CSexton311

Being sued by PRA in TX, please help!!

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1. Who is the named plaintiff in the suit? Portfolio Recovery Associates, LLC

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

3. How much are you being sued for?
 $2,771.86

4. Who is the original creditor? Synchrony
Bank/Wal-Mart 

5. How do you know you are being sued?  I was served papers last night, 1-20-17

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

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? 
 Phone calls, voicemails and mail from Portfolio Recovery Associates, but did not actually speak with anyone. 

9. What state and county do you live in? Texas, Colorado County 


10. When is the last time you paid on this account?  Not sure. Claimed to be August 29, 2015 in Complaint.  Sounds accurate. 

11. What is the SOL on the debt? 4 years in Texas

12. What is the status of your case? Suit served? Motions filed? Suit Served, have not filed an answer yet

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? No

15. How long do you have to respond to the suit? 14 days 

16. What evidence did they send with the summons?  An Affidavit from PRA, a Bill of Sale and a copy of I presume my last credit statement with Synchrony/Walmart.  The Bill is sale is generic and has no link to my name or account. The credit statement does not show any red warnings of my account being closed soon for failure to pay. Just shows that I was behind in payments and what I owed for next payment.

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A TX member name @PAGRN got her case dismissed with arbitration.  Follow the advice in her links in chronological order starting with May 1,   I will see if she can assist, even though she hasn't posted here in a while;

http://www.creditinfocenter.com/community/profile/170441-pagrn/

 

OR:  @texasrocker  If you are still posting, can you assist with the litigation route?

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Thank you @debtzapper  

From reading several threads on here, I think litigation is the route we want to take. I just am unsure on whether we should poke the bear and ask for discovery. The man that served me was a retired sheriff and gave me the advice of calling these bozos first and lowballing a settlement of say $400 and that I could only make small payments of say $50 a month. He said they'll likely turn it down. Keep that for evidence, then submit my answer and go to court. He said where we live, lawyers rarely travel this far to deal with small claims cases. Their lawyer is out of Houston and we are over an hour away from them, depending where their office is it could be even more. He said with what lawyers get charged by the hour plus mileage they likely won't even show up and would be banking that I wouldn't either so they'd get the default judgement.  I'm too nervous to gamble on that alone. 

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1 hour ago, CSexton311 said:

Thank you @debtzapper  

From reading several threads on here, I think litigation is the route we want to take. I just am unsure on whether we should poke the bear and ask for discovery. The man that served me was a retired sheriff and gave me the advice of calling these bozos first and lowballing a settlement of say $400 and that I could only make small payments of say $50 a month. He said they'll likely turn it down. Keep that for evidence, then submit my answer and go to court. He said where we live, lawyers rarely travel this far to deal with small claims cases. Their lawyer is out of Houston and we are over an hour away from them, depending where their office is it could be even more. He said with what lawyers get charged by the hour plus mileage they likely won't even show up and would be banking that I wouldn't either so they'd get the default judgement.  I'm too nervous to gamble on that alone. 

If you go the litigation route, you have to do discovery.   I don't know what you mean by" poking the bear" and I don't understand the "advice" the retired sheriff gave you.   But whether you decide to litigate or arbitrate, you will have to do a lot of serious study and work.  If you are unable or unwilling to do that, then make an offer of settlement.  Look at posts by at @texasrocker if you are SERIOUS about litigating this.   Texasrocker used to send his discovery requests  by PM, not publicly on this board.  However, he works two jobs and doesn't post that much now.  I wish he could advise you.

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Very poor advice. Absolutely do not contact a JDB under any circumstances except to send them a copy of anything you file with court of course.  Ignore any phone calls or letters from them from this point on.

File your answer as follows in the same format of the Plaintiff's Original Petition which you were served.  Edit the text in red to match the exact wording in the original petition where they claim to have been assigned the alleged debt.  Ask the clerk how the court prefers you to go about requesting their approval to begin discovery.  Once you have been granted approval I will PM you first set of discovery (or sooner if the court requests to see the discovery during the approval process)

 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 credit account was assigned to Plaintiff on October 16, 2016, and Plaintiff is the current holder of Defendant's account."  See Plaintiff's Original Petition under "Facts," paragraph 7. 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.W.3d 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 Dept. of Transp. 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 any time 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 at a 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 acknowledgment, 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, at law and in equity, to which he is entitled.

Respectfully Submitted,


Signed_________________________________

Printed Name:
Address:
Phone:

Make two extra copies, one for you to have file-stamped from the clerk for your records and one to send via certified mail to the attorney's office who filed the suit. 

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14 hours ago, CSexton311 said:

The man that served me was a retired sheriff and gave me the advice of calling these bozos first and lowballing a settlement of say $400 and that I could only make small payments of say $50 a month. He said they'll likely turn it down. Keep that for evidence,

This guy is an IDIOT.  First and foremost settlement discussions are not admissible in court.  Second, you take the risk that even though they are not admissible the Judge hears you say that and assumes you would not settle if the debt weren't yours.  From that point on any argument you make against their case is moot.

