SamanthaL

Response to Civil Summons from Portfolio Recovery Associates Today

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A sheriff hand-delivered a civil summons today based on an alleged debt that originated with HSBC. The last payment made to HSBC was such that the SOL cannot be used as a defense.

 

The docs state that I owe $1,775, plus interest at the "legal rate of 8% annum..."

 

Edit: HSBC sold the alleged debt to PRA, while Redline Recovery is simply a debt collector. Obviously, HSBC owned the debt while Recovery was trying to secure a settlement. Therefore, the following paragraph is of no significance to my case. Here's a fact that may or may not apply (see item 16 below)--again, the debt originated with HSBC. Then, I received a mailed notice dated February 2011 from Redline Recovery. Redline Recovery stated that my "account has been placed with our office for collection." I never respondend and/or contacted Redline Recovery. The last notice from Redline Recovery was dated 2/3/11, and it offered me a settlement. It states in writing that I had until 2/25/11 to accept the settlement offer. I took no action. However, in the documents I received today, there's an "assignment and bill of sale," which reads that HSBC entered into a purchase and sale agreement as of 2/7/11 with Portfolio Recovery Associates (PRA) "for the sale of Prime Fresh Charged off Receivables..." Meaning, PRA "purchased" my debt, I guess, and PRA is the plaintiff in my case. Is this noteworthy? Is it something that should be mentioned in my reply? How can the bill of sale be valid on 2/7/11 when another collection agency, Redline Recovery, had just sent me a settlement offer dated 2/3/11 for the same debt and extended the acceptance period to 2/25/11?

 

I called the local court and confirmed that, yes, a case has been filed. I have 30 days to answer the complaint received. Any ideas as to the best course of action? I'm reading through people's experiences. Thanks so much!

 

1. Who is the named plaintiff in the suit?
PRA


2. What is the name of the law firm handling the suit? (should be listed at the top of the complaint.)
Initials are S.R.


3. How much are you being sued for?

$1,775 plus 8% interest

4. Who is the original creditor? (if not the Plaintiff)

HSBC

5. How do you know you are being sued?

Served the paperwork with complaint and civil summons today.

6. How were you served? (Mail, In person, Notice on door)

Sheriff

7. Was the service legal as required by your state?

Seemingly.

8. What was your correspondence (if any) with the people suing you before you think you were being sued?

Yes, PRA snail mailed a couple notices.

9. What state and county do you live in?

North Carolina.

10. When is the last time you paid on this account?

Just under 3 years.

11. What is the SOL on the debt? To find out:
3 Years in NC.

12. What is the status of your case? Suit served? Motions filed? You can find this by a) calling the court or B) looking it up online (many states have this information posted - when you find the online court site, search by case number or your name).

N/A, yet.

13. Have you disputed the debt with the credit bureaus (both the original creditor and the collection agency?)

No.

14. Did you request debt validation before the suit was filed? Note: if you haven't sent a debt validation request, don't bother doing this now - it's too late.

No.

15. How long do you have to respond to the suit? (This should be in your paperwork). If you don't respond to the lawsuit notice you will lose automatically. In 99% of the cases, they will require you to answer the summons, and each point they are claiming. We need to know what the "charges" are. Please post what they are claiming. Did you receive an interrogatory (questionnaire) regarding the lawsuit?

30 Days.

16. What evidence did they send with the summons? An affidavit? Statements from the OC? Contract? List anything else they attached as exhibits.

  • The complaint.
  • Two credit card statements from the original creditor, HSBC, are attached as evidence. One clearly shows the last payment date.
  • Two typed "Assignments and Bills of Sale."
  • A printout with my name, account number, address, phone, and other sensitive data that reads, "data printed by Portfolio Recovery Associates from electronic records provided by HSBC Bank Nevada, N.A. pursuant to the sale of accounts from HSBC to PRA."
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Redline is merely a collection agency who collects for other businesses.  They don't buy the debts.  Portfolio is a debt buyer who purchases defaulted  debts.  Redline could have been collecting for HSBC with no idea that HSBC was selling the debt to Portfolio. 

