Being sued in GA by Cavalry SPV I LLC

[NotALawyer86]

Hi everyone!

First-timer here. So, first of all, thank you all in advance for any feedback/advice! It seems that Cavalry has sued more than enough people. I haven’t been served yet, but know they’ve filed a claim. Claim is for a credit card debt around $8K

From what I am reading, arbitration is the best route to go for this. In the statement of claim, they listed an account statement, bill of sale, and they are saying that I am indebted to them for the debt. Citi has sold the debt to them. At this point, I’m thinking that verification is enough to support their claim to file. However, I’m seeing that they are not a fan of arbitration. Any advice on where I should start? 

I have not been served yet, but want to respond timely. 

[fisthardcheese]

Assuming they filed in Magistrate Court, then once served you will need to file an answer only.  Check your county's magistrate website for a pre-printed answer form you can fill out to make it easy.  Just a denial of all allegations will do.

The Citi Card agreement says arbitration does not apply to "small claims court".  While Magistrate is considered a small claims court, it technically is not called "small claims" in any of the rules or on the courthouse walls.  I would just be prepared to make this potential argument. It may or may not work, but you can appeal a magistrate case for any reason, so if it doesn't there is a second chance.  After your answer is filed a court date will be set.  I would prepare a Motion to Compel Arbitration to bring to the court date with you.  Bring 3 copies of everything.  The attorney will meet with you in the hall before going in front of the judge. This is the time I would hand them the MTC and let them know you will be asking the judge to order this case to JAMS arbitration per the card agreement contract.  Prepare for the attorney to lie, throw a fit and attempt to intimidate you.  If you stand your ground, however, and just insist on arbitration, you should do well.  You will likely get a new court date and have to go back to prove you started the arbitration process, but eventually Cavalry should settle with you to drop the case.

[Clydesmom]

The most important piece of information is what law firm is representing Cavalry?  Because regardless of whether you believe Magistrate Court is small claims there is one firm that has now become skilled at defeating a MTC arbitration because they lost at least 4 of them thanks to this forum.  If Cavalry has hired Cooling and Winter you will have a much more difficult battle getting them to back down.

[NotALawyer86]

Thank you @fisthardcheese and @Clydesmom for your replies. The card agreement says,

“• Individual Claims filed in a small claims court are not subject to arbitration, as long as the matter stays in small claims court.”

Are you saying this means that it is not allowed in small claims? 

 

[NotALawyer86]

The firm @Clydesmom is Rosen, Varchetti & Oliver.

[Clydesmom]

1 hour ago, NotALawyer86 said:

The firm @Clydesmom is Rosen, Varchetti & Oliver.

That is a law firm we have not seen on the forums. Definitely go for the MTC arbitration.

[NotALawyer86]

@Clydesmom Oh! I don’t know whether to be nervous or happy about that. Lol! Do you think the MTC will be denied, because of the language in the arb clause? 

Technically, in GA, the court is called “Magistrate Court”. I just don’t know that “it does not apply in small claims court” means the same as “individual claims are not subject to small claims court”. I thought I’d seen where arb has been used in small claims courts by defendants, specifically relating to Citi arb agreements. I could be wrong. 

[Clydesmom]

1 hour ago, NotALawyer86 said:

I don’t know whether to be nervous or happy about that. Lol! Do you think the MTC will be denied, because of the language in the arb clause? 

It is possible it will.  There is no way to predict how the Plaintiff's counsel will respond or how the Magistrate will interpret that clause.

1 hour ago, NotALawyer86 said:

Technically, in GA, the court is called “Magistrate Court”. I just don’t know that “it does not apply in small claims court” means the same as “individual claims are not subject to small claims court”. I thought I’d seen where arb has been used in small claims courts by defendants, specifically relating to Citi arb agreements. I could be wrong.

You are not wrong but it varies from state to state.  Much depends on whether the other side objects. Sometimes they do not.  You have NOTHING to lose by trying but need to be prepared they argue that Magistrate Court IS "small claims"in Georgia and therefore the carve out applies.  Have a response to that argument ready.  There are those on theses forums that argue because a jurisdiction does not specifically use the term "small claims" in the description of the court instead using Justice Court or Magistrate that the carve out doesn't apply or that the clause is vague.  However, there are plent of Judges who disagreed.  The bottom line is YOU need to be ready to argue your position if it comes to that.

