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CREDITOR ACTION TO COLLECT CREDIT CARD DEBT - COOK V. MIDLAND FUNDING, LLC

Cook v. Midland Funding, LLC, [Ms. 2140786, Mar. 11, 2016] __ So. 3d __ (Ala. Civ. App. 2016). The Court of Civil Appeals holds that a purchaser of credit card debt failed to present sufficient evidence either of a breach of contract or of an account stated and reverses a summary judgment for the creditor. Cook made his last purchase on a Chase Bank credit card account in July 2008 and his last payment on December 22, 2009. Chase charged off the account and sold it to Midland with a balance due of $16,883.09. On October 17, 2013 – more than three years after the last payment – Midland sued to recover the balance due. It moved for summary judgment based on affidavits of a Midland employee and a Chase employee. The circuit court entered a summary judgment for Midland and denied Cook’s motion to strike the affidavits. The Court of Civil Appeals affirms the denial of the motion to strike the affidavits, relying on Ex parte Head, 572 So. 2d 1276 (Ala. 1990) regarding the sufficiency of affidavits about company accounts. The Court of Civil Appeals rejects Cook’s argument that the claim should have been considered a claim on an open account subject to a three-year statute of limitations; Midland was the master of its complaint and sued for breach of contract and breach of an account stated. Although a six-year statute of limitations applied to both of those claims, the Court of Civil Appeals holds that Midland did not support its summary-judgment motion on them. It did not have the original contract, and the Court of Civil Appeals holds that “Midland failed to present a valid contract.” To sustain the summary judgment on account stated, there would have to be evidence that Cook agreed to a statement presented to him of the amount due. For lack of such evidence, the Court holds that the summary judgment could not be supported on that basis either, and reverses. Cook had also filed a motion for summary judgment, and the Court of Civil Appeals directs entry of summary judgment on his motion “because Midland failed to produce evidence demonstrating the required elements of a breach-of-contract claim or an account-stated claim.”

Related Documents: Cook v Midland Funding 3-11-16

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