Bernhardt and Strawser, P.A., by Harrison A. Lord, for plaintiff-appellee. Michaux & Michaux, P.A., by Eric C. Michaux, for defendant-appellant.
Bernhardt and Strawser, P.A., by Harrison A. Lord, for plaintiff-appellee.
Michaux & Michaux, P.A., by Eric C. Michaux, for defendant-appellant.
This contract case involves a dispute over the unpaid balance on Defendant Henry M. Michaux, Jr.'s Sears credit card account. Defendant owes approximately $15,417.29 for purchases made using his Sears card. Defendant does not dispute any of the charges made with his credit card and he concedes that all purchases on the card were authorized and not fraudulent.
The gist of Defendant's argument is that he should not be required to pay the full interest portion of his credit card balance. Defendant contends that he never agreed to any new contract terms with Plaintiff Citibank, N.A., which acquired the entire Sears credit card portfolio in 2003. Thus, Defendant argues, he is not liable for the additional interest incurred after Citibank acquired his account and raised the interest rate on his card.
The trial court granted partial summary judgment to Citibank on the ground that Defendant admitted he purchased goods using the credit card and thus was liable for at least some of the outstanding balance. The court held that the amount of debt owed must be determined at trial.
After a bench trial, the trial court ruled that Defendant must pay the full outstanding balance owed on his card. The court found, among other things, that Defendant called Citibank in late 2008, acknowledged the credit card debt he owed to Citibank, and negotiated a special payment plan at a reduced interest rate because of financial hardship. Defendant made regular payments at that reduced interest rate for approximately one year before defaulting. The court held that Defendant's default constituted a breach of contract and entered judgment in favor of Citibank in the amount of $15,417.29 plus costs and reasonable attorneys' fees. Defendant appealed.
For the reasons set forth below, we affirm the trial court. The trial court properly entered partial summary judgment on the undisputed fact that Defendant owed some portion of the debt. The court's finding after trial that Defendant negotiated a new payment contract with a reduced interest rate and a special payment schedule is supported by competent evidence in the record, including the testimony of Citibank witnesses and admissible business records. Accordingly, we affirm the trial court's judgment.
Facts and Procedural History
In the early 1990s, Sears issued a credit card to Defendant. Citibank acquired Defendant's Sears credit card account in 2003 when the company purchased the entire Sears credit card portfolio. After acquiring the Sears accounts, Citibank informed its cardholders that it would continue to use the Sears name on the cards.
In August 2005, Citibank changed the account numbers for all of its Sears-branded credit cards and issued new cards to all its cardholders. Along with the new card, Citibank also mailed all cardholders a copy of the new cardholder agreement. It is Citibank's business practice to send cardholders a copy of the current cardholder agreement whenever a new account is opened, a new card is issued, or there is a change in the terms of the cardholder agreement. Defendant received and activated his new credit card in 2005 and continued to use the card, and to make payments, for several years. Citibank also sent another cardholder agreement to Defendant in 2008, using the same address to which it sent his monthly statements.
In January 2007, Defendant purchased appliances worth approximately $8,500 using his Sears credit card. When making these purchases, Defendant signed sales receipts which stated “cardholder acknowledges receipt of goods and/or services ... and agrees to be bound by the terms set forth in the cardholder's agreement(s) with the issuer(s) of those credit cards.”
Defendant continued to receive monthly statements during this time, all of which prominently displayed the applicable interest rate being charged on the outstanding balance. Defendant continued to use his card and to pay down the outstanding balance on his credit card.
Finally, in late 2008, Defendant called Citibank and “acknowledged his debt [,] ... represented that he was willing and intended to pay the amounts owed on the Account, and represented that the reason he was unable to pay at that time was lack of funds, exacerbated by being unable to sell his second home.” Defendant negotiated a payment plan with Citibank at a substantially reduced interest rate and made scheduled payments under that plan from December 2008 through November 2009.
In December 2009, Defendant stopped paying his credit card debt. Citibank ultimately charged off and closed the account in June 2010. Citibank filed a complaint against Defendant on 14 September 2010 seeking $15,417.29, the remaining balance on Defendant's Sears credit card account, plus interest, costs, and attorneys' fees. The case was assigned to arbitration on 17 February 2011. After the arbitrator issued an Arbitration Award and Judgment ruling in Defendant's favor, Citibank requested a trial de novoon 9 September 2011.
