Have you been sued by Cortez Investment Co., LLC? If you live in Arizona and have fallen behind on a Citibank credit card there is a good chance you could get sued by Cortez Investment Co. through their lawyers at the Hameroff Law Group out of Tucson, Arizona.

You may not fully realize the connection between Citibank and Cortez Investment Co., and there is a good reason for that – Citibank washed their hands of this debt years ago and since then it has been traded through the hands of various junk debt buyers who have bought the delinquent account with the hope of making a quick buck.

Who is Cortez Investment Co.?

Cortez is a lower-volume junk debt buyer.  Junk debt buyers are companies that purchase portfolios of old charged off credit card accounts from banks like Citibank.  Cortez Investment is a smaller debt buyer compared to many large national players in the debt buying world like Midland Funding and Portfolio Recovery Associates.

In fact, after you do this for a while like I have you will start to notice that only Hameroff Law Group handles debt collection lawsuits brought by Cortez Investment.  And this is for a good cause – the Hameroff Law Group has a close connection with Cortez.

Cortez Investment Co. is an Arizona company that is owned by two other companies – Melar Investments, LLC and Waverly Ave. Enterprises.  Melar Investments is an Arizona company and is owned by a member of the Hameroff family.

Waverly Ave. Enterprises is a California company that is owned by Ivan Lavinsky – the main (and only) witness in all of Cortez Investment’s court cases.

Why is Cortez Investment Co. Suing Me?

Cortez Investment’s business model is to purchase portfolio’s of old charged off credit card debt for as little as possible and then collect on the balance owed from the consumer.  Many debt buyers pay as little as 4 cents on the dollar and sometimes much less.

If traditional collections don’t work – like phone calls and demand letters – Cortez will then file a debt collection lawsuit.  In Arizona debt collection law suits are dealt with in two courts, Justice Court and Superior Court.  The Justice Court handles all of those debt collection cases where the amount being sought is less than $10,000.  The Superior Court handles those cases where the amount being sought is more than $10,000.

Cortez is suing you because they are alleging that they purchased a portfolio accounts (likely from Citibank) and now they are claiming that they have the right to payment.  And they want you to pay.

What Can I Do?

The most important thing to understand about being sued is that if you ignore it things will get much worse.  You must deal with this lawsuit head on.

The first step in dealing with a debt collection lawsuit is to file a written response called an Answer.  This must be drafted and filed with the appropriate court within 20 days from the day you were served with it by the process server.  If you don’t file a written Answer a default judgment will be entered against you and then you are subject to having your wages garnished and your bank accounts frozen.

From there the case will go through a discovery phase, possibly mediation, a motion for summary judgment, a pre-trial conference, and then likely a trial. Each of these steps require you to actively participate in the process and failing to do so will likely end in a judgment being entered against you.

Do I Have a Case?

Each debt collection lawsuit has its own unique twists that can influence the outcome of the case, but when it comes to Cortez Investment cases the underlying facts are very similar – i.e. a debt is owed (often to Citibank), it was then sold to a company named Pilot Receivables Management, and possibly even sold to a couple other companies, and then eventually making its way to Cortez.

Because the basics on all Cortez Investment cases are very similar, the issues and problems with their cases are similar as well.  Here are a few of their problems:

Unable to Prove there was a Contract with the Original Creditor

At their core the debt collection lawsuits filed by Cortez Investment are breach of contract claims. In order to win a breach of contract case you must prove (1) that there was a contract; (2) what the terms of that contract were; and (3) that there was a breach of those terms.

In Arizona the debt collector can prove the existence of a contract one of two ways – (1) they can have the original application that was completed by the consumer at the time the account was opened, or (2) they can prove that there was an agreement between the original credit and the consumer by showing a “course of dealing”.  This essentially means that Cortez has multiple monthly statements were there is proof of charges to the card and payment from the consumer.  The idea on the second one is if you are using the card and then sending them payment that you must have agreed to be bound by the terms of the credit card company.

In a surprisingly high number of cases Cortez Investment and other junk debt buyers struggle with this first element.  Almost never do they have the original application from the original creditor and in many cases the debt buyer provides little more than one or two monthly statements that often don’t show any charges or any payment on the card.

This most often occurs when the consumer is not represented by an attorney.  The junk debt buyer knows they can get away with less evidence if there isn’t an attorney there to press the issue.

