Capital One Bank v. Hardin

• Decision Date: 13 September 2005
• Docket Number: No. WD 64440.,WD 64440.
• Citation: 178 S.W.3d 565
• Parties: CAPITAL ONE BANK, Respondent, v. Denny R. HARDIN, Appellant.
• Court: Missouri Supreme Court

178 S.W.3d 565

CAPITAL ONE BANK, Respondent, v. Denny R. HARDIN, Appellant.

No. WD 64440.

Missouri Court of Appeals, Western District.

September 13, 2005.

Motion for Rehearing and/or Transfer to Supreme Court Denied November 1, 2005.

Application for Transfer Denied December 20, 2005.

COPYRIGHT MATERIAL OMITTED

Denny R. Hardin, Kansas City, MO, pro se.

James M. McNeile, Leawood, KS, for respondent.

Before JOSEPH M. ELLIS, Presiding Judge, PAUL M. SPINDEN, Judge and VICTOR C. HOWARD, Judge.

JOSEPH M. ELLIS, Judge.

Denny R. Hardin ("Hardin") appeals an August 3, 2004 judgment of the Circuit Court of Jackson County against Hardin in favor of Capital One Bank ("Capital One"). The judgment is affirmed.

Hardin's 65-page pro se brief contains six points relied on. Since at least one of them challenges the sufficiency of the evidence in support of the judgment, "a detailed rendition of the evidence presented at trial is necessary. In accordance with our standard of review, the factual summary is presented in the light most favorable to [Capital One], the prevailing party at trial." Vintila v. Drassen, 52 S.W.3d 28, 33 (Mo.App. S.D.2001).

Capital One filed suit against Hardin on November 12, 2003, seeking recovery on a breach of contract theory for purchases and cash advances made on a credit card Capital One had issued to Hardin, as well as the associated finance charges, late payment fees, and over-limit fees he had failed to pay. Capital One's petition alleged that under the terms of the credit card agreement between Hardin and Capital One, Hardin agreed to pay Capital One for all purchases made, services rendered, and cash advanced to or for Hardin (or any other person authorized by him to use the credit card) to obtain goods, services, and credit advances. The petition further alleged that while Capital One had paid the various merchants and banks for Hardin's purchases and cash advances on his behalf, Hardin had breached the agreement by failing to timely repay Capital One for those expenditures.

Attached to the petition was an October 9, 2003 affidavit executed by Miguelle Everett, a records custodian for Capital One. According to the affidavit, after all credits and set-offs to which Hardin was entitled, the principal balance due Capital One from Hardin as of May 15, 2003 was $1,062.59. Among other things, the affidavit also stated that interest was due on this principal balance at the rate of 25.9% per annum from May 15, 2003; that this balance was not subject to further set-off, credit or adjustment for billing errors; and that upon demand by Capital One, Hardin had failed to pay the balance due without justification or excuse. Everett's affidavit further stated that under the terms of the credit card agreement, Capital One was entitled to recover reasonable attorney's fees in the amount of $159.38.

After being served with a summons and Capital One's petition by private process server on or about January 6, 2004, on January 20, 2004, Hardin entered his appearance as counsel pro se and filed his answer. The same day, he filed a counterclaim, which he styled as "Defendant's Petition for Damages." The counterclaim averred that Capital One was attempting, by use of fraud, misrepresentation, and deceit, to extort money from Hardin that he did not owe Capital One. After receiving a timely-requested extension of time to respond to this pleading, Capital One filed a written motion with suggestions in support to dismiss Hardin's counterclaim on March 19, 2004, in which Capital One averred that the counterclaim failed to state a claim upon which relief could be granted to Hardin due to his failure to plead the circumstances constituting the alleged fraud with particularity as required by Rule 55.15. After considering Hardin's March 22, 2004 opposition to Capital One's motion, the trial court granted Capital One's motion to dismiss Hardin's counterclaim on April 16, 2004. On the same day, the trial court also overruled Hardin's "Motion for Summary Judgement Hearing Notwithstanding Jury Verdict," which raised essentially the same issues as Hardin's counterclaim except that its averments of fraud were based not only on Capital One's petition and supporting affidavit, but the documents Capital One had subsequently provided Hardin pursuant to his discovery requests.

