Eaton v. Citibank (South Dakota), N.A.

Filing 39

MEMORANDUM and ORDER denying 26 Motion for Judgment on the Pleadings Signed by Honorable James M. Munley on 3/15/10 (sm, )

IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA BRENDA EATON, Plaintiff : No. 3:09cv414 : : (Judge Munley) : v. : : CITIBANK (SOUTH DAKOTA), N.A., : Defendant : ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
M E M O R AN D U M B e fo re the court is defendant's motion for judgment on the pleadings. (Doc. 2 6 ). Having been fully briefed, the matter is ripe for disposition. B a c k g ro u n d T h is case arises from a credit card issued to the plaintiff by Defendant C itib a n k (South Dakota), N.A. ("Citibank"). According to plaintiff's second amended c o m p la in t, from 2006 until the filing of the amended complaint in September 2009, C itib a n k attempted to collect from plaintiff a debt owed on a credit card. (Amended C o m p lt. (Doc. 20) at ¶ 8). Plaintiff disputed the amount owed Citibank, contending th a t the charges were "excessive." (Id. at ¶ 9). On October 28, 2006, plaintiff sent d e fe n d a n t "an accord and satisfaction letter" and a "settlement check." (Id. at ¶ 10). She alleges that this payment was "in lieu of settlement of the account." (Id.). Defendant accepted and cashed that check. (Id. at ¶ 11). Plaintiff insists that d e fe n d a n t accepted the check as payment in full for the account by cashing her c h e c k , and that under Pennsylvania law she is no longer indebted to the defendant.

(Id. at ¶¶ 12, 16-19). P la in tiff's attorney sent defendant a letter on February 15, 2007. (Id. at ¶ 20). This letter informed defendant that plaintiff's account had been settled in full and d e m a n d e d that defendant correct plaintiff's credit report to reflect that fact. (Id. at ¶ 2 0 ). Defendant received and acknowledged that letter. (Id. at ¶ 21). Despite this le tte r, defendant refused to correct plaintiff's credit report to reflect satisfaction of the d e b t. (Id. at ¶ 22). Defendant wrote plaintiff on March 3, 2007 to reflect this fact. (Id. at ¶ 23). Plaintiff contends that defendant continues to refuse to correct her c re d it report, and continues to make erroneous reports to the credit bureaus. (Id. at ¶ 25). Plaintiff's complaint contains two counts. Count I alleges that defendant vio la te d the Fair Credit Reporting Act, 15 U.S.C. § 1681, by continuing to report p la in tiff's debt to credit report agencies after she allegedly satisfied it. Count II c o n te n d s that defendant engaged in an unlawful attempt to collect a debt by c o n tin u in g to report plaintiff's account as delinquent to credit reporting agencies. Such actions allegedly violated the Pennsylvania Unfair Trade and Consumer P ro te c tio n Act, 73 P.S. § 201, and the Fair Credit Extension Uniformity Act, 73 P.S. § 2270. D e fe n d a n t filed an answer and counterclaim on October 19, 2009. (See Doc. 2 4 ). The counterclaim alleges that plaintiff's claim arises from a Sears MasterCard c re d it card issued in plaintiff's name. (Id. at Counterclaim ¶ 2). Plaintiff used the

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account, agreeing to pay for amounts charged on the account and interest and fin a n c e charges. (Id. at ¶ 3). Defendant alleges that Eaton breached the card a g re e m e n t by not paying the account pursuant to the card agreement's terms. (Id. a t ¶ 4). Defendant contends that plaintiff owed $6,842.53 on the account as of S e p te m b e r 30, 2009. (Id. at ¶ 6). Defendant's counterclaim seeks payment of this a lle g e d ly 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 A n s w e r to Counterclaim (Doc. 24) at ¶ 2). She contends, however, that defendant b re a c h e d the credit-card contract by charging fees and raising interest rates in a m a n n e r not specified by the agreement. (Id. at ¶ 3-4). She thus denies the amount d e fe n d a n t claims she owes on the card. (Id. at ¶ 5). Defendant filed the instant motion for judgment on the pleadings on November 6 , 2009. (See Doc. 26). Defendant seeks an order dismissing plaintiff's case a g a in s t it, as well as judgment on Citibank's counterclaim and attorney's fees and c o s ts . The parties then briefed the motion, bringing the case to its present posture. J u r is d ic tio n P la in tiff 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 d is tric t courts shall have original jurisdiction of all civil actions arising under the C o n s titu tio n , laws, or treaties of the United States."). The court has supplemental ju ris d ic tio n over plaintiff's state-law claims pursuant to 28 U.S.C. § 1367(a) ("In any

