MK_Dons

Interesting Development, Midland Funding MN Court Case

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2 hours ago, fisthardcheese said:

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. 

It wouldn't be "simply". The point of a motion is to have a court decide something that the parties cannot agree upon.  If they come to court  with a motion to dismiss showing that they tried to stipulate a dismissal, and argue the other party's demands were unreasonable, what stops a court from granting that motion if the court agrees the other party was in fact unreasonable?

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Nothing, in terms of procedural rules in most jurisdictions, would stop the plaintiff  from making a unilateral motion and the court granting the motion.  The probability of it being granted in most lower US courts is probably pretty high.  Mostly because the motion and any response or reply would hardly be read.

But if the defendant opposed the motion and argued the reasonableness question, it is difficult to image how plaintiff's position would objectively appear more reasonable than defendant's -  if both positions were fully argued and carefully read by the court or court staff.

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On 3/10/2018 at 12:40 PM, Xerxes said:

Nothing, in terms of procedural rules in most jurisdictions, would stop the plaintiff  from making a unilateral motion and the court granting the motion

As with everything in court, a judge will sign off on almost anything. It is up to the opposing side to point out when something is counter to the rules or case law.  And in the situation we are talking about, most courts have a rule that states once a motion to compel has been granted (or even just an answer filed) in any case, that only a dismissal by joint stipulation of the parties my be granted.  By just citing this rule and then noting that the Plaintiff did not seek stipulation prior to their motion to dismiss, and then stating that Defendant would gladly stipulate to a dismissal with prejudice, you are showing the judge that 1.) The rules are not being followed and 2.) You are reasonably willing to stipulate to a dismissal with prejudice.  I don't see how any judge could find this to be unreasonable in any way.  They don't have to agree to my "with prejudice" stipulation, but surely they can not call this unreasonable.

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6 hours ago, fisthardcheese said:

... And in the situation we are talking about, most courts have a rule that states once a motion to compel has been granted (or even just an answer filed) in any case, that only a dismissal by joint stipulation of the parties my be granted. ...

It's true that the rules of many jurisdictions don't allow unilateral notice of dismissal once the defendant has filed a responsive pleading.  But I don't think that a dismissal is possible only by joint stipulation in most of those jurisdictions.  If only the plaintiff wants a dismissal, and the defendant won't stipulate, I don't think anything in the rules would stop the plaintiff from making a motion to dismiss - which of course the defendant could oppose with an argument that unless the dismissal is with prejudice, the defendant would be prejudiced.  This is the point of the second paragraph in my prior post to this topic.

I also agree that if a compel order is in force, technically the plaintiff should move for that order to be lifted prior to moving for a dismissal, either by separate or combined motion.

 

6 hours ago, fisthardcheese said:

I don't see how any judge could find this to be unreasonable in any way.  They don't have to agree to my "with prejudice" stipulation, but surely they can not call this unreasonable.

I agree. Though, in order for the judge to reach such a determination, the defendant has to have made a persuasive opposition to the plaintiff's crazy motion(s).

But if the question is whether or not it would be a violation of the rules (in most jurisdictions) for the plaintiff to even make the motion(s), I think they usually can make the poor decision to file those motions without being in violation of the rules.

Maybe there are some jurisdictions were it is a clear violation of the rules to seek dismissal by any means other than a stipulation.  There may also be some jurisdictions where a unilateral notice of dismissal (or "non-suit") is possible even after the defendant  has filed a responsive pleading.  Maybe the moral of this story is for one to learn the rules of civil procedure for the court that has jurisdiction of their case.

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1 hour ago, Xerxes said:

It's true that the rules of many jurisdictions don't allow unilateral notice of dismissal once the defendant has filed a responsive pleading.  But I don't think that a dismissal is possible only by joint stipulation in most of those jurisdictions.  If only the plaintiff wants a dismissal, and the defendant won't stipulate, I don't think anything in the rules would stop the plaintiff from making a motion to dismiss - which of course the defendant could oppose with an argument that unless the dismissal is with prejudice, the defendant would be prejudiced.  This is the point of the second paragraph in my prior post to this topic.

I also agree that if a compel order is in force, technically the plaintiff should move for that order to be lifted prior to moving for a dismissal, either by separate or combined motion.

 

I agree. Though, in order for the judge to reach such a determination, the defendant has to have made a persuasive opposition to the plaintiff's crazy motion(s).

