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HomeMy WebLinkAbout2008-5886 Civil HUDSON & KEYSE, LLC, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA : vs. : CIVIL ACTION – LAW : NO. 08-5886 CIVIL SVETLANA PATLATYUK, : Defendant : IN RE: PRELIMINARY OBJECTIONS OF DEFENDANT TO AMENDED COMPLAINT BEFORE HESS, OLER AND GUIDO, J.J. OPINION AND ORDER On October 2, 2008, Hudson & Keyse, LLC (“Plaintiff”) filed a complaint against Svetlana Patlatyuk (“Defendant”). Plaintiff is the ultimate assignee of Citibank (South Dakota), 1 N.A. (“Citibank”). Plaintiff asserts two causes of action against Defendant: breach of contract and, in the alternative, quantum meruit. Plaintiff alleges that Defendant failed to make timely payments on her credit card account with Citibank as required by the credit card agreement. Alternatively, Plaintiff alleges that Defendant was unjustly enriched by obtaining a credit card from Citibank, using it, and failing to pay for its use. Included as exhibits to Plaintiff’s Complaint are monthly statements showing assessments of periodic interest on Defendant’s account and three “Bill of Sale, Assignment and Assumption” agreements establishing a chain of title between Citibank and Plaintiff. Defendant filed Preliminary Objections to Plaintiff’s Complaint, including a demurrer to Plaintiff’s breach of contract claim, a motion to strike the entire complaint for failure to conform to rules of court, and in the alternative, a motion for a more specific pleading. Plaintiff then filed 1 Citibank first sold its rights pursuant to its account with Defendant to New Century Financial Services, Inc. Next, New Century Financial Services conveyed its rights to Defendant’s account to Resurgence Financial, LLC. Finally, Resurgence Financial transferred its rights under Defendant’s account to Plaintiff. (See Ex. B of Plaintiff’s Amended Complaint.) NO. 08-5886 CIVIL its Amended Complaint in which it noted that it was making progress toward obtaining the cardholder agreement between Citibank and Defendant. Defendant has again filed Preliminary Objections in the nature of demurrer to Plaintiff’s breach of contract and quantum meruit claims, and alternatively, a motion for a more specific pleading. Defendant challenges Plaintiff’s breach of contract claim in Preliminary Objections in the nature of a demurrer. When ruling on a preliminary objection in the nature of a demurrer, the court must accept as true every material and relevant fact well pleaded in the complaint and every inference reasonably deducible therefrom. See, e.g., Yania v. Bigan, 397 Pa. 316, 318, 155 A.2d 343, 344 (1959). A demurrer does not admit conclusions of law or unjustified inferences. See, e.g., Lerman v. Rudolph, 413 Pa. 555, 557-58, 198 A.2d 532, 533 (1964). The question presented by a demurrer is whether, on the facts averred, the law says with certainty that no recovery is possible. Hoffman v. Misericordia Hosp. of Philadelphia, 439 Pa. 501, 503, 267 A.2d 867, 868 (1970). If any doubt exists as to whether a demurrer should be sustained, the demurrer should be overruled. Hoffman, 439 Pa. at 504, 267 A.2d at 868. To establish a facially valid breach of contract action, the plaintiff must plead the existence of a contract, including its essential terms, a breach of a contractually-imposed duty, and resultant damages. See, e.g., CoreStates Bank, N.A. v. Cutillo, 723 A.2d 1053, 1058 (Pa.Super. 1999). While it is not necessary to state each term in exacting detail, every element must be specifically pleaded. Id. Turning to the contents of Plaintiff’s Amended Complaint, it is clear that it has pleaded sufficient facts to set forth a facially valid breach of contract action. Starting with the existence of a contract, Plaintiff alleges Defendant obtained a credit card account with Citibank on or about 2 NO. 08-5886 CIVIL July 1, 1998. (Amend. Compl. ¶ 1.) While Plaintiff acknowledges that it currently is not in possession of the credit card agreement between Citibank and Defendant, it does allege that the contractual interest rate is 20.74% per annum. (Amend. Compl. ¶ 12.) Plaintiff has also pleaded sufficient facts to set forth a breach of a contractually-imposed duty and resulting damages. This comes in the form of Defendant’s alleged failure to make timely payments as required under the cardholder agreement. (Amend. Compl. ¶ 6.) Defendant allegedly owes Plaintiff $2,944.48 plus $2044.54 interest as of November 3, 2008, continually accruing at the rate of 20.74% per annum. (Amend. Compl. ¶¶ 8, 13-14.) Because sufficient facts to set forth a facially-valid breach of contract claim have been pled, Defendant’s preliminary objection in the form of a demurrer to Count I of Plaintiff’s Amended Complaint will be overruled. Plaintiff includes in its Amended Complaint Count II, setting forth a quantum meruit claim against Defendant. Quantum meruit is an equitable quasi-contract doctrine. Wiernik v. PHH U.S. Mortg. Corp., 736 A.2d 616, 622 (Pa.Super. 