 

Be sure to check your bank records to make sure you really did make a payment on 2/12/10.  The chances are that you did, but ALWAYS verify any information provided to you by checking your own records.  

 

Read your court's rules of civil procedure.  You will use those rules throughout the case.  Here's a couple of threads from this site that are extremely helpful.  In the second link, just replace the words "Midland Funding" with "Portfolio Recovery".  They're both debt buyers.

 

http://www.creditinfocenter.com/community/topic/312714-standing-when-dealing-with-jdb/

 

http://www.creditinfocenter.com/community/topic/313112-the-all-inclusive-ive-been-sued-or-contacted-by-midland-whats-next-andor-help-me/

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Read this thread - http://www.creditinfocenter.com/community/topic/319032-being-sued-by-cavalry-spc-headed-to-trial/

 

What year was the alleged account opened and what year was the default?

 

If it were me, I'd elect arbitration via JAMS now.

 

Then I'd get my answer/affirmative defenses ready - including my election of arbitration within both.

 

Be sure and read the strategy and steps of arbitration thread in the arbitration forum.

 

Your cost to file would only be $50.  The creditor would have to pay $750. You wouldn't even have to pay arbitration costs or attorney fees, etc., even if you lose if your agreement is like most HSBC agreements I've seen.

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Portfolio has completely ignored my election, request for the remainder of JAMS fees, and my motion to compel arbitration! In my state, they have 10 days to respond. They never filed or served an opposition within the required timeframe. Guess they decided not to pursue? My motion hearing is next week so it should be interesting.

As mine was also allegedly HSBC, I can't imagine them doing anything different in your case. Read all of Linda's arb threads as she is an **Arb genius**.

In the event you don't want to go through arb, PRA is beatable. Keep researching and don't give up.

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Redline is merely a collection agency who collects for other businesses.  They don't buy the debts.  Portfolio is a debt buyer who purchases defaulted  debts.  Redline could have been collecting for HSBC with no idea that HSBC was selling the debt to Portfolio. 

 

Be sure to check your bank records to make sure you really did make a payment on 2/12/10.  The chances are that you did, but ALWAYS verify any information provided to you by checking your own records.  

 

Read your court's rules of civil procedure.  You will use those rules throughout the case.  Here's a couple of threads from this site that are extremely helpful.  In the second link, just replace the words "Midland Funding" with "Portfolio Recovery".  They're both debt buyers.

 

http://www.creditinfocenter.com/community/topic/312714-standing-when-dealing-with-jdb/

 

http://www.creditinfocenter.com/community/topic/313112-the-all-inclusive-ive-been-sued-or-contacted-by-midland-whats-next-andor-help-me/

Thanks for your response. Yes, since my original post, I read that Portfolio Recovery is the nation's third largest debt buyer.

 

Also, I understand that trying to incorporate Redine Recovery as part of the defense is not reasonable.

 

Yes, I did - in fact - make the last payment on that date, so that's concrete, a fact.

 

I've communicated briefly with a lawyer in my state. I realize that my only real two options are- to settle and/or submit the written response with my defenses. The lawyer says I should be able to get a settlement, without issue, but it's best to pay the big lump-sum (reduced settlement) immediately or Portfolio will probably only agree to payments on the full amount that's supposedly due. But, I have no contractual relationship with Portfolio. I don't owe money to Portfolio. I'm thinking about what the best option is.

 

It seems the best and strongest defense at this point, should I submit a written response, is that Portfolio is simply a third-party acting independently of any alleged first-hand contract that it's claiming it initiated between itself and me. I didn't enter into any contract with Portfolio. Portfolio included as evidence the "sale, transfer," etc. of my supposed account from HSBC to Portfolio; however, there is no authorization from HSBC included as evidence allowing the transfer of my Social Security number, which Portfolio has and submitted as evidence, per a printout HSBC provided Portfolio. Is that a violation of my rights under the Social Security Privacy Act? Portfolio isn't authorized to have the documents inclusive of my Social Security number attached to HSBC accounts.

