required by any agreement to list a debt with a collection agency as an account for collection.
(e) No litigation shall commence in the name of the licensee as plaintiff unless: (i) there is an assignment of the account that satisfies the requirements of this Section and (ii) the licensee is represented by a licensed attorney at law.
(f) If a collection agency takes assignments of accounts from 2 or more creditors against the same debtor and commences litigation against that debtor in a single action, in the name of the collection agency, then (i) the complaint must be stated in separate counts for each assignment and (ii) the debtor has an absolute right to have any count severed from the rest of the action.

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The reason they will try to strike the affirmative defenses is because they will win the motion and any victory will most likely make most Defendant's terrified.  It's a slam dunk easy motion to win and it will just appear they are in a lot stronger position than they really are in when it comes to trying to settle.   No way they are scared of defenses that would not work or are not even defenses.  They are trying to bluff and intimidate because that is the only way they can win.   I mean their bluff has the OP worried, at least a little, right? so part of their strategy worked. 

 

The affirmative defenses, generally speaking, are a horrible idea.   Yes, standing has to be proven but way shift any burden.   In fact, why even tip them off.   I'd concede the motion and say fine you win your motion.   You're in no worse position.   They strike a bunch of stuff that was not going to work, was not affirmative defenses in the first place, or that you did not want shifted.   They win the motion and win nothing.  

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http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2079155

Pursuant to Illinois Code of Civil Procedure (735 ILCS 5/2-606), if a claim or defense found upon a written instrument, a copy thereof, or of so much of the same as is relevant, must be attached to the pleading as an exhibit or recited therein, unless the pleader attaches to his or her pleading an affidavit stating facts showing the instrument is not accessible to him or her. In pleading any written instrument a copy thereof may be attached to the pleading as an exhibit. In either case the exhibit constitutes a part of the pleading for all purposes.

 

https://docs.google.com/viewer?a=v&q=cache:Q1BOYtjqy7UJ:jenner.com/system/assets/publications/10348/original/Illinois_Civil_Practice_Guide_2012.pdf%3F1343746624+&hl=en&gl=us&pid=bl&srcid=ADGEESiTD7Rzq4twoyWteqhnQ-2bu5U0JUKVB44i0uCIq1JAOaYgEQCLaNjc1d6Q5Tx0rVwU2VKByv00s9n8TVKMC9K8jSuX3hQDFhjPh25oR2YLURDSSaYTzJvvyjNiKpP3P44q_dal&sig=AHIEtbR26IOuQ-tYoAzjWM2f9a_QQsGWpA

 


http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=2017&ChapterID=56http://www.ilga.gov/legislation/ilcs/ilcs3.asp?ActID=1355&ChapterID=24

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 IL BAR association:

 

In January 2010, the Second District Appellate Court delivered an opinion, Velocity Investments LLC v. Alston, which may change the face of debt collection litigation in Illinois. While Velocity Investments does not break new ground, it is remarkable for the clarity it brings to pleading requirements for debt collection lawsuits—especially credit card collection cases. Specifically, Velocity Investments clarifies that, in most credit card collection cases, the plaintiff must attach a copy of the signed credit card agreement to the complaint in order to survive a motion to dismiss.

  Plaintiff, Velocity Investments, LLC, filed suit against defendant, Gregory Alston, alleging that the defendant had defaulted on the terms of his credit card agreement. Defendant originally entered into a credit card agreement with Household Bank, whose interest in the debt was subsequently sold to the plaintiff. The pro se defendant filed a motion to dismiss on the basis that the plaintiff had not attached the required documents establishing the existence and validity of the debt to its complaint.

The trial court denied the defendant’s motion to dismiss and entered judgment against the defendant.  The Second District Appellate Court, however, vacated the judgment, holding that “Plaintiff's failure to attach a copy of the credit card contract to the complaint, failure to recite the terms of the contract within the complaint, and failure to attach an affidavit showing that the document is inaccessible is grounds for dismissal.”

            Causes of Action in Collection Cases: Breach of Contract and Account Stated.  Most debt collection lawsuits are based on one of two causes of action: Breach of Contract or Account Stated. The essence of a breach of contract claim is the injury resulting to plaintiff by defendant’s failure to comply with the terms of the parties’ agreement. In the case of credit card collections, the plaintiff usually alleges that the defendant breached either the cardholder agreement, or an explicit or implicit agreement to pay at the time that the defendant incurred the individual charges. Whether or not these agreements exist is often a core issue in credit card collection litigation.

