Friday, September 6, 2013

Anh H. Regent - Review and critique of standard pleadings filed by this Houston-based debt collection attorney [who is now a debtor in bankruptcy[

Anh Huynh Regent – Profile of debt collection attorney

Anh Regent (not Ann; this is a guy) has his own lawfirm, REGENT & ASSOCIATES, based in Houston, which specializes in debt collection, and has numerous corporate clients, including major credit card banks.

2015 UPDATE: Anh Regent filed for bankruptcy in March 2015 in the Southern District of Texas. He owes his process servers several hundred thousand dollars and one of his (former) debt buyer clients says he absconded with money advanced for payment of filing fees in cases he never filed. He also owes $200,000 to Chase, and smaller amounts to numerous other creditors. Anh Regent is a defendant (or represented the defendant) in numerous actions in which debtors allege that he or his firm violated the Fair Debt Collection Practices Act (FDCPA).    
Regent files initial pleadings that are longer than those prepared by other debt collection attorneys because they include discovery requests as numbered sections, of which there are seven to nine, counting all. Some also includes attachments (or claim to include them, though they are actually omitted). 
Regent's original petition template is unique in pleading a hybrid causes of action titled "SUIT ON OPEN & STATED ACCOUNT/DEBT/BREACH OF CONTRACT" in a single paragraph. Although this is confusing, Regent has been presenting different banks' and debt buyer's cause of action or causes of action against the defendant in such fashion for years. Presumably it is meant to invoke the common-law cause of action of "suit on open account" (which is not applicable to credit card debt claims under long-standing precedents because the creditor does not sell goods or service); account stated (which has been approved for credit card debt collection by several courts of appeals in Texas, but not by all), and breach of contract, which is the correct and obvious legal theory for a debt claim based on a credit card agreement. As for "debt" generally, it is not a cause of action, and it is not clear what legal theory Regent intends to invoke by including it. 
[not proper under the TRCP]
The inclusion of discovery request within a pleading is a practice of dubious validity under the rules of civil procedure. One court of appeals has already taken Regent to task for embedding discovery requests within his petition, thus confounding the distinct purposes of pleadings and discovery, in violation of the TRCP, and creating confusion regarding the applicable due date for the answer to the lawsuit and the due date for discovery responses (which is longer). 

Be that as it may, it rarely becomes an issue. Pro se defendants generally do not know that the rules state that discovery is not to be filed, and consumer attorneys probably do not consider it worthwhile objecting, since the plaintiff can simply re-serve the discovery requests by fax or certified mail later. The improper form of service may, however, provide a defense for deemed admissions, or additional grounds for a motion to strike them. It may also provide a basis for an attack on a default judgment. 
Regent's typical petition encompasses two types of requests: Requests for Admissions, and Requests for Disclosures. Other debt suit attorneys also serve interrogatories with the citation and petition, but as separate document that also includes other discovery requests.

The purpose of requests for admissions is to use deemed admissions in lieu of evidence for summary judgment, or for default judgment purposes. Deemed admissions result automatically when the Defendant fails to respond to requests for admissions by the deadline. In the case of such default, all propositions which the cardholder is asked to admit, are considered admitted. (--> Deemed admissions in debt suit litigation). 
Requests for admissions are not supposed to be embedded in pleadings, but Anh Regent deliberately flouts that rule, and rarely gets taken to account when he uses the deemed admissions so obtained for default judgment purposes. See excerpt from motion for default judgment below:  

Regent uses the tactic because he can then use the return of citation, i.e. the proof that the petition was served, to also prove that the requests for admissions were served.


Regent's typical original petition also differs from pleadings filed by other debt collections attorneys in that it alleges (in the fact section) that the revolving balance was accelerated by the original creditor. The pleading typically does not identify the original creditor, however, unless the plaintiff expressly sues as assignee of such-and-such bank, and the original creditor thus appears in the case style.  

ATTORNEY FEES. Regent pleads for attorneys fees in a separate paragraph. He does not plead for a specific amount, but one of the items in the enumerated list of requests for admission asks the defendant to admit that a specific dollar figure is reasonable. That  dollar amount is 25% of the amount that the petition alleges is owed by the defendant.

SUIT-ON-ACCOUNT THEORIES. Regent pleads "open account" as a theory of recovery, and moves for summary judgment on it, as an alternative to breach of contract and account stated (discussed elsewhere). Suit on account, however, presupposes a sales transaction from the creditor to the debtor, and that does not apply in credit card debt cases. Under long-standing appellate decisions, the open account theory fails for the same reason the sworn account theory fails. Sworn account is, after all, not a theory of recovery, it is merely an expedited procedure for bringing a common-law open account suit by attaching verification and documentation to the original petition. If the procedural requisites of Rule 185 are not satisfied, the Plaintiff must prove its common-law account claim under the normal evidentiary standard. But the standard of proof does not affect the substantive requirement that the claim be based on sale of goods or services by the claimant to the defendant.

ORIGINAL CREDITOR SUITS VS LAWSUIT BY DEBT BUYERS. Regent apparently uses the same petition template for original creditors suits and collection suits by debt buyers. Some references in the standard pleading are in the disjunctive ("either/or") form so as to cover alternative scenarios, e.g. reference to "the terms of the agreement with Plaintiff/Plaintiff's predecessor in interest."  Discovery requests similarly refer to "Plaintiff or Plaintiff's predecessor in interest."

