What would you do? Discover Card Multiple Causes of Action - SOL

[been sued]

Hi Everyone,

I have been learning a lot from looking through the forums and its absolute fantastic how helpful the members are on here. I am crossing my fingers a few of you will be able to help me out with my lawsuit. Sorry about the long post, just wanted to get all the info in. 

Here are the details. I have also included the summons and declaration of venue as images.

 

 

1. Who is the named plaintiff in the suit?

 

Discover

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

 

Winn Law Group

3. How much are you being sued for?

 

$11,000 to 18,000

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

 

Discover

5. How do you know you are being sued? (You were served, right?)

 

subserved

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

 

mail

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

 

appears to be

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

 

none

9. What state and county do you live in?

 

california. county withheld. i know where to look up court rules and dont want to give too much info here

10. When is the last time you paid on this account? (looking to establish if you are outside of the statute of limitations)

 

The last time I paid was in November of 2009, but they tried and failed to take a payment without my permission in Feb of 2010.

11. What is the SOL on the debt?

Discovers contract says to use Delaware law.  I think the SOL is 3 years.

12. What is the status of your case? Suit served? Motions filed?

 

suit served

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, should have though

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?

 

I have one more week to file an answer.


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

 

nothing. 

 

In July 2009 I found out I had an 11 year old daughter I did not now about (who I now have custody of).  In 2010 I became unable to work with two herniated discs.  These hardships continue to make it difficult to pay back this debt.  I have no assets and do not want to file bankruptcy as this will be the only creditor seeking a judgement.

 

I would like to use SOL as an affirmative defense.  I just want to make sure I am doing this properly since Discover claims I made a payment (or promised a payment) in Feb. of 2010. I have not made a payment since November 2009.  Discover credited my account in January with some funny accounting, does that count as a payment?.  I also had an  verbal agreement in 2010 that they would not charge any more interest or  fees indefinitely and that I could pay the debt when I became more financially fit due to my hardships. Does California SOL on verbal agreements apply in this situation?  Is there a good example of an Answer  with multiple causes of action for the state of California I can look at anywhere?  I truly appreciate any help with this.  Below are the images of the summons.  Sorry about the large image.  I could not figure out how to adjust the size.  If you need any other info please let me know.  Thanks in advance for any help on how you think I should defend this lawsuit.

 

 

[credit_h]

Your personal information (name, county, etc.) is still visible, you might want to edit those out.

[admin]

I don't see any personal information.  

[admin]

 

I would like to use SOL as an affirmative defense.  I just want to make sure I am doing this properly since Discover claims I made a payment (or promised a payment) in Feb. of 2010. I have not made a payment since November 2009.  Discover credited my account in January with some funny accounting, does that count as a payment?.  I also had an  verbal agreement in 2010 that they would not charge any more interest or  fees indefinitely and that I could pay the debt when I became more financially fit due to my hardships. Does California SOL on verbal agreements apply in this situation?  Is there a good example of an Answer  with multiple causes of action for the state of California I can look at anywhere?  I truly appreciate any help with this.  Below are the images of the summons.  Sorry about the large image.  I could not figure out how to adjust the size.  If you need any other info please let me know.  Thanks in advance for any help on how you think I should defend this lawsuit.

 

 

 

I'm not sure you can use SOL - isn't the SOL 4 years in California?

[credit_h]

This picture clearly shows his name and county: http://imageshack.us/a/img199/8373/image17bf.jpg

[been sued]

Thanks!  Your right credit_h,  you can see it if you manipulate the picture properly.  I deleted those images temporarily.  I will update them after they are fixed.  I think they are the least important part of the summons anyway.

[been sued]

Yes SOL in California is 4 years but Discover's contract says they want to use Delaware law.  Does Discover's card member agreement void my verbal agreement?  Or is the SOL on my verbal agreement valid as well?

[skippy1960]

You will need to be sure to file an answer to the complaint and include as an affirmative defense SOL. You will then want to become very familar with the following case.

Resurgence Financial LLC v Chambers here is the link:

http://caselaw.findlaw.com/ca-superior-court/1289969.html

This was an appeals case where the court sided with the 3 year SOL based on the Credit Card Agreement. You need to understand that they aren't suing based on a written contract only Account Stated and Money Lent. The good news is in their pleading the do say "Account State in writing".

I bring this up because you will need to make sure they produce the Card Agreement as part of their evidence of the debt. If you can get them to do this, you have a good shot of being able to rely on the case above.

Of course you will need to be able to prove your last payment was November 2009. They filed the suit in Janaury, so any payment in February 2010 will leave you SOL claim out in the cold.

