Judge Denied MTC Arbitration bc of "Small Claims" - GA

[SkyStillSunny]

1. Who is the named plaintiff in the suit?  Portfolio Recovery Associates LLC

2. What is the name of the law firm handling the suit?  Weber & Olcese P.L.C.

3. How much are you being sued for?  ~$3,900 + Court Costs

4. Who is the original creditor? (if not the Plaintiff)   Home Depot (by Citibank)

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

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

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

8. What was your correspondence (if any) with the people suing you before you think you were being sued?  Received a letter prior to being served and I sent in a DV (that stated that I dispute this debt)

9. What state and county do you live in?  Georgia, Forsyth County

10. When is the last time you paid on this account? (looking to establish if you are outside of the statute of limitations)  10/15

11. When did you open the account (looking to establish what card agreement may be applicable)?  ~12/2004

12. What is the SOL on the debt? Not sure?

13. What is the status of your case? Suit served? Motions filed?  Served 5/2019, Answered 6/2019 (denied w/ arbitration as affirmative defense), Court 7/2019 (prepared MTC Arbitration)

14. Have you disputed the debt with the credit bureaus (both the original creditor and the collection agency?)  Yes, to the lawfirm only when I initially received a letter.

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').  Yes.

17. What evidence did they send with the summons? An affidavit? Statements from the OC? Contract? List anything else they attached as exhibits.  They sent copies of statements from the OC from 2015 and 2016. A copy of a bill of sale to PRA.

 

Well it finally happened, the judge denied my MTC arbitration because of the small claims verbiage below:

Quote

 

What about Claims filed in Small Claims Court? Claims filed

in a small claims court are not subject to arbitration, so long

as the matter remains in such court and advances only an

individual (non-class, non-representative) Claim.

 

He said that the wording was not ambiguous, and any statement otherwise or whether there was a clause in it at all did not matter. I tried to describe the other SCOTUS cases, and he would not hear it and said that this matter was brought to small claims, so now it is no longer subject to arbitration. He shut me down at every argument I had about the arbitration clause, and asked if I wanted to mediate w/ the attorney. I asked for a continuance, and the plaintiff said I see no reason for a continuance and the judge agreed so he denied the continuance. I did create an AAA case AFTER I was served, so when I told him that I even had an arbitration case started, he said it did not matter. At this point I was lost and did not know what to do. So I went to the attorney and said that I could write a check for $1000 right now the settle the case, and he said his client refused. I told him that’s really all I had, so then the attorney requested a continuance and it was granted for him.

 

Should I have just gone to trial and let the judge find for the plaintiff after denying my MTC for arbitration? I was scared to do that because what I’m ultimately trying to do is avoid a judgement on my record. I’d rather try to settle than have a judgement. I was thinking maybe I could appeal, but I’ve never gone through that process, and wonder what would happened if my appeal was denied or if I lost there too?

 

Any advice? I go back to court next month. I’ve attached the CCA both current, and the one while my card was active and both do contain that “small claims” verbiage.

arbitration-2016.pdf arbitration-current.pdf

[Robby8900]

Appeal his denial, i believe that will remove it from small claims court, then file Mtc with appeal court to enforce arbitration. .

[SkyStillSunny]

If I appealed his denial, then the judgement would be for the plaintiff until I filed for appeal, correct? Would I file the appeal in state court or supreme court? Does anyone know which is better for me in GA? Are there any helpful links to anyone successfully filing an appeal? 

Also, if by chance I lost the appeal in state court, would I still be able to settle at that point, or would the judgement be final against me?

[Clydesmom]

4 hours ago, Robby8900 said:

Appeal his denial, i believe that will remove it from small claims court, then file Mtc with appeal court to enforce arbitration.

Not in GA courts.  What you "believe" is dead wrong for the GA courts. 

3 hours ago, SkyStillSunny said:

If I appealed his denial, then the judgement would be for the plaintiff until I filed for appeal, correct?

