brianm

Being sued by Hayt, Hayt, Landau for Midland Funding in PA

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1. Who is the named plaintiff in the suit? Midland Funding, LLC

2. What is the name of the law firm handling the suit? Hayt, Hayt & Landau, LLC

3. How much are you being sued for? $9,XXX.XX

4. Who is the original creditor? OneMain Financial, Inc.

5. How do you know you are being sued? Received summons from local District Magistrate

6. How were you served? Mail - Certified Return Receipt

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

8. What was your correspondence (if any) with the people suing you before you think you were being sued? None

9. What state and county do you live in? Allegheny County, Pennsylvania

10. When is the last time you paid on this account? 7/16/2014

11. What is the SOL on the debt? 4 Years

12. What is the status of your case? Active - Scheduled

13. Have you disputed the debt with the credit bureaus. No.  The Civil Action Hearing Notice was the first contact I've had regarding this.

14. Did you request debt validation before the suit was filed? No.  However, I did send one once I received the hearing notice.  I'm aware this will not stop civil proceedings, however, I wanted to request debt validation to fall within the 30 day window to validate debt from initial contact.

15. How long do you have to respond to the suit? It stated to call the office immediately if I intended to defend.  I did call the next day and received a copy of the notice to defend a few days later.  The magestrial district court does not require the defendant to file an answer and there was no interrogatory regarding the suit.  The claim is as follows:

 

Plaintiff is the owner of a certain creit account (hereafter, "the Account") by virtue of the assignment of the Account, as set forth in the records maintained on Plaintiff's behalf.  As a result of the assignment, Plaintiff now holds all rights, title and interest in and to the Account.  Records further reflect that Defendant entered into a credit agreement for the ONEMAIN FINANCIAL, INC. Account bearing number XXXXXXXX5711 and used or authorized the use of the Account to obtain good and/or services an/or cash advances.  The account shows that Defendant owed a balance of $9,XXX.XX as of 2015-09-30.

 

I, (Name Omitted) verify that the facts set forth in this complaint are true and  orrect.  This statement is made subject to the penalties of Section 4904 of the Crimes Code (18 PA. C.S. Subsection 4904) related to unsworn falsification to authorities.

16. What evidence did they send with the summons? They did not send any evidence with the complaint, with the exception of the affidavit that was included in the complaint.

 

As I mentioned above, I did send a DV letter to Hayt, Hayt & Landau and they did send me information back, which is essentially discovery.  They provided me with statements from OneMain Financial, the signed contract, copies of papers that Midland Credit Management had apparently sent to me including, a Notice of New Ownership and Pre-Legal Review with a statement.

 

I have done battle with creditors for years and have been very successful up to this point.  This is the first time that I have been provided a contract and/or statements from the OC.  Here is where I'm having a little trouble.  In all of the documents provided by Midland, the account number does not match what is on the OC's contract or statements.  And I don't mean a typo, I'm talking completely wrong.  I want to mention that on the Midland paperwork, I and NOT confusing the Midland "account number" with the OC's account number, which are both specified on the Notice and statement that were provided by Midland.

 

The only mention of the actual OC account number is listed as a "Account Number Cross-Reference Number" on a document with "field data" at the top.

 

My questions:

a. - Because the account number is not mine, nor is there any reference to it in the OneMain contract or subsequent statements, is that an argument that I can fight in court?

b. - Since this is the Magestrial level, should I ask for discovery prior to the court date or is the information that they sent me when I requested DV going to be what they bring to the table?

c - Are there any other defenses that I should use (including any affirmative defenses) in this case?

d - Any other advice?

 

Thanks, in advance.

 

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It is  very difficult for pro se defendants to win in Magisterial Court.   Your chances are better in the Court of Common Pleas where you can file Preliminary Objections.  Your chances are even better if you hire a consumer lawyer as this OP did--an he won against an original creditor, which is very hard to do.  There is also the option to arbitrate if your card agreement provides for it.

 

Read this entire thread, including the case link, where the court discusses what is needed to prove a credit card case.  They must include account statements, which it seems they didn't provide you.

 

http://www.creditinfocenter.com/community/topic/326517-sued-by-cap-one-in-pa-in-a-month/

 

 

This is a more recent case, 2015, that the defendant won.

