Court Opinion

ID: 9955056
Source: CourtListenerOpinion
Date Created: 2024-03-27 16:05:02.590098+00
Date Added: 2024-06-11T08:15:16.022152
License: Public Domain

FILED
                                                                     Mar 27 2024, 8:45 am

                                                                         CLERK
                                                                     Indiana Supreme Court
                                                                        Court of Appeals
                                                                          and Tax Court

                                            IN THE

            Court of Appeals of Indiana
                                           Ciera Mayes,
                                        Appellant-Defendant

                                                   v.

                                 Goldman Sachs Bank USA,
                                          Appellee-Plaintiff

                                           March 27, 2024
                                    Court of Appeals Case No.
                                          23A-CC-1604
                           Appeal from the Dearborn Superior Court
                         The Honorable Jonathan Neil Cleary, Judge
                                       Trial Court Cause No.
                                        15D01-2107-CC-318

                             Opinion by Chief Judge Altice
                        Judges Weissmann and Kenworthy concur.

Altice, Chief Judge.

Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024             Page 1 of 15
      Case Summary
[1]   Ciara Mayes executed an Installment Loan Agreement (Loan Agreement) with

      Goldman Sachs Bank USA (the Bank) for a personal loan. After about six

      months of nonpayment, the Bank advised Mayes by letter that it was seeking

      collection of $9,235.30 owed on the loan. Mayes thereafter sent a $200 check

      and accompanying letter to the Bank, stating that cashing of the check would be

      “considered settlement in full” of the still-outstanding balance. Appendix at 80.

      The Bank cashed the check. The Bank subsequently filed a breach of contract

      action against Mayes on the Loan Agreement, and she counterclaimed,

      asserting various claims on the basis that the matter had been settled. The

      parties filed respective motions for summary judgment. The trial court

      summarily granted the Bank’s motion and entered judgment in favor of the

      Bank on its complaint and against Mayes on her counterclaims. Mayes appeals

      and raises the following restated issues:

              1. Did the Bank, by cashing the $200 check, enter into a
              settlement agreement with Mayes where the terms of the Loan
              Agreement provided that it could not be altered or modified
              except by written instrument and that partial payments received
              and negotiated would have no effect on the terms of the Loan
              Agreement?

              2. Did Mayes satisfy Indiana’s requirements as provided in Ind.
              Code § 26-1-3.1-311 for an accord and satisfaction?

              3. Was the Bank entitled to summary judgment on its breach of
              contract claim?

      Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024        Page 2 of 15
[2]   We affirm.

      Facts & Procedural History
[3]   In February 2018, Mayes entered into the Loan Agreement with the Bank, in

      which the Bank agreed to lend Mayes the principal sum of $20,000 plus interest,

      which she agreed to repay along with, if applicable, late charges, returned

      payment charges, and reasonable costs of collection. As is relevant here, the

      Agreement contained the following provisions:

              7.b. Waivers.

              . . . [N]o alteration, amendment or waiver of any provision of
              this agreement or any other document or agreement relating to
              the Loan or this Agreement, shall release, modify, amend, waive,
              extend, change, discharge, terminate or affect your unconditional
              liability, except to the extent explicitly agreed pursuant to Section
              13.

                                                       ***

              13. Amendment.

              Except as otherwise provided herein, this Agreement may not be
              amended, modified or limited except by a written agreement.

                                                       ***

              21. Partial Payments Marked Payment in Full.

      Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024          Page 3 of 15
              We may process a late payment, a partial payment or a payment
              marked with any restrictive language. If we do, that action will
              have no effect on our rights and the restrictive language will have
              no force or effect.

      Id. at 21, 22, 25.

[4]   On July 31, 2020, a law firm sent a letter (Collection Letter) to Mayes advising

      that it had been retained by the Bank to assist in the collection of funds that she

      owed the Bank under the Loan Agreement and stating that the current balance

      was $9,235.30. The letter stated:

              Please note that unless you dispute said debt, or any portion
              thereof within thirty (30) days after your receipt of this letter, this
              firm shall assume the validity of this debt.

