Opinion
NO. 2013-CA-001800-MR
12-05-2014
PATRICK MONO APPELLANT v. DH CAPITAL MANAGEMENT, INC. APPELLEE
BRIEFS FOR APPELLANT: James H. Lawson Louisville, Kentucky BRIEF FOR APPELLEE: Heather R. Peters John R. Tarter Louisville, Kentucky
NOT TO BE PUBLISHED APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE BARRY WILLETT, JUDGE
ACTION NO. 13-CI-000332
OPINION
AFFIRMING
BEFORE: CLAYTON, DIXON AND JONES, JUDGES. DIXON, JUDGE: Appellant, Patrick Mono, appeals from an order of the Jefferson Circuit Court granting summary judgment in favor of Appellee, DH Capital Management, Inc. and enforcing Appellant's credit card agreement. Finding no error, we affirm.
DH Capital is a third-party debt collector and is the current holder of a charged-off credit card debt owed by Appellant. On January 23, 2013, DH Capital filed an action in the Jefferson Circuit Court against Appellant to collect the balance due on the revolving credit account that Appellant had defaulted on with U.S. Bank N.A., N.D. The balance on the account at the time suit was filed was $11,486.32 plus interest that has accrued at a rate of 7.40% per annum, since April 30, 2010. DH Capital also sought to recover attorneys' fees pursuant to KRS 286.3-750.
On March 18, 2013, DH Capital served Appellant with Requests for Admissions. In relevant part, the requests and responses were as follows:
1. You contracted for and received credit from plaintiff, or an assignor of plaintiff on terms set forth in the documents attached to plaintiff's Complaint.
"I can neither admit nor deny. The Agreement attached to the Complaint is a generic credit card agreement, which does not identify the account holder by name or account number. I have no records or recollection that [sic] this Agreement to my account."
2. Each document attached to plaintiff's Complaint is a true and correct copy of an original document.
"I can neither admit nor deny. The Agreement attached to the Complaint is a generic credit card agreement, which does not identify the account holder by name or account number. I have no records or recollection that [sic] this Agreement to my account."
3. None of the agreements set forth in plaintiff's Complaint and exhibits thereto have been subsequently modified or superseded.
"I can neither admit nor deny. The Agreement attached to the Complaint is a generic credit card agreement, which does not identify the account holder by name or account number. I have no records or recollection that [sic] this Agreement to my account."
4. You received everything you expected to receive in consideration of, or exchange for, the extension of credit to you by plaintiff or assignor of plaintiff.
"Deny. Fees and interest were added to my account that I did not expect to receive."
5. Prior to the filing of this lawsuit, you never notified plaintiff, or an assignor of plaintiff, of any reason why you were not obligated to pay plaintiff the amount sued for.
"Admit"
6. You have made no payments to the plaintiff, or an assignor of plaintiff, which are not reflected in the principal balance sued for [in] plaintiff's Complaint.
"I can neither admit nor deny. I do not have sufficient recollection of charges and debits to the account to respond to this request."
11. There are no facts involved in this matter that support any of the affirmative defenses that you have asserted in this case.
"Deny. The Complaint includes a demand for attorney's fees and interest to which Plaintiff has no legal right to collect."
Based upon Appellant's failure to respond with any evidence refuting the allegations contained in the Complaint, DH Capital thereafter filed a motion for summary judgment. In support of the motion, DH Capital attached (1) Appellant's responses to the Request for Admissions, (2) the account statements for Appellant's credit card, (3) the credit card agreement, (4) an affidavit of balance attesting to the amount owed by Appellant, and (5) an affidavit and accounting of hours in support of DH Capital's request for attorney's fees. In his response to the motion, Appellant did not submit any affidavits, documentation or other evidence refuting DH Capital's claims, but rather challenged DH Capital's standing and the sufficiency of its evidence
On September 30, 2013, the trial court entered an order granting summary judgment in favor of DH Capital, finding:
[I]t appearing that there exists no genuine issue as to any material fact in that the plaintiff is entitled by operation of law to have all of its Requests for Admissions deemed admitted by the defendant(s), it appearing that defendant(s) has offered no evidence creating an issue of material fact, it further appearing that the plaintiff is entitled to judgment as a matter of law . . . .DH Capital was awarded $11,486.32 plus interest, as well as $2,871.58 in attorney's fees pursuant to KRS 286.3-750. Appellant thereafter appealed to this Court as a matter of right.
Summary judgment shall be granted only if "the pleadings, depositions, answers to interrogatories, stipulations, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." CR 56.03. The trial court must view the record "in a light most favorable to the party opposing the motion for summary judgment and all doubts are to be resolved in his favor." Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 480 (Ky. 1991) (citations omitted). Furthermore, "a party opposing a properly supported summary judgment motion cannot defeat it without presenting at least some affirmative evidence showing that there is a genuine issue of material fact for trial." Id. at 482 (citations omitted).
On appeal, our standard of review is "whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law." Lewis v. B & R Corp., 56 S.W.3d 432, 436 (Ky. App. 2001) (citations omitted). Because no factual issues are involved and only legal issues are before the court on a motion for summary judgment, our review is de novo. Hallahan v. Courier-Journal, 138 S.W.3d 699, 705 (Ky. App. 2004).