After extensive discovery, both Citibank and Defendant moved for summary judgment in their favor. On 18 June 2013, the trial court granted partial summary judgment in Citibank's favor on the ground that Defendant did not dispute that he owed someportion of the outstanding credit card balance. The trial court held that “there is no genuine issue as to any material fact in this case except for the sole issue of the amount of the debt that Defendant owes to [Citibank].” The court held that a trial was required to determine the portion of the outstanding balance for which Defendant was liable.
On 18 October 2013, before the trial began, Defendant filed a motion to “correct judgment” which essentially sought reconsideration of the partial summary judgment ruling. The trial court denied the motion. The court then held a bench trial that included the testimony of various witnesses, including Defendant and representatives of Citibank.
On 6 January 2014, the trial court filed an Order and Judgment that contained lengthy findings of fact. Based on those fact findings, the court entered judgment in Citibank's favor and awarded $15,417.29 plus interest from the date of judgment, $263 in costs, and $2,350 in attorneys' fees. Defendant timely appealed on 17 January 2014.
I. Partial Summary Judgment
Defendant first argues that the trial court erred in granting partial summary judgment for Citibank. We disagree.
“Our standard of review of an appeal from summary judgment is de novo.” In re Will of Jones, 362 N.C. 569, 573, 669 S.E.2d 572, 576 (2008). Summary judgment is appropriate if the record “show[s] that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law.” Forbis v. Neal, 361 N.C. 519, 523–24, 649 S.E.2d 382, 385 (2007) (quoting N.C. R. Civ. P. 56(c) ). North Carolina Civil Procedure Rule 56(c) “allows summary judgment to be rendered on the issue of liability alone although there is a genuine issue as to the amount of damages.” Langley v. Moore, 64 N.C.App. 520, 522, 307 S.E.2d 817, 819 (1983) (internal quotation marks omitted). This Court has held that a trial court should grant partial summary judgment on the issue of liability where “[i]t is undisputed” that the defendant “is liable to the Plaintiff[ ] for some amount of damages.” Whitley v. Carolina Clinic, Inc., 118 N.C.App. 523, 525–26, 455 S.E.2d 896, 898 (1995) (internal quotation marks omitted).
Upon a motion for summary judgment, the initial burden is on the moving party to show “that no material issues of fact exist.” Dixie Chem. Corp. v. Edwards, 68 N.C.App. 714, 715, 315 S.E.2d 747, 749 (1984). Once the moving party meets this burden, “the nonmovant must then set forth specific facts showing that genuine issues of fact remain for trial.” Id.The nonmovant “cannot simply rely on the same allegations he made in his complaint or answer.” Lexington State Bank v. Miller, 137 N.C.App. 748, 752–53, 529 S.E.2d 454, 456 (2000). The purpose of summary judgment is to “allow[ ] one party to force his opponent to produce a forecast of evidence which he has available for presentation at trial to support his claim or defense.” Dixie Chem.,315 N.C.App. at 717, 315 S.E.2d at 750.
Here, Citibank produced evidence showing that Defendant had used the Sears card to purchase merchandise, including signed receipts from two credit card purchases in 2007 totaling nearly $8,500. Defendant did not dispute the authenticity of those signed receipts and did not dispute that he made the purchases reflected on his credit card statements.
Because Defendant did not dispute that he authorized all purchases made with his Sears card, the trial court properly entered partial summary judgment on the ground that Defendant was liable for at least some portion of the debt. The trial court also properly held that “[t]he amount of indebtedness is a material fact to be determined at trial.” See Langley, 64 N.C.App. at 522, 307 S.E.2d at 819 ; see also Citibank, South Dakota, N.A. v. Graudin,216 N.C.App. 416, 716 S.E.2d 876 (2011) (unpublished).
Defendant argues that it was improper for the trial court to grant partial summary judgment concerning the applicability of the various cardholder agreements, which he claims he did not receive. But the trial court did not enter partial summary judgment on that issue. The court entered partial summary judgment on the ground that Defendant owed some portion of his credit card balance (a proposition that even Defendant does not dispute) and left for trial the issue of which cardholder agreements applied, and thus which interest rate or rates applied to his debt.
Defendant also argues that the trial court erred by applying South Dakota law at the summary judgment stage. But the law concerning when summary judgment is appropriate is the same in both North Carolina and South Dakota. N.C. Gen.Stat. § 1A–1, Rule 56(c) (2013) ; S.D. Codified Laws § 15–6–56(c) (2013). Thus, even if the trial court applied South Dakota law instead of North Carolina law (and we are not persuaded that it did), we would still affirm because the applicable legal rules in both jurisdictions are the same. See Arnold v. Ray Charles Enters., Inc., 264 N.C. 92, 9697, 141 S.E.2d 14, 17 (1965) (holding that choice of law is irrelevant where the law in both states is “no different with reference to the substantive question”).
