Electing Arbitration before Citibank sold debt to Calvary

[IrishNick]

Been searching the forum for an answer (thank you for all the info) and have a question.

I had a Citibank credit card account opened in 2011 that was kept current and paid until around 09/2018. A couple months prior I was no longer able to work due to a disability worsening and had filed with the Veterans Administration for a disability increase (which a year later I was rated 100% P&T disabled). My monthly income dropped to $1200 a month and could not afford to pay Citibank. I called and asked for either a lower payment or a temporary deferment until my VA increase was determined. They basically told me it was my problem not theirs, so without any income besides VA Disability, I was unable to pay them.

Fast forward to 07/15/2019 Citibank received my certified letter that I mailed on 07/10/2019 stating that I was electing arbitration in regards to the account. The next letter I received from Citibank dated 07/24/2019 said the account had been sold to Calvary SPC. In August Calvary sent me a letter saying they had bought the account and I owed them $2709. They sent me a copy of a Citibank 08/2019 invoice as proof of debt but not a copy of the signed original contract. I mailed Calvary a copy of the letter I sent  to Citibank electing arbitration via certified return receipt mail. I heard nothing from Calvary but I heard from their Virginia lawyers in January along with a summons set for 03/02/2020. I proceeded to also send them a copy of my original letter to Citibank. I know my question is last minute but I have some memory issues and blanked until I found the warrant the other day. 

Here's my question. Since Citibank received my election to arbitrate before selling the debt is Calvary required to honor that or am I screwed at my court appearance on Monday. Should I tell the Judge I want to go to trial? or can I get it dismissed because I elected arbitration with Citibank before the debt was sold. 

[Harry Seaward]

23 minutes ago, IrishNick said:

but not a copy of the signed original contract.

Forget about this.  No credit card ever has a signed contract.

23 minutes ago, IrishNick said:

Since Citibank received my election to arbitrate before selling the debt is Calvary required to honor that

An "election" to arbitrate is meaningless unless you actually initiate by opening a case and paying the fee.

The good news is that Cavalry is bound by the same agreement that allowed you to demand arbitration with Citi, so all you have to do is follow the steps in the thread I've linked to below.  The only possible hitch is that at some point Citi started including a 'small claims exemption' in their card agreements, so if your account was opened after this point in time, you likely won't be able to use arbitration if you have been sued in "small claims court".  It really all comes down to the wording of the agreement, because they had a couple of different versions of the small claims exemption, and one left a door open to possibly slip through if the court you were sued in isn't named "small claims court".  You'll need your original 2011 agreement to see what it says.

https://www.creditinfocenter.com/community/topic/329436-arbitration-overview-and-strategy-2018-most-up-to-date-info/

 

[Clydesmom]

46 minutes ago, Harry Seaward said:

It really all comes down to the wording of the agreement, because they had a couple of different versions of the small claims exemption, and one left a door open to possibly slip through if the court you were sued in isn't named "small claims court". 

Unfortunately in Virginia anything under $5000 is in Small Claims Court.  https://selfhelp.vacourts.gov/node/11/small-claims

The link is from 2019 so the information is current.  

1 hour ago, IrishNick said:

Since Citibank received my election to arbitrate before selling the debt is Calvary required to honor that or am I screwed at my court appearance on Monday.

As @Harry Seaward said electing arbitration is meaningless.  CITI considered that to be the same kind of empty threat as filing BK.  Until they actually get an arbitration case or a case from the BK court it is nothing but words.

1 hour ago, IrishNick said:

Should I tell the Judge I want to go to trial? 

You don't have a choice.  All civil cases under $5000 in VA are small claims and CITI has a carve out for small claims cases on arbitration.  Had you actually opened an arbitration case prior to the suit being filed you could have forced this out of court and kept it in arbitration.  

1 hour ago, IrishNick said:

can I get it dismissed because I elected arbitration with Citibank before the debt was sold. 

No.

The good news is if 100% of your income is from disability they cannot garnish the funds or levy your bank account.  DO NOT keep more than 2 months worth of benefits in the account.  Do not put non-exempt funds in there. Not even your great aunt's $5 birthday check.  DO NOT keep a joint account with anyone else.  As long as the only money in your account does not exceed 2 months worth of disability your money cannot be seized.

[IrishNick]

1 hour ago, Harry Seaward said:

An "election" to arbitrate is meaningless unless you actually initiate by opening a case and paying the fee.

I'll dive deeper into that thread tomorrow. Migraine starting...

The Affidavit of Claim I was sent was notarized in NY. It is only signed by the Calvary Legal Administrator. Is has the Notary Public's Name and info typed but no signature or stamp. Is this legal?

 

[Harry Seaward]

9 hours ago, Clydesmom said:

All civil cases under $5000 in VA are small claims

@IrishNick Turns out lawyers are not permitted in VA small claims courts, and since Cavalry cannot represent themselves, they have to have sued you in General District Court (or whatever they call it there).  You should be good to go on using arbitration, and the small claims exception, if it even exists in your case, is moot.

