RETAIL RECOVERY SERVICE OF NJ, PLAINTIFF-APPELLEE, v. TERESA A. CONLEY, DEFENDANT-APPELLANT.
CASE NO. 10-09-15
IN THE COURT OF APPEALS OF OHIO THIRD APPELLATE DISTRICT MERCER COUNTY
March 29, 2010
[Cite as Retail Recovery Serv. of New Jersey v. Conley, 2010-Ohio-1256.]
Appeal from Celina Municipal Court Trial Court No. 08CVF00460
Judgment Reversed and Cause Remanded
Date of Decision: March 29, 2010
APPEARANCES:
Teresa A. Conley, Appellant
Jackson T. Moyer for Appellee
{¶1} Defendant-Appellant, Teresa A. Conley, appeals the judgment of the Celina Municipal Court of Mercer County granting summary judgment in favor of Plaintiff-Appellee, Retail Recovery Service of NJ (hereinafter “Retail Recovery“), in the amount of $851 plus interest of 15% and costs. On appeal, Conley asserts that the trial court erred in granting summary judgment in favor of Retail Recovery because there were genuine issues of material fact; that the trial court committed prejudicial error in disregarding defects in the chain of title; that the trial court erred in disregarding Retail Recovery‘s lack of a valid assignment and evidence that it owned the account at issue; that the trial court erred in awarding damages that were not sufficiently proven or itemized; that the trial court erred in awarding interest at a rate that exceeded the statutory rate; and, that the trial court erred in disregarding Retail Recovery‘s failure to produce the cardholder agreement for the account. Finding that there were genuine issues of material fact, we reverse the judgment of the trial court.
{¶2} In June 2008, Retail Recovery filed a complaint against Conley alleging that Household Bank issued a credit card to Conley; that Conley used the card, thereby becoming liable for the charges and becoming bound by the terms and conditions of the cardholder agreement; that Retail Recovery purchased Conley‘s account from Household Bank and was now the legal owner of the
{¶3} In July 2008, Conley filed a pro se amended answer, denying Retail Recovery‘s allegations, or asserting lack of knowledge toward them, and asserting as defenses that the complaint failed to set forth facts sufficient to state a claim upon which relief could be granted, and that there was a failure of consideration, as there was never an exchange of money or an item of value between Retail Recovery and Conley.
{¶5} In June 2009, the trial court denied Conley‘s motion to dismiss.
{¶7} Thereafter, Retail Recovery also filed a motion for summary judgment, asserting that there were no genuine issues of material fact and it was entitled to judgment as a matter of law on the basis that Conley‘s use of the credit card established a contract between her and the creditor; that Ohio law did not require Retail Recovery to produce a signed or written application in order to collect on the account; that Retail Recovery was entitled to the contract interest rate from the date the account became due; and, that copies of an accounts receivable record generally are sufficient to prove an account under Ohio law. To its motion, Retail Recovery attached the affidavit of an unnamed record custodian1 attesting that the following were true based upon “his/her review of business
{¶8} In September 2009, the trial court granted Retail Recovery‘s motion for summary judgment, awarding it $851.22, plus interest since January 31, 2006, at a 15% interest rate, plus court costs. Additionally, the trial court denied Conley‘s motion for summary judgment.
{¶9} It is from the trial court‘s grant of summary judgment to Retail Recovery that Conley appeals, presenting the following pro se assignments of error for our review.
Assignment of Error No. I
THE LOWER COURT ERRED IN GRANTING SUMMARY JUDGMENT AGAINST THE DEFENDANT AS THERE ARE GENUINE ISSUES OF MATERIAL FACT.
Assignment of Error No. II
THE LOWER COURT COMMITTED PREJUDICIAL ERROR IN DISREGARDING THE DEFECTS IN THE CHAIN OF TITLE OF THE CLAIM BY RETAIL RECOVERY SERVICE OF NJ.
Assignment of Error No. III
THE LOWER COURT ERRED IN DISREGARDING APPELLEE‘S LACK OF A VALID ASSIGNMENT AND EVIDENCE THAT THEY [SIC] ARE THE PROPER HOLDER OF THE ACCOUNT.
