Midland Funding suit in NYC

[treblclef20]

Hi, Please see below for details of a suit by Midland Funding that my husband and I are dealing with in NYC. We would not be able to pay the full amount and certainly not the attorney costs on top of it. Based on what I've read, it seems like our best opportunity here is to get them to come to the table and try to settle with us. Any advice for making that happen is much appreciated. In meantime, we have made a discovery request in order to ensure they have proof of their purchase (since I've already read that many times, they do not have it available.)

TY for any advice here.

 

1. Who is the named plaintiff in the suit?

Midland Funding

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

Stephen Einstein & Associates

3. How much are you being sued for?

about $2500

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

Citibank NA

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, it appears it was.

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

None. They sent letters, but we did not respond to any.

9. What state and county do you live in?

New York, NY (NY County)

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

2017

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

I do not know exactly; probably somewhere between 2005-2008.

12. What is the SOL on the debt? To find out:

6 years, so not a factor here.

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

Suit served; answer filed; court date set.

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

No.

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?

Already filed an answer which was "No business relationship with plaintiff."

No questionnaire received regarding suit.

Charges are that 1) entered into agreement with citibank, 2) incurred charges; no part which has been paid, though duly demanded; defendant owes this amount plus costs of the action.

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

The only thing sent was the complaint, which contends that the plaintiff is the purchaser of this agreement. It shows the chain of title as: Citibank NA, then Midland Funding LLC, and states the last date the payment was made on the account, which is not outside the statute of limitations. It also shows the last 4 digits of the account with Citibank. 

18.  How did you find out about this site?

google

 

In addition to the above, note that we have sent a discovery request requesting a long list of proof / documents that Midland purchased the account. No response yet, as it was just sent. The first court date is soon.

[Harry Seaward]

The question form you answered had two links at the bottom.  Did you read those?  I ask because the first link is about arbitration, which is going to be your best strategy in getting out of having to pay anything to Midland.

[treblclef20]

Yes, I did, but I wasn't sure I could pursue it since I've already filed an answer - can i?

Also, what are the odds Midland will turn up the required paperwork through discovery process?

[Harry Seaward]

2 hours ago, treblclef20 said:

Yes, I did, but I wasn't sure I could pursue it since I've already filed an answer - can i?

Yes. You might need to file an amended answer to assert arbitration as an affirmative defense. There's been a few NY arbitration cases here in the last few months that you can reference as a guide. 

Here's one with pretty detailed info on both court rules/procedure and arbitration in New York. 

https://www.creditinfocenter.com/community/topic/330371-midland-funding-suing-in-ny/

2 hours ago, treblclef20 said:

Also, what are the odds Midland will turn up the required paperwork through discovery process?

Nearly 100%. Don't make discovery requests if you plan to use arbitration. 

[treblclef20]

OK, I have already made the discovery request. Did I screw myself?

Is there any strategy to just get them to settle with us?

I know arbitration could potentially get rid of this problem completely, but I'm just wondering whether there's something in the middle - i.e. getting them to settle.

[treblclef20]

One other question: my cc agreement says that suits in small claims court can't be arbitrated. I can't tell what court this suit is in, except that it's civil court.... is there any reason to think this is in small claims?

[Harry Seaward]

What's the actual wording if the small claims exclusion? 

[treblclef20]

Here's the whole limitations section:

 

Arbitration limits

• Individual Claims filed 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 affiliates 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 A A A arbitration rules in effect when the claim is filed (“AAA Rules”), except where those rules conflict with this arbitration provision. You can obtain copies of the A A A Rules at the A A A’s website (w w w . a d r . 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 final judgment entered. Neither you nor we waive the right to arbitrate by filing or serving a complaint, answer, counterclaim, motion, or discovery in a court lawsuit. To choose arbitration, a party may file a motion to compel arbitration in a pending matter and/or commence arbitration by submitting the required A A A forms and requisite filing fees to the A A A.

• The arbitration shall be conducted by a single arbitrator in accord with this arbitration provision and the A A A 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 confidential 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.

[treblclef20]

On 8/9/2019 at 10:39 PM, treblclef20 said:

 

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

 

Does anyone have thoughts on this one particular item in the cc agreement? Can i still try for arbitration? Thank you

[treblclef20]

Is there anyone who has any thoughts on this at all? I have only until Monday to file an updated answer now, if I would like to. Any help is super appreciated.

