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Portfolio Recovery Associates, LLC sueing me in Texas


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Hi All...am new to the board and have spent most of today browsing around and trying to wrap my head around all the information....quite overwhelming when a person only has a few days to reply to the summons...I was just going to ignore but after being here today I think if I can get a little direction and coaching I will attempt to try and beat this.

 

I have nothing in my possession that I can find that confirms if in fact anything being stated is in fact true....I sincerely have no idea if or when I may have had an account with the original creditor or not.

 

I have attached a copy of what has been served to me by a process server on the 28th of December and would welcome any and all suggestions on how to proceed.

 

Thanks in Advance ::daisy::

 

CAUSE NO. xyz

PORTFOLIO RECOVERY ASSOCIATES,

LLC

GENERAL ELECTRIC CAPITAL

VS.

 

ME

 

PLAINTIFF'S ORIGINAL PETITION, REQUEST FOR DISCLOSURES, AND REOUEST FOR ADMISSIONS

 

1. This is a Level One discovery control plan case.

 

2. PARTIES. Plaintiff is PORTFOLIO RECOVERY ASSOCIATES, LLC GENERAL ELECTRIC CAPITAL (Plaintiff). Defendant(s) is/are xyz; , who may be served with process at:

 

3. VENUE. Venue is proper in this court because this is where the contract was signed, where the Defendant resides, or where the events giving rise to Plaintiffs claims occurred.

 

TEX. CIV.

PRAC. & REM. CODE

 

Section 15.002(a), 15.035( B). This Court may also have jurisdiction and venue over this claim pursuant to

 

TEX. CIV. PRAC. & REM. CODE " 15.092(a) and 15.099 because it arises out of a contract to be performed in this county. If this suit arises in Justice Court, then venue is proper because there is more than one Justice Court in this city.

 

4. FACTS. Defendant received an extension of credit and used it to make purchase(s). Plaintiff is now the owner of that indebtedness. Defendant accepted the credit and became bound to repay the credit, with interest. This account represents a transaction, or series of transactions, of which a systematic record has been kept. All conditions precedent have been performed or have occurred.

 

5. SUIT ON OPEN & STATED ACCOUNT/DEBT/BREACH OF CONTRACT. Defendant defaulted in making the payments on Account Number ending in -6526 (the "Account") as required hy the terms of the agreement with Plaintiff. Due to Defendant's breach of the agreement, Plaintiff or its predecessor accelerated maturity of the total amount due on the Account. The balance due Plaintiff on the Account is $3,856.30, after all just and lawful offsets, credits and payments have been allowed. However, this amount may not include any payments or credits occurring after the date of this petition or the date of the affidavit of Plaintiffs representative. Plaintiff has made timely demand on Defendant to pay the amounts due and owing, but Defendant has not done so. Therefore, Defendant has breached the contract with Plaintiff

 

6. QUANTUM MERUIT. Pleading in the alternative, Plaintiff alleges that it should recover from Defendant for quantum meruit on the extension of credit rendered to and used by Defendant. Plaintiff would show that Defendant is indebted to Plaintiff because Defendant received the use and benefit of the credit extended to it, or ratified or accepted the benefit of the Plaintiff's extension of credit and became obligated to Plaintiff, whether through written obligation or quantum meruit; that the extension of credit was tendered and received under circumstances which reasonably indicated that Plaintiff expected to be repaid, and in fact Plaintiff did expect to be paid for the benefit conferred upon Defendant.

 

 

7. REQUEST FOR ADMISSIONS.

Pursuant to the TEXAS RULES OF CIVIL PROCEDURE, Defendant is requested to admit the truth of each of the matters listed below. Responses to these

Requests for Admission are due 50 days after service of the request, at Regent & Associates, 2650 Fountain View Dr Suite 233, Houston TX 77057. The deadline to respond to these Requests for Admissions does not alter any deadline to answer the lawsuit as set forth in the citation. Admit that:

 

1. Defendant entered into a contract with Plaintiff.

 

2. Defendant entered into a contract with Plaintiffs predecessor in interest.

 

3. Plaintiff is the owner of the indebtedness on the Account.

 

4. Defendant obtained an extension of credit from Plaintiffs predecessor in interest.

 

5. Plaintiff has applied all just and lawful offsets to the Account.

 

6. Defendant has understood from the time the Account was opened that a loan was being

made to Defendant for the amount requested.

 

7. Defendant has understood from the time the Account was opened that Defendant is

required and obligated to repay all charges or fees incurred on the Account.

 

8. Defendant presently owes Plaintiff the sum of $3,856.30.

 

9. Defendant made payments on the Account.

 

10. Plaintiff made demand on Defendant before filing suit, for payment of the outstanding

balance due at that time.

 

11. At no time prior to the filing of this suit did Defendant dispute the debt owing on the

Account.

 

12. Defendant has broken the contract with Plaintiff.

 

13. Defendant's breach has damaged Plaintiff in the amount of $3,856.30.

 

14. Defendant has no defense to this suit, and judgment should be granted, as prayed for.

 

 

REQUEST FOR DISCLOSURES. Pursuant to Rule 194, Plaintiff requests the following disclosures from Defendant:

 

(a) the correct names of the parties to the lawsuit;

 

( B) the names, addresses, and telephone numbers of any potential parties;

 

© the legal theories and, in general, the factual bases of the responding party's claims or defenses (the responding party need not marshal all evidence that may be offered at trial);

 

(d) the amount and any method of calculating economic damages;

 

(e) the name, address, and telephone number of persons having knowledge of relevant facts, and a brief statement of each identified person's connection with the case; for any testifying expert:

 

(1) the expert's name, address, and telephone number;

(2) the subject matter on which the expert will testify;

(3) the general substance of the expert's mental impressions and opinions and a brief summary of the basis for them, or if the expert is not retained by, employed by, or otherwise subject to the control of the responding party, documents reflecting such information;

(4) if the expert is retained by, employed by, or otherwise subject to the control of the responding party:

 

(A) all documents, tangible things, reports, models, or data compilations that have been provided to, reviewed by, or prepared by or for the expert in anticipation of the expert's testimony; and

 

( B) the expert's current resume and bibliography;

 

(g) any indemnity and insuring agreements described in Rule 192.3(f);

 

(h) any settlement agreements described in Rule 192.3(g);

 

(i) any witness statements described in Rule 192.3(h); in a suit alleging physical or mental injury and damages from the occurrence that

is the subject of the case, all medical records and bills that are reasonably related to the injuries or damages asserted or, in lieu thereof, an authorization permitting the disclosure of such medical records and bills;

 

(k) in a suit alleging physical or mental injury and damages from the occurrence that is the subject of the case, all medical records and bills obtained by the responding party by virtue of an authorization furnished by the requesting party.

 

9. Responses to this Request for Disclosures are due 50 days after service of the request. The deadline to respond to these Requests for Disclosures does not alter any deadline to answer this lawsuit as set forth in the citation.

 

WHEREFORE, Plaintiff prays that—

 

A. Defendant(s) be cited to appear and answer herein;

 

B. Plaintiff be granted judgment for the amount due;

 

C. Plaintiff be granted judgment for all costs of court;

 

D. Plaintiff be granted such other and further relief, special or general, legal or equitable, as Plaintiff may be shown to be justly entitled.

 

Respectfully Submitted,

REGENT & ASSOC

By

Anh H. Regent

State Bar No. 24004882

2650 Fountain view, Suite 233

Houston, Texas 77057 -

713/490-7076 -- Telephone

713/490-7075 --- Facsimile

aregent®regentlaw.com

ATTORNEY FOR PLAINTIFF

Cause No.

 

2624-2

PORTFOLIO RECOVERY

ASSOCIATES, LLC

VS.

 

 

JUSTICE COURT

PRECINCT TWO

GILLESPIE CO., TX.

STANDING DISCOVERY ORDER

Pursuant to Rule 190.5 of the Texas Rules of Civil Procedure, and in

the interests of justice, the Court hereby modifies the Discovery Control

Plan that governs this case under Rule 190.1 as follows:

 

1. Requests for Admissions may not be imbedded in a petition. See Rule

191.4 (Requests for Admissions "must not be filed"). A party who

violates this Standing Order may not rely on alleged Deemed

Admissions for any purpose in this case, including in connection with

a Motion for a Default Judgment or a Motion for Summary Judgment.

 

2. Deemed Admissions may not be used against any party in this case

(including a defendant who has not filed an answer) in the absence of

strict proof of service of the corresponding Requests for Admissions

on such party.

