Venue violations - What remedies when consumer gets sued in the wrong county & court?

What if a consumer is sued on a credit card debt where he does not live? There will likely be relief available: Motion to transfer venue and/or motion to dismiss the improperly filed suit; and possibly a cause of action under fair debt collection laws. This post focuses on the latter, the FDCPA in particular.

FEDERAL & STATE VENUE RULES FOR DEBT SUITS

Mandatory venue under federal law: Cardholder must be sued in county of residence

Under the FDCPA, a consumer must be sued in the county in which he or she lives or where the loan contract was signed. In credit card cases, the consumer typically signs no contract (except perhaps if the card is issued by a credit union); therefore there will typically only be one applicable venue, which would be mandatory, i.e leaving the debt collection attorney no choice in the matter. Another exception, involving location of real estate, is not applicable either, because consumer credit card debt is not a mortgage, and typically not secured at all, at least not in Texas.

If the consumer gets sued elsewhere, he or she may have a case under the fair debt collection laws in addition to being entitled to transfer of venue under the Texas Rules of Civil Procedure.  -- > Motion to Transfer of Venue under  TRCP.

The venue restriction on debt suits imposed by the FDCPA is found at Section 1692i(a)(2) of Title 15 of the United States Code, cited as 15 U.S.C. § 1692i(a)(2).

Mandatory venue under Texas law: Credit card debt suit must be filed in county where cardholder resides
The Texas Civil Practice and Remedies specifies where civil lawsuit may or must be brought. "May be brought" is called permissive venue and "must be brought" goes under the rubric of "mandatory venue". For consumer debt, the rules mirror the federal venue rule: the lawsuit against the consumer seeking collection of debt must be filed either where the contract was signed (if there is a signed contract) or where the consumer lives.

Texas Civil Practice & Remedies Codes also has strict rule for venue 

Venue for consumer credit cases is governed by Section 15.035(b) of the Civ. Prac. & Rem Code, which mandates that venue is proper in either the county of the consumer's residence or the county in which the consumer signed the contract. The CPRC also expressly states that this provision cannot by waived by the consumer.

Enforcement of venue provision against debt collector with a record of massive violations 

The Texas Attorney General recently brought an enforcement action against an attorney for routinely suing debtors in Justice Court court in Downtown Houston (JP Court of Harris County Precinct 1 Place 2) even though they lived outside the county and had no connection to Harris County. The civil action was filed by the Consumer Protection Division in the public interest and seeks a permanent injunction and hefty monetary penalities to be paid to the State of Texas. As of November 2013, it is still pending in Harris County District Court: State of Texas vs. Samara Portfolio Management LLC; Law Office of Joseph Onwuteaka, PC, and Joseph O. Onwuteaka, individually.

Case Style on complaint filed by AG: State of Texas v. Samara Portfolio Management LCL
TDCA Enforcement Action (above) and factual allegations section (below)

VENUE VIOLATION BY DEBT COLLECTION ATTORNEYS AS AN FDCPA CLAIM 

Under the FDCPA, unless a debt collector is suing to enforce an interest in real property, it must bring any action on a debt against a consumer in the judicial district where the consumer signed the contract at issue or in the judicial district where the consumer resided when the suit was filed. 15 U.S.C. §1692i(a)(2).
Note that the federal judicial district is not coextensive with a county (a political subdivision of the state), wherefore caselaw should be researched to determine whether a venue violation can be asserted in good faith in a particular case, such as when the defendant is sued in the wrong JP court precinct within a county.
Lawsuits on behalf of corporations are mostly filed by attorneys because corporate officers who are not attorneys are not permitted to sue and sign pleadings as agents of corporate entities unless they bring the lawsuit in justice court. -- > Can a corporate entity appear in court without lawyer?

To assert a venue-violation claim against an attorney under the FDCPA, it must be shown that the attorney meets the federal definition of debt collector. The FDCPA covers attorneys, but not all attorneys under all circumstances in which a questionable or clearly prohibited act occurred (such as a violation of the federal venue rule). An attorney only faces liability under the FDCPA for such act if he or she meets the statutory definition of "debt collector". The key element of that definition is the "regularity" of the debt collection activitities. -- > When can attorneys be sued for FDCPA violations?

The FDCPA has one-year statute of limitations. Therefore, a remedy may no longer be available under the FDCPA even if a violation could easily be proven and even if the attorney meets the statutory definition. In those instance where the claim of unfair debt collection is time-barred under federal law, it may be worth considering the TDCA as an alternative.

RELATED TOPICS RELATED TO FAIR DEBT COLLECTION COMPLIANCE: 

When are collection attorneys subject to liability under the FDCPA?
What is a covered debt under the FDCPA?
Texas Debt Collection and federal Fair Debt Collection Practices Act: Compare and Contrast
Texas AG civil injunction suits to enforce compliance with state fair debt collection statute

Do debt collection attorneys have to comply with the FDCPA? Are they covered?

FDCPA When do attorneys face liability under the federal Fair Debt Collection Practices Act?

Can collection attorneys be sued under the FDCPA if they engage in deceptive or otherwise prohibited conduct?  

In principle, yes, but not always. The debt at issue must be a consumer debt and the attorney must meet the definition of debt collector that is set forth in the act. A single debt collection suit would not make the filing attorney a debt collector (under the FDCPA) because the statute says that it applies only to those who engage in debt collection on a regular basis.

WHO IS A DEBT COLLECTOR UNDER THE FDCPA? and WHEN DOES THIS APPLY TO COLLECTION ATTORNEYS?  

Attorneys qualify as debt collectors for purposes of the FDCPA when they regularly engage in consumer debt collection, such as litigation on behalf of a creditor client that is a national bank or other financial institution, or an assignee of an original creditor.

Numbers matter

A person may “regularly” collect debts even if debt collection is not the principal purpose of his business. If the volume of a person’s debt collection services is great enough, it is irrelevant that these services only amount to a small fraction of his total business activity. Whether a party "regularly" attempts to collect debts is determined, of course, by the volume or frequency of its debt-collection activities.

What is 'regular'?

But there is no clear-cut rule or yardstick that can be used to determine what amounts to regular, so the status issue may have to be litigated in the particular case, unless the attorney's correspondence expressly states that the attorney is a debt collector on its paperwork (correspondence and pleadings) or concedes the issue in the course of an FDCPA action. In a complaint filed in federal court, specific allegations must be set forth in the initial pleading, including those pertinent to the essential elements of a cause of action, and the defendant must admit or deny each allegation in his answer.

Status definition not vague

At some point the definition of “debt collector” in 15 U.S.C. § 1692a(6) was challenged as unconstitutionally vague, but the Fifth Circuit Court of Appeals decided that it was not, pointing out that it was a statute that regulates economic activty and provides for civil penalties rather than jail, and that courts have managed with the statutory definition for a long time since FDCPA was enacted with no major problems in making the necessary determinations as to debt collector status under the Act on a case-by-case basis.

