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CrazyNorge

How Can I Discourage Midland from Filing a Lawsuit?

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I'd like to find a way to discourage Midland from filing a lawsuit against me for a JC Penney account they claim they now own.

 

From what I understand, JC Penney cards are issued by GE Money Bank, and that GE Money Bank's agreements operate under the laws of Utah.  Unless a change in the account's ownership changes this, this would mean there is a 6-year Statute of Limitations which won't expire until next year.

 

Midland recently sent me a settlement offer that I wanted to respond to in a way that may prevent them from proceeding with a lawsuit.

 

If I sent a letter to Midland that conveys the fact that i would file a general denial, proceed with a Request for Production, and defend myself at trial, I thought this may be enough to discourage them from filing a lawsuit against me.  Am I underestimating them?

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You probably would not discourage them with the above "threats". They heard that all of the time and just ignore it absent of a request from an actual court. What you can do is prepare to fight them so that when they do file the suit, they do not know what hit them. Learn the rules of civil procedure, if you get a chance, watch a few cases in court and read the briefs filed in cases where Midland has lost in your district, especially those argued by lawyers.

Midland does this because the statistics are on their side. 95% do not file an answer and then another 3% either do not file good answers or do not know how to fight. For the last 2%, they can simply dismiss the cases because they do make it up from the other 98%.

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I mostly agree with @WhoCares1000, other than the part about them giving up on the 2%. If Midland sues (which can depend on the amount of the debt and your ability to pay), they will fight you to the end, no matter how hard you fight.

 

Learn about contractual arbitration. GEMB cards have arbitration clauses that will force Midland to fold unless the amount is large (around 10K).

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If you want to discourage them from filing a suit now, you send them a demand letter to arbitrate with JAMS.  If you really want to make sure they don't sue, file it with JAMS now, send them the letter, and the notice that you  have filed.  Here is a site where you can find the JAMS arb agreement for the particular card by GE.  http://www.cardmemberagreements.org/ge/

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Midland dismissed two law suits they filed on me, 5000.00 and 7000.00.

 

I am on S.S.D, so I sent them a hardship information. They sent me the forms and I sent them

my S.S.D.  income information, well not all information, just what they needed to know.

They dismissed my cases a few months later.

 

Don't know if this can help YOU, be there ya go  

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@CrazyNorge

Actually, your debt may have already passed the SOL.

Cases have been won asserting that under UT law credit cards are open-ended accounts and have a 4 year (not 6 year) SOL. Also, two fed dist courts have also ruled that way, even though that is persuasive,not binding authority.  Here are two threads

http://www.creditinf...-updated-i-won/

 

 

http://www.creditinf...date-dismissed/

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I'm sorry it's taken me so long to read your posts and respond.  I thought I'd receive an email when someone chimed in. My mistake.

 

ARBITRATION

 

My thanks to Shellieh for providing the link for the JAMS arbitration documents.  According to the one for JC Penny, I would need to send notice to GE Money Bank that I'm electing to arbitrate a claim.  Because Midland claims ownership of the account, and I may end up having to contest their ownership and right to sue, how would I handle notice?  Should I send a letter to Midland to let them know there is an arbitration clause that I will enforce in the event they would like to pursue a lawsuit?

 

STATUTE OF LIMITATIONS

 

Nothing online seems crystal clear about the Utah SOL.  Some people say it's four-years for credit cards, some say six.

 

I found a document online ( http://www.nationallist.com/image/cache/Utah_Debt_Collection_Laws_-_Final.pdf ) that   Section IV C (Page 5) written by an attorney in Utah.  This says Utah law has established that credit card agreements are governed by the six year limitations period and not the four year "open account" statute.   It goes on to read, "While the Utah appellate courts have not specifically addressed whether a six year or four year statute of limitations applies to credit card cases, the author knows of several Utah district courts that have issued written rulings applying to Utah Code § 78B-2-309 [six years] to credit card agreements.  While these decisions are not binding here, they do offer insight as to how the courts have reached their decisions."

 

 

Thanks for all you help!

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One last thing...

 

Utah code regarding the four year SOL seems as though it would apply to credit card accounts because it reads, "An action may be brought within four years: (1) after the last charge is made or the last paymet is received."  This language seems to specifically address credit cards and other credit accounts.

 

For some reason ( b )s are replaced by smiley faces.

 

78B-2-307.   Within four years.

            An action may be brought within four years:

            (1) after the last charge is made or the last payment is received:

            (a) upon a contract, obligation, or liability not founded upon an instrument in writing;

            ( B) on an open store account for any goods, wares, or merchandise; or

            © on an open account for work, labor or services rendered, or materials furnished;

            (2) for a claim for relief or a cause of action under the following sections of Title 25, Chapter 6, Uniform Fraudulent Transfer Act:

            (a) Subsection 25-6-5(1)(a), which in specific situations limits the time for action to one year, under Section 25-6-10;

            ( B) Subsection 25-6-5(1)( B); or

            © Subsection 25-6-6(1); and

            (3) for relief not otherwise provided for by law.

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Utah is the only state I know of in which the Statute of Frauds applies to credit card agreements.  The cardmember agreement does not have to be signed, but it must be shown that the consumer received the agreement.   If the JDB cannot provide a cardmember agreement, it cannot show that the consumer ever received one.

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@CrazyNorge

 

If you want to prevent a lawsuit from midland, then I would recommend sending them a Letter demanding arbitration.  You can even fill out the JAMS paperwork and attach it to the letter.

 

Most likely, Midland will go away.  But, if they file a lawsuit against you, then you have a FDCPA & UDAP violation to use as leverage.  Then, you compel them into Arbitration, after they file the lawsuit.  