 

3. The parties may apply for a modification of the Standing Discovery

Order at any time for good cause.

 

CARL E. SCHOESSOW,

Justice of the Peace, Precinct Two,

Gillespie County, Texas

Edited by Just Me 78631
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I am in CA so the rules there maybe different.  However, I know that you must file an Answer (includes 2 parts, Denial and Affirmative Defenses) within TX mandated period.  Search the county court's website where your case was filed for information how to file an Answer.  Check out the self-help center.  The court should have some generic forms that you can use.  If not, you will have to write on  paper.  

 

Also, Check out some Articles on YOURLEGALLEGUP.COM  (Articles tap) for information how to fight your case.  Most of the time Collection Agencies don't have enough evidence to win, but if you don't know how to fight, they will win.   you dont have/need to purchase anything on that site. 

 

If you are not sure if the debt is yours, you must proceed with Debt Validation request.  here is a template that you can use. 

 

Good luck

 

Dispute Letter.docx

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So I am reading the rules of civil proceedure and run across this:

 

RULE 508. DEBT CLAIM CASES

 

RULE 508.1. APPLICATION Rule 508 applies to a claim for the recovery of a debt brought by an assignee of a claim, a financial institution, a debt collector or collection agency, or a person or entity primarily engaged in the business of lending money at interest.

 

 

RULE 508.2. PETITION

(a) Contents. In addition to the information required by Rule 502.2, a petition filed in a lawsuit governed by this rule must contain the following information:

 

(1) Credit Accounts. In a claim based upon a credit card, revolving credit, or open account, the petition must state:

 

(A) the account name or credit card name; General Electric Capitol

 

( B) the account number (which may be masked); Partial number implied

 

© the date of issue or origination of the account, if known; None

 

(D) the date of charge-off or breach of the account, if known; None

 

(E) the amount owed as of a date certain; and  ??????

 

(F) whether the plaintiff seeks ongoing interest. ??????

 

 

 

(4) Assigned Debt. If the debt that is the subject of the claim has been assigned or transferred, the petition must state:

 

(A) that the debt claim has been transferred or assigned;

 

(B) the date of the transfer or assignment;

 

© the name of any prior holders of the debt; and

 

(D) the name or a description of the original creditor.

 

RULE 508.3. DEFAULT JUDGMENT

(a) Generally. If the defendant does not file an answer to a claim by the answer date or

otherwise appear in the case, the judge must promptly render a default judgment upon the

plaintiff’s proof of the amount of damages.

 

(B)Proof of the Amount of Damages.

 

(1) Evidence Must Be Served or Submitted. Evidence of plaintiff’s damages must either be attached to the petition and served on the defendant or submitted to the court after defendant’s failure to answer by the answer date.

 

(2) Form of Evidence. Evidence of plaintiff’s damages may be offered in a sworn statement or in live testimony. The evidence offered may include documentary

evidence.

 

(3) Establishment of the Amount of Damages. The amount of damages is established by evidence:

 

(A) that the account or loan was issued to the defendant and the defendant is obligated to pay it;

 

(B) that the account was closed or the defendant breached the terms of the account or loan agreement;

 

© of the amount due on the account or loan as of a date certain after all payment credits and offsets have been applied; and

 

(D) that the plaintiff owns the account or loan and, if applicable, how the plaintiff acquired the account or loan.

 

(4) Documentary Evidence Offered By Sworn Statement. Documentary evidence may be considered if it is attached to a sworn statement made by the plaintiff or its

representative, a prior holder of the debt or its representative, or the original creditor or its representative, that attests to the following:

 

(A) the documents were kept in the regular course of business;

 

(B) it was the regular course of business for an employee or representative with knowledge of the act recorded to make the record or to transmit information

to be included in such record;

 

© the documents were created at or near the time or reasonably soon thereafter; and

 

(D) the documents attached are the original or exact duplicates of the original.

 

(5) Consideration of Sworn Statement. A judge is not required to accept a sworn statement if the source of information or the method or circumstances of preparation

indicate lack of trustworthiness. But a judge may not reject a sworn statement only because it is not made by the original creditor or because the documents attested to

were created by a third party and subsequently incorporated into and relied upon by the business of the plaintiff.

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Copy this and deliver in person or mail it to the court in the same format of the Original Petition that you were served.  Edit the parts in red to coincide with the wording on said Original Petition.  Admit to your name and address and if there is an item asking you to admit that you are not currently in the military but deny all the others.  Sign it and print your name, address and phone number.  Send a copy to the attorney who filed the lawsuit and make a copy of the first page and ask the court clerk to file-stamp it for you (if you are mailing it include a SASE.) 

 

DEFENDANT'S ORIGINAL ANSWER, PLEA TO THE JURISDICTION AND SPECIAL EXCEPTIONS

 

ANSWER

 

Defendant generally denies, pursuant to Rule 92 of the Texas Rules of Civil Procedure, each and every, all and singular, of The Plaintiff's allegations.

Defendant asserts that the claims are barred by the applicable statute of limitations.

Defendant asserts that the interest rates charged by the original creditor are usurious.

PLEA TO THE JURISDICTION

Grounds for Dismissal for Lack of Standing

This is a lawsuit arising out of an alleged consumer credit card debt. Plaintiff, is not a financial institution, original creditor, lender, or issuer of any credit card. Instead, Plaintiff alleges "Plaintiff purchased Defendant's debt" See Plaintiff's Original Petition under "Facts" paragraph 8. There is no allegation or statement as to who was the seller, and there is no way from these pleadings to determine if Plaintiff purchased the account from anyone in the chain of title, and no way to determine what rights, if any, the Plaintiff has to bring suit.
A plaintiff who seeks to sue based on rights acquired by an assignment must plead and prove up the assignment. Ceraminc Tile Intern., Inc, v. Balusek, 137 S.W3d 722, 724 (Tex. App, – San Antonio 2004, no pet.); Delaney v. Davis, 81 S.W.3d 445, 448-49 (Tex. App, – Houston [14th district] 2002, no pet.). Plaintiff has not done either.
If Plaintiff is the assignee and rightful owner of the debt, this should be very easy for Plaintiff to allege and prove, yet Plaintiff avoids and dodges the issue, when such issues cannot wait until trial. Without a pleading of an assignment and admissible evidence of the assignment, there is no subject matter jurisdiction and this case must be dismissed. Whether plaintiff has standing to bring this lawsuit is a threshold issue that should be resolved at the onset, and the instant plea to the jurisdiction is a proper means by which to address this threshold question.

Legal Standards for a Plea to the Jurisdiction

The purpose of a plea to the jurisdiction is to dismiss a cause of action without regard to whether the underlying claim has merit. Bland ISD v. Blue, 34 S.W.3d 547, 554 (Tex. 2000). The plea challenges the court's power to adjudicate the subject matter of the controversy. Texas DOT v. Arzate, 159 S.W.3d 188, 190 (Tex.App. – El Paso 2004, no pet.), Axtell v. University of Texas, 69 S.W.3d 261, 263 (Tex.App. – Austin 2002, no pet.).
Standing is a basic requirement of the judicial system and goes directly to the court's subject matter jurisdiction over a case. It may be raised at anytime and, unlike a challenge to a party's capacity to sue, cannot be waived or presumed. Nootsie Ltd. v. Williamson County Appraisal District, 925 S.W.2d 659, 661-662 (Tex. 1996), Continental Coffee Products v. Cazarez, 937 S.W.2d 444 n.2 (Tex, 1996). A plea to the jurisdiction is the proper way to challenge a party's lack of standing. Waco ISD v. Gibson, 22 S.W.3d 849, 850 (Tex. 2000).
The plaintiff must come forward with sufficient evidence to demonstrate that there is at least an issue of fact as to the existence of jurisdiction. Texas Department of Parks and Wildlife v. Miranda, 133 S.W.3d 217, 227-228 (Tex. 2004). The court should grant defendant's plea to the jurisdiction because on the face of the petition, it is clear that the plaintiff is not the original creditor, which therefore puts standing at issue and it is certain that this Plaintiff will not come forward with admissible evidence of standing to bring the lawsuit.

SPECIAL EXCEPTION TO ACCOUNT STATED

1. Credit Card Cases Are Based on Express Contracts and Cannot Be Brought On Implied Contract Theories Like Account Stated.