[fisthardcheese]

Just remember to go in demanding arbitration and don't even bring up the "small claim" business.  BUT, if THEY bring it up just have a response ready, such as "While Magistrate Court hears cases under a $15,000 claim limit, there are no actual small claims courts in GA and therefore this language in the contract does not apply to Magistrate Court".  Now, whether the judge will accept it or not is just a coin toss, honestly.

If the judge denies arbitration based on the small claims language (or any other reason), you have the right to appeal.  Any appeal from Magistrate Court is a "de novo" appeal, which means the entire case starts over in superior court and nothing from the Magistrate Case will be brought up.  After appealing to superior court, the "small claims" language in the card agreement would be irrelevant and you can then file a proper MTC in that court.

Since you have not yet been served and have the time, this is how I would prepare for this type of case:

1. Prepare an answer to file once served.

2. Prepare an MTC to take with you to court along with copies of the card agreement (3 copies of everything)

3. Prepare an argument for "small claims" and hope to not have to use it

4.  Prepare for the possibility of filing an appeal

[NotALawyer86]

3 hours ago, fisthardcheese said:

Just remember to go in demanding arbitration and don't even bring up the "small claim" business.  BUT, if THEY bring it up just have a response ready, such as "While Magistrate Court hears cases under a $15,000 claim limit, there are no actual small claims courts in GA and therefore this language in the contract does not apply to Magistrate Court".  Now, whether the judge will accept it or not is just a coin toss, honestly.

If the judge denies arbitration based on the small claims language (or any other reason), you have the right to appeal.  Any appeal from Magistrate Court is a "de novo" appeal, which means the entire case starts over in superior court and nothing from the Magistrate Case will be brought up.  After appealing to superior court, the "small claims" language in the card agreement would be irrelevant and you can then file a proper MTC in that court.

Since you have not yet been served and have the time, this is how I would prepare for this type of case:

1. Prepare an answer to file once served.

2. Prepare an MTC to take with you to court along with copies of the card agreement (3 copies of everything)

3. Prepare an argument for "small claims" and hope to not have to use it

4.  Prepare for the possibility of filing an appeal

@fisthardcheese you are a BLESSING!! This can really stress someone completely out, but what you’ve shared in this thread and others is making a difference in people’s lives! 

I am going to follow those steps. I know that you’ve shared answer templates, etc. thank you! 

In the event that the case has to be appealed, would I need to file that immediately? 

[NotALawyer86]

13 hours ago, Clydesmom said:

It is possible it will.  There is no way to predict how the Plaintiff's counsel will respond or how the Magistrate will interpret that clause.

You are not wrong but it varies from state to state.  Much depends on whether the other side objects. Sometimes they do not.  You have NOTHING to lose by trying but need to be prepared they argue that Magistrate Court IS "small claims"in Georgia and therefore the carve out applies.  Have a response to that argument ready.  There are those on theses forums that argue because a jurisdiction does not specifically use the term "small claims" in the description of the court instead using Justice Court or Magistrate that the carve out doesn't apply or that the clause is vague.  However, there are plent of Judges who disagreed.  The bottom line is YOU need to be ready to argue your position if it comes to that.

@Clydesmomthank you! Would you answer file an answer first, and at the hearing file the MTC arb? 

I saw someone’s case that was denied because they didn’t actually file the MTC, they rather stated it in writing and handed it to the appropriate parties. I want to be sure I file! 

 

[fisthardcheese]

4 hours ago, NotALawyer86 said:

@fisthardcheese you are a BLESSING!! This can really stress someone completely out, but what you’ve shared in this thread and others is making a difference in people’s lives! 

I am going to follow those steps. I know that you’ve shared answer templates, etc. thank you! 

In the event that the case has to be appealed, would I need to file that immediately? 

