Understanding the Petition in a Debt Lawsuit

Understanding the Petition in a Debt Lawsuit

For a copy of this article in PDF form, click here: Understanding the Petition

If you are being sued by a debt collector, the first step in defending yourself is knowing who is suing you and what you are being sued for. You’ll want to know what facts the plaintiff thinks it can and needs to prove, and you’ll want to look for initial weaknesses in the case. In all of these things, you will need to understand how to read the petition and understand what it is doing.

Below, you will find a sample petition. The petition (also called “complaint” in some jurisdictions – the terms refer to the same thing) is in black, and my comments about what the petition is doing is in red ink. You will see that every part of the petition has its purpose and function.

For purposes of this article, I will refer only to a few parts of the case, as these areas are often discussed in the teleconference calls and people have shown that they do not understand them. But if you look at the annotated sample petition, you will see much more. Knowing what things are called is an important part of the process of understanding what they are and do and an important first step in defending your rights.

Caption

The caption of the case is the part where it says “Debt Collector vs You” and also the name of the court and jurisdiction. Although it has come up, very rarely, that the named plaintiff may not, actually, be the plaintiff (see our article and video on assignment in the glossary), normally the person named as plaintiff is the plaintiff.

In plain English, that means that if First National Bank is named as plaintiff, that’s the person suing you and not a debt buyer. If you have any reason to doubt that, you will want to use the discovery process to pry the truth loose.

And you are the defendant along with anyone else named as defendant in the caption.

The jurisdiction is also important, as this will either tell you that the court has dollar limits to its jurisdiction or not. At a minimum, you can use this part of the caption to find out whether the court does, indeed, have such limits. In general, if it does, the lower the limits, the less likely the court is to follow the rules of evidence rigorously. We usually want the highest court possible because it is critical to debt defense that the rules should be followed.

Title Heading of Suit

The title headings in a lawsuit are not formally treated as part of the lawsuit but are, instead, guidance. But what you need to know is that if you have different “counts” of the lawsuit there will be either more than one set of facts involved or, much more likely, more than one legal theory involved. If Count One is breach of contract, and Count Two is for Account Stated, you know you are being sued under two laws. In order to win your case, you will have to win on every count.

If you have no heading, or no heading that refers to counts, you are being sued based on one law (almost certainly), although it isn’t always perfectly clear from the petition what that is.

Wherefore Clause

This is the part of the suit that says, “wherefore, plaintiff requests…” In other words, it’s the part of the lawsuit that says what the plaintiff wants. If you want to know how much they’re suing you for, this is the place to look.

The wherefore clause is usually the last paragraph of a count. If your suit has more than one count, it will have more than one wherefore clause, one at the end of each count. If it does not have more than one count, it will probably be the last paragraph of the petition.

You need to know what the debt collector is suing you for. This is where you find that.

Sample Petition for Money Owed

 

IN THE ASSOCIATE CIRCUIT COURT        “Associate” means limited jurisdiction
OF THE COUNTY OF XXXXX                        County or city jurisdiction
STATE OF XXXX

DEBT COLLECTOR COMPANY, LLC,                     This is the “Caption,” This name is the
ASSIGNEE OF CC COMPANY (Mastercard),          plaintiff [the lawyer signing is not
Plaintiff,                                                                          plaintiff, nor is Mastercard]

vs.

JOHN Q. PUBLIC,
Defendant.

COUNT ONE – SUIT ON MONEY OWED   [Title. “Count One” indicates this claim has more than one legal basis. Lots of suits are brought on only one basis and don’t have “Count __” in them]

Comes Now Plaintiff and for its cause of action against the Defendant states as follows: [Intro, sometimes much longer]

  1. Plaintiff is a limited liability company duly organized and existing under law and is the lawful assignee of this debt. [Paragraph allegations – you have to respond to each paragraph – this one identifies the plaintiff and alleges it was assigned the debt.]
  2. That defendant is a resident of xx county, state of x. [paragraph establishing court’s jurisdiction over defendant, so important – don’t admit if wrong]
  3. That defendant is in default under the terms of the documentation attached hereto, incorporated herein and marked Plaintiff’s Exhibits A and B in the amount of $1,332.14. [This is ‘breach of contract” language, often more involved than this, including claims of issuing cards or credit, etc.]
  4. That plaintiff has performed all conditions on its part required to be performed. [Establishing right to remedy – plaintiff did not breach contract]
  5. That demand for payment has been made and payment refused. [Formality, sometimes but not usually required, usually included though]

