UNIFUND, CCR, LLC v. Elyse

• Decision Date: 18 July 2016
• Docket Number: No. 73510–1–I,73510–1–I
• Citation: 195 Wash.App. 110,382 P.3d 1090
• Court: Washington Court of Appeals
• Parties: UNIFUND, CCR, LLC, Respondent, v. Amy Elyse, Petitioner.

195 Wash.App. 110

382 P.3d 1090

UNIFUND, CCR, LLC, Respondent,

v.Amy Elyse, Petitioner.

No. 73510–1–I

Court of Appeals of Washington, Division 1.

FILED: July 18, 2016

Guy William Beckett, Berry & Beckett, PLLP, 1708 Bellevue Avenue, Seattle, WA, 98122–2017, Counsel for Petitioner.

Malisa Lenora Gurule, Suttell & Hammer PS, P.O. Box C–90006, Bellevue, WA, 98009, Bradley L. Fisher, Davis Wright Tremaine LLP, 1201 3rd Avenue Suite 2200, Seattle, WA, 98101–3045, Counsel for Respondent.

Sheila M. O'Sullivan, Northwest Consumer Law Center, 520 E Denny Way, Seattle, WA, 98122–2138, Roblin John Williamson, Williamson & Williams, 2239 W Viewmont Way W, Seattle, WA, 98199–3951, Amicus Curiae on behalf of Northwest Consumer Law Center.

John Matthew Geyman, Columbia Legal Services, 101 Yesler Way Suite 300, Seattle, WA, 98104–2528, Amicus Curiae on behalf of Columbia Legal Services.

Julia Cresswell Kellison, Northwest Justice Project, 401 2nd Avenue S Suite 407, Seattle, WA, 98104–3811, Scott Kinkley, Northwest Justice Project, 1702 W Broadway Avenue, Spokane, WA, 99201–1818, Amicus Curiae on behalf of the Northwest Justice Project.

Verellen, C.J.¶ 1 A debt collector seeking to enforce a written credit card agreement must prove the debtor's assent to the material terms of the agreement. The only cardholder agreement Unifund proffered in its action against Amy Elyse was a cardholder agreement issued in 2010. Unifund relies on use of the card in 2008 and a payment in 2009 to prove assent by conduct. But those acts do not establish assent to a document that did not exist until 2010.

¶ 2 The district court properly granted Elyse's motion for summary judgment and dismissed Unifund's claims. We reverse the superior court's judgment on RALJ appeal in favor of Unifund and award Elyse her attorney fees on appeal to both this court and the superior court.

FACTS

¶ 3 The material facts are undisputed. Elyse opened a Citibank credit card account in October 2007.¹ The card was last used in July 2008. The last payment was made in November 2009. Citibank sold the account to Pilot Receivables Management in March 2013 with $1,910.11 due. Pilot sold the account to Unifund in July 2013.

¶ 4 In September 2013, Unifund sued Elyse in district court to recover unpaid credit card debt “for goods, services, and monies loaned” in the amount of $1,871.11 plus costs and interest.² After discovery, both parties moved for summary judgment.

¶ 5 Among the affidavits attached to Unifund's summary judgment motion was an affidavit of its records custodian, Joseph Doup. Doup's affidavit attached copies of 26 monthly account statements issued by Citibank from November 2007 to November 2009 and in May 2010. The statements were addressed to Elyse, showed the same account number, and detailed the purchases made. The November 2009 statement showed a balance of $1,456.77. The May 2010 statement showed a previous balance of $1,822.58 and a new balance of $1,871.11. Doup's affidavit also attached the “most recent” cardholder agreement for Elyse's account.³ The agreement was neither signed nor dated. The agreement's first page states “© 2010 Citibank (South Dakota), N.A.” and “3/10.”⁴

¶ 6 Elyse submitted her declaration stating that she had “no memory” and “no records” of receiving any credit card agreement from Citibank.⁵

¶ 7 At the summary judgment hearing, Unifund urged the district court to apply either South Dakota's six-year statute of limitations for any contract⁶ or Washington's six-year statute of limitations for written contracts.⁷ Unifund acknowledged that the only agreement it submitted in support of its argument was the 2010 cardholder agreement. The district court granted Elyse's motion for summary judgment and dismissed Unifund's action as barred by the Washington three-year statute of limitations applicable to oral contracts. The court noted Unifund's failure to produce a written credit card agreement in effect when Elyse's account was opened in October 2007. The court awarded Elyse attorney fees.