The chances this works are slim to none.  You would have to file for a stay of the case in Magistrate Court until the appeal of the denial of the motion is heard.  You will not get the appeal of the motion denial on the State Court docket before the return date in Magistrate Court.  If you win the appeal of the denial it simply gets remanded back down to the Magistrate Court to re-hear the motion or the appeal court over rules him and grants the motion.  Unless you file for a stay they will get a judgment before the appeal is ever heard which would render the appeal moot.

4 hours ago, SkyStillSunny said:

He said that the wording was not ambiguous, and any statement otherwise or whether there was a clause in it at all did not matter. I tried to describe the other SCOTUS cases, and he would not hear it and said that this matter was brought to small claims, so now it is no longer subject to arbitration.

Here is the major problem:  despite all the veiled arguments you were given to bolster your motion which did have a small chance of working, the Judge is not wrong.  The arbitration clause is not vague and they sued you before you opted for it.  The chances this gets over turned on appeal are slim to none in my opinion.  I have long held that this day would come when a court would finally rule on that clause as being 100% applicable even though it doesn't strictly say "SMALL CLAIMS" over the door of the court room or on the paperwork.  That is semantics and the judge just proved it with his ruling.  CITI has a carve out and this law firm caught it and used it.  Forsyth is one of the better run counties in GA so odds on it getting over turned are not good.

3 hours ago, SkyStillSunny said:

Would I file the appeal in state court or supreme court? Does anyone know which is better for me in GA?

You would have to file the appeal of the motion in the State Court.  You cannot bypass the levels of court in any state.  This isn't a question of what is more favorable.  It is Magistrate Court or State Court.  From there you would move up to Appellate Court and if you lost at that level the final appeal is the GA Supreme Court.  

3 hours ago, SkyStillSunny said:

Also, if by chance I lost the appeal in state court, would I still be able to settle at that point, or would the judgement be final against me?

The problem is @Robby8900 bad advice and recommendation has you confused on what appeal you are filing.   Follow it at your own risk. 

Here is how it really works in GA:

Your MTC in Magistrate Court was denied.  You have 2 options at this point.  Attempt to appeal ONLY the denial and stay the case in Magistrate Court or allow the case to conclude in Magistrate Court and if you lose appeal the entire case: verdict along with the MTC.  If you appeal the entire case it moves up to the State or Superior Court where ever you file the appeal from Magistrate and it is what is called a trial de novo.  This means everything starts over from the beginning which would include your MTC being filed and heard again.  Now the bad news:  in order to appeal the entire case to the next level GA requires you post an appeal bond in the amount of the verdict.  That means if they are awarded $3900 plus attorney fees and costs you would have to have at least $5000 to appeal the case.  This money is deposited with the court so that if you lose the appeal the other party still gets what they were awarded.  It is designed to slow down the number of frivolous appeals.

As for settling:  you can settle at any time before a verdict is issued and settlement talks are not admissible at trial.  You can settle after a judgment but the terms are less favorable for you once they have a judgment in GA.  Your original offer was 25% of the debt which PRA is not going to go for.  The best they are likely to do at this stage is 50-60% because they know a judgment is imminent.  It is far too easy to garnish your wages in GA and they don't have to warn you before they do it.  If this is the option you want to use I would look into borrowing money from friends or family to settle it in a lump sum to make it go away.  The choice is yours.

 

[pulpfiction0]

On 7/26/2019 at 2:23 PM, Clydesmom said:

The problem is @Robby8900 bad advice and recommendation has you confused on what appeal you are filing.   Follow it at your own risk. 

Do you really have to bash nearly everyone you encounter on here? Try toning it down and avoiding the attacks; we're all in the same boat here, after all.  Stop acting like you're THE authority on this board.  Given that it's pretty much the only credit board left, it's in everyone's interest to be as helpful as they can, minus the personal attacks/all-knowing attitude.  Mods: I apologize if I'm overstepping my boundaries here, but this person's posts are all too often out of line.

