Author Topic: SOL and procedural court  (Read 3034 times)

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howucantoo

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SOL and procedural court
« on: January 07, 2015 07:07:53 PM »
This is a long post,  (there was much more but I decided to cut some of the proceedings) without the lengthy detail it would be very difficult for anyone to understand and answer the questions..

Around 5.5 years ago there was a credit card dispute for a big amount with a big bank. The dispute was for cash advance check posted to the account (the amount was a few thousands). Consumer disputed the amount and  prior to this  the card holder had requested the bank to stop sending blank cash advance checks . (Consumer was paying off the account and did not want the temptation or the liability of them getting into the wrong hands ).

Creditor ignores the telephonic dispute and requests the consumer to fill out a form (the one on the back of the billing statements ). Consumer does as was told / required for investigation and sends in the paper work. ( Consumer did not write an additional  dispute letter, sent the one dispute from the back of billing statement by regular mail )

Weeks go by , nothing happened , the consumer  called the bank and requested the account be closed , bank agrees to close the account and in credit reports it is shown as " dispute / closed by consumer  ". All is fine up to this point so consumer is waiting on the result of the investigation.

Fast forward the collection calls start and law suit approximately followed six months after the dispute. Plaintiff /bank took more than half a year to serve the consumer.(don't ask why b/c consumer was available and lived in a building with a door man who was willing to allow anyone carrying envelope from the court inside). Bank's chosen law firm did not notify the consumer of the debt or an opportunity to dispute it , but after filing suit notified the consumer via letter that a suit was filed in xyz court. (First communication was the letter, but vague messages were left too ).

Consumer moves to compel arbitration and files in JAMS immediately after being served, but faces huge resistance both from the court and the bank’s attorney.  The bank’s court complaint couldn’t have been more flawed, but that didn’t stop the bank’s attorney  from objecting to arbitration (Mostly because the attorney was fresh out of law school and was getting her feet wet in the court arena) and the presiding  judge couldn’t have been  more agreeable with counsel. Campaign contributions really help persuade ;)

The next 2 + years is spent in a bloody litigation, the consumer is finally granted arbitration. Creditor voluntarily dismisses the case in the early 2012.

Meanwhile, bank refuses to  pay its JAMS fees (Consumer paid its fees about a year prior to court's dismissal) ,All along JAMS was sending requests for missing payments to the bank’s attorney  ( consumer had saved all of the request letters ) but all were ignored. Bank made its initial  payment  two months after the final notice from JAMS.  Technically, final notice sets a deadline for payment within 30 days or else the case will be dismissed . But as JAMS is a creditor friendly venue creditor bank was being accommodated for its big contributions.

Finally the arbitration commences in late 2012 with consumer filing multiple pages of complaint against the nasty bank and its law firm and attorney. The respondent bank files its answer and  counterclaimed  for the entire balance. The proceeding begins. Parties could not be more disagreeable which meant the demand for arbitrator's involvement and seven teleconference calls.
Bank was not willing to negotiate and it made it clear, their call !

Hearing is held with a team from the bank which included a witness flown from AZ.

Arbitrator disregards the rules of evidence and all other rules and issues an Award granting the bank the full asking amount. What? No  evidence but  hearsay testimony. This arbitration cost about $60K in fees alone (it does not reflect the attorneys fees and the live witness at the hearing).

Consumer filed a timely appeal which quoted the appeal’s clause in the bank’s card agreement and demanded the appeal  be conducted per terms of the contract, All parties were  notified by email and certified mail within the allotted time.

JAMS sends out a notice that  the notice of an appeal was received and JAMS will conduct an "Optional appeal" . The JAMS rule 34 is Optional appeal must be “agreed to” by all parties in writing. JAMS included a document for parties to sign. This immediately caused the  consumer to Object  to the optional  appeal procedure  by notifying all parties via certified mail and email, insisting on the enforcement of the contractual appeal.

The contract's appeal provision states: “ Appeal must request a new arbitration and “the panel will consider all factual and legal issues “anew” , follow the same rules that apply to a proceeding using a single arbitrator, and make decisions based on the vote of the majority.”

After six months of request for payment from the bank (Consumer pays additional $250 for a “new” arbitration). Keep in mind  “Anew” arbitration meant “Anew” fees, because the appeal (as per contract) was NOT an extension of the old arbitration but all must be conducted new, including new fees.

Commencement letter is received in early December 2013 , comprehensive rules are in place along with the consumer protocols.
Strike and rank list to be submitted along with the full complaint (by the claimant) by a certain date. Respondents must reply within 14 days with  counterclaim/answer (Rule 9), no answer deems denied.

