DEFENDANT S MOTION FOR SUMMARY JUDGMENT PURSUANT TO C.R.C.P. 56

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1 District Court, Larimer County, Colorado 201 Laporte Avenue Fort Collins, CO (970) Plaintiff: Discover Bank v. Defendant: Gerald Taylor Karin M. Troendle, Atty Reg. # Colorado Legal Services 211 West Magnolia Street Fort Collins, CO Telephone Number: (970) , Ext. 216 Fax Number: (970) ktroendle@colegalserv.org EFILED Document CO Larimer County District Court 8th JD Filing Date: Feb :42PM MST Filing ID: Review Clerk: Amy C Pittington COURT USE ONLY Case Number: 2010 CV 260 Division Courtroom DEFENDANT S MOTION FOR SUMMARY JUDGMENT PURSUANT TO C.R.C.P. 56 The Defendant, Gerald Taylor, by and through his attorney, Karin M. Troendle, of Colorado Legal Services, Inc., moves this Court for an Order finding Plaintiff s claim barred by the Statute of Limitations. As grounds therefor, Defendant states: Standard for granting Summary Judgment: 1. Summary judgment is a drastic remedy and may only be granted if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. C.R.C.P. 56(c); Murry, 194 P.3d at 491. A material fact is a fact that affects the outcome of a case. Trigg v. State Farm Mut. Auto. Ins. Co., 129 P.3d 1099, 1101 (Colo.App. 2005). 2. If facts alleged by Plaintiff are true, then Defendant entitled to Summary Judgment as the alleged debt would be barred by the applicable statute of limitations. 3. Based on the facts alleged by Plaintiff, the debt was barred by the applicable statute of limitations. Plaintiff does not dispute that it is alleging that the claimed debt was in default as of October 24, 2005, and that suit was not filed within three years. 4. To the extent that plaintiffs argue that the running of the applicable statute is tolled, they bear the burden of coming forward with facts sufficient to demonstrate that tolling is appropriate. See Goldsmith v. Learjet, Inc., 90 F.3d 1490, 1496 (10th Cir. 1996). 1

2 Facts: 1. The Plaintiff issued the Summons in this action on February 8, Defendant was served with the Summons, Complaint, and Civil Case Cover Sheet on or about March 4, Plaintiff has alleged that Defendant owes on a Discover Card Account and has attached Exhibits to its Motion for Telephone Testimony and provided copies of those documents in its disclosures. 3. The Plaintiff s Exhibit Discover Cardmember Agreement contains a Choice of Law Provision. The Choice of Law provision provides: This Agreement will be governed by the laws of the State of Delaware and applicable federal laws. See page 12 of the Cardmember Agreement. 4. The Plaintiff s Exhibit Discover Cardmember Agreement contains a Default provision. That provision includes: when you fail to comply with the terms of this Agreement, including failing to make a required payment when due. See page 9 of the Cardmember Agreement. 5. The Plaintiff s Exhibit Cardmember Statements reflect the last payment made and last use of credit card on September 16, Pursuant to the Account Summary with a Closing date of September 25, 2005, the next payment was due on October 24, Pursuant to Plaintiff s Exhibits, no payment was made after September 16, Delaware Statute of Limitations: Argument: Chapter Actions subject to 3-year limitation (a) No action to recover damages for trespass, no action to regain possession of personal chattels, no action to recover damages for the detention of personal chattels, no action to recover a debt not evidenced by a record or by an instrument under seal, no action based on a detailed statement of the mutual demands in the nature of debit and credit between parties arising out of contractual or fiduciary relations, no action based on a promise, no action based on a statute, and no action to recover damages caused by an injury unaccompanied with force or resulting indirectly from the act of the defendant shall be brought after the expiration of 3 years from the accruing of the cause of such action; subject, however, to the provisions of , 8119 and 8127 of this title (emphasis added). 1. If Exhibits of Plaintiff are admitted, then this action is barred as the cause of action accrued on October 24, 2005, and this action was filed on February 8, 2010, which is not within three years of October 24,