Defendant also argues that the trial court erred in denying his motion to “correct judgment,” which he filed after entry of the partial summary judgment order but before trial. To the extent that the motion—which was, in effect, a motion to reconsider its partial summary judgment ruling—was permissible, the trial court did not err in denying it because the motion did not forecast any new evidence that undermined the trial court's entry of partial summary judgment.
In sum, we hold that the trial court properly granted partial summary judgment on the ground that Defendant owed somethingto Citibank and sent the case to trial to determine which cardholder agreement or agreements applied and how much of the account balance Defendant was liable to pay.
II. Final Order and Judgment
Defendant next argues that the trial court's final order and judgment following trial is erroneous because the trial court's findings are not supported by competent evidence. Again, we disagree.
The standard of review on appeal from a judgment following a bench trial is “whether the trial judge's underlying findings of fact are supported by competent evidence, in which event they are conclusively binding on appeal, and whether those factual findings in turn support the judge's ultimate conclusions of law.” State v. Williams, 362 N.C. 628, 632, 669 S.E.2d 290, 294 (2008). “[F]indings of fact made by the trial judge are conclusive on appeal if supported by competent evidence, even if ... there is evidence to the contrary.” Tillman v. Commercial Credit Loans, Inc., 362 N.C. 93, 100–01, 655 S.E.2d 362, 369 (2008) (internal quotation marks omitted). “Unchallenged findings of fact are presumed correct and are binding on appeal.” In re Schiphof,192 N.C.App. 696, 700, 666 S.E.2d 497, 500 (2008).
Most of the findings challenged by Defendant concern whether Defendant received and assented to the terms of the various cardholder agreements. But we need not reach this issue because even if those findings were erroneous, Defendant does not challenge other findings of fact that readily support the trial court's conclusions of law.
Specifically, Defendant does not challenge the trial court's finding that, in late 2008, Defendant called Citibank, acknowledged the debt he owed at that time, and then negotiated a payment plan to pay the balance in installments at a substantially reduced interest rate:
Again in conversations with Plaintiff's representative(s) in 2008, Defendant acknowledged his debt to Plaintiff, represented that he was willing and intended to pay the amounts owed on the Account, and represented that the reason he was unable to pay at that time was lack of funds, exacerbated by being unable to sell his second home. The records further reflect that Defendant asked for and received a payment plan from Plaintiff, under which plan he was charged a reduced interest rate of 9.9% and made monthly payments of $382, which, as authorized by Defendant in his telephone conversation with Plaintiff's representative(s), were automatically drafted on the following dates that Defendant pre-selected: December 10, 2008, January 29, 2009, February 19, 2009, March 20, 2009, April 17, 2009, May 21, 2009, June 19, 2009, July 22, 2009, August 20, 2009, September 18, 2009, October 21, 2009, and November 19, 2009.
This unchallenged finding supports the trial court's conclusion that, regardless of whether he assented to the specific cardholder agreements, “Defendant reaffirmed his obligations to [Citibank] in negotiating, agreeing to, and making payments pursuant to a payment plan.” By negotiating to pay his current balance at a reduced rate and making payments under that plan for nearly a year, Defendant entered into a binding payment plan contract with Citibank. See Lewis v. Edwards, 147 N.C.App. 39, 49, 554 S.E.2d 17, 23 (2001) (holding that “[a] modification to a contract occurs if there is mutual assent to the terms of the modification and consideration for the contract” and that such modification creates a new contract). As the trial court concluded, “Defendant defaulted on his obligations under his agreement with [Citibank] as of December 19, 2009” when he ceased making payments according to his negotiated payment plan, and “[t]he default constitutes a breach of contract.” As a result of that breach, the trial court awarded Citibank the full amount of Defendant's outstanding balance.
Because the trial court's conclusion that Defendant breached his contract with Citibank and was liable for the outstanding balance adequately is supported by findings of fact unchallenged in this appeal, we must affirm the trial court.
For the reasons discussed above, we affirm the trial court's judgments.
Judges CALABRIA and DILLON concur.
Report per Rule 30(e).
Appeal by Defendant from judgments entered 18 June 2013 and 6 January 2014 by Judge Nancy E. Gordon in Durham County District Court. Heard in the Court of Appeals 19 November 2014.