14 hours ago, CSexton311 said:

He said where we live, lawyers rarely travel this far to deal with small claims cases. Their lawyer is out of Houston and we are over an hour away from them, depending where their office is it could be even more. He said with what lawyers get charged by the hour plus mileage they likely won't even show up and would be banking that I wouldn't either so they'd get the default judgement.

This part about the lawyers who filed not traveling may be true but what they do in that case is not come personally but contract it out to a local yokel attorney.  While they might not show up at all the other option they typically use is to have the court schedule ALL their cases up to 50-100 in one day making the travel worthwhile because if even 5% show they have a reason to be there other than to rubber stamp the default judgments on the rest.   

If neither party shows then the case is dismissed.  They do not automatically get a default judgment if they don't show up for their cases either.  

If you want to litigate then start studying case law on attacking standing, evidence as hearsay, and affidavits.  That will be your best weapon.

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1 hour ago, texasrocker said:

Plaintiff alleges, "Defendant's credit account was assigned to Plaintiff on October 16, 2016, and Plaintiff is the current holder of Defendant's account."  See Plaintiff's Original Petition under "Facts," paragraph 7. 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.

First, thank you for your response to help me. I do not know much about law so this is all very overwhelming and confusing. Above, it says there's no allegation or statement as to who the seller is but in the affidavit they sent me, it shows Synchrony as the account seller. Now, the bill of sale they attached didn't state any of my private information and could belong to anyone. Does that mean the affidavit doesn't hold water? I just want clarification. I'm trying to research as much as I can about how to go about this. But their "evidence" does have me a little on edge. I don't dispute that I have an outstanding balance but from what I can see, that bill of sale means nothing. 

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  As I said edit the part in red to match exactly the wording where they claim to have purchased it.

Every bit of their "evidence" is garbage and they know it.     You are not going to fall for their intimidation tactics and hand over the default judgment that they crave so much and actually obtain in over 95% of the lawsuits they file.  

Forget about the bill of sale and affidavit and anything else they may come up with  and concentrate on filing your answer in time then start on getting the court's approval to begin discovery.   After they refuse to properly answer discovery their own bill of sale will come back back and bite them on the a$$. 

Read this board every hour you are awake and not on your job for the next few weeks as if you were cramming for a final exam and learn how we beat these idiots.  Order this book and learn the rules and procedures:  https://www.amazon.com/OConnors-Texas-Rules-Trials-Supplement/dp/1598392085/ref=sr_1_2?s=books&ie=UTF8&qid=1485117044&sr=1-2&keywords=O'Connor's+Texas+Rules

 

 

 

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6 hours ago, texasrocker said:

Very poor advice. Absolutely do not contact a JDB under any circumstances except to send them a copy of anything you file with court of course.  Ignore any phone calls or letters from them from this point on.

File your answer as follows in the same format of the Plaintiff's Original Petition which you were served.  Edit the text in red to match the exact wording in the original petition where they claim to have been assigned the alleged debt.  Ask the clerk how the court prefers you to go about requesting their approval to begin discovery.  Once you have been granted approval I will PM you first set of discovery (or sooner if the court requests to see the discovery during the approval process)

 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 credit account was assigned to Plaintiff on October 16, 2016, and Plaintiff is the current holder of Defendant's account."  See Plaintiff's Original Petition under "Facts," paragraph 7. 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.W.3d 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 Dept. of Transp. 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 any time 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 at a 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 acknowledgment, 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, at law and in equity, to which he is entitled.

Respectfully Submitted,


Signed_________________________________

Printed Name:
Address:
Phone:

Make two extra copies, one for you to have file-stamped from the clerk for your records and one to send via certified mail to the attorney's office who filed the suit. 

Thank you @texasrocker  I am glad you are still  firing that Winchester.

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5 hours ago, CSexton311 said:

First, thank you for your response to help me. I do not know much about law so this is all very overwhelming and confusing. Above, it says there's no allegation or statement as to who the seller is but in the affidavit they sent me, it shows Synchrony as the account seller. Now, the bill of sale they attached didn't state any of my private information and could belong to anyone. Does that mean the affidavit doesn't hold water? I just want clarification. I'm trying to research as much as I can about how to go about this. But their "evidence" does have me a little on edge. I don't dispute that I have an outstanding balance but from what I can see, that bill of sale means nothing. 

@CSexton311  It's natural to feel overwhelmed when you are sued, but trust what texasrocker told you and do it.  Defendants like you who have followed his advice have had many cases dismissed.  You are in good hands.

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3 hours ago, texasrocker said:

As I said edit the part in red to match exactly the wording where they claim to have purchased it.

 

In the petition it states, "Defendants credit account was assigned to plaintiff on January 19, 2016, and plaintiff is the current holder of defendants account and the proper party to bring this lawsuit".  On the affidavit it shows Synchrony Bank as the account seller. So I just ignore all that and use what the petition says above? I appreciate your help. I'm trying to remain calm and hopeful. I don't want to get pushed around by these people. I absolutely am taking your help to heart. We are going to stop by our JP tomorrow to ask how they want discovery done in case I need to get questions ready now. Is it better to hold off on submitting your answer until right before it's due or does it really matter if I did it right away? 

