Arbitration advice--Midland

[4kitties]

Long time lurker, first time poster.  I need some advice regarding arbitration with Midland over a Cred1 acct (about $850).  I filed AAA arbitration back in Feb.  Midland's and/or their atty initially opposed the assigned arbitration judge while I approved of the judge.  Then, a few days later, Midland atty sent everyone a request for the arbitration administrator to dismiss this complaint.  I answered back that I prefer an abitration judge to decide this, not the admin.  About a week later, get another email from administrator that says the dismissal has been denied, and a few minutes later, another email to schedule preliminary hearing (due April 24th).  I put some times down, and so did the assigned judge.  Late on April 24th, the atty put down 2 available days.  Yesterday, get an email that the preliminary hearing (via phone) is set for May 4th, at which point it will be discussed where to hold formal hearing (I requested local city in my initial complaint).

I was HOPING that Midland wouldn't have gone this far as they were to pay my $200 filing fee, plus any fees they were required to pay.  Does this scheduled phone hearing mean they actually paid the required fees?  I know in one of the earlier emails from the administrator to their atty that fees needed to be paid (that was right after the atty filed reply informing administrator that they are atty for Midland so I don't know if it was ACTUALLY paid).   I don't know where to go from here.  Any help anyone can offer would be GREATLY appreciated.

[Harry Seaward]

Call the AAA 800 number and ask. 

Sidebar, why did you oppose the Midland's request to dismiss the case? 

[4kitties]

Harry, thanks for the reply.  Midlands request to dismiss was that they deny any liability towards Petitioner, and

respectfully prays that this Arbitration dismiss with prejudice Petitioner’s case, v. 1 claims at Petitioner’s costs; and for such other and further relief as this Arbitration may deem just
and proper in the premises.

I felt that if they dismissed it, then that would open me up to lawsuit.  Maybe I was mistaken??

 

[Harry Seaward]

Did they ask for a dismissal of their own claims with or without prejudice?

(Sounds like you filed claims against them?)

[4kitties]

They wanted to dismiss with prejudice.  And yes, I filed claim against Midland.  I hope I didn't screw myself in any way.

[Harry Seaward]

If their case were to be dismissed with prejudice, they cannot sue you later.  They probably wouldn't bother, knowing you theoretically would bring them right back to arbitration, but even if they did try, you would be able to raise res judicata and get the case kicked in court with a simple motion to dismiss. 

I would reconsider their dismissal offer assuming you don't have some pretty egregious clams against them. 

[4kitties]

Since a preliminary hearing is set up via phone, does that mean they have already paid a fee?  If their effort is over a collection of $850, wouldn't they email me privately to drop it, and maybe 'clear' out this debt?  I mean, if they (Midland) have to pay $XXXX in atty fees, plus my $200 filing fee, plus whatever AAA charges them, even if they 'won', they would still be in the negative, right?

 

[Harry Seaward]

I'd have to look over the credit one agreement and AAA rules to know for sure, but unless the agreement says you aren't responsible for any fees, the arbitrator could tack them on to whatever judgment they get at the end.

I don't know for sure what AAA's policy is re: fees before a telephone hearing on a motion to dismiss. That's why I suggested you call them to see if PRA has paid or not. In a case where a party with claims against the other has filed a motion to dismiss, it could very well be AAA's policy to have a hearing on that very specific motion via telephone without requiring fees to be paid.

[4kitties]

From Cred1 agreement: 

Each party will bear the expense of that party’s attorneys, experts, and witnesses, and other expenses, regardless of which party prevails, except that (a) the arbitrator shall apply any applicable law in determining whether a party should recover any or all expenses from another party, (b) the arbitrator shall require you to pay us collection costs and attorneys’ fees, including our in-
house attorneys’ costs, that we incur as a result of your default, as set forth in the Card Agreement and (c) the arbitrator may assess attorneys’ fees and costs against a party upon a showing by the other party that the first party’s claim(s) or conduct was frivolous or pursued in bad faith or solely for purpose of multiplying the arbitration proceedings unreasonably or vexatiously.

On the issue of motion to dismiss, AAA denied them and moved forward with the preliminary hearing.  Nothing was noted in the administrator's email about a hearing for dismissal (if that makes sense).

So, would it be 'wise' to email Midlands' atty and offer to drop my case for $300 (or some other settlement offer)??

[Harry Seaward]

Ok so the agreement says you aren't responsible for any of their arb fees, but your default means you will have to pay their legal fees if you "lose". Dismissal is not losing so basically they proposed a mutual walk away with 'costs as borne' and a guarantee they won't sue you in the future. 