VENUE PARAGRAPH. Regent asserts alternative basis why venue would be appropriate in the county in which suit is filed: (1) because this is where the contract was signed; (2) where the Defendant resides, or (3) where the events giving rise to Plaintiff's claim occurred. What is noteworthy here is the inclusion of the first. Credit card accounts typically do not involve signed contracts, and even signed applications are rarely produced as summary judgment or trial exhibits.


One court of appeals  has had occasion to examine the quality and sufficiency of Regent's pleading in an appeal from a default judgment. Applying a more exacting standard because a default judgment was involved, it found fault with it for multiple reasons, and reversed the default judgment because none of the theories of recovery that Regent urged on appeal was supported by proper allegations in the petition. Hankston v. Equable Ascent Financial, 382 S.W.3d 631 (Tex.App.- Beaumont - 2012, no petition to Texas Supreme Court).

Here is an excerpt from what the appellate panel had to say about Regent's pleading:

In this case appellee, claiming to be the current owner of an indebtedness, sued two defendants. The pleading references supporting "attached documentation[,]" but neither the underlying contract nor an assignment is attached to the petition. 

Neither the petition nor any attached document names the original lender. The petition includes only an account number, but does not name the defendant who opened the account or signed the contract. See Lambert v. Dealers Elec. Supply, Inc., 629 S.W.2d 61, 63 (Tex.App.-Dallas 1981, writ ref'd n.r.e.) (op. on reh'g) ("[O]nly those matters alleged in the body of the petition are matters upon which defendant is placed upon notice that plaintiff intends to prove upon trial."). 

Appellant's name is misspelled in the preamble, the only place in the petition other than the style where he is named, and the petition (filed in Orange County) does not provide the appellant's residence (in Harris County), although that was known. See Tex.R. Civ. P. 79. The body of the pleading refers to only one defendant, though not by name, an allegation consistent with appellant's argument that he did not sign the contract or open the account. See Lambert, 629 S.W.2d at 63. But appellee seeks to hold both defendants liable for the alleged amount.

In the petition, appellee also states: "However, this amount may not include any payments or credits occurring after the date of this petition or the date of the affidavit of [p]laintiff's representative." The attached "affidavit" appears to be dated eleven months before the default judgment is signed, and refers to a single unnamed "defendant." The affidavit is an apparent attempt to support a suit on account under Rule 185, but the affidavit does not state the "claim is, within the knowledge of affiant, just and true...." See Tex.R. Civ. P. 185; see also Griswold, 249 S.W.2d at 61(reversing default judgment because affidavit did not meet the requirements of Rule 185). Although the affidavit uses the singular "defendant," it does not state which defendant allegedly owes the debt. 

The petition contains no assertion that the account was "for goods, wares and merchandise," for material furnished, for personal services rendered, or for labor done or furnished. See Tex.R. Civ. P. 185; see also Hollingsworth v. Nw. Nat'l Ins. Co., 522 S.W.2d 242, 245 (Tex. Civ.App.-Texarkana 1975, no writ). Furthermore, appellee was not a party to the original transaction. SeeVolvo Petroleum, Inc. v. Getty Oil Co., 717 S.W.2d 134, 138 (Tex.App.-Houston [14th Dist.] 1986, no writ) ("Such accounts, though verified, are hearsay as to such parties[.]"), overruled on other grounds by Sosa v. Cent. Power & Light, 909 S.W.2d 893, 895 (Tex.1995).

Appellee argues that the pleading nevertheless is sufficient as a suit on an open account and on an account stated. But the petition does not include an allegation that the appellant agreed that the balance alleged to be due is correct. See E. Dev. & Inv. Corp. v. City of San Antonio, 557 S.W.2d 823, 824-26 (Tex.Civ.App.-San Antonio 1977, writ ref'd n.r.e.); Unit, Inc. v. Ten Eyck-Shaw, Inc., 524 S.W.2d 330, 334 (Tex.Civ.App.-Dallas 1975, writ ref'd n.r.e.). Rather, the petition itself includes an assertion that the amount may not reflect all payments made. And while the appellee also attempts to assert an action for quantum meruit, the pleading contains no assertion that appellee provided valuable services or materials to appellant. See Vortt Exploration Co. v. Chevron U.S.A., Inc., 787 S.W.2d 942, 944 (Tex. 1990). Also, the discovery requests in the petition reference an express contract. See id. ("Generally, a party may recover under quantum meruit only when there is no express contract[.]").


In Tully v Citibank, the Texarkana Court of Appeals held that the cardholder’s affidavit filed to counter Citibank’s motion for summary judgment was conclusory and therefore was ineffective, but that it did not matter because Citibank had not met its burden of proof on its only potentially viable theory of recovery: breach of contract. With respect to the other two theories on which Regent had moved for summary judgment, the court held that they were not viable as a matter of law.

The court rejected the proposition that the credit card suit can be brought as a sworn account suit, which a number of other courts of appeals have confirmed also; and held that Citibank could not recover in quantum meruit because it had proven the existence of a contract. The rule has long been that equitable remedies are not available when a plaintiff has a legal remedy for breach of contract. -- > Expresss contract defense to non-contract theories of recovery 

The opinion does not specifically address the implications of a credit card bank withholding the contract (so that it is not before the court), and moving for summary judgment only on the quantum meruit theory. That litigation tactic should fail because a written contract was required under federal law, and the plaintiff’s decision to withhold it does not alter the fact that the relationship between the parties was necessarily a contractual one. --> In re Tran, 351 B.R. 440, 445 (Bankr. S.D. Tex. 2006), aff'd, 369 B.R. 312 (S.D. Tex. 2007)(contract required by TILA).    

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