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Lawsuit Filed, I want to pursue Arbitration, Questions on My Case and Process - Urgent Action needed. Minnesota


HaplessHoper
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I was served a debt collection lawsuit and never met the JDB. Crown Asset Management is JDB for Prosper loan/note. 

I filed an answer and an amended answer (to clarify a counterclaim) and unfortunately, became ill and am now in a situation of deemed admissions giving rise to a MSJ. In Minnesota, the lawsuit does not have to filed with the court right away, and has up to a year; with this situation, the case was filed after Thanksgiving. I was in the process of preparing/filing a Motion for Leave to Withdraw and Amend Deemed Admissions, whereupon I ran across your website. After reading about arbitration, I believe this very well may be a more useful option in my case. 

I'd like to file a second amended answer, to add the arbitration affirmative defense (missed that first time round, thinking it was not beneficial). I believe I could file the MTC Arbitration along with it. I could also do an affidavit of the arbitration clause/document. I can get that Monday afternoon (needing a notary)

Because of the MSJ, time is of the essence. I have the MSJ to stop and need this to be a silver bullet. My concern is, whether there is anything else I need to consider when using arbitration. This is a prosper note, so it has the standard arbitration clause most of them do. But the amount owing is less than $3K. Are there arbitration costs that I should be aware of? I did read the @fisthardcheese post which indicates the fees are rather modest ($200 and $250, AAA and JAMS). How would I decide which arbitration to use and must I specify that in the MTC? (I do see it in the example, but is it "required" to specify the option you will use?)

Otherwise, Minn. RCP indicate I can proceed in this direction, as long as I can still amend. (I cannot find anything definitive saying I cannot amend, as we were in discovery and now a MSJ is on the table. We were not at trial.) The case was just entering discovery, then the plaintiff counsel filed a MSJ accelerating the case to a hearing which is 2/4/21. I have to respond to the MSJ by end of Dec. If the MTC is successful, would this take care of the MSJ or would i need to file an answer to dismiss it due to the jurisdiction issue? (Help on that argument would be appreciated; I can research how to write it but any key points related to arbitration is where I'm weak.) 

The reasons this approach seems advantageous to me are: 1) JDB bought from OC, 2) amount suing for is less than $3K, making it likely the JDB will not want to arbitrate, 3) seems like less of a headache in that both require mental exercise but arbitration seems like an option that would help me most in options - with court, and I lose, there is less wiggle room). Also, I'm not sure I fully understand the settlement advantage ( settling for $0 with a mutual dismissal with prejudice). Does this mean the JDB settles for $0 and then dismisses their complaint/case with prejudice? In my case, it's more concerning because of the MSJ and deemed admissions, so I'm wondering - should I ALSO file the Motion to Withdraw and Amend Deemed Admissions, if only to state, hey, I wasn't ignoring you, I was sick and life happened and you are basing your MSJ on allegations, not facts. It seems that I would not, because I want to get out of litigation altogether, but I would appreciate your views here. 

Is there anything else to consider?

Time is ticking and I am grateful for your timely responses. I will be filing something by Monday, 12/21.

Thank you, and I appreciate your feedback. Sorry if this is long - I have a few twists and turns that seem a bit atypical so tried to point those out.

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2 hours ago, HaplessHoper said:

I was served a debt collection lawsuit and never met the JDB. Crown Asset Management is JDB for Prosper loan/note. 

I filed an answer and an amended answer (to clarify a counterclaim) and unfortunately, became ill and am now in a situation of deemed admissions giving rise to a MSJ. In Minnesota, the lawsuit does not have to filed with the court right away, and has up to a year; with this situation, the case was filed after Thanksgiving. I was in the process of preparing/filing a Motion for Leave to Withdraw and Amend Deemed Admissions, whereupon I ran across your website. After reading about arbitration, I believe this very well may be a more useful option in my case. 

I'd like to file a second amended answer, to add the arbitration affirmative defense (missed that first time round, thinking it was not beneficial). I believe I could file the MTC Arbitration along with it. I could also do an affidavit of the arbitration clause/document. I can get that Monday afternoon (needing a notary)

Because of the MSJ, time is of the essence. I have the MSJ to stop and need this to be a silver bullet. My concern is, whether there is anything else I need to consider when using arbitration. This is a prosper note, so it has the standard arbitration clause most of them do. But the amount owing is less than $3K. Are there arbitration costs that I should be aware of? I did read the @fisthardcheese post which indicates the fees are rather modest ($200 and $250, AAA and JAMS). How would I decide which arbitration to use and must I specify that in the MTC? (I do see it in the example, but is it "required" to specify the option you will use?)

