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Sued by Midland Funding in Mi.


krums
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Saturday I was served an S&C in person with a suit brought by Midland Funding LLC represented by Mary Jane M. Elliot.

They're suing for around $1000 plus cost and fees.  Included in the papers I've received is only an affidavit signed 2 months ago in Minnesota and the last 4 digits of a credit card number originally held by synchrony I don't recognize.  There is literally no other information to work with, no bill of sale, records, bills, date of first missed payment, date or place the OC originated the account...nothing!  My credit report shows an open account with Midland Funding, but not where the debt originated, as the only 2 accounts I had with GE capital (now synchrony) are both marked "paid and closed."  

I'm at a complete loss how to proceed.  It doesn't make sense to hire an attorney because that would cost me way more than just allowing a default judgement, I'm not even sure I can defend this pro se for less than I could just negotiate with them to pay considering all the filing fees and what not.  If I thought I owed them any money I'd probably go that route in fact.

 Trouble is, I don't know this account, I've never heard of Midland Funding and I'm not in the habit of just giving money to people who claim I "You totally owe us money, we promise."  So, what's my best course of action and first move here?  I learn fast and I've been looking at various options for answers and affirmative defenses, but I could definitely use some help and input from the good people here.

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@krums

Please post the complaint allegations minus any personal information. Edit your first post to remove the exact amount of the debt and replace with an approximate amount ($1000).  Plaintiff's attorney is very tough, so you must be as well--and prepared. 

The documents attached to the S&C that you described would likely be enough for plaintiff to obtain a default judgment if you fail to answer. A default judgement is not the best course of action for you unless you plan on  bankruptcy in the future. Synchrony has an arbitration clause that other Michigan posters have been successful in using to get the suit dismissed. ( caveat: I am not a lawyer, IANAL, and am merely sharing my own observations and opinions.)

 

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The complaint reads as follows.

1. The cause of this action arose within the jurisdiction of this court in the county of ******

2. Plaintiff's Midland Funding LLC predecessor in interest is Synchrony Bank

3. Plaintiff's assignor allowed the Defendant to charge goods and or services on open account, and upon Defendants promise to pay for same

4. On information and belief, Plaintiff's assignor sent statements on account number ********** too the Defendant who did not dispute the charges or object within a reasonable time.

5. Defendant has not paid the balance owing on the account, despite Plaintiff's and Plaintiff's assignor demands for payment

6. Defendants Failure to pay has resulting in default on the account.

7. Plaintiff's assignor has completed performance and rendered an account stated; affidavit attached.

8. Defendant is now justly indebted to Plaintiff over and above all legal counterclaims in the amount of ($1000)

Plaintiff requests that this court enter judgement against Defendant in the amount of ($1000) plus interest, cost and attorney fees

It's just a standard form with blanks filled in with the specifics, they didn't go to the trouble of writing anything new.  

The affidavit is by a "legal specialist" employed by midland credit management, inc.  That just says plaintiff is the current owner of the debt, affiant has access to and has reviewed electronic records maintained by MCM , and I owe them this much money, but nothing else really.  If the whole affidavit helps I can post that too.

 

I planned to file an answer denying paragraph 1-3 for want of specific knowledge

Denying Paragraph 4-6 completely as I haven't received anything at all with regards to this

and  denying 7-8 for want of specific knowledge

Not sure what kind of affirmative defenses to use, and honestly I want discovery because if I am justly indebted I'd like to pay, I'm an honest guy.

 

Out of curiosity and since you brought it up, suppose I was planning to declare bankruptcy...what does that do for me with a suit already brought?

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My wife was given papers by a paper server, she was not asked to sign anything was just told that she had some paperwork for me and could she leave it with my wife. My wife at 705 am in the morning after being woken by dogs barking and a knock on the door, took the papers to only see it was a lawsuit service or she would have denied them to start with. I have been reading here and taken some advise on how to beat Midland. I have had no contact from this company not even a message on a phone. So I answer the summons to the court and deny this and do I send the same answer to the law office in Arkansas?

