Court Opinion

ID: 4908520
Source: CourtListenerOpinion
Date Created: 2021-09-07 07:06:12.987998+00
Date Added: 2024-06-11T08:13:16.154960
License: Public Domain

FIFTH DIVISION
                          RICKMAN, C. J.,
      MCFADDEN, P. J., and SENIOR APPELLATE JUDGE PHIPPS

                    NOTICE: Motions for reconsideration must be
                    physically received in our clerk’s office within ten
                    days of the date of decision to be deemed timely filed.
                               https://www.gaappeals.us/rules

                    DEADLINES ARE NO LONGER TOLLED IN THIS
                    COURT. ALL FILINGS MUST BE SUBMITTED WITHIN
                    THE TIMES SET BY OUR COURT RULES.

                                                                   September 2, 2021

In the Court of Appeals of Georgia
 A21A1104. BRANCEWICZ v. SMS FINANCIAL P, LLC.

      PHIPPS, Senior Appellate Judge.

      SMS Financial P, LLC (“SMS”) sued Leonard J. Brancewicz for credit line

debt, and the trial court granted summary judgment to SMS. Brancewicz appeals that

order. In his sole enumeration of error, Brancewicz argues that the trial court erred

by granting summary judgment against him, as the guarantor, because the underlying

written contract was not included in the record. For the reasons that follow, we affirm

the trial court’s judgment.

      Summary judgment is proper “if the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the affidavits, if any, show that

there is no genuine issue as to any material fact and that the moving party is entitled

to a judgment as a matter of law.” OCGA § 9-11-56 (c). We review the trial court’s
grant of summary judgment de novo, viewing the evidence, and all reasonable

inferences drawn from the evidence, in the light most favorable to the nonmoving

party. Houghton v. Sacor Financial, 337 Ga. App. 254, 254 (786 SE2d 903) (2016).

      So viewed, the record shows that on December 6, 2006, Brancewicz completed

a “Small Business Credit Application” for Penn Beaver Pharmacy Inc. (the

“company”), requesting a $50,000 credit line from National City Bank.1 Brancewicz

signed the first page of the application as both an authorized representative (the

company owner) and a guarantor of the credit line. Section 5 of the application stated

that the authorized officer signing on behalf of the entity agreed to be bound by all

applicable agreements containing the terms and conditions regarding the issuance of

lines of credit to the entity and/or credit cards to employees, officers, directors, and

associates of the entity. Brancewicz signed below this statement on the line

designated for “Secretary/Assistant Secretary.”

      Under a heading titled “Small Business Premium Credit Line - Agreement and

Personal Guaranties,” the application noted:

      1
        National City Bank originally issued the credit line. National City Bank later
merged with PNC Bank, National Association, which assigned and sold the subject
loan to SMS.

                                           2
      Subject to credit approval Bank will open the Small Business Premium
      Credit Line (“Account”) at the owner’s or Company’s request. Bank will
      send a Small Business Premium Credit Line Agreement (“Agreement”)
      to Company with Company’s credit card(s). The Company promises to
      pay to the order of Bank or any subsequent holder in accordance with
      the Agreement, at the address listed on the monthly billing statement,
      the amount advanced pursuant to this application and the Agreement,
      including all principal, interest, fees and other charges outstanding. The
      signature of an owner or Company Authorized Signer on this
      application, the retention of checks or credit cards or the use of the
      Account in any way means that each Obligor agrees to all the terms of
      the Agreement as amended from time to time. . . .

With respect to the guarantor, the application specifically indicated that the

guarantor’s liability remained in effect even if changes were made to the application

and agreement without his consent, that the credit company did not need to provide

him any notice regarding changes made in the application or agreement, and that he

waived any defense to his direct and absolute obligation to pay the indebtedness and

any interest accruing on the indebtedness when it became due. The application also

specified that the guarantor was responsible for paying the bank’s costs and expenses,

including attorneys’ fees, incurred in connection with the enforcement of the

guaranty.

