Plaintiff, Citibank (South Dakota), NA (Citibank), commenced this action against the defendant, Gloriane Improta, alleging that the defendant failed to make payments as agreed on a credit card agreement. A trial was held on March 9, 2015. Both sides were represented by counsel.

Plaintiff's witness, an assistant vice president of Citibank, NA, testified that she is familiar with the procedures of the plaintiff in maintaining its books and records in regard to consumer credit accounts, although she lacks personal knowledge of the defendant's particular account. She testified as to how the records for defendant's account are maintained, how account and billing statements are generated and sent to a customer, the procedure of the plaintiff for opening credit card accounts and how changes in a credit card agreement are sent to a customer such as the defendant. The court will not address the question of how the witness as an employee of Citibank, NA is familiar with the procedures for the plaintiff Citibank (South Dakota), NA as there was no explanation of the apparent discrepancy.

Plaintiff testified that, based on her review of the plaintiff's records, the defendant initially opened her account in April 1994. Plaintiff produced billing statements beginning January 26, 2006 when defendant had a "zero" balance on her account and ending in February 25, 2009 when the account was closed showing a balance due of $13,667.77.

Plaintiff also submitted a credit card agreement it issued in July 2008 and which plaintiff contends was the agreement in place when defendant defaulted under the terms of the agreement. Plaintiff's witness testified that she cannot produce any agreement between the parties signed by the defendant, but as was the custom and practice of Citibank, a new agreement would have been mailed to all card holders either with a new credit card or if there were changes made to the agreement.

The document presented by the plaintiff from July 2008, provides that the governing law of the "Agreement" is South Dakota. The statute of limitations for contract acts in both South Dakota [S.D. St. §15-2-13] and New York [CPLR §213] is six years. Plaintiff alleges the defendant breached the credit card agreement when she failed to make an agreed payment in October 2008. This action was commenced when it was filed in June 2009. Therefore the action is timely.

Defendant asserts that an essential element of plaintiff's cause of action is the production of a signed contract with the defendant. Plaintiff admits it does not have a signed agreement but asserts that sending an agreement to the defendant and the use of the credit card by the defendant makes a binding contract. Because the agreement is governed by South Dakota law, the court must examine the relevant South Dakota statute.

Chapter 54-11 of the South Dakota regulates Credit Cards and Revolving Charge Accounts. S.D. St. §54-11-9 provides:

The use of an accepted credit card or the issuance of a credit card agreementand the expiration of thirty days from the date of issuance without writtennotice from a card holder to cancel the account creates a binding contractbetween the card holder and the card issuer with reference to any acceptedcredit card, and any charges made with the authorization of the primarycard holder.

Plaintiff's witness testified that the agreement dated July 2008 would have been mailed to the defendant approximately two month's prior to its effective date. The monthly statements from the plaintiff to the defendant show charges by the defendant in October 2008, totaling $102.50. The last time before that date that the defendant used the card to make purchases was July 2007. There were no other purchases between July 2007 and February 2009 when the account was closed by the plaintiff. There were however payments made on the account during that period.

But for that small amount of activity in October 2008, plaintiff would not be able to [*2]establish that the defendant was bound by the credit card agreement because the plaintiff cannot prove mailing of the July 2008 agreement to the defendant. That minimal use means the South Dakota statute applies and the defendant had a viable account bound by the terms of the July 2008 agreement.

What makes this account interesting is that at a point in August or September 2007, defendant entered into some sort of agreement with the plaintiff to make a flat monthly payment and defer other amounts due. Presumably during that period, the defendant was prohibited from using the credit card. Neither side presented any documentation to establish the existence of such an agreement.

The statement of September 2008 has a notation that the defendant had completed her payment arrangement and that "we look forward to reestablishing your account,..." The next monthly statement closing October 28, 2008 "if you have not received your new card, please call Customer Services...." It also states "your account is suspended due to its past due status." The next month the billing statement contained the following notation: "Your account is two months past due and your credit privileges have been discontinued." By the next month, December 2008, the account was marked three months past due and closed.

