AMERICAN EXPRESS CENTURION BANK V ANDREW FREY
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STATE OF MICHIGAN
COURT OF APPEALS
AMERICAN EXPRESS CENTURION BANK,
UNPUBLISHED
July 27, 2004
Plaintiff-Appellee,
v
No. 248921
Oakland Circuit Court
LC No. 2002-041918-CZ
ANDREW FREY,
Defendant-Appellant.
Before: Murphy, P.J., and Griffin and White, JJ.
PER CURIAM.
Defendant appeals as of right the circuit court’s grant of summary disposition to plaintiff
under MCR 2.116(C)(10), and entry of judgment in plaintiff’s favor in the amount of
$33,496.54, in this breach of contract action arising from two charges to defendant’s American
Express credit cards that defendant claimed were improper. We reverse.
Plaintiff’s four-paragraph complaint stated:
1. That the Defendant herein is indebted to the plaintiff upon open account or
pursuant to contract, and defendant accepted same.
2. Plaintiff has completed performance and defendant agreed to pay the account,
copy attached.
3. There is presently due and owing, over and above all legal counter claims, the
sum of $31,152.97.
4. Plaintiff requests judgment for $31,152.97, plus interest, costs and attorney
fees.
Attached to plaintiff’s complaint was an account billing statement in defendant’s name stating a
balance due of $26,872.89, as of November 20, 2001.
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Defendant’s answer to plaintiff’s complaint denied as untrue the four allegations, and
stated no affirmative defenses.1
In response to plaintiff’s interrogatories2, defendant stated in pertinent part:
4. . . . please state all the facts and circumstances that you will rely upon in
defense of your case.
a. Further, identify each witness and document on which you rely in
support of your proofs and describe the nature of such testimony or contents of
such documents.
ANSWER: E-Max wanted to purchase equipment from Exceed and talked to
Donald Aberle. Exceed requested National Factoring Services to obtain credit
information from E-Max. In response to the NFS inquiry, Mr. Frey gave them his
American Express account numbers and expiration dates. NFS called Mr. Frey to
tell him that they do not accept American Express and he responded the he would
work it out with Exceed. In the meantime, Exceed delivered the equipment to EMax, who pays for the equipment by check. Mr. Frey then discovered that
Exceed has been involved in questionable conduct and defrauded Mr. Frey out of
$5,000 separate from the E-Max equipment purchase. Mr. Frey then called Mr.
Chambers at Exceed to credit his charge card for the $5,000. When Exceed failed
to issue the credit, Mr. Frey called American Express to challenge the $5,000
charge to his account and to alert American Express to the dubious business
practices of Aberle, Chambers and Exceed. About two months later, Aberle
and/or Chambers, on behalf of Exceed, requested NFS to process a charge against
Mr. Frey for the $28,000 or [sic of] equipment purchases that had already been
paid for by E-Max. Mr. Frey disputed the charges with both Exceed and
American Express, the latter wrongly concluding that there was no evidence of
fraud and, therefore, refused to credit Mr. Frey’s account. Instead, American
Express reported Mr. Frey as delinquent to the credit reporting agencies, thereby
causing Mr. Frey problems getting replacement credit cards and refinancing his
home mortgage.
Plaintiff moved for summary disposition under MCR 2.116(C)(10).3 Plaintiff’s motion
argued: that defendant’s answer had asserted no affirmative defenses and did not plead fraud
1
Defendant’s responses to plaintiff’s first requests for admission denied that he received goods
or benefits through the use of the credit card as provided by plaintiff, denied that he owed
plaintiff $28,782.56 for the overdue balance, denied that he was in breach of contract and owed
$28,782.56 for damages, admitted that he entered into a credit card contract with American
Express, admitted that his signature is present on the credit card application, and admitted that
the address on the account statement was his current residence.
2
The lower court record contains defendant’s answers to interrogatories 4 and 5 only, which are
attached to defendant’s responses to plaintiff’s first requests for admission.
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with specificity; that defendant then answered discovery admitting he applied and entered into a
contract with plaintiff for this account; and that defendant stated that he gave his credit card
account number to E-Max and National Factoring Services (NFS), that E-Max and NFS
responded that they did not accept American Express, and that defendant responded that he
would work it out with Exceed. The motion further asserted:
8. Defendant disputed several charges on his American Express account,
including those to Exceed.
9. American Express conducted inquiries into these disputes, and credited Mr.
Frey’s account for those disputes it found to be legitimate, where Defendant did
not provide his credit card account number to the creditors. However, these [sic]
as to the charges at issue here, American Express found them to be legitimate
based on the fact that Defendant willingly gave his credit card account number to
Exceed and National Factoring Services.
Plaintiff submitted with its motion an affidavit of Barbara Berry, identified as “an agent on
behalf of Plaintiff” who has information and personal knowledge of the facts giving rise to this
cause of action. The affidavit states in pertinent part:
3. Plaintiff and Defendant entered into contractual [sic] relationship wherein
Plaintiff agreed to provide a credit card account to Defendant.
4. Plaintiff fulfilled its obligation(s) to Defendant.
5. Defendant defaulted on its payments to Plaintiff.
6. To date, there is an outstanding balance due and owing from Defendant to
Plaintiff, for the amount of $28,782.56 exclusive costs [sic], interest and fees.
7. Defendant has defaulted on his obligations to Plaintiff.
Plaintiff’s summary disposition motion requested judgment in the amount of $28,782.56, interest
of $4,513.98, costs of $125.00, and statutory attorney fees of $75.00, totaling $33,496.54.
