Capital One Bank v. Rollins, Selaine

CourtCourt of Appeals of Texas
DecidedApril 30, 2003
Docket01-02-00279-CV
StatusPublished

This text of Capital One Bank v. Rollins, Selaine (Capital One Bank v. Rollins, Selaine) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Capital One Bank v. Rollins, Selaine, (Tex. Ct. App. 2003).

Opinion

Opinion issued April 30, 2003






In The

Court of Appeals

For The

First District of Texas

____________


NO. 01-02-00279-CV


CAPITAL ONE BANK, CAPITAL ONE SERVICES, INC., CAPITAL ONE F.S.B., AND CAPITAL ONE FINANCIAL CORPORATION, Appellants


V.


SELAINE ROLLINS, INDIVIDUALLY, AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED, Appellee





On Appeal from the 56th District Court

Galveston County, Texas

Trial Court Cause No. 00-CV-0169





O P I N I O N


          In this interlocutory appeal, Capital One, a national issuer of credit cards, challenges the trial court’s order granting class certification to two groups of Capital One credit card holders. We address whether the trial court abused its discretion in certifying each of the two subclasses. After analyzing each subclass under the requirements enunciated by the Texas Supreme Court in Southwestern Refining Company v. Bernal, 22 S.W.3d 425 (Tex. 2000) and Intratex Gas Company v. Beeson, 22 S.W.3d 398 (Tex. 2000), we reverse the trial court’s class-certification order and remand to the trial court with instructions to decertify both classes but without prejudice to further consideration of class certification.

CASE OVERVIEW

          Class representative, Selaine Rollins, (“Rollins”) obtained both a Visa card and MasterCard account with Capital One. Rollins, individually, and on behalf of similarly situated credit card holders, filed this nationwide class action suit against Capital One complaining of the manner in which Capital One charged late and “overlimit fees.” Rollins alleges the manner in which these fees were charged breached her contract with Capital One, known as a “customer agreement.” The customer agreement provision governing the imposition of such fees stated:

Other Charges. The following charges may be billed to the purchase segment of your account, unless otherwise specified: late charge if we do not receive your payment in time for it to be credited by the following statement closing date; overlimit charge if your account exceeds any temporary or permanent assigned credit limit, even if we approve the overlimit amount; returned check charge if a check is returned to us for any reason, or if we cannot honor your account access checks for any reason . . . .


(Emphasis added.)

          With regard to late fees, Rollins challenges Capital One’s former policy of failing to credit its customers’ payments on the date of receipt when those payments were received after the “cutoff” time of 9:00 a.m. Rollins contends this practice allowed Capital One to charge its customers late fees when payments were received on the payment’s due date, but after 9:00 a.m.

          Rollins asserts the practice is particularly egregious when viewed in the context of how Capital One received its customer payments. Rather than allowing the postal service to deliver customer payments to its processing center, Capital One sent couriers to the post office to pick up its mail. Rollins argues such practice allowed Capital One to control the number and timing of the payments received on any given day.

          Rollins also complains of Capital One’s policy related to “overlimit fees.” Capital One imposed an overlimit fee when the customer’s account exceeded a defined credit limit. Rollins does not take issue with the initial charge of an overlimit fee; rather, she complains of Capital One’s policy of charging an overlimit fee for each consecutive billing period that the customer’s balance remained over the credit limit, but at no time fell below the limit. Rollins contends this practice violates the plain language of the customer agreement governing overlimit fees, i.e., that Capital One may bill an “overlimit charge if your account exceeds any temporary or permanent assigned credit limit, even if we approve the overlimit amount.” According to Rollins, under the terms of the customer agreement, Capital One should only be allowed to charge the overlimit fee one time, that is, when the customer initially exceeds the credit limit. If during the next and subsequent billing periods the account balance does not fall below the set credit limit, Rollins contends the customer agreement does not allow Capital One to continue to charge overlimit fees. Capital One counters that the customer agreement “unambiguously and explicitly” provides that an overlimit fee can be charged for each billing period in which the account balance remains over the credit limit, even if the account balance never falls below the credit limit during the second and subsequent billing periods.

          Rollins moved for class certification relating to her overlimit and late fee claims. Rather than conducting an evidentiary hearing on the certification issue, the trial court instructed the parties that evidence would be considered by written submission. In accordance with the trial court’s instructions, the parties filed briefs and supporting evidentiary materials, which form the basis for the trial court’s ruling. The trial court then conducted a class certification hearing at which counsel simply presented oral argument. Following the submission of additional briefing, the trial court signed a “Class Certification Order,” certifying two classes of Capital One credit card holders pursuant to Texas Rule of Civil Procedure 42.

          The trial court defined membership in the two classes as follows:

Class No. 1 (“Overlimit Fee Class”): All past and present Capital One Bank credit card holders (a) with an account active at any time after January 1, 1995, and not in “default” according to Capital One’s records on the date the class is certified; (b) with a customer agreement which provides for the assessment of an overlimit fee but does not expressly specify that this overlimit fee will be assessed for each billing period that the account remains over the limit; and (c) that were assessed overlimit charges for two or more consecutive billing periods because the account balance was over the credit limit but where, at no time during the second or subsequent of these billing periods, was the account balance within its credit limit.

Class No. 2 (“Late Fee Class”)

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Related

Henry Schein, Inc. v. Stromboe
102 S.W.3d 675 (Texas Supreme Court, 2002)
Southwestern Refining Co., Inc. v. Bernal
22 S.W.3d 425 (Texas Supreme Court, 2000)
Ford Motor Co. v. Sheldon
22 S.W.3d 444 (Texas Supreme Court, 2000)
Intratex Gas Co. v. Beeson
22 S.W.3d 398 (Texas Supreme Court, 2000)
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