Asset Acceptance LLC v. Stocks

Decision Date28 April 2016
Docket NumberNo. 20140898–CA.,20140898–CA.
Citation376 P.3d 322,2016 UT App 84
PartiesASSET ACCEPTANCE LLC, Appellee, v. Jay R. STOCKS, Appellant.
CourtUtah Court of Appeals

Marshall Thompson, Salt Lake City, for Appellant.

Spencer B. Lythgoe, for Appellee.

Judge STEPHEN L. ROTH authored this Opinion, in which Judge KATE A. TOOMEY concurred. Senior Judge RUSSELL W. BENCH dissented, with opinion.1


ROTH, Judge:

¶ 1 Jay R. Stocks appeals the district court's denial of his motion to set aside a default judgment under rule 60(b)(1) of the Utah Rules of Civil Procedure. Stocks's proposed defense below was that the four-year statute of limitations for actions on an “open account” barred any claim against him for the unpaid balance on his credit card account. See Utah Code Ann. § 78B–2–307(1)(c) (LexisNexis 2012). The district court ruled, however, that the six-year statute of limitations for a “liability founded upon an instrument in writing” applied and that the action was therefore timely. See id. § 78B–2–309(2). Because Stocks's only claimed defense was that the suit was time-barred by the statute of limitations, the court declined to set aside the judgment against him. Stocks argues on appeal that the four-year statute of limitations applies to credit cards because credit card accounts are open store accounts and not liabilities founded on instruments in writing. See id. §§ 78B–2–307, –309. We do not reach that question but affirm the district court on the alternative basis that Stocks failed to demonstrate either mistake or excusable neglect sufficient to warrant setting aside the judgment under rule 60(b). See Utah R. Civ. P. 60(b).


¶ 2 Although the date is not apparent from the record, Stocks at some point entered into an agreement with Citibank for a credit card. Stocks used the credit card to make various purchases but eventually failed to make payments and defaulted on the account, leaving an unpaid balance of approximately $13,000. Citibank assigned Stocks's debt to Asset Acceptance for collection purposes.

¶ 3 Asset Acceptance filed a collection action and served Stocks with the complaint on February 20, 2014. Stocks, acting pro se, filed an answer on March 7, 2014. In his answer Stocks asserted an affirmative defense that because there had been no activity on the account since 2007, Asset Acceptance's claim against him was barred by the four-year statute of limitations set out in Utah Code section 78B–2–307.

¶ 4 After receiving Stocks's answer, Asset Acceptance served Stocks with its first set of discovery requests, which included both a request for production of documents and requests for admission. Asset Acceptance's discovery request contained the following notice, entirely in bold print, on the first page immediately below the caption:


This Discovery Set contains Requests for Admission in addition [to] Request [s] for Production. Under Rule 36 of the Utah Rules of Civil Procedure the Requests for Admission shall be deemed admitted unless you respond to the Requests within 28 days after service of the Requests or within such shorter or longer time as the court may allow. Be aware that Plaintiff may move to have the Court enter judgment against you if certain matters in this action are deemed admitted based on your failure to respond timely.

(Emphasis in original.) In addition to this notice on the first page, the third page also contained a notice entirely in bold print that immediately preceded the requests for admission: “The following requests for admission will be deemed admitted if not responded to within twenty-eight (28) days after service.” Stocks did not respond.

¶ 5 On May 14, 2014, Asset Acceptance filed a motion for summary judgment. The motion contained the following notice:

Defendant is on notice that failure to respond to this motion within ten (10) days of the date of mailing may result in the Court granting the motion and/or entering a judgment. Defendant['s] Answer filed in this matter is insufficient as a response to this motion.

Stocks again failed to respond. Asset Acceptance submitted the motion for summary judgment to the district court for decision on June 19, 2014. The court granted the motion on June 20, 2014, noting, “No opposition to the Motion has been filed and the time to do so has now passed.” That same day, the district court signed a judgment in favor of Asset Acceptance and sent notice of the judgment to Stocks.

¶ 6 Approximately one month later, Stocks filed a pro se motion to set aside the judgment pursuant to rule 60(b) of the Utah Rules of Civil Procedure and requested a hearing. See Utah R. Civ. P. 60(b). In his motion, Stocks stated, “I did not answer the summons and complaint in the lawsuit because: (1) I believed that the response given to the original complaint was sufficient and was waiting for my day in court. (2) I believed the defense of statute of limitation had been raised and no other actions nor further filings were needed on my behalf.”2 Stocks again asserted that the action was time-barred because under Utah Code section 78B–2–307 a four-year statute of limitations for open accounts applied to credit cards. In its memorandum in opposition to Stocks's motion, Asset Acceptance argued that Stocks had not only failed to establish a valid basis for relief under rule 60(b) but had “consciously chose [n] to disregard the warnings and not respond to Discovery or the Motion for Summary Judgment.” Asset Acceptance argues that such actions demonstrated “a clear lack of diligence” and that Stocks's “willful disregard [does] not even qualify as neglect” under rule 60(b). See id. R. 60(b)(1). Asset Acceptance further argued that a six-year statute of limitations applied to its claim and not, as Stocks asserts, a four-year statute of limitations. See Utah Code Ann. §§ 78B–2–307, –309 (LexisNexis 2012).

