Citibank (South Dakota), N.A. v. Mathew Anthony Albano (2011)

Memorandum of Decision on Defendant's Challenge to Subject Matter Jurisdiction Contained Within His Objection to Plaintiff's Motion and Order for Judgment (No. 175)

This is a contested credit card collection action brought under the doctrine of “account stated” ¹ which was assigned to a fact finder pursuant to Practice Book § 23–53.   Following a hearing, the fact finder issued his report (No. 171) finding the facts in favor of the plaintiff and recommending judgment in favor of the plaintiff in the amount of $22,688.19.   The plaintiff moved for judgment in accordance with the report.   The defendant filed “Defendant's Objection to Plaintiff's Motion and Order for Judgment” dated September 1, 2011 (No. 175).   In ¶¶ 5 and 6 of that pleading defendant alleges that:

Defendant has conducted an ongoing investigation into the activities of CITIBANK and has discovered that CITIBANK sold off the account [defendant's credit card account which is the subject of this action] years ago.   Therefore CITIBANK lacks standing to sue on this account which explains why they were reticent to answer Defendant's Discovery requests.

Since CITIBANK no longer owns this account, they are proceeding as a third-party debt-collector and may not proceed as original creditor.   Therefore, this court lacks jurisdiction in this matter.

Those allegations challenge Citibank South Dakota's standing to seek collection of the alleged debt of the defendant, and a claim of lack of standing implicates the subject matter jurisdiction of the court.  Burton v. Commissioner of Environmental Protection, 291 Conn. 789, 802 (2009).   And it is axiomatic that “[O]nce the question of lack of [subject matter] jurisdiction of a court is raised, [it] must be disposed of no matter in what form it is presented ․ and the court must fully resolve it before proceeding further with the case.”  (Internal quotation marks omitted.)  D'Eramo v. Smith, 273 Conn. 610, 616, (2005).   In keeping with that precept the court has isolated the issue of standing from the other issues raised in defendant's objection to plaintiff's motion for judgment on the fact finder's report, and this memorandum of decision is the court's ruling solely on that jurisdictional issue.

Discussion

The procedures relating to determinations of contested claims of fact and law regarding the court's subject matter jurisdiction are well established.  “The motion to dismiss shall be used to assert (1) lack of jurisdiction over the subject matter ․” (Internal quotation marks omitted.)  Sadloski v. Manchester, 235 Conn. 637, 645–46 n.13 (1995).  “The plaintiff bears the burden of proving subject matter jurisdiction, whenever and however raised.”  Fink v. Golenbock, 238 Conn. 183, 199 n.13 (1996).   But it is a “well established principle that in determining whether a court has subject matter jurisdiction, every presumption favoring jurisdiction should be indulged.”  (Internal citation and quotation marks omitted.)  Fedus v. Planning & Zoning Commission 278 Conn. 751, 778–79 (2006).  “The motion to dismiss admits all facts which are well pleaded, invokes the existing record, and must be decided on that alone ․ Where, however, ․ the motion is accompanied by supporting affidavits containing undisputed facts, the court may look to their content for determination of the jurisdictional issue and need not conclusively presume the validity of the allegations of the complaint.  “(Citation omitted;  internal quotation marks omitted.)  Ferreira v. Pringle, 255 Conn. 330, 346–47 (2001).  “When a court decides a jurisdictional question raised by a pretrial motion to dismiss, it must consider the allegations of the complaint, including those facts necessarily implied from the allegations, construing them in a manner most favorable to the pleader.”  (Internal citation omitted.)  Bagg v. Town of Thompson, 114 Conn.App. 30, 37–38 (2009).