[skippy1960]

Yes SOL in California is 4 years but Discover's contract says they want to use Delaware law.  Does Discover's card member agreement void my verbal agreement?  Or is the SOL on my verbal agreement valid as well?

SOL is based on date you breached or defaulted on the contract. If you payment was due in November 5th and you made your payment on November 10th, you would have been considered in default or breach. Generally, based on the card agreement the OC has different options.

1. They can accept your late payment and charge you a late fee

2. They could accept you late payment and charge you a late fee and then demand full payment as you defaulted on the agreement.

In the real world they accept payment, charge you a late fee and move on to the next month. At the end of the day you were likely defaulted in November, but since you really missed the December payment and all payments after. December date payment was due, the day after you breached the contract and were in default.

IMO that is when the SOL begins. Any verbal promise to pay will not change that you defaulted and breached the contract in December.

Finally, regarding the mystery payment in February, as long as you know you didn't make it and have records to prove that no money transfered from your account to their's, you did not reset the SOL.

[BV80]

SOL is based on date you breached or defaulted on the contract. If you payment was due in November 5th and you made your payment on November 10th, you would have been considered in default or breach. Generally, based on the card agreement the OC has different options.

1. They can accept your late payment and charge you a late fee

2. They could accept you late payment and charge you a late fee and then demand full payment as you defaulted on the agreement.

In the real world they accept payment, charge you a late fee and move on to the next month. At the end of the day you were likely defaulted in November, but since you really missed the December payment and all payments after. December date payment was due, the day after you breached the contract and were in default.

IMO that is when the SOL begins. Any verbal promise to pay will not change that you defaulted and breached the contract in December.

Finally, regarding the mystery payment in February, as long as you know you didn't make it and have records to prove that no money transfered from your account to their's, you did not reset the SOL.

 

From the CA Dept. of Consumer Affairs:

 

CAUTION: If you make any kind of payment toward the debt, make an agreement to pay, or charge against the account, by law, this restarts the statute of limitations.

 

http://www.dca.ca.gov/publications/debt_collectors.shtml

[been sued]

Thanks for all the help.   I am still a little confused about the answer I need to prepare.  Can I include the cardholder agreement with my answer,  should I just reference it or is there a better time to introduce it to the court.  

[credit_h]

From the CA Dept. of Consumer Affairs:

 

CAUTION: If you make any kind of payment toward the debt, make an agreement to pay, or charge against the account, by law, this restarts the statute of limitations.

 

http://www.dca.ca.gov/publications/debt_collectors.shtml

I thought in California, making a payment does not restart the SOL unless the debt is already past the SOL and you make a payment on that out of SOL debt?

[BV80]

I thought in California, making a payment does not restart the SOL unless the debt is already past the SOL and you make a payment on that out of SOL debt?

 

I believe you have it backwards.  If you make a payment while the debt is still within the SOL, then that payment restarts the SOL. 

 

BUT, if the debt is ALREADY outside the SOL. a payment will NOT restart the SOL.  I need to state that I'm not from your state.   To confirm when the SOL begins or is renewed, you should contact an attorney.  The CA Dept. of Consumer Affairs stated that a payment restarts the SOL.  But they did not clarify if a payment restarts the SOL if the debt is ALREADY outside the SOL.

 

CCP 360 in part:

 

"but no such payment of itself shall revive a cause of action once barred."

 

"Once barred" means it's already outside the SOL.

 

BTW, my response was to a post that was about when the SOL begins.  In most accounts, it does not begin on the date of default UNLESS that date of default is the last payment. 

 

One can be in default but still make payments after default.  Those payments usually determine the SOL.

[skippy1960]

I believe you have it backwards.  If you make a payment while the debt is still within the SOL, then that payment restarts the SOL. 

 

BUT, if the debt is ALREADY outside the SOL. a payment will NOT restart the SOL.  I need to state that I'm not from your state.   To confirm when the SOL begins or is renewed, you should contact an attorney.  The CA Dept. of Consumer Affairs stated that a payment restarts the SOL.  But they did not clarify if a payment restarts the SOL if the debt is ALREADY outside the SOL.

 

CCP 360 in part:

 

"but no such payment of itself shall revive a cause of action once barred."

 

"Once barred" means it's already outside the SOL.

 

BTW, my response was to a post that was about when the SOL begins.  In most accounts, it does not begin on the date of default UNLESS that date of default is the last payment. 

 

One can be in default but still make payments after default.  Those payments usually determine the SOL.

