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James T. Mullen Defendant 26 Centennial Drive, Queensbury, NY.

12804 (518) 480- 3592


Plaintiff, vs. ) Defendant


Defendants Answer Now comes the defendant and hereby specifically answers the allegations in plaintiffs complaint, to wit:

As to first part that plaintiffs allegation, defendant denies that plaintiff is

defendants creditor and demands strict proof thereof.


As to plaintiffs second allegation, the alleged transaction it is denied and

defendant demands strict proof thereof. 3. As to plaintiffs third allegation, it is hereby denied and defendant

demands strict proof thereof. 4. As to plaintiffs fourth allegation, it is hereby denied and defendant

demands strict proof thereof.


As to plaintiffs fifth allegation, it is hereby denied and defendant

demands strict proof thereof.


As to plaintiffs sixth allegation, no valid agreement exists between the

defendant and the plaintiff. Therefore the defendant cannot be held liable for attorney's fees of any amount. The plaintiff can pay their own lawyers. Such a baseless claim is a violation of the Fair Debt Collections Practices Act: "A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section: (1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law." 15 USC 1692 (f)(1).

As to plaintiffs seventh allegation, again no valid agreement exists

between the defendant and the plaintiff. Therefore the defendant cannot be held liable for additional attorney's fees of any amount. 8. 9. Defendant demands a jury trial. All allegations not specifically admitted herein are hereby denied and

defendant demands strict proof thereof.


To the extent any such claim or statement exists in the complaint, the

defendant objects to the artless deceit of trying to bait him into tacit admissions by default rather than presentation of evidence and arguments by merit.

Affirmative Defenses 1. The defendant waives no affirmative defense not explicitly raised due to a

defect in the pleading or merely because it is missing. 2. Plaintiff agrees that any information provided herein and not specifically

denied is admitted at true and correct.

First Affirmative Defense 3. The plaintiff has made no claim on which relief can be granted, only a

claim of a default. The plaintiff has neither stated nor provided any evidence that they have been in any way damaged. For relief to be granted, the plaintiff must show and prove that they have been in some way damaged by the defendant. Second Affirmative Defense

The agreement mentioned in paragraphs 3, 4, 5 of complaint is hearsay. The plaintiff has neither provided a true copy of alleged agreement, nor an affidavit, nor attempted to provide competent evidence that the material presented is factual, or is linked to the defendant in any way other than by accusation and inference. In fact, production of the original instrument is required for it to be evidentiary: "To prove the content of a writing, recording, or

photograph, the original writing, record, or photograph, is required, except as otherwise provided in these rules or by Act of Congress.". If the plaintiff does not want to be paid in photocopies of a bank's IOU's (Federal Reserve Notes), then it should not use a second or third generation of a document they (and they only) claim is an IOU from the defendant, in order to stake a claim. 4. Federal Circuit Courts have ruled that the only way to prove the

perfection of any security is by actual possession of the security. See Staff Mortg. & Inv. Corp., 550 F.2d 1228 (9th Cir 1977). Under the Uniform Commercial Code, the only

notice sufficient to inform all interested parties that a security interest in instruments has been perfected is actual possession by the secured party, his agent or bailee.

5. any document.

No one has claimed the defendant received, read, and agreed to terms on In fact, the defendant never saw and never agreed to any such terms. The plaintiff is

The defendant utterly denies any knowledge of any such terms. attempting to use the court to enforce unilateral terms after the fact. 6.

The defendant requested proof and terms of the agreement, attempting to

discover why and how HSBC Mortgage Services believed that the defendant owed them any duty or any thing of value, by sending them a letter requesting adequate assurance of due performance . The defendant is not in receipt of any answer from HSBC Mortgage Services. HSBC Mortgage Services ignored that request and left it unanswered. Instead, HSBC Mortgage Services either sent or sold the alleged account to Steven J. Baum, P.C. This inaction violates both 15 USC 1666(a) and 112 CFR 226.13(a). These state in

part that the term "billing error" includes "(6) A reflection on a periodic statement of an extension of credit for which the consumer requests additional clarification, including documentation evidence." Both acts require the creditor to investigate, reply, and produce documentation. Third Affirmative Defense 7. The defendant cannot determine from the complaint whether the

complaint is from HSBC Mortgage Services, Inc., if it is statements of counsel, or if it originates from debt collector. The plaintiff must adequately and properly identify itself. 8. If the plaintiff is actually Steven J. Baum, P.C., then they have no lawful

standing or authorization for this action. The defendant has no agreements of any kind with Steven J. Baum, P.C., nor has any such agreement ever been asserted. "Nothing in this subchapter shall be construed to authorize the bringing of legal actions by debt collectors." 15 USC 1692i(B). Likewise, Steven J. Baum, P.C. have no standing to move on their own behalf without acknowledgment of debt and assignment from HSBC

Mortgage Services, In., which was requested by the defendant, and which they have not presented. 9. The complaint simply has not provided sufficient competent material of

any type to establish a hearable matter. Without actual sworn testimony, and original documents, the defendant cannot assume that this is a valid complaint. 10. Steven J. Baum, P.C. is a debt collector and has presented themselves to

the defendant as a debt collector. See 15 USC 1692a(6). See also George w. Heintz, et al, v Darlene Jenkins, 514 u.s. 291, 115 S.Ct. 1489 (1995). If debt collector Steven J. Baum, P.C. is HSBC Mortgage Services, Inc.s representative, then they misrepresented themselves earlier as a third-party debt collector rather than as the agents of HSBC Mortgage Services, Inc. Worse, the character of the entire complaint is now cloudy. It is unclear whether the complaint is the intended testimony of some aggrieved party or merely the account of counsel. Fourth Affirmative Defense 11. Notwithstanding their dishonor and their violations, HSBC Mortgage

