Author Topic: Can I sue an OC for bringing a suit they didn't intend to litigate?  (Read 760 times)

0 Members and 1 Guest are viewing this topic.

debtcetera

  • Valued Member
  • Posts: 4
I was recently sued for a $3500 Capital One card by a law firm that acts more like a CA -- they'd also sent me dunning letters and made collections calls, which I'd ignored.  It was not sold to a JDB -- Cap1 was the named plaintiff -- but they didn't even send one of their own attorney's to PA magistrate court, probably because I'm a couple hours away from their big city offices.

They sent a "local counsel" guy with a couple of pages from a few recent statements.  I complained to the judge that he couldn't sue me for breach of a credit card contract without attaching the contract or credit card agreement to the complaint, which he had not.  The judge asked him if he had a copy of the agreement, and he immediately changed gears and tried to "plead in the alternative" that his claim was based on an "account stated" theory, which does not require a written contract attached.  The nice judge informed him that under an account stated theory, he had no basis to claim any interest or late fees, as these were only agreed to in the original credit card agreement that he'd chosen not to attach.  She then asked him if he knew how much of the $3500 was principal, and how much was interest & fees.  After some stammering and paper shuffling that was Simply Priceless to watch, he admitted that he did not.  So she entered a judgement for me, but made a point of warning me that the bank could, and probably would, appeal to the Court of Common Pleas (state court, where evidence and answers and discovery and real rules apply) within 30 days.  But they did not.  So I won.

Now, I want to file a class action suit against Capital One for threatening to take legal action that they don't intend to take because it seems to me that it could be proven by inspection of their records that they file these suits not to litigate them, but only to harass debtors. A company like Capital One probably files thousands of these every week, employing many different local law firms to file the papers and appear in court, but they dismiss cases quickly, fail to appear or, as in my case, don't even provide the poor local counsel with the paperwork necessary to get past the first court date.  It should be able to be proven, simply from the numbers, that their business model here is clearly to file a massive number of cases, only to:

a. collect settlements from those scared into settling, and
b. garnish the wages and bank accounts of those afraid to appear

And it would be many FDCPA violations if it can be shown that they walk away from those cases where consumers actually show they intend to defend themselves.

I know from reading and lurking here for about a year now that the common wisdom is that it's kind of insane to try and sue an OC, and completely <REMOVED> crazy to attempt a class action against a national bank, due to their deep pockets... but it seems obvious to me that the OC must be telling the CA law firms what to do, and PA's FCEUA makes OC's just a liable for FDCPA violations as CA's, so... I would think this could be proven in discovery, right?

I am just <REMOVED> crazy, right?

thanks in advance for your smackdowns and shuttupkid's

-detc





Admin Note:   Inappropriate language removed.
  :tos:
« Last Edit: October 02, 2017 05:16:07 PM by Admin0248 »

Clydesmom66

  • Valued Member
  • Posts: 2173
Re: Can I sue an OC for bringing a suit they didn't intend to litigate?
« Reply #1 on: October 02, 2017 04:16:18 PM »
Yes, you are crazy. First the FDCPA does not apply to original creditors.  Second they DID litigate. You won but that doesn't automaticalky mean they took an action they didn't intend. Even then the FDCPA does not apply. Be happy you won and walk away.
Be VERY careful following advice from the internet! What worked for someone with thousands of posts on a message board may not work for YOU in your state.  Consult a lawyer when ever possible.

debtcetera

  • Valued Member
  • Posts: 4
Re: Can I sue an OC for bringing a suit they didn't intend to litigate?
« Reply #2 on: October 02, 2017 05:58:43 PM »
Yes, you are crazy. First the FDCPA does not apply to original creditors.  Second they DID litigate. You won but that doesn't automaticalky mean they took an action they didn't intend. Even then the FDCPA does not apply. Be happy you won and walk away.