Wherefore, plaintiff prays judgment against defendant in the principal amount of $1,332.14 together with interest of 39% per annum from December 7, 2005, and for costs and attorneys fees herein. [the “Wherefore clause.” Says what the plaintiff wants. Usually if it does not say “attorney’s fees,” they won’t be able to get them if they win]

COUNT TWO – ACCOUNT STATED      [second claim, this one under law of account stated]

  1. Plaintiff realleges and incorporates paragraphs 1-5 of this petition as if fully stated herein. [“reincorporation clause” – standard. You will simply reallege your previous responses in the same way]
  2. Plaintiff had a regular billing arrangement with Defendant whereby each month Plaintiff would send Defendant an accounting of money due and owing either as a result of new charges made by Defendant or for charges based upon an existing balance. [necessary to show that bills, or “accounting,” were a regular thing, expected by defendant]
  3. Plaintiff sent Defendant a bill showing a charge of $1,332.14 due immediately on X date.[the “new contract,” because it was actually or “impliedly accepted”]
  4. Defendant did not dispute this bill showing a balance of $1,332.14 and accordingly accepted it. [Your supposed agreement]
  5. Defendant did not pay the amount due and is thereby in violation of the law. [The “breach” of the contract created by accepting the accounting – note that new agreement does not have any terms other than the money allegedly owed]

Wherefore, plaintiff prays judgment against defendant in the amount of $1,332.14 together with costs of this action and such other relief as this court deems appropriate under the law. [The “wherefore clause” for the account stated – note that it should not include attorney’s fees or (probably) interest]

Collection Law Firm [law firm’s signature, usually illegible. Both the named lawyer and the firm are representing plaintiff (but are NOT plaintiff) and would be on the hook for possible violations of FDCPA]

______________________

Collection lawyer,
Law Firm

Address

[There is usually some sort of affidavit to the effect that the defendant is not in active military service – if you are not, this is purely a formality. If you are in active military service, special rules apply to your case]

Motions to Dismiss Part 2

Motions to Dismiss in Debt Collection Cases, Part Two

When you’re being sued on a debt by a debt collector, motions to dismiss can come up in one or both of two ways: you could file one against them – or they could file one against you. More specifically, (1) you could file a motion to dismiss their lawsuit, or (2) they could file a motion to dismiss your counterclaim.

It is also possible that either or both of you could file a motion to dismiss certain affirmative defenses, although this does not happen very often in debt cases.

This is the second part of a two-part article. For the first part, click here. For a video on arguing motions in court, click here.

What Motions to Dismiss Are

 So what is a motion to dismiss? A motion is always the way a litigation party asks the court to take some official action. A motion to dismiss is a motion asking the court to get rid of some part of the other party’s case on the grounds that, even if what the other side says is true, it doesn’t give them the right they claim. For this reason, motions to dismiss are sometimes called motions “for judgment on the pleadings” or “demurrers.” The crucial fact in all of these motions is that all the facts alleged in the pleadings are taken, for purposes of the motion, as granted just as if they had been proven. If the motion is denied, the facts will still have to be proven later in trial.

In the Litigation Manual I illustrate the concept by supposing that a policeman has issued a ticket for exceeding the posted speed limit, but the ticket says you were going 25 mph in a 30 mph zone. There, even if what the ticket says is true (and in this case, specially if it is), it simply does not state a violation of the law. A similarly basic example in the debt law would be where you sued the other side under the Fair Debt Collection Practices Act without alleging an action that violated the act.

Many motions to dismiss really seem to be calling the court’s attention to some obvious mistake, a simple oversight, perhaps. Naturally, however, many motions to dismiss are not so simple. In many cases, although the facts are clear, what the law provides or requires is not, and these would be cases appropriate for motions to dismiss.

You can move to dismiss any claim or count of the petition. If you do not seek to dismiss the entire petition, you have to answer the part you do not try to get dismissed.