      Id. at 77. The letter also directed Mayes to “[p]lease contact this law firm to

      discuss repayment[.]” Id.

[5]   About six months later, on January 18, 2021, Mayes’s attorney sent a letter to

      the Bank advising that she had been retained by Mayes “to assist in the matter

      of debt relief.” Id. at 80. The letter further stated:

              My client disputes the debt. However, in an effort to resolve this
              matter without filing bankruptcy, I’m enclosing a check for
              $200.00. If you cash this check for the disputed debt, it will be
              considered settlement in full. If you do not cash the check, this
              debt may be included in a bankruptcy. Do not cash this check if
              you do not want to resolve this account in full.

      Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024            Page 4 of 15
      Id. Enclosed with the letter was a check payable to the Bank in the amount of

      $200, and in the memo section of the check was typed “Settlement Marcus 1 for

      Ciera”. Id. at 81. The Bank received and processed the check.

[6]   On July 14, 2021, the Bank filed a complaint against Mayes, alleging that

      Mayes breached the Loan Agreement because she failed to make monthly

      installment payments as required. The Bank stated that, pursuant to its

      contractual right to accelerate the time for repayment, it was declaring “the

      entire balance due,” and it asked the trial court for entry of judgment against

      Mayes in the amount of $9,035.30. Appendix at 12. The complaint attached

      and incorporated an Affidavit of Debt,2 which in turn attached exhibits,

      including the Loan Agreement and account statements. The Affidavit of Debt

      indicated that the loan had been “charged-off” in May 2020 but that a $200

      payment on the loan had posted on January 27, 2021. Id. at 13.

[7]   Mayes filed an answer, denying that she had failed to make payments and was

      in default. She asserted eight affirmative defenses, including that the Bank

      received “partial and/or total satisfaction with respect to the damages

      complained of . . . and the settlement prevents them from asserting this claim.”

      Id. at 47. In addition, Mayes asserted counterclaims for breach of contract,

      1
       “Marcus” is another name for the Bank, as the Loan Agreement sometimes identifies the lender as
      “Marcus: By Goldman Sachs.” Appendix at 16.
      2
        The Affidavit of Debt indicated that interest and fees, permissible under the Loan Agreement, were no
      longer being charged to the account and that the Bank was not seeking attorney’s fees or post-judgment
      interest.

      Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024                              Page 5 of 15
      criminal harassment under Ind. Code § 35-45-2-2, and treble damages pursuant

      to Ind. Code § 34-24-3-1 for violation of Ind. Code Article 35-43. 3 The

      counterclaims were grounded in allegations that Mayes “settled with [the

      Bank]” because it “accepted payment for a disputed debt and resolved this

      account,” and it was “suing on a debt that had been satisfied” and thereby was

      “attempting to collect on a debt twice.” Id. at 48-49.

[8]   The Bank filed an answer, denying all counterclaims, and later filed a motion to

      dismiss the counterclaims. The motion to dismiss asserted that Mayes’s

      tendered check for $200 did not modify or alter the Loan Agreement’s terms. It

      also stated that, although the Bank had sent Mayes the Collection Letter in July

      2020 directing her to contact a representative to discuss repayment, “[n]o

      correspondence disputing the debt or requesting information was ever received

      from Mayes.” Id. at 56. For these and other reasons, the Bank argued that

      Mayes’s accord and satisfaction claim failed, as did her counterclaims alleging

      that the Bank was attempting to collect a debt that had been settled and was

      harassing her. Following a hearing, the trial court denied the Bank’s motion to

      dismiss.

[9]   In March 2023, the Bank filed a motion for summary judgment. It designated

      an Affidavit and Certification of Amount Owed, authored by a legal operations

      analyst for the Bank. Attached as exhibits to the Affidavit were (1) the Loan

      3
          Article 43 concerns “Offenses Against Property” and includes theft and conversion and some types of fraud.

      Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024                               Page 6 of 15
       Agreement, (2) account statements on the loan, and (3) a loan history summary

       reflecting monthly payments through December 2019 and none thereafter. The

       Affidavit averred that due and owing to the Bank was the sum of $9,035.30.