Been Sued,

As you can already see the law is not as cut and dry as it appears on TV. The SOL defense has numerous twists and turns. Above BV calls out California Civil Procedure (CCP) 360, which governs how the SOL could be reset once the debt is past the SOL.

This is important because you state there is some type of payment the OC is claiming to have been made in February, after the date they file the suit.

In order to determine the start date for the debt you need to review CCP 337(2) which deals with "open book" and "account stated" actions. This states the following- 4 years from date of last item.

2. An action to recover (1) upon a book account whether consisting of one or more entries; (2) upon an account stated based upon an account in writing, but the acknowledgment of the account stated need not be in writing; (3) a balance due upon a mutual, open and current account, the items of which are in writing; provided, however, that where an account stated is based upon an account of one item, the time shall begin to run from the date of said item, and where an account stated is based upon an account of more than one item, the time shall begin to run from the date of the last item.

I would also note there is some information that CCP 344 is a possible statute. It states the following-

344. In an action brought to recover a balance due upon a mutual, open, and current account, where there have been reciprocal demands between the parties, the cause of action is deemed to have accrued from the time of the last item proved in the account on either side.

This confirms BV80 direction as to when the start date would be "date of last item". Based on your post this appears to be in November (3) years previous to the January filing per your post.

I respect BV80, but also know he is not as familiar with California, so I took a deeper dive.

Your real issue is understanding using discovery tools during the case to find out about the alleged February payment or tranaction. This will be a key for your using the Resurgence case to support the earlier SOL....

[calawyer]

Thanks for all the help.   I am still a little confused about the answer I need to prepare.  Can I include the cardholder agreement with my answer,  should I just reference it or is there a better time to introduce it to the court.  

 

 

You just prepare a general denial.  As an affirmative defense, say:

 

"Plaintiff's complaint, and each cause of action alleged therein is barred by the applicable statute of limitations."

 

THe quoted sentence above is actually demurrable because you do not specifiy WHICH statute of limitations applies.  But JDBs rarely even read your answer and I have never heard of one demurring to your answer.

 

In the alternative you can say: "Plaintiff's complaint, and each cause of action alleged therein is barred by the applicable statute of limitations including, but not limited to title 10, section 8106 of the Delaware Code." 

 

Good luck.

[been sued]

This is probably a stupid question.  With a general denial am I denying item #3 in the summons that they are a FDIC insured Delaware state bank?  If so could that be an issue for my SOL defense.

[been sued]

Sorry,  I meant to thank everyone in my last post.  You are all absolutely amazing!

[Seadragon]

)I'm not sure you can use SOL - isn't the SOL 4 years in California?

California does use choice of law provision. The Yu v. Signet Bank/Virginia, 103 Cal. App. 4th 298 (Cal. App. 1st Dist. 2002) case though goes the opposite way that the OP wants to go. This case is controlling for Choice of law enforcement Brack v. Omni Loan Co., Ltd., 164 Cal. App. 4th 1312 (Cal. App. 4th Dist. 2008).

 

Personally, I don't think the normal way we deal with these cases involving an OC applies. Perhaps the demurrer strategy based on the Choice of law, and election of remedies(The op said they agreed not to collect until the circumstances changed) and perhaps even the arbitration strategy.

 

Under Choice of law they are outside SOL and perhaps the demurrer for some of the causes of action may help.

 

we can work on that I posted a general denial with some affirmatives that was from a case in california maybe that can be used to punt a little before coming up with more mature defense.

[Seadragon]

This is probably a stupid question.  With a general denial am I denying item #3 in the summons that they are a FDIC insured Delaware state bank?  If so could that be an issue for my SOL defense.

Yes it could be something that comes to their defense.

[Seadragon]

I have this post that may help. http://www.creditinfocenter.com/community/topic/319192-general-denial-california-that-was-filed-in-a-case-redacted/#entry1228838

[Seadragon]

I want to thank all the posters for coming to aid of all who come here for help, somtimes with a shortened time to act. I look forward to helping until the case is done.

[Seadragon]

I first have to say that choice of law will be the cruxt of your defense yoo will have to show that they have done actions comparable to this case. Resurgence Financial, LLC v. Chambers, 173 Cal. App. 4th Supp. 1 (Cal. Super. Ct. 2009) is on point. Washington Mutual Bank v.

Superior Court (2001) 24 Cal.4th 906, 918 [103 Cal. Rptr. 2d 320, 15 P.3d 1071] also goes into the contract adhesion necessary components.

[calawyer]

You need no case other than  Resurgence.  That case is directly on point.

