When to file arbitration

[Robear]

Quick history:  I beat Midland in small claims (no counterclaim by me), which caused another claim by Cavalry (which I did have a counterclaim)  to settle with 0 and mutual dismissal w/prejudice a year ago.  Its been quiet ever since, however, I just received two dunning letters from two different attorneys for two different accounts.  One being capital one, the other synchrony bank (both are JDB).  No suits have been filed yet, but I feel its coming, most likely both being small claims.  I don't see an arbitration clause in the cap one agreement, so I can deal with that in small claims (same law firm I beat already).  The synchrony one is what I would like to pursue the arbitration strategy on.  The CCA has the following verbiage:

• What claims are subject to arbitration 1.  If either you or we make a demand for arbitration, you and we must arbitrate any dispute or claim between you or any other user of your account, and us, our affiliates, agents and/or Wal-Mart Stores, Inc. if it relates to your account, except as noted below.  2.  We will not require you to arbitrate: (1) any individual case in small claims court or your state’s equivalent court, so long as it remains an individual case in that court; or (2) a case we file to collect money you owe us. However, if you respond to the collection lawsuit by claiming any wrongdoing, we may require you to arbitrate. 3.  Notwithstanding any other language in this section, only a court, not an arbitrator, will decide disputes about the validity, enforceability, coverage or scope of this section or any part thereof (including, without limitation, the next paragraph of this section and/or this sentence). However, any dispute or argument that concerns the validity or enforceability of the Agreement as a whole is for the arbitrator, not a court, to decide. 

My question is, should I wait for a lawsuit or file a claim with aaa/jams preemptively?  I've read mixed feeling about each on this site.

My main concern in waiting for a lawsuit is that I cannot find any way to file a MTC in small claims in alabama.  I have googled it, looked up the court rules and even called the clerks office.  I cannot find any way to have the judge rule on moving it to arbitration, short of showing up to trial and explaining that I want arbitration as provided in the CCA.  If that is the only way, should I then have a case started already before I get there?  The answer sheet for small claims has 4 boxes to check:

A. □ I do not live in this county and the suit against me is not for work or labor performed in the county where suit has been filed; thus, I want this case transferred to my home county of ______________________________________________,

B. □ I admit everything in the Statement of Claim and do not want a trial. (This means that you consent to a judgment for the amount claimed plus court costs).

C. □ I admit that I owe some money, but not the total amount claimed by the plaintiff(s). (If this block is checked, the case will be set for trial. Please note that any money paid by you on this claim after the suit was filed may not be reflected on the Statement of Claim which you receive. You should contact the person who has sued you or his/her attorney to determine the present balance which is claimed).

D. □ I deny that I am responsible at all. (If this block is checked, this case will be set for trial).

I'm still well within the 30 days since dunning, the amount alleged is just shy of 5k.

Looking for suggestions, advice, anything.  Anybody in Alabama been through this?

Thank you all, this site really helped with the first two victories!

@fisthardcheese @Harry Seaward @BackFromTheDebt @BV80

[BV80]

@Robear

If I’m not mistaken, @fisthardcheesedoes not recommend filing a preemptive MTC unless the claim is not subject to small claims court.   I don’t believe the Synchrony agreement makes that exception.  

The Federal Arbitration Act makes no reference to a level of a particular court.   Your rules should include something about motions,   It doesn’t have to be specific to a MTC arbitration.  In fact, some state supreme court rules apply to lower courts. 

[Robear]

 hSo I'm still digging, but I was able to find the following on the Alabama Supreme Court and State Law Library: 

ALABAMA SMALL CLAIMS RULES

Rule N.

Applicability of ARCP The Alabama Rules of Civil Procedure as modified for applicability in the district courts shall be applicable to court cases when necessary to serve the ends of justice and when the Alabama Rules of Civil Procedure, as modified, are not inconsistent with these rules.

And looking up Alabama Rules of Civil Procedure under Pleadings and Motions on the same website, I found this:

(b) Motions and other papers.

(1) An application to the court for an order shall be by motion which, unless made during a hearing or trial, shall be made in writing, shall state with particularity the grounds therefor, and shall set forth the relief or order sought. The requirement of writing is fulfilled if the motion is stated in a written notice of the hearing of the motion.

(2) The rules applicable to captions and other matters of form of pleadings apply to all motions and other papers provided for by these rules.

(3) All motions shall be signed in accordance with Rule 11.

I also found a "motion cover sheet"  (see attached file)

 

If I understand correctly, I can make a motion just as if it was district court.  I would use the attached cover sheet along with my motion and my affidavit for the CCA should the JDB take this to court.  Is that how you read it?

Motion Cover Sheet.pdf

[fisthardcheese]

I would not file the JAMS claim until after court, HOWEVER, I would suggest filling out the JAMS Demand form and having copies with you in court.

Many small claims court don't look at motions prior to the trial date.  You will just have to file it and then expect the attorney to look at it for the first time on the trial date when you meet with them during the settlement talk.  I would pressure the attorney at that point to show you know that you are entitled to arbitration by law and will have the case moved.  If they don't want to agree to stipulate, then you can go to the judge to make it happen.