Otherwise, Minn. RCP indicate I can proceed in this direction, as long as I can still amend. (I cannot find anything definitive saying I cannot amend, as we were in discovery and now a MSJ is on the table. We were not at trial.) The case was just entering discovery, then the plaintiff counsel filed a MSJ accelerating the case to a hearing which is 2/4/21. I have to respond to the MSJ by end of Dec. If the MTC is successful, would this take care of the MSJ or would i need to file an answer to dismiss it due to the jurisdiction issue? (Help on that argument would be appreciated; I can research how to write it but any key points related to arbitration is where I'm weak.) 

The reasons this approach seems advantageous to me are: 1) JDB bought from OC, 2) amount suing for is less than $3K, making it likely the JDB will not want to arbitrate, 3) seems like less of a headache in that both require mental exercise but arbitration seems like an option that would help me most in options - with court, and I lose, there is less wiggle room). Also, I'm not sure I fully understand the settlement advantage ( settling for $0 with a mutual dismissal with prejudice). Does this mean the JDB settles for $0 and then dismisses their complaint/case with prejudice? In my case, it's more concerning because of the MSJ and deemed admissions, so I'm wondering - should I ALSO file the Motion to Withdraw and Amend Deemed Admissions, if only to state, hey, I wasn't ignoring you, I was sick and life happened and you are basing your MSJ on allegations, not facts. It seems that I would not, because I want to get out of litigation altogether, but I would appreciate your views here. 

Is there anything else to consider?

Time is ticking and I am grateful for your timely responses. I will be filing something by Monday, 12/21.

Thank you, and I appreciate your feedback. Sorry if this is long - I have a few twists and turns that seem a bit atypical so tried to point those out.

Have you determined if you need the permission of the court to file another amended answer?  

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11 hours ago, HaplessHoper said:

Thanks for your reply.

Yes, I will need it, which is why I am filing it with a Motion for Leave to Amend. I'm not completely sure I can't get around it but fairly sure it won't hurt if I file for leave.

It won’t hurt, but if it’s granted, the other party may argue that you waived your right to arbitrate by not raising the issue in your 2 previous answers.  

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The issue is, sickness is not an excuse for not following the court timeline and if you needed more time to answer discovery, you should have asked for it before discovery was due. In court, it is better to ask for permission than for forgiveness. They court may allow it but I would not bank on it, especially when the other side has victory in its sights. They are going to fight vigorously to stop this. Also, the fees have been paid by the plaintiff (more on this below) so you can be sure they are going to make sure that the fees were not for naught. Pro Se litigants are held to the same standards as lawyers.

Then next argument will be about when you had a copy of the contract. That will determine when you should have brought up arbitration. Since you are deep in the litigation process at this point, you might have given up that right to arbitrate but that will be based on when you should have known about it. Reading something on the internet after the fact is not when you should have known about it. The timing would have been based on contract.

Finally, Minnesota courts are expensive for both parties which is one of the reasons why Pocket Docket is used. I figure you already paid $375 in court fees (initial filing and first motion to amend). You will pay another $75 for the reply to the MSJ and $75 for the motion to remove sanctions and amend you answer and another $75 for MTC. At that point, you will have spent $600 on court fees with another $200 - $250 for arbitration. If you can come up with $1000 in this short of a time, why did you not offer the plaintiff a settlement on the debt rather than going through all this (or you can still offer a settlement and see if they take it). It will cost more to settle than it would have if you had started the arb process prior to filing in court.

To be honest, I am not sure of your chances here at succeeding at this point. You would have had a better chance when this started at getting the MTC or even a decent settlement without going to court.

 

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2 hours ago, WhoCares1000 said:

The issue is, sickness is not an excuse for not following the court timeline and if you needed more time to answer discovery, you should have asked for it before discovery was due. In court, it is better to ask for permission than for forgiveness. They court may allow it but I would not bank on it, especially when the other side has victory in its sights. They are going to fight vigorously to stop this. Also, the fees have been paid by the plaintiff (more on this below) so you can be sure they are going to make sure that the fees were not for naught. Pro Se litigants are held to the same standards as lawyers.

