My usual complaint with arbitration clauses is when they are forced upon consumers or small businesses by the big businesses. As I wrote previously, I think arbitrators favor their repeat customers, namely the big businesses. A trial court is a much more level playing field for the small business or consumer taking on Golliath. But recently I've started to see small businesses actually write arbitration clauses into their own contracts.

This creates a problem when the client comes to me because their customer won't pay their bill. There's no dispute, they're just not paying their bills, probably because of the economy.

This is a discouraging discovery. Now instead of just walking a few blocks to the court house to file suit to collect the debt and then probably taking a default judgment or getting a summary judgment in a short time against the deadbeats, we face the problem of having to go to the extra expense of opening an arbitration claim. Or if we file suit, we run the risk that they'll actually respond to the lawsuit by demanding arbitration, pursuant to the contact. If they do that, our court filing fee is down the drain and now we have to pay again for the arbitration fees.

Arbitration. Not faster, not cheaper. Not necessarily. Especially if all you are doing is trying to collect a debt. Getting a default judgment is cheaper and easier than trying to do the same in arbitration. Plus, even after you get your arbitration award, you're still not done. To collect, you then have to file (and pay for) an action with the court to confirm the arbitration award. What a bunch of hassle just to collect an undisputed debt.

A small business that likes arbitration would be wise to at least exempt their own collections claims from their own mandatory arbitration provisions in their own contracts.

Here is a list of my victories against the credit card debt collectors since 2008.

1. Dodeka, LLC v. S.P., Travis County, July 2008. Case dismissed after I filed for summary judgment.

2. Dodeka, LLC v. R.S., Travis County, September 2008. Case dismissed after I filed for summary judgment.

3. Dodeka, LLC v. E.W., Travis County, October 2008. Case dismissed after I filed for summary judgment.

4. L.G. v. Dodeka, LLC, Travis County, October 2008. After getting Dokeka's case dismissed against my clients in Denton County, I filed a FDCPA lawsuit against Dodeka and its lawyers in Travis County. Dodeka paid us $3,037 to settle. My clients received $1,500 of this and the rest went to my attorney fees. The case against the lawyer is still pending.

5. Dodeka, LLC v. B.M., Williamson County, February 2009. Judgment for my client.

6. Unifund CCR Partners v. C.E., Travis County, April 2009. Unifund dismissed its claims and paid $2,000 to my client to reimburse her for my attorney fees and for statutory damages.

7. Capital One v. F.T., Travis County, April 2009. Case voluntarily dismissed.

8. CACH, LLC v. M.A., Williamson County. My motion to vacate an arbitration award was granted and the case was dismissed with prejudice.

9. Unifund v. L.P., Williamson County, June 2009. Amount of claim: $28,693.71 plus attorney fees and interest. We settled for $500.

10. Pharia, LLC v. K.J., Bastrop County, June 2009. Case dismissed after we filed for summary judgment.

11. CACH, LLC v. W.W., National Arbitration Forum, June 2009. Claim voluntarily dismissed after I filed a petition to stay arbitration.

12. Discover v. K.L., Harris County, July 2009. Case voluntarily dismissed after I filed for summary judgment.

13. CACH, LLC v. A.B., Travis County, August 2009. Case voluntarily dismissed.

14. Portfolio Recovery Associates v. P.S., Travis County, August 2009. Case and counter-claim mutually dismissed by agreement after I filed for summary judgment.

15. CACH, LLC v. P.K., Travis County, August 2009. This was a lawsuit to confirm an arbitration award of over $65,000, which was awarded against my client prior to my representation. After I was hired, I filed a plea to the jurisdiction and the case was dismissed.

16. Amex v. D.W., Travis County, September 2009. Amount of suit was over $200,000. Case was voluntarily dismissed after I defeated AMEX's motion for summary judgment and after the court order the parties to mediation.

17. Dodeka v. W.W., Lubbock County, September 2009. My client paid $500 to settle.

18. Midland Funding v. E.O., Hays County, September 2009. Case voluntarily dismissed.

19. Midland Funding v. M.B., Parmer County, September 2009. Plaintiff dismissed the case and paid us $650 in attorney fees.

20. Pharia, LLC. v. R.M., Brazoria County, September 2009. My client paid $500 to settle. I filed a motion for summary judgment but the settlement saved my client my travel expenses.

21. Chase Bank v. L.B., National Arbitration Forum, October 2009. Claim voluntarily dismissed after I filed a petition to stay the arbitration.

22. Pharia, LLC v. L.F. November 2009, Dallas County. I filed a motion to dismiss. My client paid $500 to settle in order to save on paying for my travel expenses to Dallas.

23. Hilco Receivables, LLC v. E.W., Travis County, December 2009. Case voluntarily dismissed after I filed a motion for summary judgment.

24. Arrow Financial Services, LLC v. J.P., Travis County, December 2009. Case voluntarily dismissed after I filed a motion to dismiss.

Under Texas law, the statute of limitations on a credit card debt is four years from the last payment. If the lawsuit is not filed by this deadline, the statute of limitations can be raised as a complete defense to the lawsuit. But you have to plead this affirmative defense. You have to raise this as a defense in your answer to the lawsuit, and you have the burden of proof. Sometimes you'll find the evidence in the plaintiff's own documents or even in their pleadings. Other times you'll have to prove it from your own documents and testimony.

Tex. Civ. Prac. & Rem. Code §16.004(a)(3) establishes a four year statute of limitation on an action for a debt, and the four years starts running from the day the cause of action accrues. In a breach of contract case, the cause of action accrues at the time of the default. Jones v. Blume, 196 S.W.3d 440, 446 (Tex.App.--Dallas 2006, pet. denied). If the debt action is on an open or stated account, the cause of action accrues on the day of the last payment by the debtor. Livingston Ford Mercury, Inc. v. Haley, 997 S.W.2d 425, 429 (Tex.App.--Beamont 1999, no writ.), Tex. Civ. Prac. & Rem. Code §16.004(c).

But it gets better.

If a debt collector files a lawsuit against a consumer to collect on a credit card debt after the statute of limitations has run, and if the debt collector knew or should have known it was past the statute of limiations, this is considered to be an unfair and unconscionable practice. It is a knowing and intentional violation of 15 U.S.C. § 1692f of the Fair Debt Collection Practices Act (FDCPA). Kimber v. Federal Financial Corporation, 668 F. Supp. 1480, 1487 (M.D. Ala. 1987).

In such cases, I file a counterclaim for violation of the FDCPA and seek damages and attorney fees. When we can prove the statute of limitations and a violation of the FDCPA, the end result is that the debt collector's case is dismissed and the debt collector has to pay damages and attorney fees.

I've had some cases now in which a client was being sued by a debt collector in an action to confirm an arbitration award for a credit card debt. The clients came to me for the first time after the arbitration award had already been awarded against them. To say that the chips were down in these cases is an understatement, yet I succeeded in getting the cases dismissed.

Each of these cases involved an arbitration award from the National Arbitration Forum (NAF).

One of these cases involved an arbitration award of over $64,000 and was less than a month away from trial when I got hired. I set the case for a hearing on a plea to the jurisdiction and got the case dismissed. Even though the debt collectors had an arbitration award, they could not prove with admissible evidence that they were the owners of the debt. Without evidence that they owned the debt, they did not have standing to bring a court action and the court did not have subject matter jurisdiction to hear the case.

The debt collector had about four affidavits and about 50 pages of evidence. Every single page of evidence was inadmissible.

We snatched victory from the jaws of defeat.