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18 hours ago, krums said:

as the only 2 accounts I had with GE capital (now synchrony) are both marked "paid and closed."  

Are you saying the Synchrony account Midland is suing for is a 3rd account that the original creditor no longer reports?  When an account in default is charged off and sold to a junk debt buyer like Midland, the original creditor may remove its credit agency reporting. 

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16 hours ago, krums said:

Not sure what kind of affirmative defenses to use, and honestly I want discovery because if I am justly indebted I'd like to pay, I'm an honest guy.

 

Out of curiosity and since you brought it up, suppose I was planning to declare bankruptcy...what does that do for me with a suit already brought?

You may be an honest guy, but your plaintiff and its counsel have been found by courts and the Consumer Financial Protection Bureau (CFPB) to fall far short, repeatedly so. In many of these lawsuits we see here on CIC, defendant's  discovery requests do not yield the certainty you're hoping to find--even after motions to compel production of documents have been granted. This is because the original creditor (OC) has supplied incomplete records with the sale or the junk debt buyer refuses to buy the necessary documents from the OC , if available. If this is in fact a legitimate debt that you once owed to the OC, court costs, attorney fees and post judgment interest will impact a settlement--without leverage. If you MTC arb and it's granted, or you remain in court and manage to defeat plaintiff's claims, your obligation from this alleged debt may end. If your conscience rebels at that, you may certainly offer a settlement before this court case goes any farther down the litigation road. 

I can't answer what would happen if you filed a bankruptcy petition while this suit was still pending in court. IANAL, but if you had a judgment against you for this debt, it would likely be dischargeable in bankruptcy. You should consult with a bankruptcy attorney. Most initial consultations are at no charge.  

If I were in your shoes, and not a victim of identity theft, I would try to figure out what kind of Synchrony agreement would've been in effect during the alleged date of default. I would check out the CFPB database   https://www.consumerfinance.gov/credit-cards/agreements/issuer/synchrony-bank/?page=1 or google the type of account and year to see what the arbitration clause is. You have the option in Michigan of filing a motion to compel arbitration in lieu of an answer. If for some reason that is denied, you then have time to file an answer. ** If a motion to compel arb is granted, your plaintiff may walk away, or you may have leverage at that point to negotiate a settlement with a clear conscience. Exploring all of your options before taking any action is wise, in my opinion. 

 http://courts.mi.gov/Courts/MichiganSupremeCourt/rules/Documents/HTML/CRs/Ch 2/Court Rules Book Ch 2-Responsive HTML5/index.html#t=Court_Rules_Book_Ch_2%2FCourt_Rules_Chapter_2%2FCourt_Rules_Chapter_2.htm

 

**Rule 2.108 Time
(A) Time for Service and Filing of Pleadings.

(1) A defendant must serve and file an answer or take other action permitted by law or these rules within 21 days after being served with the summons and a copy of the complaint in Michigan in the manner provided in MCR 2.105(A)(1).

(B) Time for Filing Motion in Response to Pleading. A motion raising a defense or an objection to a pleading must be served and filed within the time for filing the responsive pleading or, if no responsive pleading is required, within 21 days after service of the pleading to which the motion is directed.

C) Effect of Particular Motions and Amendments. When a motion or an amended pleading is filed, the time for pleading set in subrule (A) is altered as follows, unless a different time is set by the court:

(1) If a motion under MCR 2.116 made before filing a responsive pleading is denied, the moving party must serve and file a responsive pleading within 21 days after notice of the denial. However, if the moving party, within 21 days, files an application for leave to appeal from the order, the time is extended until 21 days after the denial of the application unless the appellate court orders otherwise.

