Collection of delinquent credit card debts

Texas Case Law

BOONE v. CITIBANK, 09-05-135 CV (Tex.App. [9th Dist.]
12-21-2006) RENEE BOONE, Appellant v. CITIBANK (SOUTH
DAKOTA) N.A., Appellee. No. 09-05-135 CV. Court of Appeals
of Texas, Ninth District, Beaumont. Submitted on May 18,
2006. Opinion Delivered December 21, 2006.

On Appeal from the 284th District Court Montgomery County,
Texas Trial Cause No. 04-06-04339-CV.

Before McKEITHEN, C.J., KREGER and HORTON, JJ.

CHARLES KREGER, Justice.

MEMORANDUM OPINION

Appellant Renee Boone appeals the trial court’s judgment in
favor of appellee Citibank (South Dakota), N.A. for the
collection of delinquent credit card debts. Boone’s first
and second issues challenge the legal sufficiency of the
evidence to support the trial court’s judgment. The third
issue asserts Citibank waived its right to prosecute its
breach of contract claim because the claim had been
resolved by arbitration proceedings. We affirm.

Citibank extended a line of credit to Boone and issued her
an AT & T Universal credit card and a Citibank Visa credit
card, which was apparently upgraded to a Citibank Platinum
Select card. Citibank filed suit against Boone for breach
of contract to recover the amount Boone allegedly owed on
the credit cards, and, in the alternative, for quantum
meruit. Citibank alleged that Boone defaulted in making
payments on charges made to the line of credit thereby
violating certain terms contained in the credit card
agreements. Citibank also served Boone with requests for
admissions, which Boone failed to answer. After a bench
trial, the court awarded Citibank damages in the amount of
$24,162.11, $500 in attorney’s fees, and 5 % post-judgment
interest. Boone appeals the trial court’s final judgment.

Standard of Review

In Boone’s first and second issues, she argues Citibank’s
business records affidavit and the pleadings are
insufficient to support the trial court’s judgment.[fn1]
When no findings of fact and conclusions of law are
requested or filed, it is implied that the trial court made
all fact findings necessary to support its judgment. Sixth
RMA Partners, L.P. v. Sibley, 111 S.W.3d 46, 52 (Tex. 2003)
(citing BMC Software Belgium, N.V. v. Marchand, 83 S.W.3d
789, 795 (Tex. 2002)). When the appellate record includes
the clerk’s and reporter’s records, these implied findings
may be challenged for legal sufficiency points the same as
jury findings or a trial court’s findings of fact. Id.;
Roberson v. Robinson, 768 S.W.2d 280, 281 (Tex. 1989). In
our review of a legal sufficiency point, we review the
evidence in the light most favorable to the verdict and
indulge every reasonable inference that would support it.
City of Keller v. Wilson, 168 S.W.3d 802, 822 (Tex. 2005).
We credit favorable evidence if a reasonable fact finder
could and disregard contrary evidence unless a reasonable
fact finder could not. Id. at 827. The evidence is legally
sufficient if it would enable fair-minded people to reach
the verdict under review. Id. We will uphold the judgment
on any legal theory that finds support in the record.
Worford v. Stamper, 801 S.W.2d 108, 109 (Tex. 1990).

Business Record Affidavit

Boone argues the trial court improperly admitted into
evidence Boone’s credit card statements, credit card
agreements, and certain payments Boone made on the accounts
because Citibank relied upon an inadequate business records
affidavit. Boone alleges several defects in the form of the
business records affidavit, including the fact that the
affiant does not state he has personal knowledge with
regard to the credit card accounts at issue, and neither
the affidavit nor the pleadings establish certain elements
of Citibank’s breach of contract claim.[fn2] Boone further
argues the affidavit does not meet the hearsay exception
under Tex. R. Evid. 803(6). Boone did not present these
complaints to the trial court by lodging an objection when
the affidavit and accompanying exhibits were admitted into
evidence. Thus, Boone has waived any objection to
Citibank’s business records affidavit and to the exhibits
admitted into evidence. See Tex. R. App. P. 33.1(a).