[Brotherskeeper]

1 hour ago, Harry Seaward said:

@IrishNick Turns out lawyers are not permitted in VA small claims courts, and since Cavalry cannot represent themselves, they have to have sued you in General District Court (or whatever they call it there).  You should be good to go on using arbitration, and the small claims exception, if it even exists in your case, is moot.

 

10 hours ago, Clydesmom said:

Unfortunately in Virginia anything under $5000 is in Small Claims Court.  https://selfhelp.vacourts.gov/node/11/small-claims

The link is from 2019 so the information is current.  

@Harry Seaward is correct according to the link posted above:

"Small Claims
A small claims court has the power to hear civil cases in which a party (the plaintiff) is seeking a money amount up to $5,000.  This court also hears cases where the plaintiff is seeking return of personal property valued up to $5,000.  In Virgnia, these cases are heard in the General District Court.

Trials in a small claims court are conducted in an informal manner.  Each party must represent themselves.  Witnesses are put under oath, and the judge can admit all relevant evidence without applying the formalities that apply to other courts.  The purpose of trials in small claims court is for the court to be able to decide the rights of the parties fairly and quickly."

**Note: Even if a case was filed in Virginia Small Claims Court, the case can be removed to General District Court before a judge rules on the case**

"What is Removal of the Case?
Before the judge decides the case, the defendant has the right to “remove” the case from the small claims court to the general district court by completing the Removal to General District Court form found on the back of the Warrant in Debt Form and giving it to the clerk or judge.  If a case is removed, all further proceedings will occur in the general district court where formal rules of practice, procedure, pleadings and evidence apply, and where parties can be represented by lawyers."
 

[IrishNick]

My warrant in debt says General District Court. I will tell the judge tomorrow I elect arbitration. Should I file with Jams before my appearance? 

 

EDIT: 

This is from the 2011 Citibank contract I found on the web.

"Who pays? Whoever files the arbitration pays the initial filing fee. If we file, we pay; if you file, you pay, unless you get a fee waiver under the applicable rules of the arbitration firm. If you have paid the initial filing fee and you prevail, we will reimburse you for that fee. If there is a hearing, we will pay any fees of the arbitrator and arbitration firm for the first day of that hearing. All other fees will be allocated as provided by the rules of the arbitration firm and applicable law. However, we will advance or reimburse your fees if the arbitration firm or arbitrator determines there is good reason for requiring us to do so, or if you ask us and we determine there is good reason for doing so. Each party will bear the expense of that party’s attorneys, experts, and witnesses, and other expenses, regardless of which party prevails, but a party may recover any or all expenses from another party if the arbitrator, applying applicable law, so determines"

Sorry for all the questions but i'm not the brightest bulb. Does this mean I will have to pay thousands of dollars to have the case moved to arbitration, or just the filing fee?

[BV80]

1 hour ago, IrishNick said:

My warrant in debt says General District Court. I will tell the judge tomorrow I elect arbitration. Should I file with Jams before my appearance? 

 

EDIT: 

This is from the 2011 Citibank contract I found on the web.

"Who pays? Whoever files the arbitration pays the initial filing fee. If we file, we pay; if you file, you pay, unless you get a fee waiver under the applicable rules of the arbitration firm. If you have paid the initial filing fee and you prevail, we will reimburse you for that fee. If there is a hearing, we will pay any fees of the arbitrator and arbitration firm for the first day of that hearing. All other fees will be allocated as provided by the rules of the arbitration firm and applicable law. However, we will advance or reimburse your fees if the arbitration firm or arbitrator determines there is good reason for requiring us to do so, or if you ask us and we determine there is good reason for doing so. Each party will bear the expense of that party’s attorneys, experts, and witnesses, and other expenses, regardless of which party prevails, but a party may recover any or all expenses from another party if the arbitrator, applying applicable law, so determines"

Sorry for all the questions but i'm not the brightest bulb. Does this mean I will have to pay thousands of dollars to have the case moved to arbitration, or just the filing fee?

No, you will not have to pay thousands.  Your cost is limited to the filing fee.  If it were me, I’d have my MTC arbitration ready to be filed.  You might also print out the JAMS forms and have them filled out to show the judge.  

Have you read this thread?

https://www.creditinfocenter.com/community/topic/329436-arbitration-overview-and-strategy-2018-most-up-to-date-info/

@fisthardcheese

[Brotherskeeper]

1 hour ago, IrishNick said:

My warrant in debt says General District Court. I will tell the judge tomorrow I elect arbitration. Should I file with Jams before my appearance? 

@IrishNick Did you file an answer to the complaint? Are you required to do so? 

