Arbitrate v. Defending Account Stated Claim

[RockyRoad]

I'm debating whether to defend a small claims suit for $4321 for an Account Stated Claim with a law firm claiming to represent Discover Bank, or at my final hearing next week motion to compel Arbitration.  The law firm filed into the case the credit card agreement with the Arbitration clause, however, I can defend the Account Stated claim by disproving their element that we agreed to the claim's balance of $4321, citing a dispute letter I sent the firm disputing the amount.  Which strategy would possibly be more successful?

[BV80]

7 minutes ago, RockyRoad said:

I'm debating whether to defend a small claims suit for $4321 for an Account Stated Claim with a law firm claiming to represent Discover Bank, or at my final hearing next week motion to compel Arbitration.  The law firm filed into the case the credit card agreement with the Arbitration clause, however, I can defend the Account Stated claim by disproving their element that we agreed to the claim's balance of $4321, citing a dispute letter I sent the firm disputing the amount.  Which strategy would possibly be more successful?

When and under what circumstances did you send the dispute letter?

[RockyRoad]

First I sent a dispute letter to Discover May 12, 2017 when they sent me a statement after the account was behind 5 months.  I then sent a dispute letter to the firm on October 11, 2017 a week after they contacted me when they retained the defaulted account.  Thirdly I submitted a Notice of Dispute January 16, 2018 in the small claims case a month after it was filed by firm.

[BV80]

10 minutes ago, RockyRoad said:

First I sent a dispute letter to Discover May 12, 2017 when they sent me a statement after the account was behind 5 months.  I then sent a dispute letter to the firm on October 11, 2017 a week after they contacted me when they retained the defaulted account.  Thirdly I submitted a Notice of Dispute January 16, 2018 in the small claims case a month after it was filed by firm.

Disputing alone, would not be enough to defeat an account stated cause of action.  Since you're being sued by the original creditor, there's a possibility they can provide enough account statements to prove their claim.   However, if they could not provide an accounting that satisfies the judge, they would not win.  But, the judge could still determine that you do owe something.

It all depends upon what they can provide.  In the event they could provide adequate documentation, do you have proof that the balance is incorrect?

In regard to arbitration, Discover would more than likely agree to arbitrate.  The rules are different in that the arbitrator might not require the type of proof from Discover that the court might require.

Calling @LawKitty

[RockyRoad]

Discover has provided statements from a zero balance and has a witness appearing for the final hearing.  I don’t have proof of the account balance being incorrect with them providing full statements dates.  These are the elements of an account stated claim from Florida Supreme Court 416.39  ACCOUNT STATED:

1. Claimant) and (defendant) had [a transaction] [transactions] between them;

2. [(Claimant) and (defendant) agreed upon the balance due] [or] [(Claimant) rendered a
statement to (defendant) and (defendant) failed to object within a reasonable time to a statement of [his] [her] [its] account];

3. (Defendant) expressly or implicitly promised to pay (claimant) [this balance] [the amount set forth in the statement]; and

4. (Defendant) has not paid (claimant) [any] [all] of the amount owed under the account.

 

 

[RockyRoad]

Also, the credit card application submitted by the firm has an address from another county.  Would you move for a dismissal for lack of jurisdiction on that point at the hearing or just move for the application to be stricken?

[Clydesmom]

1 hour ago, RockyRoad said:

1. Claimant) and (defendant) had [a transaction] [transactions] between them;

2. [(Claimant) and (defendant) agreed upon the balance due] [or] [(Claimant) rendered a
statement to (defendant) and (defendant) failed to object within a reasonable time to a statement of [his] [her] [its] account];

3. (Defendant) expressly or implicitly promised to pay (claimant) [this balance] [the amount set forth in the statement]; and

4. (Defendant) has not paid (claimant) [any] [all] of the amount owed under the account.

Discover has MORE than enough to prove their case.  You are up against the OC who clearly has produced all the documentation.  While you can drag them to arbitration you will not win there either. You MIGHT get a better settlement but there are threads where Discover dug in and refused anything but the entire amount.  You will not win in arbitration either.  

1 hour ago, RockyRoad said:

Also, the credit card application submitted by the firm has an address from another county.  Would you move for a dismissal for lack of jurisdiction on that point at the hearing or just move for the application to be stricken?