 

It's quite clear that HSBC and Portfolio engaged in dialogue regarding transferring my personal and private information, inclusive of my Social Security number, full name, address, home phone, work phone, etc. Could this contitute a conspiracy that violates my constitutional and civil rights, disguised in such a way that it circumvents and violates the laws of the U.S. and IRS tax codes?

 

Anyway, I'm just getting started on this and am formulating...

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Portfolio has completely ignored my election, request for the remainder of JAMS fees, and my motion to compel arbitration! In my state, they have 10 days to respond. They never filed or served an opposition within the required timeframe. Guess they decided not to purse? My motion hearing is next week so it should be interesting.

As mine was also allegedly HSBC, I can't imagine them doing anything different in your case. Read all of Linda's arb threads as she is an **Arb genius**.

In the event you don't want to go through arb, PRA is beatable. Keep researching and don't give up.

Thanks for your input. I have no idea what JAMS even is, so I need to get reading! I'm off to read her threads!

 

I located the cardmember agreement, and it reads:

 

"On any claim you file, you will pay the first $50 of the filing fee. At your request, we will pay the remainder of the filing fee and any administrative or hearing fees charged by the arbitration administrator on any Claim submitted by you in arbitration up to a maximum of $1,500. If you are required to pay any additional fees to the arbitration administrator, we will consider a request by you to pay all or part of the additional fees; however, we shall not be obligated to pay any additional fees unless the arbitrator grants you an award..."

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A very helpful forum member shared with me that he beat HSBC based on its FDCPA violations. He also shared with me that, in NC, Portfolio is most likely required to attach a contract to its complaint. I need to confirm if this holds true for NC.

 

No contract was included. So, I'm going to start researching how I may be able to dismiss.

 

Separately, I'm going to pick up a copy today of the returned summons. The civil summons is dated and the complaint was filed on 2/7/13. In NC, upon filing of the complaint, the summons should be issued within five days. Mine was issued yesterday, on the 5th day. Okay on this note.

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You will not get a dismissal because they did not attach a contract, dismissals are only granted based on procedure, which means there is something that should have prevented the suit being filed in the first place. Wrong person sued, wrong venue, wrong cause of action, statute of limitations, things like that. Forgetting to attach paperwork is what they call a curable defect. That means the court will allow them to fix the mistake.

 

The defense you mention is called privity, (no contract between you and PRA) and it is absolutely worthless. The cardholder agreement you agreed to when the account was opened gives them the right to sell your account. PRA now "steps into the shoes" of the original creditor and can sue you for the full amount. Whether or not they can get it is a different story.

 

Your best defense is arbitration. JAMS has a web site. This is the best weapon to use, because PRA spent at most $35 for your account. JAMS can run into the $10,000 range easily, and PRA has to pay for it. That's one of the little benefits of putting on those shoes. Would you spend 10 grand to litgate a case so you could possibly collect 1700? Neither will they. PRA and all of these debt buyers (we call them JDBs for junk debt buyer) operate on 95% no shows, which means they sue, you do nothing, they get a judgment, and they can then attach your pay or raid your bank accounts. That's what they like and expect. Fighting lengthy, expensive court battles against people like us is not in their business model. Besides, the lawyers they use are the bottom of the barrel and don't even know what to do in court. When faced with arbitration, 90% of the time they just dismiss the case. They may then sell it to some other desperate jdb, and you can be sued again by that one. Then you just do the same thing to them. This is rare tho, once the word is out that you will invoke arbitration, they usually go away.

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I'm not a arbitration person, not because I think its a bad thing, but because I've never used it. WIthout seeing the documents, its hard to draw the exact line of how these documents came to be and to easily judge their credibility. With that said, you had Linda7 come out of mini-retirement and Bruno, who is also a resident expert talk about arbitration.

 

Based on that, it may be worth looking into.

 

Although personally I am a fan of technically curable motions to dismiss, such motions are often sufficient to act as a knockout in Court because they lack the document to overcome the motion to dismiss.