 

The SOL angle will have to be litigated.  All of the attorneys I have spoken to, believe the SOL is 6 years on a credit card.  Although, they are wrong.  There is caselaw showing what is required to fall under the 6 yr SOL.

 

I'm from UT, so feel free to ask away.

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The credit card was issued in California.

 

If I'm understanding this correctly... even after GE Money Bank sells the account, they're basically assigning their rights under the agreement to someone else.  Therefore, the new owner of the account (Midland) needs to abide by the terms of the agreement.  As a result, all disputes are subject to arbitration.  Is this correct?

 

Can you think of a scenario in which Midland would actually agree to a demand for arbitration?

 

Just so you know, Midland is seeking less than $9,000.  The original debt is a little more than $5,000.

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The credit card was issued in California.

 

If I'm understanding this correctly... even after GE Money Bank sells the account, they're basically assigning their rights under the agreement to someone else.  Therefore, the new owner of the account (Midland) needs to abide by the terms of the agreement.  As a result, all disputes are subject to arbitration.  Is this correct?

 

Can you think of a scenario in which Midland would actually agree to a demand for arbitration?

 

Just so you know, Midland is seeking less than $9,000.  The original debt is a little more than $5,000.

 

Yes, GEMB sells the account, and all rights are assigned to Midland.  So you don't have to send a letter to GEMB demanding arb, you'd send one to Midland.  

 

The nice thing about Arb, is that Midland has to pay out of pocket money up front.  It will run them upwards of $5,000 (not including attorneys fees) to get through your first hearing.  They paid probably around $300 for your account, so it makes things unfeasible to go through Arb (Not saying they won't, but the odds are in your favor).  If you can find some FDCPA violation, or Utah Consumer Sales & Practices Act violation, then you'll have more leverage.

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Thanks for the info, Coffee.

 

I just noticed something in the arbitration provison of the agreement.  It reads, "If neither the AAA or JAMS is able or willing to handle the dispute, then the parties will resolve their dispute in court."  I'm not sure if I should be worried about this.

 

If I go through the formal steps of completing the JAMS Demand for Arbitration, will I actually need to send the documents to JAMS and pay the $400.00 fee?  I was hoping a letter would suffice for now.

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Thanks for the info, Coffee.

 

I just noticed something in the arbitration provison of the agreement.  It reads, "If neither the AAA or JAMS is able or willing to handle the dispute, then the parties will resolve their dispute in court."  I'm not sure if I should be worried about this.

 

If I go through the formal steps of completing the JAMS Demand for Arbitration, will I actually need to send the documents to JAMS and pay the $400.00 fee?  I was hoping a letter would suffice for now.

 

I wouldn't worry about that provision.  Both AAA & JAMS will arbitrate with midland.

 

A formal demand letter, should be fine.  By the way, the JAMS consumer fee is capped at $250.  Make sure you're reading the consumer rules.  Also, make sure you send the Arb demand letter via CMRR, and save copies of the letter, receipt, and signed return (green card).

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Send an arb demand to the one suing you, they claim assessment, that includes any and all agreements to the account. Send the letter, then demand in court in your answer to the suit.

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Just to clarify, a lawsuit hasn't been filed yet.  They sent me a laughable settlement offer, and I do expect them to file a lawsuit within the next few months.

 

Coffee - When you say a formal demand letter should be fine, do you mean I should complete the JAMS form and send copies, proof of delivery, and the required fee to JAMS?

 

Thanks for your continued help.

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I think JAMS is capped at $200-$250. and I also think you don't have to send that in right away, you can request that Midland pay it if the agreement allows for it.

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I found the page at JAMSadr.com on Consumer Minimum Standards.  This points out the $250.00 consumer fee.  When a consumer initiates arbitration, all other fees must be paid by the company.

 

The GEMB/JC Penney agreement dated 2011 reads, "Upon your request, we wil normally pay all the fees the administrator or arbitrator charges, if we beieve you are acting in good faith.  We will always pay these arbitration costs, as well as your legal fees and costs, to the extent required under applicable law or in order for this provision to be enforced."

 

JAMS doesn't mention a time limitation for submitting documents to them and paying the fee.  Therefore, I could send Midland a Demand for Arbitration and wait for a response from them before I took any further action.

 

In the Demand for Arbitration, what would you recommend be my claim and desired relief?  Should I word this similar to a General Denial and contest Midland's ownership of the account?

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Just write a letter.

Dear xxxxxxxxxx.

I dispute this account referenced in your letter on xx/xx/xxxx. According to the credit card agreement any disputes for this account should be settled by arbitration. I am electing arbitration with JAMS to settle any disputes with this account. Thank you, me.

Send that with a copy of the agreement you found and the arb agreement highlighted.

You don't have to file with JAMS yet, you can wait until they actually do sue you, then you would have a great counterclaim if they do. Just make sure if they do indeed file suit, you answer with the arb demand, then file.

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Oh and send the letter certified mail return receipt requested so you have proof of your arb election. Keep a copy of everything you do in a file.

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I was one step ahead of you, Coffee.

 

As I was highlighting the agreement, I noticed it reads, "Upon demand.... you and we must arbitrate individually."

 

I also highlighted the paragraph about the payment of fees and added a request to the letter that they cover these fees.

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@CrazyNorge

 

Excellent, good eye!

 

I would also save every last piece of correspondence between you and midland (and any attorneys), and comb through them to see if they are violating the FDCPA or UDAP.  Start collecting & building leverage, in case this goes any further.  Save everything!

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