Citibank (South Dakota), N.A. v. Mincks

Decision Date08 June 2004
Docket NumberNo. 25586.,25586.
Citation135 S.W.3d 545
PartiesCITIBANK (SOUTH DAKOTA), N.A., Plaintiff-Appellant, v. Mary J. MINCKS, Defendant-Respondent.
CourtMissouri Court of Appeals

Edward R. Spalty, Karrie J. Clinkinbeard, Kansas City, for appellant.

James V. Nichols, Lamar, for respondent.


Citibank (South Dakota), N.A. ("Citibank") sued defendant Mary Mincks ("Mary") for breach of contract after Mary refused to make any further payments on her Citibank credit card account.1 Mary defended on the ground that: (1) the only unpaid charges on the account related to merchandise which was never delivered by the merchant; and (2) since her Citibank credit card was used to order the merchandise, she was entitled to assert the defense of non-delivery against Citibank in its action to recover the balance due on her credit card account. After a bench trial, judgment was entered in Mary's favor. On appeal, Citibank argues that the trial court's judgment should be reversed because it was not supported by substantial evidence, and it was based on an erroneous application of the provisions of the Truth-in-Lending-Act, 15 U.S.C. 1601, et seq. We affirm.

I. Standard of Review

As this was a court-tried case, our review is governed by Rule 84.13(d) and the principles articulated in Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976).2 We must affirm the trial court's judgment unless it is not supported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Bean v. Bean, 115 S.W.3d 388, 392 (Mo.App.2003). We review the evidence and all reasonable inferences in the light most favorable to the judgment and disregard all contrary evidence and inferences. Ketcherside v. McLane, 118 S.W.3d 631, 634 (Mo.App. 2003). Credibility of the witnesses and the weight to be given to their testimony is for the trial court, which is free to believe none, part, or all of the testimony of any witness. Id. Since neither party requested that the trial court prepare findings of fact, "[a]ll fact issues upon which no specific findings are made shall be considered as having been found in accordance with the result reached." Rule 73.01(c); see also Kleeman v. Kingsley, 88 S.W.3d 521, 522 (Mo.App.2002). Furthermore, we are primarily concerned with the correctness of the trial court's result, not the route taken by the trial court to reach that result. Business Men's Assur. Co. of America v. Graham, 984 S.W.2d 501, 505 (Mo. banc 1999). Therefore, the judgment will be affirmed under any reasonable theory supported by the evidence, even if the reasons advanced by the trial court are wrong or insufficient. Id.; Professional Laundry Management Systems, Inc. v. Aquatic Technologies, Inc., 109 S.W.3d 200, 203 (Mo.App.2003).

II. Factual and Procedural History

The facts in this case are relatively simple and virtually undisputed. The summary set forth below is a synthesis prepared from the pleadings, trial testimony and exhibits.

On September 18, 1999, Mary applied to have a credit card issued to her by Citibank. She filled out a document called a "Citibank Platinum Select Acceptance Form," which appears to be a typical application for personal credit. Nothing on the application indicates that credit was being sought by either a business or by an individual who intended to use the credit card for business purposes. The application listed Mary as the cardholder and showed her home address as the billing location. The form asked for the normal personal information (e.g., mother's maiden name, social security number, income) found in such personal applications. Mary applied for credit for herself, and she requested that her husband, Chuck, also be authorized to use her credit card account. The application contained the familiar exhortation, typically found in consumer credit applications, offering an introductory period of very low interest.3 Such offers tend to encourage consumers to transfer balances from other credit cards to the new account in order to obtain the benefit of a lower rate of interest.

Mary's application was accepted, and Citibank issued a credit card to her with an $8,000 line of credit. On October 26, 1999, Mary transferred the existing balances from two other credit cards, totaling $7,213.50, to her Citibank account.4 There is no indication in the record that these balance transfers were comprised of purchases for anything other than personal, family or household purposes.

Between November 1999 and January 2000, Mary purchased a few additional items with her credit card and made several payments on her account. Once again, nothing in the record demonstrates that these purchases were made for anything other than personal, family or household purposes. On January 27, 2000, Mary made a large payment on her account that reduced the outstanding balance to approximately $20.00.

