Court of Appeal (Cal.) Says “Open Book Account” Sounds in Contract, But Applies Out-of-State SofL Per Choice of Law Clause in the Subscriber Agreement

 In Professional Collection Consultants v. Lauron, 2017 WL 634714 (Cal.App. 6 Dist., 2017), the Court of Appeal found that an Open Book Account claim sounded in contract, and applied the contract’s choice of law clause.

This appeal arises out of a credit card debt collection action involving two credit cards. Appellant Professional Collection Consultants (PCC), as an assignee of the original creditor, filed a complaint against respondent Krystal Lauron alleging common counts of account stated and open book account. Lauron filed a cross-complaint alleging PCC was attempting to collect on a time-barred debt in violation of the federal Fair Debt Collection Practices Act (FDCPA) ( 15 U.S.C. §§ 1692 et seq.) and California’s Rosenthal Fair Debt Collection Practices Act (Rosenthal Act) (Civ. Code, § 1788 et seq.). In a motion for summary judgment on both complaints, Lauron argued that a Delaware statute of limitations applies to PCC’s claims because the underlying credit card agreement (Cardmember Agreement) contains a Delaware choice-of-law provision. She further argued that, under Delaware’s applicable three-year limitations period, PCC’s claims were untimely. The trial court ruled that the gravamen of PCC’s action was that Lauron had breached the Cardmember Agreement and that the action was barred by Delaware’s three-year statute of limitations governing written contract claims. Accordingly, the court entered summary judgment in Lauron’s favor on PCC’s complaint and her cross-complaint.  On appeal, PCC contends the trial court erred in applying Delaware law to its claims, which it says do not arise under the Cardmember Agreement. It maintains its claims are timely under the applicable California limitations period.   We will reverse and remand the matter to the trial court with directions. With respect to the first credit card, there is no evidence the Cardmember Agreement applies. Nor is there any evidence as to when PCC’s claims accrued. Accordingly, Lauron has not established that PCC’s claims seeking to collect on debt incurred on the first card were untimely. As to the second credit card, we agree with Lauron that Delaware’s three-year limitations period applies to PCC’s claims. However, the grant of summary judgment must be reversed because she has not established when PCC’s claims accrued.