Thanks Clydesmom66,

I guess I am a bit overeager because, actually, this is now the *second* OC to sue us for thousands of dollars and then basically give up when it became clear we would defend ourselves.  The first time was last year: Discover sued my wife in our local magisterial district court.  In that case, we appeared and argued, but they won the judgement against us for over $4000.  Afterwards I was able to get the judgement set aside by the Court of Common Pleas on a technicality (improper venue, they'd sued us in the wrong local district court).  And here again, they failed to even refile in the correct court, which would have been trivial for them to do.

That said, I don't really want to stir that pot, since their judgement was set aside without prejudice, so they can choose to refile it any time until the SOL (4 years in PA, maybe 2 left, unless the first case tolls the SOL...?).

It just makes my blood boil that these giant credit card companies' business model would be to sue consumers only for the purpose of getting default judgements, giving up the moment it looks like they might incur any actual legal costs as a consequence of their litigiousness!

Yes i know i should be happy and walk away, but I'm 2 for 2 and hard-headed :-) And it just seems unfair that they get to use the courts to intimidate consumers, garnish the wages of families and seize their bank accounts, but then they can simply walk away whenever it suits them.  Especially when there are these consumer protection laws specifically intended to protect consumers from unfair practices such as intimidation by big companies.  I guess if more people knew how easy it is to countersue, that would make banks think twice...

But FYI, as I mentioned, the FDCPA *does* apply to OC's in PA, because any violation of the FDCPA by an OC is a violation of PA's FCEUA.

thanks, etc.

CleaningUp

  • Valued Member
  • Posts: 10749
Re: Can I sue an OC for bringing a suit they didn't intend to litigate?
« Reply #3 on: October 02, 2017 06:12:55 PM »
Civil litigation has nothing to do with fairness. Never did.

Civil litigation is about the law.

As long as you view things with an emotional cast, you will not understand or be effective in the long run in the business of resolving civil disputes.


BellEbutton

  • Valued Member
  • Posts: 3488
Re: Can I sue an OC for bringing a suit they didn't intend to litigate?
« Reply #4 on: October 02, 2017 06:31:22 PM »

It just makes my blood boil that these giant credit card companies' business model would be to sue consumers only for the purpose of getting default judgements, giving up the moment it looks like they might incur any actual legal costs as a consequence of their litigiousness!



OCs don't usually give up the moment a defendant indicates he will fight back.  That action is more likely by a JDB.

Quote
But FYI, as I mentioned, the FDCPA *does* apply to OC's in PA, because any violation of the FDCPA by an OC is a violation of PA's FCEUA.

Since an OC cannot violate the FDCPA, one could not claim that the OC violated that Act.  An action by the OC would have to be one prohibited only by the FCEUA.

As to debt collectors, a violation of the FDCPA establishes a violation of the FCEU. Id. As to creditors, a creditor is deemed liable if it engages in various conduct set forth in 2270.4(b). Jarzyna v. Home Properties, L.P., 763 F.Supp.2d 742 (E.D.Pa. 2011).

debtcetera

  • Valued Member
  • Posts: 4
Re: Can I sue an OC for bringing a suit they didn't intend to litigate?
« Reply #5 on: October 02, 2017 08:04:22 PM »
Points well taken. Thanks BellEbutton.  I'll try to be more precise in my language  I meant, of course, that any case that can be made against a CA's behavior under the FDCPA can also be made against an original creditor under PA's FCEUA, since the latter literally incorporated the language of the former and extends its protections to violations by original creditors.

And yes it *was* quite surprising to me that Discover and Capital One, both large OC's with reputations for spending much more than the debt is worth to collect, ended up being so easy to beat!  Maybe it is a stretch for me to divine a pattern from my two (ahem, so far) little cases but I can't ignore my own experiences, all I can do is try to understand the reasons behind what I'm seeing.