[Clydesmom]

27 minutes ago, pulpfiction0 said:

Do you really have to bash nearly everyone you encounter on here?

Listen snowflake:  I didn't bash HIM but his advice is straight up wrong and BAD.  He is from OH and has NO experience in the GA courts. NONE.  Giving advice on filing an appeal in a court he has never been in is arrogant and misguided.  You can sit there and let someone follow it but I won't given I have won two cases in the GA Magistrate Courts without having to appeal.  When you can do better in the GA courts than I have feel free to try and play moderator until then you are over stepping your bounds.

[Robby8900]

36 minutes ago, Clydesmom said:

Listen snowflake:  I didn't bash HIM but his advice is straight up wrong and BAD.  He is from OH and has NO experience in the GA courts. NONE.  Giving advice on filing an appeal in a court he has never been in is arrogant and misguided.  You can sit there and let someone follow it but I won't given I have won two cases in the GA Magistrate Courts without having to appeal.  When you can do better in the GA courts than I have feel free to try and play moderator until then you are over stepping your bounds.

If an agreement has a clause that claims are not cover which are filed in small claims, would the outcome be the same whether its filed in Ohio, GA, or any other state?

[BV80]

18 minutes ago, Robby8900 said:

If an agreement has a clause that claims are not cover which are filed in small claims, would the outcome be the same whether its filed in Ohio, GA, or any other state?

You’re correct about the location of the outcome.  

However, the wording of the arbitration provision is “claims filed in small claims court”.   The original claim that a debt was owed was filed in small claims.  Appealing it in a higher court won’t change that fact.   

[Robby8900]

15 minutes ago, BV80 said:

You’re correct about the location of the outcome.  

However, the wording of the arbitration provision is “claims filed in small claims court”.   The original claim that a debt was owed was filed in small claims.  Appealing it in a higher court won’t change that fact.   

Ok. I was wrong.

 

[BV80]

28 minutes ago, Robby8900 said:

Ok. I was wrong.

 

I’ve been wrong plenty of times.  We’re all still learning.  ?

[Harry Seaward]

The only real question you could appeal here is whether the fact that your court isn't called "small claims", is enough to reverse a lower court finding that Citi's carve-out includes your court. The legal gymnastics of moving this case to a higher court to then use arbitration is nearly certain to fail. And honestly, it's probably almost as certain the small claims argument will fail on appeal as well. I personally would still appeal it, just because i think it's a question that needs be settled at a higher level, but an appeal is not a day at the beach, and only you can decide if that's in your cards or not. 

[Robby8900]

14 hours ago, BV80 said:

I’ve been wrong plenty of times.  We’re all still learning.  ?

I have a question? What if after the plaintiff, filed its case in small claims, and then the defendant, goes and files his/her own petition say in fed court to compel arbitration becoming the plaintiff, could there be a mutual agreement to dismiss at that point? Just a thought.

[Clydesmom]

1 hour ago, Robby8900 said:

I have a question? What if after the plaintiff, filed its case in small claims, and then the defendant, goes and files his/her own petition say in fed court to compel arbitration becoming the plaintiff, could there be a mutual agreement to dismiss at that point? Just a thought.

In theory, yes it could work.  The reality is very different.  First:  why would the Federal Courts not uphold the card agreement that specifically carves out arbitration for small claims cases?  What you are describing is called forum shopping and the courts do not take this lightly or support it.  The other issue is that it costs anywhere from  $450 to $750 to file a case in Federal Court.  There are no pre-printed forms and you have to get it RIGHT.  There is no leeway for pro-se litigants.  AND, if you lose you will get tagged with the opposing parties expenses which could add up to three or four times the debt they are suing you for.

[Pericles]

The language in the arbitration agreement "so long as the matter remains in such court" combined with "de novo" being defined in GA as "wiping the magistrate proceeding from the books", with the appeal "treated as a “re-filing” of the case in State or Superior Court" - could provide a pathway that ultimately trumps the small claims carve out.  See the series of prior forum posts here.