 

http://lancasterbar.org/wp-content/uploads/2015/08/2015_CI_CI-14-09683_Portfolio-Recover-Associates-LLC-v-Adams_20150715_OP_Madenspacher.pdf

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Thank you for your reply.  First, I was going to mention in my original post that I was aware that the likelyhood of me winning at the magestrial level was slim to none, so I am expecting to lose and then appeal.  So I guess my questions are more for when I do appeal and get my day in court then. 

 

There is an arbitration clause in the contract, however, they seem to not have sent that portion of the contract when I asked them for validation.

 

They did send statements along with the signed contract.  I'm not sure if it is all of them or not.

 

The other thing I wanted to mention was that this was not for a credit card.  I guess it would be considered a personal loan, but I believe that because it is a written agreement that the same laws, etc. would apply including the information from that case link.

 

After reading that case link, it states that according to PA law, that if the "original cardmember agreement is available that it must be attached to the complaint or state why it was not available."  It says that if it is not available that an affidavit will do, but it seems that they had this information and did not attach it to the complaint.

 

I think I'm going to scan all the information and redact it accordingly and post up when I have a little more time.  I think it may paint a clearer picture for whomever looks at this post or replies.

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Since they provided a contract that includes arbitration, I would hammer arbitration at them.  I would file an MTC with the court and get the court to stay the case pending private contractual arbittration.

 

Midland refuses to arbitrate, so once the court has ordered arb, their only other choice is to dismiss the case.

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Thank you, everybody, who is reading and posting back.

 

OK!  I had an opportunity to get the documents scanned, etc. 

 

This is the summons that I received: Summons_Redacted.pdf

 

When I requested DV, here is what was returned to me: DVResponse_Redacted.pdf

 

Here is the arbitration agreement (which they conveniently left out when they sent me a copy of the written agreement): ArbAgreement_Redacted.pdf

 

@fisthardcheese - Please see the attached arbitration agreement and see what you think.  As for filing the MTC, am I able to do that at the magestrial level?  What are the chances that Hayt, Hayt & Landau will actually do the arbitration for Midland?

 

@shellieh98 - See the attached Arb agreement.  AAA is one of the options.  And if AAA refuses to Arb with Midland, what does that mean for me?

 

I'm not familiar with arbitration at all, but if I would pursue that route and they would show up, based on the information provided, would I lose and what would my appeal options be?

 

Also, I mentioned in my original post that the account numbers were wrong.  Nobody mentioned if that was a good defense to bring up.

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The documents they sent you more than comply with DV so that is off the table as far as a violation.  Not to mention once they sue you DV is pointless but they complied so it doesn't matter.

 

As for arbitration:  that strategy works when JAMS is an option as the forum because the cost is so high that most creditors simply drop it.  NAF and AAA is way more reasonable in cost and they could very well follow you into arbitration.  If that happens then it is NOT good for the consumer because the rules of evidence are basically what ever the arbitrator decides to accept as proof.  An actual arbitration hearing is actually almost a rubber stamp for the Plaintiff.

 

Appeal options are to a 3 member panel but it could be at your expense which might not be worth it.  You need to weigh your options carefully because this is not like credit card debt.  The defense is similar but not identical for a loan.  I would run the wrong account number past a lawyer and see if that is an option as a defense.

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The documents they sent you more than comply with DV so that is off the table as far as a violation.  Not to mention once they sue you DV is pointless but they complied so it doesn't matter.

 

As for arbitration:  that strategy works when JAMS is an option as the forum because the cost is so high that most creditors simply drop it.  NAF and AAA is way more reasonable in cost and they could very well follow you into arbitration.  If that happens then it is NOT good for the consumer because the rules of evidence are basically what ever the arbitrator decides to accept as proof.  An actual arbitration hearing is actually almost a rubber stamp for the Plaintiff.

 

Appeal options are to a 3 member panel but it could be at your expense which might not be worth it.  You need to weigh your options carefully because this is not like credit card debt.  The defense is similar but not identical for a loan.  I would run the wrong account number past a lawyer and see if that is an option as a defense.

 

From what I have been reading, AAA will not arbitrate with Midland and NAF does not do consumer credit any longer.  If that is the case, then according to the arbitration agreement "Arbitration shall be administered by the chosen administrator, but if administrator is unable or unwilling to administer the arbitration, then an alternate administrator shall be chosen by the party initiating the arbitration."

