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Friday, July 15, 2005

Cases: Cardholder stuck with terms of credit agreement

Maryland_flag_1 A man whose estranged wife ran up thousands of dollars on his credit card was out of luck because he failed to comply with the terms of the credit card agreement, according to a recent decision by the Maryland Court of Special Appeals.

Seems that Arthur Spengler, Jr., had opened  a credit card account with Sears. He added his wife as an authorized user in 1996.  The original card agreement obliged Spengler to notify Sears whenever his address changed.  In 1997, Spengler paid off the credit card, destroyed it, and never used it again.  It was his intention to close the account, even though he never notified Sears.  In January 2001, Spengler and his wife separated, and he moved out of the house. Two months later, Mrs. Spengler received a bulk mailer from Sears (at Spengler's old address) saying the credit card was automatically upgraded to the Sears Gold MasterCard. Mrs. Spengler saw this and transferred her own credit card balance and made additional charges to the card, ending in a $5,638 balance.  When Spengler refused to pay the balance, Sears reported him to credit agencies, which made him unable to get a bank loan.  He sued Sears for breach of contract, defamation, and interference with business relations.  A jury awarded him $145,000 in damages, but the trial court granted a motion for judgment notwithstanding the verdict, and Spengler appealed.

The breach of contract claim had no merit, said the court, because Spengler himself failed to follow the provisions of the contract. He assumed his ex-wife would destroy the card, which she didn't. He also failed to notify Sears of his change of address, so the court failed to see why his actions and inaction should be Sears's problem.  Because the breach of contract claim had no merit, the defamation claim also failed because they were intertwined.  And since Sears engaged in no "improper means" when it reported his defalcation to the credit agencies, the interference claim also failed.

Spengler v. Sears, Roebuck & Co., 2005 Md. App. LEXIS 93 (July 11, 2005).

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