MysticRhythm

Sued by Midland Funding in Texas

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Hello all, I'm in a bit of a panic as I received a letter today from a law firm (Heston Law Firm PLLC) notifying me a lawsuit has been filed against me (they are soliciting me to retain them to handle the matter).  I know not to respond to the solicitation as they are only looking for my business.  However I have never dealt with anything of the nature before and am unsure how to proceed.  I have read through these forums somewhat but I feel like I'm over my head already with all the legalese, and we do not have the money at this time to retain a lawyer as I have health issues which are preventing me from working at this time and we are already struggling to makes ends meet on my husband's income alone.  Can anyone please point me in the right direction on how to proceed at this point?  Do I just wait to be served at this point?  Thanks so much.

 

1. Who is the named plaintiff in the suit?

Midland Funding LLC

2. What is the name of the law firm handling the suit? (should be listed at the top of the complaint.)

No idea, haven't been served yet.

3. How much are you being sued for?

$4,xxx

4. Who is the original creditor? (if not the Plaintiff)

Synchrony Bank

5. How do you know you are being sued? (You were served, right?)

I received a mail solicitation from a lawyer advising me that a lawsuit has been filed against me.  I verified this was true via a record search on my county court's website.

6. How were you served? (Mail, In person, Notice on door)

Have not been served yet.

7. Was the service legal as required by your state?

N/A

8. What was your correspondence (if any) with the people suing you before you think you were being sued?

Likely phone calls, but I don't answer calls from unknown numbers so I've never actually spoken with anyone.

9. What state and county do you live in?

Texas, Guadalupe

10. When is the last time you paid on this account? (looking to establish if you are outside of the statute of limitations)

Unsure, sometime in 2016 maybe.

11. When did you open the account (looking to establish what card agreement may be applicable)?

Unsure, probably 2015.

12. What is the SOL on the debt?

4 years.

13. What is the status of your case? Suit served? Motions filed? You can find this by a) calling the court or B) looking it up online (many states have this information posted - when you find the online court site, search by case number or your name).

07/16/2018     Original Petition (OCA)
07/16/2018     Citation
07/17/2018     CITATION ASSIGNED

14. Have you disputed the debt with the credit bureaus (both the original creditor and the collection agency?)

Yes, via Credit Karma's dispute tool.

15. Did you request debt validation before the suit was filed? Note: if you haven't sent a debt validation request before being sued, it likely won't help create FDCPA violations, but disputing after being sued could be useful to show the court that you dispute the debt ('account stated' vs. 'breach of contract').

No.

16. How long do you have to respond to the suit? (This should be in your paperwork). If you don't respond to the lawsuit notice you will lose automatically. In 99% of the cases, they will require you to answer the summons, and each point they are claiming. We need to know what the "charges" are. Please post what they are claiming. Did you receive an interrogatory (questionnaire) regarding the lawsuit?

Unknown; have not been served yet.

17. What evidence did they send with the summons? An affidavit? Statements from the OC? Contract? List anything else they attached as exhibits.

N/A

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The bad news is you are being sued and while your health situation is sad, it is not a defense to defaulting on a debt unfortunately.  The good news:  Texas does not allow wage garnishment or seizure of homes/property like cars for consumer debts.  The other good news is Synchrony has the BEST arbitration agreement in their card agreements.  Once you are served you can answer the suit using an affirmative defense of wanting private contractual arbitration in JAMS.  Then you file a MTC arbitration in the matter.  Midland usually folds in response to a MTC.

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Thanks so much Clydesmom! I appreciate it. I have another question - since I have not actually been served yet can I send a debt validation/dispute letter stating I'm electing arbitration via JAMS now, or is it too late for that? Thanks! 

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1 hour ago, MysticRhythm said:

I have another question - since I have not actually been served yet can I send a debt validation/dispute letter stating I'm electing arbitration via JAMS now, or is it too late for that?

WAY too late for that.  Electing arbitration means nothing since they have already filed the suit.  Actually getting a MTC approved will force them to it.

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I was finally served for this suit, almost a full year later!

I'm overwhelmed by all the info here and wading through it all is making it even moreso to me. I know that I now need to file an answer to the court by filing an affirmative defense saying I want to privately arbitrate through JAMS. I can't seem to locate a template or example for this letter for Texas. Any kind souls out there who can point me in the right direction?

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9 hours ago, MysticRhythm said:

I was finally served for this suit, almost a full year later!

I'm overwhelmed by all the info here and wading through it all is making it even moreso to me. I know that I now need to file an answer to the court by filing an affirmative defense saying I want to privately arbitrate through JAMS. I can't seem to locate a template or example for this letter for Texas. Any kind souls out there who can point me in the right direction?

You were gifted a full year between learning of a suit filed against you and them actually serving you, yet you didn't use any of that time to learn what to do and how to take care of this situation?  That's not a good start.  Now you have to cram and learn it all on the fly.

Start with the link in my signature.  File an answer that denies all allegations and lists the affirmative defense of "Lack of subject matter jurisdiction due to a private arbitration clause".  This must be done in the time allowed.  After that is done, work on your MTC.

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Actually I did do research, a year ago. In that time I've also had a severe downturn with my heath issues, two deaths in the family, and a couple other family issues so yes, it got put on the back burner due to other far more important things taking precedence.

Also, I know exactly what I need to do. I simply asked for help locating a template for the answer I need to file with the court since I haven't been able to locate one for Texas. 

 

Thanks for your advice. 

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Ok, I filed my answer and my Motion to Compel a while back, and have just now recieved a response from the litigation lawyer. They are asking the court to deny my Motion to Compel by saying I have "waived my right to Arbitrate". 