But if the question is whether or not it would be a violation of the rules (in most jurisdictions) for the plaintiff to even make the motion(s), I think they usually can make the poor decision to file those motions without being in violation of the rules.

Maybe there are some jurisdictions were it is a clear violation of the rules to seek dismissal by any means other than a stipulation.  There may also be some jurisdictions where a unilateral notice of dismissal (or "non-suit") is possible even after the defendant  has filed a responsive pleading.  Maybe the moral of this story is for one to learn the rules of civil procedure for the court that has jurisdiction of their case.

We are in agreement.  The Plaintiff has a right to file a motion to dismiss (even if they are SUPPOSED to first try to stipulate a dismissal), and as a response, the defendant has a right to oppose in order to let the court know that a stipulation was not first sought and that defendant wants a "with prejudice" dismissal.  The entire point is that you have a right to at least ASK for that final with prejudice and it should not be considered unreasonable.  Also, it would be clear that both parties wish to dismiss, we are only speaking of what kind of dismissal, so I don't see the judge doing anything crazy like refusing a dismissal in this situation either.  I don't see any drawback to at least opposing and asking for what you want in these scenarios.

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***UPDATE***

Wanted to post an update for everyone in case it helps your case -- and ask a few more questions.

The court granted my motion to compel arbitration, and stayed the summary judgement. The court date was canceled and the order was given to arbitrate. That was on March 8, 2018.

I had already started arbitration proceedings as I originally sent Midland my notice to elect arbitration in February. 

AAA sent its correspondence in late April and set a deadline of May 10 for Midland to answer. Midland asked for dismissal on May 8, stating that I did not file properly because the court did not issue an order regarding my motion to compel and that Midland had a motion for summary judgement filed against me. In addition, they "respectfully" asked for an extension to formally answer AAA and pay. I promptly informed AAA that the court did indeed rule in my favor and stayed the summary judgement and ordered Midland into arbitration. 

Today, well past the May 10 deadline, Midland informed AAA that, even though the court issued the order on March 8, and properly served both parties (including Midland's lead counsel), it was not aware of the court order until it was "served" on May 9. In addition, they are asking for an extension to May 28 because of Midland not being "served" until May 9, and the fact that in the AAA form's  case caption, I listed Midland funding first instead of my name. Even though in the rest of the paperwork its clearly listed that I am the consumer and Midland the business.

Any advice? Is there a proper way to inform the court of the shenanigans going on and establishing a paper trail of falsehoods? What should my next correspondence with AAA state? I understand no one has been sworn, yet... but it's pretty bold to assert a district court did not serve a multi-million dollar law firm properly.

Thanks in Advance.

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Let them have their extension.  They'll drag this out another month and then still won't pay, and will be contacting you to discuss dismissal.

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Court is irrelevant to this AAA process for now (until it is closed due to Midland's actions or non payment).  What I would do is file my written objection to the extension and reiterate the time frame, show proof (CMRRR hopefully) of when you served Midland, and remind AAA of when they sent the initial commencement letter out to both parties.  Show that Midland has had more than enough time, and more than enough notice (both from the court and from you and from AAA) regarding this arbitration process.

While, I would expect AAA to allow Midland their extension anyway, I would still file my strong objection for the record.  You never know, AAA could surprise us and side with you and force pressure on Midland to pay up or close the file.

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Update 5/31/2018

AAA granted the extension and Midland sent its Answer and Counterclaim on deadline day. 

I've attached a redacted copy of the document for reference. 

Basically, Midland is rehashing the claims it made in court, and is still pushing that I had the names in the wrong order on the original arbitration form. It is also looking to get relief from its court fees and costs associated with the arbitration case -- in addition to the amount it claims I owe.

I am in the early stages of looking at my options. As far as I can see, I have 14 days to answer the counterclaim. Any advice on next steps? The amount of money spent by Midland has to be more than the amount they claim I owe at this point. I'd assume they are posturing and trying to compel me to settle before the arbitrator is picked. 

Thanks in advance for any insight. I fully intend to keep paying this forward!

 

 

RedactedCleanedMidland_AAA.AnswerCC.Respondent.pdf

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So Midland followed, paid AAA and is requesting costs/fees be awarded? Wasn't it Mr. Scott on Star Trek that said "...well, what do you make of that?"

