Motion to Compel Cycle

February 2, 2023

The “Motion to Compel Cycle”

– What to do when the Company Suing You Won’t Answer Discovery

If you’re being sued for debt and following our system, you will serve “discovery” on the other side. That is, you will send them questions to answer called “interrogatories,” requests for documents, and requests that they admit certain things.

We do this because debt buyers usually don’t have the proof they need to establish their case, and even original creditors often don’t. We need to know exactly what they do have so we can prepare to show that it isn’t legitimate evidence. That will be important in resisting any motions they file, in filing our own motions, and preparing for and winning at trial.

You will send discovery, and no matter what you send, you will receive nothing but objections in response. This is called “stone-walling,” and it’s in every debt collector’s playbook. Do NOT just send another set of questions – it doesn’t matter what you ask, they will always object, so that would be useless. They might be stonewalling because they know they don’t have legitimate evidence, but frankly I think it’s mostly just a strategy to convince you to give up – to make you think you don’t have a chance against their lawyers and their money.

Don’t give up. Make them give you your answers.

To do that, you’re going to have to do the things that allow you to file a motion to compel, and then you will, obviously, have to file the motion, too. This whole process is what I call the Motion to Compel Cycle. So what is that?

Look at your rules of civil procedure for the rule on motions to compel. READ THAT RULE!

You will notice, in every jurisdiction I’ve ever seen, that the rule requires you to negotiate “informally” in good faith to resolve the issues raised by the other side’s objections. That is going to require you to call them up on the phone, speak to the lawyer on the other side, and discuss the objections. You will do this in good faith, but they certainly will not. And when you get through with this conversation, you will send them first a confirming letter if they’ve agreed to anything, and secondly what’s called a “good faith letter,” which outlines the items remaining in contention and states your basis for demanding the evidence.

So it goes like this:

Send discovery and wait for response

Call them to discuss objections

Write good faith letter outlining disputes and giving them a certain time to provide the information you demand

Wait for that time to expire

Write and file motion to compel.

It is possible they will respond with an argument. You should reply to that argument, but remember never to make any admissions of owing them or anyone money, of any prior relationship to the creditor, etc. NO ADMISSIONS AT ALL EVER. This is critical because they may slip a question in asking “don’t you owe __ the money?” or “don’t you already have the records? It was your credit card account!”

The only issue you should discuss is whether and why they owe you the discovery. Don’t forget.

This whole process is tedious and annoying because you know they are not in good faith. However, remember this: your efforts are requiring more attorney time spent on your case than many other cases combined would require. You are drawing blood with every minute you make them spend. And it’s the only way you will get what you need.

Remember in your first phone call to ask about EVERY SINGLE OBJECTION. I know there are dozens. Go through each one. It’s your right and responsibility, and it costs them $250/hour to talk with you.

Write a “confirming letter” if they make any concessions at all. Say “you said you would give me __ by [date]” and mention everything they agreed to. If they said they didn’t have anything responsive to a question or request, confirm that in the same way, too. You must create a written record.

You won’t get much, so you have to take the next step, the good faith letter where you say why you’re entitled to the information you request. If you’re using our model discovery, you’ll know what to say here.

They won’t give you anything even after this, in all probability, so your next step is the motion to compel. In that, you will include a statement about the phone calls you attempted, and you’ll attach your good faith letter. The court won’t hear your motion otherwise.

We have materials that could help you with all of the motion to compel cycle, from phone call to hearing.

What is Arbitration and Should you Seek or Oppose It?

January 27, 2023

Compel Arbitration or Oppose it?

Arbitration. Should you compel arbitration? Or oppose it? I’ve recently had a comment on Youtube asking me to discuss arbitration, and it has also come up in several recent teleconferences as members contemplated seeking arbitration. Others have wanted to know whether to oppose a motion to compel arbitration.

Let’s start with a definition: Arbitration is the submission of your case to a private entity known as an arbitrator. After some process and a hearing (most likely), the arbitrator will decide what happens in your case and issue what amounts to a judgment.

For debt cases, it’s always a single arbitrator or a company that will provide a single arbitrator that’s appointed, but for other cases it could be other things, like a panel, perhaps. In any event, there will be an arbitrator and some special rules that will NOT be your state’s rules of civil procedure and also might not be your state’s rules of evidence. But there will be rules that control the process.

Arbitration is popular because it makes it faster, easier and cheaper for people to engage in litigation. The discovery process will be limited, and the appeals process almost eliminated. That’s why rich companies and debt collectors always love it. Almost all of these things are completely and profoundly BAD for debt defendants. That’s why I’ve always suggested debt defendants should avoid arbitration.

But there is another side to the question, and there are some who argue in favor of allowing or even forcing arbitration in debt cases. What’s their argument?

I think the argument in favor of arbitration boils down to the fee, which apparently has to be paid up front by the debt collector And that can amount to two or three thousand dollars, or even a little more. The idea here is that debt collectors won’t want to put that much money down on the barrelhead just to chase a bad debt and that court is, for them, much cheaper.

