Case Name: Discover Bank v. Lima

Case No.: 19CV340958

Plaintiff Discover Bank (“Plaintiff”) moves for summary judgment, or in the alternative, summary adjudication, in its favor and against Defendant Sheryl Lima (“Defendant”).

I. Background
II.

A. Factual
B.

This is a collection action. According to the allegations of the form complaint, Plaintiff extended credit to Defendant for purchases and/or cash advances. Defendant was billed periodically throughout the credit relationship for these purchases but ultimately has failed to pay the $5,477.42 balance due on the account. This action followed.

C. Procedural
D.

Plaintiff filed the complaint on January 14, 2019, asserting common counts for open books account and account stated. Defendant filed her answer on May 14, 2019. On November 12, 2019, Plaintiff filed the instant motion for summary judgment, or in the alternative, summary adjudication. Defendant opposes the motion.

III. Plaintiff’s Request for Judicial Notice
IV.

In support of its motion for summary judgment/adjudication, Plaintiff requests that the Court take judicial notice of the following federal laws: 15 U.S.C. Section 1666 and 12 C.F.R Section 202.12. These items are proper subjects of judicial notice as statutory law of the United States and regulations and legislative enactments issued under its authority. (Evid. Code, § 452, subds. (a) and (b).) Accordingly, Plaintiff’s request for judicial notice is GRANTED.

V. Plaintiff’s Motion for Summary Judgment, or in the Alternative, Summary Adjudication
VI.

A. Burden of Proof
B.

The party moving for summary judgment bears the initial burden of production to make a prima facie case showing that there are no triable issues of material fact – one sufficient to support the position of the party in question that no more is called for. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850-851.) Plaintiffs moving for summary judgment bear the burden of persuasion that each element of the cause of action in question has been proved, and hence there is no defense thereto. (Code Civ. Proc., § 437c.) Plaintiffs, who bear the burden of proof at trial by preponderance of evidence, therefore “must present evidence that would require a reasonable trier of fact to find the underlying material fact more likely than not- otherwise he would not be entitled to judgment as a matter of law, but would have to present his evidence to a trier of fact.” (Aguilar, supra, 25 Cal.4th at 851.) The defendant has no evidentiary burden until the plaintiff produces admissible and undisputed evidence on each element of a cause of action. (Weil & Brown, Cal. Prac. Guide: Civ. Proc. Before Trial (The Rutter Group 2013), ¶ 10:238.) If the plaintiff meets this initial burden, it then shifts to the defendant to “show that a triable issue of one or more material facts exists as to that cause of action.” (Code Civ. Proc., § 437c, subd. (p)(1).)

C. Analysis
D.

1. Plaintiff’s Undisputed Material Facts
2.

In support of its motion, Plaintiff submits the declaration of Stacey Proctor (“Proctor”), who identifies herself as Plaintiff’s litigation support coordinator and states that she is familiar with the manner, method and preparation by which Plaintiff maintains its books and records for outstanding credit accounts, and that she personally reviewed Plaintiff’s records as they relate to the credit accounts and lines of credit opened by Defendant. (Declaration of Stacey Proctor in Support of Plaintiff’s Motion for Summary Judgment/Adjudication (“Proctor Decl.”), ¶ 3.) Proctor explains that Plaintiff’s business records (of which she is an authorized custodian) detail all transactions that occur when an individual uses their credit account and further states that unless a credit application/acceptance form had been received by Plaintiff, no credit account would have been opened in Defendant’s name. (Id., ¶¶ 4, 5.)

The contents of Proctor’s declaration, as well as the exhibits attached thereto, establish the following: Defendant applied for a credit card account and entered into a written credit card account agreement with Plaintiff for the account number ending 0923. (See Plaintiff’s Separate Statement of Undisputed Material Facts in Support of Motion for Summary Judgment/Adjudication (“UMF”), Nos. 1, 10.) Defendant agreed to be bound by the terms and conditions set forth in the cardmember agreement when she applied for, received and used the credit card account. (UMF Nos. 2, 11.) Further, the agreement provides that use of the card constitutes acceptance of the agreement. (Id.)

By use of the card, Defendant agreed to pay Plaintiff for all charges made on the account. (UMF Nos. 2, 11.) Plaintiff complied with its obligations under the credit agreement by paying all vendors for all charges that were made by Defendant on her account. (UMF Nos. 3, 12.) Defendant received monthly billing statements on the account and never asserted any objections to the balance stated to be due and owed by her on those statements. (UMF Nos. 4, 5, 13, 14.) Defendant ultimately defaulted by failing to make payments on the account as they became due, with the last payment applied to the account on February 8, 2018. (UMF Nos. 6, 7, 15, 16.) As a result of Defendant’s failure to make the agreed upon monthly payments, Plaintiff accelerated the account balances pursuant to the terms of the agreement so that the entire unpaid balance of $5,477.42 became immediately due and payable. (Proctor Decl., ¶¶ 9, 11.) This amount has not been paid.