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2 hours ago, MK_Dons said:

The amount of money spent by Midland has to be more than the amount they claim I owe at this point. I'd assume they are posturing and trying to compel me to settle before the arbitrator is picked.

For 10 years, give or take, the "Arbitration Strategy" was predicated on the belief that the costs of a Consumer arbitration were not recoverable by the plaintiff. That may have been a mistaken belief. If one reads CC Agreements and JAMS/AAA Rules and Standards as meaning "We (debt holder) must pay for a case to be adjudicated in Arbitration, but not the consequences of that Arbitration," your situation will make more sense.

   

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They are claiming they have incurred costs and "damages" of $4,200, but half of that is refundable if they settle or withdraw their claim before an arbitrator is appointed, so they are lying by saying they have already incurred those damages.  That's the first argument I would make.  Second, the AAA rules expressly prohibit reallocation of fees to the consumer except in cases where the arbitrator determines the case was filed by the consumer to harass or is "patently frivolous".  At this stage of the game, no one can know if the arbitrator will find your claims to be harassing or patently frivolous, but they never even claimed that as a basis for you owing their fees.  I would respond that there exists no rule or law that entitles them to recovery of their fees based on the arguments they have used.

https://www.adr.org/sites/default/files/Consumer_Fee_Schedule.pdf

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4 minutes ago, Harry Seaward said:

They are claiming they have incurred costs and "damages" of $4,200, but half of that is refundable if they settle or withdraw their claim before an arbitrator is appointed, so they are lying by saying they have already incurred those damages.

Isn't there also an argument against 25?  25 reads, "By failing to opt in to arbitration until after Midland incurred court filing fees and hearing fees in ____ Court, ____ damaged Midland in an amount not less than $419.00."

If there's a valid arbitration agreement between the parties, Midland incurred filing fees and hearing fees as a result of filing their case in a venue that has no jurisdiction.  Why should the defendant be required to reimburse?

 

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Right.  There's a legal concept that says you can't claim damages from others based on your own actions.  

Arguably anyone that buys old debts is imposing financial harm on themselves, and then they claim others caused the harm because they borrowed money from someone else.

It seems if Midland is paying the fees and not cutting their losses, it's their risk.

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1 hour ago, Sogeln said:

Right.  There's a legal concept that says you can't claim damages from others based on your own actions.  

Arguably anyone that buys old debts is imposing financial harm on themselves, and then they claim others caused the harm because they borrowed money from someone else.

It seems if Midland is paying the fees and not cutting their losses, it's their risk.

Thank you for mentioning this.

I'm following a court case that involves the same JDB/OC I'm currently in arbitration with.  In this case, the Defendant has requested the following in discovery: Produce all documents demonstrating that Plaintiff suffered damages of any sort based upon the conduct of Defendant.

Now I know why.

 

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1 hour ago, Harry Seaward said:

At this stage of the game, no one can know if the arbitrator will find your claims to be harassing or patently frivolous

The risk is that they already have printouts confirming the latter.

 

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1 hour ago, Sogeln said:

Right.  There's a legal concept that says you can't claim damages from others based on your own actions.  

Arguably anyone that buys old debts is imposing financial harm on themselves, and then they claim others caused the harm because they borrowed money from someone else.

It seems if Midland is paying the fees and not cutting their losses, it's their risk.

You're referring to the defense "Scienti et volenti non fit injuria".  That has nothing to do with this.  Not one court has ruled that the defense applies to credit card debt and debt buyers.

This boils down to the fact that JDBs stand in the shoes of the original creditors.  Therefore, the terms of the agreement apply to Midland.  I've never seen a cardmember agreement that says "you have to initiate arbitration before we incur court filing fees."

 

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23 minutes ago, LaneBlane said:

Thank you for mentioning this.

I'm following a court case that involves the same JDB/OC I'm currently in arbitration with.  In this case, the Defendant has requested the following in discovery: Produce all documents demonstrating that Plaintiff suffered damages of any sort based upon the conduct of Defendant.

Now I know why.

 

As I stated in my previous post, JDBs harming themselves by purchasing defaulted debts has nothing to do with this because it's not a valid defense.   In the case you're following, all the JDB must do, if required by the court, is prove it purchased the account in question. 

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3 minutes ago, BV80 said:

As I stated in my previous post, JDBs harming themselves by purchasing defaulted debts has nothing to do with this because it's not a valid defense.   In the case you're following, all the JDB must do, if required by the court, is prove it purchased the account in question.  