¶ 7 At the August 26, 2014 hearing, Stocks, appearing pro se, explained,

I didn't respond [because] ... I thought that it was a time-barred case. And then pursuant to Rule 60, I made a mistake[;] ... I didn't realize that I had to respond to each and every claim that they had made, and I thought the initial response that it said it was a time-barred statute was sufficient.

Stocks further explained that he was “surprised” when Asset Acceptance “got a summary judgment” against him. Stocks argued that Asset Acceptance's claim should fail because it was barred by the four-year statute of limitations. In response, Asset Acceptance argued that “there's [no] basis for setting aside the judgment” because “there was no response [from Stocks] to any of the subsequent pleadings to the summons complaint” and that “the judgment should ... remain in place” because the six-year statute of limitations for instruments founded on writings applies to credit cards. The district court denied Stocks's motion. In doing so the court stated,

I could set aside the judgment and ... then consider a motion for summary judgment on the grounds that it's a six-year statute [of limitations] that applies, or I could determine that there's really no point in granting a motion to set aside because a six-year statute is what applies. And I do believe that a six-year statute is what applies in this situation, so I don't see what's the point of going a longer path of setting aside, then hearing another motion for summary judgment. So I'm denying your motion to set aside.

Stocks now appeals.


¶ 8 “A trial court has discretion in determining whether a movant has shown [Rule 60(b) grounds], and this Court will reverse the trial court's ruling only when there has been an abuse of discretion.” Lange v. Eby, 2006 UT App 118, ¶ 6, 133 P.3d 451 (alteration in original) (citation and internal quotation marks omitted); see also Jones v. Layton/Okland, 2009 UT 39, ¶ 10, 214 P.3d 859 (We review a district court's denial of a rule 60(b) motion for relief from judgment for an abuse of discretion.”).

¶ 9 In denying Stocks's rule 60(b) motion, the district court stated that it had read all documents related to this matter and had found that section 78B–2–309 of the Utah Code “is the applicable statute of limitations in this case, as the account in question is based upon instruments in writing.” The court did not further explain the basis for its decision. Stocks seeks to challenge the court's denial of his motion to set aside the judgment “based on the purely legal determination that a six-year statute of limitations—not a four-year statute of limitations—applies to credit cards under Utah law.”

¶ 10 As both parties agree, the question of which limitations period applies to actions on credit card accounts is an issue of first impression in Utah. Stocks argues that the four-year period applicable to “open store account [s] for [the purchase of] any good, wares, or merchandise” and to “open account [s] for work, labor or services rendered, or materials furnished,” see Utah Code Ann. § 78B–2–307 (LexisNexis 2012), is the correct one; Asset Acceptance contends that it should be the six-year period applicable to “any contract, obligation, or liability founded upon an instrument in writing,” see id. § 78B–2–309. In other jurisdictions where a similar issue has been addressed, the results have been mixed and often involve statutory language that differs from our own in ways that may or may not be significant.3 And the question presented here is an important one that deserves attention, whether judicial or legislative, given the universality of credit cards in our society and the number of collection cases involving credit card debt that make their way into our courts. But precisely because the issue is important and may have widespread impact, we decline to attempt to resolve an issue of first impression in a case with the sort of procedural deficits this one contains. Cf. United States v. Monroe, 866 F.2d 1357, 1367 (11th Cir.1989) (declining to address an issue of first impression until “a better...

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    ...of the Utah Rules of Civil Procedure provides a mechanism for a party to obtain relief from a final order or judgment. Asset Acceptance LLC v. Stocks , 2016 UT App 84, ¶ 13, 376 P.3d 322. "[A] movant is entitled to have a default judgment set aside under 60(b) if (1) the motion is timely; (......
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    ...Appellants assumed the risk of missing critical court documents and having default judgment entered against them. See Asset Acceptance LLC v. Stocks , 2016 UT App 84, ¶ 20, 376 P.3d 322 ("[A] mistake cannot be deemed an innocent error ... where it involves hewing to a course of action in di......
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