Where you were when the application was submitted is irrelevant.  If they sued you in the county you live in NOW then they filed correctly.  Jurisdiction is correct.  This is not a legal basis to strike the application.  

[BV80]

2 hours ago, RockyRoad said:

Discover has provided statements from a zero balance and has a witness appearing for the final hearing.  I don’t have proof of the account balance being incorrect with them providing full statements dates.  These are the elements of an account stated claim from Florida Supreme Court 416.39  ACCOUNT STATED:

1. Claimant) and (defendant) had [a transaction] [transactions] between them;

2. [(Claimant) and (defendant) agreed upon the balance due] [or] [(Claimant) rendered a
statement to (defendant) and (defendant) failed to object within a reasonable time to a statement of [his] [her] [its] account];

3. (Defendant) expressly or implicitly promised to pay (claimant) [this balance] [the amount set forth in the statement]; and

4. (Defendant) has not paid (claimant) [any] [all] of the amount owed under the account.

 

 

Did you use the account and make payments?   If so, that pretty much covers it.  You'd have to show that something isn't correct.

 

1 hour ago, RockyRoad said:

Also, the credit card application submitted by the firm has an address from another county.  Would you move for a dismissal for lack of jurisdiction on that point at the hearing or just move for the application to be stricken?

The proper court can mean either the one in which the agreement was signed OR in which you currently live.   If you're being sued in the court in the county where you currently live, jurisdiction is proper.

[BackFromTheDebt]

To expand on @Clydesmom there are no guarantees that any particular strategy will work.

To put it simply, unless you declare BK, you are going to lose this case.  You can lose in court, you can lose in arbitration, or you can settle.  Those are your choices.  

The ONLY reason you should go into arbitration is to try to buy some time for a better settlement, and that sometimes doesn't work.  

I was one of the very rare people who beat Discover in arbitration, but that was because the law firm that had handled their case before arbitration really blew things, and my situation is completely different from yours.  Mine was one of the first cases they arbitrated, and they had no idea what they were doing.  Now they do.  

My advice would be to see if you can agree on a settlement.  If not, if you take them to arbitration, you MIGHT be able to get them to settle.  For example, they will often settle between the time they get their final bill for the hearing, and when they pay that bill.  And they are more likely to settle if they think you know what you are doing.  

[RockyRoad]

Thanks.  I will try to settle before the trial then.

[RockyRoad]

I ended up signing a settlement agreement right before trial.  Just got tired of the damn thing.  Could have fought it but why.  Now litigating a Fed Lawsuit against another debt collector for FDCPA violations.  Needed time to focus on that.

[Brotherskeeper]

@RockyRoad Hey, an outcome you can live with is a good outcome. Best of luck with the FDCPA case! 

[BV80]

47 minutes ago, RockyRoad said:

I ended up signing a settlement agreement right before trial.  Just got tired of the damn thing.  Could have fought it but why.  Now litigating a Fed Lawsuit against another debt collector for FDCPA violations.  Needed time to focus on that.

As long as you're satisfied with the settlement, that works. 

What company violated the FDCPA?  Have you filed the lawsuit?

 

[RockyRoad]

A law firm in south Florida.  The lawsuit is filed

[BV80]

6 minutes ago, RockyRoad said:

A law firm in south Florida.  The lawsuit is filed

How did they violate?

[RockyRoad]

23 hours ago, BV80 said:

How did they violate?

15 USC 1692 g(b) violation.  I disputed & requested an accounting of a debt requested by a law firm within 30 days of first contact.  The firm responded with copies of statements without accounting for a great part of the amount.  They continued to collect by suing me in small claims before accounting for the amount.

I have other violations.

 

[Clydesmom]

5 minutes ago, RockyRoad said:

15 USC 1692 g(b) violation.  I disputed & requested an accounting of a debt requested by a law firm within 30 days of first contact.  The firm responded with copies of statements without accounting for a great part of the amount.

Unfortunately this is not a violation.  Nothing in the FDCPA requires they do an accounting to validate.  If they provided actual statements they more than met validation.  The threshold for meeting it is so low you can trip over it.

6 minutes ago, RockyRoad said:

They continued to collect by suing me in small claims before accounting for the amount.

Once they gave you those statements they met the threshold for validation and were free to continue collection activity including filing suit.