 

This means that I would be able to elect JAMS as the administrator.

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@Clydesmom True, this is not a credit card debt, but it is now with Midland and we all know Midland does not arbitrate.  

 

They especially won't arbitrate with AAA because AAA refuses to take claims with them.  There are countless posts about AAA sending letters to consumers that they are closing the file and (once again) asking Midland to remove AAA from their agreements.

 

If this were me, I would file a motion to compel arbitration.  I would use AAA as my selected arbitrator from the contract.

 

This contract cracks me up.  I can't believe some of these lenders.  They clearly copy/pasted parts of other arb clauses to try to hodgepodge together an arbitration agreement that they thought would best suit their needs (a.k.a. screw the consumer as much as possible).  However, in doing so they have nice flaws I would love to exploit.

 

It looks like, to me, that the only argument they can try to use to block your MTC is that they will say you can't arbitrate a claim under $15k per the contract.  However, 3 lines down it specifically says that any arbitration claim that does not specify a specific dollar amount or remedy will be considered to be ABOVE the $15k threshold.  Therefore, I would make sure that I have the AAA demand form filled out and a copy submitted with my MTC wherein I state I am filing a claim against Midland for FDCPA (and possible FCRA) violations, and State Consumer law violations for an unspecified amount in damages.

 

Finally, just a note to @shellieh98 , @debtzapper and others who may find this hilarious too:  Check out how NAF & AAA are the named arbitrators in this contract, but yet their awards are appealable in accordance with JAMS rules. :ROFLMAO2:    To me, this completely gives me the right to arbitrate in AAA, then file a new JAMS claim to appeal AAA.

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They especially won't arbitrate with AAA because AAA refuses to take claims with them.  There are countless posts about AAA sending letters to consumers that they are closing the file and (once again) asking Midland to remove AAA from their agreements.

 

@fisthardcheese

 

The only problem with this is that it isn't Midland's agreement.  Midland isn't writing these the original creditor(s) of the accounts they buy ARE including it.  Midland is merely subject to the terms of the contract/agreement(s) they buy into.  They can't remove anything from a contract they buy after it's inception.

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@fisthardcheese

 

The only problem with this is that it isn't Midland's agreement.  Midland isn't writing these the original creditor(s) of the accounts they buy ARE including it.  Midland is merely subject to the terms of the contract/agreement(s) they buy into.  They can't remove anything from a contract they buy after it's inception.

 

I agree, however, Midland knows that they step into the shoes of the OC when they buy these accounts.  They also know they are not compliant with AAA, not listed on the AAA consumer registry and that AAA has repeatedly asked Midland to stop providing contracts with AAA in them.  Therefore, it is on Midland to stop buying contracts (in other words becoming a party to contracts) that include AAA OR become compliant with AAA terms and pay the fees to be placed on the AAA consumer registry.

 

But since they refuse to stop inserting themselves into contracts containing AAA, the best thing consumers can do is to get a court order that orders the parties to arbitrate per the contract and back Midland into the corner they created for themselves.

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@fisthardcheese

 

I checked the database and couldn't find any JDB registered with AAA.  Considering JDBs don't write credit card agreements, why would they have to register them?  Isn't it the responsibility of the business who writes the agreement to register it?

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(From a 2012 Thread.) Here is ydontu's Pennsylvania MTC.
 

MOTION TO COMPEL PRIVATE/CONTRACTUAL ARBITRATION AND DISMISS
OR IN THE ALTERNATIVE, TO STAY PROCEEDINGS PENDING ARBITRATION


 

NOW COMES Defendant, appearing Pro Se for its Motion to Compel Private Contractual Arbitration and as grounds thereto states the following:

1. That on or about July 19, 2012, Plaintiff filed its Complaint against Defendant.

2. Defendant sent a letter via certified mail to Plaintiff's attorney on August 22, 2012, electing arbitration with JAMS and requesting dismissal of this case (see Exhibit A, attached).

3. Defendant moves this court to compel binding Private Arbitration based on the terms and conditions of the Credit Card Agreement (see Exhibit B, attached).