The jurisdictional issue raised by the defendant is whether or not the plaintiff Citibank (South Dakota) was the owner of the credit card account which is the subject of this action.   The focal point is ownership of the account at the time this action was commenced.  Deutsche Bank National Trust Company v. Bialobrzeski, 123 Conn.App. 791 (2010).   The 6/21/07 complaint in this case alleges:  that the plaintiff is a national banking association (¶ 1);  that the defendant resides at his address in New Canaan (¶ 2);  “[t]hat the defendant was extended credit.” (¶ 3);  that the defendant failed to make payments for the credit extended and the balance due is $22,688.19 (¶ 4);  and that the plaintiff rendered to the defendant full and true accounts of the indebtedness owing as a result of the credit extended resulting in an account stated for the amount [of $22,688.19] (¶ 5).   There is no specific allegation that the plaintiff is the party which extended the credit to the defendant or that the plaintiff owned the account at any point in time.   The defendant argues in support of its claim that “Citibank regularly sells and conveys all of its credit card account ‘receivables' to a variety of little known trusts known as ‘Master Trust I’ and ‘Citibank Credit Card Issuance Trust’ (Objection, ¶ 9);  and that “[t]hese receivables are converted into ‘securities' which are bought and sold as investments (¶ 13).   Defendant appended to his objection a notarized Verification under penalty of perjury attesting that the documents attached thereto “are true and correct based on my personal knowledge and documents and evidence are true and accurate copies of original documents.”   There are five exhibits attached to the verification, several hundred pages in all, consisting of copies of (1) a Form 8–K filed with the United States Securities and Exchange Commission (SEC) by plaintiff and by Citibank Credit Card Issuance Trust, and Citibank Master Trust which is a registration statement for the issuance of securities known as Class 2009 A–5 Notes based on Citibank credit card notes ultimately assigned to Deutsche Bank Trust Company Americas as trustee;  (2) a January 3, 2007 Prospectus of Citibank Credit Card Issuance Trust and by plaintiff as sponsor and depositor relating to the public issuance of “Class 2006–A8 Notes' collateralized by credit card notes;  (3) An article downloaded from credit card.com entitled “Credit ard Securities may be in for a rough time ahead”; ²  (4) a Prospectus Supplement dated October 12, 2006 issued by Citibank Credit Card Issuance Trust and by plaintiff as sponsor and depositor relating to the Class 2007–A7 Notes;  and, (5) An excerpt from the transcript of the fact finding hearing of April 16, 2010.   The plaintiff has submitted no affidavits in opposition to defendant's claims.   Because the complaint fails to allege ownership of Mr. Albano's account, and because the defendant's exhibits in the court's view also fail to shed any light on the issue of ownership of this specific account, the Court issued an order of March 24, 2011 scheduling this issue for an evidentiary hearing at the short calendar of April 4, 2011.   See Standard Tallow Corp. v. Jowdy, 190 Conn. 48, 56 (1983) (When issues of fact are necessary to the determination of a court's jurisdiction, due process requires that a trial-like hearing be held.)

Neither party chose to call any witnesses on at the April 4 hearing.   The defendant indicated his reliance on the five exhibits attached to his objection.   The plaintiff introduced three exhibits which were admitted into evidence:  a partial transcript of the April 16, 2010 fact finding hearing before Attorney Christopher J. Jarboe (Ex 1);  a partial copy of an earlier Motion to Dismiss ³ filed by defendant Albano on June 25, 2008 also claiming lack of subject matter jurisdiction (Ex. 2);  and a transcript of the oral argument of the foregoing motion to dismiss before Judge Tierney on September 8, 2009 and Judge Tierney's oral ruling denying that motion in all respects (Ex. 3) Exhibits 2 and 3 were submitted in support of plaintiff's argument that the instant claim of lack of standing is barred by collateral estoppel because it had been made in the earlier motion to dismiss and denied by Judge Tierney.   It is true that the earlier motion to dismiss raised the standing issue in conclusory fashion where defendant claimed “[p]laintiff has not provided an agreement or contract bearing my bona fide signature and has not shown they have legal standing to sue in this court.”  (Emphasis added;  Ex. 3 ¶ 7).   In his oral ruling from the bench, however, Judge Tierney addressed and rejected the first point but failed to mention the second:

Number 7:  Plaintiff has not provided an agreement or contract bearing any bonafide signature;  that's a discovery issue;  not an issue addressing subject matter jurisdiction.(Tr. 9/8/09 (Ex. 3) p. 26).

