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Eaton v. Citibank

October 25, 2010


The opinion of the court was delivered by: Judge Munley


Before the court is defendant's motion for summary judgment. (Doc. 51). Having been fully briefed, the matter is ripe for disposition.


This case arises from a credit card issued to the plaintiff by Defendant Citibank (South Dakota), N.A. ("Citibank").*fn1 Plaintiff contends that she satisfied her obligation when she submitted as payment a check with the notation that by cashing her $110 check Citibank agreed to accept that amount as payment in full. Citibank contends that this payment did not satisfy the account and in a counterclaim demands payment of the full amount due.

The credit card here in question is covered by written terms and conditions. (Defendant's Brief in Support of Summary Judgment (hereinafter (Defendant's Brief") (Doc. 51) at 2). Plaintiff disputes that this contract is enforceable. (Plaintiff's Response to Defendant's Statement of Undisputed Material Facts (hereinafter "Plaintiff's Response") (Exh. F to Plaintiff's Brief in Opposition, (Doc. 55) at ¶ 2). The written agreement provides that the cardholder (here the plaintiff) "must pay at least the Total Minimum Due by the payment due date, and [plaintiff] may pay more at any time without a penalty." (Card Agreement, Exh. 1 to Defendant's Brief). The agreement further provides that "[w]e can accept late or partial payments, as well as payments that reflect 'paid in full' or other restrictive endorsements, without losing any of our rights under this Agreement." (Id.). The agreement also permits Citibank to "report information about your account to credit bureaus. Late payments, missed payments, or other defaults on your account my be reflected on your credit report." (Id.). The person issued the card is also responsible for any attorney's fees Citibank "incur[s], plus the costs and expenses of any legal action" if the bank is forced to turn to an outside agent to collect the account. (Id.) The agreement also establishes that federal and South Dakota law shall govern the contract. (Id.). Plaintiff contends that "the governing contract for the alleged account which is the subject of this civil action is in dipute." (Plaintiff's Response at ¶ 3) (emphasis in original). She does not explain how these written terms are "in dispute."

After being issued this card, plaintiff began receiving monthly billing statements. As part of papers submitted in support of the motion for summary judgment, defendant has provided the court with billing records for the account from June 29, 2006 through May 24, 2007. (See Exh. 2 to Defendants' Brief). These records reflect that Citibank credited plaintiff's account with $110 for a payment received on November 1, 2006. (Id.). Earlier billing records apparently do not exist, but defendant has provided the court with "transaction reference reports" for the account from March 24, 2001 until May 27, 2006. (See Exh. 3 to Defendants' Brief). These records indicate that as of May 24, 2007, the last date on which plaintiff received a bill, her account balance stood at $6,842.53. (Id.).

Plaintiff admits that she used the account to make purchases for goods and services. (Plaintiff's Response at ¶ 8). She also admits that the last payment she made on the account came on November 1, 2006. (Plaintiff's Response to Defendant's Request for Admissions, Exh. C to Defendant's Brief at ¶ 5). Plaintiff contends, however, that this statement was not a payment, but a "full and final settlement of a disputed account." (Id.).*fn2 Thus, she insists, there was no balance on the account after that date, since "accord and satisfaction on the disputed account" had been achieved. (Id. at ¶ 6). Plaintiff made no payment on the account in 2007, 2008 and 2009. (Id. at ¶¶ 7-9). George Shadie, plaintiff's husband, testified at his deposition that neither he nor his wife had ever received a writing from Citibank that their $110 check had settled the account. (George Shadie Deposition (hereinafter "Shadie Dep."), Exh. D to Defendant's Brief, at 34). Shadie claimed, however, that he had spoken with a Citibank employee on the phone, who agree to accept $110 to settle the account. (Id.). Shadie also claimed to have sent several other payments to settle the account, though he had never received confirmation from Defendant that the payments had satisfied plaintiff's obligation. (Id. at 79). In an affidavit signed on June 4, 2010, George Shadie averred that he had sent defendant checks for various amounts in 2005 and 2006, believing that the parties had an agreement to settle the account. (Affidavit of George Shadie, Exh. 1 to Plaintiff's Brief in Opposition (Doc. 55) at 1-2). When Citibank did not close the account, he and his wife sent the $110 check. (Id. at 2).