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My case was dropped by PRA with the creditor Synchrony bank, using Arbitration.  I am not a expert, but I will help if I can. 

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15 hours ago, PAGRN said:

My case was dropped by PRA with the creditor Synchrony bank, using Arbitration.  I am not a expert, but I will help if I can. 

Thank you for responding.

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On 1/23/2017 at 10:20 AM, PAGRN said:

My case was dropped by PRA with the creditor Synchrony bank, using Arbitration.  I am not a expert, but I will help if I can. 

I wonder, is arbitration better, easier in some cases? I just want them to leave me alone which ever way is easier. 

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On 1/22/2017 at 9:25 AM, texasrocker said:

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.

@texasrocker I'm getting ready to type up my answer and I've been trying to find an answer to this question, but I haven't been able to find any clarification on this site.. for my case, it is under the statue of limitations so should I omit that part in the answer above? Also, it doesn't appear that the interest rates were usurious from what I could tell. Should I omit that also? Or is there a reason to keep both in? 

As far as I could tell, I can submit this answer and plea on the same paper, correct? No need to submit a separate answer and a separate plea to the jurisdiction? 

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18 hours ago, texasrocker said:

To make the plaintiff get up off their lazy butts and work.

Do whatever you want to.

Well, I don't know how much it makes a JDB work because the burden of proving affirmative defenses is on the defendant. 

That being said, it doesn't hurt to include the SOL defense in case JDBs don't have documentation to show the date of last payment.   I'm not sure about the usurious interest defense because that could be more difficult for a defendant to prove.

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@CSexton311  You need to submit your Answer and the court's permission to start discovery as soon as possible.  Discovery is at the discretion of the judge.  Unfortunately, we have had defendants sit on their hands and get hit with a Motion for Summary Judgment and lose.

Rule 500.9. Discovery (2013) (a) Pretrial Discovery. Pretrial discovery is limited to that which the judge considers reasonable and necessary. Any requests for pretrial discovery must be presented to the court for approval by written motion. The motion must be served on the responding party. Unless a hearing is requested, the judge may rule on the motion without a hearing. The discovery request must not be served on the responding party unless the judge issues a signed order approving the request. Failure to comply with a discovery order can result in sanctions, including dismissal of the case or an order to pay the other party's discovery expenses. (

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1 hour ago, debtzapper said:

You need to submit your Answer and the court's permission to start discovery as soon as possible.  Discovery is at the discretion of the judge.  Unfortunately, we have had defendants sit on their hands and get hit with a Motion for Summary Judgment and lose.

Thank you, @debtzapperI have written my answer and plea today. Just need to print the copies out and take them to the JP office tomorrow. It's only been 8 days since I was served so I am under the time limit. When I stopped into the JP last week, the lady there had no idea how to get approval for discovery and suggested it be asked when I see the judge. So, I'm guessing they don't get asked this question a lot or she's not a clerk? Not sure. I will ask again tomorrow when I turn my papers in.  

 

Also, the lawyer handling my case is out of Houston, Texas (I googled her and that's how I found out) but the address on the petition is for PRA in VA. No other address given, so I presume I send it to PRA c/o the lawyer assigned since that's the only address given in the petition. 

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Some of the larger TX  counties have a lot of info on their court website.   Your Colorado County TX website doesn't say a lot.  This is what  texasrocker advised for a motion for discovery in a 2014 thread:

 

The format is the same as the petition you were served and your answer-

 

MOTION FOR COURT'S APPROVAL TO CONDUCT PRETRIAL DISCOVERY

 

Pursuant to TRCP 500.9(a), Comes now Defendant,________________ and files his Motion For Court's Approval to Conduct Pretrial Discovery... 

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@texasrocker @debtzapper So, I received a letter in the mail today stating my request for discovery was denied. I don't know why it wasn't approved but now I'm pretty depressed about it. I was counting on being able to use that to help my case. As it stands, I have a court date set for March 7th. I asked the clerk and she said it's just a pretrial. What can I expect from this? The plaintiff submitted an affidavit, generic bill of sale and a statement of my credit card bill. Is this a time that I can say that this evidence is hearsay? I don't know if this means the judge feels they submitted enough evidence and that's why my discovery was denied.  I'm pretty pissed because I live in a very small community and I thought the judge would be for the people and would help them out by allowing discovery. Now I don't know what to think. I don't know if the judge is already against me but it feels that way. I'm nervous about what to expect at the pretrial now. What can I do now moving forward since I cannot rely on discovery?

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If you have a bad judge that is stonewalling the usual methods that @texasrocker usually helps people win with, then I might consider doing the arbitration method.  I would file a Motion to Compel Arbitration and take this away from the court's jurisdiction.

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23 minutes ago, breturbo said:

I do have one question. Once a debt is dropped and PRA loses what happens to it?  Does it go to another JDB?

JDBs usually sell to other JDBs.  However, they can also just file it away and do nothing with it.

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