And what I saw, in both cases, had certain specific things in common:

  • Both large credit card companies chose not to sell the debts, but to sue me (us, actually. one was mine and the other was my wife's) themselves
  • Both hired large (apparently, expensive) law firms with offices in the nearest big cities to me to first send me a couple of dunning letters, make a collection call or two, and then sue in magisterial district court (PA's version of municipal / small claims court) where costs are low, no answers or preliminary objections can be filed, no discovery is allowed -- everything happens in just one day in court)
  • The two different large expensive law firms both specialize in collections and, although they're based in different cities, an hour or two away from me in different directions, they both *happened* to hire the *same* "local counsel" guy to appear in court.  Oddly, I am kinda friendly with him now :-)
  • In both cases he indicated, when both judges asked him if he had a settlement offer to make, that he wasn't authorized to make a settlement offer.  This seemed to annoy both judges
  • In both cases he had only a couple of pages of photocopied "evidence", one from the last statement indicating the final amount of debt that was charged off, one from an earlier bill that showed some specific purchases, just enough to try to "question the witness" about some specific charges (In both cases i declined to be questioned, choosing instead to object to the lack of any contract attached to the complaint)
  • And as I mentioned above, in both cases they simply stopped trying, probably right around the time their costs for these outside attorneys began to approach the amount they might possibly hope to recover

So since, as you can see, the cases are remarkably similar strategy-wise from their point of view, I do detect a pattern, I hope to understand it, and if discussing it here it helps others that would be fantastic!

But my motivations are less altruistic: I have a few more creditors hounding me, most are JDB's but two more are big-name OC's who don't seem to be selling and moderately large alleged amounts due, so of course I'm trying to plan ahead for those lawsuits!

I'm thinking -- if I'm right that these debt-collection law firms are fairly pricey, and that the OC's are playing a numbers game to keep their costs down, that  *countersuits* might be my next best defense, so I'm trying very hard -- okay maybe too hard? -- to find some grounds in advance for any FDCPA or FCEUA violations that I can use as counterclaims if/when those complaints materialize.

thanks, etc.


debtcetera

  • Valued Member
  • Posts: 4
Re: Can I sue an OC for bringing a suit they didn't intend to litigate?
« Reply #6 on: October 03, 2017 04:34:52 AM »
1) No, these law firms are not expensive. They work on fixed-fee contracts - no matter how hard you fight, it doesn't cost plaintiff "more."

Thanks, Klaxon!  Then why, do you suppose, did these two Big Credit Card Companies, Capital One and Discover Bank, choose to sue me themselves rather than sell the collections accounts to JDB's, and why both have folded so easily, neither taking me to the next level, from magisterial district (small claims) court to Common Pleas (state court)?  Maybe the amounts ($3500 and $4000) aren't enough to be worth it?  Maybe because I'm so far out in the sticks, they don't want to pay lawyers $200 an hour to drive out here? But if that's the case then, again, why did they choose sue me in the first place?

Maybe because I look particularly "garnishable"?  I have had a steady job for a long time, my mortgage is in good standing, and still have some other credit cards which have never been late?

2) Debt buyers rarely make such mistakes anymore

These weren't debt buyers.  We were both sued by national credit card companies, Discover and Capital One, who were represented by semi-local but still fairly distant outside law firms.  Also makes me curious, don't they have their own lawyers on the payroll to swear out complaints?  But I guess they need in-state lawyers who are more familiar with local laws.

and a fellow member just pursued a baseless case to higher courts that pointed out the "cottage industry" aspect of these claims.

I'm not sure what you mean, can you you post a link to this fellow member's pursuit?

You win with arbitration, no other way. There is more to your cases than what was reported.

I've read and heard that before a few times, here on debtorboards and elsewhere, that "debtors only win in arbitration".  But why then did The CFPB feel the need to "protect" consumers from mandatory arbitration clauses recently?  I've read a lot in the news about that, but don't pretend to understand it all, it's all so jargon-heavy.  Seems to be about class actions only though, I guess?  Arbitration scares me because I simply don't understand it.

And why do you say "There is more to your cases than what was reported"? Do you mean I'm not telling the whole story?  I've tried to give all the relevant details above -- what sort of circumstances do you think I may have left out?  Or do you mean there is more to the story that I don't know or can't know about... like things going on in the court, the industry, the law firms or inside these credit card companies themselves?