On 4/14/2018 at 9:58 AM, RockyRoad said:

First I sent a dispute letter to Discover May 12, 2017 when they sent me a statement after the account was behind 5 months.  I then sent a dispute letter to the firm on October 11, 2017 a week after they contacted me when they retained the defaulted account.  Thirdly I submitted a Notice of Dispute January 16, 2018 in the small claims case a month after it was filed by firm.

Discover is an original creditor and the FDCPA does not apply to them.  The other major problem is if you disagreed with the amount once charges are 6 months old they are valid.  You only have 6 months to dispute fraudulent charges.  The dispute to the law firm was validated under the FDCPA even if you did have a claim against them you would not have one against Discover as an OC.  The typical response if there was a valid FDCPA claim is to simply get another law firm and force you to continue that action separately from their claim.  Since the debt is 4 times the maximum you could get in an award if there was a violation they would simply offset the debt when they won their claim.

Last:  disputing in the small claims case is pointless and has no teeth in an FDCPA violation claim.  

 

[BV80]

3 hours ago, RockyRoad said:

15 USC 1692 g(b) violation.  I disputed & requested an accounting of a debt requested by a law firm within 30 days of first contact.  The firm responded with copies of statements without accounting for a great part of the amount.  They continued to collect by suing me in small claims before accounting for the amount.

I have other violations.

 

They validated the debt.  Here's how courts have ruled.

"No provision of the FDCPA has been found which would require a debt collector independently to investigate the merit of the debt, except to obtain verification, or to investigate the accounting principles of the creditor, or to keep detailed files." Lima v. Bank of America, N.A.,  249 F.Supp.3d 1315 (S.D. Florida, 2017)(quoting Azar v. Hayter, 874 F.Supp. 1314, 1317 (N.D. Florida), affirmed, 66 F.3d 342 (11th Circuit Court of Appeals, 1995)).

[V]erification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt. Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir. 1999).

This provision is not intended to give a debtor a detailed accounting of debt to be collected. Maynard v. Cannon, 401 F. App’x 389, 396 (10th Cir. 2010).

The Eighth Circuit Court of Appeals confirms that the verification requirement is satisfied where the debtor "could sufficiently dispute the payment obligation." See Dunham v. Portfolio Recovery Assocs., LLC, 663 F.3d 997, 1004 (8th Cir.2011).

Read the following which contains more information and court rulings.

https://www.creditinfocenter.com/community/topic/328187-fdcpa-debt-validation-myths/

1.  What other violations do you believe they committed?   

2.  Is the plaintiff in the lawsuit a JDB or an original creditor (credit card bank)?

 

[RockyRoad]

On 4/20/2018 at 1:38 PM, BV80 said:

They validated the debt.  Here's how courts have ruled.

"No provision of the FDCPA has been found which would require a debt collector independently to investigate the merit of the debt, except to obtain verification, or to investigate the accounting principles of the creditor, or to keep detailed files." Lima v. Bank of America, N.A.,  249 F.Supp.3d 1315 (S.D. Florida, 2017)(quoting Azar v. Hayter, 874 F.Supp. 1314, 1317 (N.D. Florida), affirmed, 66 F.3d 342 (11th Circuit Court of Appeals, 1995)).

[V]erification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt. Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir. 1999).

This provision is not intended to give a debtor a detailed accounting of debt to be collected. Maynard v. Cannon, 401 F. App’x 389, 396 (10th Cir. 2010).

The Eighth Circuit Court of Appeals confirms that the verification requirement is satisfied where the debtor "could sufficiently dispute the payment obligation." See Dunham v. Portfolio Recovery Assocs., LLC, 663 F.3d 997, 1004 (8th Cir.2011).

Read the following which contains more information and court rulings.

https://www.creditinfocenter.com/community/topic/328187-fdcpa-debt-validation-myths/

1.  What other violations do you believe they committed?   

2.  Is the plaintiff in the lawsuit a JDB or an original creditor (credit card bank)?

 

15 USC 1692 e(2) for collecting a false amount in there small claims suit.  They have not accounted for part of the balance they sued upon.

15 USC 1692 f(1) violation for suing for amount without providing the agreement that they sued upon.  They did not have an agreement in their small claims suit against me.

This is a law firm claiming to be representing an original creditor & says they haven’t purchased the debt.

[BV80]

42 minutes ago, RockyRoad said:

15 USC 1692 e(2) for collecting a false amount in there small claims suit.  They have not accounted for part of the balance they sued upon.

