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Actively being sued in Arapahoe County Colorado by Velocity Investments, LLC on questionable debt

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Hey gang, it's been a while since I was a more active member here. I have been lax about cleaning up my wife and my credit and only casually monitoring our credit reports through CreditKarma.com. So, it was no real surprise when we were served papers for a lawsuit in early to mid-December (2015).  Although the summons did not have a case number printed on it, I knew that in Colorado the case number isn't assigned until the Defendants have been served, so I didn't hurry to check the docket since the answer wasn't due until January 22nd. 

The plaintiff in the case is Velocity Invesments, LLC, who until I received the papers had never heard of (they are being represented by Machol & Johannes who I have tangled with in the past semi-successfully). The Complaint claims that Velocity Investments, LLC is an assignee of Santander Consumer USA who we had a car loan through starting in November 2010.  In June 2011 I started hearing rumors that my entire department was going to be laid off in September, so we turned in the vehicle voluntarily to avoid an involuntary repossession from appearing on our credit reports. We knew that being less than a year into the loan we would be upside-down and would have a deficiency balance, but decided to worry about that when it happened. 

As evidence attached to the complaint, they included our initial "Retail Installment Sale Contract" from the dealership that assigned the loan to Santander and the letter of "Explanation of Calculation of Surplus or Deficiency" dated 8/31/2011 that Santander sent after the vehicle had been sold at auction and showed a deficiency of $4646.23 (the unpaid balance of our loan was $15174.73 and they got $10900 for it - the $371.50 difference between the sale and what we owed was for costs associated with putting the car up for sale). I vaguely remember getting the letter for the deficiency, but again, figured I would deal with it at a later date. At the time, we were fast approaching the expected layoff date and I was more worried about keeping a roof over my family's head. 

Since receiving the "Explanation of Calculation of Surplus or Deficiency" letter, I had received a handful of calls from Santander reminding me about the debt (none of which I answered or returned), but nothing else and when I started using CreditKarma about a year and a half ago,  the entry for Santander showed the account was charged off, the debt had been sold to another company (no name mentioned), and the balance was $0. I never saw another listing on my credit reports for the deficiency and thought maybe I'd get lucky and be able to wait out the SOL on it (obviously, no such luck).

 December passed and I didn't do anything with the summons, including mounting a full-on defense. From my past dealings with M&J I didn't want to tip my hand too early and both work and home life were pretty busy with the holidays and I didn't have the time or energy to really get into it. I can say that my past experiences calmed my nerves and I wasn't panicked or worried about the answer because I knew I had time to answer and that they didn't really have a case as long as I didn't capitulate to anything. 

Unfortunately, I should have put everything together sooner because the week before the court date on the summons, my wife's father fell ill and she had to travel out of town to be with him and it left me as a sinngle parent for the week of the court date and I was finishing a huge project at work at the same time. I didn't put my answer together until the day before the court date when I had to make the drive from Loveland to Littleton to file my answer in person because I was not going to be able to attend court the following morning. 

As a result, my answer was short, but hopefully enough to keep them from an MSJ and a default judgment. My answer used two affirmative defenses: 

Improper Venue and Lack of Standing. 

Although the contract was entered into in Arapahoe County, I currently live in Larimer County. Article 15 Section 1692i(a)(2) prescribes that court actions must occur where the contract took place or where the defendant(s) live and recommends to Plaintiffs that unless they want the Defendant to object, they should file where the Defendant Lives and not where the contract was signed. I figured it was a longshot and not being there in person to defend it would make it difficult to persuade the judge, but I figured it was worth trying. 

For lack of standing, although the Complaint identified Velocity Investments, LLC as the assignee of Santander, there was absolutely no supporting evidence included with the summons and complaint. Additionally, they are not listed on my credit reports and I do not recall ever receiving any notice from them that they had been assigned the debt or other attempts to collect it. 

Unfortunately, case dispositions are not available online for Arapahoe County and I have not received a response to my documents request from the court yet, so I don't know how it played out. I'm posting here because I would like your opinion on how I responded to the complaint and what you think my next steps should be. I think I have answered all of the usual 16 questions for new case posts, but will look over them tonight and post the questions and answers tomorrow. 



