Can a company sue me simply to recoup the cost of suing me?

[Akicita]

[Oklahoma]

Last year, I owed a debt of $6000 to a company. Within just two months of the first bill, the company filed a suit against me for non-payment, even though I had made both payments in each of those first two months. In the suit, the company tacked on a $700 charge for the cost of preparing and filing the debt collection suit.

The suit was not served to me until seven months later. In that interim, I had no idea the company was even moving against me, and I continued to make every payment, every month. In fact, as of this month I will have paid 100% of my original debt, and there isn't even set a court date for the suit. At this point, they will have been fully paid, without any omissions on my part. Obviously, the suit is unwarranted, and was pointless from the start. the company will have no outstanding complaint to make before a small claims court.

The only part I have not paid is the $700 add-on for the cost of filing the suit. I won't pay it.

Since I have paid 100% of my original debt BEFORE even being served, can they still persist in the suit itself, simply to demand that $700 balance for their expense in preparing and filing that suit in the first place?

That would seem to be both bizarre and perhaps illegal; if a person can be sued who owes no further debt, simply to recoup the cost of the suit itself, that would be a misuse of the courts to make an additional profit without having a valid complaint before the court. Hey, I could just pick people at random and sue them, even though they don't owe me a cent, and claim that my "damage" is the expense of preparing and filing the suit! Gimme $700!

So that's my question: if I have paid off my original debt, but have NOT paid the tacked-on bill for filing a suit that was neither accurate nor necessary, can they still sue me for that one specific item alone, even though the basis for their complaint is invalid?

 

[tranquility]

It depends on the underlying contract.

 

[Akicita]

The contract says nothing that could be construed to mean "we can sue you for the cost of suing you, even if you don't owe us any money anymore." In fact, it's a rather simple contract for services that merely states, in plain English, that payment is due before the 20th of the month, that there is a 1.5% monthly fee on outstanding balance, and that they have the right to terminate service if they are unpaid. That's all there is to it. There isn't even a word about collections, legal action, etc., and CERTAINLY nothing that makes me liable for their prep/filing fees.

Since they were paid-in-full (and they even acknowledge that), it seems ludicrous that they would still go into a court on the basis of a suit whose statements of fact aren't even true, yet expect me to pay them--NOT for the debt I owed them, but for the suit itself.

 

[tranquility]

Many contracts award legal fees to the side who wins in a dispute. Otherwise all a court can generally do is order costs.

Nolo press has an example of such "boilerplate" (standard clauses in contracts):

The prevailing party shall have the right to collect from the other party its reasonable costs and necessary disbursements and attorneys' fees incurred in enforcing this Agreement.

 

[TigerD]

I won't pay it.

Then you are an idiot.

It doesn't matter when you were served. They had to hire an attorney and file suit. You get to pay for it. Just because you paid a portion of the amount due, doesn't absolve you of the balance.

If you want to argue it, you will get your chance in court.

When was the suit filed? When was your payment received and credited (that means 30 days after the check cleared)?

DC

 

[Akicita]

You can name-call if you want, but the bottom line is that the company WAS duly paid by me, in full. They are seeking to go to court on a debt that doesn't exist. Thus, there is no real legitimate reason to go to court at all (their complaint is null). So the question persists: why would I be responsible for their legal costs? To repeat: they did not "have" to file a suit to recoup their costs; I paid dutifully. It's not as if filing a suit lit a fire under me and suddenly made me start paying; I already HAD paid. The contract doesn't make a single statement about legal costs, either.

This seems like filing a suit simply for the sake of making money on the cost of it, having nothing to do with any actual, legitimate resolution of a debt that doesn't exist.

 

[forexguy99]

You can name-call if you want, but the bottom line is that the company WAS duly paid by me, in full. They are seeking to go to court on a debt that doesn't exist. Thus, there is no real legitimate reason to go to court at all (their complaint is null). So the question persists: why would I be responsible for their legal costs? To repeat: they did not "have" to file a suit to recoup their costs; I paid dutifully. It's not as if filing a suit lit a fire under me and suddenly made me start paying; I already HAD paid. The contract doesn't make a single statement about legal costs, either.

This seems like filing a suit simply for the sake of making money on the cost of it, having nothing to do with any actual, legitimate resolution of a debt that doesn't exist.