Consumer files the Original complaint filed in the first arbitration (except for the  date the entire claim remained the same).  Bank’s attorneys  did not file counterclaim within the allotted time, nor asked for extension ( BTW Respondent/bank asked for two  separate extensions without notifying the consumer  in the first arbitration). This time nothing was filed or noticed to either JAMS or the consumer. A month passed by and still nothing filed on bank's behalf.

The First conference call with the tripartite was scheduled in spring of 2014; on the call the elected chair arbitrator recited to all of the submitted paperwork that was before the panel. One of them was the first Null Award  and every objection the consumer had filed with JAMS (remember  consumer filed multiple objection to the JAMS optional appeal proceeding  ). the Chair also acknowledged the receipt of the consumer's formal complaint .BUT Nothing was said about bank's counterclaim .

Because the first initial  teleconference  was very important and it could not have been legally recorded  ( state law prohibits recording without consent), the consumer takes copious notes and  converts them in to an affidavit which was notarized immediately on the same day after the conclusion of the call.

On the call the Chair arbitrator asked if the attorney represented the bank in the first arbitration ? Attorney responded  "Yes and we filed counterclaim".
Upon conclusion of the call the chair arbitrator ordered counsel to file the bank’s counterclaim along with the argument as to why Optional appeal vs Contractual appeal should apply to the proceeding and to do this in form of a motion and by a certain date. The Chair ordered the consumer to respond by a certain date .

Thirty days or so after the panel received both sides argument it issued its order  , the tripartite unanimously rejected the bank’s argument  , and  the consumer prevailed .

The new proceeding began  which included an fresh order for discovery and exchange of the  documents.
Again no counterclaim was filed albeit the arbitrator’s order. None.

Moving forward to discovery it was business as usual all was objected to as irrelevant. Meanwhile bank’s counsel sends partial billing statements and other material from the first arbitration, without any demand or counter for money .

Consumer ordered three bureaus credit report s (hard copies) in advance of the discovery, one of them, Equiax reports last payment was on Sept  1st  (five years ago) . Bank’s billing statement shows last payment was 22 days into September.  Big  discrepancy in reporting. It also shows consumer disputes and account closed by consumer. Report showed monthly fees and interest the account  was/is accumulating.

Discovery deadline approached  two weeks before the in-person hearing.  Consumer files a Motion in Liminie and requests all (Billing statements ) and material related to debt collection claim be disregarded because there has not been a counterclaim filed as was ordered  by the panel and it was too late to counter because all rules will be broken if it was allowed this late in the game.

BTW, Discovery ended in late August and MIL was filed a few days afterward in early days of September . By design MIL was filed after the date of the final payment the bank was reporting  to Equifax .

Here is bank's attorneys response to MIL (word for word );

In consumer’s motion in liminie, Claimant argues that bank should be precluded from bring its counterclaim during the upcoming hearing. Claimant contends that because bank did not file a counterclaim in response to Claimant’s notice of appeal, it should be precluded from bringing its claim at the hearing. The bank rejects Claimant’s position.

Claimant is misconstruing procedural posture of this proceeding. It is true that the initial teleconference, subsequent submissions and panel’s ruling dealt with issue of which procedure was to be followed. First scheduling order does not mention anything in relation to bank’s counterclaim.

It was bank’s position that JAMS rule were to be used. i.e. the panel was to review all claims based on previously submitted evidence foregoing an actual hearing. This panel ruled that bank’s rules were to be followed and a new hearing was to take place. This is not a new matter, but a continuation of claimant’s original claim against the bank and bank’s claim against Claimant.

Claimant misconstrues the meaning of “anew” as used in panels’ decision and JAMS rules. Reviewing issues anew simply means that the panel is going to decide all facts , evidences and arguments anew-this does not mean the parties will issue new pleadings or claims. This proceeding is not a new claim, but an appeal from previously decided claims which are to be reviewed and decided by a panel of three neutral arbitrators. As such, all claims previously filed, both on behalf of Claimant and the bank are subject to new review by this panel.
 


Notice something ?  The phrase;  “previously submitted evidence “ in their response?  Previously submitted to who ? The last arbitration was nullified and the new panel presumably had NOT seen the previous filings /records (at least that’s what they claimed) . Then what records counsel is talking about that was previously submitted and to who it was submitted?  Consumer already had submitted the affidavit where the panel read what was before it and the list did not include anything from the first arbitration BUT the AWARD.