When the federal act is not available

Note that the FDCPA has a state law counterpart, the Texas Debt Collection Add (TDCA). The TDCA (also abbreviated DCA with the T for Texas omitted) uses a different definition of those covered by it, which includes original creditors, and differs in other significant respects. -- > Suing under the Texas Debt Collection Act.

STATUTORY DEFINITION OF DEBT COLLECTOR UNDER FDCPA

LEADING CASE FOR LAWYERS AS FDCPA DEFENDANTS

Heintz v. Jenkins, 514 U.S. 291, 292 (1995) (litigating lawyers are not exempt from the FDCPA if they otherwise qualify as debt collectors)

RELATED FAIR DEBT COLLECTION TOPICS

Consumer's counterclaim under federal and state fair debt collection laws
Federal vs state regulation of debt collectors: FDCPA and Texas Debt Collection Act
Differences between FDCPA and TDCA: Who is covered, what type of debt, and what conduct provides grounds for relief?
What is a consumer debt under federal fair debt collection practices law?
Mandatory venue violations: Consumer sued in the wrong county and wrong court 

What is consumer debt under the Fair Debt Collection Practices Act (FDCPA)?

THERE IS DEBT AND THERE IS DEBT ...

NOT ALL DEBT IS ALIKE UNDER CONSUMER PROTECTION LAWS THAT GOVERN DEBT COLLECTION AND DEBT COLLECTORS   

Debt collection activities are regulated by the federal debt collection practices act, which contains a list of no-nos that constitute violations, but are actionable under the FDCPA only if the debt sought to be collected is a consumer debt as opposed to a business debt. Other limitations also apply.-- > Who is a debt collector under the FDCPA?

If the debt is a business debt, no private remedy is available under the FDCPA. But see  -- > Texas DTPA and Texas Debt Collection Act.

American Express, for example will insist, either as a term of granting credit in the first instance, or by way of notice to card holders later, that certain types of credit or charge cards it issues are business cards and may only be used for business purposes even if the cardmember is an individual operating a sole proprietorship, which is not a distinct legal entity under Texas law.

American Express is known for issuing cards in the names of both business and owner even if the business is merely an assumed name (aka DBA for "doing business as") of an individual, i.e. a natural person as opposed to corporate entity (such as a PC, a PLLC, a LLC, or a INC). The apparent reason for this is to take the account out of the scope of the FDCPA and out of other consumer protection laws employing the same or a similar definition that also exclude business debt.

So what qualifies as consumer debt?

FDCPA DEFINITION OF CONSUMER DEBT 

The FDCPA defines a “debt” as follows:

[A]ny obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance, or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

15 U.S.C. § 1692a(5) (2000). U.S.C. stands for United States Code, with the number preceding it referring to the Title, and the number behind it to the relevant Section within the Title. The FDCPA is part of the federal Consumer Protection Act.

Definition of debt for purposes of FDCPA liability

HOW IS THE FDCPA CITED? 

General cite for federal law protecting consumers against unscrupulous collection actions:

Fair Debt Collection Practices Act 15 U.S.C. § 1692, et seq.

TOPICS AND ISSUE IN (UN)FAIR DEBT COLLECTION 

Can attorneys be sued for violations of the FDCPA? 
Who is a debt collector under the federal FDCPA?
Federal FDCPA and TDCA compared
Enforcement of fair debt collection practices by the Texas Attorney General Consumer Protection Division

Default Judgment: Appeal, Post-Judgment Motion, and Bill of Review

Default judgment entered. Judgment granted for Plaintiff. -- Now what?  

ATTACKING DEFAULT JUDGMENTS AND OTHER JUDGMENTS 

This article discusses, in general terms, what options may be available to the consumer once a judgment has been entered for the creditor. It focuses on legal remedies to attack the judgment, not on efforts to settle the case in order to avoid enforcement in the form of execution or garnishment, topics left for another day. 

Also see more recent article on --> TRAPs and PITFALLS in pro se appeals and --> Sample Briefs 

  

APPEALS, BILL OF REVIEW, and POST-JUDGMENT MOTIONS 

  

It makes sense to discuss appeals and bill of review together, at least in an article that provides a general overview because the purpose of appeal and bill of review are the same: to attack an adverse judgment. 
  
They are nevertheless two rather different vehicles, and come into play under different circumstances.   
  

The bill of review procedure applies in the trial court and may be available for as long as four years after the judgment was signed (and sometimes even potentially longer when the defendant was unaware that the judgment even existed). The timeframe for appeals, by contrast, is much shorter. More on appellate deadlines below.   

A bill-of-review proceeding is initiated to attack a default judgment while an appeal may be brought to challenge a variety of judgments: a default judgment; a summary judgment; or a judgment entered after trial on the merits.

  
A bill-of-review petition is filed in the trial court that granted the judgment. An appeal, by contrast, is taken to the court of appeals in whose geographic jurisdiction the county or district court is located, though the notice of appeal must be filed in the trial court. (Appeals from justice court, also called JP Court, are another matter; they go to county court and have their own set of rules).  

Both bill of review and appeals - ordinary appeal and restricted appeal -  have specific requirements that must be satisfied. If the judgment was entered recently (within the last 30 days), it may be possible to attack the judgment by post-judgment motion in the trial court, such as a motion for new trial or a motion to set aside the default judgment; or a motion to modify the judgment.

All such post-judgment motions have to filed within 30 days counting from the date the judgment was signed by the judge (which may differ from the hearing or trial date). It may be necessary to obtain a copy of the judgment from the clerk to be sure of the correct date. An extension may be available if the defendant did not become aware of the judgment until some point later, but the time frame under the rule that extends post-judgment deadlines under special circumstances is also restricted. -- > Late notice of judgment and motion under Rule 306a.  

DEADLINES THAT REALLY KILL 

The timing rule for post-judgment motions is very harsh. Such motions must be filed within 30 days or the plenary power of the trial court will automatically expire, meaning that the judge could no longer set aside the judgment even if inclined to do so. Sometimes judges set aside and alter judgment only to have the second judgment declared void by a higher court. 
  
The deadline for appeals is also 30 days, but the rules for appeals are more lenient in two respects: 

First, a tardy would-be appellant may qualify for a 15-day extension to file the notice of appeal; second, in the case of a default judgment, the consumer may be able to bring a restricted appeal up to six months after the judgment was entered if he or she did not file a post-judgment motion or a timely notice of appeal to initiate a regular appeal. As the name suggests, a restricted appeal is more limited in other respects. It also requires a different notice of appeal. 

