Citibank South Dakota NA v. Machleid

• Decision Date: 08 February 2010
• Docket Number: 63409-7-I
• Court: Washington Court of Appeals
• Parties: CITIBANK SOUTH DAKOTA NA, Respondent, v. ANDREW D. MACHLEID, Appellant.

CITIBANK SOUTH DAKOTA NA, Respondent, v. ANDREW D. MACHLEID, Appellant.

No. 63409-7-I

Court of Appeals of Washington

February 8, 2010

UNPUBLISHED OPINION

Dwyer J.

Andrew Machleid appeals from an order granting summary judgment in favor of Citibank South Dakota NA, which had sued Machleid to collect an outstanding debt. We affirm.

I

In June 2004, Machleid applied for a Citibank credit account to obtain Citibank's promotional rate of zero percent interest for 12 months on balance transfers. Machleid transferred the balances of two credit cards, together totaling $8,000, into his Citibank account. Upon establishing his account in June 2004, Machleid received an initial card agreement, which contained a provision allowing Citibank to unilaterally amend the card agreement. Citibank sent Machleid monthly billing statements, each of which indicated that it concerned Machleid's "Citi Platinum Select Card" account. Machleid was sent an amended card agreement as an attachment to his September 2004 billing statement.

For almost a year, Machleid made monthly minimum payments on the account. However, in June 2005, Machleid did not make a payment. As a result of this default, the interest rate charged on the outstanding balance increased from the promotional interest rate of zero percent to an annual percentage rate ranging, over the next two years, from 29.99 percent to 32.24 percent. By September 2007, due to numerous late fees and finance charges, Machleid's account was outstanding for $13,169.81.

Citibank sued Machleid seeking to collect the debt. Citibank then moved for summary judgment. In support of its summary judgment motion, Citibank provided: (1) an affidavit from Leola Phenix, an attorney management specialist for Citicorp Credit Services, which is Citigroup's servicing company (2) all of Machleid's billing statements from June 2004 through September 2007; and (3) a copy of Citibank's amended card agreement. Neither the initial card agreement in effect in June 2004 nor Machleid's credit card application was submitted to the trial court. Machleid responded with a cross-motion to dismiss or for summary judgment. Machleid submitted his own declaration, in which he stated that he had noticed in June 2005 that his interest rate had changed, that he then "contacted Citibank and told them this was an error," and that he "repeatedly communicated [with Citibank,] including a letter I sent to Citibank." The trial court denied both parties' motions without prejudice.

In February 2009, Citibank moved for summary judgment a second time, submitting an affidavit from Shauna Houghton, a different Citicorp Credit Services employee. The trial court granted summary judgment to Citibank, reserving the issue of an award of attorney fees. When Citibank later moved for such an award, Machleid responded that attorney fees should not be awarded both because the amended card agreement was inadmissible given that it was not the original contract and because Houghton's declaration was inadmissible given that it contained hearsay. This was the first time that Machleid raised these evidentiary challenges in the trial court.

Machleid timely appealed from the trial court's order granting summary judgment in favor of Citibank, but he did not appeal from the court's order awarding attorney fees to Citibank.

II

We review de novo a trial court's order granting summary judgment. Estate of Haselwood v. Bremerton Ice Arena Inc., 166 Wn.2d 489, 497, 210 P.3d 308 (2009). Summary judgment is appropriate "if the pleadings, depositions answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56(c). In determining whether a genuine issue of material fact exists, we "must view all facts and reasonable inferences in the light most favorable to the nonmoving party." VersusLaw, Inc. v. Stoel Rives, LLP, 127 Wn.App. 309, 320, 111 P.3d 866 (2005) (citing City of Lakewood v. Pierce County, 144 Wn.2d 118, 125, 30 P.3d 446 (2001)).

III

Machleid contends that summary judgment was improperly granted because a genuine issue of material fact exists as to whether Machleid agreed to the terms of Citibank's amended card agreement. We disagree.

