Jump to content

Utah SOL for Credit Cards


Recommended Posts

There have been a few decisions by Utah trial courts (not appellate courts that would set precedent) that the SOL for credit cards is 6 years. In every case I have read about it was a Pro Se defendant and they did not argue the case in completeness, just assume the judge would see the light. When you argue all points you can destroy the other side with the plain language of the law. Since I am posting this info several times over in different threads I wanted to put it into the State Law sub forum.

 

Lets start with the two applicable statutes:

78B-2-307.   Within four years.

 

            An action may be brought within four years:

            (1) after the last charge is made or the last payment is received:

            (a) upon a contract, obligation, or liability not founded upon an instrument in writing;

            ( b ) on an open store account for any goods, wares, or merchandise; or

            © on an open account for work, labor or services rendered, or materials furnished;

            (2) for a claim for relief or a cause of action under the following sections of Title 25, Chapter 6, Uniform Fraudulent Transfer Act:

            (a) Subsection 25-6-5(1)(a), which in specific situations limits the time for action to one year, under Section 25-6-10;

            ( b ) Subsection 25-6-5(1)( b ); or

            © Subsection 25-6-6(1); and

            (3) for relief not otherwise provided for by law.

 

78B-2-309.   Within six years -- Mesne profits of real property -- Instrument in writing.

 

            An action may be brought within six years:

            (1) for the mesne profits of real property;

            (2) upon any contract, obligation, or liability founded upon an instrument in writing, except those mentioned in Section 78B-2-311; and

            (3) to recover fire suppression costs or other damages caused by wildland fire.

 

The attorney's for JDBs like to waive the terms and conditions around and say "written contract". However do you see written contract in either statute? The legislature selected a specific wording when they used "Instrument in Writing". If the legislature meant written contract, they would have used those words. The rules of Statutory Construction do not allow the court to make a word superfluous when reading the statutes. They must take them in whole, therefore the use of Instrument is very important here. So what is an Instrument? Well turning to the Uniform Commercial Code 70A-9A-102 you will find:

 

70A-9A-102(47) "Instrument" means a negotiable instrument or any other writing that evidences a right to the payment of a monetary obligation, is not itself a security agreement or lease, and is of a type that in ordinary course of business is transferred by delivery with any necessary indorsement or assignment.
            (a ) "Instrument" does not include:
            (i) investment property;
            (ii) letters of credit; or
            (iii) writings that evidence a right to payment arising out of the use of a credit or charge card or information contained on or for use with the card.

 

 

Now the half awake JDB attorney is going to say that 70A-9A is the Secured Transactions section of code and that definition does not apply to Credit Cards. However, the fact remains that this is the only definition of an Instrument contain in the UCC. Notice that  70A-9A-102(47)(a)(iii) specifically excludes terms and conditions of a credit card from being an instrument.

 

One well know JDB attorney was a document out there for other attorneys that claims the Appellate court ruled in MBNA AMERICA BANK v. GOODMAN that a credit card account was an account based on an Instrument in Writing. The court made no such finding. In that case Goodman argued that without a signed contract the debt was unenforceable. The court found that a credit card agreement is enforcable without a signed agreement only.

  • Like 4
Link to comment
Share on other sites

Adding for your enjoyment the article I talked about in the last sentence of by posting. This can give you some insight into how the JDB attorneys work in Utah. Remember I already destroyed his arguement about SOL, there are other things in there that are built on a house of cards and will see about tearing them up later.

 

Utah_Debt_Collection_Laws.pdf

Link to comment
Share on other sites

  • 2 weeks later...

Good Stuff!!!!  I used this same argument in my case.  Unfortunately I didn't get to see it to the end,  they asked for a mutual dismissal before the judge got to rule on it.  So it was a good enough argument to scare them off!  I really didn't want to argue too much in front of the judge so I went along with it. 

Link to comment
Share on other sites

@KentWA

 

It's a great find, but I see one problem with 70A-9A-102(47).  It's contained in the UCC.  The following is from 70A-1a-102 of the UCC:

 

70A-1a-102.   Scope of chapter.

            This chapter applies to a transaction to the extent that it is governed by another chapter of this title.

 

That means that you'd have to show that credit card transactions are covered by another chapter in the UCC for the definition of "instrument in writing" to apply.  If that can't be done, there could possibly be a problem.   While we know that JDB attorneys aren't the brightest bulbs in the pack, an attorney who has dealt with UT law may be familiar with the UCC and that definition.  There might be judges who are familiar with it, as well.

 

I only offered this so that you and other UT residents can do some research in order to be prepared just in case your argument was challenged based on 70A-1a-102.

Link to comment
Share on other sites

@KentWA

 

It's a great find, but I see one problem with 70A-9A-102(47).  It's contained in the UCC.  The following is from 70A-1a-102 of the UCC:

 

70A-1a-102.   Scope of chapter.

            This chapter applies to a transaction to the extent that it is governed by another chapter of this title.

