Collins Asset Group, LLC, v. Michael Simmers

Collins Asset Group, LLC, v. Michael Simmers

Civil Action-Law-Breach of Contract-Loan-Debt Collection-Failure to Apply for Loan-Failure to Receive Loan Proceeds-Opportunity of Others to Submit Documents with Loan Application

Collins Asset Group, LLC, (“Plaintiff”), which acquired loans from an entity that serviced loans for FinWise Bank,  alleges that Michael Simmers (“Defendant”) applied for and was extended a loan in the amount of $12,000.00 from FinWise Bank on February 6, 2019 with last making payment on the account on March 1, 2020, leaving a balance due and owing of $12,421.98.  Defendant asserts that he never applied for a loan or received any proceeds relating to the loan.

1.  In a breach of contract cause of action, the plaintiff must establish: (1) the existence of a contract, including its essential terms; (2) a breach of the contract; and (3) resultant damages. 

2.  Where Plaintiff could not identify the bank account into which loan proceeds electronically were deposited, Defendant’s name had been removed from the bank account submitted with the loan application by the time when the loan application had been submitted, Plaintiff was unable to establish that the electronic signature on the contract was made by Defendant and Defendant testified that he did not apply for the loan or receive proceeds and opportunities were available for others to obtain documentation to submit with the loan application, Plaintiff failed to establish the existence of a contract with Defendant to support a Breach of Contract cause of action.

L.C.C.C.P. No. 2023-00491, Opinion by John C. Tylwalk, President Judge, July 24, 2024.

            IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY

                                                        PENNSYLVANIA

                                                        CIVIL DIVISION

COLLINS ASSET GROUP, LLC,                :           NO. 2023-00491

                        Plaintiff                                   :

                                                                        :

            v.                                                         :

                                                                        :

MICHAEL SIMMERS,                                 :

                        Defendant                               :

                                                            VERDICT

            AND NOW, this 24^th day of July, 2024, upon consideration of the evidence adduced at the non-jury trial conducted on July 18, 2024, it is hereby Ordered that judgment is entered in favor of Defendant Michael Simmers.

                                                                        BY THE COURT:

                                                                        ___________________________, P.J.

                                                                        JOHN C. TYLWALK

JCT/jah

Cc:  Demetrios H. Tsarouhis, Esquire/21 South 9^th Street/Allentown, PA  88513

       John J. Ferry, Esquire

       Judith Huber, Esquire/Law Clerk

IN THE COURT OF COMMON PLEAS OF LEBANON COUNTY

                                                        PENNSYLVANIA

                                                        CIVIL DIVISION

COLLINS ASSET GROUP, LLC,                :           NO. 2023-00491

                        Plaintiff                                   :

                                                                        :

            v.                                                         :

                                                                        :

MICHAEL SIMMERS,                                 :

                        Defendant                               :

APPEARANCES:

DEMETRIOS H. TSAROUHIS, ESQUIRE                      FOR PLAINTIFF

JOHN J. FERRY, ESQUIRE                                              FOR DEFENDANT

OPINION, TYLWALK, P.J., JULY 24, 2024.

            This is a debt collection case in which Plaintiff Collins Asset Group, LLC (“Collins Asset Group”) alleges that Defendant Michael Simmers (“Simmers”) applied for and was extended a loan in the amount of $12,000.00 from FinWise Bank on or about February 6, 2019.  The Complaint alleges that the last payment on the account was made on March 1, 2020 leaving a balance due of $12,421.98.  In his Answer, Simmers responded that he did not apply for the loan and did not receive the loan proceeds.  We conducted a non-jury trial on July 18, 2024 and the matter is before us for disposition.

            At the trial, London Thompson, records custodian for Collins Asset Group, testified that this loan was part of a portfolio of delinquent loans purchased from LendingPoint, which serviced loans for FinWise Bank.  Thompson explained that in order for LendingPoint to approve the loan, the borrower was required to fill out an online application, provide a blank check, driver’s license and other personal information, and sign the contract.  In this case, the loan was made pursuant to an online application on LendingPoint’s website in the name of Michael Simmers, 1510 Rolling Meadow Road, Lebanon, PA 17046.  The application contained an electronic signature in the name of Michael Simmers.  (Exhibit “1”)  Thompson explained that the Docusign signature was affixed through LendingPoint’s web portal and that the signature is not required to be witnessed or notarized. 