THE LOWER COURT ERRED IN AWARDING AN AMOUNT WHEN DAMAGES HAVE NOT BEEN PROVEN OR ITEMIZED SUFFICIENTLY TO ALLOW INDEPENDENT SUMMARIZATION.
Assignment of Error No. V
THE LOWER COURT ERRED IN THAT THE INTEREST RATE AWARDED EXCEEDS THE STATUTORY RATE OF OHIO.
Assignment of Error No. VI
THE LOWER COURT ERRED IN DISREGARDING THE LACK OF A GOVERNING AGREEMENT OR TERMS AND CONDITIONS RULING THE ALLEGED ACCOUNT.
{¶10} Due to the nature of Conley‘s arguments, we elect to address her first through third assignments of error together, and her fourth through sixth assignments of error together.
Standard of Review
{¶11} An appellate court reviews a summary judgment order de novo. Hillyer v. State Farm Mut. Auto. Ins. Co. (1999), 131 Ohio App.3d 172, 175. Accordingly, a reviewing court will not reverse an otherwise correct judgment merely because the lower court utilized different or erroneous reasons as the basis for its determination. Diamond Wine & Spirits, Inc. v. Dayton Heidelberg Distr. Co., 148 Ohio App.3d 596, 2002-Ohio-3932, ¶25, citing State ex rel. Cassels v.
{¶12} The party moving for summary judgment has the initial burden of producing some evidence which demonstrates the lack of a genuine issue of material fact. Dresher v. Burt, 75 Ohio St.3d 280, 293, 1996-Ohio-107. In doing so, the moving party is not required to produce any affirmative evidence, but must identify those portions of the record which affirmatively support his argument. Id. at 292. The nonmoving party must then rebut with specific facts showing the existence of a genuine triable issue; he may not rest on the mere allegations or denials of his pleadings. Id.;
Assignments of Error Nos. I, II, and III
{¶13} In her first, second, and third assignments of error, Conley contends that the trial court erred in granting summary judgment in Retail Recovery‘s favor
{¶15}
{¶16}
{¶17} Here, we find that Retail Recovery‘s employee‘s affidavit was sufficient to demonstrate that the bills of sale were business records kept in the ordinary course of Retail Recovery‘s business activity, as it asserted personal knowledge and created a reasonable inference that the affiant had personal knowledge of the facts set forth in the affidavit. See
{¶18} Next, we turn to the issue of whether Retail Recovery demonstrated the chain of title of the account and that it possessed a valid assignment of the
{¶19} Initially, we note that Conley has argued that nothing in the record or purported chain of title demonstrates that Orchard or Household Bank, the original issuer of the credit card, assigned the account to another entity. However, Retail Recovery attached to its motion for summary judgment a monthly credit card statement dated March 23, 2005, which provided that “Effective March 1, 2005, your credit card, formerly issued by Household Bank (SB), N.A., will be issued by HSBC Bank Nevada, N.A. Your account is serviced by our affiliates - Household Credit Services, Inc. and/or Household Credit Services (II), Inc. - who will change their names, effective March 1, 2005 to HSBC Card Services, Inc. and HSBC Card Services (II) Inc.” Additionally, the subsequent monthly statements reflect that Conley continued to use the card subsequent to the assignment. We find that this document was sufficient evidence to demonstrate that Orchard or Household Bank assigned Conley‘s account to HSBC Card Services, Inc., which appears as the first seller in the chain of title documents, and that Conley‘s continued use of the card indicated her acceptance. The remaining chain of title documents, however, are more troubling.
{¶20}
In an action on an account, when an assignee is attempting to collect on an account in filing a complaint, the assignee must “allege and prove the assignment.” In other words, in order to prevail, the assignee must prove that they are the real party in interest for purposes of bringing the action. An assignee cannot prevail on the claims assigned by another holder without proving the existence of a valid assignment agreement.
In order to establish a prima facie case for money owed on an account, “[a]n account must show the name of the party charged and contain: (1) a beginning balance (zero, or a sum that can qualify as an account stated, or some other provable sum); (2) listed items, or an item, dated and identifiable by number or otherwise, representing charges, or debits, and credits; and (3) summarization by means of a running or developing balance, or an arrangement of beginning balance and items which permits the calculation of the amount claimed to be due.” “[A]n action upon an account may be proved by the introduction of business records showing the existence of the account.”