[Brotherskeeper]

On 8/5/2019 at 7:51 AM, treblclef20 said:

OK, I have already made the discovery request. Did I screw myself?

What did you ask for?

Did they respond yet?

[Brotherskeeper]

On 8/5/2019 at 8:00 AM, treblclef20 said:

I can't tell what court this suit is in, except that it's civil court.... is there any reason to think this is in small claims?

Did you find out if you're in NY's commercial small claims? 

In General

"Anyone 18 years of age or over can sue in Small Claims Court. If you are younger than 18, your parent or guardian may sue on your behalf. Only an individual can sue in Small Claims Court. Corporations, partnerships, associations, or assignees cannot sue in Small Claims Court. However, they can be sued in Small Claims Court. If you are a corporation, partnership, association or assignee, you can bring a Commercial Claim or Consumer Transaction. For more information, click on Commercial Claims and Consumer Transactions.

Can corporations and associations start a small claims case?
"Corporations, associations, and assignees cannot start a small claims case. They must start a commercial small claims case. See page 23."

[Brotherskeeper]

2 hours ago, treblclef20 said:

 

Is there anyone who has any thoughts on this at all? I have only until Monday to file an updated answer now, if I would like to. Any help is super appreciated.

If you want to keep this option open, and can file an amended answer without needing plaintiff's or the court's permission, what is the down side to filing "First Amended Answer" to include lack of subject matter jurisdiction due to an agreement to arbitrate in the contract? A fellow NY (Suffolk County) defendant used the following affirmative defenses in her Answer: 

AFFIRMATIVE DEFENSES
1. Lack of subject matter jurisdiction. The underlying contract for the alleged debt contains a private arbitration clause and defendant has chosen arbitration as the forum for this dispute, therefore, this Court lacks subject matter jurisdiction.

2. Failure to state a claim upon which relief may be granted.

3. Upon information and belief the Plaintiff is not in control of the necessary documents or witnesses needed to prove its claims.

4. Lack of standing.
 

[treblclef20]

5 hours ago, Brotherskeeper said:

Did you find out if you're in NY's commercial small claims? 

 

When I look it up online is says civil case, rather than small claims, so I believe I am OK? I just thought that the amount of the suit might be an issue?

[treblclef20]

4 hours ago, Brotherskeeper said:

 

AFFIRMATIVE DEFENSES
1. Lack of subject matter jurisdiction. The underlying contract for the alleged debt contains a private arbitration clause and defendant has chosen arbitration as the forum for this dispute, therefore, this Court lacks subject matter jurisdiction.

2. Failure to state a claim upon which relief may be granted.

3. Upon information and belief the Plaintiff is not in control of the necessary documents or witnesses needed to prove its claims.

4. Lack of standing.
 

Thank you- so I could actually state all of these at once? 

I may need court permission to file the amended answer, but if  I do, I will just state that I've only just learned of the clause in the cc agreement. 

[treblclef20]

5 hours ago, Brotherskeeper said:

What did you ask for?

Did they respond yet?

They have not responded yet, but I believe they still technically have a few more days to do so. I asked for the following:

 

1. The fully executed credit agreement and all amendments.

2. The entire history of payments, and all statements sent to the account holder.

3. All documents relating to proof of mailing of statements.

4. All documents relating to any dispute concerning the validity of the alleged debt.

5. All documents relating to cancellation or termination of the agreement.

6. A detailed breakdown of all interest and fees that Plaintiff is seeking.

7. All documents relating to any alleged payment or settlement agreement between Plaintiff and

Defendant regarding the alleged debt.
8. All information and documents relating to Plaintiff’s acquisition of the alleged debt, including,

without limitation, executed copies of all assignments/transfers.
9. All information and documents relating to Plaintiff’s compliance with New York City’s debt

collection rules (N.Y.C. Admin. Code §§ 20-490-20-494).

10. All documents relating to reporting made to any consumer reporting agencies.

11. All documents relating to proof of service, including a copy of the affidavit of service filed with

the court and all documents related to compliance with section 20-410 of the New York City Administrative code, including a hard-copy print out of the electronic record of the time, date and location of alleged service and any supporting documents.