I don't recall the Magistrate Rule on appeal, but your time is limited. It may be 20 days.  BUT, if you are prepared, you can go directly to the clerk's office from the court room and file the appeal right then if needed.  Another thing I should have mentioned above is to download a copy of the Uniform Rules for Magistrate Court.  This will be your guide on how to file the appeal.  Most of the rules are pretty relaxed in Magistrate, so even if you get something wrong, just ask the clerk or judge - and honestly the judges dont even have to follow the rules anyway but they still give you a basic guide.

[fisthardcheese]

4 hours ago, NotALawyer86 said:

and at the hearing file the MTC arb? 

You never have to "file" the MTC Arb.  Magistrate Courts will not look at or hear a motion prior to trial.  Just bring the motion with you and tell the judge you wish to file a MTC and move your case to arbitration according to the contract.

[NotALawyer86]

1 minute ago, fisthardcheese said:

You never have to "file" the MTC Arb.  Magistrate Courts will not look at or hear a motion prior to trial.  Just bring the motion with you and tell the judge you wish to file a MTC and move your case to arbitration according to the contract.

Ok, thanks. There will be applicable motion fees, correct? Just want to be fully prepared. 

[fisthardcheese]

On 9/26/2018 at 1:57 PM, NotALawyer86 said:

Ok, thanks. There will be applicable motion fees, correct? Just want to be fully prepared. 

There are no fees to defend yourself in Magistrate Court (as should be the case everywhere, but I digress). It won't cost you anything to file the answer and motions.

[NotALawyer86]

1 hour ago, fisthardcheese said:

There are no fees to defend yourself in Magistrate Court (as should be the case everywhere, but I digress). It won't cost you anything to file the answer and motions.

I agree! Ok, would you mind pointing me in the direction of your thread where you share sample answers, motions, etc.? 

[NotALawyer86]

On 9/27/2018 at 6:25 PM, NotALawyer86 said:

I agree! Ok, would you mind pointing me in the direction of your thread where you share sample answers, motions, etc.? 

@fisthardcheese so I spoke with another attorney, and he said he's never seen a case that's been forced into arbitration from Magistrate court in GA. He felt like going this route would be rather expensive on my behalf. I shared that some debt collectors are simply not fans of arb and will drop cases many times. He seems to believe that if I filed an MTC, Cavalry will follow me into arb and win the full amount of the judgement they're seeking. 

What are your thoughts? @Clydesmom your thoughts? 

[BV80]

2 minutes ago, NotALawyer86 said:

@fisthardcheese so I spoke with another attorney, and he said he's never seen a case that's been forced into arbitration from Magistrate court in GA. He felt like going this route would be rather expensive on my behalf. I shared that some debt collectors are simply not fans of arb and will drop cases many times. He seems to believe that if I filed an MTC, Cavalry will follow me into arb and win the full amount of the judgement they're seeking. 

What are your thoughts? @Clydesmom your thoughts? 

I cannot recall a case on this site in which Cavalry arbitrated.  In most cases, JDBs want the easiest and cheapest route possible. 

[NotALawyer86]

2 minutes ago, BV80 said:

I cannot recall a case on this site in which Cavalry arbitrated.  In most cases, JDBs want the easiest and cheapest route possible. 

I have not seen a case on this site where they have arbitrated either, but I sure don't want to be the first one they try. His advice was to settle outside of the courts. The debt is $9400, his fee is flat $500 w/o trial and $750 with trial. I know we say fight it, but the risk of paying $9400 because I lose in an arb case, is not attractive. I have no idea what to offer in a settlement. 

[Goody_Ouchless]

14 minutes ago, NotALawyer86 said:

He seems to believe that if I filed an MTC, Cavalry will follow me into arb and win the full amount of the judgement they're seeking. 

It's been a while since anyone asked a lawyer about arbitration, but the consensus used to be that lawyers would say stuff like that (1) because they don't know what they're talking about, or (2) they know they won't make any money since you can do this yourself.

[Goody_Ouchless]

2 minutes ago, NotALawyer86 said:

I have not seen a case on this site where they have arbitrated either, but I sure don't want to be the first one they try.

I fully understand - I was always "skeptical" (read: "afraid"), but the evidence speaks for itself. We have seen them fold for debts larger than yours. You can always see what they'll take to settle, but it's also been our experience that a debt buyer with the "goods" isn't going to take pennies on the dollar. They'd much rather have high dollar judgement that will grow like crazy with interest. 