{¶21} In Natl. Check Bur. v. Ruth, 9th Dist. No. 24241, 2009-Ohio-4171, the Ninth Appellate District reversed a trial court‘s grant of summary judgment to a creditor on the basis that it had failed to establish a clear chain of title, partly based on the fact that the bill of sale purporting to demonstrate chain of title indicated the seller bank was conveying to the purchaser bank “accounts * * * described in Exhibit 1 attached hereto,” where no such exhibit was attached to the bill of sale in the record. 2009-Ohio-4171, at ¶7. Similarly, in Unifund CCR Partners Assignee of Palisades Collection, LLC v. Hemm, 2d Dist. No. 08-CA-36, 2009-Ohio-3522, the Second Appellate District found that a genuine issue of material fact existed as to the owner of the account where the bill of sale stated it pertained to accounts described in a section of the sales agreement, but did not include that section of the sales agreement. Although Unifund, supra, involved two different accounts with the same defendant-debtor, we do not find that the trial court‘s decision was dependent on that fact.
{¶22} Here, Retail Recovery attached to its motion for summary judgment multiple bills of sale including, in the following order: (1) from HSBC Card Services (III), Inc., to CACH, LLC, (2) from CACH, LLC, to Worldwide Asset
{¶23} Accordingly, we sustain Conley‘s first through third assignments of error.
Assignments of Error Nos. IV, V, and VI
{¶24} In her fourth assignment of error, Conley contends that the trial court erred in awarding judgment of $851.22 because Retail Recovery did not itemize or sufficiently prove that amount. Specifically, Conley argues that the original complaint filed by Retail Recovery did not demonstrate the amount due and that
{¶25} In her fifth assignment of error, Conley argues that the 15% interest rate the trial court awarded to Retail Recovery exceeds the statutory rate of interest, and that no evidence was presented, other than an affidavit of Retail Recovery‘s employee, to establish the rate of interest. Retail Recovery responds that, because this action was based upon an “instrument of writing” under
{¶26} In her sixth assignment of error, which is interrelated with her fourth and fifth assignments of error, Conley argues that the trial court erred in disregarding the fact that Retail Recovery was unable to produce the cardholder agreement to establish the terms and conditions of the account. Conley essentially argues that Retail Recovery introduced no evidence of how it calculated the balance due, including over-limit fees and late fees.
{¶27} Retail Recovery responds that no cardholder agreement was provided to it by the original creditor upon its purchase of the account, but that a valid contract was created upon the issuance of the credit card and Conley‘s subsequent use of the card as demonstrated by the monthly statements. Retail Recovery contends that the monthly statements demonstrate that Conley failed to
{¶28}
{¶29} The Sixth Appellate District has recently held, based upon the Supreme Court of Ohio‘s Decision in Minster Farmers Coop. Exchange Co., Inc. v. Meyer, 117 Ohio St.3d 459, 2008-Ohio-1259 (holding that monthly invoices detailing the interest rate did not constitute an enforceable contract), that a plaintiff-creditor cannot prove an interest rate merely by producing account statements reciting an interest rate, where it does not demonstrate that the interest rate was a term assented to by the parties in the written contract, such as by producing the terms of the underlying cardholder agreement. Heidebrink, 2009-Ohio-2931, at ¶¶36-43. Additionally, the Sixth District went on to apply the same rationale to the defendant-debtor‘s argument that the creditor had not introduced sufficient evidence that its over-limit fees and late fees were terms of an agreed-upon contract, finding that the plaintiff-creditor had not shown that the specific fees were terms of a contract between it and the defendant-debtor. Heidebrink, 2009-Ohio-2931, at ¶43. Finally, also regarding interest rate issues, the Second Appellate District has found that a genuine issue of material fact exists where the documents in the record show varying interest rates, even where the plaintiff-creditor seeks to recover the lowest or less than the lowest interest rate. Hemm, 2009-Ohio-3522, at ¶18.
{¶31} Accordingly, we sustain Conley‘s fourth through sixth assignments of error on the bases articulated in our analysis.
{¶32} Having found error prejudicial to the appellant herein, in the particulars assigned and argued in the first, second, third, fourth, fifth, and sixth
Judgment Reversed and Cause Remanded
SHAW and PRESTON, J.J., concur.
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