Then next argument will be about when you had a copy of the contract. That will determine when you should have brought up arbitration. Since you are deep in the litigation process at this point, you might have given up that right to arbitrate but that will be based on when you should have known about it. Reading something on the internet after the fact is not when you should have known about it. The timing would have been based on contract.

Finally, Minnesota courts are expensive for both parties which is one of the reasons why Pocket Docket is used. I figure you already paid $375 in court fees (initial filing and first motion to amend). You will pay another $75 for the reply to the MSJ and $75 for the motion to remove sanctions and amend you answer and another $75 for MTC. At that point, you will have spent $600 on court fees with another $200 - $250 for arbitration. If you can come up with $1000 in this short of a time, why did you not offer the plaintiff a settlement on the debt rather than going through all this (or you can still offer a settlement and see if they take it). It will cost more to settle than it would have if you had started the arb process prior to filing in court.

To be honest, I am not sure of your chances here at succeeding at this point. You would have had a better chance when this started at getting the MTC or even a decent settlement without going to court.

 

I didn't plan not to answer discovery but yes, it happened. I also tried to reach opposing Counsel more than once through this process with no success. I was never given a name, a direct phone number, nothing. When I got sick I think I gave up. All that said, I understand your points.

What I'm trying to find out is whether I can use arbitration at this point. The plaintiff's counsel never consulted me on filing this with the court. On most things, I've been told to consult with counsel and this has not happened in reverse. Why am I held to a standard their counsel does not perform? I do get your point, but I mention these points because I feel the system is rigged against the debtor. And it sounds like you think it's the same. This is very discouraging, but what came to mind when I read about arbitration is that it would be a way out that might be somewhat fair. I didn't know it was even a defense. I thought it was an option one should never use to be honest. I'm a pro se litigant by way of need not knowledge. And I'm really not trying to game the system. I'm trying to find a defense that would be fair. In this state, there is very little fairness in this process other than perhaps, being able to amend pleadings. 

I'm seeking to understand if I can use this option. I realize there may be court costs with the initial casework. I cannot help that now. I want to move forward with something that I feel will work and allow me a chance. Right now, and even from the beginning, I feel that I had no chance. I guess I got a glimmer of hope and wanted to learn more. There is an arbitration clause. And based on previous writings here, it seems like a viable option. I'm not a lawyer and I've not had anyone I've consulted even mention this option. Things are learned through litigation and this is why amendments are allowed. work. 

You didn't speak as to whether the arbitration would be viable, only that amending my answer may not be allowed. I often see that pleadings are to be amended "when justice so requires" and when replying to this post, and that article was talking about affirmative defenses. So I believe I can amend my answer. I can at least try. Here is a link to that aritcle. https://trepanierlaw.com/anatomy-of-an-answer-to-a-minnesota-summons-and-complaint/

Thank you for your feedback. I appreciate any and all comments.

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1 hour ago, HaplessHoper said:

I didn't plan not to answer discovery but yes, it happened. I also tried to reach opposing Counsel more than once through this process with no success. I was never given a name, a direct phone number, nothing. When I got sick I think I gave up. All that said, I understand your points.

What I'm trying to find out is whether I can use arbitration at this point. The plaintiff's counsel never consulted me on filing this with the court. On most things, I've been told to consult with counsel and this has not happened in reverse. Why am I held to a standard their counsel does not perform? I do get your point, but I mention these points because I feel the system is rigged against the debtor. And it sounds like you think it's the same. This is very discouraging, but what came to mind when I read about arbitration is that it would be a way out that might be somewhat fair. I didn't know it was even a defense. I thought it was an option one should never use to be honest. I'm a pro se litigant by way of need not knowledge. And I'm really not trying to game the system. I'm trying to find a defense that would be fair. In this state, there is very little fairness in this process other than perhaps, being able to amend pleadings. 

I'm seeking to understand if I can use this option. I realize there may be court costs with the initial casework. I cannot help that now. I want to move forward with something that I feel will work and allow me a chance. Right now, and even from the beginning, I feel that I had no chance. I guess I got a glimmer of hope and wanted to learn more. There is an arbitration clause. And based on previous writings here, it seems like a viable option. I'm not a lawyer and I've not had anyone I've consulted even mention this option. Things are learned through litigation and this is why amendments are allowed. work. 