There is some sense in this argument.

Debt collectors never worry about winning a case, but they do know you don’t have much money. That means that they’re sure they’ll win, but worry that they won’t collect, which is the most important thing to them. The more you make them spend, the more worried about that they’ll be. Maybe they’ll drop the case if you demand arbitration.

We often make the argument that by pursuing discovery, filing and defending motions, and preparing for trial you are driving up the costs of litigation and may make the whole thing too expensive for debt collectors to want to do. Again, not because they worry about losing, but just the amount of money they’re having to spend when their business model is designed around easy, cheap judgments. However, conducting discovery and filing and defending motions and the rest do in fact improve your chances of winning, and we think that, when it comes to a debt collector, you should win your case. These things are the way to do it, and the chance the company will drop the case is basically the icing on that cake.

In arbitration, it’s the whole cake. You should remember that.

One big question that may be more theoretical than real is, who ultimately pays the arbitrator?

I say it may be theoretical since I just said the debt collector isn’t sure you’ll have any money at all, but this won’t stop them from seeking as big a judgment as possible. And if they get a judgment, they WILL try to collect it. All. So be advised that the judgment size could matter.

Okay, but who pays the arbitrator?

I think some states may have rules that matter, and I know that California, for example, does have rules regarding employment and consumer-brought claims. In the absence of any state based rule, you
would look to the arbitration provision giving you the right to arbitration – i.e., the contract. That will often say who pays the arbitrator, and it can specify any of a number of things, from company pays all to loser pays all, to dividing it up. The contract isn’t often going to put all the burden on the company because, after all, the company wrote the contract.

If it says company pays all, though, the company can’t shift that payment to you if you lose. If it’s loser pays all, though, it obviously will. But if there isn’t a direction in the contract, that would usually mean you start by splitting the cost, but that the arbitrator can award the cost to the winner, i.e., add it to the judgment.

The rule in your case is going to depend on your own specific circumstances.

The net of all this would suggest that you will have some advantage if the contract makes the company pay, but there’s risk if the loser pays. And of course it matters a lot who pays up front, which is often the debt collector.

So… should you compel arbitration?

In a debt buyer/collector case (i.e., not the original creditor) I’d still lean strongly against. You should win this case under most state laws because of the rules of evidence, and you cannot depend on the arbitrator to enforce those rules rigorously. If it’s an original creditor, it’s a much closer question. You’ll have to consider all the things we’ve discussed here and make a judgment call.

Filing a motion to compel arbitration might trigger some settlement negotiation, but I wouldn’t think you could get the company to give you a very steep discount, but there I’m just guessing based on what I know about lawyers and not experience in these type cases.

I remain very hesitant about suggesting arbitration, but there may be value in considering it if you’re
dealing with an original creditor.

What Makes Something “Evidence” in Debt Cases?

December 12, 2019

What Makes Something Evidence

For a free copy of this article in PDF format, click here: what makes it evidence

This article is a brief but important discussion about “evidence,” what it is, how it works, and what to do about it. I get a lot of questions about “striking” documents at various times in a lawsuit, so this may help with that, too. While this article is intended to be a stand-alone article, it is also a part of our Glossary of Legal Terms, where we explain legal concepts and language to non-lawyers. Please feel free to use that resource if you run into a legal term you don’t understand.

But in this article we discuss something that most people understand a little bit about.

What is Evidence?

In a way, evidence is just “stuff.” It’s stuff that is supposed to relate to a case, so let’s start by introducing the concept of “relevance,” which is the formal way in which material relates to a case.

Relevance

Something is “relevant” if it makes some fact that matters to your case (is “material” to your case, in legalese) somewhat more or less likely to be considered true. A bank statement, for example, might be relevant to show how much you owe, or that it is your account.

It doesn’t have to “prove” it. Just make it more or less likely, and of course some evidence is much, much more convincing than other things might be. In debt law, the “credibility” of evidence actually rarely matters because what the debt collectors typically use are credit card statements and other things like that. For some reason the courts almost always believe them, despite all the stories of how often they’re wrong.

In any event, this video will presume that the “evidence” of which we are speaking is relevant. But you should never just do that. Always consider the question of relevance as one of the important first questions. Does it impact on something the debt collector must prove to establish its case? Anything else is not relevant and should be objected to on that basis.

How is Evidence Used

So what turns this relevant stuff into “evidence?”

The “stuff” becomes “evidence” when you ask the court to consider it for some specific purpose. That is deceptively simple, and you might think it doesn’t mean anything. But it means a lot, actually. It means that when a debt collector attaches statements or affidavits to its petition, it is NOT evidence, unless the petition is a “verified petition” where somebody is swearing that the allegations, and the evidence attached are true. Those are quite rare, but if you have one, you will have to verify your answer as well. So in that situation the stuff is a lot like evidence.

However, we need not consider that further because in almost all debt cases, there isn’t a verified petition, and the documents attached are NOT evidence in any present sense.