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Do you have your original agreement for the loan?

remember, they are going to need to prove standing.   So, 

M &J are infamous in colo., but also love to just get the easy cases.  They need a witness.  I was successful in keeping out their telephone witness (which will come)  but even if that tactic wouldn't have worked, their witness was not from the original creditor.  Also, since this is a repo.....

you got a letter to cure, correct?  Did you get a letter telling you the date and time the vehicle would go up for auction?  If not, you may be able to show they are not entilited to any deficit.  Rule 26a prevents discovery.  They need to send you disclosure.  You can do one of 2 things.

1.  Ask the court for permission for discovery, and then request that letter if you did not receive it. ( not to be confused with the letter they may have sent that says you owe, pay or we will sell....although if you didn't get that letter, you can bring that up to)

or 2.  Wait for all their evidence.  If that letter is not included, and they don't give you a witness ( if they do, and ask for it to be by Tele, file an objection....much later in the case) then you can write up a MOTION IN limine to preclude their evidence based on them not giving you the info...colo. Uses the UCC rules for car repossisions.  I would read up on those.


they needed to send you right to cure, when it will sell, and have a qualified witness from the original creditor to testify.   If they try to use a JDB witness, ... Well you will object to that

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It is unlikely that I have the original loan documents anymore. We have moved a half dozen times since then. We have bought and lost a coffee shop where for a time lots of our personal and business things intermingled so we lost a lot of personal items when our friendship with our former business partners went south and we had been storing some of the inventory at their home when the sheriff's department took it as part of a judgment against my wife (one of the previous times I tangled with M&J). 

I most certainly don't still have a right to cure letter nor the notice for the auction. Just as I didn't still have the original contract that assigned the debt to Santander nor the letter outlining the deficiency post auction. And the latterI kind of recall seeing so I wouldn't be surprised if Santander doesn't also have; however, none of that really matters if they can't prove their right to collect the debt in the first place, right? 

I'm wondering if I shouldn't file an amended answer to include they provide proof that Santander followed the UCC and sent me the proper notices bringing into question the legitimacy of the debt at all? Or maybe, I will have to wait and see if I lose the case initially and then use that as grounds for an appeal or to have the judgment vacated? 

At the moment, however, it is merely academic because apparently in Arapahoe County the filing of my answer immediately and aitomatically triggered an  order for "mandatory mediation." We are required to attend a two hour minimum session with a mediator (that A, we both have to agree to, and B, we're going to have to pay for). In a case like this it's going to be about as effective as trying to nail jello to a wall or, even more accurately, make the sun rise in the west. I suspect this is why they filed in Arapahoe County. If they can't outright beat us through our absence by not showing up or responding like so many do, then they'll bleed us with fees to make us weak and want to settle just to make it stop. 

Ah well.... It is what it is. I'm not giving in to these yahoos so I better go read up on mediation and see what I can come up with to either make them pay the entire session fee for me to sit in the room like a spoiled child demanding they provide proper proof or find a way to beat them in mediation.... 

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I'm not going to be much aid to you in this, but wanted to point something out:

8 hours ago, tempteroffate said:

I'm wondering if I shouldn't file an amended answer to include they provide proof that Santander followed the UCC and sent me the proper notices bringing into question the legitimacy of the debt at all? Or maybe, I will have to wait and see if I lose the case initially and then use that as grounds for an appeal or to have the judgment vacated? 

I would not go this route.  It is generally the case in courts that if you do not bring up an argument or objection in the trial court, you will not be permitted to bring it up on appeal.  There are certain circumstances where it may be permitted, such as when the piece of info in question could not possibly have been learned or discovered at the time of the trial, but even that is not a definite, and I would not want those odds.  You must bring it up in this case in order for any appeals court to even consider it.  If you feel it is pertinent, you can bring it up now, but this could be an issue, because Santander is not the party that's suing you.  Hopefully someone smarter than I will help you on that.

Wheels up,


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You wouldn't file an ammended answer, you would wait for your disclosure to come, if those things are not included,then ask for discovery.  I highly doubt they have them.  If they don't, then you could propose you never received them.  If you never received them, you should not be held liable for the deficit they are claiming.

thing to study up on.  

