The Booker Case: Breach of a (Missing & Written) Contract

Attaching a Contract to a Lawsuit

As any lawyer will tell you, if there's a written contract that a party seeks to enforce, the plaintiff suing to collect money for non-payment of the contract must attach the contract to the Complaint (lawsuit).

Person signing contract for a loan, or commercial construction

In fact, Pennsylvania law requires the existence of a written contract, to enforce numerous types of breach of contract claims, such as home improvement disputes. There, both the original contract and every change order must be in writing, pursuant to the Pennsylvania Home Improvement and Consumer Protection Act ("HICPA").

The agreement must also be in writing for:

    • Contracts for the sale of land or goods over $500, and, 
    • Credit card debt collection. Here, the creditor often misplaces the credit card application and/or a set of any terms signed by the alleged debtor. 

But what if a party -- having the burden to plead and prove a contract -- fails to attach the written agreement to the Complaint, meaning right upfront, at the beginning of the lawsuit? 

 

Pennsylvania Rule Requiring Notice of the "Contract."

If you are wondering when the party seeking to enforce a contract in PA must describe and produce it, the Pennsylvania Rules of Civil Procedure provides an answer. Pa.R.C.P. 1019(h) provides:  

(h) When any claim or defense is based upon an agreement, the pleading shall state specifically if the agreement is oral or written.
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In other words, the lawsuit against you (the Complaint) must say whether the contract is written or oral. Then, if the agreement Plaintiff seeks to enforce is written, Rule 1019(i) comes into play:  
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(i) When any claim or defense is based upon a writing, the pleader shall attach a copy of the writing, or the material part thereof, but if the writing or copy is not accessible to the pleader, it is sufficient so to state, together with the reason, and to set forth the substance of the writing.
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The Meaning of Pennsylvania Rule 1019

So in other words, pursuant to Pa.R.C.P 1019, the party seeking to enforce a contract -- for debt collection or construction law, or anything else -- must identify or attach the contract to the lawsuit right upfront. 

If, however, the original contract is unavailable, the plaintiff must describe why -- right upfront in the lawsuit -- the contract cannot be attached to the lawsuit.  In the lawsuit (Complaint), the Plaintiff must also describe the terms of the (allegedly) unavailable contract. Otherwise, a debt collection defense lawyer should file Preliminary Objections to the lawsuit. There, the defense should seek the case be dismissed or amended to comport to Pa.R.C.P 1019. 

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Discover Bank v. Booker - PA Superior Court Debt Collection Case

Then came the holding of Discover Bank v. Booker, 259 A.3d 493, 2021 P.A. Super 139 (Pa. Super. Ct. 2021).  Many interpret Booker to mean that any party -- even a creditor that misplaces a written agreement -- can file suit and win in court.  In fact, some think that the only "proof" needed to establish contractual terms -- such as an alleged "agreement" to pay 35% interest, for example -- is the invoices (or statements) sent to the customer after she used the plastic form of payment.  

However, this is simply not true, nor does it accurately describe the facts Booker.   

Let's now discuss Booker. 

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What Happened in Booker?

There, Rogina Booker (Booker) appealed from the judgment against her for $6,765.47 plus interest, claiming the lower court erred for:

"..accepting an exemplar agreement, in entering a judgment against the weight of the evidence, and in determining that Booker's conduct was tantamount to assent to the accuracy of monthly statements received from Discover. Booker's Brief at 4."

First, what is an "exemplar agreement?" It's not the original contract.  Rather, it's simply a form that's not even signed by the debtor.  It's merely offered to "exemplify" the language typically used (but maybe not here) by a creditor -- such as Discover Bank in this case -- to prove an "example" of the (possible) contract.  

OK, so the actual contract was missing in Booker, but what other evidence existed in Booker?  You see, the problem with the Booker is, it's easy to overlook the details. Many lawyers (and judges in our opinion) just read the Superior Court's bottom line "holding," and, therefore, improperly rely on Booker to believe (incorrectly) that a contract is no longer "necessary" in court to prove a claim for "breach of contract."  This, however, fails to take into account the actual evidence in Booker. 

Let's look at the actual evidence in Booker.  

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The Evidence at Trial Court in Booker

First of all, in Booker, the Plaintiff produced in court a copy of the application for the account at issue, which is rarely available in these matters. Often, the creditor is suing for re-payment of an account or loan that is decades old, having originated long before electronic record keeping, i.e., before the cloud. Hence, original documents for stale debt are often in short supply.     