You didn't speak as to whether the arbitration would be viable, only that amending my answer may not be allowed. I often see that pleadings are to be amended "when justice so requires" and when replying to this post, and that article was talking about affirmative defenses. So I believe I can amend my answer. I can at least try. Here is a link to that aritcle. https://trepanierlaw.com/anatomy-of-an-answer-to-a-minnesota-summons-and-complaint/

Thank you for your feedback. I appreciate any and all comments.

Read the following ruling about a defendant who appealed a judgment after failing to respond to admissions. See if it is, in some ways, similar to your situation.

https://scholar.google.com/scholar_case?case=7802790961183648141&q=“amended+answer”+AND+“prejudice”&hl=en&scisbd=2&as_sdt=4,24

Here is a ruling to study regarding the waiver of the right to arbitrate.  It may have some case law you can use to support a MTC if you get that far.

https://scholar.google.com/scholar_case?case=12612423902261158891&q=“arbitration”+AND+“waive+the+right”+AND+“litigation”&hl=en&as_sdt=4,24

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Sending a link regarding deemed admissions, are you implying that I need to address those as well as the MTC? 

My understanding is that I could file a motion for leave to amend my answer, along with an amended answer to include the defense of arbitration (now that I know it is one), along with a MTC for the arbitration (with affidavit). If I am pursuing a different route due to jurisdictional issues, I would think I may not have to respond to the deemed admissions. That said, it did make me realize I may also need to file a motion to vacate or stay pending completion of the arbitration (not sure, still learning). It would seem that filing the stay would please the court and it would still have a view of the outcome. But must I also address deemed admissions? I think by invoking arbitration, I'm implying that something may be there, but that i want to use the arbitration process to discover it instead of the court. I still don't know that this plaintiff/party has any rights. I just didn't know several facts about arbitration until I read more about it. I didn't even know it was a defense. 

Also the order about the deemed admissions, thinking it is similar to mine: no it's not. My case was in discovery and instead of contacting me, conferring with me, as counsel is supposed to do (and I attempted to do, without success), they proceeded to take advantage of a technical procedure with admissions to get an advantage. I wasn't over a year down the tracks. The case was a few months old. We have not had a trial, period, let alone a hearing for MSJ. And there is a reason I want admissions deemed withdrawn that could be proven during discovery; there appears to be a problem with their paperwork. So my situation is different, and in order to be heard, I thought this might be a better track. Your response alone leads me to think that. I do appreciate your voice, but it seems bitterly condemning. 

I'm just not clear whether I need to do both: reply to the deemed admissions so that I can fight the MSJ or whether the arbitration approach would address that. 

I realize this is a difficult situation but I appreciate your time and feedback. I guess I will proceed with my leave to amend, amended answer and MTC. I will add a motion to stay pending completion of arbitration. I just think arguing both sides needs clarification because it seems that doing both may not be required or even useful. I will keep pursuing what I need to address there.

Thank you.

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First off, once the case is served on you, they can move it to the court at any time by paying the fees. The 1 year limit only applies to ensuring that cases are filed in a timely fashion after being served because of past abuses of the system by creditors. In fact, a consent decree between all Minnesota Hospitals and the Attorney Generals office states that the hospitals will immediately file cases in the court as soon as the defendant answers. You are not going to get too far with that response in the court.

You really need to read through the Minnesota rules of civil procedure. Is the other side required to do a meet and confer before asking for sanctions and did they prove that before requesting that admissions be deemed admitted. Can you prove that you tried to contact the plaintiff. Is there really a problem with the papers they sent? Are the admissions an order at this point or simply a motion (which is easier to fight, you simply file a motion to oppose their motion and fight it out in court, same for the MSJ). In fact, if you go back to the beginning of discovery, it might be easier to include arbitration.

The problem here is, as you say, the case is already a few months old. Arbitration is something that usually has to be brought up quickly (same for other defenses such as SOL). Otherwise you waive your right to arbitration. Now, the judge may allow it anyways but it would be at their discretion. BV80 included those cases to give you an idea on how to fight and what to search for in fighting these things. They might not match your situation exactly but that is what lawyers do, take cases that are close and argue to the judge that they should rule for or against a certain action based on previous rulings (or that you might not have a case based on previous rulings).

