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Wallace v. Chase Bank United States, N.A.

United States District Court, N.D. Mississippi, Delta Division

September 5, 2014

DAVID L. WALLACE, PLAINTIFF/COUNTERDEFENDANT
v.
CHASE BANK USA, N.A., DEFENDANT/COUNTERPLAINTIFF

For David L. Wallace, Plaintiff, Counter Defendant: William F. Schneller, Jr., LEAD ATTORNEY, JONES & SCHNELLER PLLC, Holly Springs, MS.

For Chase Bank USA, N.A., Defendant, Counter Claimant: Mark Herndon Tyson, LEAD ATTORNEY, MCGLINCHEY STAFFORD, Jackson, MS; Stephen T. Masley, EAD ATTORNEY, MCGLINCHEY STAFFORD - Jackson, Jackson, MS.

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MEMORANDUM OPINION AND ORDER

Debra M. Brown, UNITED STATES DISTRICT JUDGE.

This action arises from debt collection efforts by Defendant Chase Bank USA, N.A. (" Chase" ) to recover full payment on a credit card account held by Plaintiff David Wallace and his ex-wife. Plaintiff maintains that he is not liable for the entire balance because it includes a charge from a convenience check his ex-wife drafted on the account without his knowledge. After Chase attempted to collect payment from Plaintiff, he filed a complaint in the County Court of Desoto County, Mississippi, seeking an order enjoining Chase from further collection attempts and requiring removal of any default notations regarding the account from his credit report. Chase removed the action to this Court and filed a counterclaim against Plaintiff for recovery of the unpaid account balance and attorney's fees. Chase now seeks summary judgment on its counterclaim, arguing that Plaintiff is liable for the entire balance pursuant to the Cardmember Agreement he entered at the time the account was opened. Plaintiff argues that summary judgment should be denied because he did not receive any benefit from the check and, therefore, is not required to repay his ex-wife's debt. For the reasons below, the Court finds that the motion for summary judgment should be granted in part and denied in part at this time.

I

While Plaintiff and his ex-wife were married, they held a joint revolving credit card account with Chase's predecessor-in-interest. Compl. [2] at 2; Pl.'s Deposition [44-9] at 9. Plaintiff claims his ex-wife opened the account in both their names. Credit card statements were mailed to the marital residence, and Plaintiff made payments on the account from his and his exwife's joint checking account. Pl.'s Deposition [44-9] at 10-11, Exh. 1-2. They used the credit card throughout their marriage and after their divorce in February 2006. See id. at 9-10, 17-18; Judgment for Divorce [44-1]. Plaintiff's ex-wife later remarried, and her last name changed from Wallace to Mack. Pl.'s Deposition [44-9] at 19; Doc. [44-12]. Plaintiff stated during his deposition that he contacted Chase in July or August 2006 and attempted to cancel the card, but was advised that the account could not be closed at that time because it had an outstanding balance of approximately $98.00. Pl.'s Deposition [44-9] at 10. Plaintiff claims he was advised that once the balance was paid, he would receive confirmation from Chase of the closed account. Id. Plaintiff further claims he paid the account in full, but never received confirmation. Id. He did not follow up with Chase regarding closing the account, nor did he use the credit card after 2006. Id.

On July 9, 2008, Plaintiff's ex-wife drafted a convenience check[1] made payable to herself for $32,700.00 on the Chase credit

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card account. Doc. [44-3]. She signed the check under her former last name " Wallace," although her name had already changed to " Mack" at that time. Id.; Pl.'s Deposition [44-9] at 19. On November 17, 2008, she executed a " Request to Accept Sole Responsibility" form for the Chase credit card account. Doc. [44-4]. Although Plaintiff's signature appears on the form, he disputes signing it[2] and suggests that his ex-wife forged his signature and submitted the form to Chase. Pl.'s Deposition [31-9] at 16. On March 20, 2009, Plaintiff's ex-wife executed a second " Request to Accept Sole Responsibility" form. Doc. [44-5]. Plaintiff's purported signature appears at the bottom of the second form, and he disputes signing that form as well. Pl.'s Deposition [44-9] at 16. By sworn affidavit, Plaintiff's ex-wife stated that Plaintiff signed both Requests to Accept Sole Responsibility, and she had not signed Plaintiff's name on any documents since their divorce in February 2006. Doc. [44-12]. Chase did not permit Plaintiff's ex-wife to accept sole responsibility for the account. See Def.'s Decl. [44-14] at 1-2.

The record indicates Plaintiff's ex-wife paid approximately $5,166.00 on the Chase account from September 2008 until March 2009. Pl.'s Deposition [44-9] at Exh. 1. The account does not reflect any other account activity during that time. Id. On March 27, 2009, Plaintiff's ex-wife filed a Chapter 7 voluntary petition in the United States Bankruptcy Court for the Northern District of Mississippi. See In re Mack, No. 09-11551-DWH (Bankr. N.D. Miss. 2009); Doc. [44-7]. On July 8, 2009, she was granted a discharge. Doc. [44-7].

Plaintiff claims he discovered the charge for the convenience check in March or May of 2009, when his credit was reviewed by the dealership where he attempted to purchase a vehicle. Compl. [2] at 2; Pl.'s Deposition [44-9] at 11. After discovering the check had been cashed, Plaintiff contacted a lawyer and asked his ex-wife to repay the debt. Pl.'s Deposition [44-9] at 12. By letter dated June 10, 2009, Plaintiff's attorney demanded confirmation of the debt from Chase. Pl.'s Deposition [44-9] at Exh. 5. On October 23, 2009, Chase advised Plaintiff that it no longer had his original credit card application on file because the application was more than seven (7) years old. Pl.'s Deposition [44-10] at Exh. 17. On November 9, 2009, Chase sent Plaintiff a copy of the convenience check. Id. at Exh. 18. By letter dated November 18, 2009, Chase acknowledged receipt of Plaintiff's liability dispute and requested that he execute an " Affirmation of Fact" form if he believed the account was fraudulent or an " Acceptance of Liability" form if he believed the account was valid. Id. at Exh. 19. Plaintiff did not return either form to Chase. Pl.'s Deposition [44-9] at 20.

On December 9, 2009, Plaintiff filed a fraud report with the Southaven Police Department regarding the convenience check. Doc. [44-13] at 2-7. The Southaven Police Department later concluded that Plaintiff's fraud allegations were unfounded and closed its investigation of the matter. See id. at 2.

On October 24, 2011, Plaintiff filed a complaint for declaratory judgment against Chase and Resurgent Capital Services, LP (" Resurgent" ),[3] in the County

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Court of Desoto County, Mississippi. Plaintiff asserts that he did not receive any benefit from the convenience check cashed by his ex-wife and he did not obligate himself to make payments on the debt. Compl. [2] at 2. In addition, he asserts that the false reporting on his credit has caused him to suffer substantial hardship in his part ownership of a small appliance repair business. Id. at 3. He seeks attorney's fees and removal of any debt reporting on the Chase account. Id. at 3-4.

On December 5, 2011, Chase removed the case to this Court pursuant to 28 U.S.C. § 1446, asserting that Plaintiff's claims arise under or are completely preempted by the Fair Credit Reporting Act (" FCRA" ), 15 U.S.C. § 1681-1681x; and that federal diversity exists over the complaint. See Notice of Removal [1] at 2-4. That same day, Chase filed a counterclaim against Plaintiff for breach of the Cardmember Agreement he entered at the time the account was opened. See Def.'s Answer [4]. Chase seeks payment for the $30,063.76 remaining balance on the account, $10,021.25 in ...


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