 

A general denial puts at issue (denies) all the material allegations of the complaint.  And the nice thing is, you do not need to go paragraph-by-paragraph through the complaint admitting and denying each one separately.

[been sued]

Hi,  once again, I truly appreciate the all the time and effort everyone has put into this.  Unbelievable! Thank you!  I probably could have used a general denial like calawyer said but I already typed up an answer.  I was wondering if there was anything you would change?  I was also wondering about paragraphs 4 and 7 below.  I am not sure if the answers worded properly.  

 

 

            I, "Been Sued", answering the Complaint herein for myself as the only defendant of this complaint, admit, deny, and allege as follows:

 

 

1. Answering Paragraphs 1 and 2 of the Complaint, Defendant does not have sufficient information or belief to enable him to answer said Paragraphs and, on that ground, deny each and every allegation contained therein.
2. Answering Paragraph 3 of the Complaint, Defendant admits that Plaintiff is now and was at all times mentioned in the Complaint an FDIC insured Delaware State bank
3. Answering Paragraph 4 of the Complaint, Defendant, admits to being an individual who resides in XXXXX County in the State of California. Defendant denies residing in the city of XXXXXX.
4. Answering Paragraph 5 of the Complaint, Defendant repeats and repleads and incorporates by reference the Answers made in Paragraphs 1 through 3 of this Answer to Plaintiff's Complaint.
5. Answering Paragraph 6 of the Complaint, Defendant does not have sufficient information or belief to enable him to answer said Paragraph and, on that ground, deny each and every allegation contained therein.
6. Answering Paragraph 7 of the Complaint, Defendant denies each and every allegation.
7. Answering Paragraph 8 of the Complaint, Defendant repeats and repleads and incorporates by reference the Answers made in Paragraphs 1 through 6 of this Answer to Plaintiff's Complaint.
8. Answering Paragraphs 9 and 10 of the Complaint, Defendant does not have sufficient information or belief to enable him to answer said Paragraphs and, on that ground, deny each and every allegation contained therein.

 

FIRST AFFIRMATIVE DEFENSE

 

             The Complaint, and each cause of action alleged therein, fails to state facts sufficient to constitute a cause of action against this answering Defendant.

 

SECOND AFFIRMATIVE DEFENSE

 

            Should this plaintiff recover damages against any other defendants, this Defendant is entitled to have the amount abated, reduced or eliminated to the extent other third parties' fault caused or contributed to plaintiffs' damages, if any.

 

THIRD AFFIRMATIVE DEFENSE

 

        Plaintiff's complaint, and each cause of action alleged therein is barred by the applicable statute of limitations. Delaware's statute of limitations governs Discover Bank's causes of action because the credit card agreement provided by Discover Bank in relation to the transactions stated in Discover Bank's Complaint contains a Delaware choice-of-law clause. Discover Bank alleges in Paragraph 3 of its original Complaint it is a Delaware State bank;  applying Delaware law, the action is barred by the three-year limitations period of title 10, section 8106 of the Delaware Code;  and section 8117 of the Delaware Code did not toll the statutory period.

 

FOURTH AFFIRMATIVE DEFENSE

 

      Since a court will not grant a judgment or other legal relief to a party who has not acted fairly by having made false representations or concealing material facts from the other party, we maintain that equitable estoppel bars plaintiff's claim.

 

Thanks!

 

[calawyer]

I would still do a general denial.

 

But if you wish to use this form:

 

Paragraphs 1, 5 and 8 should be "denies" instead of deny.

 

You should respond separately to each paragraph.  Don't combine them as you did in paragraphs 1 and 8.

 

Paragraph 2 you should deny on information and belief.

 

THird affirmative defense corrections in bold:

 

Plaintiff's complaint, and each cause of action alleged therein is barred by the applicable statute of limitations including, but not limited to Delaware's statute of limitations which governs Discover Bank's causes of action because the alleged credit card agreement provided by Discover Bank in relation to the transactions stated in Discover Bank's Complaint contains a Delaware choice-of-law clause. Discover Bank alleges in Paragraph 3 of its original Complaint it is a Delaware State bank;  applying Delaware law, the action is barred by the three-year limitations period of title 10, section 8106 of the Delaware Code;  and section 8117 of the Delaware Code did not toll the statutory period.

 

Fourth affirmative defense:

 

I don't know the factual basis for the defense but I would strike "we maintain that":

 

 Since a court will not grant a judgment or other legal relief to a party who has not acted fairly by having made false representations or concealing material facts from the other party, we maintain that equitable estoppel bars plaintiff's claim.