MEMORANDUM OPINION No. 04-10-00296-CV
LTD ACQUISITIONS, LLC, Appellant
v.
Glenn R. COOK, Appellee
From the County Court at Law No 2, Bexar County, Texas Trial Court No. 351,513 The Honorable Irene Rios, Judge Presiding
Opinion by: Marialyn Barnard, Justice
Sitting: Rebecca Simmons, Justice Steven C. Hilbig, Justice, concurring in the judgment only Marialyn Barnard, Justice
Delivered and Filed: January 5, 2011
REVERSED AND REMANDED
This is an appeal from a summary judgment in a suit to collect a credit card debt.
Appellant LTD Acquisitions, LLC (“LTD”) appeals, claiming the trial court erred in granting
summary judgment in favor of appellee Glenn R. Cook based on his contention that the statute of
limitations had run and the suit to collect the credit card debt was barred. More specifically,
LTD contends the trial court erred in: (1) granting summary judgment for Cook based on Cook’s
affirmative defense of limitations; (2) relying on the date of the last payment as the date the 04-10-00296-CV
statute of limitations began; and (3) awarding attorney’s fees in the absence of actual or statutory
damages.
BACKGROUND
LTD filed suit against Cook to recover a $39,831.31 debt stemming from his credit card
account with Chase Bank USA, NA. LTD acquired the debt from Chase Bank, and filed suit on
July 31, 2009. Cook counterclaimed that LTD violated the Federal Fair Debt Collections
Practices Act (“the FDCPA”) and the Texas Debt Collection Act (“the TDCA”) by filing suit to
collect the debt after the four-year statute of limitations expired. Cook then filed a motion for
summary judgment based on the affirmative defense of limitations. Attached to Cook’s motion
for summary judgment was evidence establishing the date of the last payment on the credit card
account—July 21, 2005. The trial court granted summary judgment for Cook based on the fact
that the limitations period began on July 21, 2005, and LTD filed suit after the four-year
limitations period expired. The trial court then awarded attorney’s fees to Cook in the amount of
$1,000.
DISCUSSION
Standard of Review
Cook filed a traditional motion for summary judgment. We review a traditional motion
for summary judgment de novo. See Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661
(Tex. 2005). Because Cook moved for summary judgment based on the affirmative defense of
limitations, Cook was required to conclusively establish that the four-year limitations period
expired. See KPMG Peat Marwick v. Harrison County Housing Fin. Corp., 988 S.W.2d 746,
748 (Tex. 1999). We will affirm the motion for summary judgment if Cook establishes there are
no genuine issues of material fact and establishes the affirmative defense of limitations. He is
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then entitled to judgment as a matter of law. See Gonzalez v. City of Harlingen, 814 S.W.2d 109,
112 (Tex. 1991) (stating that if statute of limitations is established, suit is barred as matter of
law). Once limitations is established, LTD must then raise a fact issue to avoid its effect.
KPMG, 988 S.W.2d at 748.
Statute of Limitations
In LTD’s first and second issues, LTD contends the trial court erred in granting summary
judgment in favor of Cook based on the court’s determination that the statute of limitations
began to run and LTD’s cause of action accrued on his credit card debt on the date of his last
payment to Chase Bank. We agree.
LTD argues credit card debt actions can be brought as an action on an “open account,”
and the applicable statute of limitations is section 16.004(c) of the Texas Civil Practice and
Remedies Code (“the Code”). Section 16.004(c) states, “[a] person must bring . . . an action on
an open or stated account . . . not later than four years after the day that the cause of action
accrues.” TEX. CIV. PRAC. & REM. CODE ANN. § 16.004(c) (West 2002). Cook counters that the
debt action falls under section 16.004(a)(3) of the Code, which states, “[a] person must bring suit
on the following action not later than four years after the day the cause of action accrues: . . .
debt . . . .” Id. § 16.004(a)(3). Although not originally pled as an open account, in its motion to
reconsider, LTD argued a credit card account may be brought as an action on an open account.
We agree.
A credit card account may be brought as an action on an open account because through
the regular course of dealings, the transactions between the parties create a creditor-debtor
relationship, and as long as the account is still open, the parties expect to conduct further
dealings. Eaves v. Unifund CCR Partners, 301 S.W.3d 402, 409 (Tex. App.—El Paso 2009, no
-3- 04-10-00296-CV
pet.); see also Amresco Bureau Investors LP v. Kader, Civ. A. No. H-05-4261, 2007 WL
1520996, at *4 n.4 (S.D. Tex. 2007) (mem.) (finding that credit card debt action is action on
“open or stated account” under section 16.004(c)); Austin Hardwoods, Inc. v. Vanden Berghe,
917 S.W.2d 320, 326 (Tex. App.—El Paso 1995, writ denied) (explaining credit agreement
creates an open account).
