Res Judicata – CreditRage Uncut 15


Res Judicata – When you are dealing with collectors, you need to make sure they do not get a judgment against you in a local court. If this happens, you will have a difficult, if not impossible, task of having a case heard in federal court for FDCPA. Watch the video for more information.

Boiler Williams

One comment
  1. I’m scratching my head for the same reason you did in August 2012. The “claim preclusion” FDCPA cases I’m glancing at in studying the issue either get all knotted over a set of facts or case elements being “entangled” between two actions, or a decision is made that “you shoulda argued those facts when you still had a chance”. But like you, I see not one but two different conversations in a debt lawsuit versus an FDCPA action. The former concerns the *financial* behavior and liability of a consumer; the latter attacks mainly the misdeeds of a business. I suppose if we had passed a bar exam we’d see it differently.

    Prior Litigation May Bar an FDCPA violation

    The tacit point of your prompting for timely action is to not blow a chance to raise the exposure of one’s opponent. Let’s say as a creditor’s defendant you get bad advice on good FDCPA claims and fail to raise them in time, or else you just can’t realistically wring any violations from the prior collection activity. (an arguably rare but certainly possible circumstance) What weapons for leverage remain?

    Well, many lender contracts still in force have handy private arbitration clauses. When properly invoked by the distressed consumer, they force a change of venue (or at least judicial review of the demand) to a place the banks and debt buyers almost never want to go due to the steep fees charged to them, versus the great bargain they get in state court. It’s also good for breaking up incestuous relationships between judges and debt lawyers. I have both anecdotal and personal experience supporting the maneuver, both as a defendant and a plaintiff.

    Timing can again be critical. If arb is part of the plan, it’s generally best not to litigate much in court but concentrate first on forcing the venue change. In some jurisdictions, notoriously in Florida, pleading the slightest thing about the case in court is enough to cause a judge to deny arbitration, even in spite of federal law and a SCotUS case strongly supporting your right to execute an arb clause as written. Also, per lender contract, the choice of arbitration firm may have to be seized by the first party to elect or initiate it. The cool kids like to elect arb as early as in their dispute letters to debt collectors, thus setting a sly FDCPA trap.

    The concept of “low hanging fruit” is one I’ve kept in mind in all my collector conflicts. Climbing to a higher branch often does wonders where the opposition simply doesn’t want to offer proof or argue facts.

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