Arbitration Agreement Says JDB Must Reimburse My Arbitration Fees/Expenses. Next Steps?

[LaneBlane]

I need some feedback concerning a situation with a JDB that filed in court against me in 2018.  I filed a MTC that was granted by the court and then filed a demand for arbitration with JAMS. JAMS eventually closed the case for non-payment.  Two years later, the court dismissed the case without prejudice for failure to prosecute.

Because this involved a commercial loan (not consumer), I had to pay a JAMS filing fee of around $650.  According to the arbitration provision, the JDB is on the hook to reimburse this fee.  Here's some language from the arbitration agreement:

1. "No matter which party initiates the arbitration, we will advance or reimburse filing fees and other costs or fees of arbitration."
    
2. "If either party fails to submit to arbitration following a proper demand to do so, that party will bear the costs and expenses, including reasonable attorneys’ fees, incurred by the party compelling arbitration."

Before JAMS closed the case, I sent an invoice to the attorney representing the JDB for reimbursement of my JAMS filing fee.  It was never paid.

NEXT STEPS

According to statements sent by the JDB years ago, the last payment on the account was made six years ago this month.  This will toll the SOL.

My plan is to wait for the SOL to toll before sending a letter to the JDB asking them to pay the unpaid invoice that represents reimbursement of the JAMS filing fee.  (I'll send a copy of my receipt and a copy of the arbitration agreement).  Because the collection trade line won't drop from my credit reports for another year, I was going to agree to waive reimbursement in exchange for having the tradeline removed.  Otherwise, I'd file in small claims for $650.

Any feedback or advise on this strategy would be greatly appreciated.  Thanks!

[Bulldoger]

 

26 minutes ago, LaneBlane said:

I need some feedback concerning a situation with a JDB that filed in court against me in 2018.  I filed a MTC that was granted by the court and then filed a demand for arbitration with JAMS. JAMS eventually closed the case for non-payment.  Two years later, the court dismissed the case without prejudice for failure to prosecute.

Because this involved a commercial loan (not consumer), I had to pay a JAMS filing fee of around $650.  According to the arbitration provision, the JDB is on the hook to reimburse this fee.  Here's some language from the arbitration agreement:

1. "No matter which party initiates the arbitration, we will advance or reimburse filing fees and other costs or fees of arbitration."
    
2. "If either party fails to submit to arbitration following a proper demand to do so, that party will bear the costs and expenses, including reasonable attorneys’ fees, incurred by the party compelling arbitration."

Before JAMS closed the case, I sent an invoice to the attorney representing the JDB for reimbursement of my JAMS filing fee.  It was never paid.

NEXT STEPS

According to statements sent by the JDB years ago, the last payment on the account was made six years ago this month.  This will toll the SOL.

My plan is to wait for the SOL to toll before sending a letter to the JDB asking them to pay the unpaid invoice that represents reimbursement of the JAMS filing fee.  (I'll send a copy of my receipt and a copy of the arbitration agreement).  Because the collection trade line won't drop from my credit reports for another year, I was going to agree to waive reimbursement in exchange for having the tradeline removed.  Otherwise, I'd file in small claims for $650.

Any feedback or advise on this strategy would be greatly appreciated.  Thanks!

IMO the date that starts SOL for the $650 is the date JAMS closed the case.  You may have to add the tolling due to On April 15, 2020, Governor Tim Walz signed into law HF 4556, which suspended all civil court filing deadlines, statutes of limitations, and other time periods prescribed by state law. Specifically, the legislation tolled statutory deadlines that govern district and appellate court proceedings until 60 days after the end of the peacetime emergency or February 15, 2021, whichever is earlier. 2020 Minn. Laws ch. 74, art. 1, sec. 16. The COVID-19 Peacetime Emergency declared on March 13, 2020, has been extended through December 14, 2020, and may be extended further. Emergency Exec. Order 20-97 
(Nov. 12, 2020).  

There may be more extensions so the SOL may be past the date the tradeline falls off credit report.  

JDB may not hold the debt or at least the law firm may have changed or not have your debt  anymore so you should call creditor JDB to find out where to send your request for payment. 

Minnesota small claims does not allow attorneys so if you file in small claims they will most likely just pay you the $650 rather than having to pay to transfer to district court and pay court fees attorney fees etc. 

So just send them a bill with notice you intend to sue if not paid within 30 days. If not paid then sue. 

