Opinion
11582/07.
Decided March 30, 2009.
Forster Garbus, Esqs. — Attorneys for Plaintiff.
Stephen G. Reddan, Esq. — Attorney for Defendant.
Plaintiff Citibank (South Dakota), N.A. ("Citibank") moves for summary judgment.
Defendant Ross E. Maniaci ("Maniaci") cross-moves for summary judgment.
BACKGROUND
Citibank brings this action seeks to recover an amount allegedly due on a credit card it issued to Maniaci. Citibank alleges Maniaci defaulted in the payment of the credit card, It alleges it is due $4905.95 together with legal fees in accordance with the credit card agreement.
Prior to the commencement of this action, Citibank retained Northland Group, Inc. ("Northland") to assist it in collecting the amount due on the credit card.
On March 26, 2007, Maniaci's attorney sent a letter and a check drawn on the lawyer's escrow account in the sum of $925 to Northland. The letter stated the check was ".in full settlement of the amounts claimed" to be due on the credit card. The letter further indicated "Negotiation of the within draft shall constitute a full Accord and Satisfaction, not withstanding any restriction on your endorsement." The letter stated if Northland did not want to accept the check in payment in full, the check should be returned to Maniaci's attorney.
Northland received and negotiated the check. Maniaci asserts the receipt of and negotiation of the check by Northland constitutes an accord and satisfaction.
This action commenced at or about the time the check was received and negotiated. Maniaci was served after the check had been received and negotiated by Northland.
Reduced to its simplest terms, Maniaci admits he had used the credit card. He further concedes he made the charges. He does not contest the amount Citibank alleges is due. He asserts Northland, as Citibank's agent, accepted the payment of $925 in full settlement of the amount due.
DISCUSSION
The relationship between the issuer of a credit card and the holder and user of the credit card is contractual. Citibank (South Dakota) N.A. v. Sablic , 55 AD3d 651 (2nd Dept 2008). The issuance of a credit card constitutes an offer of credit. The use of the card constitutes acceptance of the offer. Feder v. Fortunoff, Inc., 114 AD2d 399 (2nd Dept. 1985); and Empire National Bank v. Monahan, 82 Misc 2d 808 (Co.Ct. Rockland Co. 1975). The terms of the contract are the credit card agreement. Brower v. Gateway 2000, Inc., 246 AD2d 246 (1st Dept. 1998).
A contract will be interpreted in accordance with the intent of the parties as expressed in the language of the agreement. Greenfield v. Philles Records, Inc., 98 NY2d 562 (2002); and Katina, Inc. v. Famiglietti, 306 AD2d 440 (2nd Dept., 2003). The terms of an agreement are to be interpreted in accordance with their plain meaning. Greenfield v. Philles Records, Inc., supra; and Tikotzky v. New York City Transit Auth., 286 AD2d 493 (2nd Dept., 2001). The court is to give ". . . practical interpretation to the language employed and the parties' reasonable expectations." Slamow v. Del Col, 174 AD2d 725, 726 (2nd Dept., 1991), aff'd. 79 NY2d 1016
A written agreement that is clear, complete and unambiguous should be enforced in accordance with its terms. South Road Assocs., LLC v. International Business Machines Corp., 4 NY3d 272 (2005); and Greenfield v. Philles Records, Inc., supra; and W.W.W. Assocs. v. Giancontieri, 77 NY2d 157 (1990).
The credit card agreement specifically provides Citibank . . . can accept late or
partial payments, as well as payments that reflect "paid in full" or other restrictive endorsements, without losing any of our rights under this Agreement.'
The use of a check or other negotiable instrument to pay a debt subjects the transactions to the "Accord and Satisfaction" provision of Uniform Commercial Code § 1-207 even if the underlying transaction was not subject to the provisions of the Uniform Commercial Code. Horn Waterproofing Corp. v. Bushwick Iron Steel Co., Inc., 66 NY2d 321 (1985). Uniform Commercial Code § 1-207 would permit Citibank to accept partial payment and not forfeit its rights to payment of the balance if the check were endorsed with words such as "without prejudice", "under protest" or some other language that would reflect that it was reserving its rights to collect the full amount due. Metropolitan Knitwear v. Trans World Fashions, Inc., 233 AD2d 241 (1st. Dept. 1996).
Receipt and deposit of the check is considered an accord and satisfaction only if the debtor expresses ". . . a clear manifestation of intent. . . that the payment is in full satisfaction of the disputed claim (citations omitted)." Boyle v. American Airlines, Inc., 89 AD2d 667 (3rd Dept. 1982); and JRDM Corp. v. U.W. Marx, Inc., 252 AD2d 854 (3rd Dept. 1998); and Complete Messenger Trucking Corp. v. Merrill Lynch Money Markets, Inc., 169 AD2d 609 (1st Dept. 1991). "[T]he debtor must make clear that the check which he sent is offered only on condition that it is taken in full payment of the disputed claim (Citations omitted)." Manley v. Pandrick Press, Inc., 72 AD2d 452, 455-456, (1st Dept. 1980).