But the road to the court of appeals has booby traps too. In an appeal from a bench trial, findings of facts are needed in most cases, and the request for those is due before the notice of appeal itself is due: 20 days from the date of the judgment. -- > Findings of Facts and Conclusions of Law. And if the trial court is tardy in issuing findings, the prospective appellant has the burden to file a reminder called a past-due notice. 

TYPES OF APPEALS

The fourteen intermediate courts of appeals in Texas hear and decide various categories of appeals from county and district courts, not all of which are relevant to debt collection litigation. Among those that pertinent are the following: (1) appeals from final summary judgments; (2) appeals from final judgments entered after a bench trial (almost never a jury trial in collection cases); (3) direct (regular) appeals from default judgments; (4) restricted appeals from default judgments after the deadline for a regular appeal has passed. (Mandamus proceedings, which like an appeal by a different name and different rules and standards need not concern us here). 

Typically, the urge, need, or desire to appeal arises after a final judgment has been entered against the Defendant. Appeals during the pendency of a lawsuit are exceedingly rare in debt litigation. That category of appeal is called interlocutory, and must be specifically authorized by statute. The circumstances that give rise to a right to an appeal before a final judgment seldom occur in debt collection suits, but there are exceptions, as there are to almost any rule and generalization:   

IMMEDIATE APPEALS WHILE A LAWSUIT IS PENDING 

Interlocutory appeals are not a regular feature of debt collection litigation. But there are two possible exceptions: immediate appeals relating to arbitration (denial of motion to compel arbitration); and appeal of an adverse ruling on a contest to personal jurisdiction through what is called "special appearance" under Rule 120a. The latter scenario rarely occurs because consumers in debt collection suits must be sued in the county in which they reside, not merely in the state in which they live.

If a cardholder is sued in the wrong county, the remedy is a motion for transfer of venue (and a possible unfair debt collection claim based on the mandatory venue violation). Because of potential legal liability, however, debt collectors have good reason to make sure they don’t see in the wrong court. Collectors who flout the rule even risk enforcement action by consumer protection authorities. Example: Texas AG's action against Joseph Onwuteaka and his debt collection firm over mandatory venue violations: State of Texas v. Samara Portfolio Management LLC in Harris County District Court. 

As for personal jurisdiction issues involving foreign defendants, they are much more common in commercial litigation against companies and their directors and/or owners, not consumers.

The most common forms of appeal in debt litigation are (1) ordinary appeal from a final judgment -- either a summary judgment in favor of the creditor or a judgment entered after a bench trial -- and (2) restricted appeal, which is a special form of appeal that affords a remedy for default judgments under certain conditions. Sometimes, it is the creditor that appeals when the consumer prevails in the trial court. 

BILL OF REVIEW VS. APPEAL

A bill of review proceeding is a method to attack a judgment that is no longer appealable because it has become final and the deadlines for regular and restricted appeal have passed. Unlike appeals, a bill of review is filed in the trial court in which the judgment was rendered. As such, it looks more like a regular lawsuit initiated by petition (though it must be sworn). 

The bill-of-review case may be assigned a new cause number just as all other freshly filed civil suits; or it may be given the original cause number with an extension added (a hyphen plus an additional digit or letter). Regardless of how a particular county or clerk denominates the bill-of-review case, its purpose is to persuade the trial judge to set aside the final judgment in the earlier case, and thereby -- essentially -- revive that lawsuit. If the bill of review is granted, the effect will be that the parties are returned to the position they were in before the judgment was granted. This means that the case is re-opened, and will have to be tried or disposed of in some other fashion. To complicate matter further, in a bill-of-review proceeding the judgment debtor who was the defendant in the collection suit is now the petitioner (plaintiff) and the creditor is the defendant. If the case is reopened, the parties sometimes revert to their original designations. As a further wrinkle gets added when the judgment was assigned to a new owner. Suffice it say, to reopen a default-judgment case by bill of review can be a rather daunting proposition. 

An appeal, by contrast, involves a proceeding in a higher court that seeks to convince the higher court that the trial judge erred, or that there was some other problem, such as a defect in service (which the trial court judge may not have noticed and may not have been made aware of). There may be variety of outcomes: reversal and remand to the trial court; reversal and rendition of judgment in the appellant's favor; affirmance of the trial court's judgment, and partial reversal. Sometimes the courts of appeals correct a minor matter, such as deleting a word or item or adjusting the interest rate, and characterize the disposition as "affirming the judgment as reformed". 

TAKING AN APPEAL: NO EASY TASK

There are many requirements for a successful appeal, and many procedural traps along the way. It is almost impossible for a pro se litigant to be successful on appeal, though not unheard of either. Most pro se appeals in debt suits are either dismissed or denied, and even those brought with attorneys often fail, for a variety of reasons. -- > appellate decisions in debt litigation 

Dismissal is the virtually guaranteed outcome if the appellant does not pay the appellate filing fee ($205 as of 2018) or does not pay for the clerk's record (cost depends on number of pages needed for the appeal). Appeals from judgments resulting from bench trials normally also require a reporter’s record (cost depends on length measured in words spoken and transcribed; with fees charged per page). The reporter’s record should be much shorter, and cheaper, compared to other civil cases involving comparable dollar amounts in damages because little or no oral testimony is typically presented, as most if not all of the evidence is in the form of documents submitted with a business records affidavit.  

Other forms of noncompliance can also entail dismissal, such as failing to file the required appellate docketing statement. Unrepresented litigants typically do not know how to draft an appellate brief, and often violate multiple rules of form. 

They will typically be given another chance (ordered) to submit a compliant brief by a specified deadline, but a fundamental lack of familiarity with the appellate process cannot be remedied within a matter of weeks; not to mention presenting a strong argument on the merits, supported by relevant legal authority (case law). If an argument on appeal is not supported with citations (to relevant published opinions in earlier cases and to the record in the case before the court), the argument is waived, and the justices will often not even consider it. 

The panel hearing the case will often overlook defects in form that remain in the resubmitted pro se brief, but will very likely rule against the unrepresented appellant on the merits, often based on failure to preserve error in the trial court, such as not making objections at all, or not giving a ruling on them. 

Most pro se appeals thus fail, assuming they even reach decision the decision stage. -- > Common error on appeal 

That said, default judgment are easier to attack than decisions on the merits, especially when the defendant was not (properly) served with process ( -- > Defect in service of citation) or was not given notice of the trial or hearing. One of the most critical issues is the date the defendant becomes aware that a default judgment was entered and/or hires an attorney who can assess the case and see if there is a viable basis to attack it. 

The clerk of the court will typically mail notice that a judgment was entered to the defendant's last known address, but that may not be the correct one. If the defendant does not take action promptly, it may be too late to undo the judgment, unless the requirements for a bill of review are satisfied. 

