Being sued by Portfolio Recovery Assoc. in Texas

[jesssheka]

Who is the named plaintiff in the suit?

Portfolio Recovery Assoc, LLC

2. What is the name of the law firm handling the suit? (should be listed at the top of the complaint.) 

Cameron White

3. How much are you being sued for?

$1398.76

4. Who is the original creditor? (if not the Plaintiff) 

Synchrony  Bank (Wal-Mart)

5. How do you know you are being sued? (You were served, right?) 

Served 5/11/16

6. How were you served? (Mail, In person, Notice on door) 

In person

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

I think so.

Process Service Requirements by State - Summons Complaint

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? 

Texas, Bell County

10. When is the last time you paid on this account? (looking to establish if you are outside of the statute of limitations) 

October 2014

11. What is the SOL on the debt? 

4 years

12. What is the status of your case? Suit served? Motions filed? You can find this by a) calling the court or    looking it up online (many states have this information posted - when you find the online court site, search by case number or your name).

Suit Served

13. Have you disputed the debt with the credit bureaus (both the original creditor and the collection agency?) 

No

14. Did you request debt validation before the suit was filed? Note: if you haven't sent a debt validation request, don't bother doing this now - it's too late. 

No

15. How long do you have to respond to the suit? (This should be in your paperwork). If you don't respond to the lawsuit notice you will lose automatically. In 99% of the cases, they will require you to answer the summons, and each point they are claiming. We need to know what the "charges" are. Please post what they are claiming. Did you receive an interrogatory (questionnaire) regarding the lawsuit? 

14 days


16. What evidence did they send with the summons? An affidavit? Statements from the OC? Contract? List anything else they attached as exhibits.

none

 

 

[texasrocker]

Since you only have 14 days I am assuming this is in  a JP court, right?

I believe this attorney is associated with  Rausch, Sturm, Israel, Enerson & Hornik.  They are only interested in default judgments and are easy to beat.

[jesssheka]

yes they are associated with Rausch, Sturm, Israel, Enerson and Hornik. How do I go about responding?

[texasrocker]

What court is it?

[jesssheka]

Yes, JP Court.

 

[texasrocker]

Copy the following and deliver in person or mail it to the court via certified mail in the same format of the original petition that you were served.  Edit the parts in red to match exactly how they worded their explanation that they now own the alleged debt.   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.)
Send a full and complete copy via certified mail to the attorney's office who filed the lawsuit.

 

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 "Defendant's account has been assigned to Plaintiff, and Plaintiff is the current holder of Defendant's accounts" See Plaintiff's Original Petition under "Facts" paragraph 6. 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. Ceramic 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.

PRAYER

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, PLEA TO THE JURISDICTION AND SPECIAL EXCEPTIONS to the Plaintiff on the _____ day of ____________________, 20____.

Signed____________________________________

Name:
Address:
Phone:

[texasrocker]

When you take your answer to the court ask the clerk how you should go about requesting the court's approval to begin discovery.  Let me know if they ask to see what you plan on sending and I will PM it to you.  Otherwise let me know when you have received their approval and I will get it to you then to send to the plaintiff's attorney.

Order this book and study it every day as if you were cramming for a final exam-
http://www.amazon.com/OConnors-Texas-Rules-Civil-Trials/dp/1598391828/

[jesssheka]

Thank you. I will take this to the courthouse on Monday and let you know what they say about the discovery part. 

[jesssheka]

When I was typing this up I went to the section you had in red to edit it and here is what original petition says

"On or about November 19, 2012, Defendant(s) opened a credit account with SYNCHRONY BANK (WAL-MART) in the defendant's (s') name under its account number ending in *******. Defendant(s) used the account and thereby became obligated to pay for the balance owed on the credit account. Plaintiff's records indicate defendant's(s') last payment on the account occurred October 23, 2014. Defendant(s) defaulted on the obligation to make monthly payments on the credit account, and the account was subsequently canceled. The credit account was subsequently closed due to nonpayment and/or charged off to profit and loss on or about May 18, 2015. On or about June 20, 2015 Synchrony Bank (WAL-MART) assigned Defendant's(s') credit account to Plaintiff, and Plaintiff is the current holder of Defendant's (s') account and the proper party to bring this lawsuit. The balance remaining on the credit account is presently due and payable in full. 

 

What do I put in place of the red you have above?  Thanks

[jesssheka]

The court said I will need to file a motion to the court for approval for the discovery. How do i do that?

[texasrocker]

MOTION SEEKING COURT'S PERMISSION TO CONDUCT DISCOVERY

 

Comes now, Defendant ______________ and files his (her) Motion to request permission from the honorable Court to begin Level 1 discovery pursuant to Texas Rules of Civil Procedure Rule 190.2 and Rule 500.9

 

Defendant hereby asks to send Plaintiff Request for Disclosure (pursuant to TRCP Rule 194), request for admissions, production of documents, and interrogatories relative to how Plaintiff intends to prove up the assignment of the alleged debt they claim to own which is the subject of the lawsuit.  Defendant asserts that Plaintiff lacks standing to bring forth this lawsuit; therefore discovery is reasonable and necessary in order to develop his (her) defense and to minimize taking up the Court's valuable time.

 

PRAYER

Defendant prays that the honorable Court grant his (her) Motion For Permission To Conduct Discovery and grant Defendant any other relief that he (she) is entitled to.

[jesssheka]

I will be filing this tomorrow morning and will let you know what they say. Thank you. 

[cmt_78332]

Hi there, I am chiming in on your post and this too is similar into a small claims/debt claim citation I got served on my door for Target awaiting an Answer for me.  This suit was submitted by Rausch, strum, Israel, enerson & hornik, LLC as well.  Unfortunately I can not afford attorney's fees for representation or afford for this suit to go to court.  This is a first time for me.  I am enrolled with Freedom debt relief program in efforts to pay my Target Account along with other accounts but at this time there has been no response to settle.  I am curious to see the outcome for you thus far.  Thank you in advance.

[jesssheka]

I am still waiting on approval from the court to submit discovery. I did receive a letter from the attorney handling the case stating that they wanted to try and settle outside of court. What should I do? When I submitted the request for discovery the court mentioned sending a copy over to the Plaintiff's attorney. Should I do this? 

[texasrocker]

Yes, you need to send them a copy of anything that you file with court.   Ignore any settlement offers.

[debtzapper]

@jesssheka

They are asking you to settle because they know they have a losing hand and you are not rolling over for them like everyone else does.   Do exactly  what texasrocker said and do not settle.

[SAHMdawn]

It looks to me that this collection company was definitely against Texas between March and May of this year.  I've read several post on this matter and see exactly what I need to file for an answer, but was just curious on the certified info at the bottom.  Does this mean you need it notarized?  Also, the court that has my case is 30-40 minutes away from where I live so I was going to just send it certified mail.  At what point do I request the  approval from the court to submit discovery.

 

[jesssheka]

Update:

Judge denied my motion for discovery. Plaintiff sent me a packet claiming that they had sent information proving they own debt but they did not. 

[breturbo]

ANY UPDATE AFTER THIS?  DID YOU LOSE?

 

[CSexton311]

Update on your case, please?

[jesssheka]

The judge ruled I could not request discovery and I lost in court. 

[CSexton311]

1 hour ago, jesssheka said:

The judge ruled I could not request discovery and I lost in court. 

Had the plaintiff already sent you an affidavit, bill of sale or anything? What was the reason for the denial of discovery? Are you appealing the decision? Did the plantiff bring evidence to the trial?

[breturbo]

I lost in court when o requested arbitration. Judge didn't want to hear anything I had to say