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Motion to Dismiss with Prejudice after Plaintiff's Voluntary Dismissal without Prejudice


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I successfully defended a lawsuit where the Plaintiff recently threw in the towel, withdrew their case and filed their Motion to Dismiss Without Prejudice with a cover letter requesting the Judge close the file. I had a pending Motion to Dismiss with Prejudice and Motion for Sanctions which was never heard. A few things have changed since their voluntary withdrawal of the lawsuit, including the Plaintiff sending me a 1099-C for the alleged, unverified debt.     The Judge never closed the file, and the Judicial Assistant stressed to me by phone, no final Order has been issued. I believe the Judge knows their was misconduct by the Plaintiff and their attorneys and wants to hear my Motion to Dismiss with Prejudice, Motion for Sanctions, and a Motion for Costs.

 

I'd like to Amend my Motion to Dismiss with Prejudice and Motion for Sanctions as a result of the 1099-C, and other information I've recently learned. Can I Amend my Motion after their Voluntary Withdrawal of the case, or can I only call the original pending Motions to be heard?

 

In advance, thanks to the CIC brain trust for your feedback!

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The normal method to do this in most venues is to withdraw the motion and submit a new one. You should include in the title that it is the second such motion, and in the first paragraph state why. Personally, I don't think you need to refile this. If you get a hearing, bring up the 1099 then. There is some sort of legal requirement that they do this if the debt is forgiven. I do like the angle that since they never made their case, they never proved you owe them this money, hence they should have no legal standing to issue a 1099.

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Hi Bruno,

 

Thanks for the quick and helpful feedback. In addition to the 1099-C issue, my Motion to Dismiss and for Sanctions could be stronger. I have them on quite a few violations of federal and state law. While I spelled them out properly in my Affirmative Defenses, I did not detail them adequately in my pending Motion to Dismiss and for Sanctions. Just uncertain if I can still legally Amend after their withdrawal....

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You're going to have to talk to a tax professional about your particular circumstances.I know many people take the position as Bruno indicates, i.e., the debt hasn't been proven therefore, it isn't income (unlike a short sale on a house and your mortgage banker issues a 1099 for the portion of the mortgage that is forgiven, although even here there are recent exceptions as a result of the financial crisis the last few years). I'm splitting hairs here but is it that they are now forgiving the debt or are they deeming to to be uncollectible? Who is to say that they deem it to be uncollectible and just sell the debt to someone else?

 

There are a couple of situations that the IRS lists for exclusion from income - was there a discharge in BK or if you file a certain form with the IRS (think it is 982?) to show them you're insolvent, then no income. If collection of the debt is barred by SOL, there is a Tax Court case, Stewart v Commissioner of IRS, that they ruled in favor of the taxpayer not having to include the debt forgiven in their tax return

 

Others contend that if it is a JDB issuing the 1099 that it should only be for the amount that they paid for it, i.e., their cost basis in the asset they purchased not the "face amount" amount of the debt.

 

A lot of complicating factors here, thus my inital comment to talk to a tax professional (and I don't mean someone who set up a kiosk at the mall).

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Hi Coltfan,

Great reply - I've thought about it. Right now, I've won the case and the Judge is ready to hear what happened from my side. Part of the reason I don't do as you've suggested is time. If I start from scratch in Federal Court it will take quite some time. I think I might even win more in sanctions, than I can win in Federal Court, and I can get a hearing in about three months. Also, I've been speaking with a class action law firm about fighting the larger battle, as well as in contact with others similarly affected.

I'm very tempted to do as you suggest, but would rather Amend for now (if I'm still allowed to?), seek sanctions, and always reserve the right to take them on with a new lawsuit at a later date. The question is, can I still Amend?

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I forgot my old netbook died, and I still didn't recover my data form my old HDD, but you can search Florida rules of civil procedure, there 3-5 letters there to amend a motion, one is with leave of court, so basically you ask in the amended motion for that and send a copy to the OP.