A bill of review, however, is an equitable remedy, and as such leaves a lot of discretion to the judge to grant or deny it, depending on the reason that led to the default judgment and whose fault it was. An additional complicating factor is that oftentimes the judge hearing the bill of review will be the same that signed the judgment that is being attacked. If the judge made an error, it can be a delicate matter asking the same judge to correct it since the bill of review plaintiff would have to convince the judge of some wrongdoing or an oversight the last time around. In an appeal, by contrast, it is three justices on a higher court that review the actions of the judge in the court below, and they do it on a daily basis for a living. 


Last revisions 12/8/2018 

Modification of credit terms: interest rate hikes, higher fees, and other finance charges

Increases in Interest Rates (APR) and Fees as an Issue in Credit Card Actions 

This post discusses the issue of modification of credit terms in the context of debt collection litigation.

Federal law (TILA) requires written disclosure of initial terms of consumer credit as well as modification of such terms later. As a matter of state contract law, contract-modification has the same elements as contract-formation under state law, and as such requires proof of mutual assent. The creditor should accordingly be held to the burden of proving contractual authorization of interest rates actually shown as having been used to calculate and assess finance charges on monthly account statements or similar account history, especially when there was an interest rate hike and a very high rate was applied for an extended period of time prior to the lawsuit having been filed, with the result of augmenting the amount of the debt (damages pleaded for) considerably.

MODIFICATION OF TERMS FALLS UNDER TILA 

The federal Truth in Lending Act (TILA) requires disclosure in writing of changes in credit terms in additional to initial disclosure of terms when the consumer credit account is set up. -- > TILA Disclosures

CONTRACT LAW REGARDING MODS MIRRORS GENERAL CONTRACT-FORMATION PRINCIPLES 

State law governing modification of contracts requires the same essential elements to be satisfied that are required for valid formation of the initial contract: offer and acceptance with respect to the new terms, and a meeting of the mind on them.

The terms will typically be offered by the bank, but they will also have to be accepted by the customer. Therefore, when the bank sues to collect a debt that includes interest accrued at the modified rate, it should also be held to the burden of proving contractual assent to the modified rate, which -- at least in cases that end up in court -- is typically a higher rate, sometimes a much higher one.

REJECTION OF PROPOSED CHANGE IN TERMS (rarely seen in debt suit)

Rejection of new terms proposed by the bank - either via separate change-in-terms notices or notices included in the monthly statement ("bill stuffer") may result in the account being cancelled and not being available for future use. See sample opt-out instruction with announcement of consequences used by Capital One in 2007.



Sample Opt Out Provisions from Notice of Change in Terms
 issued by Capital One in 2007

Sample Citibank Notice of Interest Rate Increas

with opt out clause



Whether rejection will entail such adverse effect will depend on the terms of the existing contract and proposed changes, and whether the creditor follows through with the cancellation (which may not be in its economic interest in the case of a profitable customer) or lowers the credit limit to the existing balance as a functional equivalent of cancellation.

The issue of rejection of a modification of terms rarely arises in debt collection, not to mention documentary evidence thereof. What is commonly seen is evidence of an increase in the interest rates to very high levels (27.24% in the case of Amex cards or 29.99% APR in account issued by Chase Bank USA, N.A.) from a lower rate as reflected on copies of account statements produced by the bank or its assignee in support of a motion for summary judgment. The attorney for the creditor/plaintiff will typically argue that the cardholder did not complain until the lawsuit was filed, and that the finance charges are therefore legitimate. If the contractual basis is missing, however, this is a questionable argument under contract law.

IMPLICATIONS FOR LITIGATION 

If no signed modification agreement is offered, the plaintiff would have to prove offer and acceptance of the modified terms, such as an increase in the interest rate with proof that the defendant was given notice of the proposed changes, and that he/she accepted them by continuing to use account; or did not expressly utilize the out-out mechanism that may have been included in the notice of proposed changes in terms. Change-of-terms notices vary with regard to the specifics of opt-out provisions, if they contain them at all.

If the cardholder merely continued to make payments on the account, doing so should not be deemed acceptance of new terms because the cardholder would not have the option to discontinue making payments since the modification in terms would not cancel the preexisting repayment obligation as to a revolving balance. Stated differently, the card member did not have the option to cease making payments merely to express disapproval of the proposed changes. This would hardly be a viable excuse for not making payments in subsequent litigation predicated on Defendant's default. Therefore, the plaintiff should not be able to rely on that type of evidence to support the proposition that the Defendant consented to the rate hike.
   
But the caselaw regarding the effectiveness of interest rate changes, and the associated evidentiary burdens for the plaintiff to enforce finance charges accrued at a different (usually higher) rate is murky, perhaps because the argument was not clearly made in the trial court and/or on appeal. At least one case is on point in finding that account statements that did not show any card use subsequent to an interest rate hike could not furnish evidence of acceptance by the customer, and therefor could not relieve plaintiff from proving mutual agreement on altered terms.  

VARIATION OF FINANCE CHARGES OVER TIME AS SHOWN ON MONTHLY STATEMENTS

The documentary record is not consistent across debt collection cases that involve increases in the interest rate(s) applied to revolving balance(s), not to mention those that led to an opinion on appeal. In some cases, the only evidence of a change in terms are found on the account statements themselves. But differing interest rates shown at different times on monthly account statements does not prove that those interest rates were set and applied in conformity with the applicable contract.

If interest rates vary on different statements over time, the interest rate must have been defined as a variable interest rate (pegged on the prime rate or similar index), or there must have been a change in terms of the original interest rate. Either way, proof of the underlying contract provisions is needed.

What complicates the matter is that the underlying contract, or some supplement, may have defined contingencies that would trigger an interest rate hike (penalty or default rate). Another scenario is that the bank offered a lower interest rate for a limited time (lower relative to the regular rate).

The same applies, analogously, to fees. If, for example, different amounts of late fees appear on monthly statements at different times, this suggests are change in terms, unless the underlying contract set different monthly flat fees based on the amount of the revolving balance, or the amount required to be paid as a minimum monthly payment amount.

But variations in interest rates and fees over a series of monthly statements merely supplies evidence that different finance charges were imposed as a matter of fact; it does not prove that the applicable contract authorized them. But such proof forms part of the Plaintiff's burden of proof.

PROOF OF CONTRACTUAL AUTHORIZATION FOR HIGHER FEES AND APR 

To establish that the finance charges were correctly assessed based on the underlying TILA disclosures/contract terms, the plaintiff would have to prove up the underlying contract and its term AND the modifications in such terms by change notice(s) or by a superseding agreement.

