MEMORANDUM

To: Legal Interns

From: Mohammed Hammad
Re: Cash 4 Paper
Date: March 18, 2014

Relevant Facts
Cash 4 Paper, LLC, (C4P) a New Mexico limited liability company. C4P buys the rights which
businesses have to collect money from other people at a discounted rate. The discount rate will
depend on the factory or person that needs to be collected from. C4P are acquired three
different problems in their process of collecting money.
First problem was from collecting money from New Mexico Dreamstreet. New Mexico
Dreamstreet prepared and signed a promissory note with Dr. Kee for a joint venture that
solicited investments for a cattle breeding operation, dated January 1, 2010, which in relevant
part, reads:
New Mexico Dreamstreet hereby promises to pay to the order to Dr. William H. Kee the sum of
$400,000, payable on demand.
Four years later Dr. Kee sold the note to C4P for $200,000, C4P demanded New Mexico
Dreamstreet to pay the dept. New Mexico Dreamstreet responded by saying that while it did
borrow the $400,000 from Dr. Kee, Dr. Kee also promised to provide veterinary services to
Dreamstreet, and since Dr. Kee didnt do as promised they should get a deduction from the
amounts owed.
Second problem was that C4P buys all of the checks which Dancing Stars, LLC, One of the checks
which C4P bought from Dancing Stars was from Calia Munoz, in the amount of $3,800. The
form of the check reads pay to the order of and then has a blank for the payees name. Ms.
Munoz crossed out the word reading pay to the order of and filled in Dancing Stars name on
the blank. Ms. Munoz has put a stop payment order on the check, claiming that Dancing Stars
failed to provide the dance lessons that she paid for.
Third problem is Assembly Line of Santa Teresa, Inc. (ALST) assembles a variety of small
machines, using parts that were fabricated in the maquiladoras plants in and near Juarez.
Because the machines are assembled in New Mexico, the machines can be identified as made
in the United States. ALST sent an invoice to Maquiladoras de Nuevo Mexico, LLC, for
$800,000 for labor on a particular project. The maquiladora plant, however, could only pay
$500,000 of the debt, and provided ALST with a promissory note for the balance. The note
clearly stated the amount owed, was dated, noted that it was to the order of Assembly Line of
Santa Teresa and was to be paid with interest at the rate of 10% exactly one year after the
note was made. In relevant part, the note provided that the debt, with interest, is secured by
a mortgage on real estate made by the maker in favor of said payee. The terms of said
mortgage are by this reference made a part hereof.

The note has now matured, and C4P has made a demand on Maquiladoras de Nuevo Mexico,
LLC, for payment. Maquiladoras de Nuevo Mexico, however, has claimed that the work done
by ALST was sub-standard, and that had to spent more than $1,000,000 as a result of a
government ordered recall of the machines assembled by ALST, and that it has no intent to pay
the promissory note.

Question Presented
Should New Mexico Dreamstreet get a deduction on the amount owed
Should Calia Munoz pay the $3800?
Can Assembly Line of Santa Teresa be held to continue make payments

Short Answer
In the first scenario New Mexico Dreamstreet should get a deduction on the amount owed
because Dr. Kee didnt fulfill his part of the contract when signing the partnership contract.
In the second scenario this might be considered as a false statement from Dancing stars and an
investigation should be opened to investigate if Dancing starts actually failed to provide the
dance lessons, if so then Calia Munoz should not pay for a services she didnt get, while in the
other hand if she was provided with the dance lessons then in that case she will be held to pay
the amount owed.
In the third scenario, the maquiladora plant should be held to pay the amount due because the
work was done by ALST was modified unless Maquiladora can prove their accusation toward
ALST.

Discussion
First we need to know what can a debt collector legal actions in our country, so according to
Fair Debt Collection Practices Act

(a) Any debt collector who brings any legal action on a debt against any consumer shall --
(1) in the case of an action to enforce an interest in real property securing the consumer's
obligation, bring such action only in a judicial district or similar legal entity in which such real
property is located; or
(2) in the case of an action not described in paragraph (1), bring such action only in the judicial
district or similar legal entity --
(A) in which such consumer signed the contract sued upon; or
(B) in which such consumer resides at the commencement of the action.
(b) Nothing in this title shall be construed to authorize the bringing of legal actions by debt
collectors.
In the first case Dreamstreet should get a deduction because Dr. Kee didnt fulfill his part of the
contract by providing veterinary services to Dreamstreet, which forced Dreamstreet to seek
another veterinarian and effected them by spending more money while they could of saved if
Dr. Kee fulfilled his part of the agreement.
In the second case the debt might be viewed as False or misleading representations
For the third case C4P should go back and review the contract agreement between the two
companies and review if there were a breach of contract from ALST by doing sub-standard job.
If so a lawsuit will not help C4P because in this case the contract breach was material breach
from ALST and for so ALST will be forced to. But since Maquiladora already modified ALST then
Maquiladora should continue their payments because completely changed the work done by
ALTS.

Conclusion
Each scenario has its own ways of looking at it, when you deal with dept each party have their
own saying of avoiding payments, and if the claiming party have any proves of what they claim
then it should be represented in court to prove what they are saying. Otherwise they are held
to make the payments as agreed.