                                          3
      A credit line account was opened, and Penn Beaver Pharmacy was mailed

statements and account summaries from 2007 through 2015. These statements

showed account activity, including cash advances, convenience checks, payments,

and interest and fees. Beginning in December 2014, the account statements sent to

Penn Beaver Pharmacy indicated late and overlimit fees had been assessed. And the

January 26, 2015, account statement and summary showed that the account had been

closed, presumably by PNC Bank due to the outstanding balance. Following the

January 2015 statement, subsequent statements went unpaid, and a statement and

account summary dated June 26, 2015, indicated an account “charge off” of

$99,119.66 in principal and $3,496.30 in finance charges.

      In February 2019, SMS sued Brancewicz, alleging that “[Brancewicz] is

indebted to [SMS] in the sum of $99,119.66 principal, plus interest, on a contract, as

shown with particularity by the documentation attached [to SMS’s complaint] as

Exhibit ‘A.’” Attached to the complaint was the “Small Business Credit Application”

executed by Brancewicz as an authorized representative of Penn Beaver Pharmacy

and guarantor of the account.

      SMS subsequently moved for summary judgment. The motion included an

affidavit from a managing member of SMS averring that he was familiar with the

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lawsuit, the documents attached to his affidavit were made in the ordinary course of

business and received or made at or near the time of the transaction, and Brancewicz

was indebted to SMS in the amount of $99,119.66 plus interest. As an attachment to

the affidavit, SMS submitted “a true and correct copy of the Small Business Credit

Application applied for by Penn Beaver Pharmacy, Inc., which was also executed by

Defendant Leonard J. Brancewicz as personal guarantor.” Also attached to the

affidavit were account ledger documents showing the principal balance and amount

of accrued interest owed by Penn Beaver Pharmacy and Brancewicz as of September

17, 2019. A second affidavit from the same managing member of SMS included as

attachments the account statements and summaries sent to Penn Beaver Pharmacy

from 2007 through 2015, as well as a statement that the records were made in the

ordinary course of business.

      SMS subsequently filed an amended complaint, pursuant to OCGA § 13-1-11,2

demanding attorney fees and legal expenses incurred to enforce the guaranty. It then

amended its motion for summary judgment to include a claim for those fees and

      2
        This statute generally provides that a lender may enforce an obligation in a
note or other evidence of indebtedness to pay attorney fees as part of the debt if
certain conditions have been met.

                                         5
expenses. The trial court granted SMS’s motion for summary judgment in its entirety.

This appeal followed.

      In his sole enumeration of error, Brancewicz argues that the trial court erred by

granting summary judgment to SMS because SMS failed to establish the existence

and terms of the underlying contract. Specifically, Brancewicz asserts:

      The single most important fact on this appeal is this: the “Small
      Business Premium Credit Line Agreement” that is repeatedly referred
      to in the Small Business Credit Application as the “Agreement” and
      upon which [SMS’s] contract claim depends appears nowhere in the
      record.

(Emphasis omitted.) According to Brancewicz, SMS cannot prove his personal

liability without producing the “agreement” discussed in the application. We disagree.

      To demonstrate that it was entitled to judgment against Brancewicz on the

credit line account, SMS “was required to show that [Penn Beaver Pharmacy, with

Brancewicz as guarantor] entered into an agreement or established an account with

[National City Bank, which later merged with PNC Bank], accumulated a balance and

failed to pay.” Melman v. FIA Card Svcs., 312 Ga. App. 270, 272 (2) (718 SE2d 107)

(2011). SMS was required only to produce copies of the records “that were pertinent

to [Brancewicz’s] debt.” Id. at 272-273 (2) (a copy of the signed credit application

                                          6
was not required for summary judgment against the borrower); see also generally

League v. Citibank, 291 Ga. App. 866, 869 (2) (663 SE2d 266) (2008) (summary

judgment for creditor affirmed where creditor produced evidence that the debtor

requested and obtained the account, accumulated a balance, and failed to adequately

dispute the charges resulting in that balance).

