Small Claims and Credit Agreement

[Mlrs327]

Hello! Fantastic information you all provide. Being sued by a JDB in Collin County, Tx. My question initially, as I see the idea for MTC Arb...the original CC agreement says something to the effect of arbitration claus not applicable to small claims court suits... Is MTC still an option? As it seems the CC agreement contradicts itself in when arb is and is not applicable. Looks like run of the mill Citi agreement, last paid Sep 2017

[Clydesmom]

2 minutes ago, Mlrs327 said:

Is MTC still an option?

Depends on what court the Plaintiff files in.  In Texas the court must grant permission to do discovery for cases filed in Justice Court.  Some Plaintiff's have chosen to use the State Court rather than Justice Court for that reason.  If the case is filed in State Court that is NOT small claims and therefore that clause would not apply and a MTC arbitration would not be precluded by the agreement.

Texas abolished small claims court a few years ago making it simply Justice Court.  Some will argue that because it does not say "small claims" on the paperwork or over the court room door it isn't a small claims case subject to that exclusion.  However, there is NO guarantee that the court or the Judge agrees and you would need to be prepared that the court rules that the exclusion in the card agreement means that you cannot compel arbitration on the case.

[Mlrs327]

Hmmm, interesting. It is filed with JP court. Is it odd that when I was served(last night) there was no accompanying documentation whatsoever with the papers? No original agreement, nothing, just the complaint. I assume(I know that is a no no) that the Sep 2017 agreement I was under is the same, or close enough as far as arb clause goes, as the current agreement can find on Citis website

[Mlrs327]

And thank you for the response! The time y'all put in to help others....it's appreciated.

[Harry Seaward]

Citi agreements varied with their small claims language over the years. Some just say "small claims court". Others say "small claims court, or your States equivalent Court". Some courts have found in the former language that because Citi didn't define "small claims", any court that doesn't include "small claims" in the title it's not a small claims court. As far as the "equivalent" language used in some agreements, the jdb will have to demonstrate that Texas JP Court is equivalent to the Small Claims court in whatever choice of law jurisdiction (Delaware, or whatever) is used in the card agreement.

[Mlrs327]

Ok, thank you Harry, that helps. The agreement I can locate online from Citi, just says "Small Claims", again, I cant verify if that is MY agreement because I have no idea what agreement the JDB is pursuing on...I should have kept mine, live and learn. Lets try to tackle this another way...to be exempt from claus must remain in "Small Claims"(Lets assume JP Texas considers itself Small Claims) Is there a way I can bring it out of small claims? Debt is $7500...must be over $10k to move out of JP. Perhaps challenge the contract? This is probably where a good lawyer would come into play but alas, Im broke...Ive started to look for pro bono help for disabled vets but I fear not enough time on the clock.

[Clydesmom]

5 hours ago, Mlrs327 said:

Is it odd that when I was served(last night) there was no accompanying documentation whatsoever with the papers? No original agreement, nothing, just the complaint.

Not odd at all.  JP court does not require any evidence be attached to the complaint at all.  To get what they are going to use as evidence you would have to get permission to do discovery.  

FYI:  There is NO original agreement in a credit card case. The court knows this do not fixate on that.  There is no signed contract in a credit card case either.

4 hours ago, Mlrs327 said:

Lets try to tackle this another way...to be exempt from claus must remain in "Small Claims"(Lets assume JP Texas considers itself Small Claims) Is there a way I can bring it out of small claims? Debt is $7500...must be over $10k to move out of JP. Perhaps challenge the contract?

ANY claim can be heard at the state level but no claim over $7500 can be heard in JP court.  This is not a contract issue but a Texas law and rules of civil procedure issue.  You would need to find out from the courts if removing it to another court is allowed and if so how.  The second problem is removing it to another court to avoid one clause in the contract so that you can move it out of court is going to be very difficult as well.  At State Court level they follow ALL the rules and are not going to give as much leeway as JP court to a pro-se defendant.

[Mlrs327]

30 minutes ago, Clydesmom said:

  There is NO original agreement in a credit card case. The court knows this do not fixate on that.  There is no signed contract in a credit card case either.

Ok...I can see that...but how is one to know what agreement is being argued? Since I cannot locate one, and assume they have some type of contract...I would need to ask permission for discovery(which is crap IMO, how am I supposed to defend myself if I dont have access to what they are using against me) I cant even MTC Arb because don't know if clause is there...can't do motion for discovery and then MTC Arb because plantiff may say I waived right to Arb by motioning discovery...fells like a catch 22

[Robby8900]

Can you post a copy of the arb agreement?

 

[Mlrs327]

Just now, Robby8900 said:

Can you post a copy of the arb agreement?

No, because I have no idea what agreement they are using. I can pull a copy paste from current Citi CMA

[Mlrs327]

Covered claims 72000K-0816 •

 

You or we may arbitrate any claim, dispute or controversy between you and us arising out of or related to your account, a previous related account or our relationship (called “Claims”).