You can certainly throw a number at them, but I wouldn't be greedy or obstinate about it. I would use it more as a way to save face so you don't have to give them an "oops, my bad" when you come back to accept their offer. Again, assuming you don't have iron clad violations. 

[4kitties]

Would it be best to see if they participate in the preliminary hearing first, then contact them 'unofficially ' about a settlement?

[Harry Seaward]

Yeah, that wouldn't hurt. Did they send you a stipulation to dismiss first, or was it just a MTD straight to the arbitrator? 

[4kitties]

Straight to arb admin (I was included in the copy).

I've been reading this & sounds like I 'should' stand my ground so the fees keep adding up that they would have to pay.  An I wrong in interpreting that?  

 

[Harry Seaward]

At a certain point, the fees start to go up, but the preliminary hearing isn't with the official arbitrator it's with the 'appointment setter', if you will. If the parties can't agree to a settlement, the primary hearing person goes ahead and sets a tentative schedule for the arb proceedings. 

The problem with dragging this out is you have an agreement that says you can be liable for all of their fees if you aren't acting in good faith and "multiply the arbitration proceedings unreasonably or vexatiously". If PRA goes to the arbitrator and says they've offered a mutual walk away from jump street, but you rejected it, I would find that unreasonable and vexatious if I we're the arbitrator. 

[4kitties]

Actually, this preliminary hearing via phone is with a arb judge.  Hopefully you are right and an agreement can be reached during this initial call that benefits both parties...me in that I walk away with little or no $$ to pay & it gets wiped from my credit reports, & them not having to pay a lot of fees.  Wishful thinking but that's all that I have going for me.  Sigh 

[Harry Seaward]

Dismissal with prejudice should be enough to get it wiped from your credit reports. 

[4kitties]

Had the initial phone hearing this AM.  I wasn't able to check my personal email prior to the phone call, and apparently the 'initial' Midland atty was busy, and they sent an email to all parties about 15 minutes prior to the meeting; I was the first on the call, then the arb Judge.  While waiting for atty, the Judge asked where I was from (just some small talk) and also asked if I got the email regarding the atty change.  I said I wasn't able to check it, then she (atty) came on the line.

Judge just wanted a very brief synopsis on each side and not to go into too much detail at this stage.  He asked me about the debt, and I said I didn't know the true amount, but wasn't what they are claiming.  The atty piped in and said she has all the statements, proof of letters, etc.  Judge reeled her in (again, he wanted a brief statement).  After about 15 minutes, he said that he will have the AAA admin create an order for their atty to email the whole group all documents, statements, etc by Monday, 5pm so we both can look it over, and then a new phone hearing will be set (we are to put in our availability by Monday at 5pm, also).  He told their atty that in the next call, he wanted her to have 'full decision authority' on any settlement that is agreed to without the atty having to make calls for that settlement.  If we can't come up with something, he (judge) said we will have an in-person hearing but he didn't want to go that route if at all possible but will if we can't come up with a solution.  Seems like this judge is really fair and not 'judging' me (no pun intended) on this, all the while holding a tight leash on that atty.

Anyway, was hoping it wouldn't have come to this.  Atty said debt is $841, so I wonder how much Midland has had to pay for this initial meeting (PLUS my $200 filing fee they had to pay), and for the next phone hearing?  If it is more than $841, seems like they would just walk away.

Thoughts on this, anyone?

 

[Harry Seaward]

Did you ask AAA if Midland has paid their portion of the fees?

[4kitties]

No.  Would it be nosey if I emailed the AAA admin?  Would he give me that info?  I thought they would have to pay something as I'm sure the judge isn't doing this for free?

[Harry Seaward]

It's not nosey.  It's your case.

[Goody_Ouchless]

On 4/27/2018 at 6:31 PM, 4kitties said:

Each party will bear the expense of that party’s attorneys, experts, and witnesses, and other expenses, regardless of which party prevails, except that (a) the arbitrator shall apply any applicable law in determining whether a party should recover any or all expenses from another party, (b) the arbitrator shall require you to pay us collection costs and attorneys’ fees, including our in-
house attorneys’ costs, that we incur as a result of your default, as set forth in the Card Agreement and (c) the arbitrator may assess attorneys’ fees and costs against a party upon a showing by the other party that the first party’s claim(s) or conduct was frivolous or pursued in bad faith or solely for purpose of multiplying the arbitration proceedings unreasonably or vexatiously.

Why did you initiate arbitration? Was it based on what you read here about electing arbitration before a lawsuit in order to hope for an FDCPA violation, or was your claim in arbitration something totally different than a defaulted credit card? If this was done in hopes of avoiding a collections lawsuit then the verbiage of this contract makes it look like you were given bad advice.