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I'm sorry to hear about your situation. Aside from the testimony of your ex girlfriend and co-signer, would there be any other evidence about this "coercion"? What were the funds from the loan used for?
And did you know at the time that she had forged the co-signers signature?
The funds were used for general living expenses. The loan began at $40,000 and has since been paid down to $25,000. The co-signer has known about the loan for the last 5 years and has not taken legal action until my girlfriend and I recently broke up. I knew she forged the signature of the co-signer.
No other evidence for "coercion." She was not coerced.
Thank you. First of all, "coercion" is not a "cause of action" (a set of elements, if proved, would allow the plaintiff a recovery). That is, they could not successfully sue you for "coercion". They can claim that coercion was used in the situation in trying to prove a "cognizable" cause of action (one that would be recognized by the courts). If this co-signer were to sue you, and hope for some successful resolution, there would have to be a cause of action to do so.
She could not do this based on contract, as there was no contract between you and this co-signer.
For a co-signer, there is often an implied contract between the person that signs the contract and the co-signer, in that if there is a breach by the first party, then the co-signer can sue for that amount that the co-signer had to contribute.
But there would be no such contract between you two
Only your ex could sue you for such a "contractual" action.
And even then, your ex would have to prove that there was a contract, and that it was not "gratuitous" (made without expectation of reimbursement.
That would be difficult to prove.
The other cause of action that they could, potentially, pursue would be fraud. It's possible that they could use the "coercion" allegation in trying to prove fraud, but they would still have the burden of proof to prove it.
Essentially, in the 30-day demand, the co-signer claims that *I* took out the loan, and simply used my ex-girlfriend as a pawn. The co-signer is my ex-girlfriend's mother.
If the co-signer has known about the forged signature for 5 years, isn't there a statute of limitations for fraud? 2-3 years?
I see. Even if that is the allegation, since you're not on the contract, there is no contractual case against you.
As for fraud, it's 2 years from the date of discovery of the fraud.
Meaning, when she pulled her credit report 5 years ago and questioned my then-girlfriend, that would be the discovery of fraud?
So since there is no privity of contract (in that you were not a contracting party) then she can't sue you for breach of contract.
That would be discovery of the forgery.
She would not have a case against her daughter, no question, because of htat.
Is there grounds for "unclean hands?"
She would still have a case based on contract, since there was an implied agreement between them, in that when the mother took no action at that time, she would have "assented" to the terms of the contract.
Unclean hands is a defense, in that the plaintiff materially breached a contract which would allow the defendant to get out.
But that's contractual, which is not the case here.
I guess my primary question is: Based on these facts, what *can* the mother sue for?
I don't think that they have a case, mainly because the fraud has expired, and the only thing that they could go on would be an implied contract, but there's no "privity" between you and this cosigner.
She could sue for fraud, arguing that she only discovered the "fraud" (your alleged coercion, not the forgery) less than 2 years ago.
But that would be difficult to show, because she would have to prove the discovery element.
Wouldn't I have had to actually coerce, too?
She could argue "third party beneficiary" contract, but unless the contract specifically mentions you as a beneficiary, that would not apply.
What does that mean?
Absolutely. There would have to be fraud on your part, against your girlfriend, for that to even stand a chance.
At this point it seems like they're fishing for an easy settlement, and that they really don't have a case.
I tend to agree with you. The facts, as I know them to be true are: Daughter forged mom's signature for loan as the co-signer. Mom found out a couple months later (5 years ago). Daughter has been making payments for 5 years. Daughter and I broke up. Mom now blames me for original loan balance claiming I coerced her daughter into the loan. Mom claims the loan was taken out by me under her name as the co-signer and daughter is completely innocent.
Daughter and I spent the money over the course of the last 5 years while repaying the loan. We had joint finances.
This would have to be proven by her.
Maybe the daughter would testify in court that you signed as the cosigner in the mother's name, but that would be perjury if not true, which is a felony.
I don't know if she would be willing to risk that. A threat is easier to make than to actually pull the trigger and sue.
The daughter has told multiple people, including my parents, her therapist, her mom, etc. that she forged the signature, but she now claims that I coerced her to do so.
And that's wonderful that she has told this to all these people, as that can be used against her. Particularly a showing that she has changed her story after defaulting, that would certainly indicate that she was being less honest now than at an earlier time.
Basically in a situation where there are two conflicting stories, the earlier assertion will control (as it was closer in time to the event and would more likely be the truth)
Does the 5 year time period assist me at all? The fact that her mom has known about the loan and essentially let her daughter pay towards the balance?
Yes. That would be your argument that the statute of limitations has run. Even if she alleges that she did not know of your "coercion", you can say that she knew about the fraud, and had an obligation to take action then. The fact that she didn't means that the statute of limitations has run for her to sue.
Last question, as the coercion seems to be the sticking point that they're trying to use: How exactly could that play in this? I know I did not coerce her, but what do they need to prove to show coercion, and how does that impact her claim for the original loan balance she has listed in the 30-day demand letter?
"Coercion", in and of itself, is a contractual defense, not an offensive cause of action. That is, if you had coerced someone to sign a contract, and then you sought to enforce that contract, the defendant could argue that he or she was coerced. Now coercion in a legal context is more than just indicating a wish that someone do something, etc... it has to be physical or extreme mental coercion, and it has to be proved. So she would have to get up there and say that you forced her, against her will, with threats of physical violence, etc... to do this AND the jury would have to believe her. The fact that she forged a signature already brings her honesty into question, and that could be brought up to establish any bias.
It would be a hard case.
I agree. I feel like the mother's only "play" would have been to take us both to court and sue us jointly.
Yes, but even then, she would need to show that you were contractually obligated, and the only way that she could do that would be to prove that you were the one that forged her signature. Otherwise, your ex would be the only one contractually liable.
And like you said, with the testimony of parents, etc... that she said she forged the signature, it would be extremely difficult to overcome that.
Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, XXXXX XXXXX luck to you!
You have been great. I am new to all legal processes, so as ludicrous as this 30-day demand letter seemed, I wanted to get some clarity before I found a lawyer to respond. Is there anything else you think I should know before I rate you regarding this case?
Not off the top of my head. If I were you, though, I would still respond to this letter and ask what cause of action the mother thinks that she has against you, as "coercion" is not a cause of action. I think the reason that they're harping on "coercion" is because they have not actually thought this through.
Thanks for your time!