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Preparing for Mediation & Trial - Midland Funding - Arizona


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Hello Everyone, 

 

So far I have spent the last two months researching how to fight Midland Funding LLC. I thank everyone for their expertise and input, however I keep running into the same issue: everyone appears to use the "no standing to sue" defense, but Midland's attorney, Barry B., provided a bill of sale from Chase Bank USA N.A. to Midland Funding LLC. Of course the details are redacted and it's just an exhibit to the Credit Card Purchase Agreement. Here are the details of my case, I will try to make it as easy to read as possible. P.S. - they are bringing two different suits against me, for two different credit cards with Chase. 

1. Who is the named plaintiff in the suit?

Midland Funding LLC
2. What is the name of the law firm handling the suit? 
Barry Bursey, Esq.
3. How much are you being sued for?
$5,300 and $3,500
4. Who is the original creditor? 
Chase Bank USA, N.A.
5. How do you know you are being sued? 
Served in person
6. Was the service legal as required by your state? 
Yes
7. What was your correspondence (if any) with the people suing you before you think you were being sued?
I had mailed verification of debt letters in January 2014, with a follow-up letter in July 2014. I sent a copy to the three credit bureaus as well on the 2nd letter, which stated they had 30 days to provide valid proof of debt, which they never did. 
8. What state and county do you live in?
Arizona, Maricopa
9. When is the last time you paid on this account? 
I have no recollection of the credit cards, but according to the statements provided in Discovery on one card it was in 5/7/2010 and on the other it was 7/10/2010.
10. What is the SOL on the debt? 
6 years (as a credit card), but if they don't have a credit card agreement can't I use the 3 year stated account SOL?
11. What is the status of your case?
01 - New Case. So far on the 1st credit card, I filed an answer, they filed motions to appear by telephone and I filed an objection. I just received the MSJ on the 1st case today and I am getting ready to prepare and file my opposition. They have provided me a copy of the Bill of Sale, a few months worth of statements (no proof of payment or charges), and an affidavit. Interesting to note, on the documents they provided to me they had one individual sign the affidavit (Kathryn D.), while in the MSJ their affidavit is signed by a completely different person (Andrew L.). Is this even legal? 
On the second case, so far it has just been my filing an answer and a date set for mediation (July 28th on that one). 
12. Have you disputed the debt with the credit bureaus (both the original creditor and the collection agency?)
Yes, in 2014. 
13. Did you request debt validation before the suit was filed? 
Yes
14. What evidence did they send with the summons?
No evidence sent with the Summons and Complaint. During Discovery they sent me a Bill of Sale, Affidavit from Chase representative stating the information they were selling to Midland was true, about 8 months of statements (a few had payments posted but most didn't have any activity listed), and an affidavit of debt. 
 
As I said earlier, mediation is set for 6/17 for the 1st case they brought against me. I have provided the attorney with my letters to Midland verifying the debt in 2014. I have sent the court a Motion to Strike the Affidavit of Debt, as well as an Objection to the Motion for the Plaintiff to appear telephonically. I called the court today and the judge is giving the plaintiff time to respond to my objections. 

How should I best prepare for the mediation and I assume what will eventually be a trial? I haven't requested for a copy of a signed credit card agreement yet, but I know that they won't have one. I also want to push on the fact that they are using two different affidavits, one sent to me and one to the court. Luckily in my Motion to Strike Affidavit of Debt, I included a copy of the affidavit Bursey sent me to the court, along with the CV of the affiant from LinkedIn (thanks to tips here!). 
 
Thank you for taking the time to read my novel (if only it was fiction). I am looking forward to being another success story and helping others out!
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Arizona has rules that the jdb ( midland) can authenticate the records. (AZ rules suck). You can read threads by hot in AZ, AZ piano lady, she was somewhat successful, but they are hard to beat in AZ.

If you can amend your answers, Chase has agreements out there that have a JAMS clause. Priviate arb may be a better route for you in AZ. I will see if I can post the thread here on a AZ. Member that was successful using JAMS.

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How are they suing you for two different cards at the same time??   Were you served once or twice on these?  And in your #9 you said they have sent you discovery?  They don't have to have a signed agreement.  The mediation is where they will try to get you to settle for a lesser amt , or make pmts  forever .  Yes they always have two affadavits.  One in the complaint and another one later usually in the MSJ.

 

The amts in your case should be taken to arbitration if you want this gone.  Find out online if chase cc agreement in 2010 has an arb clause.

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http://www.antitrusttoday.com/2009/11/25/chase-rips-up-credit-card-arbitration-clauses-to-settle-class-action/

 

 

 

On Friday, Chase and the plaintiffs’ counsel announced that they had settled their dispute.  The suit against Chase will be dropped.  In return, Chase will cease using arbitration clauses for a period of three and a half years, beginning in early 2010.  Chase has also agreed not to discuss arbitration with other issuers and to cover the plaintiffs’ attorneys’ fees.

