Bugsy

Plaintiff dismissed case w/o prejudice

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Hello everyone, I was sued by midland credit in the state of New Jersey. This morning we had our hearing. When the judge was checking us in via zoom call the plaintiffs atty asked the court to dismiss the case in order for the defendant (me) to compel arbitration. I had a MTC filed, but no hearing date. The judge asked the plaintiff whether it be with or without prejudice. Unfortunately it was w/o prejudice. My question is what do I do next? Do I take them into arbitration even though they technically dropped their case? I still have the collections reporting on my credit profile and was really hoping for mutual dismissal w/prejudice. 

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We will need to know who the OC is and whether this was sold and you are being sued by a JDB or not. You will have to start Arb at some point because of you don't, they will sue you again and if you try the MTC, they will say you had your chance but did not follow through so you did not mean it.

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Original creditor was synchrony bank(PayPal credit) the JDB was midland credit management. I took your advice and filed with AAA (followed the arbitration clause in our contract). So far midlands lawyers haven’t filed an answer. I really don’t have a defense so I would love to settle this. All I want is for them not to sue me again or sell the debt off. How/what should I write to them? 

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3 hours ago, Bugsy said:

Original creditor was synchrony bank(PayPal credit) the JDB was midland credit management. I took your advice and filed with AAA (followed the arbitration clause in our contract). So far midlands lawyers haven’t filed an answer. I really don’t have a defense so I would love to settle this. All I want is for them not to sue me again or sell the debt off. How/what should I write to them? 

Is this the same lawsuit as referenced in your other thread?  In that one, you said it was dismissed with prejudice.

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29 minutes ago, Bugsy said:

Correct same lawsuit the “with” prejudice was a typo. Sorry about that I meant without prejudice 

Well, you could try to get them to arbitrate, but they don’t have to do so.  At that point, you’d have to MTC.  Even then, they could fail to pay the fees, and the arbitration case would be closed.   That could help you if they filed another lawsuit, but I doubt they’ll file.  However, it wouldn’t really help you with getting the TL removed from your CR.

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21 hours ago, Bugsy said:

Gotcha well it looks like they filed an answer. They sent me the copies, so I’m assuming they’re going to follow me into arbitration for a $2,000 debt 

You mean that Midland's attorney(s) filed Respondent's Answer to your AAA claim demand?

Did Midland file a counterclaim for the debt amount? 

I'm not clear whether or not you had a court order granted to compel Midland to arbitrate. If yes, did you include a copy of the court order to compel Midland when you filed your claim demand in AAA? 

In the past, AAA refused to handle claims with Midland without the court order. Midland failed to follow AAA's rules. @fisthardcheese may know if this is still the case. If AAA declines to arbitrate this, AAA will send a letter to both parties. 

 

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We didn’t have a court order as they dismissed the case w/o prejudice. They didn’t file a counter claim I don’t think. They just filed an answer and I learned today they paid the fees. So I guess into arbitration is set to go forward. 

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@Bugsy What did you write on the AAA consumer demand form in the box that asks you to briefly explain the nature of the dispute? If you included their claim against you, then they would not have to file it as a counterclaim. 

You should've received a copy of everything the JDB as the Respondent sent to AAA. Without a court order, AAA may still decline to allow arb with Midland to go forward if Midland has not cured its non-compliance with AAA's rules. 

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Ohh gotcha. I just made it simple and wrote something along the lines of debt dispute. I received a packet from the law firm representing midland. Just showed the debt they claim I owe along with statements etc.. I owe about 2k and didn’t think they would pay the fee. But as of yesterday I learned they payed the initial $500 fee. Not sure where to go from here. Any advice would be greatly appreciated 

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It is hard to tell you the next steps, other than play it by ear.  

Are there more fees later on for AAA?  Perhaps you should contact them ASAP and try to work out some sort of settlement, preferably a mutual walkaway.  If there will be more fees later, your chances of such a settlement improve.

 

The thing is, these things are not 100% predictable.  The vast majority of the time they don't pursue the case in arbitration, but sometimes they do.  