The Texas Supreme Court made clear in Truly v. Austin 744 S.W. 2d 934, 936 (Tex. 1988) that a plaintiff may not avoid the terms of its express contract by seeking recovery on an implied contract theory if the damages claimed are covered by the express contract. Credit card cases brought on an account stated theory violate this Supreme Court holding. Credit Card arrangements are governed by express contracts. The only viable cause of action for breach of a credit card is breach of contract. Implied or quasi-contractual causes of action like an account stated cannot be brought on a credit card debt without violating Truly v. Austin.

Texas courts will not imply the existence of contract where an express contract already exists. Fortune Production Co. v. Conoco, Inc.,52 S.W.3d 671 684 (Tex. 2000), Woodard v. Southwest States, Inc., 384 S.W.2d 674 (Tex 1964), Musick v. Pogue, 330 S.W.2d 696, 699 (Tex. Civ App.- San Antonio 1959, writ ref'd n.r.e.). The reason for this rule, as described by the Supreme Court in Fortune Production, is that parties should be bound by their express agreements. When a valid agreement addresses the matter, a party should not be able to recover more than is provided for in the agreement. Id., 52 S.W.3d at 684. "Count 1" of the Original petition fails to provide fair notice as to how The Plaintiff can avoid this express contract in favor of an account stated.

The principle that a plaintiff should not be able to use an implied contractual theory to recover more than his contract authorizes is particularly applicable to credit card cases. Credit card fees and interest rates are heavily regulated. Federal Law mandates comprehensive disclosures of these terms when the account is opened and when the account is amended. See e.g. 15 U.S.C. § 1637©(1)-(7), 12 C.F.R. 225.5-225.16. Credit card plaintiffs should be able to produce these disclosures or otherwise prove the interest rates and fees that their customers agreed to pay. Using an account stated theory to imply an agreement to pay the interest and fees would improperly relieve plaintiff from establishing the amount of interest and fees that were required to be disclosed to the defendant under Federal law, and must have been included in the terms of its alleged express agreement with the defendant.

2. A Credit Card Account Is Not an Account Stated

A credit card account is not an "account" as that term has been used in the common law governing suits on account. A credit card account does not arise out of a course of dealing between two parties engaging in transactions in goods. A credit card account is a multiparty arrangement. Each transaction involves ata minimum, the debtor, a merchant, the merchant's bank, a clearing organization such as Visa, Mastercard, American Express, the card issuing bank and the card issuing bank's credit card processing unit. Every transaction brings a new merchant and merchant bank into the web of transactions that make up the account, with the result that over the term of a credit card account, hundreds of parties may be involved, not just two as envisioned for a common law account. Moreover, the transactions in a credit card account are not merely sales of goods. The account issuer does not sell goods to the account holder: instead, it makes extensions of credit to the account holder or to third party merchants on the account holder's behalf. For these reasons the cause of action for account stated does not apply to credit cards.

An account stated is merely an open account that has been closed because the party charged has agreed that the account is correct. Whittlesey v. Spofford 47 Tex. 13, (Tex. 1877), Wroten Grain & Lumber v. Mineola Box Mfg. Co., 95 S.W. 744 (Tex Civ. App.-1906), Padgitt Bros. Co. v. Dorsey, 194 S.W. 1124, 1126 Tex Civ. App.- El Paso 1917, no writ). An open account is an implied claim that arises from the course of dealing between two parties who engage in a series of transactions in which title to goods passes from one to the other. McCamant v. Batsell, 59 Tex. 363, 367-369 (Tex 1883), Livingston Ford Mercury, Inc. v. Haley, 997 S.W.2d 425, 427 (Tex App.----Beaumont 199, no writ).

Over a century ago in McCamant v. Batsell, 59 Tex. 363, 1883 WL 9175 (Tex. 1883), a case that has never been overruled, The Supreme Court construed the word “account” as it is used in this context as limited to suits arising out of relationships in which title to goods was transferred from the plaintiff to the defendant and further excluding suits in which the rights of the parties were defined by a written agreement.

In McCamant, a suit on a promissory note, the plaintiff sought to make use of the then existing statute governing suits on account, which like current Rule 185, set up abbreviated procedure for resolving disputes involving such suits. Unlike the current rule the statute did not enumerate the kinds of action that could be brought as suits on account. The Supreme Court construed the meaning of the term “account” in the statute as being consistent with the common law meaning of the term:

“As used in the statutes of this state, in the act referred to, we believe that the word “account” is used in its popular sense, rather than in a technical sense, and that it applies to transactions between persons in which, by sale upon one side and purchases upon the other, the title to personal property passes from one to the other, and the relation of debtor and creditor is thereby created by general course of dealing.”

The Court also ruled that the plaintiff’s suit against the maker of a note and his sureties could not be brought as a suit on account or an open account because it did not arise out of the course of dealings between a buyer and seller, but was based upon a written agreement in which all the terms were fixed and certain. Id., 1883 WL 9175 at 6.

The Supreme Court reaffirmed the holding of McCamant in Meaders v. Biskamp, 316 S.W.2d 75 (Tex. 1958), in which The Court distinguished a suit on an account from a suit based upon an express contract for purposes of awarding attorney’s fees. The then applicable language of Tex. Civ. Stat. Art. 2226, the predecessor to Tex. Civ. Prac. & Rem. Code Ch. 38 permitted an award of attorney’s fees for a suit upon a sworn account but did not include the present language authorizing fees in a breach of contract case. The Meaders court, citing McCamant held that a suit founded upon a written contract for the drilling of an oil well was not a suit on account because the relationship of debtor and creditor did not arise from a course of dealing but from a contract. Id., 316 S.W.2d at 78

The classic statements of the elements of the account stated cause of action expressly draw a distinction between suits that grow out of a course of dealing and suits that grow out of an express agreement. For example, in Central Nat. Bank of San Angelo v. Cox, 96 S.W.2d 746, 748(Tex. Civ. App.—Austin 1936, writ dismissed), the court said:

“The cases are legion on what constitutes an account stated. In general the essential elements involved are: Transactions between the parties which give rise to an indebtedness of one to the other; an agreement, express or implied, between them fixing the amount due; and a promise, express or implied, by the one to be charged, to pay such indebtedness. 1 Tex.Jur. p. 371 et seq.; 1 C.J. 678; 1 Am.Jur. 272; 1 C.J.S., Account Stated, p. 693.”

The first and defining element of the claim is existence of a debtor-creditor relationship that arises from a series of transactions—from a course of dealing, not a contract. This element is identical across all suits on account, whether open, sworn or stated. While the other elements of the claim do reference an agreement, the subject matter of the agreement is not the creation or terms of the debtor-creditor relationship, but the acknowledgement, after the transactions that gave rise to the relationship have occurred, of the amount due and the obligation to pay.

Recent court of appeals decisions allowing a stated account on a credit card have overlooked these Texas Supreme Court authorities and instead are based upon mere dicta from a footnote in a decision out of the Dallas court of appeals. In a footnote in that case, Dulong v. Citibank (South Dakota) N.A., 261 S.W.3d 890 (Tex.App.----Dallas 2008) the court stated that a sworn account requires the passage of title and is thus not a proper tool for a credit card case but noted that it differs from an account stated in this regard. But neither that decision nor any of the other appellate decisions that have followed it have explained how they reached this conclusion. These decisions are utterly devoid of any analysis or legal authority on the issue, and none of them discuss McCamant v. Batsell. These decisions are simply contrary to Texas Supreme Court authority.

SPECIAL EXCEPTION TO QUANTUM MERUIT

The Defendant specially excepts to Paragraph 6 Quantum Meruit.

Quantum Meruit it is an implied contact theory where an express contract already exists. In addition, in order to establish a quantum meruit claim a plaintiff must establish that it provided services or goods directly to the defendant.  See Vortt Exploration Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990)

REQUEST FOR DISCLOSURE

Pursuant to Texas Rules of Civil Procedure 194, Defendant requests that Plaintiff disclose within 30 days of the service of this request, the information or material described in Rule 194.2(a) through (l).

Wherefore, premises considered, Defendant prays that the Court grant his Plea to the Jurisdiction, grant his Special Exceptions, enter judgment in his favor and against Plaintiff, that Plaintiff take nothing, that the Court assess costs against Plaintiff and award Defendant all other relief to which he is entitled.

Respectfully Submitted,


Signed_________________________________
Name:
Address:
Phone:



CERTIFICATE OF SERVICE


I do hereby certify that I will mail a true and correct copy of this Original Answer to the Plaintiff on the _____ day of ____________________, 20____.