In the case of an expiration of a special (low) rate offer, written evidence of the terms of the offer would have to be adduced, including the duration of the preferential rate and/or definition of events that precipitate a reversion to the normal rate (regardless of whether the special rate offer falls under TILA).  

Although the law would seem to be clear in requiring a showing of contractual authorization for the interest actually charged as evidenced by monthly statements, courts do not always hold the Plaintiff to this component of its burden of proof, but instead want to know if the Defendant disputed the rate, or if there is any evidence that the rate was incorrect (i.e., not authorized), thus shifting the burden of proof to the defendant.

Additionally, creditors and their attorneys may attempt to circumvent the proof requirements as it relates to contractual authorization of finance charges by resorting to the alternative theory of account stated. The account stated theory as a vehicle to avoid having to prove up the terms of the contract is addressed in another post. Also see -- > account stated and contractual choice of law.

EXAMPLES OF CHANGE IN TERMS NOTICES BY CREDIT CARD ISSUERS 

US Bank Reservation of Right to Change Credit Terms:

[more forthcoming]

LACK OF PROOF OF ORIGINAL APR AND/OR CHANGES IN RATES OVER TIME

In Tully v. Citibank the Texarkana court of appeals held that Citibank was not entitled to summary judgment on its breach of contract claim (or either of the other two causes of action, which were nonviable for legal reasons) because it had not proven the defendant’s agreement to the interest rates shown on monthly statements. The court noted that the interest rate was not specified on the cardmember agreement; that there were no notices of changes in terms announcing an increase in the interest rate; and that the variable APRs appearing on monthly statements could not qualify as notices in change of terms retroactively even if they were otherwise deemed a satisfactory substitute for formal notices of changes in terms.

RELATED TOPICS AND BLOG POSTS 

Elements of contract formation involving a written contract without both parties' signatures
Contractual authorization of APR and account fees (finance charges)
Requirement of proof of the terms of a loan contract under Texas law
The relevance of the Truth in Lending Act (TILA) to debt collection litigation
Interest rate hikes

Nonsuit: Voluntary Dismissal of Debt Suit under Rule of Procedure 162 (TRCP)

TRCP 162: THE TEXAS NONSUIT RULE

WHAT IS A NONSUIT?

A plaintiff's formal act of dropping a lawsuit is called nonsuit. It is done by notice of nonsuit or a motion for nonsuit under Rule 162 of the Texas Rules of Civil Procedure, cited as Tex. R. Civ. P. 162.  A motion is not even required because the judge has no discretion and must dismiss the lawsuit if no counterclaim remains on file and the case is not already in trial (for limited exceptions, see below). For the same reason, a hearing is not required either. Even in an ongoing trial, the plaintiff may still take a nonsuit if its attorney has not already finished presenting its case.

TRCP 162: THE NONSUIT RULE

The nonsuit rule gives the plaintiff the right to unilaterally terminate the lawsuit prior to trial as long as no counterclaim are on file and (s)he has not already presented all but rebuttal evidence at trial.

If counterclaims are on file, the plaintiff may still nonsuit its own claim(s), but it will not affect the opposing party's counterclaim, meaning that the lawsuit will continue on the counterclaim only. Even though it is not a counterclaim, a pending motion for sanctions will not be affected either if it is directed against the plaintiff or its attorney rather than against the Defendant (but there may be some room for argument on the issue, depending on the basis for sanctions).

EFFECT OF NONSUIT 

A nonsuit is effective when filed in writing, or dictated into the record, but the expiration of the court's plenary power, and the deadline to file a post-judgment motion, is based on the date the judge actually signs the order of dismissal, which may be a few days or more later. Once that happens, the lawsuit is officially over. A dismissal order may be delayed if the opposing party (the defendant) has a motion for sanctions pending, because the nonsuit does not nix such a motion.

The dismissal is supposed to be without prejudice rather than with prejudice because a termination by nonsuit does not involve an adjudication of the merits of the plaintiff's claims. The only thing the judge gets to do is sign the dismissal order, and that is considered a "ministerial" act, meaning that no "judging" in the common sense of the term is involved. But see -- > Dismissal with prejudice rather than without prejudice after nonsuit.

Cost of court in the nonsuit context are rarely an issue. The dismissal order may state that costs shall be borne by the party incurring same, but in a simple debt collection case all costs (in the form of filing and service fees) will already have been paid by the plaintiff, and they cannot be shifted to the defendant without a judgment against the defendant. Typically, there were no depositions in a debt collection case that ends with a nonsuit, which could otherwise entail significant costs because of the high fees charged by court reporters (typically assessed based on number of pages of double-spaced transcription of testimony).

SETTING ASIDE A PRIOR NONSUIT / DISMISSAL ORDER 

While the filing of the nonsuit leaves no discretion with the judge, a judge's approval is needed to undo it. This requires a motion to set aside the dismissal order, or other type of post-judgment motion. It may take the form of a motion for new trial even if there was no trial, and even though the notion of a new one  makes no sense under the circumstances. It could also be termed a motion to reinstate, which is the term more commonly used when the plaintiff seeks to revive a lawsuit that the court has dismissed on its own intiative (-- > DWOP; -- >  Dismissal for want of prosecution).

Like post-judgment motions under other circumstances, a motion to set aside the dismissal following a nonsuit, must be filed before the trial court's plenary power over the judgment (in this case, judgment of dismissal) expires. Such a post-judgment motion could be based on discovery of new evidence; or the plaintiff may claim that the nonsuit was filed in error. If the stated basis is dubious, the defendant's counsel may wish to oppose it. Otherwise, it may not be worth contesting it. If, for example, the plaintiff's counsel represents to the court that the nonsuit was accidentally filed in the wrong case, the trial judge will probably grant the motion and reinstate the case on the docket as an active case.

If the plaintiff files and nonsuit and the case is dismissed by the judge even though a claim for affirmative relief by the defendant against the plaintiff was pending at the time, the defendant may want to file a motion attacking the dismissal order as erroneous under Rule 162. The same time-line applies to the Defendant's motion (unless neither defendant nor defendant's counsel did not get notice of the dismissal, in which case another rule of procedure may provide a viable exception to the otherwise applicable deadline).

THE OPPOSING PARTY HAS NO SAY 

There is normally no basis for the defendant to complain of a nonsuit because the plaintiff's right to nonsuit is virtually absolute. For the same reason, there is no basis for an appeal by the other party. Even if the dismissal is with prejudice, it will rarely be worth complaining about it because such language is generally to the defendant's benefit. It can be used to support the defense of res judicata should the plaintiff refile the same lawsuit later, perhaps with a different attorney.

SPECIAL SCENARIO: PARTIAL SUMMARY JUDGMENT BEFORE NONSUIT

If a partial summary judgment has previously been granted in a pending case, the nonsuit does not vacate it. Instead, the nonsuit will make it final for purposes of appeal, as long as  the nonsuit covers all claims that remained pending after the partial summary judgment order was signed.

