Opinion
No. 2011–CA–1284.
2012-02-29
DISCOVER BANK v. Andrea NELSON.
Gregory M. Eaton, Stacey L. Greaud, Paul E. Pendley, Christian M. Craddock, Eaton Group Attorneys, L.L.C., Baton Rouge, LA, for Plaintiff/Appellee. Ginger K. DeForest, Metairie, LA, for Defendant/Appellant.
Gregory M. Eaton, Stacey L. Greaud, Paul E. Pendley, Christian M. Craddock, Eaton Group Attorneys, L.L.C., Baton Rouge, LA, for Plaintiff/Appellee. Ginger K. DeForest, Metairie, LA, for Defendant/Appellant.
(Court composed of Judge EDWIN A. LOMBARD, Judge PAUL A. BONIN, Judge MADELEINE M. LANDRIEU).
EDWIN A. LOMBARD, Judge.
The defendant, Andrea Nelson, appeals the trial court's judgment granting a motion for summary judgment in favor of the plaintiff, Discover Bank. For the reasons set forth below, we affirm.
Relevant Facts and Procedural History
On April 9, 2010, Discover Bank filed suit in First City Court for the City of New Orleans against Ms. Nelson, seeking to recover funds allegedly due on Ms. Nelson's credit card account. Discover Bank was attempting to recover the sum of “$6,333.61, together with additional interest of 18% from December 31, 2009, and attorney's fees in the amount of 25% of the total of both principal and interest, and all costs of these proceedings.” Discover Bank alleged that, as a condition of opening the account, Ms. Nelson agreed to pay reasonable attorney's fees and interest associated with collecting payments as a result of default. The petition also asserted that the balance had not been paid despite amicable demand on February 10, 2010. On December 21, 2010, Ms. Nelson filed an Answer and Request for Notice, consisting of a general denial and raising the issue of prescription as an affirmative defense.
On April 25, 2011, Discover Bank filed a motion for summary judgment and supporting documents asserting it was entitled to recover these same amounts. The trial court heard the matter on June 16, 2011, and granted summary judgment the same day in favor of Discover Bank. The defendant appeals this judgment.
Standard of Review
Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact, and that mover is entitled to judgment as a matter of law.” La.Code Civ. Proc. art. 966(B). The initial burden of producing evidence at the hearing on the motion for summary judgment is on the mover, who can ordinarily meet that burden by submitting affidavits or by pointing out the lack of factual support for an essential element in the opponent's case. Schultz v. Guoth, 10–0343, p. 4 (La.1/19/11), 57 So.3d 1002, 1006; citing Samaha v. Rau, 07–1726, p. 4 (La.2/26/08), 977 So.2d 880, 883. “At that point, the party who bears the burden of persuasion at trial (usually the plaintiff) must come forth with evidence (affidavits or discovery responses) which demonstrates that he or she will be able to meet the burden at trial.... Once the motion for summary judgment has been properly supported by the moving party, the failure of the non-moving party to produce evidence of material factual dispute mandates the granting of the motion.” Id.; (citations omitted).
“A summary judgment is reviewed on appeal de novo, with the appellate court using the same criteria that govern the trial court's determination of whether summary judgment is appropriate; i.e. whether there is any genuine issue of material fact, and whether the movant is entitled to judgment as a matter of law.” Samaha v. Rau, 07–1726, pp. 3–4, 977 So.2d at 882–83.
Discussion
In its motion for summary judgment, Discover Bank asserts that there is no genuine issue of material fact concerning Discover Bank's entitlement to recover the balance due on Ms. Nelson's account, and, therefore summary judgment should be granted in its favor. In support, Discover Bank submits the following evidence without opposition: (1) a demand letter dated February 10, 2010; (2) an unsigned credit card agreement; (3) a statement of account; (4) a “Supplemental Affidavit of Correctness of Account,” signed by an employee of the attorney representing Discover Bank; and (5) an affidavit by Discover Bank's servicing agent's account manager. These documents establish that Ms. Nelson incurred a debt which she never paid.
In opposition to the motion for summary judgment, Ms. Nelson does not contest that she incurred the debt, but contends that because Discover Bank sent her a notice that the account had been charged off, her obligation to repay her debt was extinguished. In support of her position, Ms. Nelson files an account statement entitled “Discover Open Road Card Account Summary.” Ms. Nelson alleges that this document indicates that Discover Bank credited her with $6,333.61 on January 26, 2010 and marked it as “Internal Charge–Off” with a “New Balance of $0.00.” Ms. Nelson contends that this document creates a genuine issue of material fact which precludes summary judgment. We disagree.