[WhoCares1000]

Actually, MN Conciliation Court does allow attorneys. From the court website:

"Individuals can represent themselves or be represented by a lawyer in Conciliation Court and District Court. However, an individual may not be represented by a non-lawyer.

A business or association may be represented by a non-lawyer, such as an officer or manager, only in Conciliation Court. This is done by filing a Power of Attorney for Conciliation Court. See Minn. Stat. § 491A.02, subd.4.

If a business wants to appeal a Conciliation Court judgment to District Court, then the law requires that the business be represented by a lawyer. This includes having a lawyer sign the paperwork demanding the appeal. See the "Advisory Committee Comment" to Rule 521 of the General Rules of Practice for District Courts (Tit.VI).

If you want a lawyer to represent you, it is up to you to find a lawyer. The court does not appoint lawyers in Conciliation Court cases."

https://www.mncourts.gov/help-topics/conciliation-court.aspx

Go to FAQ's and you will find the question.

However, the question then becomes, how much will it cost them to defend a $650 lawsuit. Even if they have an in-house attorney.


So, why do debt collectors use district court? Because they can then use the pocket docket rules which are confusing to most lay people in Minnesota.

[LaneBlane]

On 9/2/2022 at 5:32 PM, Bulldoger said:

IMO the date that starts SOL for the $650 is the date JAMS closed the case.  You may have to add the tolling due to On April 15, 2020, Governor Tim Walz signed into law HF 4556, which suspended all civil court filing deadlines, statutes of limitations, and other time periods prescribed by state law. Specifically, the legislation tolled statutory deadlines that govern district and appellate court proceedings until 60 days after the end of the peacetime emergency or February 15, 2021, whichever is earlier.

Thanks for your response, Bulldogger.

The SOL I was concerned with was the one tied to the JDB's alleged debt (last payment September 2016).  I didn't want to file in small claims for the $650 JAMS fee and have them counter sue for about $7,000.  I'll review the SOL extensions to make sure I'm in the clear.

On 9/2/2022 at 5:32 PM, Bulldoger said:

JDB may not hold the debt or at least the law firm may have changed or not have your debt  anymore so you should call creditor JDB to find out where to send your request for payment. 

The JDB is still reporting this as a collection to all three CRAs.  If they sold the account to someone else, wouldn't this drop?  I'm assuming the law firm is no longer involved.  I can call the JDB when the time is right to ask where I can send correspondence.

On 9/2/2022 at 5:32 PM, Bulldoger said:

So just send them a bill with notice you intend to sue if not paid within 30 days. If not paid then sue. 

What do you think about my idea of giving them the option to either 1) pay the $650; or 2) remove the tradeline from the CRAs to avoid a suit being filed against them?  I'd also add the 30 day deadline.

 

16 hours ago, WhoCares1000 said:

However, the question then becomes, how much will it cost them to defend a $650 lawsuit. Even if they have an in-house attorney.

Because the arbitration agreement is clear when it comes to their responsibility to reimburse my arbitration fees and costs, I'm somewhat hopeful that they would either agree to pay the $650 or drop the tradeline from my credit reports.  Some people will spend $1,000 to save $1, so there's no telling what they'll do.

 

My goal is to get past the SOL for the alleged debt and have the JDB agree to remove the tradeline from the CRAs in exchange for dropping my claim for reimbursement of the $650. 

[BV80]

7 hours ago, LaneBlane said:

What do you think about my idea of giving them the option to either 1) pay the $650; or 2) remove the tradeline from the CRAs to avoid a suit being filed against them?  I'd also add the 30 day deadline.

The 7-year reporting period is based on the date of first delinquency.  That’s the date you went into default with the OC and never brought the account back to a current status.  The FCRA specifies that the period begins 180 days after the delinquency that leads to collection or charge off.

When was your date of delinquency with the OC after which you never brought the account back to a current status?  

[LaneBlane]

On 9/4/2022 at 6:22 AM, BV80 said:

The 7-year reporting period is based on the date of first delinquency.  That’s the date you went into default with the OC and never brought the account back to a current status.  The FCRA specifies that the period begins 180 days after the delinquency that leads to collection or charge off.

Thanks for this info, BV80!  I thought the 7-year reporting period was based on the date the last payment was made.

I'll check the running balance the JDB sent me back in 2018.  It's very possible these records show the account was first delinquent more than seven years ago and had never been brought current.

[BV80]

5 hours ago, LaneBlane said:

Thanks for this info, BV80!  I thought the 7-year reporting period was based on the date the last payment was made.