In case it's the former, here are some more details that I omitted because i didn't think were terribly relevant, and the story has gotten sooo loooonng already:

I defended both cases pro se.  I've spent countless sleepless nights reading up on Pennsylvania law and studying the fairly bizarre and very arcane rules of court here in PA.  In both cases there was some back and forth with the judges about whether I was allowed to represent my wife.  The magisterial district judge actually accused me in open court of practicing law without a license (and the next year another, state judge, made the same accusation in an order he issued)!  But I showed the MDJ the papers I'd filed with his court clerk -- there are specific laws in PA allowing someone with "personal knowledge" of the facts of the case to represent a defendant in PA's magisterial district court, and (since i am the sole breadwinner and pay all the credit cards in the household) I certainly had personal knowledge of my wife's credit card accounts, so I showed him copies of the forms he already had in front of him, that she'd signed authorizing me to to represent her, (I'd delivered them CMRR along with the mandatory "intent to defend" forms that one must mail to the court to avoid a default judgement and have your day in court).  The nice opposing counsel actually spoke up at that point and said that he did not object to me representing my wife... But that just seemed to annoy this judge even more.

In fact, I managed to annoy his whole staff -- the entire municipal courthouse was thrown off kilter by me simply *filing* the Intent To Defend!  It literally says on the papers that were served on us (by hand, by process server, at our door) that:

  If you intend to enter a defense to this complaint, you should
  so notify this office immediately.  Unless you do, judgement
  will be entered against you by default.

But it didn't say *how* to notify them, so I'd called the phone number listed, and the poor girl who answered the phone had NO IDEA how to handle the call.  She clearly had never had anyone, ever, notify their court that they intended to defend themselves against a credit card complaint.  I hope she was just new, but I suspect my intent to defend myself was a local anomaly.  They get dozens of these cases every week -- no one ever defends themselves.  The whole thing is just a machine, a Default Judgement Factory that cranks out paperwork that allows cc companies to steal money out of people's paychecks and from their bank accounts.  But I digress.... So, after about the 3rd time I patiently and politely explained why I was calling, and after reading back to her the statement above, which she herself had mailed to me, the best response she could muster was: "Well, you should probably put that in writing, and mail it to us here."  As it turned out, some other more populous MJD districts in PA had standard Intent to Defend forms on their websites, so I ended up adapting one of those, just to make sure it said all the right things on it :-)

After we lost that case, my first ever, within days I realized that we'd been sued in a magisterial district court that, although geographically closest to our home, did NOT have jurisdiction over the township we live in.  So I read and researched and spent several more sleepless nights educating myself about the various forms of post-judgement relief from the unjust judgements our Wild West Magisterial District Court judges that are available to us from the cooler heads of our Common Pleas courts and I ultimately decided, instead of doing a normal appeal to Common Pleas, to file a Praecipe for Writ of Certiorari which, once filed in the Prothonotary's (aka: county civil court clerk's) office, does not start a new case like an appeal but simply stops the plaintiff from being able to execute the judgement (against my bank account for instance) until a Court of Common Pleas judge rules on whether to throw out the judgement itself, as this apparently could be decided without a court appearance, and it seemed quite open-and-shut, at least to me.

My grounds for the Writ of Certiorari was improper venue (i contemplated adding "such gross irregularity of procedure as to make the judgment void" but suspected his gross-ness was probably not all that irregular), and since improper venue just seemed so dead-simple to prove -- I just included as my "evidence" a printout of the county web page that clearly spells  out which courts handle which townships, a copy of the property tax bill that this county sends me every year which clearly names the township that we live in, and Discover's complaint which was clearly filed in a district that did not include our township.