[treblclef20]

Does anyone know how I can find the rules for filing an updated answer in NYC civil court? i.e. whether I need special permission, or can just go ahead and submit a new one in-person? I can't seem to find a thing on this online. 

The court appearance is later next week. I have a few biz days still where I could go in and update it before the court date, but I don't know if that's true (if there's a cut off date or something similar.)

[Brotherskeeper]

New York Consolidated Laws, Civil Practice Law and Rules - CVP - CVP NY CPLR Rule 3025

Rule 3025. Amended and supplemental pleadings

(a) Amendments without leave.  A party may amend his pleading once without leave of court within twenty days after its service, or at any time before the period for responding to it expires, or within twenty days after service of a pleading responding to it.

(b) Amendments and supplemental pleadings by leave.  A party may amend his or her pleading, or supplement it by setting forth additional or subsequent transactions or occurrences, at any time by leave of court or by stipulation of all parties.  Leave shall be freely given upon such terms as may be just including the granting of costs and continuances.  Any motion to amend or supplement pleadings shall be accompanied by the proposed amended or supplemental pleading clearly showing the changes or additions to be made to the pleading.

(c) Amendment to conform to the evidence.  The court may permit pleadings to be amended before or after judgment to conform them to the evidence, upon such terms as may be just including the granting of costs and continuances.

(d) Responses to amended or supplemental pleadings.  Except where otherwise prescribed by law or order of the court, there shall be an answer or reply to an amended or supplemental pleading if an answer or reply is required to the pleading being amended or supplemented.  Service of such an answer or reply shall be made within twenty days after service of the amended or supplemental pleading to which it responds.

 

If you're in NYC, you may find some help here:

https://www.nycourts.gov/COURTS/nyc/civil/representMenu.shtml

[treblclef20]

6 minutes ago, Brotherskeeper said:

New York Consolidated Laws, Civil Practice Law and Rules - CVP - CVP NY CPLR Rule 3025

Rule 3025. Amended and supplemental pleadings

(a) Amendments without leave.  A party may amend his pleading once without leave of court within twenty days after its service, or at any time before the period for responding to it expires, or within twenty days after service of a pleading responding to it.

(b) Amendments and supplemental pleadings by leave.  A party may amend his or her pleading, or supplement it by setting forth additional or subsequent transactions or occurrences, at any time by leave of court or by stipulation of all parties.  Leave shall be freely given upon such terms as may be just including the granting of costs and continuances.  Any motion to amend or supplement pleadings shall be accompanied by the proposed amended or supplemental pleading clearly showing the changes or additions to be made to the pleading.

(c) Amendment to conform to the evidence.  The court may permit pleadings to be amended before or after judgment to conform them to the evidence, upon such terms as may be just including the granting of costs and continuances.

(d) Responses to amended or supplemental pleadings.  Except where otherwise prescribed by law or order of the court, there shall be an answer or reply to an amended or supplemental pleading if an answer or reply is required to the pleading being amended or supplemented.  Service of such an answer or reply shall be made within twenty days after service of the amended or supplemental pleading to which it responds.

Thank you so much!  So, if I am reading this correctly, rule A doesn't work for me, because I filed the first answer more than 20 days ago. Does rule B just mean that basically I go to court and tell the judge there that I want to file an amended answer, and the judge just has to accept that for it to move ahead?

 

[Brotherskeeper]

 

37 minutes ago, treblclef20 said:

Does rule B just mean that basically I go to court and tell the judge there that I want to file an amended answer, and the judge just has to accept that for it to move ahead?

No. (I am not a lawyer.) I believe you have to prepare an amended Answer and attach it to a motion to amend. @MIOMH is going to use arbitration without having amended his/her Answer to include arbitration as an affirmative defense. A notice of a demand for arbitration was sent to the Plaintiff debt buyer, with a copy sent to the Plaintiff's attorney. 

This NY (Suffolk County) thread has a sample of a motion to amend an Answer

 

[treblclef20]

@Brotherskeeper thanks so much. I have been reading the other NY threads but having a hard time sorting what is relevant to me here. I don't think I have enough time now to get a letter to the plaintiff about intent to arbitrate ahead of the court date and will probably need to file a motion to amend an answer. Since the court date is just in a few days, do I just bring the motion to court on that day? Or would I need to come in and file ahead of the court date (like on Monday)?

