American Express Bank, FSB v. Rich

Full title: AMERICAN EXPRESS BANK, FSB, Plaintiff, v. CHARLES S. RICH A/K/A CHARLES…

Court: Supreme Court of the State of New York, New York County

Date published: Jul 22, 2010

2010 N.Y. Slip Op. 31990 (N.Y. Sup. Ct. 2010)

Opinion

114824/2009.

July 22, 2010.

DECISION/ORDER

HON. JUDITH J. GISCHE, JSC.

Recitation, as required by CPLR 2219 [a], of the papers considered in the review of this (these) motion(s):

Papers Numbered

Pltf's n/m [§ 3215] w/JC affirm, proof of service, exhs................... 1 Upon the foregoing papers, the decision and order of the court is as follows:

This is an action to recover amounts charged by defendant to a credit card account in his name. Presently before the court is plaintiff, American Express Bank, FSB's ("plaintiff') motion for entry of a default judgment against defendant, Charles S. Rich a/k/a Charles Rich ("defendant") pursuant to CPLR § 3215. Plaintiff issued a line of credit to defendant, an account holder with the bank.

Plaintiff has properly filed proof of service of the summons and complaint. Defendant was served on November 9^th, 2009 by George P. Rush, a process server who attached a copy of the summons and complaint to door of Rich's home. Rush attempted to serve the summons and complaint on two different days at different times before attaching a copy to defendant's door on his third attempt. Service was completed on November 10^th, 2009 when an additional copy of the summons and complaint was mailed the following day to Rich's home. Pursuant to CPLR § 3215(g), another copy of the summons and complaint was sent by regular first class mail to defendant's home on November 24^th, 2009. Plaintiff has verified that defendant is not on active duty with any branch of the United States military. Plaintiff contends that although Rich was served the summons and complaint, he has not answered the complaint, appeared in this action or moved for an extension of his time to do so. On February 10^th, 2009, a copy of the motion for entry of default judgment was mailed to defendant's home. Despite such service and additional notice, defendant has defaulted in appearing in this action and also in opposing this action. Therefore, plaintiff seeks entry of a default judgment against Rich.

A default judgment "requires 'proof by affidavit made by the party of the facts constituting the claim, the default and the amount due', or at least a verified complaint." Zelnik v. Bidermann Indus., Inc. 242 A.D.2d 227 (1^st Dept. 1997). Plaintiff is entitled to default judgment when the defendant has "failed to appear, plead or proceed to trial of an action reached and called for trial." CPLR § 3215 (a). A defaulting defendant is deemed to admit to all the factual allegations contained in the complaint "and all reasonable inferences that follow from them." Woodson v. Mendon, 100 N.Y.2d 62 (2003).

The following is established by the sworn affidavit of Edmond Garabedian, the Custodian of Records for American Express.

Plaintiff issued a Platinum Delta SkyMiles Card (the "Card"), which enabled him to make charges to a FSB Delta SkyMiles Card Account, Account No. 3734-970627-72006 (the "Account"). As the basic cardmember, Rich was expected to pay all the expenses charged to this account, pursuant to the terms and conditions set forth in the agreement between plaintiff and defendant (the "Agreement"). The plaintiff's issuance of a credit card to the defendant was an offer of credit, and the defendant's use of the credit card constitutes an acceptance of the offer to bind the parties. Feder v. Fortunoff, 123 Misc.2d 857 (N.Y. Sup. 1984). The Agreement also states that Rich is responsible for paying a "minimum amount due" as indicated in the monthly billing statements and is subject to a delinquency fee if the minimum is not paid. Rich is also obligated to pay all reasonable costs, including attorneys' fees upon "defaulting" on his account with American Express. Plaintiff alleges that defendant owes $60,723.70 on his account.

The complaint alleges three causes of action: [1] breach of contract; [2] account stated; and [3] unjust enrichment. Plaintiff has withdrawn the third cause of action. Mr. Garabedian states that as of October 9^th, 2009, $60,723.70 was due on the Account. Plaintiff has provided a statement dated on September 17^th, 2009 showing the outstanding balance due and indicating the account was cancelled and suspended reflecting defendant's indebtedness.

The four elements required of a cause of action for a breach of contract include: [1] formation of a contract between the parties; [2] performance by plaintiff; [3] defendant's failure to perform; and [4] resulting damage. Furia v. Furia, 166 A.D.2d 694 (2d Dept. 1986).

An account stated represents an agreement between the parties reflecting amounts due on prior transactions. Jim-Mar Corp. v. Aquatic Constr., 195 A.D.2d 868 (3^rd Dept. 1993), lv. Denied 82 N.Y.2d 660 (1993). It assumes the existence of some indebtedness between the parties. Grinnell v. Ultimate Realty, L.L.C., 38 A.D.3d 600 (2d Dept. 2007). Where either no account has been presented or there is any dispute regarding the correctedness of the account, the cause of action fails. M A Const. Corp. v. McTague, 21 A.D.3d 610 (3^rd Dept. 2005).

Plaintiff has established a prima facie cause of action for breach of contract and account stated against the defendant. Therefore, plaintiff is entitled to entry of a default judgment on the first and second causes of action in the amount alleged. The clerk shall enter a money judgment in the principal amount of $60,723,70 with interest from October 9th 2009, the date the Edmond Garabedian's affidavit.

Generally, parties involved in an action are responsible for payment of all legal fees and costs incurred and cannot recover the same from an opposing party unless there is an agreement, contract, or statute that provides otherwise. Hooper Associates, Ltd. V. AGS Computers, Inc., 74 N.Y.2d 487 (1989). Here, the Agreement provides that the defendant, upon "defaulting" on his account is responsible for paying plaintiff's attorneys' fees and "all reasonable costs". Plaintiff has not provided the court with any proof regarding the value of the legal services provided. Therefore, the court refers the issue of what reasonable legal fees plaintiff may recover from defendant to a Special Referee to hear and determine the matter.

Conclusion

In accordance herewith, it is hereby:

ORDERED that plaintiff American Express Bank, FSB's motion for default judgment against defendant Charles S. Rich a/k/a Charles Rich on the first and second causes of action is granted for the foregoing reasons; and it is further ORDERED that plaintiff has withdrawn its third cause of action from consideration and it is hereby severed; and it is further

ORDERED that the clerk shall enter judgment in favor of plaintiff American Express Bank, FSB against defendant Charles S. Rich a/k/a Charles Rich, in the sum of sixty thousand seven hundred and twenty-three dollars and seventy cents ($60,723.70) together with costs and disbursements; and it is further

ORDERED that interest shall run at the rate determined by the Agreement from September 17^th, 2009; and it is further

ORDERED that the issue of what plaintiff may recover from defendant for its reasonable attorneys fees is hereby referred to a Special Referee to hear and determine. Plaintiff is directed to serve a copy of this decision on the Office of the Special Referee, so that the references matter can be assigned; and it is further

ORDERED that any requested relief not expressly addressed herein has nonetheless been considered and is hereby expressly denied; and it is further

ORDERED that this constitutes the decision and order of the court.