Suing to Change Info on Credit Report

[tj1320]

What is the name of your state (only U.S. law)? New Mexico

I am a new attorney in NM and I apologize in advance for not having a clue as to how to solve my problem. Hopefully you guys can at least get me started.

I am having an issue with a previous landlord and their collection agency. After I moved out of my apartment, I received an invoice a couple months later for damages and fees and so on and so forth for about $1,500. This was absurd for many reasons which are too numerous to list here, so I weighed my options legally and opted to send them a check for $340.50 (the amount I believe I owe) per the NM statute governing accord and satisfaction. 90 days passed and the collection agency retained the payment without cashing it, thus creating an accord and satisfaction. After the 90 days, I sent a demand letter to the landlord explaining this and giving them 60 days to alter or otherwise correct my credit report to show that the debt was satisfied. Naturally, they ignored this and the 60 days have passed. I'm not looking for a lot here, just injunctive relief to compel them to show that this debt is satisfied, the account is closed, or whatever needs to be done to prevent this debt from negatively affecting my credit score. I have looked through a lot of forms on my legal research software, but I am unsure how to draft my complaint. Please advise. Thanks.

 

[justalayman]

to start with, I would file a dispute with the credit reporting agencies reporting it as you believe improper. I would also send a letter to the creditor stating your claim and reasons why you believe the account is paid for. Along with that, the ol' threatening to sue can be included should they not correct the tradeline to reflect an accurate statement of the account.

but picking on your claim of an accord and satisfaction:

did you do this:

(b) Unless Subsection (c) applies, the claim is discharged if the person against whom the claim is asserted proves that the instrument or an accompanying written communication contained a conspicuous statement to the effect that the instrument was tendered as full satisfaction of the claim.

to whom did you send the payment and who was the payee (landlord, collection agency, or somebody else)? If you sent it to the CA, are you certain there was an agency relationship and the CA was not simply hired to call and collect with no authority to act otherwise? Ya see, this section of that statute requires there to be an agency relationship between the CA and the creditor if you made payment to the CA.

(d) A claim is discharged if the person against whom the claim is asserted proves that within a reasonable time before collection of the instrument was initiated, the claimant, or an agent of the claimant having direct responsibility with respect to the disputed obligation, knew that the instrument was tendered in full satisfaction of the claim.

Now, you said they held the check but you said nothing about them cashing it. Did they? If not, well...

(a) If a person against whom a claim is asserted proves that (i) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (ii) the amount of the claim was unliquidated or subject to a bona fide dispute, and (iii) the claimant obtained payment of the instrument, the following subsections apply:

 

[tj1320]

Thank you for your help. I already sent a letter to the landlord explaining the accord and satisfaction and what I wished for them to do, but they have ignored it. Maybe my luck will be better with the reporting agencies.

Yes, I wrote "payment in full satisfaction of the claim" on the check in a conspicuous place and included a reference to the claim number on it. The collection agency instructed me to deal with them and even attempted to negotiate by offering to remove a $350 charge for baseboard repair in exchange for immediate payment of the remaining $1,100ish balance. Said agency also instructed me to communicate with them and not the landlord, but that I was to make the payment payable to the landlord. As for your last comment, I cannot recall the name of the case at this time, but there is case law at the state SC level treating retention of the instrument as acceptance of payment and therefore an accord and satisfaction.

 

[Zigner]

I would suggest that you research that case law. It seems ludicrous to expect that an uncashed check counts.

 

[justalayman]

I cannot recall the name of the case at this time, but there is case law at the state SC level treating retention of the instrument as acceptance of payment and therefore an accord and satisfaction.

so how about finding it since it is critical

I would like to reinforce this:

(a) If a person against whom a claim is asserted proves that (i) that person in good faith tendered an instrument to the claimant as full satisfaction of the claim, (ii) the amount of the claim was unliquidated or subject to a bona fide dispute, and (iii) the claimant obtained payment of the instrument, the following subsections apply:

I could be misreading that but I read it that if they did not cash the check, this section of law does not apply.

so far I have found that how long the check is held appears to make a difference:

http://scholar.google.com/scholar_case?case=17232930517860630536&q=accord+and+satisfaction+cashed&hl=en&as_sdt=4,32

Miller v. Prince Street Elevator Co., 68 P. 2d 663 - 1937

Warren v. New York Life Ins. Co., 58 P. 2d 1175 - 1936

none of that is very recent and the last 2 obviously quite old so I do not know if there is anything newer.

 

[bdancer]

What is the name of your state (only U.S. law)? New Mexico

..... whatever needs to be done to prevent this debt from negatively affecting my credit score.

If the collection agency has already reported the defaulted debt to the credit bureaus (and they probably have), subsequent paying will result in the item being updated to show paid or settled. But that will NOT help your score. The damage is done and will remain for the balance of the 7 year reporting period. However, it will look better to creditors reviewing your credit report if it shows as settled or paid.

 

[tj1320]

Subsection (c)(2) is also designed to prevent inadvertent accord and satisfaction. It can be used by a claimant other than an organization or by a claimant as an alternative to subsection (c)(1). Some organizations may be reluctant to use subsection (c)(1) because it may result in confusion of customers that causes checks to be routinely sent to the special designated person, office, or place. Thus, much of the benefit of rapid processing of checks may be lost. An organization that chooses not to send a notice complying with subsection (c)(1)(i) may prevent an inadvertent accord and satisfaction by complying with subsection (c)(2). If the claimant discovers that it has obtained payment of a full satisfaction check, it may prevent an accord and satisfaction if, within 90 days of the payment of the check, the claimant tenders repayment of the amount of the check to the person against whom the claim is asserted.

N.M. Stat. Ann. § 55-3-311 (West)

The decisions are in accord in holding that a creditor who receives and appropriates to his own use a check tendered as full settlement has entered into an accord and satisfaction of a disputed or unliquidated claim. There is, likewise, some authority to the effect that the mere retention of a check under such circumstances does not constitute acceptance of payment in satisfaction. See Annot., 13 A.L.R.2d 736. We are, however, committed to the principle that retention of a check tendered in full settlement of a disputed or unliquidated demand for an unreasonable length of time amounts to an election to treat it as such. Warren v. New York Life Ins. Co., 40 N.M. 253, 58 P.2d 1175. That decision indicates that ordinarily the question is one of fact but, where the facts are admitted or clearly established, may become a question of law for the court.

Miller v. Montgomery, 1967-NMSC-107, 77 N.M. 766, 768, 427 P.2d 275, 276

I had to copy and paste this in a hurry. There is some history of negative treatment of the above-referenced case, but it does not have to do with the actual retention of the instrument. The negative treatment has more to do with what was or was not written on the instrument.

 

[TigerD]

yawn.

You say you graduated law school. Act like it.

How would you answer this fact pattern on your exam?

DC