The fact that plaintiff cannot establish that it sent the July 2008 "Agreement" to the defendant is rendered moot by the billing statements which indicate that the defendant knew about and acknowledged the debt by negotiating a payment plan for a period of time which prevented her from incurring new charges until after she brought the account to a reinstated status. Further, as this account is subject to South Dakota law, use of the card even without receipt of an agreement apparently creates a contract.

Plaintiff's witness testified that although she did not have personal knowledge of defendant's account, she did have access to the electronic record system maintained by Citibank, was aware of the information preserved therein and how it was collected. She explained how she was able to produce copies of the defendant's monthly billing statement.

In New York, the State Technology Law Article 1, entitled the "Electronic Signatures and Records Act," sets forth the guidelines for the use of electronic signatures and records and for their use in litigation. State Technology Law §106 provides:

Admissibility into evidence

In any legal proceeding where the provisions of the civil practice law andrules are applicable, an electronic record or electronic signature may beadmitted into evidence pursuant to the provisions of article forty-five of thecivil practice law and rules including, but not limited to section fourthousand five hundred thirty-nine of such laws and rules.

CPLR §4539 states:

(a) If any business,...in the regular course of business or activity has made,kept or recorded any writing, entry, print or representation and in theregular course of business [*3]has recorded, copied, or reproduced it by anyprocess, including reproduction, which accurately reproduces or forms adurable medium for reproducing the original, such reproduction, whensatisfactorily identified is admissible in evidence as the original, whether theoriginal is in existence or not, and an enlargement or facsimile of suchreproduction is admissible in evidence if the original reproduction is inexistence and available for inspection under the direction of the court....

(b) A reproduction created by any process which stores an image of anywriting, entry, print or representation and which does not permit additions,deletions, or changes without leaving a record of such additions, deletions, orchanges, when authenticated by competent testimony or affidavit shallinclude the manner or method by which tampering or degradation or thereproduction is prevented, shall be admissible in evidence as the original.

Plaintiff's witness was able to establish that the monthly statements of defendant's account are kept in the regular course of business and therefore should be admissible under CPLR §4539(a). However, the witness was unable to testify as to how the records are stored and whether the process for doing so by Citibank prevents "additions, deletions, or changes" as required by CPLR §4539(b). Nor was an affidavit provided by plaintiff to meet with the criteria of the statute.

In addition, the monthly statements submitted by plaintiff are incomplete. They all appear to be "page one" only. The bottom of every statement has the following notation: "Please refer to the reverse side of the original statement for payment information." The failure to produce the second page or any other additional pages prevents the court from evaluating the accuracy of the entire bill and whether the statement contains additional information affecting the defendant's rights and obligations.

Based on the foregoing, it must be concluded that the billing statements are not admissible.

Plaintiff alleges that the defendant owed $13,667.77 when the account was closed. The amount due is calculated by taking the monthly charges for purchases and cash advances and adding to that finance charges, late charges and over the limit fees. Each statement also reflects any payments the defendant made to the account that month.

Determination of the actual purchases is relatively easy as they are set forth in the statement and the defendant, like all credit card holders, will be responsible for such charges unless the charge is protested in the manner and time frame set forth in the agreement, which the plaintiff cannot establish was ever provided to the defendant, or on the back of the monthly statement, which was not presented in court.

However, calculation of the interest assessed is another story. As this is litigation in which the plaintiff is seeking such monthly interest charges as damages, plaintiff must establish that the interest charge assessed is properly calculated. The calculation of the finance charge or annual percentage rate (APR) is set forth in the "Agreement." It provides:

APR Based on Prime. We calculate any APR based on the U.S. Prime Rate("Prime Rate") by adding the applicable amount shown on the Fact Sheet tothe Prime Rate. We use the Prime Rate published in The Wall Street Journal.

Therefore, at a minimum, the plaintiff must establish what the Prime Rate was each month on the date the interest charge was calculated. No where in the billing statement is the Prime Rate disclosed making it impossible for a consumer to verify if the correct interest rate is being charged. Neither has plaintiff's witness testified as to the Prime Rate for each month during the period when the defendant incurred these charges.