Signed____________________________________

Name:
Address:
Phone:

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wow....I have something to drop in the hat too, but it wont be so amazing like what rocker just posted....

 

The plaintiff served their petition on you....their petition included their request for admissions.  Immediately after posting that request for admissions and disclosures, they list their prayer....and then they include this:
 

 

STANDING DISCOVERY ORDER

Pursuant to Rule 190.5 of the Texas Rules of Civil Procedure, and in

the interests of justice, the Court hereby modifies the Discovery Control

Plan that governs this case under Rule 190.1 as follows:

 

1. Requests for Admissions may not be imbedded in a petition. See Rule

191.4 (Requests for Admissions "must not be filed"). A party who

violates this Standing Order may not rely on alleged Deemed

Admissions for any purpose in this case, including in connection with

a Motion for a Default Judgment or a Motion for Summary Judgment.

 

Seems to me that this attorney either has no clue what he is doing, or is just this sloppy because he thinks you will not respond.  This basically means that because of how they structured this, they are unable to use anything regarding admissions against you in this whole case, for any reason.   Also, I do not know how far you would wish to push this point, or even if you wish to use it at all, but they listed the plaintiff as "Plaintiff is PORTFOLIO RECOVERY ASSOCIATES, LLC GENERAL ELECTRIC CAPITAL".....Who in the world is that?  That's two separate companies meshed into one name.  That makes no sense at all, and does not make it clear who the real party that is suing you even is.  It casts further doubt as to who actually owns the alleged debt at this time.

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wow....I have something to drop in the hat too, but it wont be so amazing like what rocker just posted....

 

The plaintiff served their petition on you....their petition included their request for admissions.  Immediately after posting that request for admissions and disclosures, they list their prayer....and then they include this:

 

Seems to me that this attorney either has no clue what he is doing, or is just this sloppy because he thinks you will not respond.  This basically means that because of how they structured this, they are unable to use anything regarding admissions against you in this whole case, for any reason.   Also, I do not know how far you would wish to push this point, or even if you wish to use it at all, but they listed the plaintiff as "Plaintiff is PORTFOLIO RECOVERY ASSOCIATES, LLC GENERAL ELECTRIC CAPITAL".....Who in the world is that?  That's two separate companies meshed into one name.  That makes no sense at all, and does not make it clear who the real party that is suing you even is.  It casts further doubt as to who actually owns the alleged debt at this time.

The Standing Discovery Order was included in the paper work I was served which is from the local court here...Not sure they even read it, or if it was included in the paper work by the clerk of the court....but either way I am understanding this order to mean that neither myself or the plaintiff are able to rely on DEEMED admissions.

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Can someone please try and explain this to me and in your opinion is there any relevence to my case???

 

Court of Appeals of Texas,Dallas.  

RESURGENCE FINANCIAL, LLC, Appellant v. Freeman TAYLOR, Appellee.

No. 05-07-01492-CV. -- August 31, 2009

 

Before Justices BRIDGES, RICHTER, and FILLMORE. Andrew E. Lemanski, for Resurgence Financial, LLC. Freeman Taylor, pro se.

 

OPINION

Resurgence Financial, LLC appeals the dismissal of its breach of contract suit against Freeman Taylor. In two issues, Resurgence argues the trial court erred when it dismissed the suit for want of prosecution and denied its motion for default judgment. Because we conclude that Resurgence failed to prove it was entitled to a default judgment, we affirm the trial court's judgment.

 

Background

On January 4, 2007, Resurgence filed its original petition against Freeman Taylor asserting a claim for breach of contract for failure to pay a credit card account. The petition partially identified Taylor's social security number and credit card account number and stated that Resurgence had purchased the account from Citibank and was currently the owner of the account. According to the petition, Citibank and Taylor entered into an account agreement the (“Agreement”) that allowed Taylor to receive cash advances and to purchase goods and services from merchants who honored the Citibank credit card. The petition asserted that Taylor had acquired cash and/or goods and services in accordance with the Agreement and had promised to pay for the account but had failed to do so. Resurgence claimed it was damaged in the amount of $8,928.49, together with interest and attorney's fees as provided for in the Agreement. Resurgence specified that it was entitled to at least $2,976.16 in reasonable attorney's fees under Chapter 38 of the Texas Civil Practice and Remedies Code.

 

The affidavit of John Over, Resurgence's designated agent, was attached to the petition (the “Over Affidavit”). The Over Affidavit attested to the facts asserted in the petition and included a summary of Taylor's account as an attachment. The account summary reflects that Taylor's last payment was made on August 10, 2004 and the interest rate on the account is 6%. The statement shows that the total amount due is $8,928.49 as of October 31, 2006. Of this amount, $8,128.15 is designated as principal and $800.34 is designated as interest.

 

A request for disclosures and requests for admission were embedded in the petition. Taylor did not answer the petition or the discovery. On February 8, 2007, Resurgence filed a motion for default judgment. The motion was supported by an attorney's fees affidavit and a non-military affidavit.

On July 27, 2007, the trial court returned the default judgment unsigned with a form notice on which the court had checked off several perceived deficiencies. The deficiencies selected by the trial court included: (1) petition does not give fair notice of claim against defendant; (2) judgment relies on cause of action not adequately pleaded; (3) damages cannot be accurately calculated, no written instrument attached to petition; (4) no evidence of sale and delivery of merchandise or performance of services; (5) no evidence that the amount of the account or price charged is in accordance with an express contract or usual, customary and reasonable; and (6) no evidence of a systemic record kept and supported by affidavit. On August 1, 2007, Resurgence filed another motion for default judgment. The motion requested judgment on the debt owed by Taylor in the amount of $8,928.49 with interest in accordance with the Agreement and as supported by the documents attached to the original petition and the request for admissions. In further support of the requested judgment, Resurgence attached an attorney's fees affidavit and the affidavit of its designated agent. By letter dated August 6, 2007, the trial court again returned the default judgment unsigned and accompanied by the same form letter identifying the same perceived deficiencies.1

 

On August 7, 2007, the trial court issued a notice stating that the case was set for dismissal on August 24, 2007 pursuant to Rule 165a of the Texas Rules of Civil Procedure. The notice advised:

 

If no answer has been filed, or if the answer is insufficient as a matter of law to place any of the facts alleged in your petition in issue, you will be expected to have moved for, and to have heard a summary judgment or to have proved up a default judgment on or prior to that date. Your failure to have done so will result in dismissal of the case on the above date.

 

On August 23, 2007 and August 24, 2007, Resurgence filed trial briefs in support of its motion for default judgment. On October 1, 2007, Resurgence filed another motion for default judgment. Like the prior motions, the motion requested judgment on the debt owed by Taylor in the amount of $8,928.49 with interest in accordance with the Agreement and as supported by the documents attached to the petition and the deemed admissions. An attorney's fees affidavit and a non-military affidavit were attached to the motion. In further support of the motion, Resurgence included the Over Affidavit, which describes the sale and assignment of Taylor's account from Citibank to Resurgence, the account number, the balance owed on the account, and the date of the last payment. Attachments to the Over Affidavit included two documents entitled Bill of Sale, Assignment, and Assumption Agreement (the “Assignments”), the Citibank Card Agreement, four months of Taylor's 2004 account statements and one 2005 account statement. The account statements reflect payments that were made on the account and applied to the outstanding balance, including the August 10, 2004 payment referenced in the Over Affidavit. The Assignments show that certain accounts were transferred from Citibank to a limited liability company and then transferred from the limited liability company to Resurgence. Although the Assignments reference attachments that enumerate the specific accounts sold and assigned, the attachments are not included with the Assignments. Therefore, it is not possible to determine whether Taylor's account was among those sold and transferred.

 

The motion for default judgment was further supported by the affidavit of James Hull (the “Hull Affidavit”), counsel for Resurgence. The Hull Affidavit states that Resurgence's requests for admission were served on Taylor with the original petition as evidenced by the return of citation on file with the clerk and that Taylor failed to respond to the admissions within 50 days after service. In addition to the motion for default judgment and supporting documents, Resurgence also filed a request for a hearing on its motion for default judgment.3 On October 9, 2007, the trial court dismissed the case. The reasons for dismissal stated in the dismissal notice included “failure to take action after notice of intent to dismiss” and “dismiss for want of prosecution.” This appeal followed.

