Houston v. Elan Financial Services

Filing 27

ORDER granting 17 Elan's Motion for Summary Judgment. The Clerk of Court is DIRECTED to enter the appropriate judgment of dismissal and to close this case. Signed by Chief Judge Lisa G. Wood on 9/24/2015. (csr)

R the Wniteb Statto flitritt Court
for the boutbern flhtrict of deorgia
913runowith flibiion
CLARK A. HOUSTON,
Plaintiff,
CV 214-119

V.

ELAN FINANCIAL SERVICES,
Defendant.
ORDER

Plaintiff Clark A. Houston ("Houston") wants to have his
cake and eat it too. Content to pay his credit card bill from
his personal bank account when his company was solvent, Houston
suddenly reneged when his financial fortune changed, swearing
that he cannot be held individually liable for debt in the name
of his now-defunct company. Alleging that Defendant Elan
Financial Services ("Elan") perpetrated harassment and fraud,
Houston seeks damages in the amount of $5,000,000.000. For its
part, Elan seeks to hold Houston personally liable for the
outstanding debt.
Elan now moves for Summary Judgment. In its Motion, Elan
avers that the parties entered into an enforceable contract when
Houston accepted the Card Member Agreement, the terms of which
AO 72A
(Rev. 8/82)

clearly hold an individual liable for an outstanding line of
business credit. In light of the undisputed facts of this case,
the Court GRANTS Elan's Motion for Summary Judgment (Dkt. No.
17) for the reasons set forth below.
FACTUAL BACKGROUND
Houston is a licensed Georgia contractor, specializing in
electric and industrial work, for both residential and
commercial property. Dkt. No. 17-3 ("Houston Dep."), 16:21-25.
From 1984 to 2003, Houston owned a company, Houston
Construction. Id. at 17:12-14. Houston sought legal advice for
his company after he secured a large contract for a project in
2003. Id. at 17:14-17. Acting upon the advice of an attorney,
Houston incorporated his new company, becoming the president of
Houston Electric, Inc. ("Houston Electric"). Id. at 17:15-17,
25:13-15.
Initially, Houston Electric proved a great success;
Houston's company "made plenty of money . . . [and] everything
was fine." Id. at 18:1-3. In late 2009 or early 2010, Houston
Electric received a written offer from United Community Banks,
Inc. to apply for a line of business credit. Id. at 25:24_26:8.1
Houston called Elan when he was unable to successfully apply for
the credit card online, and he identified himself to the
representative as "Clark Houston," the "business owner" of
1

Elan is the "creditor, issuer and service provider" of the United Community
Banks, Inc. business credit card. Dkt. No. 17-6, p. 1.
AO 72A
(Rev. 8/82)

2

I
Houston Electric. Id. at 28:24-29:10. During that phone call,

I

the representative obtained Houston Electric's: gross annual
income (Id. at 35:24-36:2), Federal Tax Identification Number
(id. at 37:14), business address (id. at 29:23-24), as well as
Houston's personal address (Id. at 37:23-24)
Upon completion of the credit card application, the
representative relayed the following liability terms from the
Card Member Agreement:
Mr. Houston, the business owner, and each
individual employee applicant understand and
agree that the business, the business owner,
and the individual employees will be liable
for charges to the account as follows: One,
the business is jointly and severally liable
with each individual employee as to that
individual employee's charges. Two, the
business owner and each individual employee
is individually liable as to their
respective individual charges. And three,
the business owner is individually liable
and jointly liable with the business for all
charges made to the account. . . . Use of
the card or account will signify acceptance
of the terms of the Card Member Agreement.
Id. at 41:20-42:25; Following the recitation of liability,
Houston stated that he understood the terms, confirmed that he
would be the only individual with access to the card, and
verbally provided his assent for the representative to complete
his application. Id. at 43:1-11. The representative then
informed him that he would receive his credit card and Card

A0 72A
(Rev. 8/82)

