MK_Dons

Interesting Development, Midland Funding MN Court Case

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First off, thank you to everyone who provides info on this forum. I never would have gotten to where I am with my defense against Midland Funding.

I'm being sued by Midland Funding in MN civil court. They filed a motion for summary judgment and the hearing is next week. I did not file anything during discovery and instead elected to elect arbitration with AAA (alleged contract with Citibank NA states AAA is only option). At the same time I filed a motion to dismiss/compel arbitration.

Anyway, the firm representing Midland was served properly and with enough notice and the motion hearing was this morning.

No one from the firm showed up.

The judge was not too happy obviously, and said that the date originally for the summary judgement next week will now be used for my motion, she will discuss what happened with the judge scheduled for that hearing and also mentioned the possibility of a default judgement in my favor due to no one showing up. 

So, they are in trouble. My question is what should I do to keep the boot on the throat, so to speak. I believe I have some momentum in my favor, I want to be able to take full advantage. At a minimum, they wasted my time and the court's time -- how do I hold them accountable and demonstrate to the court I respect the court's time, unlike the firm suing me.

Thanks in advance.

 

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23 minutes ago, MK_Dons said:

So, they are in trouble.

Not likely.  They will show up with some sob story and the court will let them slide.  Just like would happen if you were in the same boat.

You really should have pressed the court to rule on your motion to compel, and that should have been granted by default.  The problem now is Midland has a pending MSJ.  Most jurisdictions require an automatic stay of proceedings when a MTC is pending, but there is nothing stopping the court from denying your MTC and then turning right around to grant Midland's MSJ.

I would spend the next week creating disputed issues of material fact in an opposition to summary judgment in the event the court denies your MTC.

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Thanks for the reply.

1 hour ago, Harry Seaward said:

You really should have pressed the court to rule on your motion to compel, and that should have been granted by default. 

Agreed, but it was clear the judge was not going to grant a default judgement since there already was another hearing date scheduled. That was an easy way to give them the benefit of the doubt and "let them slide". 

In MN, a response to a motion for summary judgement needs to be filed nine days before the hearing -- the hearing is in less than nine days. So the MTC will be item one on the agenda. Assuming it is denied, my assumption is I will have to layout my disputed issues of material fact at the hearing itself, correct? I've read multiple arguments against contracts having no signature, not establishing the entire debt record, etc. 

Any advice is certainly appreciated. 

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2 hours ago, MK_Dons said:

I've read multiple arguments against contracts having no signature, not establishing the entire debt record, etc. 

Neither of these have any validity in credit card debts.

You have to create disputes. Find a discrepancy in their records. Dates or amounts that don't add up. Something like that. 

You said an opposition in writing is required to be filled 9 days before the hearing. I would interpret that you mean that if you file no written opposition, the MSJ is officially unopposed. Is there anything that talks about what it means to file no written opposition? It could be the hearing is only for oral arguments on issues raised in the written filings. After all, it's not very fair for one party to show up and spring surprise arguments on the other party. We'd all have some strong feelings about it if Midland were to do that to you. 

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2 hours ago, Harry Seaward said:

You said an opposition in writing is required to be filled 9 days before the hearing. I would interpret that you mean that if you file no written opposition, the MSJ is officially unopposed. Is there anything that talks about what it means to file no written opposition? It could be the hearing is only for oral arguments on issues raised in the written filings. After all, it's not very fair for one party to show up and spring surprise arguments on the other party. We'd all have some strong feelings about it if Midland were to do that to you. 

I know it is not ideal, but Minnesota law generally favors leniency when it comes to timely filings. I will argue for resolution on the merits of the case. And will file my written opposition tomorrow via e-serve, after combing through their evidence. 

This may help:

Quote

Rule 55.01 of the Minnesota Rules of Civil Procedure

When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend within the time allowed therefor by these rules or by statute, and that fact is made to appear by affidavit, judgment by default shall be entered against that party as follows: . . . (b) In all other cases, the party entitled to a judgment by default shall apply to the court therefor. If a party against whom judgment is sought has appeared in the action, that party shall be served with written notice of the application for judgment at least three days prior to the hearing on such application.

And Howard v. Frondell

Quote

Finally, appellants contend the judgment should be vacated because they did not receive notice of Howard’s application for default and were not notified of the hearing. A party need only be served with written notice of the application for a default judgment if it has “appeared in the action.” Appellants claim that Hollender’s letter to Howard’s attorney requesting an extension constitutes an appearance. Under the rules, however, a party is deemed to have made an appearance when it “serves or files any paper in the proceeding.”

Minn.R.Civ.P. 5.01. Because appellants had not filed or served any paper at the time of the application for default, they *209 were not entitled to notice. We conclude that the trial court did not abuse its discretion in refusing to vacate the default judgment.

 

 

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Both of those are discussing "default judgment". As in no responsive "pleading" had been filed. In most jurisdictions, a pleading is a complaint, answer, counter complaint and answer to counter complaint. Also, the Howell citation does not help your case. The appellate court found there was no error when the lower court granted default judgment.

 It certainly wouldn't hurt to argue the same standards from the default judgment rule should be applied to summary judgment proceedings, but I would definitely want something more on point in making that argument. 

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Thanks for that advice. 

I am going to propose a stipulation with Midland's attorneys in granting me leave to file my opposition after the deadline has passed. That way there is at least a record of me trying to say I made an error, but I'd still like to respond. I will be surprised if they agree to it, but we will see.

 

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Did midland file an opposition to your MTC?

If not, then at the hearing, I would object to any oral opposition they make and state that they did not oppose the motion in a timely manor. I would cite the court rule on time to respond to a motion and state that they had X days according to Rule XYZ and that you respectfully request that your MTC be granted as unopposed.

If the worst happens and your MTC is denied and their MSJ granted, then i would file an appeal.  The MTC denial is good ground for an appeal that should be easily over turned.

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If your MTC is granted, be sure you specifically ask the court to stay the proceedings, including holding off on ruling on the MSJ, until the conclusion of arbitration. We've seen courts grant a defendant's MTC and then grant a the plaintiff's MSJ. 

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Thanks, everyone. 

Midland did not file any opposition. It's almost like they are assuming I just won't show up and are not paying attention to the case.

I will keep this on the top of my talking points. 

I did send a completed stipulation to the lead attorney and offered to file it. Still haven't heard anything. 

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46 minutes ago, MK_Dons said:

It's almost like they are assuming I just won't show up and are not paying attention to the case.

Not almost, that is exactly what they are doing.  The attorney that shows up to court will likely be caught by surprise that you even filed an MTC.  I would bring extra copies of your MTC to hand to the attorney and be prepared to explain that you filed on XX date and they have not responded, so you expect that your motion will be granted as unopposed (assuming they try to talk to you before hand to settle).

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Well the court heard both the Motion for Summary Judgement and the MTC. 

Plaintiff did finally file a memorandum in opposition to my MTC. It wasn't served to me properly and it wasn't in time, but I was ready to defend letting the judge know the plaintiff was not following Minnesota statutes, so they presented orally. Plaintiff argued I was not acting responsibly because I waited too long. The contract clearly states both parties can elect at any time, even if litigation is in process. They also said they would be unduly prejudiced as they would have to pay for arbitration fees, in addition to the court fees they have paid so far. I am going to file my response to their memo today and note that I was not properly served.

They also said they were unaware of the first hearing they skipped, even though they were properly served and all paperwork was in order.  

I still asked the court to compel to arbitration and stay the summary judgement until the conclusion of arbitration.

So the judge will rule on my MTC, and the summary judgement. Now I wait for for his written ruling. I will have an appeal ready to go. I would say the judge was reasonable to both sides, but by the rule of law, the plaintiff has been very sloppy.

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30 minutes ago, MK_Dons said:

but by the rule of law, the plaintiff has been very sloppy.

That is typical in these cases.

Did you tell the judge that you object to any opposition to your MTC as untimely?

When they whined about the cost and arbitration being burdensome, you should have said "I am also burdened by having to defend an alleged debt I do not owe, and if Plaintiff wishes to strike from the contract the parts that are inconvenient, I would also like a chance to strike the parts of the contract that I no longer agree with also."

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Well, the judge's order came down today. He ruled on both the MSJ and the MTC. It went in my favor.

He ordered both sides into arbitration with AAA, and everything is stayed until the results of the arbitration.

I know this is not the end, but I feel much better now. How long should I wait before sending them a settlement letter asking for everything to be expunged, dismiss with prejudice and no 1099C? Anything else I need to be aware of? 

I already filed with AAA and paid my fee as well.

Just wanted to sincerely give you thanks. My family will be in a much better position for overall success because of the help you all so graciously offer each day.

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1 minute ago, MK_Dons said:

...settlement letter asking for everything to be expunged, dismiss with prejudice and no 1099C?

First off, congratulations!!!

Second, they legally can't promise anything regarding a 1099, so instead you want the agreement worded in such a way that never uses the word "settlement." Stick with all claims being dropped and something about there being no admission or acknowledgment of debt. They will probably have a standard agreement that they use - you can just modify that one to remove any verbiage that sounds like this is a "debt settlement."

I got a 1099 after a settlement. It took some back-and-forth with IRS to get it removed, but it helped that the settlement language talked about it being solely for relief from a lawsuit, and not an admision of any debt.

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Congrats!!!

