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Court of Appeals of Kentucky.


NO. 2011–CA–002033–MR

Decided: May 24, 2013




Genie Runyon appeals from the summary judgment granted by the Spencer Circuit Court in favor of DH Capital Management, Inc. (“DH Capital”) on its claim for collection of a debt owed on a credit card.   We affirm.

On December 21, 2009, DH Capital filed the underlying collection action seeking to collect an unpaid balance under the terms of a credit card agreement between Chase Bank USA, N.A. (“Chase Bank”) and Runyon, as well as all charges incurred as a result of Runyon's default, including accrued interest and attorney's fees.   DH Capital filed a request for admissions, which stated as a factual issue, among other things, “[t]he balance herein sued for is due and owing by you to [DH Capital].”   Runyon failed to answer the request for admissions, and as such, each statement was deemed admitted per CR  Double 36.01.   DH Capital filed a motion for summary judgment, with accompanying documentation.   It provided prior monthly credit card statements from Chase Bank showing Runyon's balance, as well as her failure to make minimum monthly payments, and accrual of late fees.   DH Capital also provided documentation from the Global Debt Registry titled “Transfer of Ownership Report,” which indicates a portfolio of accounts was transferred from Chase Bank to Vion Holdings, LLC (“Vion”) on June 29, 2009;  a transfer of accounts from Vion to CCR Trust 2009–1 (“CCR”) on the same day;  and finally a transfer of accounts from CCR to DH Capital on August 3, 2009.   Based on these documents and Runyon's admissions, the circuit court granted summary judgment in favor of DH Capital, and awarded it attorney's fees and court costs.   Runyon appealed.

Summary judgment shall be granted only if “the pleadings, depositions, answers to interrogatories, stipulations, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”  CR 56.03.   The circuit court must view the record “in a light most favorable to the party opposing the motion for summary judgment and all doubts are to be resolved in his favor.”  Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 480 (Ky.1991) (citations omitted).   Further, “a party opposing a properly supported summary judgment motion cannot defeat it without presenting at least some affirmative evidence showing that there is a genuine issue of material fact for trial.”  Id. at 482 (citations omitted).

Our standard of review is “ ‘whether the [circuit] court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law.’ ”  Lewis v. B & R Corp., 56 S.W.3d 432, 436 (Ky.App.2001) (citations omitted).   Because no factual issues are involved and only legal issues are before the court on a motion for summary judgment, we do not defer to the circuit court and our review is de novo.   Hallahan v. Courier–Journal, 138 S.W.3d 699, 705 (Ky.App.2004).

While we take note of the arguments Runyon sets forth on appeal, we find her failure to answer the request for admissions, and thus admission of the debt owed to DH Capital, fatal to her case.   Per CR 36.01(2),

[e]ach matter of which an admission is requested ․ is admitted unless, within 30 days after service of the request, or within such shorter or longer time as the court may allow, the party to whom the request is directed serves upon the party requesting the admission a written answer or objection addressed to the matter[.]

Kentucky law is clear that before summary judgment may be entered in a debt collection action the plaintiff must prove “ownership or an assignment of the debt sought to be collected upon, or authority from the owner to collect the debt in question.”  Bruner v. Discover Bank, 360 S.W.3d 774, 778 (Ky.App.2012) (citation omitted).   In this case, Runyon failed to respond, and thus admitted she owed DH Capital the balance sued for in the collection action.   Such an admission entitles DH Capital to collect the debt as a matter of law.

Runyon argues her failure to respond to DH Capital's request for admissions is excused, because she previously denied the material facts in her answer to the filed complaint.   No such exemption is provided for in CR 36.01, which explicitly states that unanswered requests for admissions constitute admissions.   The only case law on the issue cited by Runyon is Perez v. Miami–Dade County, 297 F.2d 1255, 1269 (11th Cir.2002), which held that once a defendant answers a complaint, “it continues to be inappropriate for a plaintiff to re-serve the complaint in the form of a request for admissions [.]”  The holding in Perez is not clear, however, since the court further admonished that, “[t]he mere fact that a party has previously denied the matter about which an admission is sought does not obviate the need to respond to a Rule Double[ ] 36 Double[ ] request for admissions.”  Id. (citing U.S. v. Young, No. 87 CIV 9159, 1990 WL 125734, at *2 (S.D.N.Y. Sept. 10, 2990).   Even if federal law clearly supported Runyon's position, we are not required to “follow the Federal Circuit Court of Appeals on rulings involving Kentucky law.”   Bell v. Commonwealth, 566 S.W.2d 785, 788 (Ky.App.1978).   Under Kentucky law, if a request for admissions is inappropriate, an objection may be filed within the 30 day time limit.   See CR 36.01(2).   Thus, we do not find Runyon's answer to the complaint to excuse her failure to respond to DH Capital's request for admissions.   Accordingly, the statements contained therein were admitted by Runyon, and serve as a basis for the summary judgment granted by the trial court.

Finally, Runyon argues that even if she is liable for the credit card debt, she is not liable for the attorney's fees sought by DH Capital.   We disagree.

In line with the reasoning above regarding Runyon's admissions, we note that Runyon admitted to owing the debt sought by DH Capital, which included attorney's fees and court costs under the credit plan agreement.   DH Capital asserted the right to seek attorney's fees under the credit plan agreement in the complaint.   By way of the admissions, Runyon also admitted as true all claims asserted in the complaint.  KRS  Double 286.3–750 provides for reasonable attorney's fees in a collection proceeding under a credit plan agreement.   Since the attorney's fees were permitted by law, and constituted a portion of the debt Runyon admitted to owing DH Capital, the trial court did not err by imposing reasonable attorney's fees expended in the collection of the debt.

The order of the Spencer Circuit Court is affirmed.