CERTAIN DEFENSES FOR CREDIT CARD DEBT ACTIONS MAY BE AVAILABLE

A credit card company has two causes of action for credit card debt but when credit card agreements are changed due to mergers, etc., certain defenses may be available for certain causes of actions.

Citibank NA v. Geyer, NYLJ 1/17/19, Date filed: 2019-01-14, Court: District Court, Nassau, Judge: Judge Ignatius Muscarella, Case Number: CV-045509-11:

"First cause of action: Breach of Contract --- It is well settled that a "plaintiff establishes a breach of contract action by demonstrating the existence of a contract between the parties, performance by the plaintiff, breach by the defendant and damages resulting from the breach" (National Commerce Exchange of Long Island, Inc., v. Cosmopolitan Coach LTD, 2012 NY Slip Op. 30394 (U).

Here, the only evidence of the terms and conditions of the parties' agreement is premised on plaintiff's Exhibit 3, an agreement which post-dates by several months the last partial payment by the defendant. As the defendant never used the credit card after some unknown modification of the agreement previously in existence so as to establish acceptance of its terms (see Citibank (South Dakota), N.A. v. Brown-Serulovic, 97 AD3d 522, 523-524 [2d Dept 2012]), there exists nothing to establish what the terms of the parties’ agreement was during the period of the defendant’s use of the Sears card and the defendant should not be found to have accepted whatever modification of those terms might exist in this new agreement. Absent proof of same, the court is persuaded by defendant’s argument that plaintiff has failed to establish its prima facie entitlement to a recovery based thereon.

The defendant’s motion to dismiss this cause of action is, accordingly, granted.

Second cause of action: Account Stated — “An account stated is an agreement between parties, based upon their prior transactions, with respect to the correctness of the account items and the specific balance due. Although an account stated may be based on an express agreement between the parties as to the amount due, an agreement may be implied where a defendant retains bills without objecting to them within a reasonable period of time, or makes partial payment on the account. The ‘agreement’ at the core of an account stated is independent of the underlying obligation between the parties.” (Holtzman v. Griffith, 162 AD3d 874, 875-876 [2d Dept 2018][Internal quotes and citations omitted]).

Here, the documentary evidence and credible testimony establishes that during the period from July, 2009 through March, 2011 monthly statements were evidently received by the defendant as she was making regular partial payments thereon2. Moreover, Plaintiff’s Exhibit 3 establishes that at least some payments were being made using the defendant’s personal checking account and that as of the defendant’s most recent partial payment credited on March 9, 2011 the balance due from the defendant was $5,122.38. That amount had increased to $5,459.60 as of the final two monthly statements included in Plaintiff’s Exhibit 3. No objections were made by defendant to plaintiff in response to any of the billings.

Accordingly, plaintiff has established its prima facie entitlement to judgment on its cause of action for an account stated in the sum of $5,459.60. Given the absence of any evidence or testimony on defendant’s behalf, plaintiff is awarded judgment on its second cause of action."