Portfolio Recovery Assocs., LLC v. Vanleeuwen

• Decision Date: 13 May 2016
• Docket Number: Appellate Case No. 26692
• Citation: 2016 Ohio 2962
• Parties: PORTFOLIO RECOVERY ASSOCIATES, LLC Plaintiff-Appellee v. GARY F. VANLEEUWEN Defendant-Appellant
• Court: Ohio Court of Appeals

2016 Ohio 2962

PORTFOLIO RECOVERY ASSOCIATES, LLC Plaintiff-Appellee v. GARY F. VANLEEUWEN Defendant-Appellant

Appellate Case No. 26692

COURT OF APPEALS OF OHIO SECOND APPELLATE DISTRICT MONTGOMERY COUNTY

May 13, 2016

Trial Court Case No. 2014-CV-3621

(Civil Appeal from Dayton Municipal Court)

OPINION

KELLY L. WILLIAMS, Atty. Reg. No. 0080793, Portfolio Recovery Associates, LLC, 120 Corporate Boulevard, Norfolk, Virginia 23502 Attorney for Plaintiff-Appellee

GARY F. VANLEEUWEN, 639 Burkhardt Avenue, Dayton, Ohio 45403 Defendant-Appellant, pro se

FAIN, J.

{¶ 1} Defendant-appellant Gary F. VanLeeuwen appeals from a judgment granted against him and in favor of Plaintiff-Appellee, Portfolio Recovery Associates, LLC. VanLeeuwen appeals pro se, and does not identify specific assignments of error. But in his brief VanLeeuwen alleges that the judgment is not supported by sufficient evidence. Portfolio Recovery responds that the trial court did not err in granting its motion for judgment on the pleadings. We conclude that Portfolio Recovery's pleadings did not sufficiently establish that it was the assignee of the contract, or the amount due on the contract. Therefore, the judgment is Reversed and this cause is Remanded for further proceedings.

I. The Course of Proceedings

{¶ 2} Portfolio Recovery filed a pleading titled "Complaint for Money," alleging that VanLeeuwen entered into an agreement for a credit card with U.S. Bank, and that Portfolio is now the holder of the account. The complaint alleges that VanLeeuwen is in default of the credit card agreement for failing to make payments under the terms of the agreement. The complaint alleges that VanLeeuwen owes Portfolio the sum of $3,620.43. The complaint further alleges that the account records are not attached to the pleading, because Portfolio is not the original creditor, that copies were sent monthly to VanLeeuwen, and that the account records may be voluminous. Although there is no allegation in the complaint referencing or incorporating any attachments, two unauthenticated documents are attached to the complaint. The first document, Exhibit B, titled "Bill of Sale and Assignment of Assets," states that U.S. National Bank "hereby absolutely sells, transfers, assigns, sets-over, quitclaims and conveys to Portfolio Recovery all of the Bank's rights, title and interest in each of the assets identified in the Asset Schedule, attached hereto as Exhibit A." However, the record contains neither an Exhibit A, nor any other document identifying VanLeeuwen's contract, or any other contract, as part of the asset sale. The second document attached to the complaint, but not referenced in the complaint, appears to be a billing statement from U.S. Bank to VanLeeuwen for the period of October 3, 2012 through December 31, 2012. The statement lists a balance of $3,216.53, and a payment due date of January 25, 2013. The statement further states that the minimum payment due is $0.00. Although the statement does not reflect a payment, or the date of the last payment, the previous balance is $59.97 more than the current balance.

{¶ 3} In response to the complaint, VanLeeuwen sent a letter to the court, which was filed and treated as an answer. In the answer, VanLeeuwen indicated why he was having trouble paying his debts, and stated that he had been trying to enter into a payment plan with Portfolio, and had offered to pay $10 per month. Portfolio then moved for judgment on the pleadings, alleging that VanLeeuwen had admitted all allegations in the complaint and had presented no defenses. In response to the motion, VanLeeuwen asserted that he was prepared to take the case to trial because there was a statute-of-limitations issue, he offered a payment plan, he had not seen the monthly statements, receipts or the original application, and the beginning date of the delinquency was at issue.

{¶ 4} The trial court sustained the motion for judgment on the pleadings, and entered judgment against VanLeeuwen in the sum of $3,620.43, plus costs of this action. The judgment entry does not contain an award of interest.

II. The Standard of Review

{¶ 5} "A motion for judgment on the pleadings pursuant to Civ.R. 12(C) presents only questions of law, and the standard of review is de novo." Inskeep v. Burton, 2d Dist. Champaign No. 2007 CA 11, 2008-Ohio-1982, ¶ 7, citing Dearth v. Stanley, 2d Dist. Montgomery No. 22180, 2008-Ohio-487. See also Offill v. State Farm Fire & Cas. Co., 2d Dist. Montgomery No. 25079, 2012-Ohio-6225, ¶ 14.

{¶ 6} De novo review requires an "independent review of the trial court's decision without any deference to the trial court's determination." Jackson v. Internatl. Fiber, 169 Ohio App.3d 395, 2006-Ohio-5799, 863 N.E.2d 189, ¶ 17 (2d Dist.), quoting State ex rel. AFSCME v. Taft, 156 Ohio App.3d 37, 2004-Ohio-493, 804 N.E.2d 88, ¶ 27 (3d Dist).

