Legal Question in Credit and Debt Law in California
Accrual of 4-year statute on credit card debt
I'm a lawyer defending a debtor on a case originally posted here.
Credit card co. filed complaint 3/21/06. Last payment was 1/17/02 and next payment due date after that was 3/16/06 (I contended that was the date of breach and the statute then accrued).
Pltf contends that because they thereafter imposed a late fee, within 4 years of filing the complaint, the imposition of the late fee caused the statute to accrue pursuant to CCP 344 which provides that the statute ''on a mutual, open and current account'' runs from the date of the ''last item.''
The Judge bought this argument and the debtor lost. I think the judge is wrong, and I'm planning a CCP 663 motion to vacate the judgment based on an error of law. I haven't been to the library yet. Am I right, and can you think of a good case or other authority on point?
1 Answer from Attorneys
Re: Accrual of 4-year statute on credit card debt
CCP 337 & 337a govern book accounts. While it's 4 years from the "date of last item" "where an account stated is based upon an account of more than one item," which certainly could mean a late charge, you might argue that late charges only arise from the actual contract and that a late charge is not an "item" within the meaning of "book account." You might check case law to make that argument.
However, the contractual terms would control and you should determine if the date of the actual breach can be construed within the meaning of the original agreement. Since they probably didn't have the original contract (having knowledge of the collection industry) and they were only able to obtain the account statement, that explains why they apparently proceeded solely on an open account basis!
You might argue in the alternative for the court's reconsideration under CCP sec. 1008, if there's still time to do so.
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