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In this case, all they have to do is find a cardholder agreement, which shouldn't be too hard. The validity of the documents isn't part of the arb strategy, I don't care if they have videotapes of the poster buying stuff at Walmart, it's not about that when you use arb, it's about the money. Even if they think they can win, they won't pay for it.

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You will not get a dismissal because they did not attach a contract, dismissals are only granted based on procedure, which means there is something that should have prevented the suit being filed in the first place. Wrong person sued, wrong venue, wrong cause of action, statute of limitations, things like that. Forgetting to attach paperwork is what they call a curable defect. That means the court will allow them to fix the mistake.

 

The defense you mention is called privity, (no contract between you and PRA) and it is absolutely worthless. The cardholder agreement you agreed to when the account was opened gives them the right to sell your account. PRA now "steps into the shoes" of the original creditor and can sue you for the full amount. Whether or not they can get it is a different story.

 

Your best defense is arbitration. JAMS has a web site. This is the best weapon to use, because PRA spent at most $35 for your account. JAMS can run into the $10,000 range easily, and PRA has to pay for it. That's one of the little benefits of putting on those shoes. Would you spend 10 grand to litgate a case so you could possibly collect 1700? Neither will they. PRA and all of these debt buyers (we call them JDBs for junk debt buyer) operate on 95% no shows, which means they sue, you do nothing, they get a judgment, and they can then attach your pay or raid your bank accounts. That's what they like and expect. Fighting lengthy, expensive court battles against people like us is not in their business model. Besides, the lawyers they use are the bottom of the barrel and don't even know what to do in court. When faced with arbitration, 90% of the time they just dismiss the case. They may then sell it to some other desperate jdb, and you can be sued again by that one. Then you just do the same thing to them. This is rare tho, once the word is out that you will invoke arbitration, they usually go away.

Thanks so much for your reply. Roger that regarding the contract (or potential lack thereof) in conjunction with curable defect. Understood. I located HSBC's (now PRA's) cardmember agreement and disclosure statement (in my hard files).

 

You say that JAMS can run into the $10,000 range, easily. That may be true, but the HSBC (now PRA) cardmember agreement states that, "On any claim you file, you will pay the first $50 of the filing fee. At your request, we will pay the remainder of the filing fee and any administrative or hearing fees charged by the arbitration administrator on any Claim submitted by you in arbitration up to a maximum of $1,500. If you are required to pay any additional fees to the arbitration administrator, we will consider a request by you to pay all or part of the additional fees; however, we shall not be obligated to pay any additional fees unless the arbitrator grants you an award..."

 

I'm formatting the below to send as my notice of arbitration election. I updated the below to mirror the terms of the HSBC cardmember agreement.

 

[My Name]

[My Address Line 1]

[My Address Line 2]

 

[Attorney/Creditor Name]

[Attorney/Creditor Address Line 1]

[Attorney/Creditor Address Line 2]

 

Date

 

RE: CASE #XXXXXXXXX

 

NOTICE OF ARBITRATION ELECTION
 
Dear Mr. Lawyer:
 
Pursuant to the HSBC Cardmember Agreement and Disclosure Statement ("CADS"), I hereby elect arbitration via JAMS to resolve any and all of our disputes. As per the agreement, if either party elects arbitration, "the parties hereby knowingly and voluntarily waive their rights to litigate such claims in a court before a judge or jury upon election of arbitration by either party."
 
***Note: I haven't decided on the wording of this paragraph, as the CADS is quite lengthy*** I don't know if I should cite all of it. Why should I give "too much" information when PRA probably doesn't have the CADS on file relating to the alleged debt in the first place.
 
Upon receipt of this notice, I lawfully request that you dismiss or stay case #XXXXXX regarding the alleged debt pending the result of Arbitration.
 
Should you demand I initiate arbitration proceedings, consider this my written request, per the CADS, for you to reimburse me for part or all of the "administrative or hearing fees charged by the arbitration administrator on any Claim submitted."
 

Defendant name

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Read this thread - http://www.creditinfocenter.com/community/topic/319032-being-sued-by-cavalry-spc-headed-to-trial/

 

What year was the alleged account opened and what year was the default?

 

If it were me, I'd elect arbitration via JAMS now.

