Judgment On Credit Card Debt Affirmed After Standing Established


[author: David F. Johnson]

In Rogers v. Unifund CCR Partners, the court of appeals held that the evidence of standing and breach of contract was sufficient and supported a judgment for a company based on an amount due under a credit card agreement.No. 01-10-01146-CV, 2012 Tex. App. LEXIS 3027 (Tex. App.—Houston [1st Dist.] April 19, 2012, no pet. h.).  A creditor entered into a credit card agreement with a debtor, who defaulted on making payment.  The creditor assigned the account to a company who sued the debtor for the debt.  The trial court granted the company's summary judgment, and the debtor appealed, challenging the company's standing to sue on the agreement.  The court of appeals stated that in order to establish standing to maintain a breach of contract action, a plaintiff must show either third party beneficiary status or privity.  Privity in this context was established by proof that a defendant was a party to an enforceable contract with either the plaintiff or a party who assigned its cause of action to the plaintiff.

As part of its summary judgment evidence, the company provided documents detailing ownership of the account at issue.  Specifically, it filed a bill of sale and assignment by an account form from a bank to the company.  It also included an affidavit by the legal liaison for the company who swore that, prior to that assignment, the prior bank was a successor by merger to the original bank.  The company also included copies of FDIC official records indicating the history between the original bank and subsequent banks.  The court of appeals found that the company met its burden to plead facts establishing its standing to bring the case by asserting that it was an assignee of the debt and that the summary judgment evidence presented established that it had standing to bring a breach of contract claim because the individual was a party to a contract with the original bank, which, through a series of merger and assignments, assigned its interest in the contract to the company who was the plaintiff in this suit.

The court of appeals then turned to whether there was a valid breach of contract action.  The court noted that the company provided account statements and account terms and conditions showing that the bank and its successors extended credit to the defendant and that the defendant used the credit account.  Thus, the company presented evidence of an offer, an individual's acceptance of the terms of the offer, a meeting of the minds and consent to the essential terms, and execution and delivery of the contract with the intent that it be mutual and binding.  The defendant complained that the company's evidence was insufficient to show a meeting of the minds regarding the applicable interest rate or its method of calculation.  However, the court disagreed because the company produced a credit card agreement explaining the applicable interest rates and methods by calculating interest and fees, and although the document did not contain the defendant's signature and was not the original agreement, the defendant demonstrated his acceptance of those terms by his continuing use of the credit card as evidenced by the account statements.  The account statements also provided evidence that the individual used the credit to purchase goods and services, that he breached his obligations to pay for all charges to the account, and established the company's damages by reflecting that the individual owed principal and interest.  The court concluded that the trial court properly granted summary judgment for the company on its breach of contract claim.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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