 

Because the motion assumes that every fact alleged is considered true, motions to dismiss are said to be “testing the sufficiency of the pleadings.” Most courts will go ever further than that, and state that, if any set of facts (alleged or not) consistent with the pleadings could result in a valid claim, the motion to dismiss is to be denied, but from the point of view of a pro se defendant, this rule has limitations. Depending on unalleged facts can be a dangerous occupation for someone wanting to avoid a motion to dismiss.

Defendant’s Motions to Dismiss vs. Plaintiff’s Motions to Dismiss

Technically, a defendant’s motion to dismiss is treated in the same way as a plaintiff’s motion to dismiss, the only differences being who brings them and when. In any event, what is up for grabs is purely a legal question: does the law allow or prohibit certain action, and does it give a right to the person claiming it?

Despite the legal equivalence of the motions brought by plaintiff and defendant, it makes sense for us to look first at defendant’s motions, which you are likely to file against debt collectors, and secondly at plaintiffs’ motions to dismiss counterclaims or affirmative defenses, which debt collectors are likely to file against you.

Motions to Dismiss by Debt Defendants

When Petitions (or counterclaims) are filed, they are supposed to be following one of two types of pleading: “notice” pleading or “fact” pleading. The type of pleading required can make a very large difference, and it is determined by State law. In other words, your state requires either fact pleading or notice pleading. One of your first actions as a defendant in a debt lawsuit should be to find out which rule your state follows. Most states require fact pleading.

Fact Pleading

If your state requires fact pleading, then filing a motion to dismiss is as “simple” as looking at the elements (parts) of the case the plaintiff is alleging (its “prima facie” case), seeing if every fact necessary to prove that case is alleged, and moving to dismiss if any parts of the prima facie case is missing.  You might think that debt collectors, who file millions of these cases per year, would never omit a part of their case in the pleadings. In fact they do so quite often, and this is simply because of the nature of their business: they buy huge numbers of supposed debts with minimal paperwork, file cases by the truckload, and rarely get challenged by defendants or the courts. In reality, lawyers are creating forms that secretaries fill out much of the time. They are not sharp, in other words, nor do they need to worry very much about their petitions. It is easy for them to make mistakes in the pleadings, and they often do. And sometimes they do it on purpose.

For a simple example, consider the filing of a claim of breach of contract in Pennsylvania, where a plaintiff on such a claim must either state the terms of the contract or attach a copy of it. Debt collectors almost never do this despite the rule – because they can’t. They don’t have the contracts. The huge majority of the cases are won by default, but those who defend simply file a motion to dismiss (called “Preliminary Objections” in Pennsylvania). Eventually the cases of persistent defendants get dismissed with prejudice, but for each case that gets dismissed, probably thousands of inadequately pleaded cases result in default judgment for the debt collectors. And the debt collectors are never punished for flouting the law. See the attached sample motion and judgment.

Notice Pleading

Where the jurisdiction is “notice” pleading, a motion to dismiss is much more difficult to win. Notice pleading means that a petition must give the party being sued some “general idea” of what he is being sued for, and in some courts this is such a vague standard that it is almost impossible to succeed in your motion to dismiss. Unless the debt collector actually names its theory in a heading (as they often do), if it does not state all the elements of an obvious claim, your motion may well be a “Motion for More Definite Statement.” In this motion you point out that the plaintiff has not alleged any specific claim and you ask that the case be dismissed or that the debt collector be required to state the elements of a claim. Your argument there is that the vague petition fails to give you adequate notice of the claims being brought against you. This type of motion (for more definite statement) has many of the advantages of a motion to dismiss and should probably be brought if possible.

If you win that and the plaintiff then files an Amended Petition that is also inadequate in stating a claim, you will either oppose the amendment or file a new motion to dismiss.

Timing – When to File

There are two aspects of time you must consider when filing a Motion to Dismiss (or for More Definite Statement). The first of these is whether you must file your motion to dismiss before filing an Answer. In my opinion it is always a good idea to file a motion to dismiss – on any basis – before filing an Answer.

Answer and Counterclaim

It is very helpful to have a counterclaim if you’re being sued by a debt collector. In this article we’ll discuss a few mechanics – things that are obvious to lawyers but might not be so obvious to people representing themselves.