[Robear]

Thanks Fist, that's exactly the precise advice I was looking for.  

 

[Robear]

Just wanted to update this post, I did get served for both accounts as expected.  The Cap1 is up for trial next week, I have filed a counterclaim due to some clear FDCPA violations. I'm not too worried about this one, the judge is fairly debtor friendly if you know what to say (and I do). The other suit (Synchrony) has a hearing scheduled for my MTC arb. that I filed.  I want to help any other folks in Alabama find what I couldn't at first--filing a MTC in small claims.  I finally figured out to go to the courthouse and get on their computer system and just look through the small claims cases, especially concerning JDB cases.  Once you find a case that is similar you can see if it contains motions, if so you can see and even print (for a fee) a copy of it, thus learning how to compose it to meet your local court rules.  Some used a district court cover sheet for motions and some didn't (I didn't). You can file a MTC with your answer, which is what I did, don't forget to include a letter of service and mail a copy to the opposing side (you will also see a sample for that as well).  I got notice for a hearing for my MTC a few days later.  I'll update again after the upcoming showdowns.

[BV80]

6 hours ago, Robear said:

Just wanted to update this post, I did get served for both accounts as expected.  The Cap1 is up for trial next week, I have filed a counterclaim due to some clear FDCPA violations. I'm not too worried about this one, the judge is fairly debtor friendly if you know what to say (and I do). The other suit (Synchrony) has a hearing scheduled for my MTC arb. that I filed.  I want to help any other folks in Alabama find what I couldn't at first--filing a MTC in small claims.  I finally figured out to go to the courthouse and get on their computer system and just look through the small claims cases, especially concerning JDB cases.  Once you find a case that is similar you can see if it contains motions, if so you can see and even print (for a fee) a copy of it, thus learning how to compose it to meet your local court rules.  Some used a district court cover sheet for motions and some didn't (I didn't). You can file a MTC with your answer, which is what I did, don't forget to include a letter of service and mail a copy to the opposing side (you will also see a sample for that as well).  I got notice for a hearing for my MTC a few days later.  I'll update again after the upcoming showdowns.

The Cap1 is not one of the 2 that was already dismissed?

[Robear]

33 minutes ago, BV80 said:

The Cap1 is not one of the 2 that was already dismissed?

Nope, the two that were dismissed were Synchrony (midland) and comenity (cavalry).

 

[BV80]

19 minutes ago, Robear said:

Nope, the two that were dismissed were Synchrony (midland) and comenity (cavalry).

 

Okey dokey.  In the Cap1 lawsuit, are you being sued by Cap1 or a debt buyer?  What are the FDCPA violations?

[Clydesmom]

12 hours ago, Robear said:

The Cap1 is up for trial next week, I have filed a counterclaim due to some clear FDCPA violations.

Capital One is an original creditor and the FDCPA does not apply to an OC.  What FDCPA violations do you believe you have?

If it is against the law firm they will simply dismiss that firm forcing you to pursue the FDCPA claim(s) against them separately.

[Robear]

5 hours ago, BV80 said:

Okey dokey.  In the Cap1 lawsuit, are you being sued by Cap1 or a debt buyer?  What are the FDCPA violations?

JDB, the violations are continued collection before validation 

[Robear]

1 hour ago, Clydesmom said:

Capital One is an original creditor and the FDCPA does not apply to an OC.  What FDCPA violations do you believe you have?

If it is against the law firm they will simply dismiss that firm forcing you to pursue the FDCPA claim(s) against them separately.

It's not an OC, see the post above

[Goody_Ouchless]

43 minutes ago, Robear said:

JDB, the violations are continued collection before validation 

So you can show that you requested validation within 30 days of the first letter they sent you, and they continued active collection efforts in the space between when they received your validation request and when they validated?

 

[BV80]

54 minutes ago, Robear said:

JDB, the violations are continued collection before validation 

You didn’t happen to send a validation request when you were sued, did you?

[Robear]

49 minutes ago, BV80 said:

You didn’t happen to send a validation request when you were sued, did you?

No at dunning, before suit was filed

[BV80]

29 minutes ago, Robear said:

No at dunning, before suit was filed

Okay.  Just getting facts right now.   Sorry for all the questions.
 

1.  You received an initial communication that contained the 30-day validation notice?  
 

2.  If so, was it from the plaintiff or the attorney representing the plaintiff?  
 

3.  To whom did you send the validation request?

4.  Was your request sent within the 30-day time period?

[Robear]

Yes, I received a collection letter from the law firm with the 30 day verbiage.  I sent a simple validation letter certified RR, after they signed for it they sent another collection letter and filed suit THEN sent validation.

[Clydesmom]

5 hours ago, Robear said:

JDB, the violations are continued collection before validation

The problem with this is the burden of proof is on you.  Few states allow a consumer to validate at any time and Alabama is not one of them.  They are only required to validate under the FDCPA if you dispute the debt within 30 days after initial contact with you.  If they can prove they sent even one letter prior to the one you sent a dispute on your claim falls flat.

