J-A30012-15


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

CITIZENS BANK OF PENNSYLVANIA                     IN THE SUPERIOR COURT OF
                                                        PENNSYLVANIA
                            Appellee

                       v.

STEVEN K. LLOYD

                            Appellant                  No. 797 EDA 2015


             Appeal from the Judgment Entered February 26, 2015
               In the Court of Common Pleas of Chester County
                  Civil Division at No(s): No. 2014-02601-CT

BEFORE: MUNDY, J., JENKINS, J., and FITZGERALD, J.*

MEMORANDUM BY MUNDY, J.:                          FILED DECEMBER 29, 2015

        Appellant, Steven K. Lloyd, appeals from the February 26, 2015

judgment entered in favor of Appellee, Citizens Bank of Pennsylvania

(Citizens Bank), for $130,025.30, plus interest from October 23, 2014,

pursuant to the order granting Citizen Bank’s motion for summary judgment

in this debt collection action. After careful review, we affirm.

        The trial court summarized the facts of this case as follows.

                    [Citizens Bank’s] Complaint alleges the
              following.    [Lloyd] executed a Business Credit
              Application which was approved by [Citizens Bank]
              and that approval was evidenced by an Approval
              Letter and Business Credit Line Agreement
              (Agreement) providing [Lloyd] with a Credit Line in
              the principal amount of $100,000. The [Application,]
              Approval Letter[,] and Agreement are collectively
____________________________________________


*
    Former Justice specially assigned to the Superior Court.
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              referred to as the Loan Documents. Pursuant to the
              Loan Documents, the full indebtedness due is
              payable on demand. By virtue of his failure to make
              timely payments, [Citizens Bank] provided [Lloyd]
              with a written notice of default and demand for
              payment on January 21, 2014. Despite [Citizens
              Bank’s] demand, [Lloyd] failed to pay the amount
              due resulting in the initiation of the instant action.
              [Citizens Bank’s] Complaint alleges counts for Breach
              of Contract, Account Stated and Unjust Enrichment.

                    We … note that [Lloyd] admits that “as the
              result of serious business reverses, [he] was unable
              to comply with the terms of the Loan Documents and
              that an Event of Default thereunder occurred by
              reason of his inability to repay the Loan as required
              under its terms.” [Lloyd’s Answer and New Matter to
              Motion for Summary Judgment, 12/3/14, at 2, ¶ 8.]

Trial Court Opinion, 5/12/15, at 1-2.1

       The trial court also detailed the procedural history of this case as

follows.

                     On March 27, 2014, [Citizens Bank] filed the
              instant collection action based on [Lloyd’s] failure to
              make required payments due under a Business
              Credit Line Account. [Lloyd] filed his Answer with
              New Matter on May 21, 2014. [Citizens Bank] filed
              its Reply to the New Matter on June 9, 2014.
              [Citizens Bank] then filed its Motion for Summary
              Judgment on November 12, 2014 to which [Lloyd]
              filed his Answer and New Matter on December 3,
              2014. [Citizens Bank] filed its response to [Lloyd’s]
              New Matter on December 16, 2014. The Motion [for
              Summary Judgment] and various responses were
____________________________________________


1
 The trial court’s opinion does not contain pagination. For ease of review,
we have assigned each page a corresponding page number.




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              brought before the [trial court] for disposition on
              January 27, 2015. On February 4, 2015, [Lloyd]
              filed an Affidavit in support of his Answer and New
              Matter. On February 25, 2015[, the trial court]
              issued the Order [] granting [Citizens Bank’s] Motion
              for Summary Judgment. [Lloyd] timely filed his
              Notice of Appeal on March 17, 2015.[2]

Id. at 1.

       On appeal, Lloyd presents the four following issues for our review.

              1. Did the [trial] court [] err in granting summary
                 judgment where it applied the wrong statute of
                 limitations under 42 Pa.C.S.A. § 5525(a)(7) to an
                 obligation that was not “a negotiable or
                 nonnegotiable bond, note or other similar
                 instrument in writing?”

