The Civil Court of the City of New York, Richmond County, recently addressed this issue in Citibank (South Dakota) N.A. v Improta, Civ Ct, Richmond County, Mar. 12, 2015, Straniere, J., index No. CV-010975-09/RI (2015 NY Slip Op 50361[U]). The defendant defaulted on her credit card agreement, and argued that since Citibank failed to produce a copy of her signed credit card contract, she should not be held liable for the debt.
As we have previously discussed, when the plaintiff (in this case, Citibank [South Dakota] N.A.) resides in a state other than New York, it is likely that the underlying credit agreement contains a provision requiring that the laws of the plaintiff’s home state be applied in any disputes between the parties. In this case, South Dakota, was the plaintiff’s home state. So even though this debt-collection case was litigated in a New York court, South Dakota law was applied.
Chapter 54-11 of the South Dakota Codified Laws regulates credit cards and revolving charge accounts. SDCL 54-11-9, entitled, “Creation of contract between card holder and issuer,” provides as follows:
The use of an accepted credit card or the issuance of a credit card agreement and the expiration of thirty days from the date of issuance without written notice from a card holder to cancel the account creates a binding contract between the card holder and the card issuer with reference to any accepted credit card, and any charges made with the authorization of the primary card holder.
Citibank’s witness testified that the agreement dated July 2008 would have been mailed to the defendant approximately two months prior to its effective date. The monthly statements from the plaintiff to the defendant show charges by the defendant in October 2008, totaling $102.50. The last time before that date that the defendant used the card to make purchases was July 2007. There were no other purchases between July 2007 and February 2009, when the plaintiff closed the account. There were, however, payments made on the account during that period.
But for that small amount of activity in October 2008, the plaintiff would not have be able to establish that the defendant was bound by the credit card agreement, because the plaintiff could not prove mailing of the July 2008 agreement to the defendant. That minimal use meant that the South Dakota statute applied, and the defendant had a viable account, and was bound by the terms of the July 2008 agreement.
The Court held that “The fact that plaintiff cannot establish that it sent the July 2008 ‘Agreement’ to the defendant is rendered moot by the billing statements which indicate that the defendant knew about and acknowledged the debt by negotiating a payment plan for a period of time which prevented her from incurring new charges until after she brought the account to a reinstated status. Further, as this account is subject to South Dakota law, use of the card even without receipt of an agreement apparently creates a contract.” Citibank (South Dakota) N.A. v Improta, supra.
In this case, since the defendant received and used her Citibank (South Dakota) N.A. credit card within 30 days after the agreement was allegedly mailed to her, she was held to have agreed to the terms of the agreement. It was not necessary for Citibank (South Dakota) N.A. to produce a copy of a signed agreement at trial. Proof of mere use of the credit card within 30 days of the mailing of the agreement was enough to establish the agreement was in effect.
Despite this finding, this case still ended well for the Defendant, since the Judge held that the Plaintiff failed to prove its prima facie case based upon other means. The statements and agreement submitted by Citibank were found to be incomplete, and Citibank (South Dakota) N.A.’s case was dismissed.
There are many ways you can defend yourself against a debt collection lawsuit for a credit card debt. Contact us for a free case review to learn what defenses you may have.