Loading...
11-133 Collection Agreement, Credit Consulting Services, Inc. COLLECTION AGREEMENT This agreement made by and between City of Cupertino,hereinafter referred to as"Client,"and Credit Consulting Services, Inc., a collection agency governed by state and federal collection laws, including the Federal Fair Debt Collection Practices Act,hereinafter referred to as"Company": WHEREAS, Client desires Company to undertake the collection of the Client's accounts and other evidences of indebtedness ("accounts"), in the manner and under the terms and conditions hereinafter set forth; WHEREAS, Client intends to assign accounts for collection to Company pursuant to this Agreement;and, WHEREAS, the parties contemplate the future course of dealing as Client and Company, and desire to set forth and define herein the mutual rights, obligations and liabilities of the parties hereto in such course of dealing, THEREFORE, in consideration of the premises and of the mutual agreements of the parties hereto,it is hereby agreed as follows: 1. Client warrants that each account assigned to Company for collection is a valid and existing account against the debtor and each account complies with all state and federal laws. Client further warrants and represents that it is fully authorized and empowered to assign to Company all accounts,and all rights relating thereto,which are sent to the Company pursuant to this Agreement.Client also agrees to cease all collection efforts with its customer(the debtor on the account) once the account is assigned to Company. 2. Client acknowledges that Company has the authority for all assigned accounts to receive payment in cash, check or money order. Client also acknowledges that Company has the authority to endorse checks, drafts, money orders and other negotiable instruments, which may be received in payment relating to any assigned account. CONDUCT OF COMPANY 3. Collection Efforts. Company will use collection efforts that are reasonable,and consistent with all applicable laws, and the general reputation of the Client and Company. As reasonably requested by Company,including for the purposes of verification of an assigned debt as required by law,to respond to inquiries from a debtor on an assigned debt, evaluation of collection options, and prosecution of any litigation or other proceeding for the enforcement of an assigned debt, Client shall provide such information,data,and documents as reasonably necessary to Company upon Company's request.If Client fails to provide such information within a reasonable time frame, Company may elect to deem the assigned account uncollectable. I I 1 I� 4. Litigations and Enforcement. Client recognizes that on occasion Company may need to commence litigation in order to enforce a debt on Client's behalf. Company,as the assignee,shall make the decision whether litigation or other enforcement proceedings should be commenced or continued for any account assigned under this agreement. Company will first seek Client's approval before initiating any litigation and will proceed with such action only if approval is given by Client. Company may advance all necessary legal costs.When Company collects an account,in whole or in part,Company may first deduct any and all legal costs advanced before disbursing any amounts to Client or Company. If Client advances legal costs,Company will first reimburse to Client any and all legal cost advanced before making any disbursements to Company. 5.Forwarding Assigned Accounts. Client recognizes a debtor may reside in a state with restrictive laws and regulations. Company may forward any of Cli.ent's claims to another collection agency in order to comply with such laws and regulations or to improve the chance of recovery. Such other collection agency shall have the authority to exercise all ordinary and reasonable collection efforts as permitted by law. 6.Credit Reporting. Client agrees each account assigned to Company may be placed with a credit reporting agency by Company for inclusion in the individual credit file and reported as a derogatory item for the times and in the manner allowed under the Federal and applicable State Fair Credit Reporting Acts.Client reserves the right to have Company direct that an item be deleted front a credit file due to the Client's error.Company may,as it determines appropriate in its sole discretion,issue any such corrections or deletions of information reported to credit reporting agencies. 7. Settlement of Assigned Accounts. Except as provided in this Paragraph, Company shall not accept as settlement in full,on any account assigned, any amount less than the full amount as originally assigned by Client without the expressed consent of Client.Company may settle or compromise accounts, with all reductions to be made from monies due Company, without Client consent so long as client receives the amounts due under this Agreement as if the account was paid in full. 8. Reassignment of Accounts. Client may require Company to return a specific account or accounts for which there have not been any monies collected within the seven calendar month period, unless there is a payment plan between the debtor and Company,litigation has commenced by Company, or the Company has obtained a judgment on the account. Client may also require Company to return specific accounts, which Client identifies within one month after assignment was assigned in error,and for which Client has not been paid since assignment. If Client is paid within sixty days of an account cancelled as being assigned due to error, Client shall immediately notify Company of the payment, and within 10 days after receiving such payment,pay Company an amount equal to its share of such monies as if the account had not been cancelled.If Client fails to pay such amount within the 10 day time period, Company may offset such amount from a disbursement to be made to Client for monies collected on other Client assigned accounts. In the event of a cancellation, Company shall issue instructions to have previously reported information deleted by the Consumer Reporting Agencies, and it shall be Client's responsibility to conduct any such further credit reporting. 