       The Bank’s motion and subsequent reply argued that by applying for and

       accepting the $20,000 loan funds, Mayes agreed to be bound by the terms of the

       Loan Agreement, including the provisions in Paragraphs 13 and 21 that the

       agreement could not be “amended, modified, or limited except by a written

       agreement” and that processing a late or partial payment marked with

       restrictive language would have “no effect on [the Bank’s] rights.” Id. at 229-

       30.

[10]   Mayes filed a response as well as her own motion for summary judgment. She

       asserted that by “accept[ing] [the $200] payment” – with the memo line of the

       check indicating it was “Settlement” and the accompanying letter stating “if

       you cash this check for the disputed debt, it will be considered settlement in

       full” – the Bank thereby accepted the terms of the new contract “through

       performance,” which “satisf[ied] Mayes’ debt.” Id. at 211. Mayes argued that

       she and the Bank thus “had a contract” and that the Bank breached that

       contract by suing on the debt that had been fully satisfied. Id. (citing to and

       quoting from her January 18, 2021 letter to Bank). Mayes argued that the

       Bank’s motion for summary judgment should be denied, and judgment should

       be granted in her favor, because (1) the Bank accepted a settlement agreement

       with Mayes, which the Bank then breached when it filed suit, and (2) the

       requirements of accord and satisfaction found in I.C. § 26-1-3.1-311 had been

       Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024        Page 7 of 15
       satisfied. In support of her motion for summary judgment, Mayes designated

       the Bank’s complaint, her counterclaims, the Bank’s motion to dismiss, her

       $200 check and January 18, 2021 letter to the Bank.

[11]   Following a hearing, 4 the trial court summarily granted the Bank’s motion for

       summary judgment, entering judgment in favor of the Bank in the amount of

       $9,035.30 and entering judgment in the Bank’s favor on Mayes’s counterclaims.

       Mayes now appeals.

       Discussion & Decision
       Standard of Review

[12]   Summary judgment is a tool which allows a trial court to dispose of cases where

       only legal issues exist. Rossner v. Take Care Health Sys., LLC, 172 N.E.3d 1248,

       1254 (Ind. Ct. App. 2021), trans. denied. We have observed that “[s]ummary

       judgment may be particularly appropriate in contract disputes, as interpretation

       of a contract presents a question of law and is reviewed de novo.” Sapp v.

       Flagstar Bank, FSB, 956 N.E.2d 660, 663 (Ind. Ct. App. 2011).

[13]   In reviewing the grant of a motion for summary judgment, this court stands in

       the shoes of the trial court, applying the same standards in deciding whether to

       affirm or reverse summary judgment. Wilson v. Lincoln Fed. Sav. Bank, 790

       N.E.2d 1042, 1046 (Ind. Ct. App. 2003). Summary judgment should be granted

       4
           A transcript of the hearing is not included in the record.

       Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024       Page 8 of 15
       only when the designated evidence shows that there is no genuine issue as to

       any material fact and that the moving party is entitled to judgment as a matter

       of law. Ind. Trial Rule 56(C). The moving party bears the initial burden of

       showing that there are no genuine issues of material fact and that it is entitled to

       judgment as a matter of law; once this burden has been met, the non-moving

       party must respond by setting forth specific facts demonstrating a genuine need

       for trial and cannot rest upon the allegations or denials in the pleadings. Kruse

       v. Nat’l Bank of Indianapolis, 815 N.E.2d 137, 143 (Ind. Ct. App. 2004).

               On appeal, the trial court’s grant of a motion for summary
               judgment is clothed with a presumption of validity, and the party
               that lost in the trial court has the burden of persuading the
               appellate tribunal that the grant of summary judgment was
               erroneous. We do not reweigh the evidence, but we liberally
               construe all designated evidentiary material in the light most
               favorable to the nonmoving party to determine whether there is a
               genuine issue of material fact for trial. A grant of summary
               judgment may be affirmed upon any theory supported by the
               designated materials.

       Id. (citations omitted). Our standard of review is not altered by the fact that the

       parties made cross-motions for summary judgment. Sapp, 956 N.E.2d at 663.