In her deposition, plaintiff agreed that she did not make any payments on the account after submitting the check for $110. (Plaintiff's Deposition, Exh. E to Defendant's Brief, at 43). She insists this payment "was a full and final payment of an alleged balance which was in dispute." (Plaintiff's Response at ¶ 13). Plaintiff has also submitted documentation related to various requests she made to the defendant. She wrote defendant on September 30, 2005, confirming a telephone conversation of September 5, 2005. (Exh. D to Plaintiff's Brief in Opposition (Doc. 55)). Plaintiff had received the terms of the account, and refused to accept them. (Id.). She demanded a "payoff figure" and contended that she had never agreed to accept an interest rate of more than 30%. (Id.). Plaintiff requested arbitration if the parties failed to resolve their dispute. (Id.). A second letter, dated September 10, 2006 and addressed to "Billing Errors" in the Lakes, Nevada, contains a "formal" request that the parties arbitrate their dispute over the account. (See Exh. C to Plaintiff's Brief in Oopposition). Plaintiff contends in that document that she had been promised that if she paid $1,425 the account would be closed and settled as paid in full. (Id.). Later, someone promised plaintiff that the account would be marked as paid in full if she paid $348. (Id.) "Every time I call we get a different story," plaintiff complained. (Id.). "I paid these amounts to protect my credit rating." (Id.).

Plaintiff filed a complaint on March 5, 2009 (Doc. 1). She filed an amended complaint on May 5, 2009. (Doc. 6). The amended complaint contains two counts. Count I alleges that defendant violated the Fair Credit Reporting Act, 15 U.S.C. § 1681, by continuing to report plaintiff's debt to credit report agencies after she allegedly satisfied it. Count II contends that defendant engaged in an unlawful attempt to collect a debt by continuing to report plaintiff's account as delinquent to credit reporting agencies. Such actions allegedly violated the Pennsylvania Unfair Trade and Consumer Protection Act, 73 P.S. § 201, and the Fair Credit Extension Uniformity Act, 73 P.S. § 2270.

Defendant filed an answer and counterclaim on October 19, 2009. (See Doc. 24). The counterclaim alleges that plaintiff's claim arises from a Sears MasterCard credit card issued in plaintiff's name. (Id. at Counterclaim ¶ 2). Plaintiff used the account, agreeing to pay for amounts charged on the account and interest and finance charges. (Id. at ¶ 3). Defendant alleges that Eaton breached the card agreement by not paying the account pursuant to the card agreement's terms. (Id. at ¶ 4). Defendant contends that plaintiff owed $6,842.53 on the account as of September 30, 2009. (Id. at ¶ 6). Defendant's counterclaim seeks payment of this allegedly delinquent amount, plus costs, interest and attorney's fees. (Id. at ¶ 7). Plaintiff admits that the Sears MasterCard is the subject of this dispute. (Plaintiff's Answer to Counterclaim (Doc. 24) at ¶ 2). She contends, however, that defendant breached the credit-card contract by charging fees and raising interest rates in a manner not specified by the agreement. (Id. at ¶ 3-4). She thus denies the amount defendant claims she owes on the card. (Id. at ¶ 5).

Defendant filed a motion for judgment on the pleadings on November 6, 2009. (See Doc. 26). Defendant sought an order dismissing plaintiff's case against it, as well as judgment on Citibank's counterclaim and attorney's fees and costs. The court denied this motion on March 15, 2010. (See Doc. 39). The parties then engaged in discovery. At the close of discovery, defendant filed the instant motion. The parties then briefed the issues, bringing the case to its present posture.


Plaintiff brings her claims pursuant to the Fair Credit Reporting Act, 15 U.S.C. § 1681. As such, the court has jurisdiction pursuant to 28 U.S.C. § 1331 ("The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States."). The court has supplemental jurisdiction over plaintiff's state-law claims pursuant to 28 U.S.C. § 1367(a) ("In any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims ...

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