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Legant v. Chase Bank USA

December 1, 2008

LAWRENCE D. LEGANT, PLAINTIFF,
v.
CHASE BANK USA, N.A., DEFENDANT.



The opinion of the court was delivered by: Thomas J. McAVOY Senior United States District Judge

DECISION and ORDER

Plaintiff Lawrence D. Legant commenced the instant action against Defendant Chase Bank USA, N.A. alleging violations of the Truth in Lending Act ("TILA"), 15 U.S.C. §§ 1601 et seq., breach of contract, and seeking to vacate an arbitration award favoring Defendant. Presently before the Court is Defendant's motion for summary judgment pursuant to Fed. R. Civ. P. Rule 56 seeking dismissal of Plaintiff's complaint, to amend its answer to assert a counterclaim, for judgment against Plaintiff on its counterclaim, and for sanctions against Plaintiff.

I. FACTS*fn1

Plaintiff entered into a consumer credit contract with Defendant whereby Defendant provided Plaintiff with a revolving credit account. The contract included a provision that all claims or disputes between Plaintiff and Defendant could be resolved by binding arbitration. The original contract included an exception whereby claims less than $25,000 could be submitted to small claims court. In an amendment to the contract, the $25,000 exception was removed and Plaintiff was given the option to pursue in small claims court any claim falling within the small claims court's jurisdiction, based on the local court's threshold rather than the $25,000 limit. Defendant gave Plaintiff the right to reject the amendment. Plaintiff did not exercise that right.

Plaintiff stopped paying the account. He consulted NAES, a company that claimed it could rid Plaintiff of his $35,000 in credit card debt using only some letters and forms. NAES charged Plaintiff $2,000 for its service, which included various form letters that NAES directed Plaintiff to send to Defendant. These form letters stated that the account had a "billing error" because Defendant failed to credit him for "prepayments". Though Plaintiff asserted in his form letters that his billing statement was inaccurate, he was not sure of the verity of this allegation. Plaintiff followed NAES' advice hoping to exploit a legal technicality that might help him avoid his debt. Before consulting NAES, Plaintiff did not believe there were any errors in his account. Plaintiff now admits that he made no prepayments and that his account contained no billing error. Defendant responded to Plaintiff's billing inquiry.

Defendant ultimately filed a claim with the National Arbitration Forum ("NAF") against Plaintiff for the unpaid credit card bill. Plaintiff objected with another NAES form. The arbitrator issued an award to Defendant for $8,647.03. This award has not been vacated or modified. Plaintiff has not paid the award.

Plaintiff commenced the instant action asserting that Defendant failed to respond to Plaintiff's billing inquiry, wrongfully reported Plaintiff as delinquent, and that there was no valid arbitration provision in his credit card contract. Presently before the Court is Defendant's motion for summary judgment seeking dismissal of the Complaint and also seeking leave to amend its answer to assert a counterclaim, for judgment on the counterclaim, and for sanctions.

II. STANDARD OF REVIEW

A motion for summary judgment may be granted if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. The moving party has the burden to show the absence of disputed material facts by informing the court of portions of pleadings, depositions, and affidavits which support the motion. Fed. R. Civ. P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Facts are material if they may affect the outcome of the case as determined by substantive law. Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). All ambiguities are resolved, and all reasonable inferences are drawn, in favor of the non-moving party. Skubel v. Fuoroli, 113 F.3d 330, 334 (2d Cir.1 997).

The party opposing the motion must set forth facts showing that there is a genuine issue for trial. The non-moving party must do more than merely show that there is some doubt or speculation as to the true nature of the facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).*fn2 It must be apparent that no rational finder of fact could find in favor of the non-moving party for a court to grant a motion for summary judgment. Gallo v. Prudential Residential Servs. 22 F.3d 1219, 1223-24 (2d Cir. 1994); Graham v. Lewinski, 848 F.2d 342, 344 (2d Cir. 1988).

When, as here, a party seeks summary judgment against a pro se litigant, a court must afford the non-movant special solicitude. Triestman v. Fed. Bureau of Prisons, 470 F.3d 471, 477 (2d Cir. 2006).

III. DISCUSSION

a. Defendant's Motion for Summary Judgment

1. Truth in Lending Act Claims

Plaintiff argues that Defendant violated the TILA because Defendant did not respond to Plaintiff's inquiries made on or about October 29, 2004 regarding alleged billing discrepancies. Plaintiff claims that Defendant knowingly failed to respond to the request within 90 days in violation of 15 U.S.C. §§1666 and 12 C.F.R. § 226.13 and is, therefore, prohibited from collecting the balance owed on the credit card. Plaintiff also argues that Defendant wrongfully notified credit reporting agencies that Plaintiff was delinquent and that filing a claim with the National Arbitration Forum ("NAF") violated the TILA, entitling Plaintiff to damages. Defendant moves for Summary Judgment on the Truth in Lending Act ...


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