Even if error had been preserved, the affidavit was
sufficient to support the business records hearsay
exception. The affiant, who was an employee of Citicorp
Credit Services, Inc. (USA), Citibank’s authorized agent
and servicer, testified as to the following relevant
information regarding the attached credit card records:

I am one of the custodians of records for Plaintiff
[Citibank], and my duties include having custody and
control of records relating to the account of RENEE BOONE,
Citibank Account No. [AT & T Universal Card No.] and
[Citibank Platinum Select Card No.] (the “Accounts”). These
records are kept by Plaintiff in the regular course of
business and it was in the regular course of business of
Plaintiff for an employee or representative with personal
knowledge of the act, event, condition, or opinion recorded
to make the memorandum or records or to transmit
information thereof to be included in such memorandum of
records; and the records were made at or near the time of
the act, event recorded, or reasonably soon thereafter. The
records attached hereto are true and correct copies of the
originals.[[fn3]]

The affidavit lays the foundation for each element of the
business records exception to the hearsay rule. See Tex. R.
Evid. 803(6), 902(10). Thus, the business records
affidavit, along with the accompanying business records,
were properly admitted into evidence.

Breach of Contract

Deemed Admissions

Along with Citibank’s original petition, Citibank served
Boone with requests for admissions. Boone failed to serve
written responses within fifty days of Citibank’s written
requests. See Tex. R. Civ. P. 198.2(a). When requests for
admissions are unanswered, the admissions are automatically
deemed admitted, unless the court on motion permits their
withdrawal or amendment. Marshall v. Vise, 767 S.W.2d 699,
700 (Tex. 1989). Once an admission is admitted, deemed or
otherwise, it is a judicial admission, and a party may not
introduce testimony to controvert it. See id.

The elements of a cause of action for breach of contract
are: (1) the existence of a valid contract; (2) plaintiff’s
performance or tendered performance; (3) defendant’s breach
of the contract; and (4) plaintiff’s damages as a result of
the breach. Sullivan v. Smith, 110 S.W.3d 545, 546
(Tex.App.-Beaumont 2003, no pet.). Boone did not file a
motion for the withdrawal or amendment of the deemed
admissions. See Tex. R. Civ. P. 198.3. By failing to answer
Citibank’s request for admissions, Boone has admitted that
(1) she and Citibank entered into an agreement to create a
revolving charge agreement for credit and Boone understood
she was obligated to repay all charges or cash advances
incurred on the accounts (Request Nos. 3, 5); (2) Boone
requested that Citibank open a credit card account on her
behalf, and Citibank opened the account (Request Nos. 1,
2); and (3) Boone has breached her agreement with Citibank
(Request No. 11). Thus, the first three elements of
Citibank’s breach of contract claim have been conclusively
established by deemed admissions.[fn4] See Tex. R. Civ. P.
198.3.

Legal Sufficiency Review

Although we hold the deemed admissions conclusively
establish the first three elements of Citibank’s breach of
contract claim, we will nevertheless review the entire
record to determine whether there is legally sufficient
evidence to support the trial court’s judgment as to all of
the breach of contract elements. At trial, Boone
acknowledged that she made some of the charges and owed
some of the credit card debt at issue. This evidence
implies that Citibank and Boone entered into the credit
card agreements;[fn5] Citibank furnished Boone with the
credit cards; and Boone used the cards to make purchases
and cash advances. It also implies that because Boone
indicated at trial that she had an outstanding balance, she
breached her agreement with Citibank to repay all charges
and cash advances.

Without objection, Citibank offered into evidence a
business records affidavit accompanied by the credit card
balance statements of the AT & T Universal card, the
Citibank Visa card, and the upgraded Citibank Platinum
Select card.[fn6] The business records affidavit indicates
that the AT & T card and the upgraded Citibank Platinum
card are Citibank accounts.[fn7] The balance statements
provide the amount due on purchases made and cash advances
received on the accounts. The statements also indicate the
rate of interest charged on overdue balances.[fn8] The
ending balance due on the AT & T card is $8,735.25 (RR: and
the amount remaining due on the Citibank Platinum Select
Card is $16,405.79.[fn9] Thus, although the trial court
awarded an amount less than indicated on these statements,
there is some evidence to support the trial court’s
$24,162.11 award. We overrule Boone’s first two
issues.[fn10]

Arbitration Award

Boone’s third issue claims Citibank waived its right to
prosecute its breach of contract claim because the claim
had been resolved by arbitration proceedings. Boone
received an arbitration award regarding the balance due on
the credit cards at issue from National Arbitration
Council, Inc. However, the assertion of “arbitration and
award” is an affirmative defense that must be affirmatively
pleaded or it is waived. Tex. R. Civ. P. 94; Wright v.
Matthews, 26 S.W.3d 575, 579 (Tex.App. — Beaumont
2000, pet. denied) (noting that an affirmative defense must
be pleaded or it is waived). Boone did not affirmatively
plead arbitration and award; thus she has failed to
preserve error on this issue. Issue three is overruled. The
judgment is affirmed.