I suppose this is just something defense attorneys will throw out there for the heck of it.  Thanks for clarifying.

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To follow up on my last post, I forgot to mention that not only do AAA rules prohibit fee reallocation, the Citi agreement does also:
"If we prevail, we may not recover our arbitration fees, unless the arbitrator decides your claim was frivolous."

While "may not" can be argued whether something is "possible" as opposed to obligatory, "may" is often used both ways.
A.) Your car may not start when you leave for work this morning.
B.) You may not excuse yourself to take a phone call in the middle of a company meeting.

The inclusion of a condition ("unless the arbitrator....") locks "may" into the obligatory form of the word.

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8 hours ago, Goody_Ouchless said:

The risk is that they already have printouts confirming the latter.

I don't believe what we 'conservatives' advocate here is "frivolous".
https://thelawdictionary.org/frivolous/

According to that analysis, a frivolous claim "may be determined without argument or research".  Making $250,000 in FDCPA claims against an OC would certainly fall into that category, but using the options provided in a card agreement to make the same defenses in arbitration that we would in court?  I don't see it.  They sued first and we said "yes please" to the arbitration right.  Opposing JDBs always have the option to follow.  History says they won't, and that's what we keep hoping for, but it's their agreement.  They can continue or not.  I've always believed JDBs may follow just to prove a point.  If Midland is trying to make a point in OPs case, they picked the absolute wrong combination of forum and OC to do so.

(I happen to think the lawfirm representing Midland in this case didn't understand what they were committing Midland to and now want to get their fees back as an award.  The problem for OP will be when they go to far and can't get the fees refunded.  At that point they have nothing more to lose by just pressing on and getting the same judgment in arbitration that they would in court.)

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On 3/1/2018 at 10:30 AM, MK_Dons said:

... 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.

Did Midland provide the agreement to you, or did you source it elsewhere?  In recent citibank arbitration agreements (the versions where AAA is the only option), the language (present in prior agreements) for the 3-arbiter appeal panel is often removed or substantially neutered.  Check whether or not strong appeal language is present in your version (or a survivable version) of the agreement.

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Quote

25) By failing to opt in to arbitration until after Midland incurred court filing fees and hearing fees in __________ Court, _____ damaged Midland in an amount not less than $419.00.

If the defendant had sent some form of 'opt in' notice before the suit was filed, and a suit was later filed, that claim could be switched around.

Perhaps this action was originally brought as a MN pocket docket case.  In which the complaint is served, the answer returned, and all discovery between the parties is done before anything is ever filed in court.  Court filing fees are expensive in MN.

If the OP and Midland were having regular back-and-forth communication as part of the case during the pre-filing discovery stage, it might not be an entirely ridiculous argument for Midland to make that the OP should have raised arbitration to Midland then - during discovery, before the period for discovery ended.  Midland could argue that they would have went straight to arbitration and avoided the court filing fees.

Part of the actual case, including all of the discovery, happened before the case was actually filed with the MN court.  It's difficult to compare this to other jurisdictions where discovery occurs after the case is filed.  But in some jurisdictions if arbitration is only raised for the first time after discovery is completed, there might be waiver.  Midland makes that claim as well in their answer/counterclaim filing in this arbitration case.

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On 5/31/2018 at 12:56 PM, Goody_Ouchless said:

So Midland followed, paid AAA and is requesting costs/fees be awarded? Wasn't it Mr. Scott on Star Trek that said "...well, what do you make of that?"

They didn't "follow" quite yet.  They paid the initial filing fee, which we have seen several times with attorneys who don't know how arbitration works.  As soon as an arbitrator is selected and the first phone conference is scheduled, the attorney will get a new bill from AAA and will start to see the err of his ways.

The only thing that has happened in this case is that Midland filed an answer and counter claim.  In this counter claim they asked for crazy things like court costs due to "damages" and the arbitration fees.  This is standard.  I have had a dozen attorneys file this type of counter claim against me in arbitration.  The amount of times I paid any of their fees was exactly 0.

As for OP, you can file your opposition to the counter claims or you are free to ignore them (in AAA no answer means an automatic denial, so no answer is actually required).  However, if you have good arguments and case law and can present a nice briefing, then it would be good leverage to file that response and show the attorney that you are not just rolling over and that he will be up against someone who knows what they are doing - in addition to the new bill he will be getting - could help expedite that settlement of mutual dismissal.

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