The URL can be used to link to this page

Home My WebLink About2010-5668 CITIBANK (SOUTH DAKOTA), N.A., : IN THE COURT OF COMMON PLEAS OF PLAINTIFF : CUMBERLAND COUNTY, PENNSYLVANIA : : V. : : : DOUGLAS ROSS, : DEFENDANT : 10-5668 CIVIL TERM IN RE: PRELIMINARY OBJECTIONS OF DEFENDANT TO PLAINTIFF’S COMPLAINT BEFORE HESS, P.J. AND MASLAND, J. OPINION AND ORDER OF COURT Masland, J., April 18, 2011:-- Before the court are the preliminary objections of Douglas Ross, Defendant, to the complaint filed by Plaintiff, Citibank (South Dakota), N.A. For the following reasons the preliminary objections are sustained. I. Background This is a collections matter arising from an allegedly delinquent credit card account. Defendant objects to the adequacy of Plaintiff's complaint based on the following: no averment is made as to whether the alleged agreement between the parties is oral or written; no copy of the underlying agreement or writing was attached to the complaint; the complaint improperly pleads account stated; and the complaint fails to plead or otherwise demonstrate the items of special damage underlying the case. For its part, Plaintiff contends that this suit is premised on an account stated claim rather than a written credit card contract. As such, the Defendant's 10-5668 CIVIL TERM objections are of no moment because such an action does not need to be supported by written documentation. This matter raises the issue of whether a credit card collections action may proceed without written documentation by the plaintiff characterizing it as a claim based on an account stated. This question has yet to be answered by our appellate courts and there is some disagreement among the Courts of Common Pleas on this issue. Nonetheless, based on our reading of the relevant appellate precedent and the better-decided Common Pleas opinions, we now conclude that the Plaintiff in a credit card action cannot escape the pleading formalities described in Atlantic Credit and Finance, Inc. v. Giuliana, 829 A.2d 340 (Pa. Super. 2003) and Arrow Financial Services LLC v. Witmer, No. 09-6197 (Cumb. Co. May 13, 2010) (Ebert, J.) by characterizing their claim as one based on an account stated. II. Discussion At the outset, we note that unless we accept the Plaintiff's account stated theory, the complaint is clearly inadequate and the Defendant's objections would be sustained. Generally, a complaint filed against a credit card debtor must, at a minimum, include a copy of the relevant cardholder agreement and a statement of the account to substantiate the amount allegedly owed. Atlantic Credit and Finance, Inc. v. Giuliana, 829 A.2d 340 (Pa. Super. 2003). Here, the absence of a copy of any cardholder agreement would be fatal to the Plaintiff's complaint. Nonetheless, the Plaintiff distinguishes Atlantic Credit and Finance on the 2- - 10-5668 CIVIL TERM grounds that it has not premised its claim on a written agreement but on a theory of account stated. A. Account Stated An account stated is “an account in writing, examined and expressly or impliedly accepted by both parties thereto as distinguished from a simple claim or a mere summary of accounts.” Target National Bank/Target Visa v. Samanez, 156 Pitts. Leg. J. 76, 77 (2007) (Wettick, J.). Such an account is appropriate in the context of an ongoing relationship between the parties where the substance of the parties' back and forth discussions regarding the amount due are averred th in the complaint. Id.; Capital One Bank v. Clevenstine, 7 Pa. D. & C. 5 153 (Centre Co. 2009). Under some circumstances, a party's silence may be deemed an acquiescence to the correctness of the account. See Weck v. First Pa. Banking Trust, 195 A.2d 111, 114 (Pa. Super. 1965). Nonetheless, “the failure to object cannot be construed as assent to pay the amount set forth in the statement unless the creditor can plead facts in addition to the failure to object to the invoice which show an express or implied agreement to pay the amount set forth on the invoice.” Samanez, 156 Pitts. Leg. J. at 77. Here, the relevant portion of the Plaintiff's eight-paragraph complaint reads: 4. Plaintiff furnished consumer credit to the [D]efendant by means of a credit card with account number ending in 85657 hereinafter referred to as the credit card account. 5. Plaintiff kept accurate running records of all debits and credits to the account. 3- - 10-5668 CIVIL TERM 6. Plaintiff mailed to [D]efendant monthly statements for the account including the billing statement attached hereto as Exhibit A. The monthly statements accurately stated the previous balance, the debits and credits to the account for the prior billing period. 7. Before [P]laintiff mailed Exhibit A., [D]efendant had for many months made payments on account of the billing statement or retained the statement without payment. 