The issue of ownership of the account has therefore not previously been ruled on, and must be resolved here.

After review and consideration of the evidence, and keeping in mind the foregoing principle that every presumption favoring jurisdiction should be indulged, the court concludes that the plaintiff has met its burden of showing ownership of Mr. Albano's credit card account on which it is suing him.   Although there is no express statement by testimony or documentary exhibit specifically confirming account ownership, the ownership of the account is reasonably and logically inferred from the testimony before the fact finder of Ramona Aragon of Albuquerque, New Mexico, a Litigation Analyst of Citibank Credit Services, Inc. described as

․ the service provider for credit cards that are issued by Citibank South Dakota N.A. We do everything from create the actual plastic, mail it with the terms and conditions.   We maintain and generate monthly billing statements, perform any customer service or collection activity on the account, basically all transactions related to the credit cards that are issued by Citibank South Dakota N.A.

(Tr. Exhibit 1, p. 12) (hereinafter, “Tr.”)

Ms. Aragon further testified that Citibank Credit Services, Inc. maintains the books and records that are relevant to this case and would contain the account activity and documents of account activity (Tr., 12);  that she was familiar with and had knowledge of the books and records of Citibank as they pertain to its credit card business (Tr. 13);  and these systems and the data they contain are accurate and reliable (Tr. 14).   She was able to produce as exhibits before the fact finder ⁴ printouts of the terms and conditions of Mr. Albano's account and all changes thereto (Tr. 17, 18), his account statements from 1996 to 2003 (Tr. 27), copies of the checks he submitted in payment on the account (Tr. 38), and “account notes” pertaining to collection communications with Mr. Albano and others concerning his account (Tr. 41–46).   Ms Aragon's employer Citibank Credit Services, Inc., according to her testimony, provided credit card account servicing for the plaintiff Citibank (South Dakota) from the time of initial card issuance throughout the life of the account.   She did not mention her employer proving account servicing for any other account owner or holder or credit card issuer.   Those services were provided with respect to Mr. Albano's account as evidenced by the witness' production in court of the initial agreement of terms and conditions and all subsequent amendments thereto, and the monthly account statements sent to Mr. Albano and the records of payment made by him.   From these facts the inference is clear that the plaintiff Citibank owned the Albano account at least through the April 16, 2010 fact finding hearing at which Ms. Aragon testified.   Possession of the note was held in Deutsche Bank v. Bialobrzeski, supra, to be the “․ key to determining the defendant's claim [of lack of standing]” 123 Conn.App. at 797.   Here the evidence of plaintiff's servicing agent clearly shows—and the court finds—that the plaintiff, through its agent, was in possession of the Albano credit card agreement from the time the card was first issued though at least April 16, 2010 (almost three years after this action was commenced), which defeats defendant's allegation in its objection ¶ 5 that” CITIBANK sold off the account years ago.”   Nor does defendant's evidence rebut the inferences drawn by the court.   The various SEC registration statements and prospectuses show that in period 2006–2009 Citibank (South Dakota), acting in conjunction with Citibank Credit Card Issuance Trust and Citibank Master Trust was sponsoring the public issuance of securities consisting of promissory notes to investors derived from or collateralized by asssemblages of credit card account agreements.   Defendant Mr. Albano admitted at oral argument on April 4, 2011 that he was offering these publicly-filed documents to show that Citibank was generally engaging in such activities, and that none of his evidence shows that his particular Citibank credit card account was assigned to one of those trusts or was involved in the issuance of those securities.   His evidence is therefore inadequate to rebut the inferences supporting the court's finding of account ownership by the plaintiff which gives it standing to maintain this action.