BTW, Consumer's MIL was denied , and MTR was denied as well.

Hearing date approached, in the opening statement attorney stated: All of the consumer protection laws should be dismissed because statue of limitation had expired. Chair arbitrator made this statement : “If I am going to be allowing you (bank)  to counterclaim , then I must allow consumer protection law particularly FDCPA (one yr SOL) to stand, to be fair to the both sides”.

Hearing  concluded and the post-hearing brief was set due in the middle of October.

Here is the important part;

The only time during the entire proceeding  the bank countered for money was in the post-hearing brief.

This happened  Approximately a month after the statue of limitation on the entire debt had expired. Keep in mind the court case was voluntarily dismissed 2 years prior to arbitration so there was no tolling of the statue and the first award was considered NULL and VOID. 
In my understanding In order to preserve the SOL there should have been counterclaim filed in the new (Appeal) proceeding to prevent the tolling of the alleged debt and this should have been prior to approaching the 5 year SOL which was in September not afterward.

The panel rejected the bank’s demand for the balance because it could not prove the few thousand dollars posted to the account belonged to the consumer (how odd is it that from day one a copy of the check that was posted to the consumer’s account could not be tracked or provided  for inspection ) .

But then the Panel dropped the bomb and declared all of the consumer protection laws SOL!                                                                   

What the heck happened to the fairness ?

The panel erred  in its decision when it stated that the  consumer filed a complaint  in 2012.

 In oral argument and in the post hearing brief both the panel was reminded  that JAMS was filed  in 2010 right after the law suit was filed against the consumer , but because  arbitration would not commence until the business paid the required fees, commencement  would stall if the bank didn’t pay . Plus in JAMS, full complaint is filed after commencement letter is issued (meaning both side had paid their fees).

If consumer’s claims are not tolled then bank ‘s missing the deadline on filing counterclaim should be treated the same way and SOL should have ran out on those claims when  demand for money was filed in the “post hearing brief” after SOL had ran out.

Second the amount was improperly calculated , because there were  fees and interest rates associated with the amount in dispute and it should have been  reduced ,but the panel wrote : because calculation will take time we’ll just leave it alone.

Third. The opposing counsel mistakenly cited a 2004 agreement and panel (without paying attention to the actual contract’s year 2003) recited to the same year’s in its decision .  No contract was submitted for year 2004 (although in discovery the consumer requested bank to submit amendments and new agreements all of which were objected to as irrelevant).

Bank spent more than $120K for the appeal ( billing statements ) in JAMS /arbitration panel/travel/ fees alone and the billing statements do not reflect the expenses burdened by the bank . Attorney's fees (several attorneys working the case) and the live witness.

Question is : Because state does not recognize arbitration as an action can the SOL bar the bank from confirmation?

State law has a general five-year statute of limitation for civil actions."actions on unwritten contracts, expressed or implied,
or on awards of arbitration, or to recover damages for an injury done to property, real or personal, or to recover the possession of personal property or damages for the detention or conversion thereof, and all civil actions not otherwise provided for, shall be commenced within 5 years next after the cause of action accrued."

Question 2: The bank is not owed the few thousand dollars , but is reporting the same amount of debt without any changes . Consumer filed a dispute with the three credit bureaus and is awaiting the result of their investigation. Would this erroneous reporting be a violation of FCRA  to pursue in federal court?

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Bruno the JDB Killer

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Re: SOL and procedural court
« Reply #1 on: January 07, 2015 08:00:40 PM »
ZZZZZZZZZZZZZZZZZZZZZZZZ

Oh, sorry, I knew there was a question in there someplace. And this from someone who won't read my novels. What hubris. (look it up, it's not a food product)



Question is : Because state does not recognize arbitration as an action can the SOL bar the bank from confirmation?

I don't think so. The SOL would come into play in arb if the SOL had expired prior to filing for arb. In other words, you asked for it, you got it. Part of that was the loss of the SOL as a defense.

I don't think any court would disallow a confirmation of an award where the consumer asked for arbitration, got it, and made it last beyond the SOL. I think they would view the SOL as tolled by the arb request, just like a court judgment after ten years of litigation would still be valid.

If courts allowed this, it would undermine the entire arbitration process and nobody would ever collect an award, all the debtor would have to do is run out the clock. The judge would ask "the SOL was not in play when you started arbitration, why do you want to invoke it now?"


Question 2: The bank is not owed the few thousand dollars , but is reporting the same amount of debt without any changes . Consumer filed a dispute with the three credit bureaus and is awaiting the result of their investigation. Would this erroneous reporting be a violation of FCRA  to pursue in federal court?