3

Member Agreement in the mail within seven to ten business days.
Id. at 43:1-11.
On or about February 11, 2010, Elan approved Houston
Electric's credit application, establishing a line of business
credit with a limit of $3,000.00. Dkt. No. 17-4 ("Johnson
Deci."), p. 3; Dkt. No. 17-6, ¶ 1. Shortly thereafter, Houston
received the credit card and the Card Member Agreement, but he
did not read the agreement because he threw it in the trash.
Houston Dep., 47:18-29, 48:4 - 5; see also Dkt. No. 17-7 ("Card
Member Agreement"), p. 4. Houston began to use the credit card
within a month of its receipt, purchasing "a lot of things with
it." Houston Dep., 47:18-20, 60:10, 81:18-20. Elan sent
Houston Electric monthly statements beginning in February 2010,
which Houston paid from his personal bank account. Dkt. No. 178, p. 75; Houston Dep., 66:13-16, 67:1-7.
Unfortunately, Houston Electric's financial circumstances
changed for the worse when a large contract fell through, and
Houston "drained" his personal bank account in an attempt to
keep his company afloat. Houston Dep., 18:4-9, 19:1 - 2. Houston
was unable to pay his bills or find work for his company,
further compounding his financial woes. Id. at 18:24-19:2. In
the midst of this crisis, Houston attempted to repay Houston
Electric's debts by "selling everything that [he] had left" and
offering his creditors "money for a settlement." Id. at 19:3AO 72A
(Rev. 8/82)

4

13. The full balance on the Elan credit card, however, was
never paid by either Houston or Houston Electric. Johnson
Decl., p. 3; Houston Dep., 52:23. In accordance with the terms
of the Card Member Agreement, Elan reported factually accurate
information regarding the status of the account to the credit
bureau. Card Member Agreement, p.

42 Following numerous

attempts to collect payment from either Houston or Houston
Electric, on May 14, 2012, Elan- sold its right to collect
Houston Electric's debt to CACH, LLC. Johnson Decl., p. 4; Card
Member Agreement, p. 4. 3 At the time of the sale, Houston
Electric's debt was $3,799.17, including the bank's legally
chargeable interest. Johnson Decl., p. 4.
2

The applicable section from the card Member Agreement reads as follows:
30. collecting credit Information About you - You
authorize us to make any credit, employment and
investigative inquiries we feel are appropriate
related to giving you credit or collecting amounts
owed on your Account.
You agree that a consumer
credit report or business bureau file report, as
applicable, may be requested -periodically from one or
more credit reporting agencies (credit bureaus) and
used in connection with your application and any
update, renewal or extension of credit.
We may
provide information about you, your Account or your
credit history to credit reporting agencies and
others who may properly receive that information.
Card Member Agreement, p. 4.
The relevant provision from the Card Member Agreement, authorizing Elan to
assign an account to another creditor, reads as follows:
29. Assignment of your Account to Another Creditor We may assign, -sell or transfer your Account and
amounts owed by you to another creditor at any time.
If we do this, the Agreement will still be in effect
unless and until amended, and any references made in
this Agreement to "we", "us", "our", or "the issuer"
will refer to the creditor to which we assigned,
sold, or transferred the Account or amounts owed
under the Account.
Card Member Agreement, p. 4.
-

AO 72A
(Rev. 8/82)

5

PROCEDURAL BACKGROUND

Initially, Houston, proceeding pro Se, filed an action
against Equifax/Elan and All Associated [sic], on February 16,
2012, in the McIntosh County Superior Court. Dkt. No. 171, p.
2. On February 6, 2014, McIntosh County Superior Court issued
an order dismissing all of Houston's claims with prejudice
against Equifax Information Services, LLC. Id. at p. 50. On
August 27, 2014, Houston reasserted his fraud, harassment, and
wrongful collection claims against Elan, requesting that the
court award him a sum of $5,000,000.00 as damages. Id. at p.
91-93. Elan removed the action to this Court on August 8, 2014.
Dkt. No. 3. Elan filed the instant motion for summary judgment
on January 23, 2015, (Dkt. No. 17), to which Houston has filed a
Reply to Notice (Dkt. No. 19, 22)
LEGAL STANDARD

