Answering a Premier Capital Complaint: 5 Things to Check First

If your company has been sued by Premier Capital, LLC, do not assume the paperwork is right. Check who has sued you, the deadline to answer, the chain of title back to the original lender, whether the time limit for suing has run, and the defenses you will lose if you leave them out. Filing an answer is what forces them to prove the debt.

1. Check who is suing

The name on the complaint may not be the same company you signed your loan with. Massachusetts’ highest court has described Premier Capital as a company in the business of buying, managing and collecting debt. So it may be a debt buyer, not the lender you dealt with. It is not a secret that debts get sold. And debt buyers do not always make sure they have every ‘t’ crossed and every ‘i’ dotted. The company suing has to have the right to collect the debt.

The federal Fair Debt Collection Practices Act covers personal, family or household debts. That law does not protect business debts.

2. Check your deadline

Your clock starts the day you were served, not the day you got around to opening the envelope. In Massachusetts, the time is 20 days after service unless the court orders otherwise. In New York City Civil Court, it is 20 days if you were handed the summons, and longer if served another way. A phone call to the other side’s lawyer, however friendly, does not stop it. But don’t wait for the deadline to hit.

It is not unusual to assume that a letter to the judge or a call to the other side will answer a suit. It does not. An answer is a formal written response filed with the court. Filing it stops the clock and the default process.

3. Check the chain of title

If your loan has been sold, it may not be clear who owns it. The company suing you needs the paperwork to prove it. If there is a gap in the chain of title showing that the loan got from the lender to the company suing you, don’t assume that it will just work out. In one case, Premier admitted it had no direct document showing the loan ever got from the original lender Fleet to Sovereign, the bank it got it from.

Premier argued that the transfer just happened in the ordinary course of business. The court would not accept that. Just saying something is so does not make it so. You need to take a hard look and see how much and how good the proof is.

4. Check the time limit

Most contract claims in Massachusetts have to be filed within 6 years after the claim arises. That time limit is called the statute of limitations. If the limit for suing has run, the debt may no longer be collectible.

The time limits are different for sealed documents. In Premier Capital v. KMZ, the state’s highest court held that Premier’s 2007 suit on a sealed 1987 business note was timely, under the twenty-year limit for contracts under seal, for claims that arose before the six-year rule for notes.

5. Check what you could waive

When you get sued, there are defenses you have to raise right away or you can lose them. Massachusetts Rule 12(h) says you waive your right to make some defenses, such as lack of personal jurisdiction, improper venue and insufficient service of process, if you leave them out of your Rule 12 motion or do not raise them in a motion or in your answer. So they need to be in the answer.

Without a properly-filed answer, the other side can get a default judgment. Once they have that, they can levy bank accounts and place liens on real estate, without ever proving their claims at trial. In Massachusetts, missing a deadline and letting a default judgment enter is serious. Under Massachusetts Rule 60, the time limit to ask to set it aside for mistake or excusable neglect is a reasonable time, but never over a year. Not knowing the rules is not excusable neglect. A judgment can be collected for twenty years. That is a long time.

Once you know what to look for, when and how, you can weigh your options for handling your suit. Filing an answer shifts the burden back to Premier to prove it owns the debt and can sue on it. Do it right, and do it on time.

A free contract review costs nothing and takes a day or two. Call (888) 837-7053, or send the agreements to Delancey Street for a straight read on your options.