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It is my belief, and I would swear under oath to it, that there is no 3rd account opened by me that exists with an unpaid balance.  I have no memory of ever opening one, I found GE to be very unreasonable to deal with should your payment be even a day late so after the first 2 times I obtained credit through them I refused to do business with them again.  I did settle one of those accounts with them for less than what was owed, is it possible they're going after the rest of that one?  If so, it's more than 6 years since that settlement.

If I'm reading your replies right, and I do appreciate them, these slime ball debt collectors only have to show up in court with an affidavit, provide me with no other proof of the account owing whatsoever and it's up to me to prove a negative?  That seems like an uphill battle with no legs.  I suddenly feel less upstanding.

My court provides a form I can download to file an answer with check boxes to mark and affirmative defenses with check boxes.  Do I have to use that or can I write my own?  Will the court frown on me writing my own?  I mean, I can check deny on the answer portion no problem, it's the affirmative defenses part that trips me up.

None of the affirmative defenses listed on the court document match anything I've seen other people using is the main reason I wanted to write my own.  There's no box to challenge standing, stating a claim upon which relief may be granted, or laches (which I believe could apply to me).

Another question I have in stating affirmative defenses is, without further information how do I know which to use?  I mean, I could claim statute of limitations (6 years), but I don't know when the alleged debt or alleged last payment were. I could claim accord and satisfaction, but the same situation as with the statute of limitations.

Is pointing out that the plaintiff bought the debt and caused injury to themselves a valid defense?

At what point in proceeding do I ask for discovery and how do I go about doing that?  And when would I make a motion to dismiss?

Do I move to strike the affidavit with my answer or at trial when the plaintiff tries to enter it into evidence?  I've seen conflicting answers about that in doing my research.  

Finally court costs, how are those recoverable?  Michigan uses the American rule as affirmed by the Michigan supreme court in Haliw v. Sterling hts (2005), which found no statutory basis for recovery of attorney fees and court costs by either party.  Or is that just a bunch of BS?  If that's not true or applicable...can I enter a counterclaim to cover my costs?

Oh, and both midland financial and this Mary Elliot appear to have lost class action suits for their practices in the past, is any of that applicable at any point?

Sorry I have so many questions, I feel like I'm MILES over my head here!  Gonna talk to a lawyer next week but I don't know how much help that'll be.

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2 hours ago, krums said:

It is my belief, and I would swear under oath to it, that there is no 3rd account opened by me that exists with an unpaid balance.  I have no memory of ever opening one, I found GE to be very unreasonable to deal with should your payment be even a day late so after the first 2 times I obtained credit through them I refused to do business with them again.  I did settle one of those accounts with them for less than what was owed, is it possible they're going after the rest of that one?  If so, it's more than 6 years since that settlement.

You had 2 accounts. You settled one for less than owed. Did you get the settlement agreement in writing? It's possible the balance may have been sold. What happened with the 2nd account? 

 

2 hours ago, krums said:

If I'm reading your replies right, and I do appreciate them, these slime ball debt collectors only have to show up in court with an affidavit, provide me with no other proof of the account owing whatsoever and it's up to me to prove a negative?  That seems like an uphill battle with no legs.  I suddenly feel less upstanding.

No. Plaintiff has to file a complaint with enough factual support for its causes of action to obtain a default judgment if you fail to answer. Once you answer the complaint, the court process moves along. You may send interrogatories, request documents and admissions to see what evidence plaintiff has or doesn't have to support its claims. A pro se defendant is usually at a disadvantage in court against these debt mill firms--unless well prepared. 

Meeting with an experienced consumer lawyer, preferably a NACA member, who has already gone up against Midland and/or MJE is a great idea. If you have any violations of the FDCPA or MCPA , attorney fees are awarded or part of any settlement. 

Drafting your own answer--according to Michigan Court Rules and your local court rules--is perfectly acceptable and done all the time. Use the fill-in form as a guide and make certain to follow the instructions. 

