17 Apr Debt Collector Lawsuits
You are an attorney. Someone comes to you who got papers handed to him/her by the sheriff’s deputy and you see that he/she is being taken to court by Unifund, LVNV, Erin Capital, Calvary Portfolio, or any of a dozen others. Welcome to the world of nationwide debt collectors of old credit card debt.
Many of these Petitions contain multiple, alternate causes of action; breach of contract, suit on account, and quantum meruit. In Missouri, you should be able to beat all three.
First, fundamentally, if they cannot produce a signed contract, how can they plead and prove breach? The business model for these operations precludes the ability to transfer actual paperwork upon assignment or sale of the debt. Also, most credit card companies freely admit that they destroy signed membership agreements within the first couple of years.
Second, suit on account is grossly abused in this context. A suit on account is an action at law to recover money for property sold and delivered or services performed. Plaintiff has the burden of proof to make a submissible case and must present more than mere conjecture to meet this burden. Plaintiff must establish: (1) an offer, (2) an acceptance, (3) consideration between the parties, (4) the reasonableness of the charges, and (5) the correctness of the account. There is no way that a debt collector can show the reasonableness and correctness of purchases on a charge account.
Last there is the equitable cause of action called quantum meruit, which is based on an implied agreement. This is a different claim than unjust enrichment. Recovery under quantum meruit is limited to only when there is no express contract. Once again, even if the debt collector can get to damages, he still needs to demonstrate reasonableness and correctness of charges on the account.
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