      As this Court held in Davis v. Discover Bank, 277 Ga. App. 864, 865-866 (627

SE2d 819) (2006), the production of an actual signed contract is not required to

establish the existence of valid credit card debt. In that case, this Court affirmed the

grant of summary judgment to the creditor where the creditor produced (1) evidence

that a credit card was issued to the debtor along with a document providing that if he

used the card he accepted the agreement, (2) statements in the debtor’s name that

were mailed to the debtor and not returned as undelivered, and (3) an account

statement showing the balance due. Id. We noted that a contract resulting in credit

card debt is not effected at the time an application or agreement is signed; rather,

“[t]he issuance of the card to the defendant amounted to a mere offer on plaintiff’s

part, and the contract became entire when defendant retained the card and thereafter

made use of it. The card itself then constituted a formal and binding contract.” Id. at

865 (citation and punctuation omitted); see also Hill v. American Express, 289 Ga.

                                           7
App. 576, 578 (2) (657 SE2d 547) (2008) (a credit card contract may be created “not

by signature, but by use of the card”).

      Based on this case law and the facts of the case, we conclude that, contrary to

Brancewicz’s argument, SMS was not required to produce the agreement that

accompanied any credit cards or credit line account to prove the existence of his

liability for the credit line debt. Instead, SMS was required to include only “copies

of the records relied upon and referred to . . . that were pertinent to [Brancewicz’s]

debt.” Melman, 312 Ga. App. at 272-273 (2) (citation omitted). We therefore must

consider whether SMS included the pertinent records of Brancewicz’s debt.

      Here, SMS produced evidence showing that (1) Brancewicz, as the owner of

Penn Beaver Pharmacy, applied for and obtained a credit line account on behalf of

Penn Beaver Pharmacy, (2) Brancewicz individually guaranteed the account, (3) the

line of credit was used beginning in June 2007, (4) Penn Beaver Pharmacy received

and paid account statements from 2007 until 2014, (5) Penn Beaver Pharmacy

eventually stopped paying on the account, and (6) the account ultimately accumulated

a balance in the amount of $99,119.66 in principal. In addition, there is no evidence

in the record that either Penn Beaver Pharmacy or Brancewicz disputed any of the

charges, cash advances, or convenience checks resulting in the indebtedness. On the

                                          8
basis of these undisputed facts, it is clear that there is an outstanding debt and that

Brancewicz, as the guarantor, is responsible for that debt. See Melman, 312 Ga. App.

at 272 (2); League, 291 Ga. App. at 869 (2).

      “Once the party moving for summary judgment has made a prima facie

showing that it is entitled to judgment as a matter of law, the nonmovant must then

come forward with rebuttal evidence sufficient to show the existence of a genuine

issue of material fact.” League, 291 Ga. App. at 869 (2); accord Melman, 312 Ga.

App. at 273 (2). Brancewicz has not come forward with rebuttal evidence concerning

this indebtedness; he argues only that the absence from the record of the terms of the

underlying agreement precludes summary judgment. To support this claim, he cites

Houghton, 337 Ga. App. at 257 (1) (a), for the dubious proposition that summary

judgment is not warranted where a copy of the underlying written contract is not in

the record. However, this Court reversed summary judgment in that case not based

on the failure to produce a written contract, but rather because the suit was not filed

within the applicable statute of limitation. Id.

      Notably, Brancewicz has cited no binding authority standing for the

proposition that a copy of the credit agreement itself is an absolute requirement to

establish a prima facie case in an action to collect from a guarantor on a line of credit

                                           9
where, as here, the creditor has produced other evidence sufficient to establish the

existence of the debt, the guaranty, and the obligation to pay. SMS has produced

copies of the credit line account records that are pertinent to Brancewicz’s liability

as the guarantor in this case. We therefore affirm the trial court’s grant of summary

judgment to SMS.

      Judgment affirmed. Rickman, C. J., and McFadden, P. J., concur.

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