            An account stated claim, on the other hand, is an agreement between parties, who have previously engaged in a transaction, that the account representing the transaction is true, that the balance stated is correct, and that the debtor promises to pay the balance.  To put it another way, an account stated claim is akin to saying “You agreed that you owe me money. Later, I sent you statements showing the amount that you owed, and you agreed to that amount either by telling me you agreed, or by not objecting to the statements.”

            In credit card collection cases, the plaintiff usually alleges that the defendant entered into an agreement to pay credit card charges and that the credit card issuer sent account statements to the defendant, who did not object to the charges described in the statement within a reasonable time. Accordingly, the plaintiff alleges, the defendant implicitly agreed to the “account stated” in the credit card statement.  In other words, two different agreements must be proved in an account stated case: first, the underlying agreement, where the defendant agreed to pay a debt and, second, the defendant’s explicit or implicit agreement to the specific amount claimed by the plaintiff.

            The Common Thread: The Underlying Agreement.  Both breach of contract and account stated causes of action share the requirement that the plaintiff plead and prove the existence and terms of the underlying agreement. Thus, the real question becomes: what is the “underlying agreement?”

The underlying agreement could theoretically be any agreement where the defendant agreed to be responsible for the credit card charges complained of. In most credit card cases, there are only three possible sources of such an agreement: the credit card receipt executed by the defendant at the point of sale, the credit card issuer’s terms and conditions, or the cardholder agreement. Both the cardholder agreement and the credit card issuer’s terms and conditions could theoretically apply to all charges on the credit card account, whereas a point-of-sale receipt arguably applies only to the individual transaction.

            Point of Sale Receipts. In reality, point-of-sale receipts rarely form the basis for the agreement underlying a breach of contract claim or an account stated claim for several reasons. First, many credit card transactions are online.  Even a decade into the 21st Century, it is still a challenge for a plaintiff to prove an on-line agreement if the defendant did not physically sign a receipt, and the defendant’s agreement to the transaction cannot be otherwise verified.

            Second, credit card plaintiffs often do not have access to the credit card receipts executed by defendants at the point of sale.  Merchants generally do not transfer signed credit card receipts to the credit card issuers and many do not keep signed credit card receipts longer than eighteen months.

Third, there is a real question about whether the credit card plaintiff could even enforce an agreement based on a point-of-sale receipt.  The point-of-sale receipt is arguably an agreement between the defendant and the merchant, not the defendant and the card issuer.

            Finally, a point-of-sale receipt may not form the basis for the agreement because it could, at most, constitute an agreement to be liable for a single transaction and not an agreement to be liable for other charges.

            Standard Terms and Conditions. A credit card issuer’s standard terms and conditions cannot be the underlying agreement, absent proof that the defendant actually agreed to those terms and conditions. Velocity Investments specifically addressed this issue, finding that the credit card issuer’s standard terms and conditions could not form the basis for the underlying agreement because “it offers no evidence that defendant agreed to be bound by these terms or that these terms even applied to this particular account.”  In other words, it is not enough for a credit card plaintiff to allege that the credit card issuer has standard terms and conditions that apply generally to all credit card accounts—the plaintiff must show that the defendant agreed to be bound by those terms and conditions and that they applied to the particular account at issue.

            Cardholder Agreement.  Since credit card receipts and a card issuer’s standard terms and conditions generally cannot serve as the underlying agreement in a credit card lawsuit, the only remaining possibility is the original credit card agreement signed by the defendant. In most cases, the original agreement consists of the original credit application, which contains a provision that if the application is approved, then the consumer agrees to be bound by the issuer’s standard terms and conditions.  Since the application explicitly incorporates the terms and conditions, the combination of the two forms the underlying agreement and the basis for the suit.

            Pleading Requirements Bar Many Credit Card Collection Suits.  Velocity Investments highlights the important pleading requirements for credit card collection plaintiffs. Among those requirements are attachment of written instruments to complaints and fact-pleading.  These pleading requirements guard against frivolous lawsuits and ensure that plaintiffs have colorable claims. Many credit card complaints are dismissed for failure to comply with these minimum pleading requirements because the plaintiff does not attach the written credit card agreement to the complaint or fails to plead sufficient facts in support of an alleged oral credit card agreement.

            Written Instruments Must Be Attached to Complaints.  Under Section 2-606 of the Illinois Code of Civil Procedure, where a complaint is founded on a written instrument, either: (a) the instrument must be attached as an exhibit to the complaint, or ( B) the plaintiff must attach an affidavit stating facts showing that the instrument is inaccessible.

            In a credit card collection case, Section 2-606 requires the plaintiff to attach any written instruments upon which its claims are based, such as the written credit agreement and credit card statements sent to the defendant.  If the written instrument is inaccessible, then Section 2-606 requires the plaintiff to attach an affidavit stating facts regarding the inaccessibility of the instrument.The affidavit is insufficient if it merely states that the instrument is inaccessible—it must provide supporting facts “so as to excuse the failure to attach the written contract.”