Also, the typical arrangement between junk debt buyers and original creditors requires that the junk debt buyer pay additional money if they need additional documents.  This means that everyone of those statements they provide you are costing Cortez Investment extra money.  And when you are filing hundreds or thousands of cases per year that can really start to add up.

Pro Tip:  Even when the junk debt buyer has multiple monthly statements they may not be admissible in court. Junk debt buyers often will try and have admitted into evidence business documents (like monthly statements) of other companies who are not apart of the case.  The Arizona Rules of Evidence provide that a witness who is testifying about a document to have it admitted as evidence must be able to testify based upon their own personal knowledge.

The typical witness for Cortez Investment cases is Ivan Lavinsky – the owner of Waverly Ave. Enterprises who is a part owner of Cortez Investment.  He has not worked for Citibank and unless he has specific knowledge as to how companies like Citibank, Pilot Receivables, or any other company create and maintain their business records he should not be permitted to lay the foundation necessary to get monthly statements from the original creditor into evidence.

In the end, if they don’t have an application or they don’t have monthly statements demonstrating use and payment on the card, then the junk debt buyer will struggle to prove the existence of a contract.

Unable to Prove Damages

An important element of proving any debt collection case is establishing what is actually owed on the debt.  Arizona case law provides that merely stating in a conclusory manner the amount owed is not sufficient to establish what is actually owed on the debt.

Pro Tip: Something to watch out for is sometimes junk debt buyer attorneys will try and rely on Arizona Revised Statute 44-7804 which states that a debt collector can establish the amount owed by providing a copy of the last billing statement. However, this law is only applicable to uncontested cases.  If you have filed an Answer to the lawsuit the case is considered contested and thus this statute does not apply.  The debt must provide a calculation of what is owed and prove it with admissible evidence.

Unable to Prove Ownership of the Account

Finally, one of the big problems with these types of cases is that Cortez Investment Co. will often have difficulty in proving that it actually owns the account that it is suing on.  This is an important part of the case because if you think about it, Cortez Investment didn’t loan you any money and you didn’t agree to pay them any money, so why should you write them a check unless they can actually prove that they own the account?

Pro Tip: To establish ownership Cortez needs to able to prove that your specific account was transferred from Citibank, to Pilot Receivables Management, to Cortez Investment (and to any other alleged owners). Often they will try and establish this by providing several “bills of sale”. Look closely at this documents.  They will never include any specific reference to your account but will usually state that the “list of accounts is attached as Exhibit A”.  However there is no “exhibit A” attached.

If they can’t show that your account was sold each and every step of the way they cannot prove their case.  Make them prove this. Proof of ownership is often where these cases are won or lost.

Can You Represent Yourself in Your Case with Cortez Investment Co., LLC?

You are permitted to represent yourself in your debt collection case.  The question is, should you?  Obviously as an attorney I am biased in that I think you should hire a lawyer to help you with your case. But as someone who literally deals with these types of cases every working day of my life, let me give you a few things to consider:

(1) People who represent themselves in court are held to the same standard as attorneys.  This isn’t fair because you didn’t go to law school or deal with these issues on a daily basis like a lawyer does. However Arizona law requires that the judge or justice of the peace hold you to the same standard when it comes to things like knowing the Arizona Rules of Civil Procedure, the Arizona Rules of Evidence, and the relevant case law.

If you don’t have a solid understanding of these rules you will end up making a mistake and it could cost you your case.

(2) I have handled nearly 300 trials against junk debt buyers.  This means I have spent a lot of time in courtrooms watching judges and justice of the peace and how they handle these types of cases. An observation of mine is that people who represent themselves have a very difficult time winning their case and often end up with a judgment entered against them or enter into a terrible settlement offer.

(3) When you represent yourself the case will completely take over every bit of free time you have. I see this all the time. People who are representing themselves in court spend every evening trying to find forms and case law and learn the court’s procedural rules and it just get stressful.  Even in justice court it will take nearly a year (or longer) to get your case to trial. One of the biggest advantages of hiring a lawyer is it will transfer the burden of your case off of your shoulders and on to your attorney’s who can work on it all day long while you focus on your family and job.

Need Help?  Contact the Arizona Consumer Law Group

If you have been sued by Cortez Investment Co. feel free to reach and to talk with one of our attorneys (John Skiba or Jesse Walker) and learn more about the strategies you can use to fight back against junk debt buyers and take care of this debt problem once and for all.  We can be reached at (480) 420-4028.