As an action on an open account, it must be determined when the cause of action accrued
because that marks the beginning of the limitations period. Under the Code, “the cause of action
accrues on the day that the dealings in which the parties were interested together cease.” TEX.
CIV. PRAC. & REM. CODE ANN. § 16.004(c). Cook argues the parties’ dealings ceased and
limitations began to run on the date of his last payment. To support this position, Cook only
provided evidence of the date of his last payment to Chase Bank. We hold evidence of last
payment is not conclusive evidence of when the dealings between the parties ceased.
Under Texas law, because the statute of limitations begins on “the day that the dealings in
which the parties were interested together cease,” TEX. CIV. PRAC. & REM. CODE ANN.
§ 16.004(c), Cook was required to conclusively establish that the date of the last payment was
when the dealings between the parties ceased. We hold Cook did not meet this burden. Cook’s
evidence is insufficient to conclusively establish, as a matter of law, that the dealings between
Cook and LTD ceased on the date of the last payment and that the statute of limitations began
running on that date. Therefore, we sustain LTD’s first and second issues and hold the trial court
erred in granting summary judgment in favor of Cook based on limitations and remand this
matter to the trial court for further proceedings. 1
1 Our disposition should not be construed as a comment on LTD’s contention that the cause of action accrues, and the limitations period begins, when the account is closed or charged off.
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Attorney’s Fees
In its third issue, LTD contends the trial court erred in awarding attorney’s fees in the
absence of statutory or actual damages. However, we need not address this issue because Cook
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MEMORANDUM OPINION No. 04-10-00296-CV
LTD ACQUISITIONS, LLC, Appellant
v.
Glenn R. COOK, Appellee
From the County Court at Law No 2, Bexar County, Texas Trial Court No. 351,513 The Honorable Irene Rios, Judge Presiding
Opinion by: Marialyn Barnard, Justice
Sitting: Rebecca Simmons, Justice Steven C. Hilbig, Justice, concurring in the judgment only Marialyn Barnard, Justice
Delivered and Filed: January 5, 2011
REVERSED AND REMANDED
This is an appeal from a summary judgment in a suit to collect a credit card debt.
Appellant LTD Acquisitions, LLC (“LTD”) appeals, claiming the trial court erred in granting
summary judgment in favor of appellee Glenn R. Cook based on his contention that the statute of
limitations had run and the suit to collect the credit card debt was barred. More specifically,
LTD contends the trial court erred in: (1) granting summary judgment for Cook based on Cook’s
affirmative defense of limitations; (2) relying on the date of the last payment as the date the 04-10-00296-CV
statute of limitations began; and (3) awarding attorney’s fees in the absence of actual or statutory
damages.
BACKGROUND
LTD filed suit against Cook to recover a $39,831.31 debt stemming from his credit card
account with Chase Bank USA, NA. LTD acquired the debt from Chase Bank, and filed suit on
July 31, 2009. Cook counterclaimed that LTD violated the Federal Fair Debt Collections
Practices Act (“the FDCPA”) and the Texas Debt Collection Act (“the TDCA”) by filing suit to
collect the debt after the four-year statute of limitations expired. Cook then filed a motion for
summary judgment based on the affirmative defense of limitations. Attached to Cook’s motion
for summary judgment was evidence establishing the date of the last payment on the credit card
account—July 21, 2005. The trial court granted summary judgment for Cook based on the fact
that the limitations period began on July 21, 2005, and LTD filed suit after the four-year
limitations period expired. The trial court then awarded attorney’s fees to Cook in the amount of
$1,000.
DISCUSSION
Standard of Review
Cook filed a traditional motion for summary judgment. We review a traditional motion
for summary judgment de novo. See Valence Operating Co. v. Dorsett, 164 S.W.3d 656, 661
(Tex. 2005). Because Cook moved for summary judgment based on the affirmative defense of
limitations, Cook was required to conclusively establish that the four-year limitations period
expired. See KPMG Peat Marwick v. Harrison County Housing Fin. Corp., 988 S.W.2d 746,
748 (Tex. 1999). We will affirm the motion for summary judgment if Cook establishes there are
no genuine issues of material fact and establishes the affirmative defense of limitations. He is
-2- 04-10-00296-CV
then entitled to judgment as a matter of law. See Gonzalez v. City of Harlingen, 814 S.W.2d 109,
112 (Tex. 1991) (stating that if statute of limitations is established, suit is barred as matter of
law). Once limitations is established, LTD must then raise a fact issue to avoid its effect.