Moreover, in Booker, the following facts also existed, per the Superior Court's opinion: 

"Booker stipulated to the authenticity of the statements submitted by Discover, stipulated that she had applied for, received, and used a Discover card, and stipulated that she had not disputed any statement received from Discover. This is a very different situation from that posed by Atlantic Credit, where no documentary evidence satisfying Rule 1019(i) was submitted.[2]”

Such facts and stipulations typically do not exist, however. For example, it is unusual for an alleged debtor to stipulate to anything.  Why would she?  The Plaintiff has the burden of proof.  Why would the Defendant speculate about -- much less stipulate to -- what happened or did not happen ten years ago?  Thus, for example, a creditor -- such as Discover -- has the burden to produce its call log, to confirm what communications did -- or did not -- take place over the years. 

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Relieving Discover of its Burden to Prove a Contract

In Booker, Discover Bank had the burden to prove the terms of an agreement through a "meeting of the minds," i.e., a conscious ascent do certain things.  Discover Bank was trying to show that Booker "agreed" to certain things by not "disputing"  monthly statements.  But how do we know Booker received those statements?  Were they delivered certified or by email?  Probably not. 

Moreover, if Booker had made "payments," did she merely make the minimum payment, to avoid a mark on her credit score? If so, does that mean she even read any given "statement" from top to bottom?  Why would she, if the harsh terms of the credit card had nearly put her into bankruptcy.  Why waste time reading over a statement you can't afford to pay? 

Nevertheless, Booker admitted to the authenticity of the bank statements, but how?  She could not have done so unless she recalled the wording of every statement going back years, potentially. 

Think about it.  Would you be able to say whether the written wording -- on a credit card statement you received five years ago but no longer possess -- looks identical to the one offered against you today in court?  Booker's stipulation took away many of these questions from the court, affirming the answers in favor of Discover Bank.   

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The Law Applied by the Superior Court in Booker

In Booker, the Superior court acknowledged the requirements of Rule 1019. The court held: "Rule 1019(i) of the Pennsylvania Rules of Civil Procedure requires that where a

claim or defense is based upon a writing, the pleader shall attach a copy of the writingor the material part thereof, but if the writing or copy is not accessible to the pleader, it is sufficient so to state, together with the reason, and to set forth the substance in writing."

Applying the law to the facts, the Superior Court noted in Booker that:

"...Booker's card application, in tandem with the updated agreement, supports the trial court's finding that the parties contracted for Booker's use of the card in accordance with Discover's terms and conditions for that use. Booker's own behavior, in continuing to use the card and comply with its terms for so long, strongly evidences her active acquiescence to the contract's terms, which she accepted when she applied for the card. 

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Superior Court's Conclusions in Booker

Ultimately -- based on the facts in the case and stipulation from the Defendant -- the Superior Court held and opined:

We hold that the trial court correctly found the existence of a contract for use of a credit card despite Discover's submission of a subsequent agreement (rather than the original), and arrived at a just and reasonable estimate of the damages in calculating what Booker owes to Discover. We affirm.

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Debt Collection Defense Options

Notwithstanding Booker, defendants in any civil litigation are well advised to hire defense counsel to make the Plaintiff-creditor prove every element of its claim for breach of contract or any claim for unjust enrichment (discussed separately here) or account stated.  Regarding the latter, the Plaintiff must still prove a contract, even if relying on an account stated theory.  

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Commercial Litigation and Commercial Construction Disputes

Parties to commercial cases typically use air tight contracts, but often, given the amount of money involved in seven or eight figure deals, the understanding might not be papered contemporaneously with any change or modification to the Parties' understanding.  It's common for parties to waive the requirement for all changes to be in writing, for example, if the contract involves an event happening today right now real time, such as concert, or large venue event such as a coliseum, or an NFL game.    

Moreover, in commercial construction cases, involving significant bank loans and progress payment requirements, the bank might have one contract, and the parties "on the ground" doing the work in real time, may have a different understanding.  Therefore, in matters involving a construction dispute -- either for new construction or renovation of a commercial structure -- numerous agreements may need to be pieced together to ascertain the contract, which may be permissible, under Booker.  The same applies regarding mechanic's lien law:  numerous documents can be pieced together to ascertain the "contract' giving rise to the lien against property.  

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Small Claims Court Cases

Lastly, Rule 1019 does not apply to cases filed and argued at the magisterial district court (small claims court) level.  There, the procedures are more relaxed, so it rarely makes sense to even attend the small claims court hearing for breach of contract, much less file a motion for lack of specificity of evidence.  This is because any party can appeal the small claims court hearing for any reasons or no reason, which debt collectors (construction law contractors, credit card companies, or auto loan lenders, or student debt collectors) often do.    

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