The library has NADA books, go and find one dated the year the car was sold.  Look up what it says the car was worth.  Ask the librarian to copy that.  It would be even better if you could get it motorized saying it is a true and correct copy.  I would send this as part of your disclosure showing they sold the car for far less than it was worth.  It will help you later.

next Google and study the UCC code on repossions.  Colorado follows the UCC code.  If they didn't give a letter with a right to cure, then you are in no way responsible for the deficit.  If they do produce a right to cure letter, but not a letter with the date and time the car would be sold at auction, then I think they hold you responsible for 10% over what they sold it for, but I can't remember....it is in the UCC codes.

so try that route.  If the court says no to discovery, it shows you tried to get these things from them, and if they did not include them in disclosure, then you should be able to deny you owe anything.

since mediation is mandatory, these are things I would bring up.  Tell them you will not settle because they failed to provide you these things prior to the sale of the car.  They never sent you a deficit notice after the sale of the care, and as far as you knew, the repo sale covered what was owed.

get a copy of those UCC codes to cite to back you up.

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Thank you both for your responses. It's been a few years since I last fought the good fight so I am a little rusty on my civil procedure and appreciate the pointers. I think I get what you're suggesting in regards to bringing in the validity of the debt at all into question. Since they've already produced a copy of the deficit notice, I don't think it will look good for me to deny ever having received it, but the notice of the auction date and time or the right to cure, those I'm not sure if they did send them and I don't remember receiving them specifically either. 


I really like your suggestion to check out the NADA Guide for the year the vehicle was sold. If they can't prove that Santander didn't screw up and not send me the necessary notifications, that would at least minimize what they are able to collect if nothing else goes my way. 


It looks like my next moves are to look into my best options for mediation, get ahold of the UCC codes regarding repos, and wait for them to provide disclosure, prove their standing to collect, and validity of the debt? Sounds like a fun weekend ahead of me. ?

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Yep your on the right tract.  You don't have to deny the deficit notice, that is not important, it's the right to cure, and auction notice that matters.  The deficit notice is just a "hey we sold your car for 10 bucks, but you owed 10k.  Now you only owe 9990.00". Doesn't matter your car was worth 15k.  Oh ya btw my brother bought it. 

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  • 2 weeks later...

M&J are bottom feeders. This just gets uglier and uglier. 

They identified a mediator and set the mediation session time and place without consulting me. I've spent the better part of the past week searching through the Colorado Rules of Civil Procedure and Revised Statutes looking for ways to flip the situation on them since they didn't give us any input on the mediator or the session's time and place. The best I have come up with so far is to file a Motion to Set Aside the Mandatory Mediation Order based on the following: 

  1. We were excluded from the selection of the mediator.
  2. We were not consulted on time and place of the session. 
  3. We cannot enter into the mediation session in good faith because we do not recognize the plaintiff's right to the debt and it will be an unproductive two hours and $200 ($50/hour from each plaintiff & defendant with a two hour minimum). 

I also need to file a separate Motion to Dismiss for Improper Venue because my Answer was likely not even read by the case judge because filing our answer triggered the automatic mandatory mediation order. I could also file a Motion to Dismiss based on Lack of Standing (our sole Affirmative Defense in our Answer). I haven't decided if I should try this one now or after my other motions if they should fail. 