To establish a breach of contract, the plaintiff must show that a valid contract between the parties existed. Myers v. Dep't of Social & Health Servs., 152 Wn.App. 823, 827-28, 218 P.3d 241 (2009). In order for a valid contract to be formed, there must be an objective manifestation of mutual assent. Keystone Land & Dev. Co. v. Xerox Corp., 152 Wn.2d 171, 177, 94 P.3d 945 (2004). Whether mutual assent occurred is normally a question of fact. Discover Bank v. Ray, 139 Wn.App. 723, 726, 162 P.3d 1131 (2007). "But this determination of fact may be determined as a matter of law where reasonable minds could not differ." Ray, 139 Wn.App. at 726.

The offeror is the master of the offer and may propose acceptance by conduct. M.A. Mortenson Co. v. Timberline Software Corp., 140 Wn.2d 568, 590, 998 P.2d 305 (2000). The terms may then be accepted by performing those acts proposed by the offeror. Ray, 139 Wn.App. at 727. In Ray, the court held that Ray accepted the terms of Discover Bank's credit card agreement by virtue of his conduct because the agreement clearly provided that use of the credit card constituted acceptance of the agreement's terms and Ray had used the credit card for several years. 139 Wn.App. at 727.

Machleid asserts that Citibank did not prove the terms of their contract because it did not provide the court with a signed copy of the original contract.^[1]But Citibank is not required to provide the initial agreement or the application that Machleid signed. Rather, Citibank must show only that Machleid was bound by the terms of the amended card agreement (which was submitted as evidence) because he assented to that agreement. Citibank met its burden by proving (1) that when Machleid first obtained his credit account he received a card agreement, which allowed Citibank to unilaterally amend the contract; (2) that, in September 2004, Machleid received the amended card agreement, which states that the card holder accepts the terms if he or she does not object in writing within 25 days; and (3) that Machleid did not object in writing to the terms of the amended agreement. There is no dispute as to these facts. Thus, Citibank established that Machleid accepted the terms of the amended agreement, which was in effect when he defaulted on his payments.

IV

Machleid also argues that Citibank's amended card agreement is not enforceable because it violates Washington's statute of frauds by not complying with the writing requirements of either RCW 19.36.010 or RCW 19.36.110. We disagree.

RCW 19.36.010 requires, among other things, that any agreement, contract, or promise "that by its terms is not to be performed in one year from the making thereof" or that is a "special promise to answer for the debt, default, or misdoings of another person" be in writing and signed by the party to be charged, or else the agreement is void. RCW 19.36.110 provides that:

A credit agreement^[2] is not enforceable against the creditor unless the agreement is in writing and signed by the creditor. . . . Partial performance of a credit agreement does not remove the agreement from the operation of this section.

Machleid first contends that the card agreement is void without his signature because it is a "promise to answer for the debt, default, or misdoings of another person." RCW 19.36.010. However, this provision of the statute is inapplicable to the agreement between Machleid and Citibank because Machleid was agreeing to answer for his own personal debt, not for the debt of another.

Machleid also contends that RCW 19.36.110 requires the credit agreement between Citibank and Machleid be written and signed. However, credit card agreements and extensions of credit for personal, family, or household purposes are explicitly exempted from any signature requirements by RCW 19.36.120, which provides that:

RCW 19.36.100 through 19.36.140 and 19.36.900 shall not apply to: (1) A promise, agreement, undertaking, document, or commitment relating to a credit card or charge card; or (2) a loan of money or extension of credit to a natural person that is primarily for personal, family, or household purposes and not primarily for investment, business, agricultural, or commercial purposes.

Machleid asserts that RCW 19.36.120 does not apply to his agreement with Citibank because Citibank has not shown that he obtained either a credit card or a credit account for "personal use." However, the record—particularly the billing statements—reveals that Machleid had a credit card account. RCW 19.36.120 exempts both agreements for a credit card and agreements to extend credit for personal use. Therefore, Citibank was not required to prove that Machleid used the extension of credit for personal use. The agreement between Citibank and Machleid is enforceable without a signature pursuant to RCW 19.36.120.

V

Machleid next contends that summary judgment was improperly granted because a genuine issue of material fact exists as to whether Citibank's card agreement violated the Truth in Lending Act (TILA).^[3] We disagree.

Where the moving party has met its burden pursuant to CR 56, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts . . [T]he nonmoving party must come forward with 'specific facts showing that there is a genuine issue for trial.'" Matsushita Elec. Indus. Co. v Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348,...