3 2. Plaintiff has alleged contract terms and has chosen to allege a valid contract exists. Plaintiff cannot avoid the application of the choice of law provisions and statute of limitations contained in the document they proffer as the terms of the contract. 3. Therefore, Plaintiff s claim should be denied, and Summary Judgment granted with prejudice. Tolling: 1. Nor may Plaintiff prevail on an argument based on tolling of the Delaware Statute of Limitation. The statute of limitations was not tolled pursuant to Delaware Chapter To toll the statute of limitations when a company chose the governing law and chose to extend credit to an out-of-state Defendant would lead to an unconscionable, absurd result that would violate public policy. 2. Based on Plaintiff s exhibits, the Defendant did not reside in Delaware at the time credit was extended or used. The Plaintiff could and did serve the Defendant in Colorado, the state in which the Defendant resided. 3. In Hurwitch v. Adams, 155 A.2d 591 (Del. 1959), the Delaware Supreme Court rejected an argument that state law tolled the statute of limitations against out-of-state defendants. The Court found that the tolling statute had no application to a case in which, during the limitation period, the defendant was amenable to personal service. The Court did not toll the statute of limitations because the defendants were nonresidents. Instead, the Court determined that the foregoing cases, we think, taken together, demonstrate that 10 Del.C has no tolling effect on the applicable statute of limitations when the defendant in the suit is subject to personal or other service to compel his appearance. (emphasis added). 4. The Plaintiff had the ability to, and has, brought suit against the Defendant in the appropriate forum, and there should be no tolling of the Delaware statute of limitations. 5. Delaware s tolling statute has been interpreted by other Courts in relation to suits on credit card debt. 6. Recently, for example, in McCorriston v. L.W.T. Inc, 536 F.Supp.2d 1268 (M.D.Fla. 2008) the Court addressed the tolling statute in connection with a Fair Debt Collection Practices Act Claim. The Court found that: The Supreme Court of Delaware has correctly observed that the blanket application of the tolling statute to cases involving non-resident defendants, as Defendants urge here, "would result in the abolition of the defense of statutes of limitation in actions involving non-residents." Hurwitch v. Adams, 155 A.2d 591, 594 (Del.1959). In Hurwitch, the court found that the tolling statute did not apply where substitute service was available to subject the non-resident defendant to personal jurisdiction in 3

4 a Delaware court. Id. at 593. By contrast, Defendants argue that the Delaware Supreme Court recently applied 8117 to toll the statute of limitations for several years against a non-resident defendant corporation until it entered Delaware and filed a lawsuit. Saudi Basic Indus. Corp. v. Mobil Yanbu Petrochem. Co., Inc., 866 A.2d 1, 18 (Del.2005). That court noted that the plaintiff would not have been able to obtain personal jurisdiction over the foreign defendant in Delaware until it was present in the state and subject to service of process. Id. The holdings of Hurwitch and Saudi Basic are entirely consistent. When a nonresident defendant is subject to service in Delaware, either through personal or substitute service, the statute of limitations is not tolled. When a non-resident defendant is sued in Delaware, but is outside its jurisdiction, the statute of limitations is tolled until the defendant is available to be served in Delaware. However, one key factor distinguishes these cases from the instant case. In both cases, the courts evaluated the effect of the tolling statute on cases brought in Delaware. The holdings were premised on plaintiff's ability (or inability) to obtain personal jurisdiction over the non-resident defendant in Delaware. No such jurisdictional problem was present in Defendants' state court action. Plaintiff resided in Florida and was subject to personal jurisdiction in Florida. For the purposes of determining Defendants' good faith, the Court notes that 8117 is not expressly limited to cases filed in Delaware. Notwithstanding, 8117 references "the State," an obvious reference to Delaware. Defendants' proposed application of 8117 to a case filed in Florida is plainly problematic. Defendant's construction of 8117 would indefinitely toll lawsuits filed in states other than Delaware, notwithstanding that those lawsuits were filed against account holders who were never in Delaware, but who are subject to service in the state in which the suit was filed. Such a construction would, as the court in Hurwitch noted, effectively "result in the abolition of the defense of statutes of limitation in actions involving non-residents," an absurd result. Defendants' strained construction of 8117 would inject an inherent ambiguity into the statute, an illogical and unreasonable result. Moreover, the cases cited by Defendants do not support such a construction. Simply put, Defendants are wrong about Florida's statute of limitations applying and wrong about the statute being tolled because McCorriston was not in Delaware. Notwithstanding, Defendants' bona fide error defense based on their mistake of law turns not on whether Defendants were wrong or made every conceivable attempt to ensure that their suit was timely but on whether Defendants had procedures "reasonably adapted" to preventing their legal error. [6] 15 U.S.C. 1692k(c). Id. 7. California has also addressed the tolling issue in Resurgence Financial LLC v. Chambers, 1-08-AP (CASUPAD), 173 Cal.App.4th Supp. 1. There the Court found that section 8117 did not toll the statute of limitations when the debtor did not reside in Delaware. The Court held: 4