The problem with this strategy is the expense and the bond, and that if it doesn't work, with the bond sitting there, there is no remaining leverage.

[BV80]

4 hours ago, Robby8900 said:

I have a question? What if after the plaintiff, filed its case in small claims, and then the defendant, goes and files his/her own petition say in fed court to compel arbitration becoming the plaintiff, could there be a mutual agreement to dismiss at that point? Just a thought.

While your motion to compel would be in federal court, you are not changing the facts that the plaintiff’s claim was already filed and is still pending in small claims.  The federal court would have to consider those facts in conjunction with the small claims exclusion in the arbitration provision. 

If the federal court were to consider granting your motion, the case would have to be stayed in small claim because that is the claim on which your motion to compel is based.  Filing your motion to compel in federal court would not change the jurisdiction of the claim that has already been filed in a state small claims court.   The federal court would only have jurisdiction to hear the MTC.  

In addition, considering the fact that you are attempting to compel arbitration of a lawsuit that has already been filed in small claims, the JDB would argue that you are attempting to bypass the contract language.   I don’t know if that’s fits the definition of “forum shopping”, but it’s possible.

Under the current circumstances where a lawsuit has already been filed, the only way I can see to succeed with a MTC is to get the federal court to deem the small claims exception unconscionable or, as @Harry Seaward suggested, show that the claim was not filed in small claims court.

[Harry Seaward]

On 7/28/2019 at 11:23 AM, BV80 said:

show that the claim was not filed in small claims court.

@SkyStillSunny I'm not so interested in what court they filed in as much as the fact that the Citi agreement uses a term,  "small clams", that is not universal. For example Arizona has a division of our Justices Court system named "small claims". It's technically not a separate court, but operates under different rules. One of those rules is that lawyers are not permitted, so there's no possible way a consumer could have a small claims case brought against them by a bank. So does that mean that, under the Citi agreement, all justice courts are "small claims" courts because the same court/judge hears both types of cases? No. But you can see how not defining "small clams" opens a can of worms in places like Arizona. 

Other Citi agreements did define "small claims" by saying that it's any court that is the equivalent of the Delaware Small Claims Court, so it's not like they didn't think of it, or are prohibited in some way. But even this leaves the door open a little since very few courts are identical from one jurisdiction to the next, but at least it gives some guidelines to work with, as opposed to simply saying "small claims court".

Disclaimer for the haters: this method will probably fail. Use discretion. Yada.

[Clydesmom]

1 hour ago, Harry Seaward said:

I'm not so interested in what court they filed in as much as the fact that the Citi agreement uses a term,  "small clams", that is not universal.

If what you claim is true that the CITI agreement(s) are vague and open to interpretation how do you explain the Judge's ruling in this case?

"He said that the wording was not ambiguous, and any statement otherwise or whether there was a clause in it at all did not matter. I tried to describe the other SCOTUS cases, and he would not hear it and said that this matter was brought to small claims, so now it is no longer subject to arbitration."

Regardless of what MIGHT be possible in AZ or any other state what is the OP supposed to do in GA where Magistrate Court IS small claims and the Judge has ruled the wording in the agreement is not ambiguous and the case is in small claims to deny a MTC?

[Harry Seaward]

30 minutes ago, Clydesmom said:

If what you claim is true that the CITI agreement(s) are vague and open to interpretation how do you explain the Judge's ruling in this case?

I'm not claiming anything, other than the fact that "small claims" is not a universally defined term. As you pointed out, it's used to mean different things in different parts of the country. Just because GA has a small claims-type of court that OP happened to be sued in, these card agreements are in use all over the country, and must be universally applicable. (This is why Citi and some others use the "or your state's equivalent court" language.) Because of this, I think it's possible a higher court will find that the use of an undefined term renders that term ambiguous. If that's the case, it means the lower court was wrong, at least as far as whatever appellate court finds as such. Maybe then PRA takes it to the GA Supreme Court, and they find the term "small claims" is not ambiguous.  In that case, the lower court judge will be "right" again. Then maybe it ends up at the US Supreme Court, and that court finds that it is ambiguous. Then the lower court will be forever wrong. One court's finding isn't always right. Any court ruling is only as right as whatever higher court has found.  That's why appeals exist. 