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@Bugsy @BV80  @WhoCares1000 @BackFromTheDebt 

I think you need to find out from AAA if they will agree to arbitration with Midland without a court order. Also, will you request a hearing or a documents only arbitration? 

https://www.adr.org/sites/default/files/Consumer_Fee_Schedule_2.pdf

New AAA Consumer Fee Schedule Addresses Mass Arbitration Costs

"A litigation phenomenon that has recently surged is the simultaneous filing of hundreds or even thousands of individual arbitration demands against the same company by the same law firm, requiring the company to pay the substantial up-front filing fees typically charged by arbitration administrators.  Initially used in the context of employment arbitration claims, such “mass arbitrations” are now also being pursued against consumer businesses.

The American Arbitration Association (“AAA”) recently implemented a sliding scale for filing fees in “multiple consumer cases.”  The fees will apply when the AAA determines, in its sole discretion, that 25 or more similar arbitration claims have been filed by or against the same party by the same counsel or coordinated counsel.  The rules took effect on November 1, 2020.

Under prior AAA rules, in an arbitration commenced by an individual consumer, the filing fee was as high as $1,900. The business was required to pay $1,700 of that amount, and the consumer $200.   Failure to timely pay the filing fee could result in dismissal of the arbitration, enabling the consumer to sue in court.  When thousands of individual arbitrations were made or threatened against a company, as has happened on several occasions, the up-front filing fees totaled millions of dollars.  Under the new rules, the following filing fees are payable by businesses in “multiple consumer cases”: (a) $300 per case for the first 500 cases; (b) $225 per case for cases 500 to 1,500; (c) $150 per case for cases 1,501 to 3,000 and (d) $75 per case for cases 3,001 and beyond.  Consumers pay $100 per case for the first 500 cases, and $50 per case for cases 501 and beyond.

It is too early to tell whether the new AAA rules will have an impact on the filing and administration of mass arbitration claims.  The AAA rules also require businesses to pay a $1,400 case management fee prior to the appointment of an arbitrator, a minimum $2,500 arbitrator fee, half of which is payable once a preliminary management conference is held, and a $500 hearing fee.  The rules do not clarify whether these additional amounts must be paid in each case or if and how they are adjusted if there are multiple consumer cases.  Nor do they clarify whether multiple consumer cases must be filed at the same time or can be aggregated over a period of time.  In any event, this is clearly a step in the right direction as it seeks to balance the rights of all parties to the arbitration agreement."

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4 hours ago, Brotherskeeper said:

@Bugsy @BV80  @WhoCares1000 @BackFromTheDebt 

I think you need to find out from AAA if they will agree to arbitration with Midland without a court order. Also, will you request a hearing or a documents only arbitration? 

https://www.adr.org/sites/default/files/Consumer_Fee_Schedule_2.pdf

New AAA Consumer Fee Schedule Addresses Mass Arbitration Costs

"A litigation phenomenon that has recently surged is the simultaneous filing of hundreds or even thousands of individual arbitration demands against the same company by the same law firm, requiring the company to pay the substantial up-front filing fees typically charged by arbitration administrators.  Initially used in the context of employment arbitration claims, such “mass arbitrations” are now also being pursued against consumer businesses.

The American Arbitration Association (“AAA”) recently implemented a sliding scale for filing fees in “multiple consumer cases.”  The fees will apply when the AAA determines, in its sole discretion, that 25 or more similar arbitration claims have been filed by or against the same party by the same counsel or coordinated counsel.  The rules took effect on November 1, 2020.

Under prior AAA rules, in an arbitration commenced by an individual consumer, the filing fee was as high as $1,900. The business was required to pay $1,700 of that amount, and the consumer $200.   Failure to timely pay the filing fee could result in dismissal of the arbitration, enabling the consumer to sue in court.  When thousands of individual arbitrations were made or threatened against a company, as has happened on several occasions, the up-front filing fees totaled millions of dollars.  Under the new rules, the following filing fees are payable by businesses in “multiple consumer cases”: (a) $300 per case for the first 500 cases; (b) $225 per case for cases 500 to 1,500; (c) $150 per case for cases 1,501 to 3,000 and (d) $75 per case for cases 3,001 and beyond.  Consumers pay $100 per case for the first 500 cases, and $50 per case for cases 501 and beyond.