What is a Counterclaim?

First of all, what is a counterclaim? Very simply, a counterclaim is a lawsuit you file in the same court against someone who is already suing you. That is, it is any lawsuit you file, whether or not it is related to the suit the other person filed.

The theory is that if two people are already in court for any reason, they may as well get everything done at the same time, but there are certain exceptions in cases where hearing the cases together would be too confusing, or the like. Many counterclaims do not have to be brought – you can wait till the first case is over and then (if time hasn’t run out) bring your case separately as an original suit. On the other hand, sometimes possible claims are so closely related that you are not allowed to wait: these are called “mandatory” counterclaims, and if you fail to bring a mandatory counterclaim as part of the first lawsuit you will lose the right. A classic example of mandatory counterclaims would be claims by both people in a car crash against each other – waiting and filing separately would be a big waste of court time and might also lead to contradictory judgments.

For debt defense, though, you might think of it as a defensive countermeasure. As in judo, they’ve been attacking you, and now you’re going to use what they’ve done against them.

Claims under the Fair Debt Collection Practices Act (FDCPA) can be brought as counterclaims, but they are not mandatory. You could, if you wanted to, bring a claim under the FDCPA in federal court – or even another state court – while a lawsuit against you for the debt was still underway. As a practical matter, when I was still practicing, I never did that, but you could do it.

Sources of Counterclaims

The FDCPA is the most logical source of counterclaims when you are being sued by debt collectors, for several reasons.

For one thing, the law is very broad. Anything that is an “unfair” debt collection practice is illegal under the FDCPA. Although several things are specified in the Act, many other things have been found to violate the law. That allows you to be a little creative.

Secondly, the FDCPA does not require any sort of “intent” to harm you. All you have to do is show that the debt collector did what you say is illegal. And you don’t actually have to have been hurt by what the debt collector did. That means that the unfair collection practice you claim they did does not have to have fooled you or hurt you at all.

In fraud cases, to give an example of a different kind of law, you have to prove that the person you claim defrauded you meant to do it (intent) and that it somehow harmed you (they did fool you, and you lost money). This makes claims under the FDCPA much easier than most other lawsuits. Finally, there is the question of evidence. Many FDCPA claims arise out of the debt collector’s lawsuit against you, and this will be part of the record, but all of the claims will be relatively easy to prove. Here are some articles that discuss some possible claims under the FDCPA:

There are other sources of possible counterclaims, however. There is a law in consumer law that provides that any time you would have a claim or defense against the seller, you also have that claim or defense against someone trying to collect the bill.That means that if you were ripped off by a seller, and then a debt collector comes after you, you can sue the debt collector for that fraud. If you do, you will probably have some significant advantages, as the debt collector probably does not have access, much less inexpensive, convenient access, to the witnesses it would need to defend the case. And there are other possible claims – like defamation or possible violations of the Fair Credit Reporting Act.

What You Actually Do

Assuming you decide to bring a counterclaim, what you actually do is attach it to your Answer. That is, you create your Answer, and then at the end you add allegations that would support your counterclaim. The materials in my Litigation Manual provide you samples of these.

 

Four Sneaky Tricks of Debt Collectors

Debt collectors make their money by scaring or tricking, people into forfeiting their rights to defend themselves. Often they will let you think you have come to some sort of agreement with them to avoid court (and judgment), they won’t work with you to accommodate your schedule, and in general try to trick, intimidate and scare you into staying away from court. Then they get default judgments. Here are some of their more common tricks. Check out the Litigation Manual and materials for things you can do if debt collectors try these on you.

Don’t let them trick you out of your right to defend yourself. If you fight, you have an excellent chance to win – if you don’t show up and they get a default judgment you may find your wages or bank accounts garnished before you know it.

Sample motion to Dismiss

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Motions to Dismiss for Failure to State a Claim

A Motion to dismiss is a request to the court to “kick out” the case against you. It isn’t based on evidence that you have or could produce or show (a motion for summary judgment is the way you do that), but rather is designed to “test the sufficiency of the pleadings.” Debt defendants tend to overuse the motion to dismiss – or to “over-rely” on them. They often do not work, but filing them can be a way to familiarize yourself with the law and to slow the pace of the lawsuit – things which are helpful to pro se debt defendants.