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Forget about analyzing what they have provided with their complaint.  What they provide at initial disclosure and supplemental disclosures is what's going to matter.  There is a sure fire way for Midland to win in court here in AZ and they know how to do it.  If you pursue this in court you will almost certainly lose and end up with judgments for both debts and also have Midland's attorneys fees and court costs tacked on for both cases.  The only way they can lose here is if they totally crap the bed.  Don't even waste your time thinking about fighting them in court.  Either get this into arbitration or settle.

 

In AZ, they can file as many lawsuits against you at one time as they want.  You can motion the court to have them consolidated and the court would probably do it, but if you are going to take these to arbitration, you're way better off having them separate since they will have to pay the arbitration fees twice.  Of course, then they will ask to have them consolidated and it will probably happen and there's not much you can do to stop it.

 

Arbitration is an alternative dispute method.  The reason it works for these types of cases is because the business (Midland) has to pay a fee (something like $1,750) to get the arbitrator to accept their case, however your fees are limited to something like $250.  Then, the arbitrator charges a fee for each hearing and Midland has to pay that also.  Per your contract (probably), once your initiate arbitration the court no longer has jurisdiction.  This puts Midland in a pickle.  The court must refuse to allow Midland to litigate in court so if they want to pursue their claims, they have to pay the costs of arbitration.  On a low debt amount, it's a no brainer; they will walk away from a $2,000 debt instead of pay to arbitrate.  Your case is deserving of a word of caution.  Because of the total debt amount involved here ($8,800), Midland may decide it's worth whatever the arbitration costs are to actually pursue their claims in arbitration.  Even still, I believe the odds of them walking away when faced with arbitration are better than you being able to beat them in court.

 

If you want to arbitrate, you have to send Midland a notice that you demand arbitration to settle the disputes, then wait a couple weeks and then file a Motion to Compel with the court.  @debtzapper posted that they stopped using arbitration in their agreements in early 2010, however, 2010 is when your last payment was made.  If you opened the account prior to early 2010, you will have had an arbitration clause in the governing agreement - and that clause probably had a survivability clause, meaning the arbitration clause remained even if Chase removed it from subsequent agreement updates.

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I'm not sure how that's going to play out with that case. I think I would politely decline any settlement offers at mediation and then ask to see the judge because you now realize the matter is subject to private contractual arbitration and pursuant to Arizona Revised Statutes 12-1502, you want to ask the judge to order the parties to use this instead of court. You need to act fast here because your case is pretty far along and the court might be inclined to find you waived your right to arbitrate. 

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@Harry Seaward 

I found Chase's 2008 credit card agreement. I am reading the Arbitration Agreement and it states I can go through the American Arbitration Association or the National Arbitration Forum. Which one would be best?

 

Also noted, the agreement states that:

"We will reimburse you for the initial arbitration filing fee paid by you up to the amount of $500 upon receipt of proof of payment. Additionally, if there is a hearing, we will pay any fees of the arbitrator and arbitration administrator for the first two days of that hearing. The payment of any such hearing fees by us will be made directly to the arbitration administrator selected by you or us pursuant to this Arbitration Agreement."

 

I want to make sure that Midland falls under this statement, and I found this in the CC agreement as well:

Parties Covered

For the purposes of this Aribtration Agreement, "we","us", and "our" also includes our parent, subsidiaries, affilates, licensees, predecessors, successors, assigns, any purchaser of your Account...

 

That holds Midland as a covered party for arb, correct?

 

ALSO - Read that statute of limitation is governed by Delaware... which has a 3 year SOL and not 6 like in AZ. I already listed SOL in my affirmative defenses in my Answer.... 

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The Delaware SOL is out.  I argued it 3 ways to Sunday and the appellate court ruled that AZ SOL apples to credit card lawsuits filed in AZ.

 

Yes, Midland is an "us"and covered by that agreement.  So basically you pay your filing fee and they will reimburse you up to $500.

 

NAF no longer accepts credit card disputes so you're left with AAA.

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@Harry Seaward I am thinking that I will probably have to go to trial with case #1 and request arbitration for case #2 by filing an amended answer. 

 

My confidence is starting to wane, and I am trying to stay positive. I was thinking I could go to the "hearsay" route for the affidavit of debt and credit card statements, but I have read mixed reviews on several posts here about those defenses. 

 

But one thing that I think I can point out to the judge is that the oldest statement Midland provided had an over limit balance, there were no transactions or purchases ever listed, thereby not constituting a valid agreement?

 

Also, statements show payments made on the CC, which I certainly didn't do. Can I use that as a defense?