            Fact-Pleading Requirements Apply to Alleged Oral Agreements. Since Illinois is a fact-pleading jurisdiction, complaints must contain a plain and concise statement of the pleader’s cause of action. “[A]lthough complaints do not need to contain evidence, a complaint cannot be merely conclusory but must allege facts sufficient to bring a claim within a legally recognized cause of action.”  Furthermore, plaintiffs must plead facts in support of each element of each cause of action asserted.  In other words, a complaint is insufficient if it merely recites the elements of a cause of action, instead of setting out specific facts of the case that establish that each of the elements is met.

In many credit card collection cases the complaint alleges that the agreement at issue is an oral agreement, not a written agreement. A “written agreement” is a contract where the “parties are all identified and all the essential terms are in writing and easily ascertainable from the instrument itself.”On the other hand, an “oral agreement” does not necessarily mean that the agreement was entirely verbal between the parties; rather, it is an agreement that may (or may not) be partially in writing, but “resort to parol evidence is necessary to identify the parties or essential terms.”

            Specifically, in credit card collection cases, it is not uncommon for a complaint to attach a standard “terms and conditions” document as part of the agreement, and then allege that other essential terms were made orally; however, there is no exception to the fact-pleading requirement where a plaintiff’s cause of action is based on an alleged oral agreement.  The plaintiff must plead facts to establish the prima facie formation of a valid and enforceable oral contract, which include “offer and acceptance, consideration, and definite and certain terms.” A credit card plaintiff’s failure to plead facts establishing the existence of a valid contract, or merely pleading conclusory allegations, should be grounds for dismissal of the claim. Not surprisingly, Velocity Investments found the complaint in that case to be deficient both for failing to attach the written agreement, and for failing to recite all of the relevant terms of the contract.

            The Achilles Heel: The Credit Agreement is Unavailable.  A credit card plaintiff’s lawsuit is in trouble if it cannot obtain a copy of the credit agreement prior to filing suit. As detailed in Velocity Investments, and in this article, most credit card lawsuits will not survive a motion to dismiss if the original credit agreement is not attached to the complaint.

            There are three major reasons why a credit card plaintiff may be unable to obtain a copy of the agreement. First, the card issuer may be unable to locate the agreement because the account is old, has changed hands through merger of financial institutions, or the issuer has simply lost track of it.

Second, the consumer may have never signed an actual credit card agreement. For example, if the consumer applied for the account online, it will be much more difficult, although not necessarily impossible, for the plaintiff to plead and prove the existence and terms of an underlying agreement.

Finally, the plaintiff may be a third-party debt collector that purchased the debt from the original creditor, or from another third-party debt collector, and does not have access to the original agreement.

            It is a common practice in the consumer credit industry for credit card issuers to sell delinquent accounts to debt buyers for pennies on the dollar; the debt buyers can turn around and attempt to collect the full face value of the debt for their own account, including additional fees and interest as they accrue. Indeed, business is booming in the debt collection industry: the industry employed over 400,000 people in 2008, and jobs are expected to grow by 19 percent over the next ten years.

            It may come as a surprise that few debt collectors receive full documentation of the debt that they are purchasing. Often, the documents that are necessary for the debt collector to properly plead its claim, such as the credit card agreement or copies of account statements, are not provided in connection with the sale of the debt.  So, why do debt collectors continue to buy billions of dollars of defaulted accounts without sufficient documentation?  The answer is that they often succeed in litigation because the vast majority of consumers are unaware of their rights and do not adequately defend themselves.

            But What About Portfolio Acquisitions?  Readers are strongly encouraged to review the First District’s 2009 opinion Portfolio Acquisitions, L.L.C. v. Feltman (“Portfolio Acquisitions”).  While not directly on point with the subject matter of this article, Portfolio Acquisitions is nonetheless a crucial opinion for understanding how Illinois courts view liability for credit card transactions.

Importantly, Portfolio Acquisitions reaffirmed the long-standing principle that “each time a credit card is used, a separate contract is formed between the cardholder and bank.”