 

Discussion

Resurgence contends the trial court erred in denying the motion for default judgment and dismissing the case for want of prosecution. On this record, we disagree.

The denial of a motion for default judgment is reviewed under an abuse of discretion standard. Aguilar v. Livingston, 154 S.W.3d 832, 833 (Tex.App.-Houston [14th Dist.] 2005, no pet.). A plaintiff may seek a default judgment if the time has passed for the defendant to answer, the defendant has not answered, and the citation with the officer's return has been on file with the clerk for ten days. See Tex.R. Civ. P. 107, 239.

 

In a no-answer default judgment, the failure to file an answer operates as an admission of the material facts alleged in the petition, except as to unliquidated damages. Holt Atherton Indus., Inc. v. Heine, 835 S.W.2d 80, 83 (Tex.1992). A claim for damages is liquidated if the amount of damages can accurately be calculated by the court from the factual, as opposed to the conclusory allegations in the petition and written instruments. Argyle Mech., Inc. v. Unigus Steel, Inc., 156 S.W.3d 685, 687 (Tex.App.-Dallas 2005, no pet.); see also Novosad v. Cunningham, 38 S.W.3d 767, 773 (Tex.App.-Houston [14th Dist.] 2001, no pet.) (suit to recover amount due for professional services was liquidated claim proved by written instruments where plaintiff attached original instruments to verified petition and motion for default judgment). When damages are unliquidated, the judge must “hear” evidence on the damages. See Argyle Mech., Inc., 156 S.W.3d at 687; see also Tex.R. Civ. P. 243. In contrast, “if the claim is liquidated and proved by an instrument in writing, the damages shall be assessed by the court, or under its direction, and final judgment shall be rendered therefor․” Tex.R. Civ. P. 241.

Here, the pleadings provide the requisite factual allegations to prove Resurgence's claim for breach of contract. Recovery under a breach of contract claim requires proof of four elements: (1) the existence of a valid contract; (2) performance or tendered performance by the plaintiff; (3) breach of the contract by the defendant; and (4) damages sustained by the plaintiff as a result of the breach. Orix Capital Mkts., L.L.C. v. Wash. Mut. Bank, 260 S.W.3d 620, 623 (Tex.App.-Dallas 2008, no pet.). The petition states that Taylor opened the account with Citibank, used the account to buy goods and services, promised to pay for the account, but failed to do so. The contract is further evidenced by the Agreement attached to the petition. The petition also states that Resurgence purchased the account from Citibank and is the current owner of the account entitled to payment. The Over Affidavit further attests to the sale of the account.

The account is specifically identified by the partial disclosure of Taylor's social security number, the account number, and Taylor's name and address. Account statements, an account summary and supporting affidavits establish the amount due on the account as of the date of default, the date of the last payment, and the application of payments to the outstanding balance. The amount of attorney's fees for which judgment is requested is stated in the petition and supported by affidavit.

The admissions provide further proof in support of a judgment. The admissions were embedded in the petition, and the record demonstrates the petition was properly served.4 Because Taylor failed to object or timely answer the admissions, they were deemed admitted as a matter of law. See Tex.R. Civ. P. 198.2©. Deemed admissions may be employed as proof. Sherman Acquisition II L.P. v. Garcia, 229 S.W.3d 802, 812 (Tex.App.-Waco 2007, no pet.) (default judgment); Elkins v. Jones, 613 S.W.2d 533, 534 (Tex.Civ.App.-Austin 1981, no writ) (summary judgment). Once admissions are deemed admitted by operation of law and fully support each element of a cause of action, including damages, they will fully support a judgment thereon. Sherman, 229 S.W.3d at 812. Answers constituting admissions of law, however, are of no effect and are not binding on the court. See Esparza v. Diaz, 802 S.W.2d 772, 775 (Tex.App.-Houston [14th Dist.] 1990, no writ); Neal v. Wis. Hard Chrome, Inc., 173 S.W.3d 891, 894 (Tex.App.-Texarkana 2005, no pet.).

By failing to answer the requests for admissions, Taylor admitted that (1) he applied for the credit card and requested that the account be opened; (2) he understood that use of the account resulted in a loan that he was obligated to pay; (3) he made purchases and took cash advances on the account; (4) the account is due; (5) the $8,928.49 balance stated in the petition is the correct amount due on the account; (6) he received monthly statements showing the amount of charges and specifying the amount due; (7) the monthly statements advised him of his right to dispute any error and he has never given any notice of an error or dispute; (8) he promised to pay for the account; (9) payment was requested but has not been made; (9) the contractual interest rate is 6% and the Agreement provides for late and over the credit limit fees; and (11) $2,976.16 is a reasonable amount of attorney's fees for the prosecution of this suit.

The petition and supporting documents give fair notice of Resurgence's breach of contract claim based on the unpaid credit card account. See Low v. Henry, 221 S.W.3d 609, 612 (Tex.2007) (fair notice standard met when opposing party can ascertain nature of the claim, basic issues, and evidence that might be relevant to the controversy). But the evidence Resurgence proffered did not provide sufficient information for the trial court to render a damage award. There was not only insufficient information from which to calculate the interest due on the outstanding account balance, the evidence that was submitted conflicted as to the rate of interest to be charged. Specifically, the Over Affidavit and deemed admissions state that the contract rate of interest is 6%, but neglect to state whether this is computed as simple interest. Four of the five credit card statements reflect that the periodic interest rate for purchases and advances is 0.06573%, with an annual percentage rate of 23.990%. But the 2005 statement reflects that the periodic rate is 0.06915%, with an annual percentage rate of 25.240%. The Agreement provides for a default rate of up to 24.99% and also provides for late fees to be assessed based upon the outstanding balance. Although the default rate appears to have been charged on one of the monthly statements, the other statements reflect that a different interest rate was applied. The record reflects that the outstanding balance on the account as of October 31, 2006 was $8,928 .49, but provides no definitive basis for calculating the principal and interest due beyond that point. Because Resurgence's evidence was insufficient to support the default judgment it requested, we conclude the trial court did not err in denying the motion.

The trial court's notice required Resurgence to move for and have heard a summary judgment or prove up a default judgment by August 24, 2007. Although Resurgence filed a motion for default judgment, it failed to establish its entitlement to the judgment it requested. Under these facts and circumstances, we cannot conclude the trial court erred in dismissing the case for want of prosecution. See Crown Asset Mgmt. LLC v. Loring, 05-07-01418-CV (Tex.App.-Dallas August 27, 2009) (holding dismissal for want of prosecution permissible when plaintiff fails to show entitlement to a default judgment by court-ordered deadline). We affirm the trial court's dismissal order.

FOOTNOTES

1. Although the form letter is dated August 6, 2007, a handwritten notation at the bottom states “mailed 9/21/07.”

2. We are not aware of any authority by which a court may require a party to move for summary judgment.

3. Resurgence does not complain about the trial court's failure to conduct a hearing.

4. We express no opinion about the propriety of embedding the requests for admissions in the body of the petition.

MARTIN RICHTER, Justice.

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wow....I have something to drop in the hat too, but it wont be so amazing like what rocker just posted....

 

The plaintiff served their petition on you....their petition included their request for admissions.  Immediately after posting that request for admissions and disclosures, they list their prayer....and then they include this:

 

STANDING DISCOVERY ORDER

Pursuant to Rule 190.5 of the Texas Rules of Civil Procedure, and in

the interests of justice, the Court hereby modifies the Discovery Control

Plan that governs this case under Rule 190.1 as follows:

 

1. Requests for Admissions may not be imbedded in a petition. See Rule

191.4 (Requests for Admissions "must not be filed"). A party who

violates this Standing Order may not rely on alleged Deemed

Admissions for any purpose in this case, including in connection with

a Motion for a Default Judgment or a Motion for Summary Judgment.

If nothing else this appears to be a defendant-friendly court.

 

The case that the OP just posted somewhat clarifies what you said about the plaintiff not being able to use any admissions against the defendant but then the last comment on it is, "We express no opinion about the propriety of embedding the requests for admissions in the body of the petition."  I would definitely be holding onto this for use in knocking down a Motion for Summary Judgment if they file one and knowing Ahn Regent he probably will do so about a year from now.   If you defeat their MSJ they have essentially lost the case.