8. Defendant's actions as set forth above constituted an account stated between parties for the sum of $14,452.96 which sum reflects the Exhibit A statement balance less credits, if any, which were applied subsequent to the date of Exhibit A. Compl. at ¶¶ 4-8 (emphasis added). It is with these bare allegations that the Plaintiff purports to establish an account stated relationship with the Defendant entitling it to collect a monthly late fee of $39.99 and to accrue an interest rate of 29.99%. See Compl. Ex. A. Without a writing, such as a cardholder agreement, and absent substantially more detailed factual averments regarding the dealings between the parties, the Plaintiff has failed to plead sufficient facts to prove an express or implied agreement to such extreme terms. Accordingly, the Plaintiff has failed to state a claim based upon an account stated. The Defendant's preliminary objections will be sustained and the complaint dismissed. B. Disagreement Among the Courts Despite our conclusion, we realize there is some disagreement on this issue among the courts of common pleas. See Citibank (South Dakota) v. Ambrose, 13 Pa. D. & C. 5th 402 (Adams Co. 2010) (finding account stated 4- - 10-5668 CIVIL TERM properly pleaded on similar averments as the instant complaint); American Express Centurion v. Decker, 9 Pa. D. & C. 5th 299 (Centre Co. 2009) (finding similar complaint adequately pleaded on grounds that existence of account stated relationship between parties presented question of fact); Citibank v. King, 2 Pa. D. & C. 5th 60 (Centre Co. 2007) (finding account stated properly pleaded on similar averments as the instant complaint). But see Citibank (South Dakota) N.A., Bank v. Ananiev, 13 Pa. D. & C. 5th 557 (Adams Co. 2010) (rejecting account stated claim and demanding attachment of credit card statements and cardholder agreement); Target National Bank v. Kilbride, 10 Pa. D. & C. 489 (Centre Co. 2010) (holding defendant's mere failure to respond to monthly credit card statements insufficient to establish assent required to maintain account stated claim); Capital One Bank v. Clevenstine, 7 Pa. D. & C. 5th 153 (Centre Co. 2009) (rejecting account stated claims for modern credit card collections); Target National Bank/Target Visa v. Samanez, 156 Pitts. Leg. J. 76, 77 (2007) (Wettick, J.) (requiring detailed averments to establish account stated claim against alleged credit card debtor). III. Conclusion Ultimately, of the cases cited, we reject the former and endorse the latter because we believe they are most in accord with our Superior Court's seminal credit card case, Atlantic Credit and Finance. There, the court, speaking through President Judge Emeritus McEwen, marveled at the high interest rates and late fees associated with credit card debt, going so far as to note: Don Corleone once rasped: "A lawyer with his briefcase can steal more than a hundred men with 5- - 10-5668 CIVIL TERM guns." Mario Puzo, The Godfather, p. 51 (Putnam Publishing Group 1969)-one supposes that professional courtesy precluded his allusion to the banker. Atlantic Credit and Finance, Inc., 829 A.2d at 344 n.3. We decline to editorialize about the current state of consumer debt, but the facts remain that an APR of 29.99% and the associated monthly late fees represent extraordinary damages and a debtor's acceptance of such conditions must be established by some documentation. Specifically, a copy of the cardholder agreement, a statement of the account, and evidence detailing any assignment of the account must be included. Id. at 345; Arrow Financial Services LLC v. Witmer, No. 09-6197 (Cumb. Co. May 13, 2010). Although there is disagreement among the courts, we find that Plaintiff cannot escape this requirement by characterizing its claim as being based on an account stated. ORDER OF COURT AND NOW, this day of April, 2011, the preliminary objections filed by SUSTAINED.DISMISSED the Defendant, Douglas Ross, are The complaint is and the Plaintiff is granted 20 days to file a legally sufficient amended complaint. By the Court, Albert H. Masland, J. 6- - 10-5668 CIVIL TERM Yale D. Weinstein, Esquire 1060 Andrew Drive, Suite 170 West Chester, PA 19380 For Plaintiff Ashley M. Derr, Esquire 210 Grant Street, #301 Pittsburgh, PA 15219 For Defendant :saa 7- - CITIBANK (SOUTH DAKOTA), N.A., : IN THE COURT OF COMMON PLEAS OF PLAINTIFF : CUMBERLAND COUNTY, PENNSYLVANIA : : V. : : : DOUGLAS ROSS, : DEFENDANT : 10-5668 CIVIL TERM IN RE: PRELIMINARY OBJECTIONS OF DEFENDANT TO PLAINTIFF’S COMPLAINT BEFORE HESS, P.J. AND MASLAND, J. ORDER OF COURT AND NOW, this day of April, 2011, the preliminary objections filed by SUSTAINED.DISMISSED the Defendant, Douglas Ross, are The complaint is and the Plaintiff is granted 20 days to file a legally sufficient amended complaint. By the Court, Albert H. Masland, J. Yale D. Weinstein, Esquire 1060 Andrew Drive, Suite 170 West Chester, PA 19380 For Plaintiff Ashley M. Derr, Esquire 210 Grant Street, #301 Pittsburgh, PA 15219 For Defendant :saa