Professional Collection Consultants v. Lauron
8 Cal. App. 5th 958
| Cal. Ct. App. | 2017Background
- Lauron had two Chase credit-card accounts (ending 5285 and 5274); Chase sent a Cardmember Agreement for the 5274 account containing a Delaware choice-of-law clause.
- No charges occurred on the 5274 account after June 8, 2008; last payment received Oct. 30, 2008; last item on that account was before Nov. 13, 2008.
- Chase sold both accounts through intermediaries; PCC was assigned the accounts for collection in March 2010 and sued Lauron on Nov. 14, 2011 asserting common counts (account stated and open book account) for both cards.
- Lauron filed cross-claims under the FDCPA and Rosenthal Act, arguing PCC sought to collect time-barred debt; she moved for summary judgment asserting Delaware's 3-year limitations period (per the Cardmember Agreement) barred PCC’s claims.
- The trial court granted summary judgment for Lauron, concluding PCC’s claims were essentially breach-of-contract claims governed by Delaware law; judgment entered for Lauron on both PCC’s complaint and her cross-claims.
- On appeal, the Court of Appeal reversed: it held Delaware law did not apply to the 5285 card (no agreement in record) but did apply to the 5274 card; however, Lauron failed to prove accrual dates under either card, so summary judgment was improper and remand was required.
Issues
| Issue | Plaintiff's Argument (PCC) | Defendant's Argument (Lauron) | Held |
|---|---|---|---|
| Whether Delaware law applies to PCC's claims for the 5274 card | Claims are common counts (account stated/open book) not based on the Cardmember Agreement; Delaware choice clause doesn't govern | Cardmember Agreement governs; gravamen is breach of contract so Delaware law applies | Gravamen is breach of contract; choice-of-law clause enforceable; Delaware's 3-year limitations applies to 5274 |
| Whether Delaware law applies to PCC's claims for the 5285 card | Same common-counts argument applies to both cards | No evidence Cardmember Agreement governs 5285; apply California law | No record evidence that the Cardmember Agreement governs 5285; Delaware law does not apply to 5285 |
| Whether the claims were time-barred under the applicable statute(s) | Under California (4 yrs) or Delaware (3 yrs), PCC's suit was timely or accrual/tolling defeats Lauron's defense | Statute ran before PCC sued; under Delaware 3-yr period (and section 8117 tolling argument), suit is untimely | Lauron failed to prove accrual dates for either account; summary judgment on statute-of-limitations grounds denied; court rejects broad tolling application of 10 Del. C. § 8117 to avoid indefinite tolling |
| Enforceability of the unsigned Cardmember Agreement choice-of-law clause | Clause unenforceable because agreement unsigned or federal limitations statute applies | Clause enforceable; Delaware has substantial relationship and no fundamental California policy conflict | Choice-of-law clause enforceable; federal 4-yr catchall (28 U.S.C. § 1658) not applicable; unsigned-contract argument forfeited or not persuasive |
Key Cases Cited
- Jones v. Wachovia Bank, 230 Cal.App.4th 935 (discusses burdens on summary judgment movant)
- Nedlloyd Lines B. V. v. Superior Court, 3 Cal.4th 459 (policy favoring enforcement of contractual choice-of-law clauses)
- Careau & Co. v. Security Pacific Business Credit, Inc., 222 Cal.App.3d 1371 (elements of breach of contract action)
- Maggio, Inc. v. Neal, 196 Cal.App.3d 745 (definition and effect of account stated)
- Waxman v. Citizens Nat. Trust & Sav. Bk., 123 Cal.App.2d 145 (accrual rule for contract breaches)
- Aguilar v. Atlantic Richfield Co., 25 Cal.4th 826 (summary judgment evidentiary burdens)