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Danner v. Discover Bank

Court of Appeals of Arkansas, Division I

June 3, 2015



Scholl Law Firm, P.L.L.C., by: Scott A. Scholl, for appellant.

Allen and Withrow, by: Gus Allen, for appellee.


This long and tortured case returns to us for a third time. See Danner v. Discover Bank (Danner I), 99 Ark.App. 71, 257 S.W.3d 113 (2007); Discover Bank v. Danner (Danner II), 2013 Ark.App. 540. Appellant Betsy Danner contends that the trial court erred in concluding that the Arkansas Court of Appeals required the trial court to enter a judgment in favor of appellee Discover Bank. We agree and therefore must again reverse and remand.

This case began on July 26, 2005, when Discover Bank filed a complaint seeking to collect on appellant's Discover credit-card account. Danner denied the allegations, and a bench trial was held in the Clark County Circuit Court. The trial court found in favor of Discover Bank on the basis of its findings that Danner "did not say without question that these were not her charges" and that payments had been made on the account. On appeal, Danner asserted that the trial court erred by impermissibly shifting the burden of proof to her to show that the charges were not authorized. This court agreed and reversed and remanded the case for a new trial. Danner I, supra.

Following remand, a second bench trial was held. After hearing all of the evidence presented, the trial court found that Discover Bank had failed to meet its burden of proof. By an order entered on May 1, 2012, the trial court made the following findings of fact and conclusions of law:

It is clear that Ms. Danner had a Discover Card account that she charged to and made payments on prior to the disputed charge. Discover Bank alleges that Danner purchased a "hyperbaric chamber" from a company called OxyHealth, LLC located in California and that she paid for the product by charging her Discover account in the amount of $6, 000 on July 1, 2004. Ms. Danner disputes this charge and testified that she did not purchase the item; did not charge the $6, 000 to her account; did not receive the item; and did not even know what a hyperbaric chamber was until this litigation commenced.
In an effort to meet the proof required by the court of appeals decision, Discover Bank introduced additional proof at the second trial. For example, the affidavit of Jeffrey Dolin from OxyHealth, LLC was submitted, which verified their company record of invoice number 4933 to Betsy Danner dated July 16, 2004. The invoice reflects that a hyperbaric chamber was billed to Betsy Danner and shipped to Betsy Danner at her correct Arkadelphia address. According to the invoice, the item was shipped "prepaid" via UPS ground. The invoice was in the amount of $9, 625 and reflected full payment of $9, 625 leaving a $0.00 balance and was marked "PAID." An OxyHealth, LLC computer screen copy was also submitted into evidence reflecting a July 1, 2004 customer payment of $6, 000 received from Betsy Danner through a Discover payment method. However, the OxyHealth, LLC documents do not reflect a signature or other written authorization by Betsy Danner. The documents also do not constitute an executed "sales slip" by Betsy Danner. Discover Bank also did not present a signed receipt from UPS verifying the delivery of the hyperbaric chamber that was allegedly delivered to Danner's home. Discover Bank did not present an executed credit application or cardholder agreement executed by Betsy Danner.
The OxyHealth, LLC sales transaction evidence is further muddled by the fact that the July 16, 2004 "PAID" invoice is in the amount of $9, 625 but the company record reflects a Betsy Danner Discover Card payment of only $6, 000 on July 1, 2004. There is no evidence of how the difference of $3, 625 was paid. You would expect there would be a record of who paid the additional $3, 625 and by what method of payment.
Discover Bank introduced voluminous personal checking account records of Betsy Danner that included a $9, 000 check from Betsy Danner's mother to Betsy Danner on July 7, 2004. The implication was that this proved some connection between Betsy Danner and the $9, 625 hyperbaric chamber purchase. However, Discover Bank failed to sufficiently connect this evidence together as proof that Ms. Danner actually purchased the hyperbaric chamber.
Discover Bank contends that it is impractical and unfair for them to require merchants who accept payment through Discover Card to keep signed sales receipts or signed sales slips just to prove a disputed case by a disgruntled customer. However, I disagree with this position based upon the court of appeals decision in this case and the reasoning of the Crestar [Bank, N.A. v. Cheevers, 744 A.2d 1043 (2000)] case. The initial burden of proof is clearly upon the credit card company to prove the accuracy of charges made by the customer. Contrary to Discover Bank's primary argument this case does not depend upon the credibility of Betsy Danner in her denial of the credit card charge. The case turns on whether Discover Card met its burden of proof. It failed to so. The case against Ms. Danner is dismissed.

In the second appeal, Discover Bank argued that the circuit court erred when it determined that Discover Bank did not meet its burden of proof on its suit against Danner. Without expressly setting out Discover Bank's argument, this court again reversed and remanded. Danner II, supra. In our opinion, we stated:

First, [Danner] stipulated that the credit card was in fact her card, that she had used it for a substantial period of time, and that she had made payment on that account. Second, [Discover Bank] presented significant evidence to show that at least some of the disputed charges had been made by [Danner], including an affidavit from a California merchant saying that a machine costing over $9, 000 had been purchased for shipment, that $6, 000 of the ...

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