            Even so, Velocity Investments holds credit card collection plaintiffs to minimum pleading standards. If a credit card plaintiff alleges that an individual credit card transaction forms the basis for the existence of a contract, then the plaintiff must either attach a copy of any documents that it alleges forms the basis for the contract, or allege sufficient facts to establish the existence of a valid and enforceable oral agreement.  Indeed, Velocity Investments cites Portfolio Acquisitions with approval for the proposition that a credit card issuer’s standard terms and conditions cannot generally provide the foundation for a credit card lawsuit

           Velocity Investments has the potential to profoundly affect debt collection litigation in Illinois. A large number of credit card and other debt collection lawsuits—especially suits by third party debt collectors—could be thrown out of court under the pleading standards elucidated by the Second District’s opinion. This may result in greater due diligence by third-party debt collectors in obtaining the documentation that they need to ultimately prove their claims at trial, in connection with the purchase of defaulted accounts.

            In reality, however, credit card debt collectors are keenly aware that very few consumers adequately defend themselves against credit card lawsuits, and even fewer retain an attorney to help them take full advantage of all of their potential defenses and counterclaims. As a result, credit card plaintiffs will likely continue to succeed at a very high rate in obtaining judgments, even where their complaints could have been thrown out for failure to meet the minimum pleading requirements described in Velocity Investments. □

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A couple if Illinois specific things that you'll need to keep in mind:

 

1) Complaint is under $10,000 making this a Small Claims case.

2) Since this falls under small claims, if you want to conduct discovery, you must ask the Judge for permission. Something to consider at your next court date.

3) As noted in howyoucan2's & racecar's posts, unless the attached affidavit states why they haven't attached a contract, their complaint is legally insufficient. You can attack this as an affirmative defense. I would consider bringing this up at your next hearing. This tactic worked for upsman40 who recently got a dismissal with prejudice in his case, it was in Michigan but still applicable.

4) Be prepared to have a trial date set at your next court date.

5) Did you attach an affidavit of your own to support claims where you responded  Defendant is without knowledge or information sufficient to form a belief as to the truth of the averment. It's required by IL Civil Procedure.

 

Otherwise, be careful in the future using lack of standing as an affirmative defense before conducting discovery. They may just have the proper documents to prove standing and you just don't know it yet. A denial of their claim that they are an assignee of the OC is enough to assert this defense without listing it as an affirmative defense.

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735 ILCS 5/ Code of Civil Procedure.

 

Supreme Court Rules - Art. II (Rules 101-300)

 

Rules of Evidence

 

 

 

 

 

Rule 287. Depositions, Discovery and Motions

(a) No depositions shall be taken or interrogatories or other discovery proceeding or requests to admit be used prior to trial in small claims except by leave of court.

( B) Motions. Except as provided in sections 2--619 and 2--1001 of the Code of Civil Procedure, no motion shall be filed in small claims cases, without prior leave of court.

 

 

You need to file a Request for Leave to Conduct Discovery. Section 2-1001 of the CCP deals with substitution of judge, and 2-619 is regarding MTD. I don't think your motion to strike is allowed without leave of court.

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Why are we filing an answer in small claims? In cook county, filing an appearance serves as a general denial. Its probably a straightforward and pretty easy win, but once you start going off the rules, who knows what can happen.

 

You should have filed a motion for leave and attached a 619.1 motion. There you attack the deficiencies in the complaint using a 615 mtd, and then use the affirmative defenses via 619. Its two motions rolled into one.

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Why are we filing an answer in small claims? In cook county, filing an appearance serves as a general denial. Its probably a straightforward and pretty easy win, but once you start going off the rules, who knows what can happen.

 

You should have filed a motion for leave and attached a 619.1 motion. There you attack the deficiencies in the complaint using a 615 mtd, and then use the affirmative defenses via 619. Its two motions rolled into one.

 

I agree, in Illinois small claims it's to your advantage to NOT file an answer (unless you are ordered to, of course) because if no answer is filed "any defense may be proved as if it were specifically pleaded." (Rule 286).

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Supreme Court Rules for small claims are few, and are easy to read. Its always to ones advantage to avoid tripping oneself up.

 

If I were the OP, I would

 

1) Strike the answer and affirmative defenses on my own at the hearing;

2) Seek a trial date out 3-4 months;

3) File a motion to dismiss, and;

4) Wait for the voluntary nonsuit by Midland.

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Affirmative defense is bad, we have said it over and over again here. You shift the burden onto yourself to prove it. About the only time they should be used is in the case of SOL or ID Theft when you can prove it.

 

Let's just look at one of those. Lack of Standing: You may have now shifted the burden to you to prove they do not have standing, where as it is a critical element of their case to prove.

 

You can not speculate on any actions to take until you get their motion and see what they are doing.

I disagree many of these are quite easy to prove. The standing issue is proved with their documents. The others also. without some defenses listed in the pleading stage they are hereby waived later on.

 

Getting into discovery they will have to give you discovery to prove the defenses.

 

I have seen around with no defenses the courts take liberties, with them factual issues are in dispute.

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