5 Delaware courts have held that section 8117 tolls that statute of limitations only when the defendant is not subject to service of process. (Saudi Basic Indus. Corp. v. Mobil Yanbu Petrochemical Co., supra, 866 A.2d 1, 18 [ 8117 tolled statute of limitations with respect to foreign company until Delaware could assert personal jurisdiction over the company]; Brossman v. Federal Deposit Ins. Corp. (Del. 1986) 510 A.2d 471, 472 [statute of limitations did not run against Pennsylvania resident prior to enactment of long-arm statute making him amenable to service of process]; Hurwitch v. Adams (Del. 1959) 52 Del. 247 [155 A.2d 591][2]; cf. Code Civ. Proc., 351.) The only evidence submitted at trial indicates that Chambers was not subject to personal jurisdiction in Delaware. Section 8117 suspends the limitations period for actions that are brought in Delaware courts during the time that Delaware courts do not have jurisdiction over the defendant. The purpose of section 8117 is to protect persons seeking to file suit in Delaware from defendants who have made filing suit in Delaware difficult or impossible. In this case, Resurgence asserts that it is not a Delaware corporation, does not reside there, and could not legally have filed an action in Delaware based on federal and state law. (See 15 U.S.C et seq. [3] Fair Debt Collection Practices Act; Civ. Code, 1788 et seq.; [173 Cal.App.4th Supp. 6] Rosenthal Fair Debt Collection Practices Act.[4]) Instead, Resurgence was required to file suit in California. (See Harrington v. CACV of Colo., LLC (D.Mass. 2007) 508 F.Supp.2d 128, 133.) Thus, Chambers was always subject to suit in the only forum where she was amenable to suit. There is no reason for the Delaware legislature to extend the limitations period with respect to actions that are not filed in Delaware and could not be filed in Delaware. Accordingly, section 8117 can be most reasonably read to apply only to actions that are actually filed in a Delaware court or actions that could have been filed in a Delaware court. Id. 8. The Court in Resurgence v. Chambers further found that: Conclusion: The facts in this case are nearly identical to those in the underlying case discussed in McCorriston v. L.W.T., Inc., supra, 536 F.Supp.2d Applying the Delaware s tolling statute to a case filed in California in these circumstances would be absurd. Because Resurgence did not, and could not, file its lawsuit in Delaware, section 8117 did not toll the applicable limitations period under Delaware law. Id. Based on the Plaintiff s sworn statements submitted to this Court, in the form of Disclosures and Exhibits, the applicable Delaware statute of limitations ran prior to the filing of this case, tolling does not apply, therefore, Defendant s Motion for Summary Judgment should be granted and this action should be dismissed with prejudice. 5

6 WHEREFORE, Defendant prays that the Honorable Court enter an Order Dismissing Plaintiff s Claims with Prejudice, and for such other relief as may be proper in the circumstances. Respectfully Submitted: S/ Karin M. Troendle Karin M. Troendle, Atty Reg. # Attorney for Defendant Colorado Legal Services 211 West Magnolia Street Fort Collins, CO Telephone Number: (970) , Ext. 216 CERTIFICATE OF SERVICE I certify that on this 11 th day of February, 2011, I served a true and correct copy of this Defendant s Motion for Summary Judgment, to Richard Rose, Attorney for Plaintiff, via lexis/nexis. S/ Karin M. Troendle 6