If it comes back verified when the arbitrator said the money is not owed, I would say yes. You'll have to see what comes back, they may change it to avoid a suit. Especially with YOU, you little devil. Don't forget to send me a wedding invitation when you hook up with Sabo. Just think, he could double his wardrobe of undergarments.
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howucantoo

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Re: SOL and procedural court
« Reply #2 on: January 07, 2015 08:35:51 PM »
Wait until you're sober.

There was no counterclaim filed until POST hearing After SOL had passed . The arbitration rules says Counterclaim/answer should be filed within a certain time. If not it's basically denied.

As for marrying Sabo ,let's just say he doesn't prefer my type. Maybe you get a proposal and pink whatever soon.

Oh, the bank has wiped its traces (  accessing my credit) after the complaint was filed in JAMS. This issue of accessing credit during litigation touched the nerves of  one arbitrator. (They got an earful)
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Bruno the JDB Killer

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Re: SOL and procedural court
« Reply #3 on: January 07, 2015 08:44:10 PM »
When all else fails, resort to the cheap shot. Bruno cannot even have a nice glass of Chianti without being subjected to the tirades of the Harridan of Chicago.

Again, oh great frozen oracle of Illinois, how can you invoke the SOL when state law says it is out the window where arb is concerned? The judge will nail you with that.

As for marrying Sabo ,let's just say he doesn't prefer my type


No, he probably prefers humans. Although we are waiting for the DNA test, so you still have a shot. He kept looking at a picture in his pocket when he testified, I think it was yours because he had a translation program running.
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howucantoo

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Re: SOL and procedural court
« Reply #4 on: January 07, 2015 08:54:43 PM »
So I grilled him and his @#$%^ didn't stick like it did in some other cases  (Wink, wink).

This is what the law says  in regards to actions (court filing is an action )

 Section 13-205 provides: "actions on unwritten contracts, expressed or implied,
or on awards of arbitration, or to recover damages for an injury done to property, real or
personal, or to recover the possession of personal property or damages for the detention or
conversion thereof, and all civil actions not otherwise provided for, shall be commenced within 5
years next after the cause of action accrued." 735 ILCS 5/13-205 (West 2006).

they can twirl or twerk but can't file an action after SOL, it's against public policy.
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Bruno the JDB Killer

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Re: SOL and procedural court
« Reply #5 on: January 07, 2015 09:03:34 PM »
Yes, but you were in arbitration, not court. The SOL went out the window when you filed for arb and went to  Alinea  with Stevie for those cute little sandwiches with the crust removed. Why is the SOL suddenly an issue?

So I grilled him and his @#$%^ didn't stick like it did in some other cases  (Wink, wink).


How did that work out? Did you win your case, or just share makeup with him?
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howucantoo

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Re: SOL and procedural court
« Reply #6 on: January 07, 2015 09:21:32 PM »
What do you mean " SOL went out the window when you filed for arb "?

Are you suggesting that arbitration does not effect SOL ?

Well if that was the case then the panel was biased when consumer laws were thrown out because SOL effected them. SOL comes into play when it pertains to the tiny little consumer and the laws that protects its rights, then why doesn't it effect  the bank's over the statue counter?

If it's good for the geese it's good for the gander !
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Bruno the JDB Killer

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Re: SOL and procedural court
« Reply #7 on: January 07, 2015 09:36:47 PM »
YOU said arb cancelled the SOL because it is not a court action. Therefore, it does not apply in any way. Now you want it to apply because of the arb outcome. Can't have it both ways. Unless you accept Stevie's marriage proposal, then I'm sure you can. He's waiting breathlessly for you.

Let's see some case law that supports your position. (kneeling and begging LOL) Not case law related to filing beyond the SOL either, because that seems to be the basis of your argument. You're trying to game the system.