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Rule 1190:

 

(e) Amendments Generally. At any time in furtherance of justice, upon such terms as may be just, the court may permit any process, proceeding, pleading, or record to be amended or material supplemental matter to be set forth in an amended or supplemental pleading. At every stage of the action the court must disregard any error or defect in the proceedings which does not affect the substantial rights of the parties.

 

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Hi Kutuzov,

 

I just re-read your reply and Florida Rules of Procedure 1.190(a) - thanks! If understand correctly, I just file an Amended Pleading, giver the other party 10 days to respond, and if they object - then I need Leave of the Court - if they don't object, I can then call the matter for Hearing. Correct?

 

(Note: I'm way past 20 days from the original filing of the Motion I seek to amend)

 

1.190 Amended and Supplemental Pleadings
 

(a) Amendments. A party may amend a pleading once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed on the trial calendar, may so amend it at any time within 20 days after it is served. Otherwise a party may amend a pleading only by leave of court or by written consent of the adverse party. If a party files a motion to amend a pleading, the party shall attach the proposed amended pleading to the motion. Leave of court shall be given freely when justice so requires. A party shall plead in response to an amended pleading within 10 days after service of the amended pleading unless the court otherwise orders.

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Thanks for the reply Numbersguy, but I'm not looking at the tax implications now.  I'm trying to determine if I can still legally Amend my Motion to Dismiss with Prejudice and Motion for Sanctions after their voluntary withdrawal of the case.

 

Let it go. They're allowed to dismiss under Rule 1.420, period. 

 

If a 1099-c has been issued, plaintiff no longer has standing to sue you again anyway. If you believe the 1099-c was improperly issued, challenging it in county court will get you nowhere.

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Hi Nascar,

 

I think my mentioning the 1099-C has given the wrong impression here. I only mentioned it as it is one of several things I would use to request that the Court change the final outcome to "with prejudice." I'll deal with the tax implications and validity of the 1099-C outside of the courtroom.

 

The reason I am looking to proceed and request a MTD with prejudice, is at the same time I wish to Motion for Sanctions (they violated state and federal law numerous times throughout the case), and to Motion for Costs. I just want to make sure I use the right procedure. Can you opine regarding the correct procedure to Amend my original Motion after their withdrawal?  Thanks for your feedback.

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Hi Nascar,

 

I think my mentioning the 1099-C has given the wrong impression here. I only mentioned it as it is one of several things I would use to request that the Court change the final outcome to "with prejudice." I'll deal with the tax implications and validity of the 1099-C outside of the courtroom.

 

The reason I am looking to proceed and request a MTD with prejudice, is at the same time I wish to Motion for Sanctions (they violated state and federal law numerous times throughout the case), and to Motion for Costs. I just want to make sure I use the right procedure. Can you opine regarding the correct procedure to Amend my original Motion after their withdrawal?  Thanks for your feedback.

Unfortunatly Nascar is correct in the respect that they can withdraw an action even if you motion to dismiss and the motion is not ruled on yet. However if it was a discovery motion which would have terminating sanctions then they would not be able to withdraw.

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I successfully defended a lawsuit where the Plaintiff recently threw in the towel, withdrew their case and filed their Motion to Dismiss Without Prejudice with a cover letter requesting the Judge close the file. I had a pending Motion to Dismiss with Prejudice and Motion for Sanctions which was never heard. A few things have changed since their voluntary withdrawal of the lawsuit, including the Plaintiff sending me a 1099-C for the alleged, unverified debt.     The Judge never closed the file, and the Judicial Assistant stressed to me by phone, no final Order has been issued. I believe the Judge knows their was misconduct by the Plaintiff and their attorneys and wants to hear my Motion to Dismiss with Prejudice, Motion for Sanctions, and a Motion for Costs.

 

I'd like to Amend my Motion to Dismiss with Prejudice and Motion for Sanctions as a result of the 1099-C, and other information I've recently learned. Can I Amend my Motion after their Voluntary Withdrawal of the case, or can I only call the original pending Motions to be heard?