I'll check the running balance the JDB sent me back in 2018.  It's very possible these records show the account was first delinquent more than seven years ago and had never been brought current.

Good luck!   The relevant section of the FCRA is 15 U.S. Code § 1681c(c).

[LaneBlane]

15 hours ago, BV80 said:

Good luck!   The relevant section of the FCRA is 15 U.S. Code § 1681c(c).

Thanks for referencing the FCRA section.

I don't have a credit report that lists the date of first delinquency.  My TU report shows the item will be removed around August 2023.  August 2016 must be the "compliance date" the JDB reported to the CRAs.

According to the accounting the JDB provided years ago, the first delinquency was in 2015 and the account was never current as of the beginning of that year.  This would put me past the 7-year reporting period.

Minnesota's SOL extension in the wake of Covid-19 indicates the state "tolled statutory deadlines that govern district and appellate court proceedings until 60 days after the end of the peacetime emergency or February 15, 2021, whichever is earlier."  Because the last payment was made six years ago this month, the SOL should be tolled in a matter of days.

[LaneBlane]

Just a follow-up.

I sued the JDB in small claims last month for just over $2,500.  This included reimbursement of my arbitration fees, attorney's fees, and $1,000 for damages from FCRA violations for reporting the collection past the seven-year reporting period.

Less than a week before our hearing, the JDB sent me a check for the entire amount I was seeking.  They didn't admit to any liability and asked for a full release of any claims and dismissal of the court case with prejudice.

It would have been perfect to have this collection removed from my credit reports.  It's still there, though.  When you have a check in hand, it's probably a good idea to leave well enough alone.  I do have the email for the CEO that sent the letter accompanying the check.  Should I send him an email asking for removal, or should I take the win and drop it?

[BV80]

1 hour ago, LaneBlane said:

Just a follow-up.

I sued the JDB in small claims last month for just over $2,500.  This included reimbursement of my arbitration fees, attorney's fees, and $1,000 for damages from FCRA violations for reporting the collection past the seven-year reporting period.

Less than a week before our hearing, the JDB sent me a check for the entire amount I was seeking.  They didn't admit to any liability and asked for a full release of any claims and dismissal of the court case with prejudice.

It would have been perfect to have this collection removed from my credit reports.  It's still there, though.  When you have a check in hand, it's probably a good idea to leave well enough alone.  I do have the email for the CEO that sent the letter accompanying the check.  Should I send him an email asking for removal, or should I take the win and drop it?

Is the debt reporting 7 years past the date of first delinquency? 

[LaneBlane]

13 minutes ago, BV80 said:

Is the debt reporting 7 years past the date of first delinquency? 

Yes.  According to the running balance statement the JDB provided during the court proceedings, before my MTC Arbitration was granted, the date of first default was July 2015.  The statement shows the account was never brought current since then.  This is why I added $1,000 for FCRA damages to my small claims case against them.  (They included this $1,000 in their check to me).

 

[BV80]

1 hour ago, LaneBlane said:

Yes.  According to the running balance statement the JDB provided during the court proceedings, before my MTC Arbitration was granted, the date of first default was July 2015.  The statement shows the account was never brought current since then.  This is why I added $1,000 for FCRA damages to my small claims case against them.  (They included this $1,000 in their check to me).

 

I would file a well written, fact-specific dispute with the CRAs that are still showing the JDB’s account.  Provide proof of the date of first delinquency.  The dispute is that the account is past the reporting period and is, therefore, obsolete.  It should not come back verified which means it will be removed.

If the JDB is stupid enough to verify it, I would send a letter to the CEO.

When you added the FCRA damages to your small claims case, did you specifically allege that the account was still being reported despite ithe obsolete status?

[LaneBlane]

15 minutes ago, BV80 said:

If the JDB is stupid enough to verify it, I would send a letter to the CEO.

When you added the FCRA damages to your small claims case, did you specifically allege that the account was still being reported despite ithe obsolete status?

Thanks for your help, BV80.

Yes.  My claim specifically alleged the account was being reported past the 7-year reporting period.  A few months before I filed in court, I sent a letter to the JDB that referenced their running balance statement that showed when the first delinquency occurred.  My letter gave them the opportunity to remove the account from my credit reports.  Otherwise, I would file in small claims for damages under the FCRA.  They never responded, so I added $1,000 in FCRA damages to my claim.