9. Disbursement of Monies Collected. Company will deposit all payments into a trust account. The Company's payment and Client's payment will be distributed directly from the trust account. Company shall make the payment to Client, after paying Company the reimbursable costs and expenses 2 as provided in this Agreement, for monies collected the previous month. A report shall be given to the Client not later than the 15th of the month following the close of the previous month.All monies due the client shall be paid in full with a remittance statement of each account collected Client recognizes Company is due a commission on any money collected once the account is assigned for collection regardless of payment source or payment location. If Client cancels an account after receiving payment, in addition to Client being obligated to pay Company the full percentage amount due on such account and any other rights of Company,Client shall pay an additional fixed fee of five hundred dollars($500.00),to compensate Company for identifying,tracing, and accounting for the such monies. If Client fails to pay such amount, Company may offset such amount from a disbursement to be made to Client for monies collected on other Client assigned accounts. 10. Client Direct Payments. Client agrees to promptly report all payments, bankmptcy notices, and any and all communications from the debtor or any third party. Client also agrees to forward all payments received by Client("Direct Payment")for any account, which has been assigned to Company, unless otherwise agreed in writing, and direct all communication from debtors to Company. Client shall notify Company the following information for each Direct Payment: A)The amount of the payment; B) The name of the debtor;and,C)The debtor's account number. 11.Interests Assigned In addition to the principal amount of the debt assigned, Client assigns all rights, whether contractual or statutory,relating to the assigned account(s),including without limitation, the right to interest, fees, costs,bad check charges, attorneys' fees,and other financial obligations to the Company. Company shall retain all interest owing after the time of assignment, and all pre-assignment interest, which was not listed in the balance due on the account by the Client at the time of assignment. Pursuant to the assignment, Company shall have the right to commence suit as it determines necessary and appropriate in the collection of the assigned account. 12.Fees and Interests in Monies Collected. For all accounts assigned, Company is assigned 30 percent of all Principal Sums ("Principal Sums" is the dollar amount of the account as assigned by the client, including the interest and other costs as then computed by the Client) collected from whatever source or any items returned as a credited item on accounts referred from this date hereon forward. On accounts where legal action is instituted or it becomes necessary to forward the account to an agency outside the geographic area, Company is assigned 30 percent of all Principal Sums collected. Company recognizes that on occasion Client may have a large balance account that is significantly larger than the normal assignment. In these instances Company agrees to negotiate a lower rate on these accounts on a case by case request and such agreed upon rate shall be in writing(see exhibit A). Client recognizes there is value in determining whether the assigned amount is owed or previously paid prior to assignment. If it is determined the debt is not owed,the Company can provide factual and verifiable information for that determination, and the Client agrees to that determination,the Company shall be entitled to a discovery fee of five percent (5%) of the original amount submitted for collection, and if not so paid, Company may deduct such amount from the monthly disbursement to Client for monies due on other assigned accounts in the next calendar month following Company reporting the determination to Client. The Company's statement to the Client shall be due in full upon receipt.Any statement balance not paid in full within(30)days of the date of such statement shall accrue interest at the compounded rate of one and one half percent(1.5%)per month.In the event the Company 3 files any action or proceeding against the Client for the recovery of any monies due from the Client to the Company pursuant to this Agreement, Client shall pay Company all costs incurred by the Company in prosecuting such action,including,without limitation,reasonable attorneys'fees. The Client's duties and obligations under Paragraphs 9 through and including 12, 14 and 15 of this Agreement shall continue subsequent to termination, for any reason,of this Agreement with respect to payments received upon which the Company remains entitled to receive pursuant to this Agreement. 13. Term of Agreement. This"Agreement"shall remain in full force and effect for one year from this date hereon, and unless terminated in writing by either party on a thirty (30) day notice, shall automatically be renewed from'year to year. Should ether party elect to terminate this agreement, all accounts that remain in collections(payment plan, litigation,and judgment)will remain under the terms of this agreement. Client recognizes Company has costs associated with canceling accounts from credit reporting. 