¶ 8 Unifund appealed to superior court. The superior court on RALJ appeal reversed the district court and entered a judgment in favor of Unifund. The court gave no reasoning for its decision. We granted Elyse's motion for discretionary review.⁸

ANALYSIS

¶ 9 We review a summary judgment order de novo.⁹ Summary judgment is proper if there are no genuine issues of material fact.¹⁰ “ ‘A material fact is one that affects the outcome of the litigation.’ ”¹¹ We view the facts and all reasonable inferences in the light most favorable to the nonmoving party.¹² Whether a claim is barred by a statute of limitations is a question of law we review de novo.¹³

¶ 10 We need not address the parties' arguments as to the admissibility of the documents Unifund offered on summary judgment under the business records act, chapter 5.45 RCW.¹⁴ Even assuming the documents were properly admitted, Unifund failed to prove Elyse's assent to a written cardholder agreement.

¶ 11 To establish a claim for the unpaid credit card debt, Unifund had to show that Elyse assented to a contract with Citibank by accepting the cardmember agreement and personally acknowledging the account.¹⁵ Unifund failed to meet this burden. The only written contract Unifund proffered was the 2010 cardmember agreement. But Unifund failed to prove that Elyse assented to that agreement.

Unifund did not produce a signed credit card agreement, a signed credit card application, or any other express written assent by Elyse to the terms of a specific credit card agreement. Nor did Unifund produce any cancelled checks evidencing Elyse's payments on the account.¹⁶

¶ 12 Unifund argued on summary judgment and here that Elyse assented to the 2010 agreement through her use of the credit card.¹⁷ “The use of a credit card, if sufficiently detailed and itemized, constitutes acceptance of terms clearly stated in a cardmember agreement.”¹⁸ In order to prove Elyse's assent to the terms of the 2010 cardmember agreement by use of a credit card, Unifund had to document Elyse's use of a credit card when governed by that specific agreement. But Elyse could not have assented to the terms of the 2010 cardholder agreement by her conduct since her credit card was last used in July 2008 and the last payment was made on the card in November 2009. Therefore, Unifund did not prove Elyse assented to the terms of the 2010 cardmember agreement and failed to prove the existence of a written contract on which its claim against Elyse for unpaid credit card debt could be based.

¶ 13 And, contrary to Unifund's argument, this does not equate to a requirement to submit every version of a credit card agreement that applied during the period the account was open. Rather, a debt collector relying on assent by conduct in the form of continuing use of a credit card proves assent to the version of the card agreement in existence at the time of the card's most recent use.

¶ 14 To the extent the record suggests a claim in the nature of an oral agreement between Elyse and Citibank, the Washington three-year statute of limitations on oral contracts had run when Unifund sued Elyse in 2013.¹⁹ Any such claim is time barred.

¶ 15 We reject Unifund's argument that two South Dakota statutes apply based on the choice of law provision in the 2010 cardholder agreement. The 2010 agreement provides that “[f]ederal law and the law of South Dakota ... govern the terms and enforcement of this Agreement.”²⁰ Relying on that provision, Unifund cites South Dakota's six-year limitation period for oral or written contract claims,²¹ as well as South Dakota's statute that a cardholder is bound to a credit card agreement if the cardholder fails to cancel the account within 30 days after issuance of the credit card agreement.²² But the 2010 contract choice of law provision is not relevant absent proof by Unifund that Elyse assented to that agreement. As discussed, there is no such evidence.

¶ 16 We also reject Unifund's argument that Washington's six-year limitations period for accounts receivable applies. Unifund did not argue in district court that Elyse's account was an account receivable governed by RCW 4.16.040(2). It attempted to raise this legal theory for the first time on appeal. But RALJ 2.2(d) expressly limits the issues that may be raised for the first time in superior court on RALJ appeal just as RAP 2.5(a) limits the issues that may be raised for the first time on appeal to this court from superior court.²³ Although RAP 2.5(a) and RALJ 2.2(d) are phrased permissively that the court “may refuse to review,”²⁴ it is the rare exception when an appellate court will entertain a new legal theory that the opposing party and the trial court did not have an opportunity to fully explore.²⁵ We decline to consider a legal theory Unifund raised for the first time in superior court on its RALJ appeal.²⁶ The district court was correct in dismissing Unifund's action on Elyse's motion for summary judgment. The superior court erred in reversing the district court and entering judgment in favor of Unifund.

¶ 17 Elyse requests an award of attorney fees on appeal and properly devotes a section of her brief to her request.²⁷ A defendant is deemed the prevailing party and may be entitled to an award of attorney fees when the plaintiff recovers nothing in a damage action for less than $10,000.²⁸ If a statute allows a party to recover attorney fees in a court of limited jurisdiction, a party may recover attorney fees on appeal to the superior court.²⁹ Similarly, if allowed by statute, we may award attorney fees to the prevailing party on appeal under RAP 18.1(a). Because Elyse is the prevailing party on appeal, we award her reasonable attorney's fees and direct the district court to determine the amount of the award on remand.³⁰

¶ 18 We reverse the superior court's judgment and remand with directions that the superior court vacate its judgment and remand this matter to the district court for reinstatement of...