Mertola, LLC v. SantosAnnotate this Case
At issue was when the statute of limitations commences on credit card debt subject to an optional acceleration clause.
The Supreme Court held that Mertola LLC’s lawsuit seeking to collect an outstanding credit card debt from Alberto and Arlene Santos (together, Santos) was barred by the six-year statute of limitations pursuant to Ariz. Rev. Stat. 12-548(A)(2), despite the credit card agreement in this case giving the bank the option of declaring the debt immediately due and payable upon default.
Santos defaulted on the credit card debt, and Mertola eventually acquired Santos’s debt. Mertola sued for breach of the account agreement, seeking the entire outstanding balance. The superior court granted summary judgment for Santos, concluding that the breaches alleged by Mertola occurred more than six years prior to the filing of this action. The court of appeals reversed, concluding that although the statute of limitations for a missed payment begins to run when the payment is due, the cause of action as to future installments does not accrue until the creditor exercises the acceleration clause. The Supreme Court vacated the court of appeals’ opinion and affirmed the trial court, holding that when a credit card contract contains an optional acceleration clause, a cause of action to collect the entire outstanding debt accrues upon default.