[NotALawyer86]

1 minute ago, Goody_Ouchless said:

It's been a while since anyone asked a lawyer about arbitration, but the consensus used to be that lawyers would say stuff like that (1) because they don't know what they're talking about, or (2) they know they won't make any money since you can do this yourself.

Oh believe me, I thought the same thing. And then I thought about a $500 flat fee to retain an experienced lawyer to fight a debt collection suit. I just was not convinced that he was looking to "make money" ( not very much at least) off of my case. 

[NotALawyer86]

2 minutes ago, Goody_Ouchless said:

I fully understand - I was always "skeptical" (read: "afraid"), but the evidence speaks for itself. We have seen them fold for debts larger than yours. You can always see what they'll take to settle, but it's also been our experience that a debt buyer with the "goods" isn't going to take pennies on the dollar. They'd much rather have high dollar judgement that will grow like crazy with interest. 

Yes, that's true. I looked at the cases they were involved in local to me, and none were moved to arb. They either won MSJ, default judgement, dismissed without prejudice, and dismissed for parties not showing up to mediation first ordered by the court. 

[Clydesmom]

18 minutes ago, NotALawyer86 said:

He seems to believe that if I filed an MTC, Cavalry will follow me into arb and win the full amount of the judgement they're seeking. 

What are your thoughts? @Clydesmom your thoughts? 

The attorney is wrong and assuming you actually want to arbitrate.  The reality is a bad case in court is equally bad in arbitration.  The goal is NOT to actually arbitrate but make it so expensive that Cavalry decides it isn't worth it to pursue.  To date we have not seen one JDB follow a consumer into arbitration.  Original creditors?  Sure.  AMEX and Discover will go full speed ahead damn the expense.  JDBs paid pennies on the dollar and are not about to throw good money after bad.

We have had plenty of cases where the contract has been upheld in GA and the MTC approved.  Some also don't get that far with the JDB folding in the hallway negotiation conference.  

Your biggest battle is the fact that CITI has a carve out for arbitration for small claims cases.  While the actual words "SMALL CLAIMS" may not be on the court documents or over the court doors that is splitting hairs in my opinion.  Anything under $15,000 in GA is in Magistrate Court which is considered small claims.  If the Plaintiff argues the clause applies and the Magistrate agrees your only option is to appeal to a higher court when you lose the case because once the MTC is denied you go to trial immediately on the spot.  There is no delay.  

You could always have a plan to settle during the hallway conference if the opposing counsel seems willing to fight against arbitration.  

I would be less concerned about actually arbitrating and the best way how to manipulate this to the outcome I wanted.

[NotALawyer86]

7 minutes ago, Clydesmom said:

The attorney is wrong and assuming you actually want to arbitrate.  The reality is a bad case in court is equally bad in arbitration.  The goal is NOT to actually arbitrate but make it so expensive that Cavalry decides it isn't worth it to pursue.  To date we have not seen one JDB follow a consumer into arbitration.  Original creditors?  Sure.  AMEX and Discover will go full speed ahead damn the expense.  JDBs paid pennies on the dollar and are not about to throw good money after bad.

We have had plenty of cases where the contract has been upheld in GA and the MTC approved.  Some also don't get that far with the JDB folding in the hallway negotiation conference.  

Your biggest battle is the fact that CITI has a carve out for arbitration for small claims cases.  While the actual words "SMALL CLAIMS" may not be on the court documents or over the court doors that is splitting hairs in my opinion.  Anything under $15,000 in GA is in Magistrate Court which is considered small claims.  If the Plaintiff argues the clause applies and the Magistrate agrees your only option is to appeal to a higher court when you lose the case because once the MTC is denied you go to trial immediately on the spot.  There is no delay.  

You could always have a plan to settle during the hallway conference if the opposing counsel seems willing to fight against arbitration.  

I would be less concerned about actually arbitrating and the best way how to manipulate this to the outcome I wanted.

Thank you for weighing in. The appeal to the higher court would force arb based on the contract. Are you familiar with whether or not there is a fee to appeal to a higher court?