       We consider each motion separately to determine whether the moving party is

       entitled to judgment as a matter of law. Id.

       1. Mayes’s Motion for Summary Judgment – New Contract

[14]   Mayes claims that she is entitled to summary judgment on her counterclaims

       because she and the Bank “agreed to a settlement and new contract” when the

       Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024         Page 9 of 15
       Bank processed the $200 check. Appellant’s Brief at 4. She continues that,

       because the debt that was the subject of the complaint had been satisfied

       through “a binding settlement agreement,” the Bank breached this new contract

       when it filed a complaint against her and/or was harassing her to collect on a

       satisfied debt. Id.

[15]   Acknowledging that Paragraph 21 of the Loan Agreement provides that cashing

       a partial-payment check with restrictive language does not alter the terms of the

       Loan Agreement, Mayes points out that she “is not arguing a change in

       agreement occurred by the mere fact that the check [had] restrictive language

       [about settlement] on the memorandum line.” Id. at 6. Rather, her argument is

       that the Bank “accept[ed] the explicit terms of the offer and acceptance” that

       was stated in the January 18, 2021 letter, and the Bank should not be able to

       “renege with impunity” by filing the complaint against her months after

       acceptance. Id. at 6; Reply Brief at 4.

[16]   Mayes’s argument is founded on the premise that the Bank accepted the offer to

       settle through performance, namely “by cashing the check.” Appellant’s Brief at

       9. This position ignores Paragraph 13 of the Loan Agreement that provides

       that its terms may not be amended, modified or limited except by a written

       agreement. Here, there is no new written agreement. Under the circumstances

       of this case, we decline to find that Mayes and the Bank entered into a new

       contract to settle the outstanding loan balance for $200.

       Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024     Page 10 of 15
       2. Mayes’s Motion for Summary Judgment - Accord and Satisfaction

[17]   Alternatively, Mayes asserts that she is entitled to summary judgment because

       the Bank’s claim was discharged through an accord and satisfaction. The term

       “accord” denotes an express contract between two parties by means of which

       the parties agree to settle some dispute on terms other than those originally

       contemplated, and the term “satisfaction” denotes performance of the contract.

       Wolfe v. Eagle Ridge Holding Co., LLC., 869 N.E.2d 521, 524 (Ind. Ct. App. 2007)

       (some quotations omitted). The question of whether the party claiming accord

       and satisfaction has met its burden is ordinarily a question of fact but becomes a

       question of law if the requisite controlling facts are undisputed and clear. Id.

[18]   We have recognized that I.C. § 26-1-3.1-311 5 (Section 311) governs where a

       party attempts an accord and satisfaction by tender of a negotiable instrument.

       See Wolfe, 869 N.E.2d at 525. Section 311 provides that if a person against

       whom a claim is asserted proves:

               (1) that person in good faith tendered an instrument to the
               claimant as full satisfaction of the claim;

               (2) the amount of the claim was unliquidated or subject to a bona
               fide dispute; and

               (3) the claimant obtained payment of the instrument

       5
        This statute is Indiana’s codification of Section 3-311 of the Uniform Commercial Code. See Wolfe, 869
       N.E.2d at 525.

       Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024                            Page 11 of 15
       then the claim is discharged “if the person against whom the claim is asserted

       proves that the instrument or an accompanying written communication

       contained a conspicuous statement to the effect that the instrument was

       tendered as full satisfaction of the claim.” I.C. § 26-1-3.1-311(a), (b).

[19]   Mayes contends that she satisfied the requirements of Section 311 but we

       disagree. There is no dispute that Mayes’s check and accompanying letter

       includes the “conspicuous statement” about being tendered as full satisfaction

       of the claim. However, we are hard pressed to accept the suggestion that an

       offer to settle a $9,235 loan balance for $200 was tendered in “good faith,”

       given the great disparity in the two amounts as well as because the Loan

       Agreement contained language indicating that partial or late payments would

       not affect the Bank’s rights under the Loan Agreement.