              2. Did the [trial] court [] err in granting summary
                 judgment where there were genuine contested
                 material issues of fact as to whether the
                 “payment” alleged to have occurred in June of
                 2010 was in fact, a payment which would have
                 tolled the expiration of the statute of limitations?

              3. Did the [trial] court [] err in granting [Citizens
                 Bank’s] motion for summary judgment based on
                 an affidavit which purported to authenticate the
                 “loan history,” but which “loan history” was
                 neither a copy of any actual business records, a
                 proper compilation of such records, nor did the
                 affidavit contain the required elements to make
                 the record admissible under the provisions of 42
                 Pa.C.S.A. § 6108?

              4. Did the [trial] court [] err in granting the motion
                 for summary judgment by failing to take all facts
                 of record and reasonable inferences therefrom in
____________________________________________


2
 Lloyd and the trial court have complied with Pennsylvania Rule of Appellate
Procedure 1925.



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               a light most favorable to [Lloyd] who was the
               non-moving party and in failing to resolve all
               doubts as to the existence of a genuine issue of
               material fact against [Citizens Bank] as the
               moving party and in deciding that [Citizens
               Bank’s] right to judgment was clear and free from
               all doubt?

Lloyd’s Brief at 4-5.

      We begin by noting our standard and scope of review of a grant of

summary judgment.

                  As has been oft declared by [our Supreme]
            Court, “summary judgment is appropriate only in
            those cases where the record clearly demonstrates
            that there is no genuine issue of material fact and
            that the moving party is entitled to judgment as a
            matter of law.” Atcovitz v. Gulph Mills Tennis
            Club, Inc., 812 A.2d 1218, 1221 (Pa. 2002); Pa.
            R.C.P. No. 1035.2(1). When considering a motion
            for summary judgment, the trial court must take all
            facts of record and reasonable inferences therefrom
            in a light most favorable to the non-moving party.
            Toy v. Metropolitan Life Ins. Co., 928 A.2d 186,
            195 (Pa. 2007). In so doing, the trial court must
            resolve all doubts as to the existence of a genuine
            issue of material fact against the moving party, and,
            thus, may only grant summary judgment “where the
            right to such judgment is clear and free from all
            doubt.” Id. On appellate review, then,

                   an appellate court may reverse a grant of
                   summary judgment if there has been an error
                   of law or an abuse of discretion. But the issue
                   as to whether there are no genuine issues as
                   to any material fact presents a question of law,
                   and therefore, on that question our standard of
                   review is de novo. This means we need not
                   defer to the determinations made by the lower
                   tribunals.




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            Weaver v. Lancaster Newspapers, Inc., 926 A.2d
            899, 902-03 (Pa. 2007) (internal citations omitted).
            To the extent that this Court must resolve a question
            of law, we shall review the grant of summary
            judgment in the context of the entire record. Id. at
            903.

Summers v. Certainteed Corp., 997 A.2d 1152, 1159 (Pa. 2010) (parallel

citations omitted).

      In his first and second issues on appeal, Lloyd argues that the trial

court applied the incorrect statute of limitations to find that Citizens Bank

timely initiated this action. “As this matter implicates an issue of statutory

interpretation, our task is to determine the will of the General Assembly

using the language of the statute as our primary guide.” Technical Servs.,

LLC v. River Station Land, LLC, 124 A.3d 289, 298 (Pa. 2015) (citations

and internal quotation marks omitted).

      The parties agree that this action is governed by the four-year statute

of limitations contained in Section 5525 of the Judicial Code, 42 Pa.C.S.A.

§§ 101-9909, but they disagree over whether the applicable statute of

limitations is contained in Section 5525(a)(7) or Section 5525(a)(8). Under

those subsections, the statute of limitations commences upon the occurrence

of different events. Specifically, Section 5525 provides, in relevant part, as

follows.