Services, Inc. "advanced" no funds to the defendant. Instead, they failed consideration and thus voided any alleged contract that might have existed. Any funds provided to the defendant came from an direct deposit account at the bank in the defendant's name. This too has been concealed, but will be established during discovery. 12. At the time the disputed account was opened, defendant deposited an

amount of money equal to the greatest credit limit for the disputed account with Plaintiff. This fact it can be ascertained by an application of the Generally Accepted Accounting Principle known as "verifiability." Verifiability is the accounting principle that allows the terms of an agreement to be verified by an examination of the accounting ledger maintained for a particular written agreement. The accounting will reveal the fact that

the plaintiff, although the provider of credit services, was not the lender for the disputed account. The accounting records will reveal that no account was debited at the time the disputed account was opened, credited or created. The funds for the disputed account originated from the defendant's promise to pay, the credit application. 13. The defendant is not accountable for entering into a contract whose terms

and conditions were not known at the time of James T. Mullens signature, and still are not fully known. Any one of the defenses so far raised would void any agreement that might obligate the defendant. No lawful agreement ever existed or exists now. 14. Plaintiff failed to properly notify defendant of alleged breach or default.

Defendant is not in receipt of any notices of default as required by law. Sixth Affirmative Defense 15. Offset. Defendant is entitled to offset of the purported debt in an amount

equal to the credit limit. Defendant has the right to set off against the purported debt in an amount equal to the value of the greatest credit limit. Plaintiff or petitioners records will show that no other accounts were debited in order to fund or open the disputed credit account. There is a possibility that an intermediary account was credited from no other debited accounts for the purpose of debiting it to credit or create the disputed credit account. The accounting records will establish the defendant as the depositor, although there are no records of this deposit made via currency or check from the defendant, the deposit was made with the defendant's credit application or promise to pay. The plaintiff created an accounting record to reflect this deposit thereby creating the credit account without lending any money or thing of value. Seventh Affirmative Defense 16. Under the Doctrine of Ultra Vires Plaintiff Bank was not empowered

and/or authorized to enter into credit card transactions with anyone including, but not

limited to, the above-named Defendant. National banks are corporations of limited capacity having no powers Except such. as are given them expressly or by necessary implications by an Art of Congress passed with relation to such Banks See Texas and Pacific R Co. Pottorff Tex 54 Supreme Court 416. 291. U.S. 245. 78 L.E.b, 777. "A

national bank cannot lend its credit to another by becoming surety, endorser, or guarantor for him, such an act being ultra vires." See Merchants' Bank v. Baird 160 F. 642 17. It has been laid down at a general rule that, while transactions were

contracts, to which a national bank is a party, are Ultra Vires the bank, they are void. See Fist National Bank v. Stokes Supra The officers of a national bank cannot,

ordinarily, bind it by contracts or acts which are not within the scope of the business which the bank is authorized to transact. See Stockmens Nat. Bank v. First Nat. Bank of Emmett Supra. 18. In the Case at hand, HSBC Mortgage Services, Inc. was not empowered to

enter into the alleged transaction at issue. Since no bank charter gives them permission to lend their "credit", and Congress never gave the banks permission to create money, all such loans of credit are Ultra Vires or unlawful. The bank, by loaning credit, has unjustly enriched itself. It pays no interest for the use of its credit but charges its customers the same amount of interest as if it loaned out its money. The courts have consistently ruled that banks cannot lend their credit, but can only lend their money, and that all loans of credit are ultra vires. See First National Bank of Tallapoose v. Monroe, 69 SE 1123; Norton Grocery Co. v. People's National Bank 144 SE 501; Credit Bank v. L'Herisson, 33 F. 2nd 841; Bank, 194 NW 427). HSBC Mortgage Services, Inc. acted outside the scope of its authority and therefore, consistent with the cases cited supra, the alleged transaction is void. Federal Intermediate

American Express Co. v. Citizen's State

Eighth Affirmative Defense 19. Fraud by concealment. Fraud by misrepresentation. On and before the

29th day of June, 2006, plaintiff advertised and/or represented to the defendant that it would lend money to the defendant upon plaintiff's acceptance of defendant's credit worthiness. Instead plaintiff lent nothing to the defendant. 20. At no cost to the plaintiff, plaintiff obtained defendant's money by

deceptive business practices. Plaintiff advertised and represented to the defendant that it lent money and would lend money to the defendant upon credit approval. Defendant's application for credit was used to originate the money for the purported credit account and plaintiff lent none of this money to the defendant. Defendant was not aware of the manner in which plaintiff originated the money for the purported credit account and had been deceived into believing that the plaintiff would lend the money in the origination of the account. Defendants money has never been returned and plaintiff has consistently taken measures to conceal the accounting records involving the transaction so as to avoid detection.

VERIFICATION The foregoing statements are true and correct to the best of my knowledge and belief. DATED this 30th day of August, 2010 __________________________________ James T. Mullen Defendant 26 Centennial Drive Queensbury, NY 12804 518-480-3592

CERTIFICATE OF SERVICE I James T. Mullen hereby certify that a true and correct copy of the foregoing was sent to Plaintiffs counsel, by first class mail addressed to:

Steven J. Baum, P.C. P.O. Box 1291 Buffalo, NY 14240-1291

on this 31st day of August, 2010

James T. Mullen