• If arbitration is chosen by any party, neither you nor we will have the right to litigate that Claim in court or have a jury trial on that Claim. Except as stated below, all Claims are subject to arbitration, no matter what legal theory they’re based on or what remedy (damages, or injunctive or declaratory relief) they seek, including Claims based on contract, tort (including intentional tort), fraud, agency, your or our negligence, statutory or regulatory provisions, or any other sources of law; Claims made as counterclaims, cross-claims, third-party claims, interpleaders or otherwise; Claims made regarding past, present, or future conduct; and Claims made independently or with other claims. This also includes Claims made by or against anyone connected with us or you or claiming through us or you, or by someone making a claim through us or you, such as a co-applicant, authorized user, employee, agent, representative or an affliated/parent/subsidiary company. Arbitration limits

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

• We won’t initiate arbitration to collect a debt from you unless you choose to arbitrate or assert a Claim against us. If you assert a Claim against us, we can choose to arbitrate, including actions to collect a debt from you. You may arbitrate on an individual basis Claims brought against you, including Claims to collect a debt.

• Claims brought as part of a class action, private attorney general or other representative action can be arbitrated only on an individual basis. The arbitrator has no authority to arbitrate any claim on a class or representative basis and may award relief only on an individual basis. If arbitration is chosen by any party, neither you nor we may pursue a Claim as part of a class action or other representative action. Claims of 2 or more persons may not be combined in the same arbitration. However, applicants, co-applicants, authorized users on a single account and/or related accounts, or corporate affliates are here considered as one person.

How arbitration works

• Arbitration shall be conducted by the American Arbitration Association (“AAA”) according to this arbitration provision and the applicable AAA arbitration rules in effect when the claim is fled (“AAA Rules”), except where those rules confict with this arbitration provision. You can obtain copies of the AAA Rules at the AAA’s website (www.adr.org) or by calling 800- 778-7879. You or we may choose to have a hearing, appear at any hearing by phone or other electronic means, and/or be represented by counsel. Any in-person hearing will be held in the same city as the U.S. District Court closest to your billing address.

• Arbitration may be requested any time, even where there is a pending lawsuit, unless a trial has begun or a fnal judgment entered. Neither you nor we waive the right to arbitrate by fling or serving a complaint, answer, counterclaim, motion, or discovery in a court lawsuit. To choose arbitration, a party may fle a motion to compel arbitration in a pending matter and/or commence arbitration by submitting the required AAA forms and requisite fling fees to the AAA.

• The arbitration shall be conducted by a single arbitrator in accord with this arbitration provision and the AAA Rules, which may limit discovery. The arbitrator shall not apply any federal or state rules of civil procedure for discovery, but the arbitrator shall honor claims of privilege recognized at law and shall take reasonable steps to protect account information and other confdential information of either party if requested to do so. The arbitrator shall apply applicable substantive law consistent with the FAA and applicable statute of limitations, and may award damages or other relief under applicable law.

• The arbitrator shall make any award in writing and, if requested by you or us, may provide a brief statement of the reasons for the award. An arbitration award shall decide the rights and obligations only of the parties named in the arbitration, and shall not have any bearing on any other person or dispute.

[Mlrs327]

Paying for arbitration fees

• We will pay your share of the arbitration fee for an arbitration of Claims of $75,000 or less if they are unrelated to debt collection. Otherwise, arbitration fees will be allocated according to the applicable AAA Rules. If we prevail, we may not recover our arbitration fees, unless the arbitrator decides your Claim was frivolous. All parties are responsible for their own attorney’s fees, expert fees and any other expenses, unless the arbitrator awards such fees or expenses to you or us based on applicable law.

The fnal award

• Any award by an arbitrator is fnal unless a party appeals it in writing to the AAA within 30 days of notice of the award. The arbitration appeal shall be determined by a panel of 3 arbitrators. The panel will consider all facts and legal issues anew based on the same evidence presented in the prior arbitration, and will make decisions based on a majority vote. Arbitration fees for the arbitration appeal shall be allocated according to the applicable AAA Rules. An award by a panel on appeal is fnal. A fnal award is subject to judicial review as provided by applicable law. Survival and Severability of Terms This arbitration provision shall survive changes in this Agreement and termination of the account or the relationship between you and us, including the bankruptcy of any party and any sale of your account, or amounts owed on your account, to another person or entity. If any part of this arbitration provision is deemed invalid or unenforceable, the other terms shall remain in force, except that there can be no arbitration of a class or representative Claim. This arbitration provision may not be amended, severed or waived, except as provided in this Agreement or in a written agreement between you and us.

[Mlrs327]

5 minutes ago, Mlrs327 said:

You may arbitrate on an individual basis Claims brought against you, including Claims to collect a debt.

This is where it seems to contradict itself...first it says its not subject to arb if stays small claims, this says I can

[Robby8900]

1 hour ago, Mlrs327 said:

This is where it seems to contradict itself...first it says its not subject to arb if stays small claims, this says I can

 Don't allow it to stay in small claims court. if it was me, i would do a general denial of the alleged allegations, and file motion to Dismiss and MTC.