 

Then I'd get my answer/affirmative defenses ready - including my election of arbitration within both.

 

Be sure and read the strategy and steps of arbitration thread in the arbitration forum.

 

Your cost to file would only be $50.  The creditor would have to pay $750. You wouldn't even have to pay arbitration costs or attorney fees, etc., even if you lose if your agreement is like most HSBC agreements I've seen.

Thanks for your response, Linda. In looking at credit reports, I can confirm that the alleged HSBC account was originally opened in Oct. 2003. The year of default is 2010.

 

The HSBC cardmember agreement states: "On any claim you file, you will pay the first $50 of the filing fee. At your request, we will pay the remainder of the filing fee and any administrative or hearing fees charged by the arbitration administrator on any Claim submitted by you in arbitration up to a maximum of $1,500. If you are required to pay any additional fees to the arbitration administrator, we will consider a request by you to pay all or part of the additional fees; however, we shall not be obligated to pay any additional fees unless the arbitrator grants you an award..."

 

Edit: see below. How do I know if the cardmember agreement cited above is applicable at this stage? What if there was an addendum or another that was sent to replace what I have on file? I only have the above on hand. But, I cannot confirm that another was or was not sent. Arbitration definitely sounds like the way to go.

 

The following is part of the cardmember agreement, under "Miscellaneous."

 

"This arbitration agreement shall survive termination of your Account as well as the repayment of all amounts borrowed hereunder. If any portion of this arbitration agreement is deemed invalid or unenforceable under any law or statute consistent with the FAA, it shall not invalidate the remaining portions of this arbitration agreement or the Agreement except that in no event shall the invalidation of any portion of this arbitration agreement have the effect of authorizing an arbitrator to arbitrate a class action or other matter  involving joinder or consolidation of claims without express written consent of you and us. In the event of a conflict of inconsistency between the rules and procedures of the arbitration administrator and this arbitration agreement, this arbitration agreement shall govern. No class actions or joinder or consolidation of any Claim with the claim of any other person are permitted in arbitration without the express written consent of you and us."

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How do I know if the card member agreement cited above is applicable at this stage? What if there was an addendum or another that was sent to replace what I have on file? I only have the above on hand. But, I cannot confirm that another was or was not sent. Arbitration definitely sounds like the way to go.

 

Look for a 'survivability clause' which would state something to the effect that the arbitration clause survives any and /or all changes to the card member agreement. Quite a few of these agreements have such a clause in them.

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Look for a 'survivability clause' which would state something to the effect that the arbitration clause survives any and /or all changes to the card member agreement. Quite a few of these agreements have such a clause in them.

Thank you, Savoir! Think I found it under "Miscellaneous."

 

It reads: "This arbitration agreement shall survive termination of your Account as well as the repayment of all amounts borrowed hereunder. If any portion of this arbitration agreement is deemed invalid or unenforceable under any law or statute consistent with the FAA, it shall not invalidate the remaining portions of this arbitration agreement or the Agreement except that in no event shall the invalidation of any portion of this arbitration agreement have the effect of authorizing an arbitrator to arbitrate a class action or other matter  involving joinder or consolidation of claims without express written consent of you and us. In the event of a conflict of inconsistency between the rules and procedures of the arbitration administrator and this arbitration agreement, this arbitration agreement shall govern. No class actions or joinder or consolidation of any Claim with the claim of any other person are permitted in arbitration without the express written consent of you and us."

 

There is also something under the "Waiver" section that I don't like. It states that "We may choose to delay enforcing or waive any of our rights under this Agreement in certain situations. We can delay enforcing or waive any of our rights without affecting our other rights. If we waive a right, we do not thereby waive the same right in other situations."

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Please excuse my confusion, but why does that concern you?

Hi HotWheels96! Truly, it isn't of much concern vs what I just read--I've been combing through the terms. The agreement states that the OC or JDB may change or terminate all or any part of the agreement or add new terms at any time. Imagine if the JDB receives a notice of arbitration (or thinks it will), only to immediately change the agreement such that it excludes an arbitration option.