The Prothonotary's office also acted as if they had never seen a Praecipe for Writ of Certiorari in their life before, and so they initially refused to let me file it.  After a few days and after meeting with the county's attorney, the Prothonotary himself called me back and said that yes, I could file it.  Then the court clerk did't know what the filing fee should be.  They finally decided on a (pretty friggin big!) number, took my money and stamped the danged thing.  The rules said i then had to file a motion in support of the Writ of Certiorari {sigh}, and that I had to then serve the Praecipe and the Motion on the opposing counsel.   I did all that., and there it sat for NINE MORE MONTHS before a judge finally "issued upon the plaintiff a Rule to show cause why the court should not grant the Writ of Certiorari", giving Discover just 20 days to answer.  I almost missed the part where that order was mailed just to me, and me only, and for some unfathomable arcane rule-reason, it was then MY responsibility to serve the court's order on the opposing counsel -- wtf? -- I almost missed the 5-day deadline on filing the proof of service for that! 

Discover's big city lawyers chose not to answer it.  I bet they were just waiting for me to miss a step and lose on a technicality, there were so many little insane rules like filing that proof of service within days bit!

Is this the sort of thing you meant by me not telling the whole story?  It goes on and on like that.  Like, before filing the motion, I faxed the opposing counsel in that far away big city a request for concurrence to attach to my motion, since I read some motion practice rules somewhere that said that every motion you file in PA must be accompanied by a either a statement of concurrence by the opposing counsel or evidence that a good faith attempt was made by the moving party to seek concurrence.  Their lawyer ignored my fax of course, and my calls and voicemails and messages left with his receptionist.  He finally took my call (I think by accident) and said he'd get back to me, but never did.  My faxed letter to him, detailing the obviously incorrect venue, and my notes wherein he repeatedly ignored my good faith attempts to save the court's valuable time by seeking concurrence all went into my motion and ended up making him look like a real jerk. Which was fair, because he was. :-)

When they didn't answer the Order to Show Cause, I was THEN required to make a motion to make the rule absolute, which I did.  But I forgot (well, didn't know actually, that I was supposed) to include in that motion a Proposed Order for the judge to sign.  But I got a call from the judge's clerk (who thought I was an attorney, and asked for "Attorney [My Full Name]" when she called, which warmed the cockles of my cold, dark heart) telling me that they'd received my motion, but that the "Proposed Form of Order" was missing, and telling me I could just mail it to the Prothonotary's office.  Which was darned nice of her since they could have simply ignored the motion and proceeded to dismiss my Praecipe for not filing a timely motion and I would never have known why I lost -- but I filed a whole new motion with the proposed order the next day.

Then, (nothing ever goes as planned right?) instead of granting the motion, the judge issued an order denying the motion because my motion was:

  filed by someone claiming to be the "Authorized Representative"
  of the Defendant without proof of a valid Power of Attorney. Such
  individual may be "authorized" by the Defendant to file the Motion,
  but may be engaging in the unauthorized practice of law. This Court
  will not enter a final order under such circumstances.

So now I'd been accused of UPL twice, by two different judges!  That's how you know you're doing it right, I tell you :-)

So I filed it again, having the wife sign it herself this time. The judge then signed the order.
 The Writ of Certiorari was granted.  E-I-E-I-O. The motion was set aside, explicitly without prejudice.  The plaintiff was advised that they were free to either refile the case in the correct Magisterial District Court -- or -- the court of Common Pleas.  But so far [knock on wood] they have chosen to do neither, and it has been several months now.

If this is unheard of -- being sued twice by national credit card companies themselves instead of JDB's -- and winning by basically just showing up and being an annoyingly litigious pro se consumer litigant, then that makes me all the happier!

But now I am kind of sickly looking forward to the next complaint because my takeway from all that is that, had I filed counterclaims against them, then they wouldn't have been able to cut their losses and walk away so easily -- they would have to make ME a settlement offer to make the case go away.

