Claims & Counter Claims
Facing a lawsuit is one of life’s most stressful experiences. It can feel like the deck is stacked against you, especially when dealing with a big-name lender and their legal team. But just because you are being sued doesn’t mean you have no options. In fact, you might have the opportunity to fight back and even turn the tables on the party coming after you.
Whether you are being sued by a merchant cash advance (MCA) lender or another party, don’t assume their claims are airtight. Often, the people or companies filing lawsuits have skeletons in their own closets.
That’s where counterclaims come in. These powerful legal tools allow you to make your case, showing that the plaintiff isn’t as blameless as they claim to be. And our counterclaims lawyer in New York can help. At Colonna Cohen Law, we strive to provide tailored solutions that protect our clients’ interests throughout legal proceedings.
Understanding Claims & Counterclaims
When someone sues you, you may believe their claims are valid or assume the court will favor them. But that’s not always true.
In legal disputes, a claim is what the plaintiff is asking for. It’s their side of the story. Many people don’t realize they have the right to assert their own claims, even when they’re the defendant in a case. These are called counterclaims, and they can be a powerful way to stand up for yourself when you have been wronged.
Counterclaims can be persuasive, especially in cases involving merchant cash advance (MCA) lenders or other financial disputes. Many lenders cut corners, overreach, or fail to meet their own obligations. If they breached a contract, acted unfairly, or even misled you, you have every right to bring that to the court’s attention.
Examples of Counterclaims
Counterclaims allow you to hold the plaintiff accountable for their own wrongful actions. (Crossclaims allow filers to hold the defendant accountable, not the plaintiff.) Counterclaims claims shift the focus of a lawsuit and show the court there’s more to the story. Here are common grounds for counterclaims:
- Breach of contract: The plaintiff failed to meet their obligations under the agreement. For instance, a lender may not have reconciled your account as promised.
- Fraud: The plaintiff intentionally misled you to benefit themselves. This could include false promises or deceptive terms designed to trap you.
- Violation of good faith and fair dealing: The plaintiff acted in ways that harmed you instead of helping you. For example, they may have failed to provide flexibility when reasonable.
- Conversion: The plaintiff took more money or property than they were entitled to. This might involve over-collecting from your bank account.
- Fraudulent inducement: The plaintiff convinced you to sign an agreement based on lies or misrepresentations. This is common when lenders downplay risks or exaggerate benefits.
These examples highlight how counterclaims can expose the plaintiff’s own misconduct. Are you dealing with a lawsuit where the other side seems to be hiding something? Our NYC lawyer on claims & counterclaims can help you understand your options and make informed decisions regarding your legal strategy for defense.
Types of Counterclaims
Not all counterclaims are the same. They fall into two main categories: compulsory and permissive.
1. Compulsory Counterclaims
Compulsory counterclaims are directly related to the plaintiff’s claims against you. For example, if a lender sues you for failing to repay a loan, a breach of contract counterclaim—based on the lender’s failure to reconcile your account—would be compulsory.
These counterclaims must be brought during the same lawsuit. If you don’t raise them, you may lose the right to pursue them later. Think of it as your chance to address issues that are tied to the original case.
2. Permissive Counterclaims
Permissive counterclaims involve separate issues that don’t directly relate to the plaintiff’s claims. For instance, if the plaintiff owes you money for an unrelated business deal, you can raise this as a permissive counterclaim.
Unlike compulsory counterclaims, permissive ones can often be filed in a separate lawsuit. However, combining all claims in one case can save time, money, and effort.
How to Bring a Counterclaim
Being sued can feel like all the power is in the plaintiff’s hands. But if the lender or plaintiff didn’t hold up their end of the bargain, you have the right to file a counterclaim and hold them accountable. Here’s how to bring a counterclaim:
- Identify wrongdoing by the plaintiff: Ask yourself the following questions: Did they breach the contract, such as failing to reconcile your account? Did they act in bad faith or violate fair dealing practices? Have they over-collected funds or engaged in fraudulent behavior? You might want to discuss this matter with a counterclaims lawyer in New York.
- File the counterclaim with your response: Include your counterclaim when you respond to the lawsuit. In the counterclaim, you should clearly explain how the plaintiff’s actions harmed you. Provide supporting evidence, such as contract terms, payment records, or communications.
- Show how the plaintiff violated your rights: Outline the legal basis for your counterclaim, like breach of contract or fraud. You will also need to detail the damages you have suffered as a result of their actions.
- Consult legal counsel: You may need a law firm to ensure your counterclaim is properly drafted and filed on time. Your lawyer will also explain whether your counterclaim is compulsory or permissive.