Appellant first argues that the trial court erred in considering the documents submitted by DH Capital in support of its motion for summary judgment because they were inadmissible hearsay. Specifically, Appellant contends that all documents used in support of a motion for summary judgment must be sworn to or certified by affidavit, which the documents in question were not. We find no merit in Appellant's argument.
CR 56.01 provides:
A party seeking to recover upon a claim, counterclaim, or crossclaim or to obtain a declaratory judgment may, at any time after the expiration of 20 days from the
commencement of the action or after service of a motion for summary judgment by the adverse party, move with or without supporting affidavits for a summary judgment in his favor upon all or any part thereof. (Emphasis added).While there must be some evidence in the record supporting a movant's position, an exhibit that is evidentiary in character and sufficient to support the motion "may be properly regarded the same as would an uncontradicted supporting affidavit." Daniel v. Turner, 320 S.W.2d 135, 137 (Ky. 1959). See also Miller v. Massey, 2007-CA-002347-MR (January 16, 2009). In other words, a summary judgment "may be rendered solely on the basis of affidavits or other evidentiary materials." Hill v. Fiscal Court of Warren County, 429 S.W.2d 419, 422 (Ky. 1968) (quoting Smith v. Hillard, 408 S.W.2d 440, 442 (Ky. 1966)).
Appellant's argument hinges on his misinterpretation of CR 56.05. Contrary to his belief, the rule does not require that all documents submitted in support of a motion for summary judgment be sworn to or certified by affidavit, but rather provides that "[s]worn or certified copies of all papers or parts thereof referred to in an affidavit shall be attached thereto and served therewith." (Emphasis added). CR 56.05 simply ensures that a party opposing a motion for summary judgment is properly served with the documents that are said in an affidavit to support the motion. Accordingly, CR 56.05 is not applicable when the affidavit does not reference any extraneous documents or where the documents are attached to the motion independently. See Berghaus v. U.S. Bank, 360 S.W.3d 779 (Ky. App. 2012) (summary judgment was reversed where party failed to attach or serve the documents referred to in the affidavit supporting the motion).
As previously noted, DH Capital attached to its motion for summary judgment (1) Appellant's responses to the Request for Admissions, (2) the account statements for Appellant's credit card indicating charges and payments made on the account, (3) the credit card agreement, and (4) an uncontroverted Affidavit of Balance signed and sworn to by an authorized agent of DH Capital attesting to the balance owed by Appellant. We conclude that the documents submitted by DH Capital did not need to be individually sworn to by affidavit and that they were, in fact, admissible evidence supporting its motion for summary judgment.
Appellant next argues that DH Capital failed to meet its burden of proving it was entitled to summary judgment as a matter of law. Appellant relies upon Bruner v. Discover Bank, 360 S.W.3d 774, 778 (Ky. App. 2012), wherein a panel of this Court held that to prevail on a motion for summary judgment, a plaintiff/creditor must provide (1) a bill of sale listing the name and account number of the defendant; (2) a document specifically detailing how the creditor/plaintiff reached the principal and interest amounts that it is suing for; and (3) documentary evidence that the defendant is in fact the person responsible for the debt. The panel did note, however, that "[r]egarding the first of these elements, an assignment from the demonstrated owner of the debt for the purpose of collection or the demonstrated owner's specific authorization to its agent to collect the debt on its behalf through legal proceedings, serve virtually the same purpose as a bill of sale." Id. Nevertheless, Appellant argues that neither bill of sale submitted by DH Capital, one from U.S. Bank National Association ND to Pilot Receivables Management, LLC and the other from Pilot Receivables to DH Capital, specifically list him by either name or account number. Thus, it is Appellant's position that DH Capital has failed to establish a chain of title demonstrating its right to collect the debt at issue.
After reviewing the record we necessarily do not reach Appellant's argument because his answers to the request for admissions are essentially an admission of the debt owed to DH Capital. CR 36.01provides, in relevant part:
(1) A party may serve upon any other party a written request for the admission, for purposes of the pending action only, of the truth of any matters within the scope of Rule 26.02 set forth in the request that relate to statements or opinions of fact or of the application of law to fact, including the genuineness of any documents described in the request. . . .
(2) Each matter of which an admission is requested shall be separately set forth. The matter is admitted unless, within 30 days after service of the request . . . the party to whom the request is directed serves upon the party requesting the admission a written answer or objection addressed to the matter . . . . If objection is made, the reasons therefor shall be stated. The answer shall specifically deny the matter or set forth in detail the reasons why the answering party cannot truthfully admit or deny the matter. A denial shall fairly meet the substance of the requested admission, and when good faith requires that a party qualify his answer or deny only a part of the matter of which an admission is requested, he shall specify so much of it as is true and qualify or deny the remainder. An answering party may not give lack of information or knowledge as a reason for failure to admit or deny unless he states that he has
made reasonable inquiry and that the information known or readily obtainable by him is insufficient to enable him to admit or deny. A party who considers that a matter of which an admission has been requested presents a genuine issue for trial may not, on that ground alone, object to the request; he may, subject to the provisions of Rule 37.03, deny the matter or set forth reasons why he cannot admit or deny it. (Emphasis added).The failure to respond, or to provide a response that fairly meets the substance of the request under CR 36.01, may constitute an admission justifying the granting of a summary judgment or a directed verdict. Tackett v. Tackett, 508 S.W.2d 790 (Ky.1974); Com. ex rel. Matthews v. Rice, 415 S.W.2d 618 (Ky. 1966). See also Ky. Collections § 7:2, Requests for Admissions (2014 ed.)