III. The Trial Court Erred by Rendering Judgment on the Pleadings withoutSufficient Proof of Standing and Damages

{¶ 7} We construe the allegations in VanLeeuwen's pro se brief as assigning as error that the trial court erred in rendering judgment on the pleadings without sufficient proof of all elements of a claim for breach of a credit card contract. Civ. R. 12(C) provides, "[a]fter the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings." "Determination of a motion for judgment on the pleadings is restricted solely to the allegations in the pleadings and any writings attached to the complaint." Offill v. State Farm Fire & Cas. Co., 2d Dist. Montgomery No. 25079, 2012-Ohio-6225, ¶ 14, citing Peterson v. Teodosio, 34 Ohio St.2d 161, 165, 297 N.E.2d 113 (1973). "A motion for judgment on the pleadings is proper when only questions of law are presented; the determination of the motion is restricted solely to the allegations of the pleadings. The trial court may grant a judgment on the pleadings where no material factual issue exists and one party is entitled to a judgment in his favor as a matter of law." (Internal citations omitted.) Vaught v. Vaught, 2 Ohio App.3d 264, 265, 441 N.E.2d 811 (12th Dist.1981).

{¶ 8} "A suit regarding a credit card balance is 'founded upon contract and thus a plaintiff must prove the necessary elements of a contract action.' " Am. Express Centurian Bank v. Banaie, 7th Dist. Mahoning No. 10 MA 9, 2010-Ohio-6503, ¶ 11, citing Capital One Bank (USA), N.A. v. Heidebrink, 6th Dist. Ottawa No. OT-08-049, 2009-Ohio-2931, at ¶ 29, quoting Gabriele v. Reagan, 57 Ohio App.3d 84, 85, 566 N.E.2d 684 (12th Dist. 1988). The elements of a breach of contract claim are: 1) the existence of a contract between the parties; 2) performance by the plaintiff; 3) breach by the defendant; and 4) damage or loss to the plaintiff. Doner v. Snapp, 98 Ohio App.3d 597, 600, 649 N.E.2d 42 (2d Dist.1994).

{¶ 9} In the case before us, Portfolio alleged in its complaint that it is the holder of the account between U.S. Bank and VanLeeuwen, pursuant to an assignment from U.S. Bank to Portfolio. Portfolio attached a document to the complaint that purports to be the assignment, but refers to another document that is not attached. A motion for judgment on the pleadings cannot consider documents that are not attached to a pleading.

{¶ 10} We have held that in an action on an account, in order to prevail, the assignee must prove that it is the real party in interest for purposes of bringing the action. H & S Fin., Inc. v. Davidson, 2d Dist. Montgomery No. 24291, 2011-Ohio-4290, ¶ 24. An assignee cannot prevail on the claims assigned by another holder without proving the existence of a valid assignment agreement. Id. See also EMCC Invest. Ventures v. Rowe, 11th Dist. Portage No. 2011-P-0053, 2012-Ohio-4462, ¶ 27. As explained by the Ninth District,

In an action on an account, when an assignee is attempting to collect on an account in filing a complaint, the assignee must "allege and prove the assignment." In other words, in order to prevail, the assignee must prove that they are the real party in interest for purposes of bringing the action. An assignee cannot prevail on the claims assigned by another holder without proving the existence of a valid assignment agreement.

(Citations omitted.) Matrix Acquisitions, L.L.C. v. Manley, 9th Dist. Summit No. 27191, 2014-Ohio-2860, ¶ 3, citing Natl. Check Bur., Inc. v. Ruth, 9th Dist. Summit No. 24241, 2009-Ohio-4171 ¶ 6, quoting Worldwide Asset Purchasing, L.L.C. v. Sandoval, 5th Dist. Stark No. 2007-CA-00159, 2008-Ohio-6343, ¶ 26.

{¶ 11} "It is fundamental that a party commencing litigation must have standing to sue in order to present a justiciable controversy and invoke the jurisdiction of the * * * court ." Matrix, supra, citing Citibank N.A. v. Rowe, 9th Dist. Lorain No. 12CA010217, 2013-Ohio-523, ¶ 8, quoting Fed. Home Loan Mtge. Corp. v. Schwartzwald, 134 Ohio St.3d 13, 2012-Ohio-5017, 979 N.E.2d 1214, ¶ 41. Subsequent to Schwartzwald, the Supreme Court of Ohio clarified that the creditor need not prove standing within its complaint in order to state a claim for relief, but that it must be established before the court has jurisdiction to grant judgment on the merits. Wells Fargo Bank, N.A. v. Horn, 142 Ohio St. 3d 416, 2015-Ohio-1484, 31 N.E.3d 637, ¶ 17. Numerous cases have held that unless the party seeking relief establishes standing, a court cannot consider the merits of the party's legal claim. State ex rel. Ohio Civ. Serv. Emps. Assn. v. State, 2013-Ohio-4505, 2 N.E.3d 304, ¶ 42 (10th Dist.), affirmed in part and reversed in part on other grounds, Ohio Sup.Ct. Slip Opinion No. 2016-Ohio-478; U.S. Bank Natl. Assn. v. Gray, 10th Dist. Franklin No. 12AP-953, 2013-Ohio-3340, ¶ 17. "Lack of standing is certainly a fundamental flaw that would require a court to dismiss the action, and any judgment on the merits would be subject to reversal on appeal." Bank of Am., N.A. v. Kuchta, 141 Ohio St.3d 75, 2014-Ohio-4275, 21 N.E.3d 1040, ¶ 23, ci...