The Williams v. Unifund case: Significance

In Williams v. Unifund CCR Partners Assignee of CitiBank the First Court of Appeal, in an opinion by Justice Evelyn Keyes, held that Citibank assignee who sued on a credit card had not met the requirements of proof for breach of contract because it had not produced the underlying cardmember agreement from Citibank or any other document establishing the terms that governed the account, and the monthly account statements showed variation in the interest rate and corresponding accrual amounts for individual billing cycles.

THE WILLIAMS V. UNIFUND CASE (2008 opinion on proof requirements for credit card debt suit)  

This is a credit card case in which the consumer lost on Unifund's motion for summary judgment in the trial court, and then appealed. The appeal was assigned to the First Court of Appeals (Houston), which held that the assignee of Citibank was not entitled to summary judgment on its breach of contract case because it had not produced the cardmember agreement, nor any other documentary evidence of the terms that governed the account.

The interest rate printed on the Citibank account statements varied (--> variable APR), and the assignee claimed additional interest after chargeoff and sale of the account by the original creditor.

SIGNIFICANCE

This case is most usefully cited for the proposition that it is not enough for a creditor to establish the fact that some sort of contract existed; it must instead prove the terms of that contract.

The panel opinion does not mention that the interest rate was required to be set forth in writing pursuant to federal law (TILA & Regulation Z), but cites an old case from Texas for the proposition that the interest rate is a material term in a loan contract, and must therefore be proven when asserting a breach of contract claim involving such a type of debt. (Claims for debt may also arise from other sources, such performance of services).

The opinion also mentions alternative theories (sworn account and quantum meruit) and overrules the consumer's limitations defense.

The award of attorney's fees to Citibank's assignee was also reversed because Unifund was no longer the prevailing party, a requirement for fee recovery under Chapter 38 of the Civil Practice and Remedies Code. The fee claim, by an attorney associated with Hull & Associates, was high for a case of this nature. James Hull and his associates routinely claim much higher amounts as reasonable and necessary that other debt collection attorneys, including those that also litigate in other major cities.
-- > Amounts of fees in debt collection cases.

The court also rejected the sworn account theory as nonviable for collection of cc debt based on the substantive element of such suit: underlying sales transaction(s)

The defendant's SoL defense was overruled as the debt claim was found not to have been time-barred based on the date of the last payment and the date the suit was filed.

The appellate opinion in Williams v. Unifund was written by Justice Evelyn Keyes. It overturned a summary judgment for the debt buyer granted by Judge Lynn Bradshall-Hull, who was then a county court-at-law judge, and later became a District Judge in Harris County.

CAVEAT: This was an appeal from a summary judgment, not a bench trial.

CASE CITES: MSJ ON BREACH OF CONTRACT CLAIM WITH AND WITHOUT CREDIT CARD AGREEMENT

Compare Williams v. Unifund CCR Partners, 264 S.W.3d 231, 236 (Tex. App.-Houston [1st Dist.] 2008, no pet.) (reversing summary judgment because there was no document produced showing terms of credit card agreement), with Rogers v. Unifund CCR Partners Assignee of Citibank, No. 01-10-01146-CV, 2012 Tex. App. LEXIS 3027, at *14 (Tex. App.-Houston [1st Dist.] Apr. 19, 2012, pet. denied) (mem. op.) (affirming summary judgment based on Unifund's evidence of credit card agreement, although not original agreement, that reflected agreement's terms and cardholder's acceptance of those terms by his continued use of credit card).