I suggest you put on your Donald Duck jammies and Bunny slippers, and take a bottle of Jameson to bed, and hope the power doesn't go out. You might want to read some law journals before you pass out. LOL That way you can answer your own argument, because I sure as heck can't.
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howucantoo

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Re: SOL and procedural court
« Reply #8 on: January 07, 2015 09:46:23 PM »
Oh I 'll have some reading for you :

http://www.thefreelibrary.com/When+do+statutes+of+limitations+apply+in+arbitration%3f-a0170582130

Case law ;

Peregrine Financial Group Inc. v. Futronix Trading, Ltd. No. 1-09-2293 (Ill. 1st May 21, 2010) on appeal, the court noted that sec. 13-205 of the Code of Civil Procedure explicitly includes “awards of arbitration” among the types of actions to which it applies. The court rejected the Plaintiff’s argument based on public policy — that applying the five-statute of limitations would run counter to Illinois public policy of enforcing arbitration awards. While it’s true that Illinois has such a public policy, the court said, it also has a public
policy to enforce statutes of limitations.
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howucantoo

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Re: SOL and procedural court
« Reply #9 on: January 07, 2015 09:59:06 PM »
Smither v. Asset Acceptance, Indiana Court of Appeals, 2010

"It is well-settled, however, that contractual choice of law provisions govern only the substantive law of any claims arising out of the contract; the law of the forum state where the suit is filed still governs procedure. A statute of limitation is a procedural constraint on when suit may be filed.  Additionally, "the prevailing authority indicates that, unless the parties expressly agree to apply the statute of limitations of another state, general choice of law provisions in contracts incorporate only substantive law and do not displace the procedural law of the forum state."
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howucantoo

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Re: SOL and procedural court
« Reply #10 on: January 07, 2015 10:03:31 PM »
Where did you go, Bruno?

I was getting warmed up !
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cgoodwin

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Re: SOL and procedural court
« Reply #11 on: January 08, 2015 01:55:56 AM »
Hearing date approached, in the opening statement attorney stated: All of the consumer protection laws should be dismissed because statue of limitation had expired. Chair arbitrator made this statement : “If I am going to be allowing you (bank)  to counterclaim , then I must allow consumer protection law particularly FDCPA (one yr SOL) to stand, to be fair to the both sides”.

Hearing  concluded and the post-hearing brief was set due in the middle of October.

Here is the important part;

The only time during the entire proceeding  the bank countered for money was in the post-hearing brief.

This happened  Approximately a month after the statue of limitation on the entire debt had expired. Keep in mind the court case was voluntarily dismissed 2 years prior to arbitration so there was no tolling of the statue and the first award was considered NULL and VOID. 
In my understanding In order to preserve the SOL there should have been counterclaim filed in the new (Appeal) proceeding to prevent the tolling of the alleged debt and this should have been prior to approaching the 5 year SOL which was in September not afterward.

The panel rejected the bank’s demand for the balance because it could not prove the few thousand dollars posted to the account belonged to the consumer (how odd is it that from day one a copy of the check that was posted to the consumer’s account could not be tracked or provided  for inspection ) .

But then the Panel dropped the bomb and declared all of the consumer protection laws SOL!                                                                   

I would challenge the confirmation on this issue.  Since the Chair originally said the SOL would be waived for the consumer claim, to turn around and enforce it would mean they should enforce it on all parties.  While the forum is allowed to be flexible on evidence and procedures, they have to be equitable to both parties.

The other issues raised are the risks of using arbitration.  The forum is allowed to make their own rules.
If you think this is legal advise.......
ask yourself why I wasn't smart enough to avoid this myself?!?

howucantoo

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Re: SOL and procedural court
« Reply #12 on: January 08, 2015 02:19:55 AM »
Definitely, I am going to challenge .

The reason I brought SOL up is because of the dismissal of the consumer protection laws. Not all of them were FDCPA most where state law claims which were proven to have been broken. Even one of the respondents admitted to breaking it. But the panel lightly dismissed as " Mistake". If that is the case every mistake shall be forgiven and no one should go to jail over anything.

Unfortunately, one of the panel was also involved in another arbitration case with the same bank. This may have swayed the votes, because if they all ruled for the consumer , then the bank would never hire them in JAMS. Decision has economic impact on the arbitrators.

BTW, I have no gag order so, when it's appropriate I may expose a lot more on hows and whos that will help consumers win their case.
« Last Edit: January 08, 2015 02:27:45 AM by howucantoo »
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cgoodwin

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Re: SOL and procedural court
« Reply #13 on: January 08, 2015 03:33:43 AM »
They may have inadvertently done you a favor.  They could have found they violated the law and awarded you a minimal amount.  That would have likely stood up under review.
If you think this is legal advise.......
ask yourself why I wasn't smart enough to avoid this myself?!?

Bruno the JDB Killer

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Re: SOL and procedural court
« Reply #14 on: January 08, 2015 01:48:09 PM »
Where did you go, Bruno?

I was getting warmed up !


Dinner time. I don't post at night. Looks like you're in with that case.
I am not an attorney. Any information I post is strictly my opinion and should be treated as such.

 

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