This in turn suggests that a motion to strike the attachments is pointless, and you should also be aware that the plaintiff is not trying to prove its case – so a motion to dismiss for lack of evidence is also pointless at that stage.

Stuff generally becomes “evidence” at two times in a case.

On an “evidentiary motion.”
And at trial.

An evidentiary motion is a motion that calls for some sort of proof. Most typically, that would be a motion for summary judgment, but a motion to dismiss for failure to serve would also involve proof of that failure. Likewise, motions to compel require that you show the court certain facts, and motions for sanctions can involve much more involved fact finding.

And a motion to vacate is also going to require some very specific evidence.

But in most of these situations you’re simply presenting evidence to show a rational person could believe something – you’re not asking the court actually to believe it. In motions for summary judgment you’re asking the court to find, decisively, that certain facts are established beyond dispute, and at trial you’re asking the fact finder to believe you and not the other person.

Evidence is always Evidence of Something

In any event, we now have stuff that has become evidence. It’s always evidence of SOMETHING. Right?
It’s supposed to show some specific, important thing is true or not true. And of course evidence could show more than one thing is true or not true, which is important.

Evidence is always evidence of some fact or facts, in other words. You don’t move to “strike” it. You OBJECT to it when the other side tries to get the court to consider it. You object to its being used to prove some specific fact (but maybe not some other fact).

Admissibility

Before the court can consider the evidence, it first must decide whether it is “admissible” (It has to decide whether it can consider it.)

We talk a lot about admissibility in other materials, because most debt cases are decided based on
whether evidence – usually affidavits and bank statements – is admissible. Your objection to evidence is to its admissibility. In other words, you are asking the court not to consider the evidence at all. At a jury trial, it’s important to do this before the evidence is seen by the jury, so you object to the question asked (rather than the answer given) if possible, or you object when the other side asks to show it to the jury.

Remember that it is possible to have evidence admitted for one thing but not another thing. Suppose you’re claiming, for example, that you sent a request for verification, but they never verified before suing you. Your copy of the letter would be proof of what the request said. Your testimony that you sent the letter would be proof that you sent it, but you would ALSO need some proof that they received it. Hence it makes sense to send them by certified mail.

The letter itself is admissible about the contents of the request but not the receipt.

Normal people are not used to breaking things down in this way, and this turning of everything into an elaborate flow-chart takes some getting used to. But you need to think that way both to get your own evidence admitted, and also – more importantly in debt cases – to attack the debt collector’s evidence.

Remember that if the debt collector manages to get credit card statements admitted into evidence that will almost always be fatal to your defense.

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How to Create Good Faith Letter

June 20, 2018

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Court Involvement in Discovery

June 20, 2018

What is the court’s involvement in discovery? Does it oversee interrogatories, requests for production and requests for admissions?

In most jurisdictions, there is no court involvement in the discovery process unless and until a motion to compel becomes necessary. Even in those jurisdictions, a lot of people will send a “notice of service of discovery” which simply informs the court of the date and type of service certain discovery was served on the other side: “On this date, defendant served his first set of interrogatories, requests for admissions, and requests for production on plaintiff by first class mail, postage prepaid, at the address noted below as the service address.”

Perhaps a very few courts require this by local rule. For other courts, it probably does not hurt and may occasionally do some good. If, for example, some issue of notice arises, parties are usually held responsible for knowing what was in a notice to the court. I’m not aware of that ever actually making a significant difference, however, and most lawyers do not send such notices unless required by rule.

In a very few courts – I just heard of one shortly before writing this article – the courts still take copies of the discovery. That’s a question you could ask a court clerk and probably get an answer, because if they don’t want it, they really don’t want it. That is, for most courts if you send them a copy of the discovery you sent to the other side, the court will return it to you and not accept it.

The Way Discovery Works

What happens is simple. You serve discovery directly to the other side. They answer, object, or ignore you. If you take no further action, nothing will happen. No one looks out for you! Some people think that’s wrong, but the court gives the parties the freedom to choose their fights, and if you don’t fight about it, the court is only too happy to forget it.

Specifically this means that if you serve discovery on the other side and they ignore it, the court will probably not prevent them from using things they should have given you at trial. If you want to protect yourself you have to follow through.

If you want to force the debt collector to answer, you must file a motion to compel (and typically you have to send them a “good-faith” letter to try to get them to agree to answer, first). Then you attach all your discovery requests and their answers and objections, and file it with the court. That’s the first time the court will see it, so your motion to compel has to be thorough and complete.

And there’s more. After the other side responds, you will need to “call” (schedule your motion with the court) and argue it in front of the judge in order to get the court to rule. The court will either sustain their objections or overrule them and order them to answer the requests. It will usually give them a little time to do that.

At the argument and in your motion, you have to go through each item of discovery and every objection one at a time. It can be maddening, but you are asking the court to rule on a long series of objections, and it must make up its mind on each separate thing.

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