Ackicita, when you made your first two monthly payments on that $6,000.00 debt, were they on time? Or, was the initial $6,000.00 debt past due to begin with, and you made a settlement with the company to pay it off in monthly installments? Please be more specific, because if either of those 2 situations apply to you, that means at some point in the past you violated the terms of your contract agreement, and the company then has the right to sue at any point in time after the violation - even if that action is deemed unethical or bad business practice. So, if either of the above scenarios is the actual case here, the company then can successfully sue you for the costs of bringing the lawsuit against you, even if your debt is all paid up by the time the court date comes to pass.

 

[cosine]

It doesn't matter when you were served. They had to hire an attorney and file suit. You get to pay for it. Just because you paid a portion of the amount due, doesn't absolve you of the balance.

No, they didn't ... they didn't need to hire an attorney because they didn't need to file suit. Read the original post. The OP was paying the monthly amounts on time. Se where he says "even though I had made both payments in each of those first two months" and "and I continued to make every payment, every month". Also note the statement "At this point, they will have been fully paid, without any omissions on my part".

I have to agree with the OP when he says "Obviously, the suit is unwarranted". And this point is particularly important ... "and was pointless from the start."

If you want to argue it, you will get your chance in court.

It sure looks like that might be so. And then the shyster will get his chance to pay the OP's real legal bills, if the luck of the draw picks an honest judge with integrity.

Now, if you believe statements in the OP's post are in error, or wrong, please specify exactly which is in error, and why you believe that to be so.

Now tell me what you would do if you owed me money, and were paying, and paid on time every month, and completed the payment of the original debt, and later found out I added legal fees of my own making to the debt, because I prepared a needless lawsuit against you during the course of those payments, for some reason ... like maybe I was expecting you to default and you didn't.

 

[forexguy99]

No, they didn't ... they didn't need to hire an attorney because they didn't need to file suit. Read the original post. The OP was paying the monthly amounts on time. Se where he says "even though I had made both payments in each of those first two months" and "and I continued to make every payment, every month". Also note the statement "At this point, they will have been fully paid, without any omissions on my part".

I have to agree with the OP when he says "Obviously, the suit is unwarranted". And this point is particularly important ... "and was pointless from the start."


It sure looks like that might be so. And then the shyster will get his chance to pay the OP's real legal bills, if the luck of the draw picks an honest judge with integrity.

Now, if you believe statements in the OP's post are in error, or wrong, please specify exactly which is in error, and why you believe that to be so.

Now tell me what you would do if you owed me money, and were paying, and paid on time every month, and completed the payment of the original debt, and later found out I added legal fees of my own making to the debt, because I prepared a needless lawsuit against you during the course of those payments, for some reason ... like maybe I was expecting you to default and you didn't.

Cosine - the OP never specifically indicated that she made the first two payments on time. If you go back to her original post she stated "I had made both payments in each of those first two months". She then indicated in her second post that the payments had to be received by the 20th of each month. If she made either one or both of those payments after the 20th, then she broke the contractual agreement and the attorney at that point had the right to sue her. I'm guessing this is what happened, because I can't imagine an attorney suing on a debt obligation case when the debtor never made a late payment. This could cause the attorney to be liable for damages due to negligence in filing a frivolous lawsuit.

 

[tranquility]

I agree. The OP was a bit vague on what happened and I assumed there was a breach in some way. Now, the claim is that because the debtor has all the money covered by the debt, the OP is not responsible for the ordinary and necessary costs of trying to collect.

He may not be. The United States is not the English system of loser pays. But, I bet there is a contractual clause somewhere stating something like the boilerplate I posted.

True, a couple of assumptions I know.

 

[cosine]

Cosine - the OP never specifically indicated that she made the first two payments on time. If you go back to her original post she stated "I had made both payments in each of those first two months". She then indicated in her second post that the payments had to be received by the 20th of each month. If she made either one or both of those payments after the 20th, then she broke the contractual agreement and the attorney at that point had the right to sue her. I'm guessing this is what happened, because I can't imagine an attorney suing on a debt obligation case when the debtor never made a late payment. This could cause the attorney to be liable for damages due to negligence in filing a frivolous lawsuit.

If you can make a guess on your own reading of the OPs post, then I can make a guess, too. But MY GUESS is not going to include any new information that was stated. She did NOT state that she was late. Maybe she was, and maybe that matters. But even if she was a FEW DAYS LATE, that is HIGHLY UNUSUAL for someone to initiate a lawsuit. Usually, lawsuits happen once someone is at least 30 days late (more often 60 to 90).