In February 2000, Chuck received a solicitation to order merchandise from Purchase Plus Buyers Group ("PPBG"). PPBG sold products like mailing cards, telephone cards and other similar items which could be used to promote a home business. After reviewing the solicitation, Chuck decided to order some high-definition, high-color postcards that he could use to contact potential customers for a home business that he had started about three months earlier. On February 24, 2000, Chuck placed an order with PPBG for 4,000 postcards. The order form was sent by fax from Lamar, Missouri, to PPBG's office in Westerville, Ohio. Chuck used Mary's Citibank credit card to pay the $7,600 purchase price for the postcards. The charge for this purchase first appeared on Mary's Citibank statement in March 2000.

Four weeks after placing the order, Chuck contacted PPBG by telephone to find out why he had not yet received the postcards. He was told that the merchandise was on backorder and would not be available for another month. Having no reason to doubt that explanation at the time, he waited another month. When he still had not received the postcards, he contacted PPBG again by telephone. The persons with whom he spoke were very positive and continued to assure him that he would receive the postcards in time. Thereafter, he called PPBG "innumerable times" by telephone, and PPBG personnel kept reiterating that he would ultimately receive the postcards he ordered. In mid-May 2000, Chuck first learned from PPBG that the type of postcards he ordered had been discontinued in December 1999, even though the product continued to be offered for sale until April 2000. On May 18, 2000, he faxed a letter to PPBG requesting that he be given some other type of product that he could use since the postcards he wanted were no longer available. He received no response. He faxed the same letter to PPBG's executive committee on July 13, 2000, and again received no response.

Around August 1, 2000, Chuck decided he was never going to receive the postcards he ordered from PPBG. On August 4, 2000, he faxed a written demand for a full refund to PPBG because the company had failed to deliver either the postcards or a satisfactory alternative product. He sent this fax because he still believed he could get a refund for the undelivered merchandise. This belief changed on September 1, 2000, when he received a fax from PPBG stating the company had ceased operations and permanently closed its doors that day. Chuck knew then he would not be able to get a refund from PPBG.

On September 28, 2000, the Mincks sent a letter to Citibank. In sum, the letter provided Citibank with the following information: (1) Chuck's $7,600 postcard order from PPBG had never been delivered; (2) the charge for this order first appeared on Mary's March 2000 statement; (3) the facts showing that Chuck had made a good faith effort to resolve the issue with PPBG were recounted with considerable specificity and detail; (4) PPBG committed a breach of contract and fraud by failing to deliver the ordered merchandise and by continuing to sell a discontinued product; and (5) the Mincks were invoking their rights under Regulation Z of the federal Truth-in-Lending-Act to have their account credited in the amount of $7,600 and to have this sum charged back to PPBG.5

On October 9, 2000, Citibank responded in a letter sent to Mary. Citibank took the position that it was not able to assist the Mincks because it had not received their letter "within 60 days of the disputed charge." Citibank advised the Mincks to pursue the matter with the merchant or through some alternative means available to them.

After receiving the October 9, 2000, letter from Citibank, the Mincks continued to use Mary's credit card. They made a few additional purchases with the card, and they continued to make payments on the account. That changed in February 2002, when the Mincks stopped making any payments on the Citibank account. The outstanding account balance at this time was comprised solely of the remaining amount due for the undelivered postcards ordered from PPBG, plus accrued interest and late charges.6 Citibank continued to add interest charges, over credit limit fees, and late fees to Mary's credit card account until July 2002. As of that date, the outstanding account balance was $9,048.49.

On October 7, 2002, Citibank sued Mary for breach of contract and sought to recover the $9,048.49 then due, accrued interest at the rate of 24.99% per annum and a 15% attorney fee. Insofar as pertinent to the issues here, the petition alleged that: (1) Citibank had issued a credit card to Mary; (2) by acceptance and use of the credit card, Mary had agreed to make the monthly payments described in the Citibank Card Agreement attached to the petition; (3) Citibank had advanced credit to Mary, through the use of the credit card, to certain persons or firms shown on her account statements; (4) Citibank had made demand on Mary to pay the amount due on her account, but she refused to do so...

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