4. The parties are bound by the Credit Card Agreement. The Arbitration Agreement states among other things:

(a) EITHER YOU OR WE MAY, WITHOUT THE OTHER’S CONSENT, ELECT MANDATORY, BINDING ARBITRATION FOR ANY CLAIM, DISPUTE, OR CONTROVERSY BETWEEN YOU AND US (CALLED “CLAIMS”).

( B) ARBITRATION REPLACES THE RIGHT TO GO TO COURT, INCLUDING THE RIGHT TO A JURY AND THE RIGHT TO PARTICIPTATE IN A CLASS ACTION OR SIMILAR PROCEEDING.

© AT ANY TIME YOU OR WE MAY ASK AN APPROPRIATE COURT TO COMPEL ARBITRATION OF CLAIMS, OR TO STAY THE LITIGATION OF CLAIMS PENDING ARBITRATION, EVEN IF SUCH CLAIMS ARE PART OF A LAWSUIT, UNLESS A TRIAL HAS BEGUN OR A FINAL JUDGMENT HAS BEEN ENTERED.

(d) EVEN IF A PARTY FAILS TO EXERCISE THESE RIGHTS AT ANY PARTICULAR TIME, OR IN CONNECTION WITH ANY PARTICULAR CLAIMS, THAT PARTY CAN STILL REQUIRE ARBITRATION AT A LATER TIME OR IN CONNECTION WITH ANY OTHER CLAIMS.

(e) CLAIM MEANS ALL CLAIMS RELATING TO YOUR ACCOUNT, A PRIOR RELATED ACCOUNT, OR OUR RELATIONSHIP.

(f) THIS ARBITRATION PROVISION IS GOVERNED BY THE FEDERAL ARBITRATION ACT.

5. The Federal Arbitration Act (FAA) 9 USC, Section 1-2 provides:

“A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction or the refusal to perform the whole or any part thereof or an agreement in writing to submit to arbitration an existing controversy arising out of such contract, transaction, or refusal, shall be valid, irrevocable and enforceable save upon such grounds as exist at law or in equity for the revocation of
any contract”.

6. The Supreme Court Ruling, decided April 27, 2011, AT&T MOBILITY LLC v. CONCEPCION ET U, states that courts must enforce arbitration agreements according to their terms. If there is an arbitration clause in the contract, that clause must be honored.

"We have described this provision as reflecting both a “liberal federal policy favoring arbitration,” Moses H. Cone , supra, at 24, and the “fundamental principle that arbitration is a matter of contract,” Rent-A-Center, West, Inc. v. Jackson , 561 U. S. ____, ____ (2010). In line with these principles, courts must place arbitration agreements on an equal footing with other contracts, Buckeye Check Cashing, Inc. v. Cardegna , 546 U. S. 440, 443 (2006) , and enforce them according to their terms, Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ. , 489 U. S. 468, 478 (1989) ."

Furthermore, "The “principal purpose” of the FAA is to “ensur[e] that private arbitration agreements are enforced according to their terms.” Volt , 489 U. S., at 478; see also Stolt-Nielsen S. A. v. AnimalFeeds Int’l Corp. , 559 U. S. ___, ___ (2010). This purpose is readily apparent from the FAA’s text. Section 2 makes arbitration agreements “valid, irrevocable, and
enforceable” as written (subject, of course, to the saving clause); §3 requires courts to stay litigation of arbitral claims pending arbitration of those claims “in accordance with the terms of the agreement”; and §4 requires courts to compel arbitration “in accordance with the terms
of the agreement” upon the motion of either party to the agreement . . . "


7. The Defendant elects arbitration to settle this dispute.

WHEREFORE, Defendant moves this Honorable Court to compel private contractual arbitration pursuant to the Cardmember Agreement and to dismiss Plaintiff’s complaint due to Lack of Subject Matter Jurisdiction or in the alternative, to stay proceedings pending contractual arbitration.


Respectfully submitted this [date]

____________________________________
[name], Defendant, pro se


 

VERIFICATION
 

I verify that the statements made in this Motion are true and correct. I understand that false statements herein are made subject to the penalties of 18 Pa.C.S. §4904, relating to unsworn
falsification to authorities.