            § 5525. Four year limitation

            (a) General rule.--Except as provided for in
            subsection (b), [relating to actions for identity theft,]


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            the following actions and proceedings must be
            commenced within four years:

                                       …

                  (7) An action upon a negotiable or
                  nonnegotiable bond, note or other similar
                  instrument in writing.        Where such an
                  instrument is payable upon demand, the time
                  within which an action on it must be
                  commenced shall be computed from the later
                  of either demand or any payment of principal
                  of or interest on the instrument.

                  (8) An action upon a contract, obligation or
                  liability founded upon a writing not specified in
                  paragraph (7), under seal or otherwise, except
                  an action subject to another limitation specified
                  in this subchapter.

                                       …

42 Pa.C.S.A. § 5525(a)(7)-(8).

      Herein, the trial court applied the four-year statute of limitations in

Section 5525(a)(7).     Trial Court Opinion, 5/12/15, at 3.        In granting

summary judgment in favor of Citizens Bank, the trial court rejected Lloyd’s

statute of limitations defense, based on its conclusion that the action was

timely commenced within four years from when Citizens Bank demanded

payment on January 21, 2014. Id. The trial court also opined that the June

7, 2010 payment did not affect or toll the calculation of the limitations period

because the payment was made before the limitations period began. Id.

      Lloyd contends that the trial court erred in applying the four-year

statute of limitations contained in Section 5525(a)(7) because the loan


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agreement was not “a negotiable or nonnegotiable bond, note or other

similar instrument.” Lloyd’s Brief at 16, quoting 42 Pa.C.S.A. § 5525(a)(7).

In his brief Lloyd asserts that the Loan Documents do not meet the definition

of “negotiable instrument” contained in Section 3104 of the Pennsylvania

Uniform Commercial Code (PUCC), 13 Pa.C.S.A. §§ 1101-9809. Id. at 9-10.

Instead, he argues that the four-year statute of limitations contained in

Section 5525(a)(8) governs this action because the loan is “a contract,

obligation   or     liability   founded    upon   a   writing   not   specified   in

[Section(a)(7)].”       Id. at 19.        Lloyd contends that, because Section

5525(a)(8) applies, the limitations period began running when the cause of

action accrued, i.e., when Lloyd defaulted on the loan by failing to make a

payment in October 2009. Id. at 22. He further argues that the July 2010

payment that Citizens Bank withdrew from his checking account does not toll

the statute of limitations because Lloyd did not voluntarily remit it. Id. at

27.   Lloyd asserts Citizens Bank had until October 2013 to file a timely

action on the contract; consequently, Citizens Bank’s March 27, 2014

complaint was untimely. Id. at 22.

      We conclude that the trial court was correct in applying the statute of

limitations in Section 5525(a)(7) because the loan documents are “a

negotiable or nonnegotiable bond, note or other similar instrument in

writing.” By its terms, Section 5525(a)(7) has three requirements: (1) the

action must be based on a writing, (2) that writing is a bond, note, or other


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similar instrument, and (3) it is negotiable or nonnegotiable. 42 Pa.C.S.A.

§ 5525(a)(7).     The Judicial Code does not define the operative terms of

“negotiable,” “nonnegotiable,” “bond,” “note,” or “instrument.”        See id.

§ 102 (defining various terms for purposes of the Judicial Code).

      Our Supreme Court has defined “instrument” for purposes of a related

statute of limitations in Chapter 55 of the Judicial Code in Osprey Portfolio,

LLC v. Izett, 67 A.3d 749, 754 (Pa. 2013). Therein, the Court decided that

a written guaranty of a loan allowing the guarantor’s business to borrow “up

to $50,000” was an “instrument” for purposes of the 20-year limitation

period for an instrument under seal at Section 5529(b)(1). Osprey, supra

at 755.   The Court considered and rejected the argument that the term

“instrument” in the Judicial Code should have the same definition as

“negotiable instrument” in Section 3104 of the PUCC.            Id. (explaining

“[t]here is nothing to suggest that Section 5501 was intended to import [the

PUCC’s definition of instrument] into Chapter 55 of the Judicial Code,

particularly as the latter expressly refers to negotiable and nonnegotiable

bonds,    notes     and   ‘other   similar   instruments[s].’    42   Pa.C.S.A.