The case was eventually set for trial by jury on July 19, 2004. On the morning of trial, Capital One filed a motion in limine which requested the exclusion of "any testimony or evidence [at trial] regarding all affirmative defenses and [Hardin's] previously stricken counterclaim." After a long colloquy between Hardin and the trial judge during which the trial court indicated that it was going to grant the motion and explained the specific types of evidence Hardin would be precluded from offering to the jury during trial, Hardin opted to waive his right to a jury trial. There being no objection by Capital One, a bench trial was held instead.

As he explained to the trial court before any evidence was presented, Hardin's defense theory was three-fold: (1) that he "never signed" a Card Agreement obligating him to repay Capital One for the charges and cash advances he had made on the credit card; (2) that all of the disputed amounts "were fraudulently put on the card [by Capital One] after [he] asked for a cancellation"; and (3) that under Article VI, Section 23 of the Missouri Constitution, "a corporation can't sue somebody when they don't pay their bills."

According to the transcript,¹ Capital One called only one witness at trial, a legal recovery manager for Capital One by the name of Richard Napolitano. Napolitano testified extensively concerning six exhibits, all of which had been produced to Hardin during discovery. They were: a copy of the original credit card solicitation mailed to Hardin in late August 2000 or early September 2000 (Exhibit 1); a copy of the Acceptance Certificate/Application Hardin signed on September 15, 2000 and mailed to Capital One (Exhibit 2); a copy of a Customer Agreement dated 2002, which contained the contract terms and conditions associated with Hardin's credit card (Exhibit 3); a copy of the Billing Rights Summary associated with Hardin's credit card account (Exhibit 4); a copy of all of the credit card billing statements sent to Hardin by Capital One over the active history of his account, which was the period from September 26, 2000 through May 14, 2002 (Exhibit 5); and a copy of a Control System History Report which identified various processes that occurred over the history of Hardin's account, including the results of telephone conversations between Hardin and Capital One's customer service representatives (Exhibit 6).

Hardin did not object to the admission of Exhibits 1, 2, 4, 5, or 6 as business records of Capital One. However, he did object to the admission of Exhibit 3 on the ground of relevance, arguing that it was dated some two years after Capital One issued his credit card. The trial court sustained the objection, noting that Capital One was free to attempt to lay a proper foundation for its admission. Shortly thereafter, Napolitano testified that even though Exhibit 3 was dated 2002, "with respect to the terms and conditions and with respect to usage of the card, interest rates, interest calculation and default, et cetera," it was "virtually identical ... to the account agreement" in effect in 2000, when Hardin opened his credit card account. The only difference between the two, Napolitano testified, was the addition of an arbitration clause in October 2001, which was not implicated in this case. Hardin renewed his objection, arguing that there had been no testimony that Capital One ever provided him with a copy of either the 2000 or 2002 Customer Agreements as part of the documents he received when he opened his credit card account with Capital One. The trial court then stated that it would defer ruling on Hardin's renewed objection until it heard further testimony on that issue. Napolitano proceeded to testify that throughout the twenty-four years he had been employed by Capital One and its predecessors, it had always been company policy to enclose the Customer Agreement in the same envelope containing the credit cards themselves, and that "a copy of the cardholder agreement is sent to every person that is approved for a credit card." This time, Hardin objected that since Napolitano did not testify that he personally mailed Hardin a copy of the 2000 or 2002 Customer Agreements, Napolitano's testimony was "hearsay testimony on what other" Capital One employees might have done, noting that he (Hardin) denied ever having received a Customer Agreement of any kind. Hardin's hearsay objection was overruled and Exhibit 3 was admitted into evidence.

Napolitano testified about Capital One's policies on credit limits, finance charges, monthly membership fees, cash advance fees, late payment fees, over-limit fees, returned check fees, account cancellation and default, as well as Capital One's right to recover reasonable attorney's fees and prejudgment interest in the event of default, all of which were detailed in the Customer Agreement. He testified that Hardin made his last payment to Capital One on October 15, 2002, after which the remaining balance on his credit card account was $581.05, which was $81.05 over his $500 credit limit. Napolitano stated that due to accumulated finance charges (at the rate of 25.9% per annum applied to defaulted accounts such as Hardin's) as well as late payment and over-limit fees, which Hardin repeatedly advised Capital One he would refuse to pay but were nevertheless authorized under the terms of the Customer Agreement, this balance had increased to $1,062.59 as of May 15, 2003.

Hardin's billing records demonstrated that several of the over-limit and late payment fees he was charged by Capital One over the history of his account were later credited back to him prior...