Citibank (south Dakota) v. Perz

• Decision Date: 03 December 2010
• Docket Number: No. L–10–1033.,L–10–1033.
• Citation: 947 N.E.2d 191,191 Ohio App.3d 575
• Parties: CITIBANK (SOUTH DAKOTA), N.A., Appellee,v.PERZ, Appellant.
• Court: Ohio Court of Appeals

191 Ohio App.3d 575

947 N.E.2d 191

2010 -Ohio- 5890

CITIBANK (SOUTH DAKOTA), N.A., Appellee,

v.PERZ, Appellant.

No. L–10–1033.

Court of Appeals of Ohio, Sixth District, Lucas County.

Decided Dec. 3, 2010.

Melissa A. Hager and James Oh, Cleveland, for appellee.Barry E. Savage, Toledo, for appellant.COSME, Judge.

[Ohio App.3d 577] {¶ 1} This is an appeal from a summary judgment in favor of appellee for the full amounts due and owing on two credit-card accounts and against appellant on her counterclaim. The trial court held that appellee's negotiation of two checks for less than the outstanding balances, which were offered by appellant in complete satisfaction of the accounts, did not constitute an accord and satisfaction. For the following reasons, we reverse the judgment of the Toledo Municipal Court.

I. Background

{¶ 2} The relevant facts in this case are undisputed. Appellee, Citibank (South Dakota), N.A., extended two separate credit-card accounts to appellant, Julie Perz, also known as Julie Benoit, who used the extensions of credit to make various purchases. As of May 2004, appellant had a balance of $4,285.63 on one account, which had an account number ending in 2247, and a balance of $9,016.80 on the other account, which had an account number ending in 6898.

{¶ 3} On May 12, 2004, appellant sent a check to appellee in the amount of $1,000 in payment of account number 2247 and a check for $3,000 in payment of account number 6898. Both checks were signed by Sally Perz, appellant's mother, and were restrictively endorsed as follows: “The proceeds of this draft accepted in full settlement of all claims against Julie Benoit on credit card account [followed by account number].”

{¶ 4} Both checks were accompanied by a letter from appellant's counsel, which stated:

{¶ 5} “We represent Julie Benoit who is delinquent on the above account as well as other credit card accounts. Ms. Benoit is a candidate for bankruptcy.

{¶ 6} “In the interests of avoiding bankruptcy, Ms. Benoit has secured a loan from a family member to offer a full and complete settlement of this account for the [enclosed] sum. A check from Sally A. Perz in the [stated] amount * * * is [Ohio App.3d 578] enclosed which contains an endorsement whereby if accepted it will settle any liability Ms. Benoit has on the account in full. The check is stapled to this letter.

{¶ 7} “If you are agreeable to a full and complete settlement of the account as proposed you may negotiate the check and apply it to the account as ‘settlement in full.’ If the settlement is not acceptable, please return the check to the undersigned within fourteen (14) days from the date of this letter and Ms. Benoit will pursue filing bankruptcy.”

{¶ 8} Appellee cashed the checks, applied the amounts to the balance of appellant's accounts, and continued to send monthly statements for the remaining balances. On April 13, 2005, appellee filed a complaint in the Toledo Municipal Court, seeking to recover the remaining balances. Attached to the complaint were two affidavits by Pam Cline, an employee of Citibank's parent corporation, dated September 14, 2004. In each affidavit, Cline identified the respective account and stated, “Exhibit A attached hereto is a hard copy printout of the financial information, including the balance owing” on that account. Attached to Cline's affidavits were several account statements reflecting the last closing dates for which a charge was incurred. On June 14, 2005, appellant filed an answer, which alleged accord and satisfaction as an affirmative defense, and a counterclaim, which alleged that she had settled her accounts with appellee in May 2004, and sought damages for “wrongful filing of the Complaint in this action.”

{¶ 9} On February 15, 2006, appellee filed a motion for summary judgment on the outstanding account balances, arguing that it “did not agree to accept Defendant's [May 2004] payments on either account as settlement in full.” In support of its motion, appellee attached the following documents: (1) the entire account history for each of appellant's credit cards (Exhibits A and B), (2) the affidavits of Pam Cline previously submitted along with the complaint (Exhibits C and D), (3) two documents entitled “Card Agreement,” each containing the provision, “We can accept late or partial payments, as well as payments that reflect ‘paid in full’ or other restrictive endorsements, without losing any of our rights under this Agreement” (Exhibits F and G), and (4) the letters and checks sent by appellant and her counsel on May 12, 2004 (Exhibits H and I). Appellee maintained that the negotiation of appellant's restrictively endorsed checks did not qualify as an accord and satisfaction because of the partial-payment provisions in the card agreements and because there was no good-faith dispute as to the balance of either account.

{¶ 10} Also on February 15, 2006, appellant filed a motion for summary judgment on appellee's complaint, arguing accord and satisfaction. In support, appellant attached her own affidavit, in which she attested to having borrowed $4,000 from her mother in order to make the offers to Citibank in an effort to avoid filing for bankruptcy. She also stated, “In making the offer of settlement I [Ohio App.3d 579] had changed my position in that I had borrowed money, and in reliance upon their acceptance [of the checks], I did not file bankruptcy.”

{¶ 11} The trial court ordered the parties to submit findings of fact and conclusions of law. In her proposed findings, appellant submitted that the card agreements attached to appellee's motion for summary judgment “are not supported by Affidavit” and that the affidavits of Pam Cline do not support any “allegation made in the [plaintiff's] Motion for Summary Judgment other than the balances due on the accounts.” Thus, appellant proposed a finding that the partial-payment provisions cannot be enforced because the card agreements had “not been authenticated by * * * affidavit as being applicable to both accounts.”

{¶ 12} In a decision journalized on January 7, 2010, the trial court consolidated the opposing motions for decision, adopted appellee's findings of fact and conclusions of law, and granted summary judgment in favor of appellee on its complaint and appellant's counterclaim, thus awarding appellee the aggregate account balance of $9,848.13 plus interest. In so doing, the trial court first found that the account statements were sufficient to establish the amounts due on each account, and then proceeded to the issue of accord and satisfaction. The trial court held that appellant's partial payments did not constitute a valid settlement or accord and satisfaction, for three reasons: (1) the partial-payment provision in “the terms and conditions of the original agreements Defendant entered into with Plaintiff * * * clearly states that Plaintiff may accept restrictively endorsed [partial] payments, without satisfying the debt in full,” (2) “[t]here is no evidence of communication between the parties that alludes to a discussed settlement,” and (3) “[t]he letters sent to Plaintiff, accompanied by two restrictively endorsed checks, do not indicate a dispute as to the balance claimed by Plaintiff.”

{¶ 13} Appellant now appeals this judgment, asserting six assignments of error. In order to facilitate a logical analysis, we have elected to discuss the assigned errors in groups based upon the common issues presented by them.

II. Partial–Payment Provision

{¶ 14} In her first two assignments of error, appellant asserts:

{¶ 15} “1. The documents filed in support of Plaintiff's Motion for Summary Judgment do not meet the requirements [of] Rule 56 of the Ohio Rules of Civil Procedure and to grant judgment thereon was in error.

{¶ 16} “2. Plaintiff's Exhibit F and G do not support the granting of a Motion for Summary Judgment.”

{¶ 17} Appellant argues that the two card agreements attached to appellee's motion for summary judgment, which contain the partial-payment clauses, were not authenticated by affidavit and that appellee did not offer any evidence [Ohio App.3d 580] establishing that the terms and conditions of those agreements applied to her accounts or constituted her actual agreement with Citibank. Appellant contends, in particular, that appellee has offered no proof that she “signed any acknowledgment as to the terms and conditions or that the terms and conditions were even sent to [her].”

{¶ 18} Appellee argues that it “presented to the trial court affidavits attesting as to amounts owed on the accounts, copies of billing statements for the accounts * * *, and copies of card agreements governing the accounts.” Appellee maintains that this evidence is sufficient to establish a prima facie case for money owed on a credit-card account and to support a motion for summary judgment. Appellee further contends that appellant's use of the credit cards created a legally binding contract.

{¶ 19} We agree with appellant. The issue here is not whether appellant's use or continued use of the credit cards created a legally binding contract, but whether the card agreements attached to appellee's motion for summary judgment represent that contract. The account statements, as authenticated by the affidavits of Pam Cline, may certainly be sufficient in themselves to establish a prima facie case for money originally owed on the accounts, but appellee's claim for the original amounts was tied to and depended upon a determination that it had not agreed to settle or compromise those accounts. In that regard, appellee is seeking to enforce a term in the card agreements, and it must properly authenticate those documents and establish that they are binding on appellee in order have them considered on a motion for summary judgment.

{¶ 20} In Discover Bank C/O DFS Servs., L.L.C. v. Lammers, 2d Dist. No. 08–CA–85, 2009-Ohio-3516, 2009 WL 2105990, Discover Bank filed a motion for summary judgment on a...