Opinion
SCR 001410/2010.
Decided April 15, 2010.
Allyn J. Crawford, Esq., Attorney for Plaintiff, Staten Island, NY.
Pro Se, Joseph Durso d/b/a Carcoverusa, Inc.
Plaintiff initiated this breach of contract action seeking $12,962.02 in damages from defendant, credit card company, over its alleged failure to properly credit its account after disputing charges paid to Mel Nelson, a merchant.
Defendant moves for an order pursuant to CPLR 3211 (a) (1) and (7) to dismiss on the grounds that documentary evidence demonstrates that the complaint herein fails to state a cause of action. As is set forth below, defendant's motion is granted in its entirety.
The case herein involves a commercial dispute between a defendant merchant, and a plaintiff customer, and the responsibility that a third party credit card company has under the Fair Credit Billing Act to investigate and to respond to alleged billing errors as required by 15 USC § 1666(a).
In or about January 2008, the plaintiff engaged the services of Mel Nelson, individually and doing business as the SEO Shop, to provide search enging optimization services for 3 (three) of his companies CARCOVERUSA, Inc's. websites. Although, Mel Nelson listed a San Francisco mailing address the plaintiff discovered well in advance of transmitting any payment to Nelson, during the course of a January 8, 2008 email exchange, that Nelson operated his business from Malaysia. A copy of this email is attached as (Exhibit "1") to the affidavit of Joseph Herrara dated March 9, 2010.
In conjunction with the services rendered by Nelson the plaintiff authorized payment to Nelson via charges to his Chase Master Card Business Account in the amounts of $4,300.00 on January 22, 2008, $4,162.02 on January 23, 2008, and $4,500.00 on February 4, 2008, for a total of $12,692.02.
Nelson and the plaintiff's business relationship deteriorated over the course of this time and was terminated in September 2008. Throughout this period the plaintiff permitted Nelson to debit his account for the forementioned sums. In October 2008, more then 9 (nine) months after the posting of charges totaling $12,962.02 for services rendered by Nelson, the plaintiff herein filed a claim with Chase Credit Card Services disputing these charges. Immediately upon plaintiff's filling his dispute, Chase Credit Card Services posted a $12,962.02 credit to plaintiff's account pending the full investigation of the disputed charges. In July 2009, Chase denied plaintiff's claim after conducted an extensive review of plaintiff's claim. The $12,962.02 in charges was reinstated to plaintiff's account.
In considering a motion to dismiss for failure to state a cause of action (CPLR 3211[a][7]), the pleadings must be liberally construed (CPLR 3026). The sole criterion is whether from [the complaint's] four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law ( see, Guggenheimer v. Ginzburg, 43 NY2d 268, 275; Bovino v Village of Wappingers Falls, 215 AD2d 619 [App Div, 2nd Dept, 1995].) The facts pleaded are to be presumed to be true and are to be accorded every favorable inference, although bare legal conclusions as well as factual claims flatly contradicted by the record are not entitled to any such consideration ( see, Morone v Morone 50 NY2d 481; Gertler v Goodgold, 107 AD2d 481, 485 [App Div, 1st Dept, 1985], affd. 66 NY2d 946, 948.)
It is well settled that a consumer can trigger a credit card company's responsibility under Fair Credit Billing Act to investigate and respond to alleged billing errors by sending a billing error notice to the creditor within 60 (sixty) days of the creditor's transmission of the statement reflecting the alleged error (See, 15 USC § 1666(a). A "billing error" includes "[a] reflection on a statement of goods or services not accepted by the obligor or his designee or not delivered to the obligor or his designee in accordance with the agreement made at the time of a transaction." (See, 15 USC § 1666(b)(3). Importantly, this 60-day period begins to run after the creditor has transmitted the first periodic statement that reflects the alleged billing error (See, 12 CFR § 226.13(b)(1). A valid billing error notice must be "received by a creditor . . . no later than 60 days after the creditor transmitted the first periodic statement that reflects the alleged billing error (emphasis supplied).
