ILNews

Suit filed after statute of limitations end

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The Indiana Court of Appeals reversed summary judgment for a company that purchases and collects charged-off credit card debt, ruling the statute of limitations prevented the company from going after a delinquent consumer.

Jason Smither obtained a Mastercard account from Providian Bank in 1999. On Feb. 9, 2000, he had made a payment toward his $1,700 debt on the card but never made another payment or charge on the card. Providian "charged off" the debt Sept. 18, 2000, but kept sending monthly statements to Smither, eventually requesting a minimum payment of $670 on the outstanding balance in December 2000. Asset Acceptance purchased Smither's account in December 2001 from Providian Bank. On May 30, 2006, Asset sued Smither seeking damages of $2,157.62 plus interest.

Asset tried serving Smither twice at an incorrect address, and the trial court granted default judgment for the company. The court later ordered the case closed for failure to prosecute but noted the case could be redocketed in the future. Around this time, Smither discovered the default judgment by looking at his credit report and contested the judgment saying the statute of limitations had passed. The trial court granted summary judgment for Asset.

Even though Asset didn't introduce the account agreement applicable to Smither's card, the appellate court in Jason Smither v. Asset Acceptance LLC, No. 55A04-0902-CV-70, used the boiler plate language regarding default and acceleration to decide the appeal. Using Portfolio Acquisitions LLC v. Feltman, 909 N.E.2d 876, 881 (Ill. App. Ct. 2009), the judges decided that Indiana Code Section 34-11-2-7(1), which governs actions on accounts and unwritten contracts and has a six-year statute of limitations, is appropriate to use when ruling on attempts to collect credit card debt.

Feltman established credit card accounts aren't like promissory notes or installment loans because the amount of debt a consumer has may be in flux, wrote Judge Michael Barnes. He also noted that credit card accounts closely resemble the common law definition of an "open account." The general rule is that the statute of limitations for an action on an open account "commences from the date the account is due."

"Whether we consider the statute of limitations to have begun running on the date of Smither's last payment or the next payment due date thereafter, Asset's lawsuit filed on May 30, 2006, was more than six years after both dates," wrote Judge Barnes.

Asset argued it was entitled to delay the running of the statute of limitations because the credit card agreement governing Smither's account had an optional acceleration clause that it used when it "charged off" his account in 2000.

Even if the Court of Appeals assumed that a credit card company could delay the running of the statute of limitations by waiting to invoke an optional acceleration clause, Providian never invoked it and Asset had no evidence equating a debt "charge off" with the exercise of an optional acceleration clause. Even if Providian believed it was invoking the clause, it never took any affirmative action to notify Smither of that fact, wrote Judge Barnes. The first time Asset or Providian requested immediate and full payment from Smither was after the lawsuit was filed in 2006. Thus, the suit is time-barred.

The judges remanded for summary judgment to be entered for Smither.

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  1. No second amendment, pro life, pro traditional marriage, reagan or trump tshirts will be sold either. And you cannot draw Mohammed even in your own notebook. And you must wear a helmet at all times while at the fair. And no lawyer jokes can be told except in the designated protest area. And next year no crucifixes, since they are uber offensive to all but Catholics. Have a nice bland day here in the Lego movie. Remember ... Everything is awesome comrades.

  2. Thank you for this post . I just bought a LG External DVD It came with Cyber pwr 2 go . It would not play on Lenovo Idea pad w/8.1 . Your recommended free VLC worked great .

  3. All these sites putting up all the crap they do making Brent Look like A Monster like he's not a good person . First off th fight actually started not because of Brent but because of one of his friends then when the fight popped off his friend ran like a coward which left Brent to fend for himself .It IS NOT a crime to defend yourself 3 of them and 1 of him . just so happened he was a better fighter. I'm Brent s wife so I know him personally and up close . He's a very caring kind loving man . He's not abusive in any way . He is a loving father and really shouldn't be where he is not for self defense . Now because of one of his stupid friends trying to show off and turning out to be nothing but a coward and leaving Brent to be jumped by 3 men not only is Brent suffering but Me his wife , his kids abd step kidshis mom and brother his family is left to live without him abd suffering in more ways then one . that man was and still is my smile ....he's the one real thing I've ever had in my life .....f@#@ You Lafayette court system . Learn to do your jobs right he maybe should have gotten that year for misdemeanor battery but that s it . not one person can stand to me and tell me if u we're in a fight facing 3 men and u just by yourself u wouldn't fight back that you wouldn't do everything u could to walk away to ur family ur kids That's what Brent is guilty of trying to defend himself against 3 men he wanted to go home tohisfamily worse then they did he just happened to be a better fighter and he got the best of th others . what would you do ? Stand there lay there and be stomped and beaten or would u give it everything u got and fight back ? I'd of done the same only I'm so smallid of probably shot or stabbed or picked up something to use as a weapon . if it was me or them I'd do everything I could to make sure I was going to live that I would make it hone to see my kids and husband . I Love You Brent Anthony Forever & Always .....Soul 1 baby

  4. Good points, although this man did have a dog in the legal fight as that it was his mother on trial ... and he a dependent. As for parking spaces, handicap spots for pregnant women sure makes sense to me ... er, I mean pregnant men or women. (Please, I meant to include pregnant men the first time, not Room 101 again, please not Room 101 again. I love BB)

  5. I have no doubt that the ADA and related laws provide that many disabilities must be addressed. The question, however, is "by whom?" Many people get dealt bad cards by life. Some are deaf. Some are blind. Some are crippled. Why is it the business of the state to "collectivize" these problems and to force those who are NOT so afflicted to pay for those who are? The fact that this litigant was a mere spectator and not a party is chilling. What happens when somebody who speaks only East Bazurkistanish wants a translator so that he can "understand" the proceedings in a case in which he has NO interest? Do I and all other taxpayers have to cough up? It would seem so. ADA should be amended to provide a simple rule: "Your handicap, YOUR problem". This would apply particularly to handicapped parking spaces, where it seems that if the "handicap" is an ingrown toenail, the government comes rushing in to assist the poor downtrodden victim. I would grant wounded vets (IED victims come to mind in particular) a pass on this.. but others? Nope.

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