Finally, things are different in each state and Minnesota has some very weird rules when it comes to civil cases. The excessive court fees and pocket docket system in Minnesota is a dead horse that has been beaten many times in this board. In fact, in a normal case that has not reached the court yet, we tell Minnesota residents to send in the answer and MTC, and then call the plaintiff and offer $600 as settlement because that is what it will cost in court fees and arb fees to get to arbitration. The plaintiff either accepts the settlement, abandons or dismisses the case without going to court, or goes to court and the wheels start. You case is so far in that this will not work. You therefore need to do the research to determine if you can stop the train wreck or not.

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7 hours ago, WhoCares1000 said:

First off, once the case is served on you, they can move it to the court at any time by paying the fees. The 1 year limit only applies to ensuring that cases are filed in a timely fashion after being served because of past abuses of the system by creditors. In fact, a consent decree between all Minnesota Hospitals and the Attorney Generals office states that the hospitals will immediately file cases in the court as soon as the defendant answers. You are not going to get too far with that response in the court.

You really need to read through the Minnesota rules of civil procedure. Is the other side required to do a meet and confer before asking for sanctions and did they prove that before requesting that admissions be deemed admitted. Can you prove that you tried to contact the plaintiff. Is there really a problem with the papers they sent? Are the admissions an order at this point or simply a motion (which is easier to fight, you simply file a motion to oppose their motion and fight it out in court, same for the MSJ). In fact, if you go back to the beginning of discovery, it might be easier to include arbitration.

The problem here is, as you say, the case is already a few months old. Arbitration is something that usually has to be brought up quickly (same for other defenses such as SOL). Otherwise you waive your right to arbitration. Now, the judge may allow it anyways but it would be at their discretion. BV80 included those cases to give you an idea on how to fight and what to search for in fighting these things. They might not match your situation exactly but that is what lawyers do, take cases that are close and argue to the judge that they should rule for or against a certain action based on previous rulings (or that you might not have a case based on previous rulings).

Finally, things are different in each state and Minnesota has some very weird rules when it comes to civil cases. The excessive court fees and pocket docket system in Minnesota is a dead horse that has been beaten many times in this board. In fact, in a normal case that has not reached the court yet, we tell Minnesota residents to send in the answer and MTC, and then call the plaintiff and offer $600 as settlement because that is what it will cost in court fees and arb fees to get to arbitration. The plaintiff either accepts the settlement, abandons or dismisses the case without going to court, or goes to court and the wheels start. You case is so far in that this will not work. You therefore need to do the research to determine if you can stop the train wreck or not.

Why do you think it's "so far along"? Discovery was supposed to start (their discovery was served, I had not yet filed mine). A few months passed, no interaction. (I can prove that.) I can also prove on my phone that I called them. I didn't make every call from my phone but I did some of them. It shows that I tried to confer. 

I am trying to figure out how to get into arbitration and avoid/deal with the MSJ that way. It's an odd set of circumstances. I need case law supporting that I didn't waive my rights and also that I have issues of material fact. Some are averments until I get out of discovery, which oddly, seems like I missed being able to do it. Why can't I do it? What about FDCPA issues? What about not even knowing who this party is until they sued me? It's really weird and then, now I have to fight these things and would struggle even with that. 

I don't feel I have used the "litigation machinery" sufficient to prove arbitration would be a complete about face. Had they conferred, they would also know that, and they could have avoided court costs. Can I state that? I feel that I can and should, and that this is s factor. What can they prove once I show them my phone records? That they didn't answer the phone? That's a nice picture. That's the picture I want to paint. This has not been fair but then, I've got this monkey wrench in that I got very sick. I just think there is room for reconsideration.

Thanks for your feedback. It's just a tough situation; everyone here has been helpful.

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On 12/21/2020 at 1:45 PM, HaplessHoper said:

 What about FDCPA issues? What about not even knowing who this party is until they sued me? It's really weird and then, now I have to fight these things and would struggle even with that.

What kind of FDCPA violations do you think have been committed? About the only way any FDCPA violation would help you is either a.) you file your own suit, or counter sue the JDB, or b.) use it as leverage to try and get the matter presently in court dismissed.

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8 minutes ago, HaplessHoper said:

I did add potential FDCPA violations. I had never heard of this party before suit. I asked for debt validation by way of the lawsuit process; I'm not sure that would even work if they prove standing. But I did add in that possibility in the Answer as a counterclaim. 

Explain some more, please.  What exactly did you state in your counterclaim?  

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