I am not a lawyer. I believe under Virginia rules of civil procedure you will need to file a motion to compel arbitration and stay the case pending arbitration. I would not file a demand claim in JAMS prior to your court appearance. You are being sued and need to get that case stayed before filing with JAMS. Fisthardcheese's pinned thread on arbitration has a template for you to modify for your particulars. You might tell the judge that you notified the plaintiff of your election of arbitration and that you intend to file a motion to compel and stay the case. 

Here is an attorney prepared primer on Virginia arbitration. 

https://www.beankinney.com/media/publication/390_Compelling and Staying Arbitration in Virginia _00986602xAC2B5_.pdf

[Brotherskeeper]

1 hour ago, IrishNick said:

Sorry for all the questions but i'm not the brightest bulb. Does this mean I will have to pay thousands of dollars to have the case moved to arbitration, or just the filing fee?

From the JAMS website:

Consumer Arbitration Minimum Standards

"7. With respect to the cost of the arbitration, when a consumer initiates arbitration against the company, the only fee required to be paid by the consumer is $250, which is approximately equivalent to current Court filing fees. All other costs must be borne by the company, including any remaining JAMS Case Management Fee and all professional fees for the arbitrator's services. When the company is the claiming party initiating an arbitration against the consumer, the company will be required to pay all costs associated with the arbitration."

[IrishNick]

1 hour ago, Brotherskeeper said:

@IrishNick Did you file an answer to the complaint? Are you required to do so? 

The warrant In Debt says I need to answer at the 3/02 Court hearing. 

[IrishNick]

Thanks for all the help. I sincerely appreciate it. Been searching for answers but never been to court before so I think i'm over analyzing and missing the obvious answers.

[Brotherskeeper]

@IrishNick  Arbitration is considered to be an "Affirmative Defense," which is usually required to be pleaded in a "responsive pleading" such as an (written) Answer to the Complaint. I'm not familiar with what happens in a Virginia court hearing when a written Answer has not been filed. Please let us know what happens. Good luck.

[IrishNick]

@Brotherskeeper

This is the warrant in debt. From what I see and have read in VA law I need to answer at the court date. 

[Brotherskeeper]

@IrishNick That's what it says.

Virginia offers the plaintiff the right to non-suit this at the hearing, which plaintiff may choose when you bring up arbitration, or at some point along the way. 

 "What is a nonsuit? Simply stated, a nonsuit is a voluntary withdrawal or dismissal of a lawsuit by the party that filed it that allows the party to bring a second suit on the same cause of action. (See Va. Code § 8.01-380). It results in a termination of the case “without prejudice,” leaving open the possibility that the plaintiff will bring the same claims a second time."

[IrishNick]

Had my court hearing today. Filed my motion to arbitrate. Their lawyer was fine with that. Got a 60 day continuance to return to make sure Arbitration process has been started. The only thing that seemed odd was the Lawyer said arbitration was fine before we were called up. 

[Harry Seaward]

9 hours ago, IrishNick said:

The only thing that seemed odd was the Lawyer said arbitration was fine before we were called up.

Either he doesn't understand what you meant by "arbitration", or they are realizing fighting these motions is a fool's errand.  Most courts have compulsory arbitration (aka "mediation") that is sponsored by the court and is free to the parties, so its possible he thought that's what you were asking for.  You'll find out once you get your arbitration case open and they get their first $1,700 bill.

[IrishNick]

Never mind found the answer. 

[IrishNick]

To serve the demand I send (CMRRR) Cavalry's lawyer a copy of the the Demand for Arbitration form I downloaded from the site and filled out?

[Brotherskeeper]

9 hours ago, IrishNick said:

To serve the demand I send (CMRRR) Cavalry's lawyer a copy of the the Demand for Arbitration form I downloaded from the site and filled out?

"When sending in the Demand for Arbitration, I never send money initially.  If you are required to pay the $200/$250 consumer filing fee (or any portion of it), then the arbitration firm will tell you to submit that in order to continue.  They will never reject your filing, but will send you a case number and request for payment to move forward.  Having the case number is key evidence that you filed the case (which may be needed for Court later). If the Card Agreement states that "they" will pay for your filing fee, I will include a cover letter with my Demand form stating that per the Agreement you are asking the company to forward the consumer filing fee directly to AAA/JAMS.

Also when sending the Demand, I send it to AAA/JAMS and to the attorney for the JDB at the same time.  I send both CMRRR and retain the green cards.  Although the Demand Form instructions say that proof of service is needed, I simply include a "certificate of service" with my forms that states that I certify that I sent a copy to the JDB by USPS Certified Mail.  If there is ever a question about service after I file, I will have the green card to submit as proof if needed."

[IrishNick]

Is there a website with a list of phone numbers various JDB's call from? I found some from Cavalry but I'm sure there has to be more. It might be moot though since they can spoof their numbers. 

[IrishNick]

Calvary agreed to walk away from this case.

[Brotherskeeper]

2 hours ago, IrishNick said:

Calvary agreed to walk away from this case.

Fantastic!