Date:

________________________________
[name]

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Ty DZ. @brianm I old file the MTC for AAA. NAF does not do consumer Arb any longer, and AAA won't Arb with midland. What that means for you if your motion is granted, midland either has to kiss and make up with AAA, or dismiss your case. If they object to your motion, you respond. You need to get your motion granted, then it should go away.. Midland has lost bigger cases than yours because of AAA, and they are not willing to pay them what they owe, I don't see why your case would be different. They owe thousands to AAA.

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@fisthardcheese

 

I checked the database and couldn't find any JDB registered with AAA.  Considering JDBs don't write credit card agreements, why would they have to register them?  Isn't it the responsibility of the business who writes the agreement to register it?

 

@BV80 You are right, a JDB should not have to register the agreement. I shouldn't have included that in what Midland needs to do, but AAA has demanded that Midland comply with AAA rules, which requires them to pay whatever back-owed bills they have accumulated.

 

Part of the AAA agreement with companies is that when AAA is included in a contract, and subsequently a claim is filed with AAA, then the business must pay the filing fee even if the case is settled before arbitration commences.  I believe AAA allows a 50% refund to the business if the claim is settled within 30 days of the claim being filed.  But even half of the filing fee, still means the business must pay around $1,000 to AAA any time a consumer opens a claim with them.  This is what Midland has failed to do multiple times and why AAA immediately sends a letter to all parties refusing to arbitration any claim involving Midland.   .... and if you have a granted MTC, this automatically puts Midland in violation of a court order.  It's a good place to be as a defendant in one of their suits.

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Just an update for everybody.  In true Midland fashion, they withdrew their complaint when it got near time to show up in court.  I decided to try my hand in the court system since this was just Magestrial court, no matter the outcome, the judgement wouldn't have mattered if I would have appealed.  I did not elect for arbitration because of that reason.

 

Thank you everybody for your help and information.  It definitely helped me choose a path to go on and if I would have needed to, I would have went the arbitration route when we got to the common pleas courts.

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You should send Midland a demand for ARB NOW.  If they refile in court, you have a defense already in that you elected arbitration before they filed.  It will only help you.  (you do not have to initiate arb now, just elect it with a letter to Micland)

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What are the chances that they would refile?  I also thought that I would be able to beat them in Magistrial court based on all the information that I had.  I think my chances in the Court of Common Pleas is even greater.  And where I live, I can elect arb at any time before judgement.  So I'm going to hold that in my pocket. 

 

The reason is that they did not provide me with an arb clause in the signed contract that they sent, so if they object to it, I will be able to say that I was not aware earlier that I could elect arb.

 

To be honest, I believe that I can get the "evidence" thrown out because none of the account numbers match up, the amounts aren't what is on the statements, there is no real bill of sale, not to mention the counter claims that I have of contacting 3rd parties, etc.  I can handle myself in court, but arb frightens me a little bit.  That's why I'm just going to hold on to that in case it is needed.

 

My next question would be, when it comes to the DV that I sent them:  Since they withdrew, would that count or does it not matter that they withdrew and it is still too late for DV?

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@brianm

 

My next question would be, when it comes to the DV that I sent them:  Since they withdrew, would that count or does it not matter that they withdrew and it is still too late for DV?

 

 

A summons and complaint is not considered an initial communication under the FDCPA.  They didn't have to respond to your DV but simply chose to do so.   However, because the DV was not sent in response to an initial communication, you don't have a cause of action under the FDCPA.

 

If you had sent the DV in response to an initial communication (1st collection letter), it would remain to be seen if the information they provided validated the debt.  In other words, if the balance on their documentation matched the balance in the collection letter, the debt would be considered validated.  If the amounts in the collection letter and documentation were different, and there was no explanation as to the reason for the difference, it would not be considered validated.

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Well for a debt of 9K, and they have a signed contract, along with last payment in 2014 I would venture a guess they will get their paperwork in order and refile.  

You can try court. The thing is, if they do refile, they will probably do so IF the reason they dismissed was because they didn't have their accounts straight.  If you know this to be your debt, I would want to play it on the safe side.  (just me)  By electing ARB before the suit is filied, you could be setting them up for a potential FDCPA violation for filing on a suit they are not legally entitled to sue you for. (you elected arb, read the wording in the agreement.It would be kind of a safeguard.)  But I guess you will see how it goes, just my opinion.

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