Bringing a counterclaim isn’t just a legal tactic—it’s a way to hold the plaintiff accountable. Instead of staying on the defensive, you can take action and fight for your rights.
Signs You May Have a Valid Counterclaim
If you are being sued, it’s important to consider whether you might have your own claims against the plaintiff. But how do you know if you have a valid one? To find out, ask yourself the following questions:
- Did the plaintiff fail to meet the terms of your agreement?
- Were you misled about the terms of your contract or the agreement’s risks?
- Did the plaintiff make promises they never intended to keep?
- Did the plaintiff fail to work with you during financial difficulties?
- Have they taken steps that seem punitive rather than reasonable?
- Have they collected more money than they are entitled to?
- Did they misuse their access to your bank account or assets?
- Has the plaintiff’s conduct caused you financial losses or other damages?
- Are there unrelated issues where their actions have harmed you?
If any of these situations sound familiar, you may have grounds for a counterclaim. Filing one not only defends your rights but can also expose the plaintiff’s misconduct. Not sure if your case qualifies? Consider talking to a NYC lawyer on claims & counterclaims.
Challenging A Merchant Cash Advance Lender’s Claim
Merchant cash advance (MCA) lenders often use aggressive tactics and questionable practices, but their original claims can be challenged. Common MCA defense strategies include:
- Invalid or unenforceable contract terms: Courts often strike down agreements with terms that violate state or federal laws. For example, this may happen if the contract is unfairly one-sided or designed to trap you.
- Failure to reconcile accounts: MCA lenders are supposed to adjust payments based on your revenue. If they didn’t reconcile your account as required, it may be grounds for a counterclaim.
- Misrepresentation or fraud: False promises or hidden fees could invalidate their claims against you. This may be the case if the lender misleads you about the terms or the risks involved.
- Excessive collection practices: If the lender took more money than they were entitled to, it could amount to conversion. You will need to do the math and determine whether or not the lender over-collected from your bank account.
- Violation of good faith and fair dealing: Lenders must act fairly and reasonably under the law. If they refused to work with you or acted unreasonably, they could be in breach.
- Recharacterization of the advance as a loan: MCA agreements are not supposed to be loans. If the terms resemble a loan, they may violate usury laws that cap interest rates.
Remember: by exposing your MCA lender’s misconduct, you can shift the focus of the case and reduce or eliminate your liability. That’s why filing a counterclaim may be an option worth considering. And our lawyer at Colonna Cohen Law is here to help you make an informed decision about your defense strategy. Schedule a consultation with our counterclaims lawyer in New York by calling 917-740-2077 or contact us via our website.
Frequently Asked Questions (FAQs) About Claims & Counterclaims
A claim is when a merchant cash advance (MCA) lender sues you, alleging missed payments under your contract. A counterclaim, on the other hand, is when you assert that the lender breached the contract by failing to reconcile your account, over-collected from your bank, or acted in bad faith. Counterclaims are your opportunity to shift the focus of the lawsuit and hold the plaintiff accountable for their actions.
In New York, you must file a counterclaim when submitting your response to the lawsuit. Typically, you have 20 to 30 days from being served with the initial complaint to file your answer, depending on how you were served.
To write a counterclaim, identify your claims by determining how the plaintiff has harmed you. You need to state your allegations clearly and include specific details about the plaintiff’s actions and how they violated your rights.
Your counterclaim needs strong evidence, so make sure to attach documents, communications, or other proof that backs up your claims. Use the court’s required format and include your counterclaim as part of your answer to the lawsuit. If you have doubts about how to proceed with a counterclaim, consider seeking guidance from a lawyer.
If you fail to respond to a claim, the court may rule in favor of the plaintiff who filed it. This is called a default judgment, and it can lead to legal or financial consequences. Always respond within the timeframe set by the court to avoid losing your chance to defend yourself.
Filing a counterclaim shifts focus from just defending yourself to holding the plaintiff accountable. It also highlights breaches of contract, fraud, or other misconduct by the plaintiff. If your counterclaim is successful, you could recover compensation for harm caused by the plaintiff.
In New York, a notice of claim must generally be filed when suing a government agency or public entity. You typically have 90 days from the date of the incident to file the notice. The notice must include details of the claim, such as what happened, when, and where.
In New York, the standard timeframe to respond to a counterclaim is 20 days if served in person or 30 days if served by mail. This is the same as the timeframe for answering the original complaint. Failing to respond can lead to a default judgment against you.
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If your business is struggling with Merchant Cash Advance lawsuits, frozen accounts, UCC liens or collection actions, please contact Colonna Cohen Law to provide relief and protect your livelihood.