The rationale for the rule that a partial summary judgment is unaffected by a subsequent nonsuit is that such judgment constitutes a judicial decision on the merits. To attack it, it would have to be made the subject of a timely post-judgment motion or challenged by appeal after the partial summary judgment is rendered final by the nonsuit (dismissal) order that disposes of the rest of the lawsuit.

A common scenario in debt litigation is the following: The plaintiff's attorney has obtained a default judgment or a summary judgment against one of two defendants, and the plaintiff then nonsuits the second defendant so it can start enforcement action against the first based on a final judgment against that defendant. If the statute of limitations is not running out, a separate lawsuit can be filed against the second defendant later, should the collection efforts on the judgment against the first defendant be unsuccessful.

If the statute of limitations is an issue, the plaintiff may instead seek a severance so as to obtain a final enforceable judgment against one defendant while continuing the lawsuit against the other (-- > Motion to sever). This would also preclude that defendant from arguing that collateral estoppel should bar the claim against her. She might try that defense in a second, separate lawsuit, reasoning that the claim has already been litigated and resulted in a final judgment, -- a final judgment against someone else (the co-defendant in the first lawsuit) and that the plaintiff should not be allowed to split  the same debt claim.

Partial summary judgments involving some cause of actions or claim, but not others, are unlikely in debt suit litigation because the underlying facts and damages are the same for different theories of recovery. Thus, if the creditor's attorney obtains a judgment for breach of contract, the other theories (if any) will become moot because the plaintiff cannot recover the same damages twice using a different legal theory (-- > single satisfaction rule, alternative theories of recovery).

In any event, most likely the summary judgment order will not even specify the successful legal theory and will include the words that all relief not granted is denied, thus indicating that nothing remains to be decided. -- > Mother Hubbard Clause; interlocutory vs. final summary judgments; -- > finality of judgments for purposes of appeal.)

TRCP 166a - The Summary Judgment Rule in Texas State Courts

TRCP 166a - THE SUMMARY JUDGMENT RULE IN TEXAS STATE COURTS

All motions for summary judgment in Texas courts (not federal courts, which have their own summary judgment rule under the federal rules of procedure) are governed by Rule 166a of the Texas Rules of Procedure; cited as Tex. R. Civ. P. 166a.

The lower-case letter 'a' next to the number 166 suggests the summary judgment rule is a subsection of Rule 166, but that is not so. The summary judgment rule is a separate rule, and a very important one at that. Rule 166 (sans 'a') deals with another pre-trial matter: PRETRIAL CONFERENCE. The reason for the counter-intuitive numbering was presumably to have the summary judgment rule appear in the proximity of other rules relating to pretrial procedure.

Rule 166a - Image of first two (sub) sections:
(a) for Claimant, and (b) for Defending Party

There are other instances were the lower-case 'a' denotes a separate rule, rather than a subsection of the rule with the same number that precedes it, e.g. the DWOP rule (Rule 165a) or the recusal rule (Rule 18a). Rule 165a addresses dismissal for want of prosecution while rule 165 covers abandonment of claims or defenses. Rule 18a governs recusals and disqualification of judges while Rule 18 deals with nonavailability of judge as a result of events such as death or resignation before expiration of the term of office.

TRADITIONAL MOTION, NO-EVIDENCE MOTION, AND BLEND OF BOTH TYPES

Traditional motions are governed by subsection (c) of the summary judgment rule while no-evidence motions are addressed in subsection (i).  Based on the location within the Texas Rules of Civil Procedure, a motion for summary judgment may be titled a Motion for Summary Judgment under Rule 166a(c) or Rule 166a(i). But the title of a motion does not control; the substance does.  -- > Misnomered motions. Some attorneys even file motions for summary judgment without expressly saying under which subsection of the rule. Other invoke both subsections as grounds for summary judgment. Those motions are called hybrid motions or "combined" motions.

THE SUMMARY JUDGMENT RULE USES DIFFERENT TERMINOLOGY 

Rule 166a does not actually use the word TRADITIONAL to refer to this subtype of motion; nor does it make the distinction between plaintiff and defendant. Instead it uses the term "Claimant" and "Defending Party". The apparent reason for this is that there may be more parties than just the plaintiff and defendant, any of whom could file a summary judgment motion. After all, the rules are general and cover a wide and diverse spectrum of civil cases.

Rule 166a(i), the no-evidence rule, does use the term phrase "no evidence" and authorizes such a motion against anyone who has the burden of proof on a claim or a defense. The party that has the burden of proof has such burden on all of the essential elements (though that burden may be met on undisputed elements by judicial admission or stipulation); but a no-evidence motion may target just a single essential element. It need not attack all. Indeed, it may be counterproductive to do so because it will not be credible if there is no question that the plaintiff has some evidence, such as the contract that is actually attached to its pleadings.

CLAIMANTS AND DEFENDING PARTIES AS MOVANTS AND NON-MOVANTS 

The term "claimant" for purposes of traditional summary judgment motions is broader and encompasses third parties, cross-claimants, and defendants who assert a counterclaim. Correspondingly, a party may face claims from different types of opponents, not only from the plaintiff. A plaintiff becomes a defendant (counter-defendant) with respect to any counterclaim asserted by the original defendant, who thereby assumes the posture of counter-plaintiff. Cross-claims can also be asserted and third parties may be brought into a lawsuit, or may chose to get involved under the rule governing interventions, subject to being booted out as interlopers on motion of any party.

That said, the additional scenarios that justify the use of the broader terms in Rule 166a  rarely occur in debt collection cases involving unsecured bank debt.

The most common scenario in a debt collection case involving a consumer is one plaintiff (either the original creditor or a debtbuyer suing as assignee of the claim) and one defendant only.

The second most common scenario is that of a bank or debt buyer suing two defendants, typically spouses (sometimes former spouses by the time the debt suit is filed).

Going beyond consumer credit cases, another commonly seen type of collection action is one in which the creditor sues an individual and a business, either a corporation that is owned by the individual (or one for which the individual works) or a sole proprietorship (dba). There are many suits by American Express that are of this nature. -- > Amex debt suits on business credit card accounts.

If a corporation is a named party on the account, it will have to be named as a defendant because it is a separate legal entity (though corporate privileges may have been forfeited or suspended and/or alter ego  and other theories may provide a basis to hold a natural person such as owner or officers liable). If the business is a dba, the distinction between individual defendant and business will likely be of little or no significance (unless the nature of the debt, i.e. business debt vs consumer/household debt, becomes an issue for FDCPA counterclaim purposes). This is because a business conducted by an individual under an assumed name ("dba" for "doing business as") is not a separate legal entity under Texas law. -- > dba and sole proprietorship; -- > substitution of true name for assuming name in litigation.

