PORTFOLIO RECOVERY ASSOCIATES, LLC, Appellant, v_ PAUL
FERNANDES, Appellee_ Circuit Court, 15th Judicial Circuit (Appellate)
in and for Palm Beach County
13 Fla. L. Weekly Supp. 560a
Contracts -- Credit agreement -- Limitation of actions -- No error in
dismissal of statement of claim for breach of contract, account stated,
and unjust enrichment for debt incurred on credit card based on
expiration of four-year statute of limitations -- Construction of
conflicting statutory provisions establishing five-year limitations period
to recover on contract founded on written instrument and four-year
limitations period to recover on liability not founded on written
instrument and on store accounts requires that store accounts be
subject to four-year statute of limitations whether or not founded on
written instrument -- Further, action is not founded on written
instrument where evidence of liability consists partially of written
cardholder account and security agreement but writing is incomplete
to establish liability -- Accordingly, contract is regarded as oral for
statute of limitations purposes
PORTFOLIO RECOVERY ASSOCIATES, LLC, Appellant, v. PAUL
FERNANDES, Appellee. Circuit Court, 15th Judicial Circuit (Appellate) in
and for Palm Beach County. Case No. 502005AP000032XXXXMB,
Division ‘AY'. March 6, 2006. Appeal from County Court, in and for
Palm Beach County, Judge Nancy Perez. Counsel: Leslie Mark
Schneider, Hayt, Hayt & Landau, Miami, for Appellant. Paul Fernandes,
Boca Raton, pro se.
(PER CURIAM.) Appellant, Portfolio Recovery Associates, LLC
(“Portfolio”), sued Appellee, Paul Fernandes, as the alleged assignee of
a debt incurred by Fernandes to Sears National Bank on a Sears credit
card. Portfolio filed a statement of claim under the Small Claims Rules
for breach of contract (Count 1), account stated (Count 2), and unjust
enrichment (Count 3), claiming $3,201.06 in damages.
Fernandes orally moved to dismiss the claims as outside the statute of
limitations at the pretrial conference. See Rule 7.090(c), Fla. Sm. Cl.
R. Portfolio argued that Florida Statute §95.11(2)(b), which provides
for a five year statute of limitations, governed because the statement
of claim alleged a cause of action to recover on a contract founded on
a written instrument. Fernandes argued that Florida Statute
§95.11(3)(k), which provides for a four year statute of limitations,
governed because the action was not founded on a written instrument
or was on a store account. The trial court dismissed the case based on
its finding that the credit card account was an open account subject to
the four year statute of limitations.1
Portfolio argues that the trial court erred when it dismissed the
statement of claim based on a finding that the claim was barred by the
four year statute of limitations. We disagree.2
An order dismissing a complaint is reviewed de novo. See City of
Hollywood v. Petrosino, 864 So.2d 1175 (Fla. 4th DCA 2004). The
claim must be taken as true and considered in the light most favorable
to the plaintiff, subject to the trial court's ability to summarily dispose
of small claims actions if no triable issue exists. See Bryant v.
Adventist Health Systems Sunbelt, Inc., 869 So.2d 681 (Fla. 5th DCA
2004); Rule 7.135, Fla. Sm. Cl. R.
The nature of the claim, and not the specific form of action selected by
a plaintiff to assert it, determines the applicable statute of limitations.
See 20 Am. Jur. 2d, Credit Cards, §46 (2005). In Count 1, Portfolio
alleged that Fernandes “by execution of the application and/or by use
of the credit card, accepted the terms and conditions of the credit card
holder agreement” attached as Exhibit A. Attached as Exhibit A was a
copy of a document entitled “Sears Credit Card Account Sears
Premium Card Account Cardholder Account and Security Agreement.”
Section 95.11(2)(b), Fla. Stat., provides that the statute of limitations
on actions to recover on a contract founded on a written instrument is
five years. Conversely, section 95.11(3)(k), Fla. Stat., provides that
the statute of limitations to recover on a contract, obligation or liability
not founded on a written instrument and on store accounts is four
years.
When construing statutes, the specific controls over the general. See
Northwest v. Balkany, 727 So. 2d 382 (Fla. 5th DCA 1999). Thus, if a
claim arguably falls within two contradictory subsections of the statute,
the more specific controls. Even if Count 1 could be deemed an action
founded on a written instrument, it can also be deemed an action on a
store account. See 20 Am. Jur. 2d, Credit Cards, §46 (2005); Carte
Blanche Corporation v. Pappas, 216 So. 2d 917 (La. 2d Cir. 1968).3
Store accounts have been subject to a separate statute of limitations
since 1872. Laws of Florida 1872, c. 1869, §10; McClellan's Digest,
§10, p. 733. “The provision is for the benefit of those who have stores,
and keep goods therein for sale, and sell them, keeping accounts
against the purchasers and relying upon their books of accounts in
which the articles are charged as evidence in case of controversy,” and
applies whether there is an express or implied agreement covering the
charges. Saloman v. The Pioneer Co-operative Company, 21 Fla. 374,
385, 1885 WL 1777 (Fla. 1885). The current grammatical structure,
which provides for the limitations period on actions “upon a contract . .