1999). Elements of a quantum meruit claim include, “benefits conferred on defendant by plaintiff, appreciation of such benefits by defendant, and acceptance and retention of such benefits under such circumstances that it would be inequitable for defendant to retain the benefit without payment of value.” Id. (quoting Styer v. Hugo, 422 Pa.Super. 262, 267, 619 A.2d 347, 350 (1993)). The law does not always require an election of remedies as between breach of contract and quantum meruit. To the contrary, in proper cases, claims for breach of contract and quantum meruit are not inconsistent. See Larry Pitt & Associates v. Long, 716 A.2d 695, 703 (Pa.Cmwlth. 1998) (Workers’ Compensation claimant’s former attorney, who sought recovery of attorney fees, was not restricted to an 3 NO. 08-5886 CIVIL election of either a remedy for breach of contract or a remedy by way of quantum meruit.) On the other hand, it has been held that where the contract is written or expressed, the doctrine of quasi-contract or quantum meruit, is inapplicable. Northeast Fence and Ironworks, Inc. v. Murphy Quigley Co., Inc., 933 A.2d 664, 669 (Pa.Super. 2007) citing Lackner v. Glosser, 892 A.2d 21, 24 (Pa.Super. 2006). The dispute in the case sub judice arises from a written contractual agreement between Defendant and Citibank. Plaintiff quotes Northeast Fence & Iron Works, Inc. v. Murphy Quigley Co., Inc., 933 A.2d 664 (Pa.Super. 2007) and has apparently given the phrase “in spite of the not absence of an agreement” a far too literal reading. The absence of an agreement is the same as the inability of Plaintiff to obtain a copy of an existing agreement. As a result of the express, written nature of the relationship at issue here, Defendant’s Preliminary Objection in the nature 2 of a demurrer to Plaintiff’s quantum meruit will be sustained. Next is the question of whether the court should grant Defendant’s motion for a more specific pleading. Defendant argues that Plaintiff’s Amended Complaint fails to conform to the requirements of Rule 1019(f), which requires “averments of time, place and items of special damage shall be specifically stated” in a complaint. Pa.R.C.P. 1019(f). As a result of these omissions, Defendant argues that it is not possible to respond to Plaintiff’s Amended Complaint and moves for a more specific pleading pursuant to Rule 1028(a)(3). As noted above, Rule 1019(f) requires specific averments of time, place and items of special damages. Subdivisions (h) and (i) of Rule 1019 are also relevant in this context. Rule 2 The allegation that the defendant enjoyed the benefit of obtaining goods and services by using her credit card merely underscores the importance of written documentation of the credit card transactions. In the meantime, the assessment of late fees and arguable usurious interest can hardly be said to be “benefits” which were “appreciated” by the defendant and inequitable for the defendant to “retain.” 4 NO. 08-5886 CIVIL 1019 (h) requires that “when any claim or defense is based upon an agreement, the pleading shall state specifically if the agreement is oral or written.” Pa.R.C.P. 1019(h). Directly related to Rule 1019(h) is subdivision(i), which states: When any claim or defense is based upon a writing, the pleader shall attach a copy of the writing, or the material part thereof, but if the writing or copy is not accessible to the pleader, it is sufficient so to state, together with the reason, and to set forth the substance in writing. Pa.R.C.P. 1019(i). Thus, there is substantial overlap between subsections (f), (h), and (i) of Rule 1019 in the context of a civil action to recover an outstanding credit card balance. Generally, when evaluating a motion for a more specific pleading under Rule 1028(a)(3), the issue is “whether the complaint is sufficiently clear to enable the defendant to prepare his defense, or whether the plaintiff's complaint informs the defendant with accuracy and completeness of the specific basis on which recovery is sought so that he may know without question upon what grounds to make his defense.” Rambo v. Greene, 906 A.2d 1232, 1236 (Pa.Super. 2003) (quoting Amlung v. City of Chester, 224 Pa.Super. 47, 302 A.2d 491, 498 n. 36 (1973)) (internal quotation marks omitted). In debt collection actions filed by credit card companies against their customers, the plaintiff must include with the complaint a copy of the credit card agreement and a statement of account. Atlantic Credit and Finance, Inc. v. Giuliana, 829 A.2d 340, 344-45 (Pa.Super. 