 

In advance, thanks to the CIC brain trust for your feedback!

I think that with the case still open that you can file the motion to dismiss with prejudice if the court is awaiting the motion to dismiss from you. They cannot do what they did but have to refile the case. So file the motion for sanctions and to dismiss with prejudice based on the fact that plaintiff dismissed to avoid sanctions and had no prima facie case. any abuse of the discovery statute would make them subject to terminating sanctions.

 

people say don't file it but if you don't file it you will 100% lose if you file it you have a 50/50 chance.

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The normal method to do this in most venues is to withdraw the motion and submit a new one. You should include in the title that it is the second such motion, and in the first paragraph state why. Personally, I don't think you need to refile this. If you get a hearing, bring up the 1099 then. There is some sort of legal requirement that they do this if the debt is forgiven. I do like the angle that since they never made their case, they never proved you owe them this money, hence they should have no legal standing to issue a 1099.

But if you beat them in court the debt is not forgiven, you can use the court case to prove it. I think by filing a 1099c on a debt that was lost in court can warrant fraud, I heard this some where during law school, need to research this.

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Hi Coltfan,

Great reply - I've thought about it. Right now, I've won the case and the Judge is ready to hear what happened from my side. Part of the reason I don't do as you've suggested is time. If I start from scratch in Federal Court it will take quite some time. I think I might even win more in sanctions, than I can win in Federal Court, and I can get a hearing in about three months. Also, I've been speaking with a class action law firm about fighting the larger battle, as well as in contact with others similarly affected.

I'm very tempted to do as you suggest, but would rather Amend for now (if I'm still allowed to?), seek sanctions, and always reserve the right to take them on with a new lawsuit at a later date. The question is, can I still Amend?

If you get the court to agree to sanctions they are not payable to you. If you want money file a motion to amend defendants counterclaim. And start from there.

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Thanks for the valuable feedback SeaDragon.

 

Unfortunatly Nascar is correct in the respect that they can withdraw an action even if you motion to dismiss and the motion is not ruled on yet. However if it was a discovery motion which would have terminating sanctions then they would not be able to withdraw.

 

My last Motion was a combined Motion to Dismiss, Motion for Sanctions, and Motion to Disqualify Counsel. The Judge already had enough information to see I had a serious claim of professional misconduct, in addition to their case lacking validity or proof.  The Judge said I could put my Motions on her trial calender, and would give me sufficient time to interview witnesses and conduct discovery. I tried to set a hearing date for my Motions, and the Plaintiff's attorneys refused to agree to a hearing date.

 

(edit - One of the Sanctions I called for was Dismissal due to their Professional Misconduct)

 

Eventually I went back to the Court and they instructed me to set the Hearing three months into the future. As soon as I set the hearing date, the Plaintiff sent in a voluntary withdrawal and their Motion to Dismiss without prejudice. So, it wasn't a Discovery Motion per se, but the Court's instructions (and we had a Court Reporter there) were, being aware my Motions were "evidentiary in nature" and would "require the interview of witnesses", that I should proceed in that fashion. Although the Plaintiff requested the Judge "close her file" - perhaps this is why the Judge won't close the file?

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Thanks BTO, great info!

 

But if you beat them in court the debt is not forgiven, you can use the court case to prove it. I think by filing a 1099c on a debt that was lost in court can warrant fraud, I heard this some where during law school, need to research this.

 

If you have any info on how filing a 1099-C on a debt that was lost in court could warrant fraud, I'm all ears (or in this case, all eyes).  Seriously, it would be terrific info to have if you have it easily at hand.

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But if you beat them in court the debt is not forgiven,

 

 

The case was withdrawn by the Plaintiff, this is not adjudication on the merits. I would argue that there was no clear victory nor any proof that the debt was legitemate, therefore there should be no 1099 even if it is required by the IRS. If it is not provably your debt, how can they forgive it? Absent any proof that the debt was legit, I'd sue them for the amount of the tax liability.

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