PMSJ and DMSJ - Acronyms for Summary Judgment Motions (MSJs)

LAWYER LINGO AND ACRONYMS RELATED TO SUMMARY JUDGMENT MOTIONS

MSJ, PMSJ, DMJS ... What's that all about? 

In litigation, MSJ stands for motion for summary judgment, sometimes also rendered as MFSJ, i.e. with the 'F' for the word 'for' also included in the acronym.

PMSJ and DMSJ are sub-types of the parent category MSJ. A PMSJ is a motion for summary judgment filed by the Plaintff; a DMSJ is a motion filed by the Defendant. These labels only identify the movant and reveal nothing about the nature of the motion or its basis or bases (plural).

Abbreviations such as MSJ, PMSJ, and DMSJ are very useful for handwritten notes, electronic messaging, and as file names for documents on computers; but they may also spill over into actual lawyer talk (or talk by law office staff).

Standing by themselves, the abbreviations PMSJ and DMSJ do not indicate whether the motion for summary judgment is of the matter-of-law type (traditional motion for summary judgment under RuleTex. R. Civ. P. 166a(c) or a no-evidence motion under Rule 166a(i), unless the extension -TRAD and -NE are added.

Litigation guides and manuals also use such abbreviations, for reasons of space and economy. It saves ink and paper. Given their target audience, the authors and publishers do not have to worry about the readers/users not understanding them, but will include a glossary or legend, or a prefatory note on "conventions" and "usage", in any event.

Tex. R. Civ. P 166a - THE SUMMARY JUDGMENT RULE IN TEXAS STATE COURTS

All motions for summary judgment in Texas courts (not federal courts, which have their own summary judgment rule under the federal rules of procedure) are governed by Rule 166a of the Texas Rules of Procedure; cited as Tex. R. Civ. P. 166a. Click hotlink for separate post on the Texas MSJ Rule.

RELATED TOPICS AND LINKS TO OTHER POSTS 

The summary judgment rule in litigation in Texas courts
Traditional summary judgment motions by Plaintiffs in debt litigation
Summary judgment motion by Defendant against the Plaintiff 
Traditional Motion for Summary Judgment vs. No-evidence Motion
Summary Judgment Evidence: Affidavits and Documents
Evidentiary objections to summary judgment exhibits and affidavits in debt collection suits
Responding to a motion for summary judgment with a client affidavit
Countering an attorney fee affidavit file in support of Plaintiff's motion for summary judgment
Motion for summary judgment based on deemed admissions

Motion for summary judgment against creditor (bank or debt buyer)?

Can a consumer sued on a debt file a motion for summary judgment against the bank (or the bank's assignee)?  
 
Sure, but probably not without an attorney, unless the defendant is himself an attorney, or is well-versed in civil procedure. As a basic principle, motions for summary judgment are not the exclusive province of plaintiffs, even in debt suits. But that does not mean that all such motions are created equal, not to mention that they have an equal chance of success.

First, there are two types of motions, and they serve different purposes and have different requirements: No-evidence motion and traditional motion for summary judgment. Second, some types of motions are much more popular in debt litigation than others, -- and much more successful than others, statistically speaking.

Plaintiffs will typically only file traditional motions for summary judgment, seeking a money judgment based on one cause of action, or on several that they invoke as alternative bases for judgment. There are occasional exceptions: Sometimes a plaintiff will also target an affirmative defense raised by the defendant, either by no-evidence motion or on the merits. A single motion that encompasses both types is called a hybrid motion for summary judgment or a combined motion for summary judgment. -- > Summary judgment terminology and acronyms. 

Consumer and debt defense attorneys may file either type of motion (or both) on behalf of defendants, depending on their general litigation strategy for different plaintiffs, and the characteristics of a specific case.

Some defense attorneys will first send discovery requests to the Plaintiff’s counsel to see what evidence they will readily produce, and then customize their no-evidence motion accordingly. That said, many defense attorneys do not file motions for summary judgment at all, and may not even respond to a motion directed at their client, but request a continuance and try to settle the case before it comes to a hearing, or a trial.

OTHER CLASSIFICATIONS OF SUMMARY JUDGMENT MOTIONS 

No-evidence motions and traditional motions are based on different subsections of the summary judgment rule, have different requirements, and serve different purposes. But the distinction of these two types is not the only way to categorize summary judgment motions.

FINAL VS. PARTIAL

Additionally, motions for summary judgment can be distinguished based on whether they seek to resolve the entire case (motions for final summary judgment); or only a part of the case (partial summary judgment). In cases involving more than just one Defendant, a motion for summary judgment might involve only two parties, or all of them. At the minimum, there will always be two parties involved: the party that files the motion (movant) and the party that is being targeted by the motion (the nonmovant).

SHORT-HAND JARGON FOR MSJs BASED ON WHICH PARTY FILES THEM 

Finally, motions for summary judgment are also denominated based on who files them, and abbreviations are often used by lawyers and their staff, as well as by court personnel. A motion filed by the Plaintiff is a PMSJ (or a P’s MSJ); one by the Defendant a DMSJ (D’s MSJ). These acronyms are generic in the sense that they do not identify the nature or the motion or its basis. They only identify the movant (and, by implication, the non-movant, at least in a case in which there is only one, and thus no ambiguity).

This blog post will compare and contrast no-evidence and traditional summary judgment motions filed by Defendants, rather than summary judgment motions filed against them by debt collection attorneys on behalf of creditors, which will be covered elsewhere.

NO-EVIDENCE MOTION FOR SUMMARY JUDGMENT AGAINST CREDITORS AND DEBT-BUYERS 

The no-evidence motion is simpler. It allows the defendant to ask the court to dismiss the Plaintiff’s case for lack of evidence on one or several elements of the Plaintiff’s cause of action. Technically, the result sought is a take-nothing judgment on the merits rather than a dismissal, but the distinction is not always clearly made even by lawyers.

The decision which element to attack on lack-of-evidence grounds requires an examination of the Plaintiff’s pleading. Debt collection attorneys almost always plead breach of contract, which is the obvious theory since the breach of the terms of a credit agreement is involved. But many plead additional theories in the alternative. In order of popularity: Account Stated and open account, and quantum meruit. Unjust enrichment and promissory estoppel are also seen occasionally.

Each cause of action has several essential elements, and any one can be challenged as lacking evidentiary support. As would-be movant for no-evidence summary judgment, the defendant or her attorney would have to identify these elements, which are not always set forth expressly in the plaintiff’s petition, and then decide which one(s) to target with the no-evidence motion. If the element(s) on which the no-evidence motion for summary judgment is not expressly identified, the motion is formally defective and the court is free to deny it without further ado.