In the meantime, M&J has sent two letters requesting that we call them to discuss a settlement outside of the mediation and trial. One of them was part of a packet of information that looked like Disclosure documents. They included copies of the Right To Cure letters sent by Santander, the Notice of Intent to Sell from Santander (which according to the form versions available in UCC § 9-614(3) is for a Consumer Goods Transaction), the Explanation of Calculation of Surplus or Deficiency (which had been included with the original summons), a number of documents related to our original purchase from the dealer including the original Retail Installment Sale Contract, the original application for credit to the dealer, what appears to be a copy of Santander's copy of the sales receipt (from an auction and not the private sale they told us they were going to sell the car in), our offer "letter" to buy the car from the dealership, the dealer's copy of the blue book information at the time of the sale to us, our application for title/registration, and the original bill of sale from the dealer. It was a lot of effort to prove that we indeed bought the car, that Santander loaned us the money for the car, and that Santander followed the UCC in terms of the repossession and disposition of the car/colatteral, but very little to prove that Velocity Investments has any right to pursue us for the deficiency following the sale of the car (I am curious if I can use the fact that it appears to have been sold at auction and not in a private sale as they initially indicated). To prove that, they included two Bills of Sale and Assignment (they're very generic and do not include anything specifically referencing us by name, account number, location, or anything other than "those certain receivables, judgments or evidences of debt described in the Financial Asset Schedule ... attached hereto" but there is no attachment) and what appears to be the associated Power of Attorney Affidavits. They also included an "Affidavit if Sale of Account by Original Creditor & Certificate of Conformity" that indicates "On July 25, 2014, Santander Consumer USA Inc. closed the sale of a pool of accounts by a Financial Assets Sale Agreement and a Bill of Sale and Assignment to Cascade Capital, LLC" (based on this and one of the Bill of Sale documents, Santander sold our account to Cascade Capital and Cascade Capital sold it to Velocity Investments), but again the "Financial Assets Sale Agreement" is not included that may have had our specific account information.  

There is one document they included that seems very odd and I can't determine if maybe this is supposed to be the piece of identifying information that ties our specific account to those sales from Santander to Cascade and then to Velocity. I think it's from an internal program of M&J's, but I think it is intended to muddy the waters and make us think they have everything. I have redacted any identifying information. What I can tell you is it is terribly out of date despite the date in the upper right hand corner being after I received the first and only letter from M&J on Velocity's behalf (it was a dunning letter that we received last Sept that I ignored because I had never heard of Velocity Investments, it wasn't listed on any of my credit reports, and the balance they claimed was owed didn't match anything that was on my credit reports either - I know should have DV'd them, but at the time all of my focus and energy was on a project I was involved with at work and I just didn't take the time to DV them). 

I think I would need a Motion In Limine to prevent them from using the Bills of Sale and Power of Attorney because they aren't specific enough and the Financial Assets Sale Agreement isn't included, but are we sunk? Will a judge find this weird document is good enough to link our OC account to Velocity? Hardly seems that way to me, but I'm also not a lawyer and have been burned in the past by their sneaky tactics. 

20160211 MandJ Unspecified Exhibit.jpg

Edited by tempteroffate
Expanded CRCP because I couldn't remember what it stood for when I typed the original reply. And uploaded a different image because the first one missed a piece of identifying information to redact.
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Well that sucks.  They have everything they need except a witness.

Focus on all the documents are heresay.  They need a witness to testify to the documents.  In their disclosure did they name a witness?  Who did the witness work for? study up.  if it was sold twice, they need to overcome the heresay objection twice.  If the witness named works for velocity, how do they know the documents are correct?  how are they familiar with  the record keeping practices of the 1st JDB, and then Santander?  

They do have the goods on you, but you can still fight to keep all that stuff out of the court records.  And yes, I would try to get out of mandatory mediation.  They will let anything into evidence.

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  • 1 month later...

I wish I had some really exciting news like mediation went fantastic and they agreed to drop the case, reimburse us for the expenses associated with defending ourselves, and to never resell or attempt to collect it again, but, sadly, the only news I have is that mediation is finished and they're getting ready to set the trial date. 

Mediation went about as I expected. I managed to get the opposing counsel and the mediator to allow me to appear by phone so I didn't have to make the drive from Northern Colorado to Littleton to spend two hours telling them that they didn't have sufficient evidence to prove the debt was owed to them and I was not settling for any amount. It cost me $100, but we've passed that hurdle and are now wrapping up disclosure and preparing for trial. 

Since I wasn't there at the mediation session, we had to describe the various documents that they brought to mediation, but based upon the mediator's description, it sounded like they only brought the documents they had previously sent me in the packet of info I described earlier. Unfortunately, this meant that I never did get a confirmation that that doc I scanned and posted here (see above) came from either the plaintiff's internal system or the attorney's internal system. I think the best course of action for that document is to motion to get it stricken or precluded from being submitted as evidence since there is no identifying information that identifies its source and/or there is no witness or affidavit or anything else to verify its authenticity and as the link between Santander and either Cascade or Velocity. 