Summary judgment is required where "the movant shows that
there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law." Fed. R.
Civ. P. 56(a) . A fact is "material" if it "might affect the
outcome of the suit under the governing law." FindWhat Inv'r
Grp. v. FindWhat.com , 658 F.3d 1282, 1307 (11th Cir. 2011)
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986)) . A dispute over such a fact is "genuine" if the
"evidence is such that a reasonable jury could return a verdict
A0 72A
(Rev. 8/82)

10,

for the nonmoving party." Id. In making this determination,
the Court is to view all of the evidence in the light most
favorable to the nonmoving party and draw all reasonable
inferences in that party's favor. Johnson v. Booker T.
Washington Broad. Serv., Inc., 234 F.3d 501, 507 (11th Cir.
2000)
The party seeking summary judgment bears the initial burden
of demonstrating the absence of a genuine issue of material
fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986) . To
satisfy this burden, the movant must show the court that there
is an absence of evidence to support the nonmoving party's case.
Id. at 325. If the moving party discharges this burden, the
burden shifts to the nonmovant to go beyond the pleadings and
present affirmative evidence to show that a genuine issue of
fact does exist. Anderson, 477 U.S. at 257. The nonmovant may
satisfy this burden in two ways: First, the nonmovant "may show
that the record in fact contains supporting evidence, sufficient
to withstand a directed verdict motion, which was 'overlooked or
ignored' by the moving party, who has thus failed to meet the
initial burden of showing an absence of evidence." Fitzpatrick
v. City of Atlanta, 2 F.3d 1112, 1116 (11th Cir. 1993) (quoting
Celotex Corp., 477 U.S. at 332 (Brennan, J., dissenting)).
Second, the nonmovant "may come forward with additional evidence
sufficient to withstand a directed verdict motion at trial based
AO 72A
(Rev. 8/82)

7

on the alleged evidentiary deficiency." Id. at 1117. Where the
nonmovant attempts to carry this burden instead with nothing
more "than a repetition of his conclusional allegations, summary
judgment for the defendants [is] not only proper but required."
Morris v. Ross, 663 F.2d 1032, 1033-34 (11th Cir. 1981)
DISCUSSION
I.

Houston Is Liable for Houston Electric's Credit Card Debt

Houston sets forth three arguments as to why he cannot be
held responsible for Houston Electric's debt: (1) that he never
signed as a guarantor of the debt; (2) that Elan illegally
provided information regarding Houston to various credit
reporting agencies; and (3) that Elan fraudulently modified his
account, holding him personally liable for debt when the account
was originally established in Houston Electric's name. Houston,
however, misunderstands the law.
As an initial matter, a creditor does not need to present a
debtor with his signature on a credit card application to prove
the existence of credit card debt. A creditor can prove the
existence of credit card debt by presenting the Court with the
following evidence: (1) that it issued a credit card to the
debtor; (2) that the debtor agreed to be bound by the terms of
the credit card agreement if he used the card; (3) that the
debtor received monthly statements that were not returned to the
creditor; and (4) that the debtor failed to pay the outstanding
AO 72A
(Rev. 8/82)

balance. Davis v. Discover Bank, 627 S.E.2d 819, 89-21 (Ga.
Ct. App. 2006) . As in Davis, Elan presented the Court with the
following undisputed evidence: (1) the letter approving Houston
Electric's application for a credit card (Dkt. No. 17-6); (2)
the Card Member Agreement (Dkt. No. 17-7); (3) a record of the
monthly statements that were mailed to Houston Electric (Dkt.
No. 17-8, pp. 1-77); (4) Houston's acknowledgement that he
received the aforementioned monthly statements (Houston Dep.,
66:13-15); and (5) sworn statements that Houston failed to pay
his outstanding balance (Decl. James Johnson,

p. 3; Houston

Dep., 52:53). On the basis of these undisputed facts, it is
thus clear that there is an outstanding debt and that Houston is
responsible for that debt.
An individual can be held personally responsible for a line
of business credit if he consents to be bound by the terms of
the Card Member Agreement. An individual's receipt of a credit
card amounts to a "mere offer" from the credit card company—an
offer that the individual must accept or reject. Read v. Gulf
Oil Corp., 150 S.E.2d 319, 320 (Ga. Ct. App. 1966) (explaining
that an individual can accept an offer by retaining the card and
making purchases with it or reject an offer by choosing not to
use it and returning it) . Acceptance of the credit card
constitutes "a formal and binding contract" between the parties.
See id. Houston's mere use of the credit card thus signified
A0 72A
(Rev. 8/82)

two major concessions: (1) that he accepted and agreed to the
terms of Elan's Card Member Agreement; and (2) that he consented
to the entry of a formal and binding contract between himself
and Elan.
When evaluating a contract between parties, basic
principles of contract interpretation apply. See Jones v.
Barnes, 318 S.E.2d 164, 166 (Ga. Ct. App. 1984) (explaining that
"[i]f the terms used in a contract are plain, unambiguous, and
capable of only one reasonable interpretation, then they must be
given their ordinary significance") . The terms of the Card
Member Agreement clearly set forth Houston's liability for
Houston Electric's debt. The relevant provision of the Card
Member Agreement, clause twenty-one, states as follows:
You are individually liable and you and your
employer (which includes the individuals or
co-obligor(s) who executed the application
for credit) are jointly liable for all
charges to the Account, including, without
limitation, all fees and INTEREST CHARGES.
In addition, if you are the individual or
co-obligor who executed the application for
credit, you are individually liable and
jointly liable with the Company for all
charges to the Account for your use of the
Accounting, including, without limitation,
all fees and INTEREST CHARGES.
You are
responsible and agree to pay for all charges
in connection with your use of the Card and
Account regardless of whether you have been
reimbursed by your Employer.
Card Member Agreement, p. 4. The Card Member Agreement could
not be more clear: the credit card applicant—here, Houston—is
A0 72A
(Rev. 8/82)

ME

individually liable to pay for all charges associated with the

account. Houston's claim that Elan fraudulently pursued him to
pay for Houston Electric's debt fails as a matter of law. Elan
expressly reserved the right to hold Houston personally liable
for his business debt. Id. at p. 4. That Elan chose to
exercise its right to seek repayment from an individual
applicant, as opposed to the company, does not render its
actions fraudulent.
Houston's final claim—that Elan illegally reported
information regarding his credit to credit reporting agencies—
lacks merit and must fail as a matter of law. Clause thirty of
the Card Member Agreement clearly states that Elan can provide
current information regarding an individual's account status or
credit history to credit reporting agencies. See supra note 2.
Given that Houston expressly provided his consent for Elan to
report information regarding his account to credit bureaus, he
cannot now claim that Elan is perpetrating a fraud.
Notwithstanding the above, the Court will not disturb the terms
of the Card Member Agreement when the meaning of the terms of
that agreement can be clearly construed from the text of the
document. In light of such an unambiguous contract, Houston's
claim that he cannot be held liable for Houston Electric's debt
fails as a matter of law.

A0 72A
(Rev. 8/82)

11

II. Elan Did Not Defame Houston when it Reported Accurate
Information to the Credit Bureau

In his complaint, Houston sets forth a defamation claim,
regarding Elan's act of "presenting or publishing false
information" about him to the credit reporting agencies. Dkt.
No. 9, p. 2. To succeed on a claim of defamation, Houston must
show:
that the defendant made a false and
defamatory statement concerning the
plaintiff; that the defendant made an
unprivileged communication of that statement
to a third party; fault by the defendant
constituting at least negligence; and either
that the plaintiff suffered special harm or
that the statement is actionable even in the
absence of special harm.
Wylie v. Denton, 746 S.E. 2d 689, 696 (Ga. Ct. App. 2013)
(citing Renton v. Watson, 739 S.E.2d 19 (Ga. Ct. App. 2013) . As
discussed supra, when Houston entered into the contract with
Elan, he consented to Clause Thirty of the Card Member
Agreement. See supra note 2. Elan expressly reserved the right
to report accurate information regarding Houston's account
status and credit history to credit bureaus. Id. A truthful
disclosure about the status of Houston's account or credit
history cannot qualify as defamation, regardless of the unsavory
contents in the report. See Wylie, 746 S.E.2d at 696.
III. Houston's Claims of Harassment and Wrongful Collection
Lack Evidentiary Support

A0 72A
(Rev. 8/82)

ITI

Houston failed to support his allegations of harassment and
wrongful collection with evidence that would allow this Court to
provide him with his requested relief. In his complaint,
Houston alleges "harassment, Wrongful Collections" [sic] . Dkt.
No. 9, p. 3. The Court interprets Houston's pro se complaint
liberally as it "is held to less stringent standards than formal
pleadings drafted by a lawyer." Erickson v. Pardus, 551 U.S.
89, 94 (2007) (citing Estelle v. Gamble, 429 U.S. 97, 106
(1976)). Accordingly, the Court construes Houston's complaint
as an attempt to state a claim pursuant to the Federal Fair Debt
Collection Practices Act ("FDCPA"), 15 U.S.C.A. § 1692(d)
(2015) .

"Wrongful Collection" is a layman's term, which

15 U.S.C. 1692(d) reads as follows:
A debt collector may not engage in any conduct the
natural consequence of which is to harass, oppress,
or abuse any person in connection with the collection
of a debt. Without limiting the general application
of the foregoing, the following conduct is a
violation of this section: (1) The use or threat of
use of violence or other criminal means to harm the
physical person, reputation, or property of any
person; (2) The use of obscene or profane language or
language the natural consequence of which is to abuse
the hearer or reader; (3) The publication of a list
of consumers who allegedly refuse to pay debts,
except to a consumer reporting agency or to persons
meeting the requirements of section 1681(a) (f) or
1681(b) (3) of this title; (4) the advertisement for
sale of ani debt to coerce payment of the debt;
(5)Causing a telephone to ring or engaging any person
in telephone conversation repeatedly or continuously
with intent to annoy, abuse, or harass any person at
the called number; (6) Except as provided in section
1692(b) of this title, the placement of telephone
calls without meaningful disclosure of the caller's
identity.

AO 72A
(Rev. 8/82)

13

encompasses the prohibited conduct of a debt collector. Id. at
§ 1692(d) (l)-(6).
Houston's claim of harassment pursuant to the FDCPA fails.
The record is devoid of any details of Elan's alleged predatory
behavior. Indeed, Houston's various filings fail to address
specifics of the alleged harassment—none of his pleadings
explain how, where, or when Elan committed these acts. See,
e.g., Dkt. No. 9, Dkt. No. 14, Dkt. No. 19. Even construed
liberally,a mere statement that Houston suffered "mental
anguish, anxiety, grief, shock, humiliation, and mental
suffering," (Dkt. No. 9, p. 3), does not warrant granting
Houston's requested relief. Johnson, 234 F.3d at 507.
Houston's final claim of wrongful collection in violation
of 15 U.S.C. §1692(d) similarly lacks evidentiary support for
the reasons set forth above. Six different types of actions
qualify as a prohibited behavior for a debt collector. 15
U.S.C. 1692(d) (1)-(6) . Although Houston states that he has been
subject to a "constant barrage of harassment and threats," (Dkt.
No. 9, p. 3), he fails to provide the Court with evidence of
these alleged acts. Without more, the dearth of detail is a
death knell for his claims.
CONCLUSION

No matter how he tries to slice it, Houston is liable for
Houston Electric's outstanding line of business credit. Elan's
AO 72A
(Rev. 8/82)

14

Notion for Summary Judgment (Dkt. No. 17) must, therefore, be
GRANTED in its entirety. The Clerk of Court is DIRECTED to enter

the appropriate judgment and to. close this case.
SO ORDERED, this 24TH day of September, 2015.

LISA GODBEY WOOD, CHIEF JUDGE
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA

15