 

That means that you'd have to show that credit card transactions are covered by another chapter in the UCC for the definition of "instrument in writing" to apply.  If that can't be done, there could possibly be a problem.   While we know that JDB attorneys aren't the brightest bulbs in the pack, an attorney who has dealt with UT law may be familiar with the UCC and that definition.  There might be judges who are familiar with it, as well.

 

I only offered this so that you and other UT residents can do some research in order to be prepared just in case your argument was challenged based on 70A-1a-102.

 

Or maybe the best approach is what a fed dist judge said in  "Hood v. American Express Centurion Bank," (S.D. Ill. 2011).  The court quoted from Utah Code Annot. 78B-2-309(B) saying that it provides a 'six year statute of limitations upon any contract, obigation or liability founded upon an instrument in writing.'  He then contrasts it to Utah Code Annot. 78B2-307(1)(b.c), saying, "Another provision of delineates a four year statute of limitations 'after the last charge is made or the last payment is received"upon an "open store account for any goods, wares or merchandise" or an "open account for work,labor, or services rendered or materials furnished."

 

"A credit card is an open-ended account, and 78B-2-307(1) enumerates various other types of open accounts.  So this Court finds that credit card accounts best fit within the four year statute of limitations provided by Utah Code Annot. 78B-2-307(1). 

Link to comment
Share on other sites

The Truth in Lending Act defines credit cards as open accounts:

 

22 South Duke Street | Lancaster, PA 17602 | Fax: 717-299-1092
logo-red.png
Contact us at717.205.1483

Serving Lancaster and its surrounding countiesfor more than 40 years

banner-img-red.jpg
The Truth in Lending Act - Open-End Credit Disclosures

Open-End Credit Defined

 

In "open-end credit," the creditor:

 

 

(1) reasonably expects the consumer to make repeated transactions;

 

 

(2) may impose a finance charge from time to time on the unpaid balance; and

 

 

(3) generally makes the amount of credit available again to the consumer as the outstanding balance is paid.

 

 

Examples of open-end credit include bank and retail gasoline credit cards, department store revolving charge accounts, and cash-advance checking accounts.

 

 

Open-End Credit Disclosures

 

 

When open-end credit is offered or extended, the Truth in Lending Act requires the creditor to disclose certain information before the first transaction takes place. The disclosures must be made clearly and conspicuously, in writing, and in a form the consumer can keep. In some cases, the Act requires the disclosures to appear on monthly billing statements. Special disclosure rules apply to credit cards, applications taken by telephone or mail, and loans involving real estate.

 

 

Generally, the following information must be disclosed:

 

 

(1) the annual percentage rate; and

 

 

(2) any applicable finance charges and how they are calculated

Link to comment
Share on other sites

@debtzapper

 


The Truth in Lending Act defines credit cards as open accounts

 

TILA defines "open-end credit".  Unfortunately, open-end and an open account are not always the same.  It could depend upon how one's state laws define specific types of accounts.

 

An open account doesn't always involve credit cards.  Also, it usually involves an account between a consumer and a specific business.

 

For instance, a roofer can have an account with a construction supply company.  Every time he needs materials for a job, he calls the company, orders the materials, and the company delivers them to the job site.  There's no credit card involved.

 

Another type of open account might be an account with a specific business that does employ the use of a credit card.  That could be a retail credit card.  You can only use that card at that business.  You can't use it at other businesses.  Again, the definition could depend upon state law. 

 

A credit card with a national bank can be used at every business.  It doesn't involve a relationship between the consumer and the specific business where the card was used. 

Link to comment
Share on other sites

@debtzapper

 

 

TILA defines "open-end credit".  Unfortunately, open-end and an open account are not always the same.  It could depend upon how one's state laws define specific types of accounts.

 

An open account doesn't always involve credit cards.  Also, it usually involves an account between a consumer and a specific business.

 

For instance, a roofer can have an account with a construction supply company.  Every time he needs materials for a job, he calls the company, orders the materials, and the company delivers them to the job site.  There's no credit card involved.

 

Another type of open account might be an account with a specific business that does employ the use of a credit card.  That could be a retail credit card.  You can only use that card at that business.  You can't use it at other businesses.  Again, the definition could depend upon state law. 

 

A credit card with a national bank can be used at every business.  It doesn't involve a relationship between the consumer and the specific business where the card was used. 

Yes, different states have different interpretations of what is an open acct.  Apparently, UT has no case law on that, but a fed dist judge in the case I cited above held that a credit card was an open-ended account based on his interpretation of UT law.

 

"A credit card is an open-ended account, and 78B-2-307(1) enumerates various other types of open accounts.  So this Court finds that credit card accounts best fit within the four year statute of limitations provided by Utah Code Annot. 78B-2-307(1)."

Link to comment
Share on other sites

Guest
This topic is now closed to further replies.
 Share

×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.. For more information, please see our Privacy Policy and Terms of Use.