Right?

thanks, etc.
« Last Edit: October 03, 2017 05:02:24 AM by debtcetera »

BellEbutton

  • Valued Member
  • Posts: 3488
Re: Can I sue an OC for bringing a suit they didn't intend to litigate?
« Reply #7 on: October 03, 2017 05:11:55 AM »
Thanks, Klaxon!  Then why, do you suppose, did these two Big Credit Card Companies, Capital One and Discover Bank, choose to sue me themselves rather than sell the collections accounts to JDB's, and why both have folded so easily, neither taking me to the next level, from magisterial district (small claims) court to Common Pleas (state court)?  Maybe the amounts ($3500 and $4000) aren't enough to be worth it?  Maybe because I'm so far out in the sticks, they don't want to pay lawyers $200 an hour to drive out here? But if that's the case then, again, why did they choose sue me in the first place?


I don't know about Cap1, but I've never heard of Discover Bank selling to a JDB.  As to why they folded so easily, sometimes it's the attorneys, not the plaintiffs, who fold.  There are lazy attorneys who only want easy wins. 

Quote
These weren't debt buyers.  We were both sued by national credit card companies, Discover and Capital One, who were represented by semi-local but still fairly distant outside law firms.  Also makes me curious, don't they have their own lawyers on the payroll to swear out complaints?  But I guess they need in-state lawyers who are more familiar with local laws.

In order for an attorney to represent a client in court, he must licensed in the state in which the lawsuit is filed.  An attorney from DE could not appear in a PA court unless he's also licensed in PA.

Quote
So now I'd been accused of UPL twice, by two different judges!  That's how you know you're doing it right, I tell you :-)

No, you were not "doing it right".  If your wife was the defendant, she was the one required to sign the pleadings.  If you signed your name, that was wrong.  Unless you're an attorney, you could not represent your wife. 

Clydesmom66

  • Valued Member
  • Posts: 2173
Re: Can I sue an OC for bringing a suit they didn't intend to litigate?
« Reply #8 on: October 03, 2017 05:31:44 AM »
I'm thinking -- if I'm right that these debt-collection law firms are fairly pricey, and that the OC's are playing a numbers game to keep their costs down, that  *countersuits* might be my next best defense, so I'm trying very hard -- okay maybe too hard? -- to find some grounds in advance for any FDCPA or FCEUA violations that I can use as counterclaims if/when those complaints materialize.
#I am thinking you get EXTREMELY lucky that 2 known aggressive original creditors at suing and collecting farmed the cases out to incompetent local yokel attorneys who botched the case.  It rarely happens so count your blessings on that one.  You cannot count on that happening in the future.

You are dead wrong that they hire high priced firms.  As @Klaxon already said they hire these firms on a flat rate retainer that includes representation and litigation for a specified number of cases for the year regardless of outcome.  It also probably includes a set percentage of what they collect as well.  The days of running up the legal expenses to get them to back off are LONG over.

Again, the FDCPA does not apply to OCs so you are NOT going to get a counter claim out of it that way.  Not to mention that creditors have gotten a whole lot smarter since the recession and are no longer making the same mistakes with abandon like they used to.  Add to that, that the Judge will be seeing you for the umpteenth time and eventually is going to simply conclude that you already got 2 bites at the apple and tag you with debt(s) eventually. 

But if that's the case then, again, why did they choose sue me in the first place?

Maybe because I look particularly "garnishable"?  I have had a steady job for a long time, my mortgage is in good standing, and still have some other credit cards which have never been late?

Speculating on that is a waste of time.  They have their own internal business model that tells them which consumers are best pursued but having a job, equity and assets certainly tips the scale in that direction.

I'm not sure what you mean, can you you post a link to this fellow member's pursuit?

A member named "Gowyo" filed not one but TWO frivolous baseless FDCPA cases and now has established case law that set consumers back a decade in defending their rights.

Be VERY careful following advice from the internet! What worked for someone with thousands of posts on a message board may not work for YOU in your state.  Consult a lawyer when ever possible.

nobk4me

  • Valued Member
  • Posts: 855
Re: Can I sue an OC for bringing a suit they didn't intend to litigate?
« Reply #9 on: October 04, 2017 10:25:08 PM »
What the OP described, the Default Judgment Factory, accusations of UPL, etc. are why many of us prefer arbitration.  Not to mention that it is very costly to the creditor.
Molon labe

Judgment Proof!