If there is no violation (and they are rare these days) they may still fold with a counter claim filed as most JDBs prefer the easy fast collection not having to work for it.

[BV80]

3 hours ago, Robear said:

Yes, I received a collection letter from the law firm with the 30 day verbiage.  I sent a simple validation letter certified RR, after they signed for it they sent another collection letter and filed suit THEN sent validation.

Is Cap1 named as the plaintiff?  Due to the requirements of the FDCPA, this is important.  

[Robear]

45 minutes ago, Clydesmom said:

If they can prove they sent even one letter prior to the one you sent a dispute on your claim falls flat.

Agreed.  But that's what court is about, what they can prove and what I can prove.

 

47 minutes ago, Clydesmom said:

If there is no violation (and they are rare these days) they may still fold with a counter claim filed as most JDBs prefer the easy fast collection not having to work for it.

 Agreed.  I beat one already this way.  I don't expect they will fold, in fact I'm kind of excited to prove my case, but if it comes up I'll take it.  Time will tell...

[Robear]

19 minutes ago, BV80 said:

Is Cap1 named as the plaintiff?

Nope, its a common U-gly, N-o good, I-gnorant, F-oolish, U-ppity, N-auseating, D-isgusting  JDB, if you know what I mean

[BV80]

1 minute ago, Robear said:

Nope, its a common U-gly, N-o good, I-gnorant, F-oolish, U-ppity, N-auseating, D-isgusting  JDB, if you know what I mean

Okay.  Based upon what I understand, the alleged FDCPA violation would be against the law firm representing the JDB.  

There is always the possibility that the JDB will voluntarily dismiss the lawsuit.  However, if that doesn’t happen, you need to consider and prepare for the possibility of the following.

The law firm is not a party to the lawsuit filed against you.   There are usually rules for filing counterclaims against non-parties.  

What are your court rules for counterclaims against nonparties to a lawsuit?  Did you read and follow those rules?

Since the plaintiff is a debt buyer, it could possibly be held vicariously liable for the actions of its agent, but you need to find out what your courts have ruled on that issue.  Assuming it can be vicariously liable, you would have to make the proper allegations.

 

[Robear]

18 minutes ago, BV80 said:

What are your court rules for counterclaims against nonparties to a lawsuit?

Here is the best I could find so far, what do you make of it?

http://judicial.alabama.gov/docs/library/rules/cv13.pdf

 

Then there is this specifically for small claims:

http://judicial.alabama.gov/library/SmallClaimsRules

Defending. The defendant shall file a short and plain reply showing what defendant admits, what he denies and why he denies it. This reply shall be called an answer, shall be filed within the deadline set forth at Rule “F”, and the form of answer [SM-3] appearing in the appendix to these rules shall be sufficient. If a defendant has a claim against a plaintiff, he shall file it with his answer and send a copy of it to the plaintiff. Said claim shall be in the form applicable to a complaint and it shall be called a counterclaim [SM-6]. Failure of a defendant to make a counterclaim which is based upon things which gave rise to plaintiff's claim will not of itself prevent the defendant from raising such claim in another court or case so long as the defendant either wins his case in the court or prevents the judgment of the court from becoming a final judgment by the filing of a notice of appeal as provided in Rule “M”. Answer may not be made by a motion to dismiss. The court shall be very lenient in the allowance of changes or amendments to complaints, answers and counterclaims and continuances of trials when necessary to serve the ends of justice

 

[fisthardcheese]

On 11/15/2019 at 11:05 PM, BV80 said:

Okay.  Based upon what I understand, the alleged FDCPA violation would be against the law firm representing the JDB.  

There is always the possibility that the JDB will voluntarily dismiss the lawsuit.  However, if that doesn’t happen, you need to consider and prepare for the possibility of the following.

The law firm is not a party to the lawsuit filed against you.   There are usually rules for filing counterclaims against non-parties.  

What are your court rules for counterclaims against nonparties to a lawsuit?  Did you read and follow those rules?

Since the plaintiff is a debt buyer, it could possibly be held vicariously liable for the actions of its agent, but you need to find out what your courts have ruled on that issue.  Assuming it can be vicariously liable, you would have to make the proper allegations.

 

It has been a few years and I did not save the case law where I can easily access it because this was a case I had an attorney work on, however, I filed a counter claim against a JDB due to similar actions of their agent law firm.  A debt collector can be held liable for the actions of their agent attorney when the attorney is doing the collection work for the collector (i.e. sending dunning letters) and not just acting as representation.

[BV80]

1 minute ago, fisthardcheese said:

It has been a few years and I did not save the case law where I can easily access it because this was a case I had an attorney work on, however, I filed a counter claim against a JDB due to similar actions of their agent law firm.  A debt collector can be held liable for the actions of their agent attorney when the attorney is doing the collection work for the collector (i.e. sending dunning letters) and not just acting as representation.

Agreed.  I just don’t know for a fact that all courts have made that decision.  Hopefully, the OP has precedent that would help him.