Appellant had an obligation to either specifically deny the matters set forth in DH Capital's request for admissions, set forth in detail the reasons why he could not truthfully admit or deny those matters, or submit a written objection. Appellant did none of those, but rather merely relied on lack of recollection without any investigation. The trial court deemed his failure to properly answer the requests an admission that he owed the debt to DH Capital. We must agree.
A party presented with a motion for summary judgment has the burden of presenting at least some affirmative evidence showing that there is a genuine issue of material fact for trial. Steelevest, Inc., 807 S.W.2d at 482. Reliance upon "claims and arguments without significant evidence" is improper, Wymer v. J.H. Properties, Inc., 50 S.W.3d 195, 199 (Ky. 2001), and "speculation and supposition are insufficient to justify a submission of a case to the jury . . . ." Goodman v. Goldberg & Simpson, P.S.C., 323 S.W.3d 740, 744 (Ky. App. 2009) (quoting Chesapeake & Ohio Ry. Co. v. Yates, 239 S.W.2d 953, 955 (Ky. 1951)). Herein, Appellant did not submit anything to refute DH Capital's claims or documentary evidence. Although Appellant disagrees, his answer and discovery responses did not create genuine issues of material fact precluding summary judgment. His defense was that he could not remember applying for, receiving, or using the credit card. However, a complete lapse of memory is not sufficient to establish a genuine issue of material fact. Brooks v. Lexington-Fayette Urban County Housing Authority, 132 S.W.3d 790, 798-99 (Ky. 2004). As a result, he admitted he owed DH Capital the balance sued for in the collection action, and such an admission entitles DH Capital to collect the debt as a matter of law.
Finally, Appellant argues that even if summary judgment was proper, the trial court nevertheless erred in awarding DH Capital attorney's fees because the U.S. Bank cardmember agreement was not a revolving credit plan as defined by Kentucky statutes and DH Capital is not a bank. Again, we disagree.
Revolving credit plans are governed by Kentucky Revised Statutes Chapter 286 as well as Federal Law. This duality of regulation is recognized in KRS 286.3-720(1), which provides
(1) A revolving credit plan, and all extensions of credit thereunder, may take such form and contain such provisions, not inconsistent with KRS 286.3-710 to 286.3-770 or otherwise prohibited by law, as the bank may from time to time establish and the debtor may accept, and each extension of credit made by the bank pursuant to such plan, evidenced in any manner
provided in such plan, shall be evidence of a loan, which may be prepaid by the debtor under agreed conditions in whole or in part at any time, made by the bank to the debtor in the amount advanced by the bank. (Emphasis added).
Appellant claims that the credit card at issue is not a "revolving credit plan" because his card agreement and monthly statements provided for interest rates and fees that were in excess of that allowed under Kentucky law. See KRS 286.3-740 and KRS 286.3-750. However, Appellant fails to recognize that US Bank, the original owner of his account, is a national bank domiciled in North Dakota, and is exempt from state usury statutes under the National Bank Act, 12 U.S.C. § 85. Specifically, the Act provides that a national bank may charge its customers "interest" which includes late-payment fees for an account that is closed, at a rate that is allowed by the laws of the state where it is located, even if it is higher than the rate permitted in the state where the cardholder resides. See Smiley v. Citibank, N.A., 517 U.S. 735, 116 S.Ct. 1730, 135 L.Ed.2d 25 (1996). Accordingly, the fact that Congress has determined that North Dakota law shall govern the periodic interest rate and fees to be charged on Appellant's credit card does not mean that it is not a revolving credit plan.
We likewise find no merit in Appellant's claim that DH Capital cannot recover attorney fees under Kentucky Law because it is not a bank. As used in KRS Chapter 286, a "Bank" is defined as "a bank organized under the laws of this state or of the United States, or any assignee of the bank's rights under a revolving credit plan." KRS 286.3-710(1). An assignee has the same right to recover attorney's fees that its assignor bank does. See Wayne Supply Co. v. Morgan Construction Company, 440 S.W.2d 779 (Ky. 1969). As DH Capital was an assignee of the U.S. Bank account, it was entitled to the same rights as the Bank, including the right to attorney's fees. Accordingly, the trial court did not err in awarding DH Capital attorney's fees.
For the foregoing reasons, the order of the Jefferson Circuit Court is affirmed.
ALL CONCUR. BRIEFS FOR APPELLANT: James H. Lawson
Louisville, Kentucky
BRIEF FOR APPELLEE: Heather R. Peters
John R. Tarter
Louisville, Kentucky