[Brotherskeeper]

@treblclef20 I'm sorry but I'm not familiar enough with NY laws and rules enough to give advice here. I don't know whether an arbitration agreement must be stated as an affirmative defense in an answer or amended answer or it is likely waived. @MIOMH believes it is not waived. If you have not asserted arbitration as an affirmative defense, and have not sent a notice of intent to arbitrate the claims, how is Plaintiff to know you don't intend to remain in court to litigate? How can they be compelled to arbitrate a dispute when you haven't given any notice of it in your answer, or made a demand to arbitrate, and have sent extensive discovery production requests? How have they refused to arbitrate at this point? Under NY CPLRs, can you ask that they be compelled without first making a demand? I don't know.  

Has the plaintiff made a request (RJI) and paid to have a judge assigned? Asking plaintiff to stipulate to allowing an amended answer would solve the problem. I assume that filing a motion to amend your answer must follow the CPLR rules on motion practice. 

@usctrojanalum is our NY expert, but is very busy these days. I'm not trying to discourage you from pursuing arbitration, I just lack an understanding of what you should do. If you don't even try to get this kicked out of court and into arb, you can't possibly succeed, can you? If I were in your shoes, I'd try and let the judge tell me no. (IANAL!)

[treblclef20]

@Brotherskeeper Thank you; appreciate your sharing your thinking on this in any case. 

In response to a consideration you raised about how plaintiff can be compelled to arbitrate -- doesn't the CC agreement say that any dispute should be arbitrated? So by bringing this to court first, aren't they actually not following what was in our agreement? (Even if I don't give them notice, which I will try to do in any case.) Or is arbitration simply a right? i.e. I can request arbitration if I see fit, and so can they; but it's not a requirement. 

 

 

[Brotherskeeper]

3 hours ago, treblclef20 said:

 

@Brotherskeeper Thank you; appreciate your sharing your thinking on this in any case. 

In response to a consideration you raised about how plaintiff can be compelled to arbitrate -- doesn't the CC agreement say that any dispute should be arbitrated? So by bringing this to court first, aren't they actually not following what was in our agreement? (Even if I don't give them notice, which I will try to do in any case.) Or is arbitration simply a right? i.e. I can request arbitration if I see fit, and so can they; but it's not a requirement. 

 

 

Under US and NY law, arbitration of a dispute/claim is a matter of contract. What does the contract's arbitration section state? That all disputes or claims must be arbitrated? That no party to the contract may go to court? Or, that a party may choose to arbitrate under certain circumstances described in the contract's arbitration clause? A  party can choose/demand to arbitrate certain/any claims/disputes not exempted by the contract's arbitration clause--even if the other party has already filed a lawsuit, but before a trial? 

A motion to compel arb is a motion to have a judge order the other party to arbitrate, when that party opposes arbitration and wants to remain in court. If you've answered the complaint without asserting arbitration as a affirmative defense, have sent requests for production of many documents, not just the cc agreement, have not sent a notice of intent or a demand to arbitrate the claims, how has Plaintiff opposed or refused to arbitrate? They haven't been given the opportunity to do so yet; they've only exercised their contractual right to choose to file a claim in court. Unless the Citibank cc agreement bars them from ever filing in court. You haven't taken any steps since they filed to assert your contractual right to arbitrate their claim or any counterclaim you may have.

[treblclef20]

Update: I've discovered that I can just submit an "amended answer" to the court. I am past the normal deadline to do so, but a judge can decide to accept the updated answer. So I will submit the update tomorrow, and when I go to the pre-trial hearing later this week will let the judge know that I submitted it at this time having just learned about the arbitration clause in my CC agreement. 

I'll then overnight mail to the plaintiff's attorney: the amended answer + a letter stating intent to arbitrate.

That way, at least I will have done those things before the court date and can state to the judge that I have done so.

I have also received no answer to my discovery request, which I realize is a separate thing, but hopefully will help in that I am not the only one late to the game here.... 

If anyone has any thoughts on this, would greatly appreciate. Otherwise, I'll let you know how it goes.