As for imagining what can happen ... I don't need to imagine attorneys filing frivilous lawsuits because I've been the victim of one (and fought back, won, and won a judgment ... but failed to get him disbarred). Of course I do know BOTH kinds of problems occur ... often. Attorneys file frivilous lawsuits all the time. People are late paying their bills all the time (yes, that has happened to me, too ... though I've never been sued for it). All sorts of other errors have happened to me, too (been accused of being late when I paid on time, had payments credited to the wrong account, had a bank computer actually add up a set of numbers wrong, had money illegally pulled from a bank account by a "reputable" corporation, yada, yada, yada ... I've been around the block and in court a few times).

I'm going on what the OP posted. I do know people post wrong things here, or leave info out. But to talk about anything other than what is actually posted is guessing and speculation. I'm not against guessing and speculation ... but I think people should at least say they are guessing and/or speculating about what really happened when they respond on that basis.

I do know a lot of debt collection lawyers do a lot of shady and even illegal things. Why would becoming "liable for damages due to negligence in filing a frivolous lawsuit" stop them?

 

[cosine]

I agree. The OP was a bit vague on what happened and I assumed there was a breach in some way. Now, the claim is that because the debtor has all the money covered by the debt, the OP is not responsible for the ordinary and necessary costs of trying to collect.

He may not be. The United States is not the English system of loser pays. But, I bet there is a contractual clause somewhere stating something like the boilerplate I posted.

True, a couple of assumptions I know.

I'll add one more assumption ... that if that contract you describe exists ... there probably is NOT an arbitration clause (else they would more likely have used that). So if it does go to court, THEY have to show the OP did pay late leading to the legal/collection costs. I don't think such collection costs would stand if they can't (at least not if the luck of the draw gets an honest judge with integrity).

 

[The_Saint]

Then you are an idiot.

It doesn't matter when you were served. They had to hire an attorney and file suit. You get to pay for it. Just because you paid a portion of the amount due, doesn't absolve you of the balance.

If you want to argue it, you will get your chance in court.

When was the suit filed? When was your payment received and credited (that means 30 days after the check cleared)?

DC

You can't charge someone a fee for something you were going to do. The OP has not been served with anything and no suit has been filed. The debt is (or about to be) settled so theres nothing to sue for.

 

[tranquility]

First of all, yes they can. Second:

Within just two months of the first bill, the company filed a suit against me for non-payment,

Reading is FUNdamental.

 

[Akicita]

I apologize for not being clearer. For the record I am a male.

To clarify the points: every payment was on time. I never missed one. The suit was served a month before I made my final payment to bring the balance to $0. There were no boilerplate clauses regarded the issue of repayment at all, EXCEPT for these: if the balance is not paid in full in the first 30 days they can suspend representation of me (which is standard), and that the balance that persists after the first 30 days is subject to a 1.5% monthly interest. There is NO clause about collections, small claims, etc. Nor did the firm ever once indicate that they had ceased to be happy with my payments each month. In fact, they never contacted me at all about anything--I made my payments and heard nothing from them until May when I got their nasty surprise.

They filed the suit paperwork during the first two months, based on a preemptive assumption they would not be paid. As a matter of pure serendipity, I wasn't ever served any notice about it until, as I mentioned, the final month of my payment. (To me, that makes it even stranger: they allowed their file to persist even though they continued to receive my monthly payments before I was ever served notice of their intent to sue! So in other words, they knew full well they were being paid; they couldn't have been mistaken about that, nor believed they needed to sue to motivate me to pay).

I sent my response to the judge, providing him with documentation of all my payments and my assurance that we were in the final month of my payment anyway. And when I made that payment, I sent him an addendum to document that, true to my word, I had made that final payment and the whole original balance, plus interest, stood at $0.

The firm disputes this. They agree that I've made payments equal to the amount of the entire original bill plus interest, but they say that since it cost a few hundred dollars to file a suit I should still pay them for that. They continue to send me invoices on the amount I owe them for suing me for the debt I've 100% paid.

This has gone on since May. There is no response from the court about a docket yet.

Sorry to persist on the question, but even though everyone I know with any legal insights things this is a downright goofy case, I just don't trust it.