FSB v. Jerry Liddell (2013)

MEMORANDUM OF DECISION

The Plaintiff, American Express Bank, FSB (Plaintiff), pursuant to contractual agreement with the Defendant, Jerry Liddell, is seeking payment in the amount of $27,185.84 for default of said contractual agreement.

The defendant applied for and received a credit account from the plaintiff.   Statements were sent to the defendant on a monthly basis reflecting account activity and the minimum required balance due the plaintiff.   The defendant made regular payments on the account balance up and until October 4, 2008.   As a result of the defendant's failure to make future payments on the account, the account was closed and the balance remaining is $27,185.84.   The defendant does not dispute the amount in question, however, his sole claim is that he should not be held personally liable on the debt because the debt was incurred as a result of his failing and now defunct business operation.

On March 28, 2013, the court presided over a bench trial regarding the sole issue raised in this case and after reviewing the testimony and exhibits submitted into evidence makes the following findings:

(1) With regard to the general operation of Doubleheart CMU LTD, Jerry Liddell was the President and sole full-time employee of said company.   His credit line with American Express was based solely on his personal worth and or assets.   There was no testimony that the credit line was based on the worth and/or assets of his business.   There was no testimony that said business had any identifiable assets and/or worth.   The defendant did testify that he did employ some part-time help.   It is important to note that many of the payments made by the defendant to the plaintiff were drawn from personal checks sent from the defendant's personal residence.  (See Plaintiff's Exhibit # 3.)

More importantly, the court has reviewed the terms of the agreement between the plaintiff and the defendant and finds that the language defining the terms of the credit line holder is clear and unambiguous.

Promise to Pay—Business Capital Line Agreement

You and the company promise to pay all Charges on your Account.   This promise includes any Charge for which you indicated an intent to incur the Charge, including cases where you have not signed a charge form or presented the Card or a check.   You also promise to pay any Charge incurred by anyone that you let use the Account, even though you have agreed not to let anyone else use the Account.   You and the company are liable for any losses as well as any other consequences related to or resulting from actions taken by any third parties authorized to act on your or the Company's behalf.

(Plaintiff's Exhibit P(1)(A).)

The defendant claims that over the course of the credit line agreement the terms of the contract had changed substantially with regard to issue of liability.   The defendant testified that it was always his understanding from the inception of his contractual agreement with American Express that the expressed language never included a provision with regard to personal liability.   Although neither party could produce documents that date back to the original agreement, the court does find credible the testimony of Edmund Garabedian, an American Express Representative, who testified that in his 17 years as a record keeper, the terms of the agreement which is the subject of this litigation has never substantially changed and that even though the credit line was issued for the use and operation of a small business, the business owner was always personally liable for payment of the loan balance.   That condition has never changed, American Express issues a substantial number of these credit line accounts to small business owners.   To not hold them personally liable for payments on the loan would absolutely defy sound and logical business sense.

For the above stated reasons, the court finds in favor of the plaintiff in the amount of $27,185.84.

BY THE COURT,

Ginocchio, J.

Ginocchio, James P., J.