The No-Evidence MSJ Rule in Texas

If the motion meets the requirements as to proper form, it must be filed and served on the opposing counsel using one of the method of service specified in Rule 21a. Regular first class mail (not certified or registered) is not a proper method of service. The motion must also be accompanied by a proposed order granting it. The motion must then be set for hearing (either oral hearing or submission), with at least 24 days of notice to the other attorney. Even if no court appearance is involved because the motion is presented by submission, a submission date must be set and noticed because that submission date controls the deadline for the other party to file a response. Such a response is due 7 days prior to either hearing date or submission date, whichever applies. In some jurisdiction, a setting-order (“fiat”) may be needed to set the date. In others, a party’s attorney may be permitted to pick a date for oral hearing or submission. (They choice may be restricted to a particular day of the week, or several days but not all, and time will typically be standardized, e.g. 9am docket call).

If the opponent – the non-movant with respect to the Defendant’s no-evidence motion – does not respond to it, the court must grant the motion. If the plaintiff responds, and files evidence to prove the movant wrong with regard to the no-evidence contention regarding a specific element, the court must determine whether the evidence is sufficient to allow the Plaintiff to survive the motion. If the judge determines that it is not sufficient, the Defendant wins and the case is over, assuming all causes of action were attacked in the no-evidence motion so that nothing else remains to be ruled upon.  

TRADITIONAL MOTION FOR SUMMARY JUDGMENT BY THE DEBTOR 

The procedural requirement for a traditional motion are the same (service and notice), but a traditional motion requires evidence to support it, and it cannot be granted merely because the opponent ignores it and does not respond to it.

Instead, the defendant, as movant for traditional judgment, must prove either that the Plaintiff has no case, or that the Plaintiff’s claim is barred under the statute of limitations, the statute of frauds, or some other type of affirmative defense. If the basis for the traditional motion is an affirmative defense, the defendant must prove it. Like causes of action for the Plaintiff, the affirmative defenses also require proof on several essential elements, and the Defendant must prove all such elements under the summary judgment standard in order to prevail.

Traditional motions for summary judgment are much more demanding than no-evidence motions because of the proof requirements, assuming they are warranted at all.

The most common affirmative defense is limitations, which generally bars debt claims if four years or more have passed since the default. But the starting point for the running of limitations may be subject to some dispute for a variety of reasons that are the subject matter of another blog post. -- > statute of limitations and accrual of claim for limitations purposes.

Additionally, some types of loans do not have a statute of limitations at all because federal law overrides (preempts) state laws to the contrary -- > Private and guaranteed
student loans; -- > Federal preemption

EFFECT OF DENIAL 

If a motion for summary judgment is denied, the case is not over. Nor does such a denial preclude the same party from filing a second (improved) motion, or an amended motion. The judge may deny a motion for summary judgment without giving a reason, but may provide some clues at the oral hearing, if there is one, about the problems with the motions. The issue will most often have to do with the supporting evidence.
A motion could also be denied because the evidence is not admissible. But most evidentiary objections are waived if the opposing party does not make them. Therefore, it will be much less common for the judge to deny a motion for summary judgment on admissibility-of-evidence grounds, rather than for reason of insufficient evidence (unless the nonmovant files objections).

Generally, a summary judgment cannot be reversed for error in the admission of evidence (such as defects in affidavit or lack of affiant qualifications) if the non-movant did not raise the matter in the trial court and did not get a written ruling on the objection(s). -- > Objection to summary judgment evidence; -- > motions to strike summary judgment affidavit; -- > error preservation for purposes of appeal.

SJ-RELATED TOPICS AND BLOG POSTS:

Motions for Summary Judgment in Debt Collections Cases - General Overview
Different types of summary judgment motions and related terminology
Plaintiff’s motion for summary judgment (PMSJ) in a debt collection case
Summary judgment standards for no-evidence and traditional motions
Partial summary judgment and (non) finality
The summary judgment rule
Appellate review of summary judgments
Appeals from summary judgment orders that are not final (interlocutory appeal) 

Admissibility of Spanish language documents as evidence in civil litigation under Texas Rule of Evidence 1009 (TRE 1009)

This post discusses authentication of foreign language documents for use as evidence with sworn translations pursuant to Texas Rule of Evidence 1009, and challenging the translation offered by the proponent of the foreign-language document as a trial exhibit or as summary judgment evidence. 

SPANISH LANGUAGE VERSIONS OF CONTRACTS AND 

ACCOUNT DOCUMENTATION IN LITIGATION 

Some banks, such as Wells Fargo and Bank of America (FIA Card Services, N.A.), cater to ethnic submarkets by offering written materials, including cardmember agreements and monthly account statements, to customers belonging to various national or ethnic groups in their own language. Not surprisingly, the most common foreign language is Spanish. 

Documents in Spanish thus occasionally also surface in debt litigation; be it in the course of discovery, as attachments to motions for summary judgments, as business records filed under a business records affidavit, or as trial exhibits.

Even if the client speaks the language, such documents should be objected to when offered without certified translation. The language of the courts is English, and even if a judge knows Spanish, counsel for the defense has no obligation to either know a foreign language or incur expense to have a foreign document translated. Without being able to comprehend the writing on the material, the defendant's attorney would be compromised in the rendition of the best possible advice to the client. 

ADMISSION FOR FOREIGN-LANGUAGE DOCUMENTS UNDER TRE 1009

Texas adopted a new rule of evidence in 1998 that provides for a simplified method to make foreign language documents admissible, assuming they otherwise qualify for admission as business records or on some other basis. See Tex. R. Evid. 1009.

Rule 1009 permits the proponent to file an English translation of the foreign language document prepared by a qualified translator and attested to as such by affidavit (now presumably also by sworn declaration under penalty of perjury in lieu of a sworn affidavit).

The rule also permits the opposing party to object to the accuracy of the translation, but the opposing party is not required to have a certified translator do a competing translation. It can rely on other resources or means to evaluate the certified translation offered by the opposing counsel and decide whether to challenge any part thereof.  

What the opponent must do, however, in order avail himself of the right to contest the translation, is to point out with specificity any error or inaccuracy in the translation, and offer an alternative translation of the relevant portions of the text. This must be done in a timely manner.

Otherwise, any objection to the faithfulness of the English-language translation filed by the proponent of admission of the foreign language documents will be waived, and the party will not be permitted to complain of translation error at trial.

TEXT OF TEXAS RULE OF EVIDENCE 1009 (image of TRE 1009) TITLED ‘TRANSLATION OF FOREIGN LANGUAGE DOCUMENTS’

Tex. R. Eviv. 1009 governing translation of foreign language documents (click image to enlarge)