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The plaintiff lost that appeal because they submitted conflicting information on the account.  The appeals court did not rule for or against the statute that I mentioned previously because there was no need for them to consider that point.  The plaintiff's case was defective for other reasons, and so they never took up the cause of whether or not the admissions were properly done.  That's how I read it.  The statement in bold at the end simply means that they did not look at that aspect of the case, because the plaintiff's submissions were defective and did not prove their claim.  So, even viewing the appeal in the most favorable light for the plaintiff, the court could not agree with the plaintiff.

 

Texasrocker, the way I read what the OP has posted, those admissions are definitely imbedded.  They are not attached to or included with.  Notice the structure of the document--the plaintiff lays out the basics of its complaint, lists out the request for admissions, then states its prayer for relief.  If they had completed the petition, prayer and all, and then had a separate document included in the same envelope that contained the admissions, then they might be in the clear.  But the way the OP posted it, it's my opinion that the admissions are definitely imbedded in the petition. 

 

Also, in the appeals case the OP just posted, It appears to me that the original court did not give any weight to the admissions at all.  Since we know that something not specifically denied is deemed admitted, we have to consider that the original court did not see enough at all to prove the plaintiff's claims.  They twice denied the plaintiff's default judgment motions on the grounds that the plaintiff did not adequately plead their claims.  That says to me that they did not deem the admissions as admitted to be true.  If they had, I would think that they would have ruled in favor of the plaintiff. 

 

An interesting side note--the plaintiff took this case all the way to the Supreme Court(case #09-0911), and the Supreme Court denied a review of the petition.  So the plaintiff went as far as they could to try to get the decision overturned, and lost anyway.  This could end up being a good piece of case law for you.....

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Yes there is no doubt that it is embedded.  I had not read the OP's Original Petition earlier.     

 

It sure is excellent case law in our favor.  That is why I asked the OP to post it here after she had PM'd it to me.  I wanted everyone to see it and for other new people here to see the example she has set by laboring to dig up a gem such as this.

 

Bringing up inadequate pleadings is the whole purpose of the special exceptions in the answer I provided here.  It is imperative to bring them up right out of the gate because the judge could very well agree with you and toss the case or at least force the JDB to go back to square one and start over.  It is common to see Account Stated but I was somewhat amazed to see Quantum Meruit being pleaded here and in another recent case that I handled in PM's only.  

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STANDING DISCOVERY ORDER

Pursuant to Rule 190.5 of the Texas Rules of Civil Procedure, and in

the interests of justice, the Court hereby modifies the Discovery Control

Plan that governs this case under Rule 190.1 as follows:

 

1. Requests for Admissions may not be imbedded in a petition. See Rule

191.4 (Requests for Admissions "must not be filed"). A party who

violates this Standing Order may not rely on alleged Deemed

Admissions for any purpose in this case, including in connection with

a Motion for a Default Judgment or a Motion for Summary Judgment.

 

 

The above refers to "deemed admissions".   That usually means admissions that have been deemed admitted.  In other words, if the OP doesn't answer the complaint (#2 in the judge's order), or admits to an admission to which he should not have admitted, those deemed admissions could not be used against him.

 

Now look at #2 of the judge's order:

 

2. Deemed Admissions may not be used against any party in this case

(including a defendant who has not filed an answer) in the absence of

strict proof of service of the corresponding Requests for Admissions

on such party.

 

 

The above says "including a defendant who has not filed an answer".  That's the default judgment to which I referred.

 

It also says that deemed admissions cannot be used  "in the absence of strict proof of service of the corresponding Requests for Admissions on such party".

 

If the plaintiff serves a corresponding set on the OP, any deemed admissions COULD be used against him.

 

But this shouldn't be a problem if the OP answers the complaint, properly responds to all of the admissions, and doesn't admit to something to which he shouldn't admit.  If he does all of that, there will be no deemed admissions.

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...
Also, I do not know how far you would wish to push this point, or even if you wish to use it at all, but they listed the plaintiff as "Plaintiff is PORTFOLIO RECOVERY ASSOCIATES, LLC GENERAL ELECTRIC CAPITAL".....Who in the world is that?  That's two separate companies meshed into one name.  That makes no sense at all, and does not make it clear who the real party that is suing you even is.  It casts further doubt as to who actually owns the alleged debt at this time.

If in AZ, I would be looking into pushing the real party in interest ("RPII") issue.

 

The closest I can find (on a quick search) to a RPII (Fed Rule 17) in TX is on pg 28 http://www.supreme.courts.state.tx.us/rules/trcp/trcp_part_2.pdf

SECTION 3.

PARTIES TO SUITS

RULE 28. SUITS IN ASSUMED NAME

Any partnership, unincorporated association, private corporation, or individual doing business under an assumed name may sue or be sued in its partnership, assumed or common name for the purpose of enforcing for or against it a substantive right but on a motion by any party or on the court's own motion the true name may be substituted.

 

I have pushed the RPII issue in AZ (with mixed but overall positive results) using AZ's Rule 17(a) which is similar to FRCP 17(a):

http://www.azcourts.gov/rules/Home.aspx

16 A.R.S. Rules of Civil Procedure, Rule 17(a)

Rule 17(a). Real party in interest

Every action shall be prosecuted in the name of the real party in interest. An executor, administrator, guardian, bailee, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or a party authorized by statute may sue in that person's own name without joining the party for whose benefit the action is brought; and when a statute of the state so provides, an action for the use or benefit of another shall be brought in the name of the State of Arizona. No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest.

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Here is something from TJCTC in Dec 2012 on this and several other instances od same subject matter

 

EMBEDDED REQUESTS FOR DISCOVERY

CASELAW UPDATE

By Thea Whalen

Program Attorney, TJCTC

The issue of how to handle embedded discovery requests,

particularly requests for admissions, is one that our courts

have been dealing with for quite some time. Recently,

some litigants have been citing caselaw that they claim

does not

 

preclude this tactic. We will address those cases

as well as another recent case that discusses embedded

discovery requests.

One case cited by parties who embed discovery is Crown

Asset Management, L.L.C. v. Loring, 294 S.W. 3d 841

(Tex. App.-Dallas, 2009). In this case, Crown sued to

collect a debt from Loring. It presented the court with a

default judgment when Loring failed to answer the

complaint. The lower court indicated its motion was not

well taken due to a lack of notice to the Defendant, in this

case, failure to state a claim. The court warned Crown to

respond or have the case dismissed for want of

prosecution, which ultimately happened and was upheld

by the Appellate Court. The issue of requests for

admissions embedded in the petition is only directly

addressed in a

 

dissenting footnote. The dissent of a case

is the opinion of the minority of the court and has no legal

authority. Also, it was merely in a footnote which read:

Although not necessary to my analysis, I would also note

that the requests for admissions embedded in the

petition implicitly convey additional information about the

contract in question … Because the requests were part

of the same document that included the original petition,

arguable they should be considered in the fair-notice

analysis as well.

The dissent is accepting the placement of the embedded

admissions, but does not specifically state it is allowed

under the Texas Rules of Civil Procedure and as stated

above, it is contained in the opinion of the minority of the

Court. We do not believe anything about this case asserts

an argument in favor of embedded admissions.

Another case cited by parties in favor of embedded

admissions is Lucas v. Clark, 347 S.W.3d 800, (Tex. App-

Austin. 2011). In this breach of contract case, the

Defendant had a default judgment granted against them

and claimed the judgment was not valid, among other

reasons, because, “the use of requests for admissions

embedded within a petition to support the no-answer

default judgment awards of unliquidated damages was

‘inappropriate’ and undermined Texas Rule of Civil

Procedure 243.” Id. The appellate court did overturn the

judgment of unliquidated damages and remand to the

County Court for further proceedings.

Lucas is a bit more interesting in that the judgment was

granted mainly on the Plaintiff’s reliance on one of its

embedded admissions. The Court dedicated a section of

their opinion discussing the “Purpose for Requests for

Admissions.” Id. The Court noted that Requests for

Admissions purpose is to “simplify trials by eliminating

matters about which there is no real controversy.” See Id.,

citing Stella v Papania, 927 S.W.2d 620 (Tex 1996). The

Court also noted they were not to be used as a “tool,”

“trap,” or to force a party to ”admit he had no cause of

action or ground of defense.” Id.; see also Birdo v

Hammers, 842 S.W.2d 700 (Tex.App-Tyler 1992, no writ.)

When admissions are not used as intended, they may be

considered improper and therefore, not admitted.

Specifically, overly broad admissions that try to preclude a

party from presenting their case should not be allowed.

See In re Estate of Herring, 970 S.W.2d 583 (Tex. App-

Corpus Christi 1998, no pet.)