Although Ms. Nelson argues that the document is sufficient to demonstrate that she would meet her burden at trial, the document, in fact, shows only that the amount of $6,333.61 was internally charged off. In researching the term “internal charge-off,” we find no directly related jurisprudence, but the term “internal,”
is generally defined as “of, relating to, or occurring on the inside of an organized structure (as a club, company or state),” and the general definition for the term “charge-off”
“internal.” Merriam–Webster Online Dictionary, 2011. http:// www/ merriam- webster. com (29 January 2011).
is “[t]o treat (an account receivable) as a loss or expense because payment is unlikely; to treat as a bad debt (a debt that is uncollectable and may be deductible for tax purposes).” Thus, an internal charge-off is only a corporate accounting mechanism and does not extinguish a debt. Therefore, Ms. Nelson's submission of this document does not create a genuine issue of material fact.
Black's Law Dictionary (9th ed.2009).
Conclusion
Upon de novo review, we find no genuine issue of material fact exists as to whether Ms. Nelson is indebted to Discover Bank in the amount of $6,333.61. Accordingly, we affirm the judgment of the trial court.
AFFIRMED BONIN, J., dissents with reasons.
BONIN, J., dissents with reasons.
I respectfully dissent. I would reverse the summary judgment and remand to the trial court for a trial on the merits.
By July 1, 2009, Discover Bank received no payments from Ms. Nelson on her credit-card account. The bank increased its finance charge to 28.99% APR, so that Ms. Nelson was being charged more than $125.00 per month on the account plus $39.00 in “purchases” which correlated to a late fee. Her “previous balance” on the July statement was $5,029.53; by December 31, 2009, it had swollen to $6,333.61. All of the increase was due to finance charges at 28.99%, late fees, and ultimately “overlimit” fees.
Then Discover Bank, as the majority notes, sent Ms. Nelson a credit-card statement in which it explained that it had taken an “internal charge-off” of $6,333.61 which it credited to her previous balance, resulting in a new balance of “$0.00.”
In her opposition to summary judgment, Ms. Nelson timely raised and factually supported the affirmative defense of remission of the debt.
Ms. Nelson did not raise the affirmative defense of extinguishment of the debt through the creditor's remission in her answer. SeeLa. C.C.P. art. 1005 (the answer shall set forth affirmatively “extinguishment of the obligation in any manner”). It is preferable to raise the defense in the answer, but it is not necessary to a party's opposing summary judgment that the defense have been affirmatively raised in the party's answer. See, e.g., Dubois v. Fab–Con, Inc., 02–1731, p. 5 (La.App. 4 Cir. 5/21/03), 848 So.2d 679, 683;Walters v. Metropolitan Erection Co., 04–0162, pp. 6–7 (La.App. 4 Cir. 10/27/94), 644 So.2d 1143, 1147, and, most recently, Johnson v. Orleans Parish School Bd., 10–1388, p. 9 (La.App. 4 Cir. 12/20/11), 80 So.3d 1175, 1182, writs pending 2012–C190, 2012–C–195, and 2012–C–236 (La.01/23/12).
“A remission of debt by an obligee extinguishes the obligation.” La. Civil Code art. 1888. “That remission may be express or tacit.” Id. Importantly, “[a] remission of a debt is effective when the obligor receives the communication from the obligee.” La. Civil Code art. 1890. And “[a]cceptance of a remission is always presumed unless the obligor rejects the remission within a reasonable time.” Id. (emphasis added)
Because under the substantive law applicable to this controversy Ms. Nelson is presumed to have accepted the remission of the debt, she has sufficiently factually supported her defense (on which she bears the burden of persuasion) and, in my view, raised a genuine issue of material fact whether the obligation claimed by Discover Bank was still owed by her, which would preclude summary judgment. There is, even under the Anderson v. Liberty Lobby, Inc.
test, sufficient evidence that a fact-finder applying the evidentiary standard “could reasonably find” for Ms. Nelson. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
Anderson v. Liberty Lobby, Inc., 477 U.S. at 249, 106 S.Ct. 2505. I have considerable reservations, however, that Anderson is an appropriate authority for summary judgment review in this creditor-debtor dispute, and mean only to suggest that even under the Anderson standard, which treated of a libel case in which the substantive standard was “clear and convincing,” a fact-finder applying the presumption of acceptance of the remission of the debt could return a judgment favoring the nonmoving party, Ms. Nelson. In our case, the burden of persuasion is by a preponderance of the evidence; the burden on proving the debt is on the moving party, Discover Bank, and on proving the extinguishment of the debt on the nonmoving party, Ms. Nelson.
Discover Bank has not pointed out that there is an absence of factual support for Ms. Nelson's defense that her debt to it has been extinguished by remission. SeeLa. C.C.P. art. 966 C(2). Because it failed in its burden on its motion, summary judgment is not authorized.
Accordingly, I dissent.