. not founded upon an instrument of writing, including an action for
goods, wares and merchandise sold and delivered, and on store
accounts,” has been used since 1919. (emphasis supplied). Laws of
Florida 1919, c. 7838, §10, subd.9. “. . . (C)lauses separated by
commas are nonrestrictive clauses intended to introduce independent
concepts.” Amendments to the Florida Rules of Appellate Procedure,
696 So. 2d 1103, 1108, footnote 6 (Fla. 1996) (Anstead concurring)
(quoting brief); see, also, The Elements of Style, Struck and White,
3rd Ed., p. 5 (“(p)lace a comma before a conjunction introducing an
independent clause”). Thus store accounts are subject to a four year
statute of limitations whether or not founded on a written instrument.
See Saloman, supra; Wagner v. Botts, 88 So. 2d 611, 613 (Fla. 1956)
(“(h)istorically, parliamentary enactments originally were not
punctuated at all. However, the Legislatures of our country have
consistently attempted to follow the rules dictated by grammar books
with the result that statutes are now punctuated prior to enactment.
The better rule now seems to be that punctuation is a part of the Act
and that it may be considered in the interpretation of the Act but may
not be used to create doubt or to distort or defeat the intention of the
Legislature . . . We deem it proper to adhere to what now appears to
be the better rule which is to treat the rules of punctuation on a parity
with other rules of interpretation.”); Broward Builders Exchange, Inc.
v. Goehring, 231 So. 3d 513, 515 (Fla. 1970) (“(i)t cannot now be
assumed that the Legislature was unfamiliar with this simple rule of
punctuation . . .”). Store accounts, of course, as a species of open
accounts, may be based on either a written or oral agreement. See
Robert W. Gottfried v. Cole, 454 So. 2d 695 (Fla. 4th DCA 1984);
Hawkins v. Barnes, 661 So. 2d 1271 (Fla. 5th DCA 1995).
Count 1 alleges that Fernandes bound himself to the terms of the
Cardholder Account and Security Agreement either when he executed
an application for a Sears card or when he used a Sears card. If the
Cardholder Account and Security Agreement alone were introduced
into evidence at trial, though, it would not be sufficient to establish
Fernandes' liability. See Colorado National Bank of Denver v. Story,
261 Mont. 375, 862 P. 2d 1120 (Mont. 1993). By itself, it created no
liability for Fernandes.4 Instead, it addressed the manner in which a
liability which might be later created should be discharged.5 If
evidence of liability is partially in writing but the writings are
incomplete to establish liability, then the contract is regarded as oral
for statute of limitations purposes. See ARDC Corporation v. Hogan,
656 So. 2d 1371 (Fla. 4th DCA 1995), rev. den. 666 So. 2d 143 (Fla.
1995); Multi-Line Claims Service, Inc. v. Cumis Insurance Society,
Inc., 739 So. 2d 144 (Fla. 3d DCA 1999) (four years statute of
limitations for breach of oral contract applied to action on oral contract
for adjusting services, though parties agreed to compensation based
on a written fee schedule); Johnson v. Harrison Heardware Furniture
Co., 119 Fla. 479, 472, 160 So. 878 (1935) (“(t)he writings attached
to, relied on, and made a part of, the second amendment to plaintiff's
replication do not on their face constitute a contractual
acknowledgment of the loan of any money by plaintiff to defendant,
which is the thing sued for, therefore such writings per se can avail
nothing to plaintiff as a sufficient preclusion of the bar of the threeyear statute of limitations [applicable to actions not founded upon an
instrument in writing.] . . .”); Gulf Life Inc. Co. v. Hillsborough County,
129 Fla. 98, 104, 176 So. 72 (1937) (“(i)n order that a contract be
founded upon a written instrument, the instrument must contain a
contract to do the thing for the nonperformance of which the action is
brought.”); Ball v. Roney, 112 Fla. 186, 150 So. 240 (1933); Schrank
v. Pearlman, 683 So. 2d 559 (Fla. 3d DCA 1996), rev. den. 691 So. 2d
1081 (Fla. 1997).6 The action is not founded on a written instrument
for statute of limitations purposes.7
The legislative scheme makes sense. See Bush v. International Fidelity
Ins. Co., 834 So. 2d 212 (Fla. 4th DCA 2002), rev. den. 847 So. 2d
976 (Fla. 2003) (statutory provisions to be given reasonable and
logical construction). “. . . (S)tatutes of limitations are designed to
prevent undue delay in bringing suit on claims and to suppress
fraudulent and stale claims from being asserted, to the surprise of
parties or their representatives, when all the proper vouchers and
evidence are lost, or the facts have become obscure from the lapse of
time or the defective memory or death or removal of [a] witness.”