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Portfolio has completely ignored my election, request for the remainder of JAMS fees, and my motion to compel arbitration! In my state, they have 10 days to respond. They never filed or served an opposition within the required timeframe. Guess they decided not to pursue? My motion hearing is next week so it should be interesting.

As mine was also allegedly HSBC, I can't imagine them doing anything different in your case. Read all of Linda's arb threads as she is an **Arb genius**.

In the event you don't want to go through arb, PRA is beatable. Keep researching and don't give up.

Sounds like you're in a good place! I'd love to hear how it goes next week! Thanks;o)

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The cardmember agreement states that I may contact NAF or AAA to file a claim. Also, the agreement and the account are to be governed by federal law and, to the extent state law is applicable, the laws of Nevada, even though I don't live there.

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Thank you, Savoir! Think I found it under "Miscellaneous."

 

It reads: "This arbitration agreement shall survive termination of your Account as well as the repayment of all amounts borrowed hereunder. If any portion of this arbitration agreement is deemed invalid or unenforceable under any law or statute consistent with the FAA, it shall not invalidate the remaining portions of this arbitration agreement or the Agreement except that in no event shall the invalidation of any portion of this arbitration agreement have the effect of authorizing an arbitrator to arbitrate a class action or other matter  involving joinder or consolidation of claims without express written consent of you and us. In the event of a conflict of inconsistency between the rules and procedures of the arbitration administrator and this arbitration agreement, this arbitration agreement shall govern. No class actions or joinder or consolidation of any Claim with the claim of any other person are permitted in arbitration without the express written consent of you and us."

 

There is also something under the "Waiver" section that I don't like. It states that "We may choose to delay enforcing or waive any of our rights under this Agreement in certain situations. We can delay enforcing or waive any of our rights without affecting our other rights. If we waive a right, we do not thereby waive the same right in other situations."

 

 

What would concern me more is that the 'survivability clause' makes no mention of surviving changes to your agreement . I have no idea as to when your alleged account was opened ......... or how many amendments were made to that original agreement during the life of that alleged account but, that being said, I'd pay serious attention to the questions posed by Linda7 in the above posts and to read the links in the Arbitration Forum if you're seriously considering arbitration.

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The cardmember agreement states that I may contact NAF or AAA to file a claim. Also, the agreement and the account are to be governed by federal law and, to the extent state law is applicable, the laws of Nevada, even though I don't live there.

I would "not" use that agreement.

 

Let me do some checking.  I know HSBC has JAMS and that is the one you want.  Let me do some reading a little later.

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I would "not" use that agreement.

Let me do some checking. I know HSBC has JAMS and that is the one you want. Let me do some reading a little later.

Wow, thanks so much, Linda.

Separately, and as an aside, I looked up the name of the man who signed the supposed assignments and bills of sale from HSBC to the JDB. His title is shown as Sr VP on the docs I received. Per LinkedIn, he's now with JPMorgan, but when he was with HSBC, his true title was Sr VP of Call Center Operations. He was responsible for East Coast call centers. There's a difference between a Sr VP and a Sr VP of Call Center Operations.

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Wow, thanks so much, Linda.

Separately, and as an aside, I looked up the name of the man who signed the supposed assignments and bills of sale from HSBC to the JDB. His title is shown as Sr VP on the docs I received. Per LinkedIn, he's now with JPMorgan, but when he was with HSBC, his true title was Sr VP of Call Center Operations. He was responsible for East Coast call centers. There's a difference between a Sr VP and a Sr VP of Call Center Operations.

If you end up going to trial make sure and subpoena this guy. Just make sure and double verify your information. You will need to follow your local rules of court for an out of state subpoena.

 

I had a similar situation where the custodian of records no longer worked there. She didn't show and they dropped the case the morning of the trial. 

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If you end up going to trial make sure and subpoena this guy. Just make sure and double verify your information. You will need to follow your local rules of court for an out of state subpoena.

 

I had a similar situation where the custodian of records no longer worked there. She didn't show and they dropped the case the morning of the trial. 

Nice! Wow, thanks for sharing!

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