If you file a motion to compel arbitration in lieu of an answer, you follow the MCR rules for motions. There is a fill-in form for motion notice and hearing that you can use as a template to draft your own. We can assist with examples.

(IANAL) Possible Affirmative Defenses :

1. Existence of an agreement to arbitrate bars claim.

2. Lack of standing.

3. Failure to state a claim upon which relief may be granted.

4. Statute of limitations bars claim.

Don't get ahead of yourself. Stay focused on priorities: you must motion to compel in lieu of an answer, OR answer the complaint with an affidavit (account stated cause of action) preserving any affirmative defenses that may be waived if not asserted in the answer, OR pursue settlement to avoid court. Response must be made by court deadline. Ask questions here. 

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Mary Jane Elliott do some shady things. I have a consumer law attorney who loves to beat up their attorneys.

They are getting slick, no breach of contract claim to get around the need to produce an agreement. It is an open account claim. They need to attach the assignment to the complaint, which they did not.

That affidavit does not do squat, it is there to appear that Midland has standing. It cannot be used to prove they have standing or that the debt is actually owed. This is where people on here get tripped up.

They need an actual statement showing the debt or the agreement, not some made up statement that was made for the sole means of litigation. Right now, there affidavit is hearsay.

This is very simple to defend.

 

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@krums About Affirmative Defenses (from Civil Proceedings Benchbook)  https://mjieducation.mi.gov/training/CCBBcivilResponsiveHTML5/index.html#t=CCBBcivil%2FCh_2_Jurisdiction_and_Pleadings%2FCivil_Pleadings-.htm%23IX_affirmative_defense

 

An affirmative defense is any defense that seeks to foreclose relief for reasons unrelated to the plaintiff’s prima facie case. Stanke v State Farm Mut Auto Ins Co, 200 Mich App 307, 312 (1993). In other words, an affirmative defense accepts the plaintiff’s allegations, but would deny relief for a reason not disclosed in the pleadings. Id. at 312. The list of affirmative defenses in MCR 2.111(F)(3) is not exclusive. Citizens Ins Co of America v Juno Lighting, Inc, 247 Mich App 236, 241 (2001), citing Campbell v St John Hosp, 434 Mich 608, 616 (1990). The party asserting an affirmative defense has the burden of presenting evidence to support it. Palenkas v Beaumont Hosp, 432 Mich 527, 548, 550 (1989).

                                                                                                                * * *

“[D]espite the language in MCR 2.111(F)(3) that affirmative defenses should be part of the responsive pleadings, affirmative defenses do not amount to a pleading by themselves nor do affirmative defenses demanding a reply count as a pleading requiring a response.” McCracken v City of Detroit, 291 Mich App 522, 528 (2011). “Although affirmative defenses are not ‘pleadings,’ the Court Rules unambiguously permit them to be amended in the same manner as pleadings.” Tyra v Organ Procurement Agency of Mich, 302 Mich App 208, 213 (2013), overruled in part on other grounds 498 Mich 68, 74 (2015). (internal citation omitted). “[A] defendant may move to amend their affirmative defenses to add any that become apparent at any time, and any such motion should be granted as a matter of course so long as doing so would not prejudice the plaintiff.” Id. If a defense is based on a written instrument, a copy of the instrument must be attached to the pleading as an exhibit, subject to exceptions listed in the court rule. MCR 2.113(F)(1). Additionally, affirmative defenses must be listed under a separate heading and must include the facts constituting such defense. MCR 2.111(F)(3). “The purpose of this requirement is to provide the opposing party with sufficient notice of the alleged affirmative defenses to permit that party to take a responsive position, and a stated affirmative defense that does so will not be deemed insufficient.” Tyra, 302 Mich App at 213-214, overruled in part on other grounds 498 Mich 68, 74 (2015). “[A] statement of an affirmative defense must contain facts setting forth why and how the party asserting it believes the affirmative defense is applicable.” Id. at 214.

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