The Lucas Court felt the Request in the case was just that

– overly broad. The request the Plaintiff was relying on for

their unliquidated damages was the only evidence they

used to support it. That request sought, “Lucas to admit

that the [Plaintiffs] have suffered $10 million in damages”,

aimed to eliminate Lucas’s ability to present a defense to

the only element at issue, proof of unliquidated damages.

See Lucas at 804. The Court stated that, “uch sweeping

requests cannot be deemed judicial admissions … nor can

they provide any evidence to support a trial court’s

damages award.” Id.

In the Lucas case, the Court also considered TRCP 243,

which requires a hearing and evidence in unliquidated

damages cases. Regarding this rule, the Court stated:

Relying on an embedded request for admission that

precludes any presentation of evidence on unliquidated

damages undermines the spirit of Rule 243 and is not

consistent with its purpose. Requests for admissions

were simply not meant to be used in the way that [they

have been used here], i.e. to wholly preclude a

defendant from presenting his defense.

The Court in Lucas held that because of the this rule

requiring evidence to be heard and the broad nature of the

request for admission (as well as the particular standard of

proof in this type of case which required “reasonably

certain evidence” because it was a suit for lost profits), the

requests for admissions were “not sufficient to constitute

conclusive evidence of the statement that is contained.” Id.

While the Lucas Court did not specifically hold embedded

admissions could not be filed, they clearly did not believe it

was the correct approach, certainly not in the way they

were used to prove unliquidated damages.

(Continued on Page 6)

Page 6

Page 6

Another case that may be raised by parties wishing to

rely upon their embedded admissions is Resurgence

Financial, LLC v Taylor, 295 S.W.3d 429 (Tex. App-

Dallas, 2009). In this credit card assignee case, the

lower court denied the Plaintiff’s default judgment due

to lack of sufficient evidence. Specifically, the lower

court found, “there was insufficient information from

which to calculate the interest due on the outstanding

account balance.” Id. Part of the evidence relied on was

a set of embedded admissions. However, the Taylor

Court specifically stated in a footnote that they,

“express no opinion about the propriety of embedding

the requests for admission in the body of the petition.”

Id. So, this case is an odd one to use in favor of

accepting embedded admissions because it is

specifically not addressed. However, the parties in

favor of embedded discovery feel this case supports

their position that an appellate court has not specifically

ruled

 

against embedding discovery.

As indicated above, these cases have been relied on in

the recent past as argument that embedded admission

cannot be precluded. The Training Center believes if

your court has a standing discovery order in which

parties are on notice, you may indicate that you do not

accept embedded admissions. Even without this

standing order, the above Lucas case can provide

additional guidance as how to weigh that discovery in a

default situation.

An unpublished case from the Court of Appeals in

Beaumont came out in October of this year: Hankston

v. Equable Ascent Financial, 2112 WL 4666916

(Tex.App.-Beaumont). In this credit card case, the

plaintiff won a default judgment but the defendant later

learned of the suit and filed his appeal. Id. The

appellate court reversed the granted default judgment,

but not on grounds related to admissions embedded in

the petition. Id. However, the Hankston Court did offer

its thoughts on embedded requests for admission in

dicta -- and while not controlling, it again can offer

guidance to dealing with these discovery requests. The

Court stated:

Including the discovery requests in the petition

confuses the different purposes of discovery and

[petition]; the questionable procedure followed by [the

plaintiff] worked to diminish the function of the

[petition] … The pleading includes two separate

instructions that the response are due 50 days after

service of the requests. Without further explanation,

[the plaintiff] also alleges in the petition that the 50

day deadline “does not alter any deadline to answer

this lawsuit as set forth in the citation” Before the 50

days expired, [the plaintiff] had obtained the default

judgment. Id.

The Court clearly had concerns that this method does

not give the defendant fair notice. See Stoner, 578

S.W. 2d at 683 and Tex.R.Civ.P 45, 46, and 47. The

Court was also concerned with the fact that the default

judgment was granted prior to the deadline to respond

to the requests for admissions. Id. This is particularly

important because in most cases in your courts, the

purpose of the embedded requests for admission is to

prevail on a default judgment.

The Hankston Court was also concerned with TRCP

191.4. This is the rule that we at the Training Center

cite as an indication that discovery was not meant to be

imbedded because this rule states that discovery is not

to be filed. Interestingly enough, the parties asking our

courts to blindly accept requests for admissions assert

that this rule is being read incorrectly. They claim this

was just written for large jurisdictions to keep the court

files smaller. First, nothing in the rules indicates this is

this case. Second, as stated above, there are other

rules that indicate embedded discovery request

certainly were not what was contemplated by the rules.

And third, at least one Court of Appeals certainly takes

a different view of Rule 191.4. Not only does the

Hankston Court indicate Rue 191.4 does not allow

discovery to be filed, but notes TRCP 45 and 46 call for

the petition to be only “one instrument of writing,” in

other words, it is not supposed to also be discovery. Id.

The Court also cites to TRCP 59 which states, “No

other instrument of writing shall be made an exhibit to

the petition.” In the Court’s view, “[t]he effect of

embedding was to create conflicting dates for response

to a single writing.” Id.

While none of these cases specifically prohibits the

embedded request for admission, they do not

specifically allow them either. However, there is

significant discussion in both Lucas and Hankston

regarding those Courts’ thoughts on embedded

requests for admissions and those discussions are not

favorable to embedded admissions. The cases do not

change the Training Center’s stance that a failure to

answer a petition with embedded admissions would

render those admissions admitted. But, they do offer

your courts additional consideration, specifically

evaluating the fair notice given to a party by embedding

admissions and considerations that the requests

themselves may be overly broad and therefore,

improper.

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The above refers to "deemed admissions".   That usually means admissions that have been deemed admitted.  In other words, if the OP doesn't answer the complaint (#2 in the judge's order), or admits to an admission to which he should not have admitted, those deemed admissions could not be used against him.

Why would it say they cannot be embedded in the Original Petition then?  Deemed admissions do not yet exist when the Original Petition is written and filed.

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General Electric Capitol is who they are saying is the original creditor

The cover sheet states Portfolio Recovery Associates, LLC. The pleading caption states Portfolio Recovery Associates, LLC General Electric Capital.

 

It appears they are just sloppy and incompetent. I would probably caption my pleading and motion practice with Portfolio Recovery Associates, LLC.

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Requests for admissions have been widely used in suits to collect credit card debt in Texas. Two factors explain this widespread use. First, in many of these suits the credit card debt has been written off by the bank or other party that extended the credit and the debt has been assigned for collection to a third party, such as Unifund CCR Partners, LVNV Funding, Dodeka or Michael Scott & Associates, for collection. Typically, when the debt is assigned in this manner the assignee does not receive detailed records of the transactions on the account but only a computer generated print out of the amount allegedly due. Therefore, the assignee does not have sufficient business records to prove up the history of the underlying transactions but only a summary of the debt and the charges that have allegedly accrued. Second, many of these cases are for relatively small amounts and the prospects for collection are often remote. Although the assignees may have paid only pennies on the dollar to acquire the debt, their realization in collecting the debt depends on obtaining judgments with a minimum of expense. The use of requests for admissions, particularly against pro se defendants, to prove up their case in these circumstances is hardly surprising.

This widespread use has given rise to the following issues: (1) May requests for admissions be embedded in a petition, and if so what practical effects does this have? (2) What limits, if any, apply to the scope of requests for admissions? And (3) When must the court permit a party to withdraw deemed admissions?[3]

I. Overview of Requests for Admissions under Tex. R. Civ. P. 198

On its face Rule 198 of the Texas Rules of Civil Procedure is simply a discovery tool designed to eliminate issues that are not in dispute from a case thereby narrowing the genuine issues for trial and avoiding the need to spend time on matters as to which there is no controversy.

Rule 198.1 permits a party to serve upon another party, at least 30 days before the end of the discovery period, “written requests that the other party admit the truth of any matter within the scope of discovery, including statements of opinion or of fact or of the application of law to fact, or the genuineness of any documents served with the request or otherwise made available for inspection and copying.” The party serving the requests must state separately each matter for which an admission is requested. Id.

Rule 198.2 prescribes the time for responding, the contents of the response and the effect of failing to respond on time. Under Rule 198.2(a), a party upon whom a request for admissions has been served “must serve a written response on the requesting party within 30 days after service of the request, except that a defendant served with a request before the defendant’s answer is due need not respond until 50 days after service of the request.”