3. Open Book Account
4.

Plaintiff has asserted common counts, i.e., simplified forms of pleading used to aver the existence of monetary indebtedness (McBride v. Boughton (2004) 123 Cal.App.4th 379, 394), against Defendant, the first of which is an open book account. An open book account is defined as a “detailed statement in the nature of debit and credit, arising out of contract or a fiduciary relationship.” (Interstate Group Administrators, Inc. v. Cravens, Dargen & Co. (1985) The elements of a book account are: (1) the existence of the principal record of one or more transactions between the creditor and debtor; (2) entries in the record that were made in the creditor’s regular course of business; and (3) the record was kept in a reasonably permanent form and manner. (Code Civ. Proc., § 337, subd. (a).) In deciding whether a book account exists, a court must examine the agreement between the parties and their conduct in the course of their dealings. (Maggio, Inc.. v. Neal (1987) 196 Cal.App.3d 745, 752.) The book must show against whom the charges are made and it must also be made to appear in whose favor the charges run. (McBride, supra.) A book account is considered open if the debtor has made some payments, but has not paid the full outstanding balance on the account leaving a balance due. (Id.)

Here, the evidence submitted by Plaintiff establishes each of the foregoing elements and thus Plaintiff seemingly has met its initial burden on this cause of action. In her opposition, however, Defendant insists that Plaintiff has not, asserting that the computer records submitted by Plaintiff have not been properly authenticated and therefore cannot be considered by the Court. In making this argument, however, Defendants relies on federal authority, specifically In Re Vihee (Bankr. 9th Cir. 2005) 336 B.R. 437, which involved the relevant standard concerning federal rules of evidence and is therefore of no import here. The Court is otherwise persuaded that with the contents of the Proctor Declaration, Plaintiff has properly authenticated the credit card statements submitted as evidence of the credit account that Defendant maintained with Plaintiff and established that these items properly come within the business records exception to the hearsay rule (Evid. Code, § 1271). This includes Proctor’s explanation of when and how the computer records are generated relative to Defendant’s act of utilizing the subject credit card account.

Notably, Defendant does not dispute that she applied for and obtained a credit card from Plaintiff and utilized the credit account, incurring a balance owed to Plaintiff. In her declaration, Defendant maintains that she never received a copy of the subject agreement, but assuming this is true, it does not defeat Plaintiff’s showing that Defendant entered into said agreement, accepted its terms through use of the credit card, incurred a balance, and failed to pay said balance. (See In re Anastas (9th Cir. 1996) 94 F.3d 1280, 1285—[“we view each individual credit card transaction as the formation of a unilateral contract between the card holder and card issuer consisting of the following promise in exchange for performance: the card holder promises to repay the debt plus to periodically make partial payments along with accrued interest and the card issuer performs by reimbursing the merchant who has accepted the credit card in payment”].) Defendant otherwise fails to establish a triable issue of material fact, which is her burden. Consequently, Plaintiff is entitled to summary adjudication of this claim in its favor.

5. Account Stated
6.

Plaintiff has also met its burden of proof for the account stated cause of action. Actions on open book accounts frequently arise from a series of transactions that also constitute an account stated. (Maggio, Inc. v. Neal, supra, 196 Cal.App.3d 745, 753.) “The essential elements of an account stated are: (1) previous transactions between the parties establishing the relationship of debtor and creditor; (2) an agreement between the parties, express or implied, on the amount due from the debtor to the creditor; (3) a promise by the debtor, express or implied, to pay the amount due.” (Zinn v. Fred R. Bright Co. (1969) 271 Cal.App.2d 597, 600.) “An account stated is an agreement, based on prior transactions between the parties, that the items of an account are true and that the balance struck is due and owing.” (Maggio, Inc. v. Neal, supra, 196 Cal.App.3d 745, 752.) “When a statement [of indebtedness] is rendered to a debtor and no reply is made in a reasonable time, the law implies an agreement that the account is correct as rendered.” (Id. at 753.)

As stated above, Defendant never objected to the monthly statements sent to her reflecting the balance due on her account and in her opposition does not dispute that the amount requested by Plaintiff is correct. Consequently, she fails to raise a triable issue of material fact and Defendant is entitled to summary adjudication of this claim in its favor.

In accordance with the forgoing analysis, Plaintiff’s motion for summary judgment is GRANTED.

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