It is too early to tell whether the new AAA rules will have an impact on the filing and administration of mass arbitration claims.  The AAA rules also require businesses to pay a $1,400 case management fee prior to the appointment of an arbitrator, a minimum $2,500 arbitrator fee, half of which is payable once a preliminary management conference is held, and a $500 hearing fee.  The rules do not clarify whether these additional amounts must be paid in each case or if and how they are adjusted if there are multiple consumer cases.  Nor do they clarify whether multiple consumer cases must be filed at the same time or can be aggregated over a period of time.  In any event, this is clearly a step in the right direction as it seeks to balance the rights of all parties to the arbitration agreement."

I think it would be dependent on whether the business wishes to go into arbitration or not. That is why I like @fisthardcheese's idea to hold off filing for arbitration until you have the order to compel in hand. Of course sometimes, you think you have the order or at least agreement (such as the recent Virginia case that has been discussed).

With the sliding fee scale, will that make businesses more likely to short circuit the court process and go directly to arbitration. Note that the rules say "by the same counsel or coordinated counsel. I highly doubt pro se defendants could be considered coordinated by any legal means of the word. Seems like they are lowering their initial fees. They will have to make the money back from somewhere.

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1 hour ago, WhoCares1000 said:

I think it would be dependent on whether the business wishes to go into arbitration or not. That is why I like @fisthardcheese's idea to hold off filing for arbitration until you have the order to compel in hand. Of course sometimes, you think you have the order or at least agreement (such as the recent Virginia case that has been discussed).

It isn't easy of late to get some of these judges to issue the order to compel; they will stay the case for 90-120 days, but stop short of signing an order.  I believe it was back in 2016 or so when forum members began to get letters from AAA that declined to accept claim demands against Midland due to Midland's failure to follow AAA's rules. Fisthardcheese advised that AAA would accept the claim if there was a court order compelling Midland that could be included in the demand packet--if an order could be gotten. Perhaps Midland has now complied with the AAA conditions and is back in the good graces of AAA. I hadn't heard that it had. 

Here's the gist of AAA letter a CIC member posted from June, 2016: 

Dear Parties:

Claimant has filed with us a demand for arbitration. We note that the arbitration clause provides for arbitration by the American Arbitration Association (“AAA”).

We must, at this time, decline to administer this claim and any other claims between Midland Funding, LLC and its consumers because the business failed to comply with the AAA's policies regarding consumer claims. These policies can be found on our web site, www.adr.org, in the Consumer Due Process Protocol (“Protocol”) and the Consumer Arbitration Rules.

On a previously-filed consumer matter, this business did not timely submit its share of the filing fees and/or failed to waive a provision in its consumer contract that the AAA identified as a material and substantial deviation from the Protocol. The AAA sent correspondence informing the business that it may decline to administer consumer arbitrations involving this business and requested that the business remove the AAA from its consumer arbitration agreements so that there would be no confusion to the public.

In addition, Midland Funding, LLC has not complied with our request to register its consumer clause on the AAA's Consumer Clause Registry (www.adr.org/consumerclauseregistry). Please note that submission of the expedited review fee on any particular matter does not satisfy the separate obligation to register the consumer clause.

Accordingly, we have administratively closed our file and will refund any payment received by the filing party. According to R-1(d) of the Consumer Arbitration Rules, should the AAA decline to administer an arbitration, either party may choose to submit its dispute to the appropriate court for resolution.

Pursuant to the AAA's current policy, in the normal course of our administration, the AAA may maintain certain electronic case documents in our electronic records system. Such electronic documents may not constitute a complete case file. Other than certain types of electronic case documents that the AAA maintains indefinitely, electronic case documents will be destroyed 18 months after the date of this letter.

Please email ConsumerFiling@adr.org if you have any questions.

Sincerely,


Consumer Filing Team
ConsumerFiling@adr.org
Fax: (877) 304-8457

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