The cover letter transmitting the check clearly indicated the check was being tendered as payment in full for Maniaci's obligations on the credit card.
However, the clear and unequivocal terms of the credit card agreement permit Citibank to accept partial or late payment without forfeiting or waiving any rights they have under the agreement. One the rights they have if the cardholder defaults is to declare the cardholder in default and sue to recover the amount due as of the date of default.
Where the credit card agreement states the credit card company may accept late or partial payment without forfeiting any rights, receipt and acceptance of partial payment does not constitute an accord and satisfaction unless the credit card holder establishes the credit card issuer expressly agrees to accept the partial payment in lieu of defendant's obligations under the credit card agreement. Manufacturers Traders Trust Co. v. Mills, 210 AD2d 657 (3rd Dept. 1994).
Maniaci has failed to offer any evidence establishing Citibank or Northland expressly agreed to accept the partial payment in full satisfaction of Maniaci's obligations on the credit card. Maniaci has also failed to introduce any evidence Citibank or Northland agreed to waive the provisions of the credit card agreement which permitted acceptance of late or partial payment without a waiver of rights. If the court accepted Maniaci's argument, any credit card holder could extinguish their existing credit card debt by mailing the credit card company a check for partial payment marked "payment in full", unless the credit card company endorsed the check reserving its rights.
Citibank has established a prima facie entitlement to judgment as a matter of law. See, Winegrad v. New York University Medical Center, 64 NY2d 851 (1985); and Zuckerman v. City of New York, 49 NY2d 557 (1980). Once the party seeking summary judgment has made a prima facie showing of entitlement to judgment as a matter of law, the party opposing the motion must come forward with proof establishing the existence of triable issues of fact or must demonstrate an acceptable excuse for its failure to do so. Zuckerman v. City of New York, supra. See also, Davenport v. County of Nassau, 279 AD2d 497 (2nd Dept., 2001); and Bras v. Atlas Construction Corp., 166 AD2d 401 (2nd Dept., 1991). Defendant has failed establish the existence of triable issues of fact or to provide the court with an acceptable excuse for its failure to do so.
The only opposition to Citibank's motion is an attorney's affirmation. An affirmation by an attorney without personal knowledge of the facts is insufficient to defeat summary judgment. 9394 LLC v. Farris , 10 AD3d 708 (2nd Dept. 2004). While Maniaci's attorney has personal knowledge of the transmittal of the check to Northland, he does not have any personal knowledge of the credit card agreement or Maniaci's failure to make payment of same. Not even in the attorney's affirmation does Maniaci deny owing the amount Citibank alleges is due.
A credit cardholder had 60 days from the receipt of the bill to notify the issuer of the card of any disputes regarding the bill. 15 U.S.C. § 1666. Maniaci did not produce any evidence that he challenged or questioned any of the charges on the credit card bills within 60 days of receipt of the bills. See, Plutchok v. European American Bank, 142 Misc 2d 149 (District Ct. Nassau Co. 1989).
The final statement attached to the motion papers dated October 10, 2006 shows a shows a balance due of $4,408.85. After that date, Maniaci made the payment of $925. Therefore, Citibank is awarded damages of $3483.85 (4408.85 — 925).
Citibank's attorney seeks legal fees. The agreement provides for the cardholder to pay Citibank's legal fees should the matter be referred to an attorney for collection.
Such provisions are valid and will be enforced. Arent, Fox, Kinter Plotkin Kahn PLLC v. Lurzer GmbH, 297 AD2d 590 (1st Dept., 2002). Such legal fees are awarded on a quantum meruit basis and cannot not be determined summarily. See, Simoni v. Time-Line, Ltd., 272 AD2d 537 (2nd Dept., 2000); and Borg v. Belair Ridge Development Corp., 270 AD2d 377 (2nd Dept., 2000).
Therefore, the action is set down for a hearing in Civil Part 3 of this Court on May 8, 2009 at 9:30 a.m. to determine the legal fees of plaintiff's attorney.
Upon the foregoing, plaintiff's motion for summary judgment is granted. Defendant's cross-motion for summary judgment is denied. The clerk is directed to enter a judgment in favor of the plaintiff Citibank (South Dakota), N. A. and against the defendant Ross E. Maniaci in the sum of $3483.85 together with interest at the legal rate from October 10, 2006 to the date of entry of judgment, legal fees as determined by the court and costs and disbursements as taxed by the clerk,
SO ORDERED: