Midland Funding and their attorneys fined for filing lawsuit without having documents to prove claim
Midland Funding, LLC filed a lawsuit in the City Court of New York, Mount Vernon division, Midland Funding LLC v. Vivia Austinnam. #2959-13.
Midland Funding, LLC claimed that they purchased a delinquent credit card debt from Bluestem Brands, Inc, that WebBank was the original creditor that was owed by Ms. Austinnam.
Midland Funding got a default judgment on January 2, 2014.
Ms. Austinnam retained a consumer attorney, who moved the Court to set the default aside, as Midland Funding had failed to follow the Rules of the Court in obtaining the default judgment.
On June 11, 2014, based upon the consumer attorney’s motions, Midland Funding moved to set aside the default judgment, and to dismiss the case.
Ms. Austinnam’s consumer attorney then filed a motion for sanctions against both Midland Funding, LLC and its attorneys, for filing a frivolous action that could not be proved by the documents that Midland Funding, LLC had in its file.
On July 15, 2014, the Court conducted a hearing to determine if Midland Funding LLC and its attorneys should be fined for filing a frivolous debt collection lawsuit.
On August 5, 2014, Midland Funding LLC and its attorneys had to appear before the Court to justify their filing of this lawsuit, and to prove Midland Funding LLC had documents that proved that they had purchased Ms. Austinnam’s debt, and had the “standing” to bring the lawsuit. The Court also directed Midland Funding LLC and its attorneys to explain at this hearing why Midland Funding, LLC no longer wished to proceed with the lawsuit.
Midland Funding LLC and its attorneys filed a Motion to cancel the hearing, which the Court denied. The hearing was continued to August 21, 2014.
On January 6, 2015, the Court ruled that Midland Funding could not prove that it purchased the specific credit card account issued to Ms. Austinnam that its lawsuit was based upon. Therefore, Midland Funding, LLC could not prove it had the right to bring the lawsuit.
Midland Funding, LLC and its attorneys filed post-hearing documents to try to prove that it had the right to bring the lawsuit.
The Court again ruled that these new documents did NOT prove that Midland Funding, LLC had purchased the specific credit card account issued to Ms. Austinnam that its lawsuit was based upon. Specifically, the Court ruled:
“The Court views the repeated assertion of superfluous information as an attempt by plaintiff to obfuscate plaintiff’s inability to provide the requisite documentary proof need to substantiate the validity of its action against the defendant.
There is no admissible proof specifically establishing that defendant’s credit card account was one of the accounts assigned to plaintiff. Nothing in the documents produced establishes plaintiff’s chain of assignment of defendant’s alleged debt, and therefore, plaintiff’s counsel has not documented a prima facie case against defendant.”
The Court fined Midland Funding, LLC $10,000…..
The Court fined Midland Funding’s two attorneys $5,000 each.