Wednesday, September 27, 2017

Dismissals of National Collegiate Student Loan Collection Lawsuits under way in Texas (data for Harris County)


The external audit of NCSLT collection case files for defaulted student loans, which is part of the package of remedies ordered by the CFPB, has yet to commence, but in the interim dismissals of pending collection cases are already in progress, even freshly filed ones.  

NCSLT collection suit dismissal order signed by Judge Storey
Harris County CCCL3 Sep. 25, 2017 

In July 2017, the various trusts filed 21 collection suits on defaulted student loans in Harris County Civil County Courts at Law (CCCLs) and two more in August. Of these, seven have now been nonsuited as of yesterday (Sep 26, 2017). Two are still awaiting orders of dismissal, and more may follow. 

All non-suit dismissals were filed after 9/18/2017, when the CFPB issued its CONSENT ORDER against TSI and proposed CONSENT JUDGMENT in its enforcement action against the Trusts, filed the same day in federal district court in Delaware. 

In Texas state courts, Plaintiffs may unilaterally dismiss cases by filing a NOTICE OF NONSUIT, i.e. without the opposing party's consent or the court's approval. The notice of nonsuit (sometimes called a motion for nonsuit or a motion to dismiss) is effective upon filing, and terminates the pending action immediately. The court's signing of an order of dismissal (which is supposed to be attached as a proposed order to the notice), is merely a ministerial act, meaning that the court does not get to decide whether to grant it or not. Some judges sign them more quickly than others. 

One exception to automatic case termination is a scenario where the Defendant has a counter-claim on file, which is rare. If a counterclaim is on file, the nonsuit will still be effective, but the case will remain pending until the counter-claim is resolved.

Because nonsuits are (generally) without prejudice, they do not prevent the plaintiff from re-filing them later. A nonsuit therefore does not "erase" the debt, and it may remain enforceable, depending on whether or not the statute of limitations has run, and other factors. A dismissal with prejudice, by contrast, would generally have preclusive effect, barring another lawsuit based on the same debt.
Shown below is the tally of the Harris County cases filed since July, their status, and some key characteristics, including program lender and documentation on the file. Only one lawsuit had the entire loan contract attached (i.e. not just the signature page or the first two pages in cases where the signature is on page 2), and none had complete chain-of-title evidence. Several lawsuits contained Pool Supplements. For purposes of default judgment or trial, of course, additional documentation would be submitted, with an affidavit from TransWorld Systems, Inc. aka TSI.

Also see page with

Status of Nat'l Collegiate Trust collection cases as of Sep. 26, 2017 
OP Filed = Original Petition (Complaint) filed on __
Order Date = Date nonsuit order was signed by the judge
Appl Date = Date on Student Loan Application (date of signature or fax stamp)
CCL = Court to which case assigned by number (there are four)
Items = Items on e-docket for the case (measure of activity)
Ds = Number of Defendants (1 or 2) (does not necessary match with number of signers on note)
OP Attachments = Documents attached to the Original Petition
SP = Signature Page (without Terms and Conditions pages)
2PGs = Same as SP, but 2 pages with signature(s) on the second page
NDS = Note Disclosure Statement
PS = Pool Supplement (for specific lender/loan program)
RFA = Requests for Admission (asking Defendant(s) to admit all relevant facts, incl. Trust’s ownership of note and amount of debt). Admissions are deemed admitted if not expressly denied in timely fashion.


This notice was filed 9/22/2017, but it is dated August 22, 2017
Perhaps an internal review was already under way to 
screen cases for dismissal under the CONSENT ORDER criteria before it made the news.
But plain clerical error is also a possibility. 

This nonsuit is dated September 21, 2017 and was also efiled that day
Judge Barnstone of CCCL1 signed the dismissal order a day later. 

Nonsuit / Dismissal Order signed one day after filing of Nonsuit Notice by the Trust  

No comments:

Post a Comment