AFFIRMED.

[fn1] Boone does not expressly present these issues as legal
sufficiency challenges. However, because she has cited
legal sufficiency case law, we will construe these issues
as such.

[fn2] Boone contends these defects are insufficient to
support a summary judgment under Tex. R. Civ. P. 166a.
Although Citibank filed a motion for summary judgment and
the motion was set for hearing, no ruling on the motion
appears in the record. This case was tried to the trial
court.

[fn3] The express language of the affidavit controverts the
following arguments Boone asserts regarding the affiant:
(1) the affiant failed to establish he was an employee of
Citibank; (2) the affiant does not state who maintained the
business records; (3) the affiant failed to show he had
personal knowledge regarding Citibank’s records retention
policy; and (4) the affiant did not establish he had
personal knowledge regarding the Citibank Visa account,
which was upgraded to the Citibank Platinum Select card.
Boone also argues that the credit card statements are not
true and correct copies because they are not two-sided.
Boone admitted, in request for admissions no. 21, that the
balance statements showing the final balance due on the
accounts were true and correct copies. Furthermore, “[a]
duplicate is admissible to the same extent as an original
unless (1) a question is raised as to the authenticity of
the original or (2) in the circumstances it would be unfair
to admit the duplicate in lieu of the original.” Tex. R.
Evid. 1003. Boone has not challenged the authenticity of
the original balance statements and, considering that Boone
may be the party in possession of the original balance
statements, we do not find that it was unfair for the trial
court to admit the copies in lieu of the originals.

[fn4] We note that an argument may be made that Citibank has
waived its right to rely on requests for admissions nos. 9,
10, and 12 regarding the amount due on the credit cards
when Citibank allowed Boone to testify and submit evidence
that may have controverted these admissions. See Marshall,
767 S.W.2d at 700 (explaining that when a party attempts to
offer evidence that contradicts the deemed admissions, the
party relying on the admissions must protect the record and
object to the introduction of the evidence). Without
deciding whether Citibank has waived its rights to rely on
these admissions, we will review the damages element of the
breach of contract claim as part of our legal sufficiency
analysis.

[fn5] Boone argues Citibank failed to prove the existence of
a contract because the credit card agreements entered into
evidence did not name the parties to the agreement;
Citibank did not prove that the agreements were delivered
to Boone or that Boone accepted the terms of the
agreements; and the agreements were not definite in their
terms. We find there is some evidence of the agreements
because Boone admitted that she and Citibank entered into
the agreements and her testimony indicates that she used
the credit cards.

[fn6] Boone argues there is no evidence she received these
statements. Boone’s address appears on each statement.
Furthermore, she has admitted, by failing to respond to
request for admission no. 6, that she received credit card
statements for both accounts on a monthly basis.

[fn7] The first balance statement on the Citibank Platinum
card indicates that the beginning balance on the platinum
card is the remaining balance from the prior Citibank Visa
card. This indicates that the Citibank Visa card was also
an account owned by Citibank.

[fn8] Boone challenges the amount of interest applied to the
accounts and alleges that Citibank failed to establish the
contractual interest rate and did not prove that it sent
her any notices regarding interest rate increases as
required by the credit card agreements. However, when Boone
failed to respond to Citibank’s request for admissions no.
18, she admitted that the contractual rate of interest was
23.990% per year. Boone is not allowed to offer evidence to
controvert this admission. See Marshall, 767 S.W.2d at 700.
Boone also contends that Citibank failed to establish that
the interest rates charged were in compliance with
applicable usury laws. The Rules of Civil Procedure provide
that a party asserting that a contract sued upon is
usurious must file a verified pleading, otherwise no
evidence of usurious interest as a defense shall be
received. Tex. R. Civ. P. 93(11). Boone did not file a
verified pleading; thus she has waived all arguments
regarding this issue. See Tex. R. Civ. P. 93(11).

[fn9] Boone contends Citibank failed to prove that it
properly calculated the amounts due on the accounts. The
balance statements themselves provide some evidence as to
the amounts due on the accounts. We may thus assume the
trial court made an implicit finding that the calculations
used to determine the amounts were accurate.

[fn10] Because the evidence establishes that a contract
existed, the trial court could not have awarded damages
based on Citibank’s quantum meruit theory. See Tully v.
Citibank (S.D.), N.A., 173 S.W.3d 212, 216
(Tex.App.-Texarkana 2005, no pet.).