Order letting Midland win — important lesson if sued by Midland

Order letting Midland win — important lesson if sued by Midland

Right decision and wrong decision when dealing with Midland lawsuit

Sign showing right decision and wrong decision when dealing with Midland lawsuit

This Order was sent to me — it is not a case I was involved in.  And the lawyer representing the consumer is an excellent lawyer.  The point of posting this is to warn about the danger of not properly answering discovery and/or not hiring a lawyer early enough in the process.

Here is the order and then I’ll provide a bit of analysis in [brackets]:

The Complaint was filed on January 6, 2015. On January 22, 2015 the Defendant filed an Answer (pro se) denying the allegations of the Complaint. Requests for Admissions were issued to the Defendant by the Plaintiff on April 15, 2015.

[“Pro se” means not having an attorney.  So the consumer represented herself at first.  Request for admissions are statements that you have to say “Admit” or “Deny” on and if you don’t answer, then the statements are admitted.]

The Defendant’s Attorney conceded that no written responses to the Requests for Admissions were ever filed by the Defendant. Defendant’s counsel argued that the Defendant lacked the knowledge to admit many of the matters made the basis of the requests.

[Since no responses were made, the statements are admitted.  The argument made by the consumer’s lawyer (who apparently was hired right before trial) was that this rule should not be applied since the consumer would not be able to know the answers to the questions listed below.]

However, Rule 36 provides that “the matter is admitted” unless the Defendant “serves . . . a written answer or objection addressed to the matter, signed by the party or by the party’s attorney.” The Defendant also was not in Court personally on the date of the Bench Trial to contest or respond to the subjects of the Requests for Admissions. Therefore, considering the totality of the facts and circumstances presented to the Court on the date of the Bench Trial, the matters made the basis of the Requests for Admissions shall be treated by the Court as admitted and established.

[So the court agreed with the debt collector — Midland — that the admissions were actually admitted.  Let’s see what those admissions were.]

The Requests for Admissions sent by the Plaintiff to the Defendant requested that the Defendant admit or deny the following matters:

  1. You are a resident of the county in which this suit was filed.

[If a debt collector sues you in the wrong county, you normally can sue the debt collector in Federal Court under the FDCPA — Fair Debt Collection Practices Act — so this admission is to protect the debt collector against this type of suit.]

  1. You signed the original application for the Card in the county in which this suit was filed.

[This is also to protect the debt collector from being sued.]

  1. You used the Card to make purchases or obtain extensions of credit in the county in which this suit was filed.

[Same thing as first two.]

  1. Defendant applied to Issuer for issuance of the Card.

[This is to show that this was not identity theft.]

  1. The Card was issued to Defendant.
  1. Defendant received the Card.
  1. Defendant accepted the Card.

[This is to show that the consumer agreed to the terms of the contract with the credit card company.  But remember the credit card company has not sued the consumer which will explain some admissions below.]

  1. Defendant signed the back of the Card.
  1. Defendant used the Card to make purchases or balance transfers.

10.Defendant used the Card to obtain extensions of credit.

11.Issuer made cash advances to Defendant, either as actual cash or in payment for purchases Defendant made from third parties by using the Card.

12.Defendant accepted each such advance on the Account.

13.By accepting each such advance under the terms of the agreement applicable to the Account, Defendant became bound to pay the amounts of such advances, plus any additional charges provided for in such agreement.

14.Issuer sent to Defendant on a monthly basis a statement of charges and balance due on the Account.

15.Defendant did not, within sixty days of any billing statement on the Account send to Issuer a written dispute of the billing statement.

[The debt collector Midland is using this to argue — improperly — that not objecting to a billing statement means it has proven its case.  This is not true.  Midland knows this as we have pointed this out years and years ago to Midland.  But it still tries to make this argument because many lawyers and consumers don’t understand that this is meaningless.]

16.Defendant has failed to repay all of the credit extended and advances made by Issuer on the Account.

[So this is to show the consumer owes the money alleged.]

17.You received a statement from Issuer reflecting a balance of $3,161.98 due on the Account.

[This is to show the amount owed is the $3,161.98.]

18.The Account was sold to Plaintiff.

[KEY QUESTION — does Plaintiff (debt collector Midland) own the debt.  If you as the consumer don’t deny this statement, then you have admitted the critical part of the lawsuit.]

19.The Account was assigned to Plaintiff.

[This again is a critical question.]

20.Plaintiff is presently the owner of the Account.

[But even if Midland owned the debt, does it still own the debt now?  If this statement is admitted, then the answer is “yes” even though I’ve never seen Midland be able to prove this.]

21.Defendant is indebted to Plaintiff for the amounts asserted in Plaintiff’s Original Complaint in this case.

[This is a killer question as if admitted, then you have just lost the case.  Some judges don’t allow these “ultimate” questions but it is asked here.]

22.Defendant is not entitled to any setoff for sums unconnected with payments that have been made by or on behalf of Defendant.

[If no set offs, then the amount sued for is owed.]

23.Each of the charges comprising the Account was reasonable.

[This is to argue that all of the charges on any credit card statement are reasonable which is really only needed for what is called an “open account” which is clearly a three year statute of limitation.]

24.You received mail at XXXXXXXX address.

[This is asked because Midland, improperly, argues that if you received the mail, then you have agreed to a “stated account” or “account stated” theory which is a six year statute of limitation.  Midland needs this type of theory as it almost always sues at more than three years.]

Therefore, upon consideration of the evidence presented including the matters admitted by virtue of the Plaintiff’s Requests for Admissions, the arguments of counsel, and the law of Alabama, the Court hereby enters Judgment in favor of the Plaintiff Midland Funding, LLC against the Defendant, without waiver of exemptions, in the amount of $3,161.98 plus costs of Court.

So this consumer lost to Midland.  Why?

Because if Midland sends out request for admissions, you must properly answer them or let your lawyer know if you hire a lawyer right before trial.  Otherwise you can lose even if you “know” that Midland cannot prove it owns the debt.

If you have questions about collection lawsuit by a debt buyer, let us know and we’ll be happy to help you think through your five options when sued — you can reach us at 205-879-2447 or contact us through our contact form.

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