All in all, I still think I have a pretty decent/solid case. I don't think anything they've sent clearly shows that Santander sold our account to Cascade Capital or that Cascade Capital sold it to Velocity Investments. Even if that one weird document were admissible as evidence that the account was originally owed to Santander and is now in Velocity Investment's possesion, there still isn't a clear chain of custody from Santander to Cascade AND from Cascade to Velocity. One thing I did learn from the mediator though was that the judge in our case tends to give pro se defendants a bit more leeway and be stricter with the collection attorneys. It sounds like if I carefully and clearly lay out the case that they haven't proven standing, I should be able to get it dismissed. :)

Thoughts? Suggestions? Direction?

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yep, what ever is in that disclosure is what you need to dispute.  They will send a list of witnesses or an affidavit in lieu that you will object to.   They will try to list a witness as "someone with knowledge" that works for blah blah, but you are entitled to a persons name and how they can be contacted for personal service. If they do not send that, object object object.  No one will be able to testify unless they are named if you object. And i would send my objections (Motion in Limine) at the last possible moment so they have no time to prepare.  Read your court rules to find out how many days before trial they need to be in.

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Thanks, Shellieh. 

I will havet to scan everything in the packet and post it here (after redacting my personal info, of course) and make sure I'm objecting to everything necessary correctly. 

I have copies of the CRS and CRCPs, so I'll have to look up the dates, but I seem to recall it's pretty much up to two weeks out I think. I'll look it up tonight too. 

I'm debating letting this move forward to court now or if I should file the motion to dismiss based on improper venue still. If the judge grants that motion it would almost definitely be without prejudice and I would likely have to go through almost all of this again and probably wouldn't get my filing fees and the mediator fees reimbursed. 

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  • 4 months later...

Sheesh.... I am way behind in updating this thread.... My sincerest apologies to anyone that was waiting with bated breath for the outcome of this one. It has been a pretty hectic and busy few months and for most of it almost nothing happened.... And then.... 

Following the mediation session, I got another letter from the plaintiff's attorneys (M&J) offering to settle and/or to be included in setting the trial date, but nothing else. I decided that my best bet was to bide my time until three weeks before the scheduled trial date (was scheduled for Aug 8) and then I was going to hit them up with the mess of Motions in Liminie and objections to prevent them from using affidavits from the OC, the first assignee, and then the plaintiff to verify that my individual account was part of the sales transactions they had provided affidavits for, and to object to the potential signors of those affidavits from appearing telephonically in order to rack up the expenses to make it not worth the payoff. 

Weeks and months went by and I just waited for them to send me anything else as part of discovery because despite shellieh's impression that the only thing they were missing was a witness, I felt pretty confident that they were still missing key identifying documents because while they provided an affidavit that said Santander had sold a bunch of accounts to Cascade and another that said Cascade had sold a bunch of accounts to Velocity, they did not have anything that proved that my account was included in those two bulk sales. 

And then.... three and a half weeks prior to trial, we received a letter from M&J that said their client had decided that the expense of a trial wasn't worth it and they would like to dismiss WITH prejudice and included a "Stipulated Motion to Dismiss With Prejudice and Mutual Release" for us to sign and return for them to file with the court. The letter even kindly explained that with prejudice meant that the account would be effectively dead and could never be brought to court again. After reading through the motion extremely carefully looking for any "gotchas" we obviously agreed, signed the motion, and sent it back to the plaintiff's attorneys as requested.

That was on July 15 and we never heard back from them, either to confirm they had received the signed motion, that it had been filed, or that the judge had dismissed the case. Given that the trial date is a week from today, I tried looking up the case through the court's website and couldn't find our case on the docket, nor could I find any information about it, so I called the courthouse directly to find out the status of the case. After going rounds with the courthouse's automated phone system, I got a nice young woman that was able to confirm that the motion had been filed and the case was indeed dismissed!! 

We held our ground, they blinked and we won! Granted, it cost me about $200 that I didn't get compensated for, but compared to the $3200+ they would have gotten if I had done absolutely nothing, I will take it! 

As always, I appreciate everyone here that offered advice or that has been through similar cases and posted their information. It was very helpful and I wouldn't have had the confidence to stand our ground without it. 

On to the next case.... :) 

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