14. Collection Litigation. If the parties agree that litigation should be commenced respecting the collection of any account,Company shall be responsible for all legal fees and costs incurred,except as set forth below. In addition, in the event of such litigation, the percentage of any recovery assigned to Company pursuant to paragraph 12,above,shall be increased to: 40% in cases where a complaint is filed and the matter is resolved prior to the commencement of a trial; 50% in cases where the matter is resolved alter the commencement of trial or where a verdict is entered. In cases where the debtor files a cross complaint, counter claim or other affirmative claim for damages or other relief based on the conduct of Client, Client shall pay all of Company's legal fees and cost incurred relating to the claims or rights asserted in such cross complaint, counter claim or other affirmative claim for damages. Client will be notified of such affirmative claim to make appropriate arrangements before Company undertakes any defense. Client shall be responsible for entering its appearance and defending such affirmative damage claims based on the conduct of Client asserted by a debtor. 15.Indemnification. Client agrees to indemnify,defend,and hold harmless Company,its officers, management,members,employees,and agents from damages,claims,or liability arising out of or related to Client's conduct or any information provided to Company by Client. Client acknowledges that Company shall rely upon the information as provided by Client for accounts assigned pursuant to this Agreement in performing its collection activities,including reporting information to Consumer Reporting Agencies, commencing litigation, and enforcing a judgment and Company is not obligated to independently investigate information provided by Client. Company agrees to indemnify, defend, and hold harmless Client, its officers, management, and employees from damages, claims, liabilities arising solely out of Company's collection activities on an account assigned pursuant to this Agreement. 16.Limitations. Notwithstanding any other provisions of law,all claims,disputes, corrections or other alleged errors by Company concerning the monies disbursed to Client for amounts collected on assigned accounts must be made, and any judicial or non judicial proceeding commenced, within four 4 hundred and eighty-five(485)days of the disbursement having been mailed to Client.Each disbursement to Client shall be deemed a separate and independent potential claim for which the four hundred and eighty-five (485) day period shall separately apply, and such period shall not be extended by any subsequent disbursements. 17. Choice of Law. This Agreement shall be construed and interpreted in accordance with and governed by the laws of the State of California.The Company and the Client hereby expressly agree that any action to interpret,construe,or enforce this Agreement shall be brought in the Superior Court in and for Monterey County,in the State of California. 18.Fees and Costs. If either party resorts to legal action to enforce or interpret any provision of this Agreement, the prevailing party shall be entitled to recover the costs and expenses of the action, including without limitation,reasonable attorneys'fees. 19. Entire Agreement This Agreement represents the entire agreement of the parties and supersedes all other oral or written agreements, understandings, statements, or representations between them regarding the subject matter hereof; except for previous agreed compensation; on previously assigned accounts. Each of the parties hereto have relied solely on their own judgment and knowledge, and been provided the opportunity.to seek'.the advice of their own respective legal counsel in entering into this Agreement. No modification, amendment, or alteration of this Agreement shall be valid unless in writing and signed-by each of the parties hereto. 20. Counterparts. This Agreement may be executed by the parties hereto in duplicate counterparts,each of which shall be deemed an original,when attached together shall form one document:; Signatures on this Agreement May be conununicated by facsimile transmission and shall be binding upon the parties transmitting the same by facsimile transmiss ion.Counterparts with original signatures shall be provided to the other party within fifteen.(15) days of the applicable facsimile transmission, provided,. however, that the failure to provide the original counterpart shall have no effect on the validity or the binding nature of the Agreement. 21. Confrdentialtty. Subject to the Public Records Act,the parties further agree to maintain the confidentiality of any confidential information and/or trade secrets that they may learn about each other throughout the course of this Agreement,including without limitation,the terms of any contracts that the other party may have with any third parties. APPROVED AND ACCEPTED: CREDIT CONSULTING SERVICES,INC. y. °0 Dated: \\f za fi t [print name] [print title] • 5 j � I CITY OFC�CUPERTINO TINO / By: ( vim/ " Dated: /2-g ( ,4-PL LL9©©D b(l2t°cra Pt 8 Actr .-'i [print name] [print title] UU S w i Ce Contacts: David Woo,Director of Finance City of Cupertino 10300 Torre Ave Cupertino,CA 95014 Telephone:408-777-3280 Email:davidw @cupertino.org Rodney Meeks,V.P.Business Development CREDIT CONSULTING SERVICES,INC. 201 John Street,Suite E Salinas,CA 93901 Telephone: 831-424-0606/800-679-6888 Facsimile 831-424-3732 6 �'xHr 13 Cr A CREDIT CONSULTING SERVICES, INC. P.O.Box 5879•201 Yohu Street,Suite E•Salinas,CA 93901 831-424-0606•831-2175-9836•Outside 831:1-800-679-6888 August 22,2011 David Woo Finant'e Director City of Cupertino 10300 Torre Ave Cupertino, A.95014 Dear David; As per the collection:agreement between Credit Consulting Services,Inc.and the City of CupertinO on page three;paragraph twelve"Fees.end Interest on Monies Collected",Credit Consulting Services Inc. agrees to wept a$250,000 outstanding judgment front the City of Cupertino on a contingericy basis of 10 percent. Sincerely, Rodney Meeite. Vice President • Iii