Capital One N.A. v. Lauren Westbay

Plaintiff presents evidence establishing that (1) Defendant applied for and received a personal loan of $35,000 from Discover Bank in January 2023 (Plt. Exs. A, B; see also Dft. Ex. F); (2) Defendant received monthly statements of the amounts due (Plt. Ex. C); (3) the last payment applied to the account was in August 2024, after which Defendant was in default (Plt. Ex. C); and (4) the amount outstanding is $31,408.06 (Plt. Ex. D). Plaintiff has made a prima facie case for purposes of its common counts.

Defendant responds first that Plaintiff has not established it is the real party in interest, i.e., the owner of the outstanding loan. The Court disagrees. Plaintiff submitted the declaration of McKay Bannavong who states he is a “Litigation Support Specialist for CAPITAL ONE, N.A., successor

by merger to DISCOVER BANK.” (Bannavong Decl., ¶ 1.) “Upon merger ... the separate existence of the disappearing corporations ceases and the surviving corporation shall succeed, without other transfer, to all the rights and property of the disappearing corporations ....” (Corp. Code, § 1107, italics added.) Defendant herself submits a copy of the certificate issued by the Office of the Comptroller of the Currency reflecting the merger of Plaintiff and Discover Bank. (Westby Decl., ¶ 2, Ex. B.) Nothing more is needed to show Plaintiff is the successor in interest to the loan at issue. And Defendant’s request for a chain of title or documentation showing an asset transfer for the loan is unnecessary in light of Corporation’s Code section 1107.1

Second, Defendant argues Plaintiff “charged-off” the account in January 2025, while the merger did not become effective until May 18, 2025. (Westbay Decl., ¶ 2, Exs. A, C.) A “charged-off consumer debt” “means a consumer debt that has been removed from a creditor’s books as an asset and treated as a loss or expense.” (Civ. Code, § 1788.50.) The debt nonetheless remains legally valid and collectible. (Cavalry SPV I, LLC v. Watkins (2019) 36 Cal.App.5th 1070, 1075, fn.) Although the Fair Debt Buying Practices Act (Civ. Code, § 1788.50 et seq.) applies to collection of debt by debt buyers,2 Defendant has not cited any law that prevents the original lender from collecting the debt after it has been charged-off. A charge-off is a bookkeeping device, not a legal discharge of the obligation. In light of the merger, Plaintiff is the original lender with the power to collect the underlying debt.

Third, Defendant argues Bannavong’s declaration does not satisfy the requirements of Evidence Code section 1271. Not so. Bannavong states she is “responsible for maintaining account records pertaining to Discover Personal Loan accounts and interacting with Discover Personal Loan Account Holder[s] with regard to payments owed on those accounts.” (Bannavong Decl., ¶ 1.) She further states she is “familiar with the ongoing business operations for the Personal Loan accounts and have access to records regarding [Defendant’s] Discover Personal Loan account.” (Bannavong Decl., ¶ 3.)

She also states that Plaintiff and “Discover Products Inc.” maintain these records in the ordinary course of business, evidencing she is familiar with the systems of both entities. (Bannavong Decl., ¶ 3.) 3 “[A] a qualified witness need not be the custodian, the person who created the record, or one with personal knowledge in order for a business record to be admissible under the hearsay exception. [Citations.]” (Estate of O’Connor (2017) 16 Cal.App.5th 159, 170.) The Court finds Bannavong is a qualified witness for purposes of Evidence Code section 1271.

1 Defendant’s speculative argument that the debt may have been sold before the merger was completed is not supported by any evidence. The party opposing summary judgment must provide substantial evidence. “Evidence that gives rise to no more than mere speculation is insufficient to establish a triable issue of material fact. [Citations.]” (Edmon & Karnow, Cal. Practice Guide: Civil Proc. Before Trial (The Rutter Group 2026) ¶ 10:253.1.) 2 Plaintiff is not a “debt buyer” with respect to the loan at issue. (Civ. Code, § 1788.50(a)(1).) 3 Defendant provides no evidence that Discover Bank and Discover Products Inc. are separate legal entities such that Bannavong’s knowledge of the latter is insufficient to support his verification of the exhibits attached to his declaration.