In the case at bar, there is no question that the plaintiff herein failed to assert the existence of the so-called billing errors until months after the 60 day period for reporting had run. Indeed, plaintiff in his August 7, 2009 letter to Chase, repeatedly acknowledged that his disputed charge claims are untimely and requests an exemption. See (Exhibit "7") to the Herrara Affidavit where the plaintiff in a August 7, 2009 fax to defendant wrote, "I am asking for an exception to the time limit . . ."
It is clear to the court if a consumer fails to send the billing notice within the 60 day window, a creditor's duty to investigate and respond under 15 USC § 1666(a) is not triggered, and the creditor cannot then be held liable for allegedly failing to comply with 15 USC § 1666 (See, Greisz v Household Bank (IL), 8 F.Supp2d 1031, 1042 [N.D. Ill. March 25, 1998]; affirmed, 176 F.3d 1012 [7th Cir. 1999].) A consumer's transmittal of billing error notice nine months after receipt of the statement containing alleged error "did not trigger [credit card issuer's] duty to investigate and resolve the alleged billing error" (See, Dawkins v Sears Roebuck Co., 109 F.3d 241, 242-243 [5th Cir. 1997].) A consumer's claim for an alleged violation of 12 USC § 1666 was dismissed where the consumer allowed 88 days to elapse from transmission of the first statement containing alleged error before tendering billing error notice (See, Jaffe v Capital One Bank, 2010 WL 691639 [SDNY Mar. 1, 2010].) A plaintiff's claim was dismissed on non-compliance with 60 day notice period (See. Washington Mutual Bank v Forgue, 2007 WL 4232708, at *1 [WDNY Nov. 27, 2007](same); Citibank (South Dakota), N.A. v Maniaci, 23 Misc 3d 1103(A) WL 865605, at *3 (NY Dist. Ct. Mar. 30, 2009)("A credit cardholder ha[s] 60 days from the receipt of the bill to notify the issuer of the card of any disputes regarding the bill") (citing Plutchok v European American Bank, 143 Misc 2d 149 [Nassau Dist. Ct. 1989].)
Notwithstanding plaintiff's procedural defect, Chase still undertook an exacting investigation of the plaintiff's claims, reviewing dozens of communications between the merchant and customer in connection with the services at issue and multiple statements from the merchant in response to plaintiff's claims, before concluding that plaintiff knowingly and willingly authorized charges for contracted services. Indeed, plaintiff acknowledged that Nelson "did a lot spent a lot" and Nelson in turn, rightly points out that claims of unsatisfactorily constructed websites are belied by the fact that plaintiff made a second $4,500.00 payment for completed, live websites.
The record before this court is clear that plaintiff was aware that Nelson operated from Malaysia at least two (2) weeks before authorizing his first credit payment to Nelson. Plaintiff consequently knew or should have known of the attendant risks and inconveniences, legal and otherwise, in enlisting the services of a stranger located halfway around the world. Even if Nelson were proven to be a "scam artist" as plaintiff contends, the liability for loss rests soley with Nelson and it is never incumbent on Chase, as a credit card issuer, to be an indemnitor or arbiter for a credit card holder's knowing, voluntary yet ultimately poor choices. To impose such a duty upon a credit card issuer would turn the banking system on its head and necessitate intrusive, time and cost prohibitive, pre-approval procedures for even the smallest credit card purchases. To permit, as plaintiff advocates here, a consumer to disavow authorized credit card charges almost 10 (ten) months after the fact, as a consequence of belated buyer's remorse and for the sheer opportunity to commence suit against a local rather than a foreign defendant who is the true, proper party, is counterintuitive to fair and sound banking practices.
Accordingly, defendant's motion to dismiss is granted and the complaint herein is dismissed.
This constitutes the decision and order of the court.