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civil action of which the district courts have original jurisdiction, the district courts s h a ll have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or c o n tro v e rs y under Article II of the United States Constitution."). Legal Standard D e fe n d a n t has filed a motion for judgment on the pleadings pursuant to F e d e ra l Rule of Civil Procedure 12(c). That rule provides that "[a]fter the pleadings a re closed­but early enough not to delay trial­a party may move for judgment on the p le a d in g s ." FED. R. CIV. P. 12(c). "Under Rule 12(c), like Rule 12(b)(6) (dismissal fo r failure to state a claim upon which relief can be granted), judgment will not be g r a n te d : u n le s s the movant clearly establishes that no material issue of fact remains to b e resolved and that he is entitled to judgment as a matter of law. In c o n s id e rin g a motion for judgment on the pleadings, the trial court is required to view the facts presented in the pleadings and the inferences to be drawn th e re fro m in the light most favorable to the nonmoving party. In this fashion th e courts hope to insure that the rights of the nonmoving party are decided as fu lly and fairly on a rule 12(c) motion, as if there had been a trial." S o c ie ty Hill Civic Association v. Harris, 632 F.2d 1045, (3d Cir. 1980) (quoting 4 C. W rig h t & A. Miller, Federal Practice and Procedure, § 1368, at 690 (1969); see also, S ik iric a v. Nationwide Insurance Co., 416 F.3d 214, 220 (3d Cir. 2005) (finding that u n d e r Rule 12(c) "[j]udgment will not be granted unless the movant clearly e s ta b lis h e s there are no material issues of fact, and he is entitled to judgment as a m a tte r of law.").

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Discussion T h e defendant seeks both dismissal of plaintiff's claims and judgment on its c o u n te rc la im . The court will address both matters in turn. a . Plaintiff's Claim D e fe n d a n t argues that plaintiff's claim must be dismissed because the card a g re e m e n t between the parties contains a provision that allows Citibank to accept p a ym e n ts marked, as the payment here was, as payment in full for the debt incurred u n d e r the card. This provision, the defendant claims, means that Citibank can cash a check like the one plaintiff supplied without losing its right to seek full payment on th e account. The basis of the defendant's motion is the card agreement that allegedly e xis te d between the parties. Defendant provides a copy of this agreement as Exhibit A to its brief in support of the motion. That agreement establishes that Citibank "can a c c e p t late or partial payments, as well as payments that reflect "paid in full" or other re s tric tiv e endorsements, without losing any of our rights under this Agreement." (Card Agreement, Exh. A to Plaintiff's Brief (Doc. 27) at "Payments"). As such, d e fe n d a n t argues that it could not and did not waive its right to collect on the debt by c a s h in g plaintiff's check, which was offered as full payment for the amount owed. Defendant does not supply any information by which the court could conclude, h o w e ve r, that the document supplied in defendant's motion represents the actual a g re e m e n t between the parties. Plaintiff claims that it does not. A question of 5

material fact therefore exits as to whether the agreement supplied by the plaintiff a p p lie s to the parties. At this early stage of the litigation, the court cannot find that p la in tiff could not prevail on her claims. The parties must engage in discovery to e s ta b lis h the terms of their agreement. The issue raised here may be more a p p ro p ria te ly addressed at the summary judgment stage. Accordingly, the court will d e n y the defendant's motion at this point. b . Counterclaim T h e defendant insists that plaintiff admits that she has not made a payment on h e r account since October 2006 and that the account is now delinquent and past d u e with an outstanding balance of $6,842.53. Since defendant cannot maintain that h e r account was settled and her debt discharged by sending a letter stating that her p a ym e n t was satisfaction for the account in full, she is responsible for the entire a m o u n t due and judgment for that amount must be granted Citibank on the c o u n te r c la im . T h e court finds that there are questions of material fact which prevent granting ju d g m e n t pursuant to Rule 12(c) on defendant's counterclaim. To prevail on a b re a c h of contract claim in Pennsylvania, a plaintiff must prove three elements: "[(1)] th e existence of a contract, including its essential terms, (2) a breach of a duty im p o s e d by the contract and (3) resultant damages." Omicron Systems v. W e in e r, 8 6 0 A.2d 554, 564 (Pa. Super. Ct. 2004) (quoting J.F. W a lk e r Co., Inc. v. Excalibur O il Group, Inc., 792 A.2d 1269, 1272 (Pa. Super. Ct. 2002)). First, defendant has

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presented no evidence­simply its assertions­of the amount plaintiff owes on the c a rd issued her. Plaintiff has denied that she owes this amount, and nothing in the p le a d in g s demonstrates conclusively the amount owed. Moreover, plaintiff insists th a t defendant improperly assessed finance charges on the account. Thus, even if p la in tiff cannot contend that she has satisfied her debt, she can still assert that she d o e s not owe the amounts that defendant alleges in its counterclaim, or that the c h a rg e s have been laid contrary to the agreement between the parties and she has n o obligation to pay them. The pleadings before the court do not establish that there a re no questions of material fact on this issue, and the court will deny the motion on th is point. Such questions are better left for the close of discovery on the c o u n te rc la im , at which point a motion for summary judgment may be appropriate. C o n c lu s io n F o r the reasons stated above, the court will deny the defendant's motion for ju d g m e n t on the pleadings. An appropriate order follows.

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IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF PENNSYLVANIA BRENDA EATON, Plaintiff : No. 3:09cv414 : : (Judge Munley) : v. : : CITIBANK (SOUTH DAKOTA), N.A., : Defendant : ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
ORDER AN D NOW, to wit, this 15th day of March 2010, the defendant's motion for ju d g m e n t on the pleadings (Doc. 26) is hereby DENIED.

BY THE COURT: s / James M. Munley JUDGE JAMES M. MUNLEY U N IT E D STATES DISTRICT COURT

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