2003). In addressing the question of whether preliminary objections asserted a meritorious defense for the purpose of opening a judgment, the court said: We find that the failure to attach the writings which assertedly establish appellee’s right to a judgment against appellants in the amount of $17,496.27, based on an alleged debt it allegedly purchased for substantially less than $9,644.66, is 5 NO. 08-5886 CIVIL fatal to the claims set forth in appellee’s complaint. Thus, the preliminary objection of appellants based on failure to produce a cardholder agreement and statement of account, as well as evidence of the assignment, establishes a meritorious defense. Id. at 345. Additionally, “an assignee may sue as the real party in interest, but it must first ‘trace in [its] pleading the derivation of [its] cause of action from [its] assignor.’” Remit Corp. v. Miller, 5 Pa. D. & C.5th 43, 47 (Centre Co. 2008) (quoting Brown v. Esposito, 157 Pa. Super. 147, 149, 42 A.2d 93, 94 (1945)). In addition, in Remit Corp., the court held that the plaintiff had not complied with the requirements of Rule 1019(i) by including with its complaint an unsigned credit card agreement dated two years after the defendant allegedly opened her account. Remit Corp., 5 Pa. D. & C.5th at 45. th In Capital One Bank (USA) NA v. Clevenstein, 7 Pa. D.& C. 5 153 (Centre County 2009), the court held that the plaintiff satisfied Rule 1019(i) by including with its complaint “several Capital One monthly billing statements bearing defendant's name, dating from the opening of the account to the present, and reflecting individual charges and fees,” sufficient to illustrate how the plaintiff arrived at the amount it sought from the defendant. Capital One Bank, 7 Pa. D. & C.5th at 156. We decline to hold that the Plaintiff in this case must attach each and every monthly billing statement. It is possible, in fact, that the contract between the parties precludes a challenge to a credit card transaction after a certain period of time. Nonetheless, we are satisfied that, in this case, Plaintiff’s Amended Complaint falls short of the requisite specificity required by Rule 1019. In this case, while Plaintiff acknowledges that it is not currently in possession of the credit card agreement between Citibank and Defendant, it has failed to set forth the substance of 6 NO. 08-5886 CIVIL the contract, as required by Rule 1019(i). These terms are essential, as they would presumably explain the imposition of interest, fees, and other charges that led to the sum to which Plaintiff claims entitlement. Instead, attached to the complaint are several monthly statements supporting Plaintiff’s conclusory claim of entitlement to judgment in the amount of $5,055.94 plus continually accruing interest at the rate of 20.74% per annum from November 3, 2008. These statements come after Defendant ceased using the card for purchases and/or cash advances, as they show that the only charges incurred by Defendant are periodic interest charges. As a result, they do very little – if anything at all – to illustrate how Plaintiff arrived at the amount it now seeks from Defendant. ORDER rd AND NOW, this 3 day of September, 2009, the preliminary objection of the Defendant in the nature of a demurrer to the Plaintiff’s claim for breach of contract is DENIED. The preliminary objection of the Defendant in the nature of a demurrer to a count of quantum meruit is GRANTED and said count is DISMISSED. The Defendant’s preliminary objection in the nature of a motion for a more specific pleading is GRANTED and the Plaintiff is granted leave to amend the complaint consistent with the accompanying opinion and, specifically, with the standards as set forth in Atlantic Credit and Finance, Inc. v. Giuliana, 829 A.2d 340, 344-45 (Pa.Super. 2003). BY THE COURT, _______________________________ Kevin A. Hess, J. 7 NO. 08-5886 CIVIL Ronald Amato, Esquire Michael J. Kennedy, Esquire Michael R. Lessa, Esquire Justin N. Davis, Esquire For the Plaintiff John G. Milakovic, Esquire Thomas S. Beckley, Esquire For the Defendant :rlm 8 HUDSON & KEYSE, LLC, : IN THE COURT OF COMMON PLEAS OF Plaintiff : CUMBERLAND COUNTY, PENNSYLVANIA : vs. : CIVIL ACTION – LAW : NO. 08-5886 CIVIL SVETLANA PATLATYUK, : Defendant : IN RE: PRELIMINARY OBJECTIONS OF DEFENDANT TO AMENDED COMPLAINT BEFORE HESS, OLER AND GUIDO, J.J. ORDER rd AND NOW, this 3 day of September, 2009, the preliminary objection of the Defendant in the nature of a demurrer to the Plaintiff’s claim for breach of contract is DENIED. The preliminary objection of the Defendant in the nature of a demurrer to a count of quantum meruit is GRANTED and said count is DISMISSED. The Defendant’s preliminary objection in the nature of a motion for a more specific pleading is GRANTED and the Plaintiff is granted leave to amend the complaint consistent with the accompanying opinion and, specifically, with the standards as set forth in Atlantic Credit and Finance, Inc. v. Giuliana, 829 A.2d 340, 344-45 (Pa.Super. 2003). BY THE COURT, _______________________________ Kevin A. Hess, J. Ronald Amato, Esquire Michael J. Kennedy, Esquire Michael R. Lessa, Esquire Justin N. Davis, Esquire For the Plaintiff John G. Milakovic, Esquire Thomas S. Beckley, Esquire For the Defendant :rlm