As noted above, part of the calculation is a number from the "Fact Sheet" added to the Prime Rate. According to the "Agreement" of July 2008 placed into evidence by the plaintiff:

This Card Agreement is your contract with us. It governs the use of yourcard and account. The accompanying Important Account Information table,which we call a "Fact Sheet," is part of this Agreement. Please read thisAgreement, including the Fact Sheet, carefully. Keep both for your records.

The Fact Sheet is such an integral part of the Agreement that the plaintiff advises the card holder to keep that document as well. Apparently such advice does not apply to the plaintiff, as the exhibit submitted as the "Agreement" does not include the "Fact Sheet." Of the sixteen page document submitted no page indicates it is the "Fact Sheet."

In an effort to ensure the court was not missing anything, the court held the exhibit up to the light including, sun, incandescent, fluorescent, and LED. It revealed nothing. It then sought to locate the Enigma Machine in case the Fact Sheet was included but in code. But it too had no success. Finally, it held a séance to try to contact Samuel Osgood the founder in 1812 of Citibank's predecessor in case he knew about the Fact Sheet. All to know avail.

The failure to establish what the Prime Rate was each month and to provide the "Fact Sheet" is a failure of proof on the part of the plaintiff. The court cannot confirm that the proper interest rate was charged each month. Because plaintiff has included those calculations in the amount it claims it is due, it cannot prove its damages. More importantly, it prevents the defendant and every other card holder from being able to verify the accuracy of the monthly charges. I know it may be hard for people to believe, but not everyone reads or has access to the Wall Street Journal on a daily basis.

In addition, plaintiff assessed "late fees" if the minimum payment was not made each month by the defendant. The amount of this "late fee" is set forth in the "Fact Sheet."

If the defendant incurred charges in excess of her total credit line, plaintiff could assess an over the credit limit fee. This is charge is disclosed in the "Fact Sheet."

Based on the foregoing, the failure of the plaintiff to produce the "Fact Sheet" for defendant's account, means the plaintiff has had a failure of proof in regard to the calculation of its damages to include finance charges, late fees and over the limit assessments.

A review of the monthly statements submitted by the plaintiff show that in August 2007 plaintiff purchased credit protector coverage. Generally, this is purchased by a card holder to insure that the creditor will be paid each month in the event the card holder is unable to make payments as agreed, usually due to job loss or illness. There is no indication if this insurance coverage was ever utilized by the defendant unless the nine months of $140.00 payments to the plaintiff was from that source.

Once again the court questions at what point does an interest rate set in another state in excess of New York's usury law of 16% [3 NYCRR §4.1]become unenforceable as in violation of New York's public policy.

There is no question that the defendant had a credit card agreement and that the defendant owed money to the plaintiff. There is also no question that the plaintiff has failed to prove its prima facie case for the reasons set forth above.

If the court were to ignore the defects in plaintiff's proof and hold that the plaintiff had established its case because the monthly statements were mailed to and received by the defendant without protest, because the plaintiff did not attach the "Fact Sheet" the court would have to eliminate all charges triggered by the "Fact Sheet." This would limit plaintiff's claim to the actual charges made by the defendant during the relevant period. The court calculated that the defendant incurred charges of $16,274.13. Included in those charges were late fees and over the limit fees of $343.00 which, along with any finance charges, are disallowed because they were set in the missing "Fact Sheet." This left a balance of valid charges of $15,931.13. Defendant made payments in the amount of $5,439.65, which when subtracted from the valid charges left a total due the plaintiff of $10,491.46. This would have been the best case scenario for the plaintiff and might be a starting point for the parties to enter into settlement negotiations rather than asserting any post trial rights they might have.

Judgment for defendant. Plaintiff's cause of action is dismissed.

Exhibits, if any, will be available at the office of the clerk of the court thirty days after receipt of a copy of this decision.

The foregoing constitutes the decision and order of the court.