In plain English, a motion to dismiss argues that the plaintiff has not alleged enough facts – even if everything it does allege is considered true – to make a claim against you that the law would recognize. I have, in other articles, compared it to a speeding ticket for “driving 25 mph in a 30 mph zone.” It just isn’t illegal to do that, and the case would get kicked out.

Of course it is rarely so simple. From time to time I suggest possible violations of the Fair Debt Collections Practices Act (FDCPA). For example, I have suggested that including the supposed right to verify in the Petition is deceptive and unfair. Eventually someone will allege that in a counterclaim, and the debt collector will probably file a motion to dismiss, arguing that including that language in the petition does not violate the FDCPA. So you can see from that example that motions to dismiss can be brought against counterclaims as well as claims in a Petition.

Procedure for Motions to Dismiss

Motions to Dismiss are controlled by the Rules of Civil Procedure for your jurisdiction. Find the appropriate rule by looking up “motions” or “motion to dismiss.” You will see that there are many enumerated bases for motions (at least in Missouri). In general, if the argument is that there simply isn’t a right to the relief requested from the court (as in my examples above), you can usually file this motion at any time because the court really lacks the power or authority to do something the law doesn’t allow. If the argument is about whether the court has authority over you, on the other hand (because you weren’t served correctly, for example), you would probably need to bring a motion to dismiss before answering the petition.

You can, and probably should, in general, bring a motion to dismiss before you answer a petition. In other words, if you file a motion to dismiss, you almost certainly do not need to file an Answer. The motion stops the clock on the time for responding. If you lose the motion, the court will order you to respond to whatever part of the petition or claim that remains.

It isn’t always clear who needs to “set” the motion to dismiss for a hearing. In general I suppose it is whoever wants the case to move forward – and that usually means the debt collector. The case will not move forward until the motion to dismiss is resolved. Sometimes courts will dismiss the entire action for “failure to prosecute” if the debt collector does not call the motion. Sometimes the judge will pressure the defendant to argue the motion or will deny it if it isn’t set for argument. This seems to depend on the personality of the judge.

For a sample Motion to Dismiss a simple debt collection, please click here.

Incidentally, these motions are sometimes called “motions to dismiss for failure to state a claim,” and that is the name of federal rule 12(b)(6) (and many state court rules as well, which are usually identical). Remember that you won’t be bringing your motion under federal law but whatever your applicable state law is.

The Answer and Some Early Defense of Debt Litigation

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How to Amend Your Answer

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Entry of Appearance

The way you let the court and other side know, formally, that you are going to defend yourself, is by filing an “Entry of Appearance.” This video discusses this requirement and some other “red tape” like how days are counted.

The Entry of Appearance is important because once you do that, the court and other side must provide you notice of anything that is happening. Before that, you are subject to default without notice. You CAN enter a case without answering it, but you’re still subject to default. So enter your appearance AND answer the petition at the same time – even if you aren’t required by the court to do so.

In the lower courts in Missouri, people often show up for court and announce their presence when called. But if they don’t file an answer, if they miss another hearing they still get defaulted. Don’t let this happen to you.

Click here for a sample Entry of Appearance.

 

How to Answer a Petition when Sued for Debt

When you’re sued for debt, one of the first things you have to do is write and file an answer. You could lose the case very easily until you do. Luckily, it isn’t hard, and this video will show you how. For more detailed information and help on fighting and winning your suit against the debt collector, get the Debt Defense System. If it hasn’t come to litigation yet and you hope to keep it from doing so, you can get the Debt Negotiation and Settlement System.

 

Answering a petition in a debt law case is actually very simple. Keeping in mind that it is up to the plaintiff to prove its case if you deny a part of the petition, there is little incentive to admit anything. Pro se defendants also quite frequently overestimate the things they should admit. For example, you may know that you borrowed some money or used a credit card, but do you really know how much you borrowed or whether all the charges were legitimate? Do you know for sure that you did not pay some of the debt or that you truly, legally, owed every amount claimed? And do you know with certainty even that the company suing you owes the debt at all?