Foremost Properties, Inc. v. Gladman, 100 So. 2d 669, 672 (Fla. 1st
DCA 1958), cert. den. 102 So. 2d 728 (Fla. 1958) (citation omitted). A
review of the statute shows, consistent with common sense, that those
actions on which proof is less likely to deteriorate over time are
subject to longer limitations periods; those actions on which proof is
more likely to deteriorate because of faulty memory or otherwise are
subject to shorter limitations periods. Unlike a written contract
containing all the terms sued on, proof of the balance due under a
store credit card depends on the correctness of the store's books. We
know, though, that record keepers come and go; purchased items are
returned or exchanged; and partial payments are made. Proof of the
amount due under a store credit card is simply not as secure as proof
of the amount due on, for example, a promissory note that contains in
writing all the terms of the parties' undertakings. See Nardone v.
Reynolds, 333 So. 2d 25, 36 (Fla. 1976), mod. on other grds., Tanner
v. Hartog, 618 So. 2d 177 (Fla. 1993) (unfair to allow one who has
slept on his rights to sue a party “ ‘. . .who is left to shield himself
from liability with nothing more than tattered or faded memories,
misplaced or discarded records, and missing or deceased witnesses' ”);
Allie v. Ionata, 503 So. 2d 1237 (Fla. 1987).
Because Count 1 alleges a claim on a store account; because it does
not allege a claim to recover on a contract founded on a written
instrument; because under the Small Claims Rules the trial court
properly inquired into undisputed facts at the pre-trial conference that
would be dispositive of the claims; and because the trial court properly
found that the claims raised in Counts 2 and 3 of the statement of
claim were likewise subject to a four year limitations period, which
Portfolio does not dispute, it is
ORDERED AND ADJUDGED that the trial court's judgment is
AFFIRMED. (SMITH, MAASS and STERN, JJ., concur.)
__________________
1Apparently the trial court summarily disposed of the statement of
claim on being apprised of the last payment date. See Rule 7.135, Fla.
Sm. Cl. R.
2On appeal from an order of dismissal an appellate court may consider
only issues presented to the trial judge. See Sparta State Bank v.
Pape, 477 So. 2d 3 (Fla. 5th DCA 1985). This Court agrees with the
trial court's decision to dismiss Counts 2 and 3 of the statement of
claim. Neither party has taken issue with the trial court's decision to
dismiss those counts. Portfolio concedes its claims are precluded if
subject to the four year limitations period.
3Portfolio alleges it is the assignee of Sears National Bank, an affiliate
of Sears, Roebuck and Co. See preamble to Cardholder Account and
Security Agreement; 12 U.S.C. § 1841(k) (“. . .the term ‘affiliate'
means any company that controls, is controlled by, or is under
common control with another company.”) Under the Competitive
Equality Banking Act of 1987, Sears could own a credit card bank
without violating the Bank Holding Company Act of 1956 and thus
charge a nationwide uniform rate of interest on credit card sales. See,
also, Marquette Nat'l Bank v. First Omaha Serv. Corp., 439 U.S. 299,
99 S. Ct. 540 (1978).
4Portfolio implicitly recognized this when it incorporated elements of a
claim for account stated in Count 1. See Paragraphs 8, 9, statement of
claim; Merrill-Stevens Dry Dock Co. v. “Corniche Express”, 400 So. 2d
1286 (Fla. 3d DCA 1981).
5No statement of account was attached to the statement of claim.
6The cited cases are distinguishable from those where the written
instrument obligated the debtor to purchase defined goods or services
and pay for them at a contemporaneously determined or determinable
rate. Compare, e.g., McGill v. Cockrell, 88 Fla. 54, 101 So. 199
(1924); Mercy Hospital, Inc. v. Carr, 297 So. 2d 598 (Fla. 3d DCA
1974), cert. den. 307 So. 2d 448 (Fla. 1974).
7For example, assume Smith agrees in writing with Jones that if Jones
loans him money Smith will repay it with 10% interest. If Jones later
sues Smith claiming Smith borrowed money and did not repay it,
whether Smith is liable to Jones is dependent on whether and how
much he borrowed. Suit to recover the money loaned is not founded
on a written instrument. See Johnson v. Harrison Hardware &
Furniture Co., supra.
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