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The hearsay objection to the affidavits is a dead end.  Midland can authenticate Chase's business records.  You have to find defects in the records themselves. 

 

If Midland brings what they usually bring, you're only chance of beating this is to swear under oath that the account was not yours and you never made the charges. Payments being made by someone else is irrelevant if you can't swear you never made the charges. 

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Hi, For what it is worth to you, Harry , Goody and I have been studying and fighting for three years.  If I had a message for myself three years ago it would be to elect arbitration.   I also had the same agreement as you and because NAF was defunct I was told AAA was creditor friendly.   So since I did not have the JAMS option I decided to go to trial.

 

Looking back I would have elected arbitration.  And so would have hot in az.  So to save you gobs of time and worry  either settle the first one and elect arb on the second, or if you can arb both.  Good luck.

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@Harry Seaward@Az Piano Lady 14 I appreciate the feedback and advice. I called the court clerk yesterday and I can file a motion to amend my answer, and then file an amended answer. Obviously allowing the plaintiff's attorney to object to me amending my answer. I am going to argue that since this is not my debt, I had no access to the credit card agreement. I then researched the 2008 Chase credit card agreement, and found the arbitration clause. Hopefully it will work for case #2. Since I have filed motions on case #1, I am just going to play it out and see what happens. 

 

Maybe splitting the cases for arb could work in my favor, since case#2 is the smaller debt. I will let you know what happens in mediation today. Thanks again. 

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@WhoopsNotMyName

Midland will probably try to tell you they are not a "we".  Tell them you want the judge to decide that.

 

And I would also have your request to the judge in writing.  Something like this:

 

 

On xx xx, 2015 I was presented with a copy of an agreement that Midland claims governs the debt they have sued me on.  Prior to this date I could not have known that Midland's claims are subject to the arbitration.  I have decided I want these claims settled by private contractual arbitration as provided in the agreement and in accordance with Arizona Revised Statutes 12-1502(a ), I would like the court to order Midland and me into arbitration.

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@Harry Seaward Just got back from mediation. Surprise surprise a mediator was not available. I spoke with Plaintiff's attorney and stated this is not my debt, that obviously the file that Chase sold your client contained errors. The attorney said that if this is a case of identity theft, he will send me an Affidavit of Identity Theft and ask Midland if they want to dismiss the case. I then brought up the fact that they had filed a MSJ on case #1 already, and he said he would be submitting a dismissal of the MSJ to the court today or tomorrow. Ever heard of this affidavit and/or possible outcomes?

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@Harry Seaward

 

Midland will probably try to tell you they are not a "we".  Tell them you want the judge to decide that.

 

 

If the agreement contains definitions, "we" would probably be defined as Chase and its assigns.  Midland would be really stupid to argue that they are not "we".  I'd construe it as an admission that they are not an assignee.

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@Harry Seaward

 

 

If the agreement contains definitions, "we" would probably be defined as Chase and its assigns.  Midland would be really stupid to argue that they are not "we".  I'd construe it as an admission that they are not an assignee.

I never said Midland's attorneys were smart. :-)  Just saying I wouldn't be surprised if they tried it to discourage OP from pursuing arbitration.   If it would have taken place under the umbrella of 'settlement negotiations', it's likely none of what was discussed there would be admissible. 

 

Edit: IMO, if Midland were to claim they are not subject to the arbitration clause of the agreement, they would be committing an FDCPA violation. Enforcing it would be a different matter...

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he said he would be submitting a dismissal of the MSJ to the court today or tomorrow.

I just re-read your post and this part jumped out at me.   Don't believe this until it happens. If they don't "dismiss" the MSJ, and you don't respond to the MSJ in a timely manner, they could very likely get the MSJ granted by default.   It's not supposed to happen that way but it has before and the appellate court has upheld those rulings so I wouldn't take any chances and would not trust that Midland's attorney will do what they said; especially when it means they could win their case without lifting another finger.   IOW, they are highly motivated to 'forget' to withdraw their MSJ.

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I just re-read your post and this part jumped out at me.   Don't believe this until it happens. If they don't "dismiss" the MSJ, and you don't respond to the MSJ in a timely manner, they could very likely get the MSJ granted by default.   It's not supposed to happen that way but it has before and the appellate court has upheld those rulings so I wouldn't take any chances and would not trust that Midland's attorney will do what they said; especially when it means they could win their case without lifting another finger.  

@Harry Seaward Yes, I immediately thought that as well. The "Don't believe Bursey and Midland - They LIE" quotes I have seen on here have helped. I asked when he would send to the court, and he said 6/17 or 6/18. I have until the 29th to submit my opposition to the MSJ, so if the court clerk doesn't show they have their dismissal by 6/24, I will send overnight via UPS.

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