Would a well-written, fact-specific dispute to the CRAs include a copy of my court claim, a copy of the JDB's check in the amount of the entire claim, and a copy of the running balance statement that shows the date of first delinquency?

[BV80]

Just now, LaneBlane said:

Thanks for your help, BV80.

Yes.  My claim specifically alleged the account was being reported past the 7-year reporting period.  A few months before I filed in court, I sent a letter to the JDB that referenced their running balance statement that showed when the first delinquency occurred.  My letter gave them the opportunity to remove the account from my credit reports.  Otherwise, I would file in small claims for damages under the FCRA.  They never responded, so I added $1,000 in FCRA damages to my claim.

Would a well-written, fact-specific dispute to the CRAs include a copy of my court claim, a copy of the JDB's check in the amount of the entire claim, and a copy of the running balance statement that shows the date of first delinquency?

Well, since the court didn’t rule on your lawsuit, I would not include a copy of your claim.  Without a ruling in your favor, it’s just a claim.  I would, however, include a copy of the balance statement that shows the date of first delinquency.

The reason I asked about the specifics of your complaint is in case the JDB gets really stupid and verifies the account with the CRAs.  Since your complaint alleged that the debt was obsolete, but the court made no ruling, you could possibly sue on that claim again, if necessary,  But I don’t know for sure.  A possible lawsuit is also the reason for disputing with the CRAs.  You have no cause of action if a specific dispute is not filed with the CRAs.  But, hopefully, the JDB won’t be stupid and it won’t get that far.

 

[LaneBlane]

33 minutes ago, BV80 said:

The reason I asked about the specifics of your complaint is in case the JDB gets really stupid and verifies the account with the CRAs.  Since your complaint alleged that the debt was obsolete, but the court made no ruling, you could possibly sue on that claim again, if necessary,  But I don’t know for sure.  A possible lawsuit is also the reason for disputing with the CRAs.

The letter from the CEO that accompanied the check reads, "By depositing this check, you agree to the full release of [JDB] and that you will dismiss the above referenced claim with prejudice within 10 days of the deposit date."  An earlier paragraph defines full release, "[JDB] does not admit to any liability, but is simply tendering payment in exchange for a full release of any claims you have had, may have or will have in the future against [JDB]."

If I deposit the check, I may not be able to sue the JDB for an FCRA claim again because I'm agreeing to a full release.  This depends on whether the JDB can legally have me agree to give up my right to sue them in the future if they continue to violate the FCRA.

 

[BV80]

10 minutes ago, LaneBlane said:

The letter from the CEO that accompanied the check reads, "By depositing this check, you agree to the full release of [JDB] and that you will dismiss the above referenced claim with prejudice within 10 days of the deposit date."  An earlier paragraph defines full release, "[JDB] does not admit to any liability, but is simply tendering payment in exchange for a full release of any claims you have had, may have or will have in the future against [JDB]."

If I deposit the check, I may not be able to sue the JDB for an FCRA claim again because I'm agreeing to a full release.  This depends on whether the JDB can legally have me agree to give up my right to sue them in the future if they continue to violate the FCRA.

 

I’d speak to a consumer attorney.  You could go ahead and dispute with the CRAs before depositing the check, but see what an attorney says first.  

[LaneBlane]

1 hour ago, BV80 said:

I’d speak to a consumer attorney.  You could go ahead and dispute with the CRAs before depositing the check, but see what an attorney says first.  

Thanks for the advise and feedback.  I really appreciate it.

 

[BV80]

24 minutes ago, LaneBlane said:

Thanks for the advise and feedback.  I really appreciate it.

 

Good luck! 👍

[LaneBlane]

14 minutes ago, BV80 said:

Good luck! 👍

Thanks!  I already have a check in hand for the full amount I was asking for, so I consider myself to be the victor here.

[LaneBlane]

@BV80

The account just dropped from one of my credit reports.  I'll run new reports tomorrow to see if they've dropped from the others.

I may have pulled off a complete victory here!

[BV80]

7 hours ago, LaneBlane said:

@BV80

The account just dropped from one of my credit reports.  I'll run new reports tomorrow to see if they've dropped from the others.

I may have pulled off a complete victory here!

I sure hope it falls off of all of them for you.

Sometimes it can take a couple of months for accounts to fall off after making agreements with debt collectors.  It could be because the debt collectors have to notify the CRAs and then the CRAs have to go through their process to remove them.  So removal per a “pay for delete” or some other agreement doesn’t happen over night or even in a week.  It’s not unusual for it to take some time.