Fourth, Defendant argues the account stated claim fails because Plaintiff cannot show the account is undisputed. An essential element of an account stated is “an agreement between the parties, express or implied, on the amount due from the debtor to the creditor.” (Zinn v. Bright Company, Inc. (2017) 271 Cal.App.2d 597, 600.) Defendant argues her credit reports from Experian and TransUnion evidence a dispute between the parties. Both credit reports include comments referencing a prior dispute that has been resolved. (Dft.

Exs. D [“Account previously in dispute, investigation complete, reported by data furnisher”], G [“Dispute resolved reported by grantor”].) Defendant has not presented any evidence showing she timely disputed the balance of the account statements sent to her on a monthly basis. (Professional Collection Consultants v. Lauron (2017) 8 Cal.App.5th 958, 968 [“[w]hen a statement is rendered to a debtor and no reply is made in a reasonable time, the law implies an agreement that the account is correct as rendered”].)

Defendant has failed to provide evidence raising an issue of material fact on this element of the account stated claim.

Fifth, Defendant argues acceleration of the loan was improper. The terms of the Loan Agreement provide, “If you are in default, we can demand upon notice the immediate payment of your outstanding Loan balance.” (Plt. Ex. B.) Defendant argues that Plaintiff has not made a sufficient demand. In support, she cites a letter from Plaintiff dated February 1, 2025 stating, “Your personal loan(s) is in default due to a failure to make the scheduled monthly payments .... Please refer to the table below for loan details.” (Plt.

Ex. H.) The table then states the balanced due as of February 1, 2025 is $31,408.06. The letter then states, “Please contact us at your earliest convenience to make payment arrangements.” (Plt. Ex. H.) A demand is “ ‘something claimed as due.’ [Citation.]” (River Garden Retirement Home v. Franchise Tax Bd. (2010) 186 Cal.App.4th 922, 956; see also Westrec Marina Management, Inc. v. Arrowood Indemnity Co. (2008) 163 Cal.App.4th 1387, 1392 (Westrec) [a demand “is a request for something under an assertion of right”].)

The February 1, 2025 letter clearly claims the full loan amount is due as of that date and requests payment. As such, it constitutes a sufficient demand. (Westrec, supra, at p. 1391 [“interpretation of contract and its application to undisputed facts are questions of law”].)

Finally, Defendant asks the Court to continue the MSJ to at least sixty days after her pending Motion for Leave to Conduct Additional Discovery pursuant to Code of Civil Procedure section 95. That motion is currently set for hearing on September 24, 2026.

“If it appears from the affidavits submitted in opposition to a motion for summary judgment or summary adjudication, or both, that facts essential to justify opposition may exist but cannot, for reasons stated, be presented, the court shall deny the motion, order a continuance to permit affidavits to be obtained or discovery to be had, or make any other order as may be just. The application to continue the motion to obtain necessary discovery may also be made by ex parte motion at any time on or before the date the opposition response to the motion is due.” (Code Civ. Proc., § 437c, subd. (h).)

Defendant argues without additional discovery she cannot determine whether Bannavong has the foundation to authenticate the records created by Discover Bank or Discover Products Inc.’s systems. “ ‘To be entitled to a continuance, the party opposing the motion for summary judgment

must show that its proposed discovery would have led to “facts essential to justify opposition.” ’ [Citation.]” (Scott v. CIBA Vision Corp. (1995) 38 Cal.App.4th 307, 326.)

Bannavong’s declaration is based on her personal knowledge as well as a review of the relevant documents. She states she is responsible for maintaining account records for Discover Personal Loan accounts, and that both Plaintiff and Discover Products Inc. maintain these records in the ordinary course of business. Defendant raises no grounds to question Bannavong’s knowledge of Discover Bank’s systems. And notably, Defendant does not dispute the correctness of the documents submitted.

The Court denies the request for a continuance.

ORDER (PROPOSED)

The motion is granted. Judgment is entered for $31,408.06 plus costs in the amount of $966.41.

Defendant’s evidentiary objections are overruled. The Court grants Plaintiff’s objections to Defendant’s exhibits C, D, and G.

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