Just FYI Midland has the upper hand in the dismissal negotiations, since it's their lawsuit. At this point, I'd hang back for at least a couple weeks to find out what happens with AAA. IIRC, AAA has refused to accept Midland cases because they never pay their fee. Once you get some kind of confirmation about what's going on there, then you can move the court to compel Midland to either pay up or dismiss. 

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15 minutes ago, Goody_Ouchless said:

First off, congratulations!!!

Second, they legally can't promise anything regarding a 1099, so instead you want the agreement worded in such a way that never uses the word "settlement." Stick with all claims being dropped and something about there being no admission or acknowledgment of debt. They will probably have a standard agreement that they use - you can just modify that one to remove any verbiage that sounds like this is a "debt settlement."

I got a 1099 after a settlement. It took some back-and-forth with IRS to get it removed, but it helped that the settlement language talked about it being solely for relief from a lawsuit, and not an admision of any debt.

I almost wish I had known about this back in the day.  

Instead, I had to fill out forms to the IRS that showed I was insolvent.  If one is insolvent, one doesn't pay taxes in general.

Exception:  suppose you are $2000 under water including the debt and you get a 1099 for $3000.  Now you are above water by $1000, so you have to pay taxes on that amount.  

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3 hours ago, Harry Seaward said:

Congrats!!!

Just FYI Midland has the upper hand in the dismissal negotiations, since it's their lawsuit.

I disagree.  There is an order to arbitrate and if Midland does not wish to follow this court order, their only option without being in violation of that order is a joint stipulated motion to dismiss. This gives OP the upper hand in settlement negotiations.

3 hours ago, MK_Dons said:

How long should I wait before sending them a settlement letter asking for everything to be expunged, dismiss with prejudice and no 1099C? Anything else I need to be aware of? 

I would wait until AAA closes the case for non payment by midland or they contact you to settle first.  I would not bother with that laundry list of items.  All you need is a mutual dismissal with prejudice.  A DWP takes care of all of that.  You won't get a 1099 and you can get it removed from credit reports.  Just push them on a dismissal WITH prejudice.

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14 hours ago, MK_Dons said:

He ruled on both the MSJ and the MTC. It went in my favor.

Congratulations!!! Would you mind sharing a recap of the hearing and what the judge said? It will help members coming along behind to have an idea of what to expect, plus help them prepare for any unforeseen issue that might otherwise be a surprise. 

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12 hours ago, fisthardcheese said:

their only option without being in violation of that order is a joint stipulated motion to dismiss.

No, they can simply do nothing, the end result of which will be a 'default' dismissal which is rarely with prejudice.  Or they can also motion the court to dismiss on their terms (without prejudice) and argue OP isn't being reasonable. 

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16 hours ago, fisthardcheese said:

All you need is a mutual dismissal with prejudice.  A DWP takes care of all of that.  You won't get a 1099 and you can get it removed from credit reports.

Not sure if that's true about CR, if case was never adjudicated, but good point about 1099 - if there's no "settlement agreement," there's nothing to trigger 1099.

 

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4 hours ago, Harry Seaward said:

... Or they can also motion the court to dismiss on their terms (without prejudice) and argue OP isn't being reasonable. 

How might that argument go?  We aren't going to comply with the court's order and we want the option to do it all over again?  And the OP, who is in compliance with the court's order, is being unreasonable in his aversion to being prejudiced by continued exposure to a new action that would require repeating efforts just instantly expended?

 

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11 hours ago, Harry Seaward said:

No, they can simply do nothing, the end result of which will be a 'default' dismissal which is rarely with prejudice.  Or they can also motion the court to dismiss on their terms (without prejudice) and argue OP isn't being reasonable. 

I haven't read all the rules for every court in the country, but I can not imagine that any of them would allow a party that was just ordered by the court to arbitrate and stay the case to simply dismiss the case instead without a joint stipulation. 

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7 hours ago, Goody_Ouchless said:

Not sure if that's true about CR, if case was never adjudicated, but good point about 1099 - if there's no "settlement agreement," there's nothing to trigger 1099.

 

I suppose YMMV applies here, but in the past I had 2 TLs removed by disputing them to the CRAs and submitting a copy of the dismissal with prejudice. One of them did require a second dispute after the first time it came back "verified".  But a dismissal with prejudice is considered an adjudicated matter.  I also had Midland's automated system continually pulling a "soft" copy of my credit reports every 2 months like clockwork after they had dismissed with prejudice the case against me.  I handed that evidence over to an attorney who sued them for the FCRA violation of obtaining copies of my reports without permissible purpose (due to the fact that "dismissed with prejudice" is a final adjudication and they no longer have the right to pull reports or attempt to collect in anyway). That ended up in an "amicable settlement".

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