Can anyone please advise? 

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7 minutes ago, MysticRhythm said:

They are asking the court to deny my Motion to Compel by saying I have "waived my right to Arbitrate". 

Can anyone please advise? 

Did you use arbitration as an affirmative defense in your answer?

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Yes, my Affirmative Defense in my Answer was "Lack of Subject Matter Jurisdiction - the underlying contract contains a private arbitration clause which the Defendant has elected to exercise". I attached the credit card agreement to my answer as well. 

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I see a year has passed, but has anything happened, other than this just sitting around waiting for court? I don't see that as rising to level of "substantial litigation."

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1 minute ago, Goody_Ouchless said:

I see a year has passed, but has anything happened, other than this just sitting around waiting for court? I don't see that as rising to level of "substantial litigation."

No, I've spent that year waiting to be served so I could file my answer and MTC. It took them forever to serve me, and used alternate service to do so, even though I'm a stay at home mom who's always home and I never had anyone come to my door nor any notice left until last month. 

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Typical desperation play - note the definition of significant litigation from the case they cite:

"The Plaintiffs vigorously opposed (indeed spurned) arbitration in their pleadings and in open court;  then they requested hundreds of items of merits-based information and conducted months of discovery under the rules of court;  finally only four days before the trial setting they changed their minds and decided they would prefer to arbitrate after all.   Having gotten what they wanted from the litigation process, they could not switch to arbitration at the last minute like this."

I would ask plaintiff to provide the "hundreds of items" and "months of discovery" that the OP requested in this case...

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Interesting - we'd been seeing a slew of TX cases where they fold when faced with an answer, and here they wasted time fighting arb.

 

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I agree, I was not expecting this response at all. 

When I filed my answer with the court, I asked the clerk if we needed to set a date for my Motion to be heard, and she said no, to just wait until the hearing date that had already been set for September for it to be heard. So I guess I need to just go then and argue my case that I did not waive my right to Arbitrate, that I elected arbitration right after having been served, and that there has been no litigation to speak of like the plaintiff is arguing in their response? 

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2 minutes ago, MysticRhythm said:

So I guess I need to just go then and argue my case that I did not waive my right to Arbitrate, that I elected arbitration right after having been served, and that there has been no litigation to speak of like the plaintiff is arguing in their response? 

I would file a response to their opposition stating that answering the suit invoking the contractual right to arbitration does not meet the definition of "substantial litigation" (find case law to support this) and also that the Plaintiff has not been unfairly prejudiced by the request to arbitrate since they waited an entire year to perfect service.

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The case they cited gives a pretty good description of what the court considered to be substantial litigation. I believe the case also reaffirms the court's preference for arbitration, but, in that case, the defendant was abusing the option.

 

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@MysticRhythm

ARBITRATION-RELATED LITIGATION IN TEXAS UPDATED AUGUST 2018

Waiver is addressed on pages 13-15. Some excerpts with footnote citations:

"A party waives arbitration by substantially invoking the judicial process to the other party’s detriment.181 To determine whether a party has waived its right to arbitrate, courts look to the totality of the circumstances, including the following factors: (1) whether the party asserting the right to arbitrate was plaintiff or defendant in the lawsuit, (2) how long the party waited before seeking arbitration, (3) the reasons for any delay in seeking to arbitrate, (4) how much discovery and other pretrial activity the party seeking to arbitrate conducted before seeking arbitration, (5) whether the party seeking to arbitrate requested the court to dispose of claims on the merits, (6) whether the party seeking to arbitrate asserted affirmative claims for relief in court, (7) the amount of time and expense the parties have expended in litigation, and (8) whether the discovery conducted would be unavailable or useful in arbitration.182 No one factor is dispositive."

182 RSL Funding LLC v. Pippins, 499 S.W.3d 423, 430 (Tex. 2016); Perry Homes, 258 S.W.3d at 591-92.

"There is a strong presumption against waiver.183" 

183 Perry Homes, 258 S.W.3d at 590.

"Mere participation in litigation is not enough to establish waiver.184"

184 In re Vesta Ins. Group, Inc., 192 S.W.3d 759, 763 (Tex. 2006) (per curiam); see also In re D. Wilson Constr. Co., 196 S.W.3d 774, 783 (Tex. 2006); In re Bank One, N.A., 216 S.W.3d at 827.

"A party attempting to establish waiver must also show that it has been prejudiced. 196 Prejudice in this context is “the inherent unfairness in terms of delay, expense, or damage to a party’s legal position that occurs when the party’s opponent forces it to litigate an issue and later seeks to arbitrate that same issue.”197 For example, the court found prejudice in Perry Homes where one party’s delayed arbitration request resulted in extensive discovery and delayed disposition, while at the same time limiting its opponents’ right to appellate review.198 A party asserting waiver should offer proof of how it would be prejudiced, rather than relying on general allegations of delay and expense.199"

196 RSL Funding, 499 S.W.3d at 430.

197 Perry Homes, 258 S.W.3d. at 597.

198 Id.; see also Raju, 709 Fed. App’x at 319 (affirming finding of prejudice where defendant was “required to answer the complaint, to file a counterclaim, to consult with two law firms, and to gear her legal strategy to court proceedings instead of arbitration.”).

199 See IBS Asset Liquidations LLC v. Servicios Multiples Del Norte SA de CV, 419 S.W.3d 573, 575-76 (Tex. App.— San Antonio 2013, pet. denied).

 

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Thanks very much all for your input, I appreciate the help immensely! 

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