[SkyStillSunny]

Thanks everyone for your valuable input. I learn something new every time I post. 

So regarding the term "small claims," I very much doubt I will be able to argue. There are about 6 different magistrate judges, and the one I happened to get that day is a hard a$$ on defendants. I've had him before where he seemed disappointed to allow my MTC arbitration (bc in that case the agreement had no verbiage regarding small claims court), and now he recognizes me. He seemed more than happy to deny my motion, since he cut me off whenever I tried to argue anything. He's the only judge that says a speech in the beginning of the calendar and says something about "anything under 15k is considered small claims, therefore this court is for small claims only," or something to that effect, but he does use the words "small claims". This is the judge that scares me, but I tried my best with everything I had in my MTC, and he flat out refused it all. I just happened to be against an attorney that did know about the "small claims" verbiage and used that against my request to arbitrate. I feel like I should have never added an "affirmative defense of arbitration" in my answer. Do you think that gave the attorneys a heads up? Idk.

@Clydesmom thank you for the straightforward advice for GA courts. I'm leaning towards just trying to settle for 50% at our next court date and hope they approve. I don't want to risk an appeal to state court and end up paying more, and then just getting remanded down back to magistrate court which would do nothing more than just drag this out. My main goal really is to avoid a judgement on my record without having to pay anything, but in this case it looks like arbitration won't work, and an appeal in GA won't work (without major effort and cost), so I'm just going to try to stick with not getting a judgement.

So if I settle, then I should be signing a "consent order" not a "consent judgement" form, correct? Am I allowed any terms to that? Such as removing it from my credit report and dismissing this case with prejudice once paid to the agreed upon terms?

If they won't settle w/ me for 50% (because honestly why would they since they will win anyway), then I guess I get a judgement anyway and they'd garnish wages?

[Harry Seaward]

56 minutes ago, SkyStillSunny said:

If they won't settle w/ me for 50% (because honestly why would they since they will win anyway), then I guess I get a judgement anyway and they'd garnish wages?

This is pretty much where you're at. It sounds like you're in a creditor-friendly court, and if that's the case, you can bet opposing counsel knows this, and has no interest in settling for a lesser amount, except to save some time and hassle of going to court. Practically speaking, that might be enough to shave $500 of the total amount. It certainly won't hurt to shoot for the moon, but just be realistic about your expectations, and know what your plan will be in the worst case. 

[Clydesmom]

3 hours ago, SkyStillSunny said:

So if I settle, then I should be signing a "consent order" not a "consent judgement" form, correct? Am I allowed any terms to that? Such as removing it from my credit report and dismissing this case with prejudice once paid to the agreed upon terms?

HOW you settle determines what you sign.  If you are making payments on the agreed upon settlement amount then yes, they will expect you to sign a consent judgment.  What that means is that if you default again and that includes simply being late with a payment they do not have to sue you to collect.  They can simply file that document with the court and proceed to garnish wages or levy bank accounts.  You also forgo your right to appeal.  If you agree to a lump sum one time payment settlement then you would sign a settlement agreement not a judgment.  

How much they settle for will depend on how you settle.  Lump sum usually equates to a lower number than consent judgment.  If they have to take a risk on payments again they typically want more money in the long run.

As for terms of the settlement things like deletion of trade line and dismissing are about leverage and right now you have none.  You can ask but I would not get stuck on terms beyond the amount that you cannot control.

3 hours ago, SkyStillSunny said:

If they won't settle w/ me for 50% (because honestly why would they since they will win anyway), then I guess I get a judgement anyway and they'd garnish wages?

