Portfolio Recovery Assocs., LLC v. Sanders

• Citation: 462 P.3d 263,366 Or. 355
• Decision Date: 23 April 2020
• Docket Number: S066456,SC S066455 (Control)
• Parties: PORTFOLIO RECOVERY ASSOCIATES, LLC, Respondent on Review, v. Jason SANDERS, Petitioner on Review. Portfolio Recovery Associates, LLC, Petitioner on Review, v. Jason Sanders, Respondent on Review.
• Court: Supreme Court of Oregon

366 Or. 355

462 P.3d 263

PORTFOLIO RECOVERY ASSOCIATES, LLC, Respondent on Review,

v.Jason SANDERS, Petitioner on Review.

Portfolio Recovery Associates, LLC, Petitioner on Review,

v.Jason Sanders, Respondent on Review.

SC S066455 (Control)

S066456

Supreme Court of Oregon, En Banc.

Argued and submitted September 19, 2019.

April 23, 2020

Tomio Buck Narita, Simmonds & Narita LLP, San Francisco, California, argued the cause for the petitioner on review Portfolio Recovery Associates, LLC. Jeffrey A. Topor filed the briefs for petitioner on review Portfolio Recovery Associates and the brief for respondent on review Portfolio Recovery Associates. Also on the briefs was Julie A Smith, Cosgrave Vergeer Kester, LLP, Portland.

Bret A. Knewtson, Law Office of Bret A. Knewtson, Hillsboro, argued the cause and filed the brief for respondent on review Jason Sanders, and filed the briefs for petitioner on review Jason Sanders.

Nadia H. Dahab, Stoll Stoll Berne Lokting Shlachter PC, Portland, filed the brief on behalf of amicus curiae Oregon Trial Lawyers Association.

FLYNN, J.

This case arises out of Portfolio Recovery's action to recover a credit card debt from Sanders under a common-law claim for an "account stated," which we have described as " ‘an agreement between persons who have had previous transactions of a monetary character fixing the amount due in respect to such transactions and promising payment[.]’ " Sunshine Dairy v. Jolly Joan , 234 Or. 84, 85, 380 P.2d 637 (1963) (quoting Steinmetz v. Grennon , 106 Or. 625, 634, 212 P. 532 (1923) ). The parties filed competing motions for summary judgment in the trial court—Portfolio contending that it was entitled to summary judgment on the merits of its account-stated claim and Sanders contending that he was entitled to summary judgment on his affirmative defense that the claim is governed by, and barred by, the statute of limitations of Virginia, a state with connections to the underlying credit card agreement. The Court of Appeals held that neither party was entitled to summary judgment, and both parties sought review.

The case presents two distinct issues: first, whether an account-stated claim is established as a matter of law when a credit card customer fails to object to the amount listed as the "new balance" on a credit card statement and, second, how Oregon's choice-of-law principles resolve a conflict between competing state statutes of limitations when the relevant substantive law of the two states is the same. We agree with the Court of Appeals that neither party is entitled to prevail on summary judgment.

I. BACKGROUND

In reviewing the parties’ competing motions for summary judgment, we view the evidence for each motion "and all reasonable inferences that may be drawn from the evidence in the light most favorable" to the party opposing the motion to determine whether the moving party has demonstrated that "it is entitled to judgment as a matter of law." TriMet v. Amalgamated Transit Union Local 757 , 362 Or. 484, 491, 412 P.3d 162 (2018). We describe the pertinent facts in light of that standard.

Portfolio brought the present action after acquiring the right to collect Sanders’ credit card debt from Capital One Bank (USA), N.A., with which Sanders had entered into a credit card agreement. Pursuant to the terms of that agreement, Capital One sent Sanders monthly statements showing his balance, which included fees and interest charged on previous balances. In late 2009, Capital One suspended Sanders’ use of the account because he had missed several monthly payments, but it continued to send monthly statements reflecting a balance that rose each month due to the addition of interest and fees.

In March 2010, the statement that Capital One sent to Sanders advised that his account was "now 7 payments past due"; that his "new balance," including accrued interest and late fees, was $1,494.85; and that he would be contacted soon "to discuss options for resolving [his] debt." The statement also advised that the amount listed as "due" was not necessarily the "payoff amount" for various reasons, including that charges might be added or that "the amount you owe may differ if you've entered into a separate payment arrangement." Sanders did not object to Capital One's statement of the balance due on the account, but he also made no payments toward that balance.

