Are violations of law actionable from settlement negotiations?

[Downto0]

If, during negotiations, the debt collector says something like, "If these negotiations don't work out then we will report your debt to the CRAs," and the debt is not within the SOL of reporting, is this actionable?  The debt collector clearly threatened to do something they cannot do which is a clear violation of the FDCPA.  Could one use the debt collector's statement against them even though it was said during settlement negotiation...which fell apart?

[Anonymous]

It is my understanding that SOL refers to a timeframe in which a creditor or CA can sue you for a debt, which varies from state to state. SOL has nothing to do with reporting.  If the debt is not older than 7 years, then it can still be included/reported to the CRAs. CAs can report an account anytime within the 7 year inclusion period. If the account is older than 7 years and they report, you can dispute it as being too old for inclusion.

I'm sure others will chime in and correct me if I am wrong (very possible!)

[StartingOver10]

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@Downto0 wrote:

If, during negotiations, the debt collector says something like, "If these negotiations don't work out then we will report your debt to the CRAs," and the debt is not within the SOL of reporting, is this actionable?  The debt collector clearly threatened to do something they cannot do which is a clear violation of the FDCPA.  Could one use the debt collector's statement against them even though it was said during settlement negotiation...which fell apart?

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I took your statement as the debt is beyond the reporting period. If the collector made that statement to you and you can prove it, it sounds like a violation to me. I would certainly go after the collector if the negotiations fell apart and they reported (that's your proof).

[Downto0]

Right, beyond credit reporting.  Anyway, that was just an example.  There are several ways a debt collector can violate the FDCPA.

What I've gotten in my preliminary search thus far is that the only way to preclude one of the parties from using information gained in a settlement negotiation is to include a confidentiality clause stating that no information gained can be used against either party:

Prudent lawyers may execute a written confidentiality agreement at the outset of a dialogue on settlement. If such an agreement is in place, then any subsequent disclosure in violation of stipulated terms provides a basis to argue for damages and specific performance—not to mention for a claim that the other party has waived any right to rely on the evidence in question. Moreover, a breach of the confidentiality agreement may move the court to award sanctions under Code of Civil Procedure section 128.7, as well as to award reasonable expenses under section 128.6.

However, lawyers genuinely rely on the "Privileged and Confidential" clause you see in your correspondences with your attorney:

Lawyers routinely send and receive settlement communications marked "Privileged and Confidential Pursuant to CA Evidence Code §§ 1152 and 1154." They are often certain that what is said in settlement discussions cannot be discovered later on in the litigation or in another case.  But in fact the two sections cited do not make anything privileged or confidential. They simply make settlement communications inadmissible to prove or dispute liability for the claim being negotiated. Settlement communications are often discoverable and admitted into evidence for purposes other than to buttress or attack liability for a given claim...

...If an opponent makes improper threats during settlement negotiations; refuses reasonable settlement offers; or seeks to recover attorneys fees for time spent that did not improve the settlement, it makes sense to use the settlement discussions. Indeed, in that situation such discussions would appear to be highly relevant and admissible under the authority cited above.

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&cad=rja&uact=8&ved=0CCsQFjAC&url=htt...

[RobertEG]

Threat to report to a CRA is not an action they cannot take.

However, bringing legal action on a debt known to be time-barred has been sucessfully litigated as being a violation of the FDCPA.

[Downto0]

Right, threatening to report to the CRAs is not an action the CA cannot take.  Threatening to report to the CRAs when the debt is past the SOL of reporting is an action the CA cannot take.

Or, we can use your example of bringing legal action on a debt known to be time-barred.  My intent was not to list the ways a collector could threaten to do what they cannot do.  My question was, if one of the parties involved in settlement negotiations could use statements made by one of the other parties during the negotiations to file a new claim.

The reason I asked this is because I always thought that settlement negotiations could not be used against any of the parties involved in the negotiations.  It seems that I heard this on a forum somwhere and did not follow up until now.  And, I follow up now because I have such a situation where the collector has actually said something which opens up an entirely new statute with new separate violations and damages - all unrelated to the current action.

I want my attorneys to either amend my current claim or, if the judge won't allow the amendment, dismiss the current action and refile with the new violations.  The one roadblock I could see is the possible "privileged" information in settlement negotiations.

So, can I or can't I use statements made by the collector during settlement negotiations to file a new separate claim?