Defendant’s response to plaintiff’s motion argued that questions of fact remained whether
defendant was responsible for the “improper, unauthorized and fraudulent charges pursuant to
the credit card agreement and issues as to whether Plaintiff properly concluded to allow the
charges.” Defendant further argued that American Express “allegedly investigated the charges
and unilaterally and wrongly concluded to allow the charges.” In the alternative, defendant
argued that should the circuit court deem summary disposition proper, he should be allowed to
amend his pleadings to assert affirmative defenses and a counterclaim. Defendant submitted no
documentary evidence in response to plaintiff’s motion, and relied on his response to
(…continued)
3
Plaintiff’s motion was brought under MCR 2.116(C)(9) as well, but at the motion hearing,
plaintiff’s counsel dropped that sub-rule as a basis for the motion and proceeded under MCR
2.116(C)(10) alone.
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interrogatory # 4, quoted supra, as setting forth the factual basis of his claim and as being
tantamount to an affidavit, as it was sworn.
The circuit court granted plaintiff’s motion, and entered judgment in the amount of
$33,496.54. The circuit court denied defendant’s motion for reconsideration.
Defendant contends on appeal that the circuit court erred in granting summary disposition
because plaintiff did not carry its burden of demonstrating entitlement to judgment as a matter of
law. We agree.
This Court reviews de novo the circuit court’s grant of summary disposition. A motion
under MCR 2.116(C)(10) tests the factual support for a claim. Smith v Globe Life Ins Co, 460
Mich 446, 454; 597 NW2d 28 (1999). The court considers affidavits, pleadings, depositions,
admissions, and documentary evidence submitted in the light most favorable to the nonmovant.
Id.
In presenting a motion for summary disposition, the moving party has the initial
burden of supporting its position by affidavits, depositions, admissions, or other
documentary evidence. The burden then shifts to the opposing party to establish
that a genuine issue of disputed fact exists. [Smith, supra at 455, quoting Quinto v
Cross & Peters Co, 451 Mich 358, 362-363; 547 NW2d 314 (1996).]
Plaintiff’s complaint alleged breach of contract, and its motion for summary disposition
argued there was no genuine issue of fact that defendant had breached the contract and was
indebted to plaintiff, yet at no time did plaintiff submit a copy of the contract it alleged defendant
had breached. The contract not being before us, the parties’ obligations thereunder in the event
of unauthorized charges are unknown to us, beyond the cursory explanation provided on the back
of monthly account statements, quoted infra. Nor did plaintiff submit below the application that
defendant signed. The affidavit plaintiff submitted below states only broad, conclusory
statements, is unsupported by pertinent documentation, and fails to address that defendant
challenged the charges as unauthorized and the investigatory process plaintiff undertook
thereafter. Plaintiff not only failed to produce the contract it alleged defendant breached, but
also failed to cite or discuss any case or statutory authority to support its claim. The record
before this Court contains only the following boilerplate language set forth on the back of
defendant’s American Express credit card statement/invoice:
Billing Rights Summary: In Case of Errors or Questions About Your Bill: If
you think you bill is incorrect, or if you need more information about a
transaction on your bill, write us on a separate sheet of paper at the address noted
to the right. We must hear from you not later than 60 days after we sent you the
FIRST bill on which the error or problem appeared. You can telephone us at the
number indicated on the front of this statement, but doing so will not preserve
your rights.
In your letter, give us the following information: 1. your name and account
number; 2. The dollar amount of the suspected error; 3. Describe why you
believe there is an error. If you need more information, describe the item you are
unsure about. You do not have to pay the amount in question while we are
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investigating, but you are still obligated to pay the parts of your bill that are not in
question. While we investigate your question, we cannot report you as delinquent
or take any action to collect the amount you question. If you have authorized us
to pay your bill automatically from your savings or checking account, you can
stop the payment on any amount you think is wrong. To stop the payment, your
letter must reach us three business days before the automatic payment is
scheduled to occur.
Defendant does not dispute that plaintiff removed certain charges from his account that it
concluded were improper or unauthorized. However, defendant does dispute that the $20,000
charge and $5,000 charges at issue here were properly incurred and charged to him. The circuit
court did not view the facts in a light most favorable to defendant, the non-movant, and
erroneously concluded that plaintiff had met its burden to show entitlement to judgment as a
matter of law by mere allegations that defendant had given his credit card number to two entities,
Exceed and NSF, regardless of whether defendant authorized the charges at issue. Under these
circumstances, summary disposition under MCR 2.116(C)(10) was improper.
Even assuming that plaintiff did meet its initial burden of production under MCR
2.116(C)(10), we conclude that the pleadings and documentary evidence submitted below,
viewed in a light most favorable to defendant, raised a genuine issue of fact whether the disputed
charges could be legitimately charged to defendant based simply on the fact that he gave his
credit card number to the charging entities, given that defendant maintains he did not authorize
the disputed charges.
Given our disposition, we need not reach defendant’s claim that the circuit court erred in
denying his motion to amend responsive pleadings to add a counterclaim for setoff, and a
violation of the Michigan Consumer Protection Act (MCPA). Because the matter will again be
before the circuit court, we direct the court to permit defendant to promptly amend as requested.
We reverse and remand for further proceedings consistent with this opinion. We do not
retain jurisdiction.
/s/ William B. Murphy
/s/ Richard Allen Griffin
/s/ Helene N. White
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