[Mlrs327]

1 minute ago, Robby8900 said:

Don't allow it to stay in small claims court. if it was me, i would do a general denial of the alleged allegations, and file motion to Dismiss and MTC.

Ill give that a go, and suppose will just go from there if the MTC Arb is denied...on to the threads about MTC I go

[Robby8900]

Don't forget your affirmative defense in your answer:  lack of subject matter jurisdiction due to an underlying arbitration clause.

[BV80]

10 minutes ago, Robby8900 said:

 

Don't forget your affirmative defense in your answer:  lack of subject matter jurisdiction due to an underlying arbitration clause.

Considering the small claims exception in the arbitration provision, what should the OP do if the plaintiff objects to arbitration based on that exception?

[Clydesmom]

12 minutes ago, Robby8900 said:

 Don't allow it to stay in small claims court. if it was me, i would do a general denial of the alleged allegations, and file motion to Dismiss and MTC.

Texas Justice Court is WAY different.  If you don't have experience you could cause more harm than good.

[Clydesmom]

1 hour ago, Mlrs327 said:

Ok...I can see that...but how is one to know what agreement is being argued?

You go to the CFPB and find the agreement that was in effect at the time you defaulted.  For example if the last year they updated the agreement was 2017 and you defaulted in 2018 then the 2017 agreement is the one you use.

12 minutes ago, Mlrs327 said:

Ill give that a go, and suppose will just go from there if the MTC Arb is denied...on to the threads about MTC I go

DO NOT file a motion to dismiss.  That would be engaging in the litigation process and could effectively waive your right to arbitration.  You need to file an answer with a general denial and invoking private contractual arbitration.  This last one is VERY important because the JP courts have started endorsing court ordered mediation at a big expense:  $1500 split by both parties. You do not want this as it is nothing more than trying to just force you to pay and racking up a nice cheap profit for the courts without a trial.

At the same time as you file your answer file a MTC.  Be prepared to defend the motion and why the small claims carve out does not apply.

[Robby8900]

1 hour ago, BV80 said:

Considering the small claims exception in the arbitration provision, what should the OP do if the plaintiff objects to arbitration based on that exception?

IDK, enlighten me.

 

[Harry Seaward]

1 hour ago, BV80 said:

Considering the small claims exception in the arbitration provision, what should the OP do if the plaintiff objects to arbitration based on that exception?

I would say to file a response pointing out that Citi never defines "small claims" and hope the court agrees. That's about all that can be done. 

[BV80]

25 minutes ago, Robby8900 said:

IDK, enlighten me.

 

I didn’t give the advice or claim that I knew what to do.  

You, however, did give the advice, so don’t respond to me with a sarcastic remark.

[Mlrs327]

If I may....every one of you give excellent advice...you all put forth effort that is in no way required of you, so despite any differences you have between eachother, THANK YOU! You all try to the best of what you believe, and that is admirable.

 

On the note of the suit, I actually may pull an old CMA that fits what I want to be honest. If I cant easily request what plantiff has, and plantiff did not likely supply evidence with the suit in JP,  no way for JP court to know what I supply as evidence is correct(or even me for that matter, if I cant get any info on the suit then its not necessarily wrong doing on my part to just find something that looks good that I even REMOTELY feel is feasible)....that would put the burden on plantiff to come forward with the CMA they have to challenge my MTC Arb. Again, I would never DELIBERATELY provide known false evidence as Im sure that is a crime, but I have no clue whatsoever what contractual agreement I was in, so if this information is not voluntarily provided to me by plantiff...I will do the best I can to assume I was under "X" contract and then let plantiff challenge

[Robby8900]

9 hours ago, BV80 said:

I didn’t give the advice or claim that I knew what to do.  

You, however, did give the advice, so don’t respond to me with a sarcastic remark.

Didn't claim to know what to do, nor was i being sarcastic. I, have a question for the knowledgeable. Does the ''Act'' of congress (FAA) supersede? Why can't the OP object to the plaintiff, filing suit in small claims and motion for dismissal of the complaint pursuant to lack of subject matter jurisdiction to render judgment on the merits supported by HENRY SCHEIN, INC. v. ARCHER & WHITE SALES, INC; Jan 2019 and in the alternative MTC as agreed pursuant the terms of the written agreement. 

[Harry Seaward]

8 hours ago, Mlrs327 said:

On the note of the suit, I actually may pull an old CMA that fits what I want to be honest.

To put yourself in the best position possible, the agreement should be the last agreement in effect before the account was closed.  We have seen plaintiff's argue the dates on the agreements don't jive with the time the account was being used, resulting in the court ordering defendants to find 'correct' agreements before it will grant a MTC. 

Did you look at the CFPB website?  They have all current agreements, and an archive section going all the way back to 2011.
https://www.consumerfinance.gov/credit-cards/agreements/