[20]   Even assuming that the tender was made in good faith, Mayes did not “prove”

       that the debt “was unliquidated or subject to a bona fide dispute.” I.C. § 26-1-

       3.1-311(a)(2). First, the balance owed was not unliquidated – that is, one that is

       uncertain and not definite or fixed 6 – as correspondence from the Bank as well

       as the complaint advised Mayes of the specific amount due and owing with

       supporting account statements.7 Second, Mayes did not prove that the debt was

       6
         See Gearhart v. Baker, 393 N.E.2d 258, 260 (Ind. Ct. App. 1979) (comparing a claim that is “liquidated,
       definite, and fixed” to an “unliquidated” claim that is “uncertain in nature” because it is “subject to a good
       faith dispute”).
       7
        Mayes asserts that the Bank “admitted that the claim is unliquidated” in its motion to dismiss. Appellant’s
       Brief at 10. In arguing that Mayes failed to satisfy Section 311, the motion read, “not only is the claim
       unliquidated, but [Mayes] also cannot establish that [the Bank]’s claim is subject to a bona fide dispute.”

       Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024                                 Page 12 of 15
       subject to a bona fide dispute. On this point, we agree with the Bank that her

       attorney’s singular statement in the January 18, 2021 letter that “my client

       disputes this debt” does not prove, or even provide evidence of, a bona fide

       dispute. Appendix at 80. Accordingly, Mayes did not prove that an accord and

       satisfaction occurred when the Bank cashed her $200 check.

[21]   Having failed to establish either (i) that the parties entered into a new contract,

       namely a settlement agreement, or (ii) that the debt was satisfied through

       accord and satisfaction, Mayes has not shown that the Bank engaged in

       criminal harassment or committed violations of I.C. Art. 35-43 that would

       entitle her to treble damages under I.C. § 34-24-3-1. Accordingly, Mayes was

       not entitled to summary judgment on her counterclaims against the Bank.

       3. Bank’s Motion for Summary Judgment – Breach of Contract

[22]   We next address whether the Bank was entitled to summary judgment on its

       breach of contract claim. The essential elements of a breach of contract action

       are the existence of a contract, a breach of it, and damages. Wilson, 790 N.E.2d

       at 1048. In support of its motion for summary judgment, the Bank designated

       as evidence: an Affidavit of amount owed; the Loan Agreement; monthly

       statements; and a summary chart that was sent to Mayes in February 2022,

       reflecting that she had made monthly payments through December 2019 but

       had made no payments thereafter other than a credit of the $200 in January

       Appendix at 57. It is evident, based on phrasing and broader context, that the Bank intended to state that the
       debt was not unliquidated.

       Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024                                Page 13 of 15
       2021, for an owed balance, including interest, of $9,035.30. The designated

       materials established that the parties entered into a contract for Mayes to

       borrow money, Mayes accepted the disbursed funds, she failed to repay as

       required, and the Bank suffered damages as a result. The Bank thereby showed

       that it was entitled to judgment as a matter of law on its breach of contract

       claim.

[23]   As the Bank met that burden, it was incumbent on Mayes to respond with

       specific facts demonstrating a genuine need for trial. See Kruse, 815 N.E.2d at

       143. She has not done so. While Mayes designated her attorney’s letter to the

       Bank, stating the words “My client disputes the debt,” neither the letter nor any

       other designated evidence indicates that she had in fact paid or, if not, on what

       basis she was not required to pay. The only evidence in the record is that

       Mayes agreed to make monthly installment payments, did so for a time, then

       stopped. The Bank thus established that Mayes breached the contract and that

       it suffered damages. Mayes has not met her burden to establish that the grant of

       summary judgment in favor of the Bank on its breach of contract claim was

       erroneous.

[24]   Judgment affirmed.

       Weissmann, J. and Kenworthy, J., concur.

       Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024      Page 14 of 15
ATTORNEY FOR APPELLANT
Julie A. Camden
Fishers, Indiana

ATTORNEYS FOR APPELLEE
Ian R. Flora
South Bend, Indiana

Kara James
Indianapolis, Indiana

Court of Appeals of Indiana | Opinion 23A-CC-1604 | March 27, 2024   Page 15 of 15