The application was accompanied by a voided check for a USAA Federal Savings Bank account ending in “5163.”  The names “Michael R. Simmers” and “Rachel Simmers” with the Rolling Meadow Road address appeared on the check.  Also submitted were a photocopy of Simmers’ Pennsylvania driver’s license indicating his address as 1139 Hunters Chase Lane, Lebanon, PA 17046 and a change of address card to the Rolling Meadow Road address which had been issued on February 2, 2017.  Thompson also presented copies of two paystubs for Simmers which had been submitted with the loan application.  The paystubs indicated that direct deposit of Simmers’ pay was made to a New Cumberland Federal Credit Union account ending in “756.”  (Exhibit “2”) 

Thompson explained that once the loan was approved, the funds would be transferred electronically, usually to the account from which automatic payments were to be received as indicated on the blank check which would have been submitted with the application.  However, Thompson could not identify the account to which the loan proceeds were transferred in this case. 

Thompson explained that the loan was to be repaid in 39 installments in the amount of $452.69 with a final maturity date of February 7, 2022. (Exhibit “3”)  The payments were to be made via “ACH” to be debited from the account ending in “5163” indicated on the voided check submitted with the application.  (Exhibit “2”) Out of nineteen attempts to obtain the payments from that account, only three were successful, with the other attempts indicating the account had insufficient funds.  Two of those payments were made by ACH and one was made by debit card.  The attempts to obtain the payments from the checking account ceased due to a notification from the borrower that the account could no longer be utilized for payments on the loan.

Simmers testified that he never applied for this loan, did not authorize anyone to apply for the loan, did not receive the loan proceeds, and did not make any payments.  He first learned of the existence of the loan when he received papers regarding this debt collection litigation.

Simmers explained that he had previously lived at the Rolling Meadow Road address when he was married to his ex-wife, Rachel.  He last lived there in February of 2018.  On February 6, 2018, he moved out of the marital home and  moved to 410 Wheatstone Place in Lebanon.  At the time the application for this loan was made, he and Rachel were separated and he was living at the  Wheatstone Place address.  He lived at the Wheatstone Place address for approximately 26 months until he moved to his present home at 1833 Ashton Drive in Lebanon in April of 2020. 

Simmers explained that the account ending in “5163” on the check submitted with the loan application had been a joint account with his ex-wife that had been used for household expenses when they lived together.  He had his name removed from the account when the parties separated in February 2018 but believed that there were still blank checks remaining in the Rolling Meadow Hills address after he moved out.  Simmers explained that his paystubs were available from his employer online.  His ex-wife still had online access to his financial and insurance information from his employer in February 2019 as they were still married.  He did not know who applied for the loan and did not know who told LendingPoint to stop debiting the account ending in “5163.”   He did not pursue any identity theft charges because there were a lot of people in and out of the Rolling Meadow Road address at the time of the loan application and he did not know who was responsible.

Three elements are necessary to establish a cause of action for breach of contract: (1) the existence of a contract, including its essential terms; (2) a breach of the contract; and (3) resultant damages. American Express National Bank v. Logothetis, 309 A.3d 1021, 2023 WL 7273825 (Pa. Super. 2023), citing 412 N. Front St. Associates, LP v. Spector Gadon & Rosen, P.C., 151 A.3d 646, 657 (Pa. Super. 2016). We find that Collins Asset Group has failed to establish the existence of a contract with Simmers. 

Thompson could not identify the account into which the loan proceeds were electronically deposited.  However, she acknowledged that the proceeds would typically be transferred to the checking account connected with the blank check submitted with the loan application and from which payments would be automatically withdrawn.  This was the account ending in “5163” from which Simmers’ name had been removed by the time the loan application was submitted to LendingPoint.  The paystubs submitted with the application also indicated that Simmers used a different account at the time of the loan application as direct deposits from his employer were made to a different account ending in “756.”   Collins Asset Group was unable to establish that the electronic signature on the contract had been made by Simmers. 

Simmers testified that he did not apply for the loan and that he did not receive the proceeds of the loan.  He explained the opportunities which were available for others to obtain the documentation submitted with the loan application.  We find Simmers’ testimony to be credible and find that he did not apply for or receive the loan at issue.^[1]  The evidence established that he was not a party to the loan agreement.  For these reasons, we will enter judgment in his favor. 

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[1] Collins Asset Group attempted to impeach Simmers’ credibility with questions regarding theft charges which had been lodged against him in 2019.  However, Simmers explained that, at the time, he needed security clearance for imminent deployment by his employer.  For that reason, he pled guilty to a summary offense of criminal mischief as that would not affect his security status and he did not wish to jeopardize his job.