KPMG, 988 S.W.2d at 748.
Statute of Limitations
In LTD’s first and second issues, LTD contends the trial court erred in granting summary
judgment in favor of Cook based on the court’s determination that the statute of limitations
began to run and LTD’s cause of action accrued on his credit card debt on the date of his last
payment to Chase Bank. We agree.
LTD argues credit card debt actions can be brought as an action on an “open account,”
and the applicable statute of limitations is section 16.004(c) of the Texas Civil Practice and
Remedies Code (“the Code”). Section 16.004(c) states, “[a] person must bring . . . an action on
an open or stated account . . . not later than four years after the day that the cause of action
accrues.” TEX. CIV. PRAC. & REM. CODE ANN. § 16.004(c) (West 2002). Cook counters that the
debt action falls under section 16.004(a)(3) of the Code, which states, “[a] person must bring suit
on the following action not later than four years after the day the cause of action accrues: . . .
debt . . . .” Id. § 16.004(a)(3). Although not originally pled as an open account, in its motion to
reconsider, LTD argued a credit card account may be brought as an action on an open account.
We agree.
A credit card account may be brought as an action on an open account because through
the regular course of dealings, the transactions between the parties create a creditor-debtor
relationship, and as long as the account is still open, the parties expect to conduct further
dealings. Eaves v. Unifund CCR Partners, 301 S.W.3d 402, 409 (Tex. App.—El Paso 2009, no
-3- 04-10-00296-CV
pet.); see also Amresco Bureau Investors LP v. Kader, Civ. A. No. H-05-4261, 2007 WL
1520996, at *4 n.4 (S.D. Tex. 2007) (mem.) (finding that credit card debt action is action on
“open or stated account” under section 16.004(c)); Austin Hardwoods, Inc. v. Vanden Berghe,
917 S.W.2d 320, 326 (Tex. App.—El Paso 1995, writ denied) (explaining credit agreement
creates an open account).
As an action on an open account, it must be determined when the cause of action accrued
because that marks the beginning of the limitations period. Under the Code, “the cause of action
accrues on the day that the dealings in which the parties were interested together cease.” TEX.
CIV. PRAC. & REM. CODE ANN. § 16.004(c). Cook argues the parties’ dealings ceased and
limitations began to run on the date of his last payment. To support this position, Cook only
provided evidence of the date of his last payment to Chase Bank. We hold evidence of last
payment is not conclusive evidence of when the dealings between the parties ceased.
Under Texas law, because the statute of limitations begins on “the day that the dealings in
which the parties were interested together cease,” TEX. CIV. PRAC. & REM. CODE ANN.
§ 16.004(c), Cook was required to conclusively establish that the date of the last payment was
when the dealings between the parties ceased. We hold Cook did not meet this burden. Cook’s
evidence is insufficient to conclusively establish, as a matter of law, that the dealings between
Cook and LTD ceased on the date of the last payment and that the statute of limitations began
running on that date. Therefore, we sustain LTD’s first and second issues and hold the trial court
erred in granting summary judgment in favor of Cook based on limitations and remand this
matter to the trial court for further proceedings. 1
1 Our disposition should not be construed as a comment on LTD’s contention that the cause of action accrues, and the limitations period begins, when the account is closed or charged off.
-4- 04-10-00296-CV
Attorney’s Fees
In its third issue, LTD contends the trial court erred in awarding attorney’s fees in the
absence of statutory or actual damages. However, we need not address this issue because Cook
was awarded attorney’s fees based on the fact he was the prevailing party under the Federal Debt
Collection Practices Act and the Texas Debt Collection Act. See 15 U.S.C. § 1692k(a)(3)
(2006), amended on other grounds by Dodd-Frank Wall Street Reform and Consumer Protection
Act of 2010, Pub. L. No. 111-203, 124 Stat. 1376 (stating that “in the case of any successful
action to enforce the foregoing liability, the costs of the action, together with a reasonable
attorney’s fee” will be awarded); TEX. FIN. CODE ANN. § 392.403(a)-(b) (West 2006) (stating that
debtor must be successful in obtaining injunction or actual damages to receive attorney’s fees).
Due to our disposition of Cook’s summary judgment, he is no longer the prevailing party and, at
this time, no longer entitled to attorney’s fees under the statute.
CONCLUSION
Based on the foregoing, we hold the trial court erred in granting summary judgment to
Cook based on his defense of limitations. We therefore reverse the trial court’s summary
judgment in favor of Cook and remand this matter for further proceedings.
Marialyn Barnard, Justice
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