Order

Defendant's claim of lack of standing of the plaintiff as set forth in ¶¶ 5 and 6 of his Objection to Plaintiff's Motion and Order for Judgment is rejected and overruled.   The plaintiff Citibank (South Dakota), N.A. has standing to maintain this action.

The challenge to subject matter jurisdiction having been resolved in favor of upholding jurisdiction, either party may now claim to the short calendar Plaintiff's Motion for Judgment and Order for Payments dated August 17, 2010 (No. 172), the remaining issues of Defendant's Objection to Plaintiff's Motion and Order for Judgment dated September 1, 2010 (No. 175) and Defendant's Objection to Fact Finder Report dated September 14, 2010 (No. 176).

Alfred J. Jennings, Jr., Judge Trial Referee

FOOTNOTES

FN1. “A claim for an ‘an account stated’ is premised on the creditor's rendition of the account so that [the debtor's] retention [thereof] for an unreasonable time constitute[s] an account stated which is prima facie evidence of the correctness of the account.   Citibank v. Gemska, Superior Court, judicial district of Middlesex, Docket No. CV 05 4002020 (December 21, 2005, Mcweeny, J.) (40 Conn. L. Rptr. 489), citing General Petroleum Products, Inc. v. Merchants Trust Co., 115 Conn. 50, 56, 160 A. 296 (1932).”  (Internal quotation marks omitted.)   Citibank v. Strumpf, Superior Court, judicial district of Litchfield, Docket No. CV 06 4004215 (September 13, 2006, Pickard, J.)..  FN1. “A claim for an ‘an account stated’ is premised on the creditor's rendition of the account so that [the debtor's] retention [thereof] for an unreasonable time constitute[s] an account stated which is prima facie evidence of the correctness of the account.   Citibank v. Gemska, Superior Court, judicial district of Middlesex, Docket No. CV 05 4002020 (December 21, 2005, Mcweeny, J.) (40 Conn. L. Rptr. 489), citing General Petroleum Products, Inc. v. Merchants Trust Co., 115 Conn. 50, 56, 160 A. 296 (1932).”  (Internal quotation marks omitted.)   Citibank v. Strumpf, Superior Court, judicial district of Litchfield, Docket No. CV 06 4004215 (September 13, 2006, Pickard, J.).

FN2. This exhibit, designated by the defendant as Exhibit J–3 to his objection to motion for judgment, has been disregarded by the court as obvious hearsay..  FN2. This exhibit, designated by the defendant as Exhibit J–3 to his objection to motion for judgment, has been disregarded by the court as obvious hearsay.

FN3. There have actually been three motions to dismiss (or equivalent) in this case:  a motion to dismiss filed on 9/21/07 (No. 101) denied by Judge Downey on 6/10/08;  the motion to dismiss of 6/25/08 (No. 113) denied by Judge Tierney on 9/8/09, and the instant claim of lack of subject matter jurisdiction contained in the objection of 9/1/10 (No. 175) to plaintiff's motion for judgment in accordance with the fact finder's report..  FN3. There have actually been three motions to dismiss (or equivalent) in this case:  a motion to dismiss filed on 9/21/07 (No. 101) denied by Judge Downey on 6/10/08;  the motion to dismiss of 6/25/08 (No. 113) denied by Judge Tierney on 9/8/09, and the instant claim of lack of subject matter jurisdiction contained in the objection of 9/1/10 (No. 175) to plaintiff's motion for judgment in accordance with the fact finder's report.

FN4. None of the exhibits admitted into evidence before the fact finder were offered into evidence at the evidentiary hearing of April 4, 2011 before the undersigned regarding defendant's claim of lack of standing, but they are described in the testimony excerpted in the transcript (Ex. 1).  FN4. None of the exhibits admitted into evidence before the fact finder were offered into evidence at the evidentiary hearing of April 4, 2011 before the undersigned regarding defendant's claim of lack of standing, but they are described in the testimony excerpted in the transcript (Ex. 1)

Jennings, Alfred J., J.T.R.