Opinion
NOT FOR PUBLICATION
Supplement To Memorandum Decision Dated July 15, 2008.
MEMORANDUM DECISION
Laura S. Taylor, United States Bankruptcy, Judge.
The Court issues this Supplemental Memorandum Decision and herein renders its decision as to the appropriate amount of Credit Card interest properly deemed non-dischargeable. In its Memorandum Decision dated July 15, 2008 (the "Memorandum Decision"), this Court requested that Ms. Dwyer provide the Court with a calculation of appropriate interest on the Credit Card account. In rending this accounting Ms. Dwyer was limited to calculations of Credit Card interest based on already submitted evidence, and Ms. Dwyer was required to calculate interest in a manner that took into account that some portion of the interest was her responsibility. Defendants were provided an opportunity to file a counter declaration. Memorandum Decision p. 20-21.
Capitalized Terms not defined herein shall have the meaning set forth in the Memorandum Decision.
This Court having reviewed the Declaration of Alicia Dwyer dated August 4, 2008 and the Declaration of Daniel J. Winfree dated September 5, 2008 determines that nondischargeable interest shall be included in the Judgment available to Ms. Dwyer in the amount of $4,489.16.
In making this determination the Court makes the following findings of fact:
1. Total Finance Charges. Ms. Dwyer incurred finance charges during the relevant time period in the total amount of $6,789.16. See Trial Ex. 2, 5 and 6. The Court calculated this amount by totaling the finance charges on all Credit Card statements submitted into evidence other than the September, 2004 statement which reflects Credit Card charges after Ms. Dwyer paid the Credit Card in full. Thus, the Court included all finance charges on Credit Card statements submitted into evidence other than the $1.62 reflected by the September, 2004 statement.
As discussed in the Memorandum Decision, Ms. Dwyer borrowed funds from another source to payoff her Credit Card balance. While Ms. Dwyer undoubtedly incurred interest charges in connection therewith, Ms. Dwyer failed to provide any evidence in this regard. Thus, Ms. Dwyer is not entitled to include any amount of interest accruing after Credit Card payoff in her non-dischargeable judgment.
The Court's total differs from the $7,643.74 total contained in Ms. Dwyer's August 4, 2008 Declaration. In reconciling this discrepancy, the Court reviewed Ms. Dwyer's calculations as contained in Trial Exhibit 4 ("Exhibit 4"). The Court assumed that Ms. Dwyer utilized Exhibit 4 to prepare her August 4, 2008 Declaration as it contains entries that total $7,643.74. Based on this review, the Court identified the following errors which lead to the difference between the numbers.
First, in Exhibit 4, Ms. Dwyer used $367.95 for the finance charge for May, 2003. The actual finance charge for that period was $355.78. Ms. Dwyer improperly used the amount of "purchases and adjustments" for that month, rather than the finance charge.
Second, in Exhibit 4, Ms. Dwyer improperly double counts the finance charge for December of 2003. The Court is not sure how this occurred. Ms. Dwyer correctly shows the December charge as $404.82, but then shows a January charge of $404.00. Instead, the correct January charge was $431.49 (this charge is shown as a February 1, 2004 charge) and the correct February charge is $417.70 (this charge is shown as a February 29, 2004 charge.)
Third, in Exhibit 4, Ms. Dwyer omitted 31 cents from the March 2004 charge.
Finally, in Exhibit 4, Ms. Dwyer included $438.72 of "interest" for September of 2004. In fact, review of the September statement shows that this was the amount of payments made on the Credit Card during August presumably on account of purchases made after payment in full of expenses related to the Property Sale. The August statement was not introduced into evidence.
When these reductions and the one 13 cent increase are made to Ms. Dwyer's total, it equates to the total reached by the Court.
2. Appropriate Deductions From Total Finance Charges. Ms. Dwyer used an estimated amount of $100.00 per month as the amount of interest allocable to her on account of personal charges unrelated to the Property Sale related charges authorized by Mr. Kelley. This monthly estimate exceeds the $69.33 payable by her on the first Credit Card statement submitted into evidence, an amount of interest entirely allocable to Ms. Dwyer.
As charges against the Credit Card continued thereafter, the balance allocable to Ms. Dwyer increased for a period of time. However, Ms. Dwyer ceased all charges against the Credit Card for her personal benefit as of February 13, 2003. Trial Ex. 2, 5, and 6.
In addition to personal charges, however, principal amounts under the Credit Card properly allocable to Ms. Dwyer also increased as a result of late payment charges. Ex. 5 and 6. This Court previously found that these amounts accrued only as a result of the timing of payment. Thus, these amounts are not properly included in the non-dischargeable judgment. Memorandum Decision p. 21-22.
During the period prior to payment in full of the Credit Card in July of 2004, Ms. Dwyer also made payments on the Credit Card. This Court previously found that such payments would be allocable to a reduction of the amounts for which Ms. Dwyer bore responsibility. Memorandum Decision p. 21.
Thus, in analyzing appropriate interest and reviewing Ms. Dwyer's calculations, this Court utilized a starting balance allocable to Ms. Dwyer, increased it by all personal charges and late payment fees, and reduced this balance by any payments made prior to payment in full. The Court utilized interest rates as set forth in the Credit Card statements admitted into evidence. These statements reflect several interest rate increases prior to payment in full.
Ms. Dwyer calculates interest at $100.00 per month over a 23 month period. Thus, she deducts $2,300.00 from total interest. The Court notes that the applicable period appears more correctly to be 21 months as the first Credit Card statement at issue was issued in November of 2002, and the Credit Card was paid in full on July 1, 2004.
The Court concludes that over a 21 month period, interest allocable to Ms. Dwyer as evidenced by the Credit Card statements was only slightly greater than $100.00 a month on average and that the additional $200.00 Ms. Dwyer deducts more than compensates for this slight overage. In short, the Court finds, based on its mathematical review, that Ms. Dwyer's estimate is largely correct and, if incorrect, slightly overstates the interest allocable on her account. As Ms. Dwyer bears the burden of proof on this issue, the Court will not increase the interest component of the non-dischargeable judgment to conform it to the slight discrepancy ascertained by the Court.
3. Mr. Kelley's Response. The Court finds that the Declaration provided by the counsel for Mr. Kelley was not helpful to the Court. It argues that interest should be charged at the earliest rate of 12.99% over the entire 21 month period. This argument ignores the fact that the Credit Card statements were introduced into evidence without objection and that they evidence interest rate increases on the Credit Card account.
As a result, this Court supplements its previous Memorandum Decision and finds that Ms. Dwyer is entitled to include in the judgment, as a nondischargeable portion of her claim, interest in the amount of $4,489.16. The total amount of the non-dischargeable portion of Ms. Dwyer's claim is thus $16,379.91.
Ms. Dwyer is directed to prepare and submit an appropriate judgment promptly.