After March 2010, Capital One continued to send Sanders statements, although no longer on a monthly basis. The record includes a statement from August 2011 listing a "new balance" of $1,918.60, which included interest charges for the year to date of just over $222. Eventually, Capital One assigned its rights in the debt to Portfolio in 2013. At that time, Capital One calculated the balance of Sanders’ account as $2,039.21.

Although the credit card statements in the record were addressed to Sanders at locations in Washington and Utah, he lived in Oregon in 2014—when Portfolio filed the present action in Multnomah County Circuit Court. Portfolio's complaint asserted that it was the assignee of Capital One's claim against Sanders for "account stated."¹

It alleged that Sanders became obligated to pay $1,494.85 (the amount set out as the "new balance" in the March 2010 credit card statement) because, "[b]y failing to object or otherwise dispute" the credit card statement, Sanders "impliedly agreed to pay the stated balance[.]" When Portfolio moved for summary judgment, it argued that the "new balance" set out in the March 2010 credit card statement was a "final accounting" of Sanders’ debt and that Sanders’ admitted failure to object before the lawsuit was filed established—as a matter of law—that Sanders impliedly promised to pay that amount. On those facts, Portfolio contended, Sanders became liable under the common-law doctrine of "account stated."

Sanders responded with a pleading that combined his opposition to Portfolio's motion and his own cross-motion for summary judgment. In opposing Portfolio's motion, Sanders argued that the record permitted a reasonable inference that neither he nor Capital One intended to agree that the amount stated as "due" in the March 2010 statement was a final accounting of his debt to Capital One. Sanders also argued that Portfolio's account-stated claim was contrary to the terms of the express credit card contract,² including because the balance Portfolio sought to recover as an "account stated" was calculated by including fees that the express contract did not permit Capital One to charge.

In support of his own motion for summary judgment, Sanders argued that Portfolio's claim should be governed by Virginia law and that the claim was untimely under Virginia's three-year statute of limitations for contract claims. Va Code Ann § 8.01-246(4). Sanders pointed to evidence that Capital One is chartered under Virginia law and that its cardholder agreement provides, "[t]his Agreement will be interpreted using Virginia law," which Sanders contended gave Virginia the only relevant connection to the claim. Portfolio did not dispute that the account-stated claim would be barred under Virginia's statute of limitations. But it contended that Oregon law governs the claim and that the claim was timely filed under Oregon's six-year statute of limitations for claims sounding in contract, ORS 12.080.

The trial court ruled for Portfolio on both motions, and Sanders appealed. Although the Court of Appeals ultimately agreed with Sanders’ argument that genuine issues of material fact preclude Portfolio from prevailing as a matter of law on the account-stated claim, the court first disagreed with Sanders’ argument that Virginia law supplies the applicable statute of limitations. Portfolio Recovery Associates v. Sanders , 292 Or. App. 463, 468, 425 P.3d 455 (2018). With respect to the limitations issue, the court addressed the conflict by turning first to ORS 15.360, which generally "govern[s] the choice of law applicable to any contract, or part of a contract," if the parties have not made "an effective choice of law."³ Id. at 470, 425 P.3d 455 ; see ORS 15.305 ; ORS 15.360. That statute requires the court to begin by identifying "the states that have a relevant connection with the transaction or the parties" and then to evaluate "the relative strength and pertinence" of the "policies underlying any apparently conflicting laws" of the states having "a relevant connection." ORS 15.360.

The Court of Appeals answered that inquiry by concluding that the summary judgment record did not reveal that either Virginia or Oregon had "a relevant connection with the transaction or the parties" because neither state had a connection that was "of the type that evidences a state interest in having its law applied to Portfolio's claim." 292 Or. App. at 471, 425 P.3d 455 (emphasis in original). The court then defaulted to applying Oregon's statute of limitations because, it reasoned, "[w]here neither state has a connection to the transaction such that it has an interest in having its law applied, we will apply the law of Oregon as the forum state." Id. (citing Erwin v. Thomas , 264 Or. 454, 459-60, 506 P.2d 494 (1973), for the proposition that "[n]either state has a vital interest in the outcome of this litigation and there can be no conceivable material conflict of policies or interests if an Oregon court does what comes naturally and applies Oregon law"). Thus, the court affirmed the denial of Sanders’ motion for summary judgment but reversed the grant of summary judgment to Portfolio. Both parties sought review, each contending that the Court of Appeals erred in ruling that the party is not entitled to summary judgment.

II. ANALYSIS

We allowed both petitions and have consolidated the cases. According to Sanders, the Court of Appeals erred by failing to recognize that Virginia—and only Virginia—has a "relevant connection" for purposes of the choice-of-law inquiry and, thus, supplies the governing statute of limitations.⁴ According to...