Most likely.

[Harry Seaward]

On 8/1/2019 at 12:48 PM, Clydesmom said:

What that means is that if you default again and that includes simply being late with a payment they do not have to sue you to collect.

@SkyStillSunny just to clarify further, a consent judgement generally doesn't become a recorded judgment against you unless you default on the terms.  Just be sure to read what you sign, and ask to have this language included if it's not already. 

[fisthardcheese]

Okay, OP, the good news is that you are still in a GA Magistrate court.  If this were me and my MTC failed and I had a continuance, I would be filing a counter claim.  Any counter claim is the next best thing in Magistrate Court.  The JDB attorneys do not want to litigate a claim against their clients in Magistrate for the same reasons it is difficult for all defendants - because it is a total crap-shoot with Magistrate's lack of rules and trial-by-ambush.

After filing a counter claim and sending a copy to the attorney, when I show up for my new trial date, I would meet with the attorney and offer a mutual dismissal with prejudice.  This is what I did and settled with in my last Magistrate counter claim debt lawsuit.

If for whatever reason this does not work out, then I would file an appeal.  I would not worry about all the appeal comments above.  The only thing that matters is that in Magistrate court, you are entitled to a "de novo appeal".  This means you can appeal for ANY reason (or NO reason) and that everything that happened in Magistrate is tossed (there is no recorded record of these cases anyway) and everything starts over fresh in State Court.  Once you get a State Court case number, the first thing I do is file my MTC in that court under the new case number.  This time it will have to be granted per the SCOTUS laws.

[SkyStillSunny]

@fisthardcheese If I filed a counterclaim, what would I even file the counterclaim for? My judge for this case doesn't play around and will rip me a new one if I don't have anything to back up my counterclaim. I already have a trial date coming up bc the other attorney asked for a continuance. Could I present counterclaim then, or do I do it now?

Also, the attorneys just sent me a Motion for Default Judgement for not filing an answer on time, which is total BS. I have a copy of my answer stamped from the magistrate court, yet they say they contacted the magistrate and have no record of it. I called them, they do have it. Plus the attorney told me they were asking for a continuance to discuss w/ their client on settlement terms and they'd let me know what those were by mail. Never got anything.

My concern about appealing is this:

Quote

AND, if you lose you will get tagged with the opposing parties expenses which could add up to three or four times the debt they are suing you for.

If I do appeal to state court, what if I do lose the appeal? I don't know all the nuances and fees for Forsyth County, but that seems like if I lost then I'd end up paying more than if I settled. When I go into trial, then if the judge rules in favor for the plaintiff and signs an order, do I say that I want to file an appeal at that point, or do I even mention an appeal? Should I tell the attorney that I will file an appeal?

[SkyStillSunny]

I was just reading through some other posts, and was hoping @NormInGeorgia has any advice for Forsyth County in GA? I am referring to this below:

Quote

You would have to file for a stay of the case in Magistrate Court until the appeal of the denial of the motion is heard.  You will not get the appeal of the motion denial on the State Court docket before the return date in Magistrate Court.  If you win the appeal of the denial it simply gets remanded back down to the Magistrate Court to re-hear the motion or the appeal court over rules him and grants the motion.  Unless you file for a stay they will get a judgment before the appeal is ever heard which would render the appeal moot.

If I file for an appeal to State Court, and I win, does it get remanded down back to magistrate court? Why would I file a stay of the case in magistrate if the judgement has already been made? If GA is "de novo" as @fisthardcheese stated, then it sound like my magistrate case is closed and wiped and I get a new case in state. I'm just confused whether I would get remanded back to magistrate and my original case would stay in "limbo" while my state case is heard. Do I have to file for a stay before a judgement is made in magistrate? Because the judge I have is not going to allow me a stay.

Also, when I go back to court I plan to try to settle for a portion. Can I tell the attorneys that I plan to appeal and bring my motion to State to help persuade them to settle? Or should I keep that to myself?