Under Rule 198.2(B), if the responding party does not state an objection or assert a privilege, then the party must “specifically admit or deny the request or explain in detail the reasons” for not being able to do so. The response “must fairly meet the substance of the request” and the responding party “may qualify an answer, or deny a request in part, only when good faith requires.” It is not a proper response to state that the party lacks information or knowledge “unless the responding party states that a reasonable inquiry was made but that the information known or easily obtainable is insufficient to enable the responding party to admit or deny.” And it is not a proper response simply to assert that the request presents an issue for trial.

If a response is not timely served, then under Rule 198.2© “the request is considered admitted without the necessity of a court order.”

Rule 198.3 prescribes the effect of an admission and the procedure for withdrawal or amendment. Significantly, it states that a “matter admitted under this rule is conclusively established as to the party making the admission unless the court permits the party to withdraw or amend the admission.” The court may permit the party to withdraw or amend the admission if: “(a) the party shows good cause for the withdrawal or amendment; and (B) the court finds that the parties relying upon the responses and deemed admissions will not be unduly prejudiced and that the presentation of the merits of the action will be subserved by permitting the party to amend or withdraw the admission.” The rule also makes it clear that an admission made by a party “may be used solely in the pending action and not in any other proceeding.”

As noted above, requests for admissions have been used extensively in credit card cases in ways that raise important legal issues.

II. May Requests for Admissions be Embedded in a Petition?<

One common approach that plaintiffs in credit card collection actions have utilized is to “embed” requests for admissions within a petition. Rather than serving a separate set of requests for admissions, or other discovery requests, as a stand-alone document in addition to and apart from the petition, these plaintiffs simply incorporate the requests for admissions within the petition, either in the body of the petition itself or immediately after the prayer for relief but before the signature block. Is this practice proper and if so what practical effect does it have on a plaintiff’s ability to obtain a default judgment or summary judgment?

On their face the Texas Rules of Civil Procedure would seem to prohibit, or at least strongly discourage, this practice. First, the rules clearly distinguish between the contents of the petition and discovery requests. Rule 79 states that the “petition shall state the names of the parties and their residences, if known, together with the contents prescribed in Rule 47 . . . .” Rule 47 in turn states that an original pleading setting forth a claim for relief shall contain: “(a) a short statement of the cause of action sufficient to give fair notice of the claim involved; (B) in all claims for unliquidated damages only the statement that the damages are within the jurisdictional limits of the court, and © a demand for judgment for all the other relief to which the party deems himself entitled.” See also Tex. R. Civ. P. 45 (pleadings shall be by petition and answer and consist of a statement in plain and concise language of the plaintiff’s cause of action or the defendant’s grounds of defense); Tex. R. Civ. P. 46 (original and every other petition shall be contained in one instrument); Tex. R. Civ. P. 48 (party may set forth alternative claims or defenses). Rule 22 states: “A civil suit in the district or county court shall be commenced by a petition filed in the office of the clerk.” Thus, the petition must be filed. By contrast, discovery requests to be served on parties, including requests for admissions, “must not be filed.” Tex. R. Civ. P. 191.4(a).[4] By embedding the requests for admissions in the petition, a plaintiff would appear to be circumventing this prohibition.

Second, different response times apply to the petition and discovery requests. A defendant has until the Monday following twenty days after service of the citation to file an answer to a petition but a party has 50 days to respond to requests for admissions when served before the defendant’s answer is due. Compare Tex. R. Civ. P. 99 with Tex. R. Civ. P. 198.2(a). By embedding the requests in the petition, the plaintiff may create confusion as to the response time for the requests or cause the defendant to be deprived of up to 30 days that the rules give the defendant to respond to the requests for admissions.

Finally, what happens if a defendant simply files a general denial to a petition in which requests for admissions are embedded? Rule 92 states that a general denial “of matters pleaded by the adverse party which are not required to be denied under oath, shall be sufficient to put the same in issue.” Responses to requests for admissions are not required to be denied under oath. Therefore, if a plaintiff chooses to embed requests for admissions in a petition and the defendant files a general denial, would this not constitute a denial of each request? Again, at a minimum embedding the requests creates confusion as to the appropriate response required by the defendant.

These issues have been addressed in varying degrees and with different results by several courts. In Sherman Acquisition II, LP v. Garcia, 229 S.W.3d 802, 812-13 (Tex. App.—Waco 2007, no pet.), the Tenth Court of Appeals held that deemed admissions established the amount of unliquidated damages that the plaintiff had failed to establish through defective affidavits.[5] The plaintiff in that case had embedded the requests for admissions in the petition. Id. at 812. The court noted that “no objection is made to this procedure and by our holding we express no opinion upon the propriety of this form of request for admissions or its service.” Id. Since Garcia had failed to respond to the requests, they were deemed admitted and based on these admissions the court held:

Because the trial court would have been able to ascertain the amount of damages and attorney’s fees based on the request for admissions, we conclude that the evidence conclusively established the amount of damages to Sherman and attorney’s fees and that the trial court erred in failing to render judgment for Sherman.

Id. at 813.

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@texasrocker

 

This where we need to read some more cases to make sure we're understanding "deemed admissions".  Here's a sentence from Curry v. Clayton, 715 SW 2d 77 - Tex: Court of Appeals, 5th Dist. 1986.  It's an older case, but it seems to explain the term.

 

Clayton sent requests for admissions to Curry, which Curry received on February 19. Curry failed to file a response or objection to these requests within thirty days of the date of receipt; thus, the requests were deemed admitted by operation of law. TEX.R.CIV.P. 169.  Clayton then filed a motion to deem requests for admissions admitted and a motion for summary judgment, based upon the deemed admissions and the supporting affidavit of Clayton.

 

As you can see, "deemed admissions" means admissions that are considered admitted.  "Deemed" is what happens after there's no response or a response is improper.

 

Think of a default judgment.  If the admissions are included in the petition, but the defendant doesn't answer the complaint, those admissions become "deemed admissions". 

 

In the case where a defendant answers the complaint, but improperly responds to the admissions, they can become deemed admissions.   The term seems to have to do with admissions for which there are no response and, possibly, those for which an improper response was provided. 

 

The judge is merely saying that any embedded admissions that are deemed admitted because the defendant didn't do something cannot be used to support the plaintiff's case.  It's to protect the defendant.

 

That's why the judge stated that deemed admissions could only be used if a corresponding set was sent separately to the defendant.  If the defendant fails to respond to those admissions or still responds improperly, then it's obvious that the defendant either isn't defending himself or possibly has no defense.  In that case, the embedded admissions that are deemed admitted could be used.

 

But again this should make no difference to the OP as long as he answers the complaint, responds properly to the requests, and doesn't admit anything he shouldn't admit.  None of those requests could be deemed admitted at any point.

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The practice of embedding requests for admissions in a petition is inconsistent with the Texas Rules of Civil Procedure and should be prohibited or discouraged for the reasons discussed in Hankston v. Equable Ascent Financial, 382 S.W.3d 631 (Tex. App.—Beaumont 2012, no pet.).

Limits apply to the use of requests for admissions that are contradictory or vague and “overly broad, merits-preclusive requests for admissions are improper and may not result in deemed admissions.” Lucas v. Clark, 347 S.W.3d 800, 804 (Tex. App.—Austin 2011, pet. denied). Requests for admissions were never intended to be used as a trap for the unwary or as a means of wholly precluding a defendant from presenting a defense on the merits. Id. at 803.

Although a trial court has broad discretion in considering a motion to withdraw or amend deemed admissions, due process concerns arise when a party uses deemed admissions to try to preclude the presentation of the merits of a case. In the absence of flagrant bad faith or callous disregard for the rules of civil procedure, a trial court must carefully consider whether good cause and no undue prejudice exist so as to permit the withdrawal of merits-preclusive deemed admissions. Marino v. King, 355 S.W.3d 629, 632-33 (Tex. 2011).

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These cases have presented Texas courts with issues relating to: (1) the business records exception to the hearsay rule; (2) the proper use of requests for admissions; (3) liquidated damages; (4) the statute of limitations; and (5) proof of assignment of the debt. This article addresses the business records exception to the hearsay rule; subsequent articles will address the remaining issues.

 

https://www.yourhonor.com/in-chambers/single-issue-feature/Spring-2012/Issues-in-Credit-Card-Cases-Part-I

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