Unless your state laws or court rules require it, they don't have to account for the balance when they file suit.   If you want them to account for the balance, you have to request discovery.

42 minutes ago, RockyRoad said:

15 USC 1692 f(1) violation for suing for amount without providing the agreement that they sued upon.  They did not have an agreement in their small claims suit against me.

Same as the previous answer.   Even if they don't provide it when they file suit, it's not an FDCPA violation.

If you filed suit in federal court, I hope you didn't include the original creditor as a defendant.  The FDCPA does not apply to OCs.

When did you make your last payment?

[RockyRoad]

28 minutes ago, BV80 said:

Unless your state laws or court rules require it, they don't have to account for the balance when they file suit.   If you want them to account for the balance, you have to request discovery.

Same as the previous answer.   Even if they don't provide it when they file suit, it's not an FDCPA violation.

If you filed suit in federal court, I hope you didn't include the original creditor as a defendant.  The FDCPA does not apply to OCs.

When did you make your last payment?

No I didn’t claim the OC under the FDCPA but I did claim the OC under the FCCPA (Florida) which does apply to original creditors.  I don’t know when the last payment was.  The statements sent to me say Nov 2016.

[BV80]

13 minutes ago, RockyRoad said:

No I didn’t claim the OC under the FDCPA but I did claim the OC under the FCCPA (Florida) which does apply to original creditors.  I don’t know when the last payment was.  The statements sent to me say Nov 2016.

Just because they didn't provide a complete accounting doesn't mean the amount claimed is false.   If they provided the last credit card statement that shows the balance for which you're being sued, you're going to have to prove it's false.

Here's what a FL Court of Appeals has ruled.

An itemized statement of underlying charges is not required to establish a claim for an account stated.  Farley v. Chase Bank, U.S.A., N.A., 37 So.3d 936, 937 (Fla. Ct. App. 2010).

[BV80]

3 hours ago, RockyRoad said:

No I didn’t claim the OC under the FDCPA but I did claim the OC under the FCCPA (Florida) which does apply to original creditors.

I should have added this to my last post.   The FCCPA is a state statute.  Unless you have federal claims against the OC, it was improper to file the FCCPA state claim in federal court.

[BV80]

@RockyRoad

It's common for consumer defendants to jump in head first without researching the proper way to answer a complaint, what constitutes an FDCPA violation, etc.

For instance, when sued by an OC, some defendants mistakenly assume the plaintiff is actually the law firm and not the OC.  They might request proof that the OC sold or assigned the debt to the law firm.  In fact, there are sites on the internet that tell people that OCs rarely ever sue.  It's just not true.

Law firms/attorneys merely represent their clients in court. The plaintiff has not assigned the debt to the law firm.  If a consumer were to sue someone, he could hire an attorney to represent him and do all the work..  The consumer would still be the plaintiff.

I'm not implying that you made that mistake.  I just cite it as an example of how consumers may make assumptions and mistakes without doing the proper research.

Why don't you give us some information on the current lawsuit against you, and maybe we can help.

[RockyRoad]

1 hour ago, BV80 said:

@RockyRoad

It's common for consumer defendants to jump in head first without researching the proper way to answer a complaint, what constitutes an FDCPA violation, etc.

For instance, when sued by an OC, some defendants mistakenly assume the plaintiff is actually the law firm and not the OC.  They might request proof that the OC sold or assigned the debt to the law firm.  In fact, there are sites on the internet that tell people that OCs rarely ever sue.  It's just not true.

Law firms/attorneys merely represent their clients in court. The plaintiff has not assigned the debt to the law firm.  If a consumer were to sue someone, he could hire an attorney to represent him and do all the work..  The consumer would still be the plaintiff.

I'm not implying that you made that mistake.  I just cite it as an example of how consumers may make assumptions and mistakes without doing the proper research.

Why don't you give us some information on the current lawsuit against you, and maybe we can help.

The current lawsuit was by an OC through a law firm that stated I defaulted on the credit card.  The law firm said they did not purchase the debt.  I thought they purchased the debt, so I requested validation to which they responded with statements.  I then sued them in the fed for failure to validate and collecting a wrong amount.  They have now put in a motion to dismiss for failure to state a claim.  I based my decision on the Haddad v Alexander case where the won in appeals on failure to validate.