§ 5525(a)(7)[]”).    Instead, the Court defined “instrument” according to its

ordinary meaning for purposes of the Judicial Code as “a written document

defining rights, duties, entitlements, or liabilities, such as a contract, will,

promissory note, or share certificate.” Id., citing BLACK’S LAW DICTIONARY 813

(8th ed. 2004), WEBSTER’S NEW WORLD COLLEGE DICTIONARY 741 (4th ed. 1999),


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J-A30012-15


United States v. Int’l Longshoremen’s Ass’n, 518 F. Supp.2d 422, 465

(E.D.N.Y. 2007).

      Additionally, this Court has defined a “negotiable instrument” as “an

instrument capable of transfer by endorsement or delivery. Negotiability

provides a means of passing on to the transferee the rights of the holder,

including the right to sue in his or her own name, and the right to take free

of equities as against the assignor/payee.”    Manor Bldg. Corp. v. Manor

Complex Assocs., 645 A.2d 843, 846 (Pa. Super. 1994) (en banc).               A

nonnegotiable instrument is an instrument that is not transferable.

      Applying these definitions to the Loan Documents in this case, we first

conclude the Loan Documents are an instrument because they define the

rights, duties, and liabilities of the parties.   The written Business Loan

Application, filled out and signed by Lloyd, included a personal guaranty also

separately signed by Lloyd, that he would be personally liable for the debt in

the event of a default.    See Business Loan Application, 6/2/06.      Citizens

Bank approved the application and issued a credit line to Lloyd with a limit of

$100,000.00 that he could draw on via checks provided by Citizens Bank.

Further, the written Business Credit Line Agreement sets forth Lloyd’s right

to draw on the credit line, the obligation to pay the loan principal and related

charges, and the corresponding right of Citizens Bank to obtain payment on

demand.    It also details the other rights and obligations of the parties.




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Therefore, the Loan Documents are an instrument under Section 5525 of the

Judicial Code. See Osprey, supra.

       Because the Loan Documents constitute an instrument, whether they

are negotiable or nonnegotiable, we conclude that the four-year statute of

limitations in Section 5525(a)(7) applies in this case. 3      Section 5525(a)(7)

specifies that if the instrument is payable on demand, the limitations period

begins at the later of either the last payment or the demand of payment. As

we noted above, the Credit Line Agreement specifies that the instrument is

payable on demand. Business Credit Line Agreement at 2, ¶ 6. 4 The trial

court found that Citizens Bank provided Lloyd with a written notice of default

and a demand for payment on January 21, 2014. Accordingly, the four-year

statute of limitations period began on January 21, 2014, when Citizens Bank

submitted     its   demand      for   payment.     42   Pa.C.S.A.   §   5525(a)(7).

____________________________________________


3
  An instrument may either be negotiable or nonnegotiable for the purposes
of Section 5525(a)(7). Because we conclude the Loan Documents are an
instrument, they must be either negotiable or nonnegotiable. Therefore, we
need not decide the issue because Section 5525(a)(7) applies to both types
of instruments.
4
   We also note that the Business Credit Line Agreement purports to be
“made as an instrument under seal.” Business Credit Line Agreement at 4,
¶ 35.    However, the Agreement is not signed by either party.            See
Beneficial Consumer Discount v. Dailey, 644 A.2d 789, 791 (Pa. Super.
1994) (opining that the distance a signature appears from a pre-printed
“seal” may affect the validity of the seal). Citizens Bank did not assert that
the Agreement qualified as an instrument under seal pursuant to Section
5529.     See 42 Pa.C.S.A. § 5529(b)(1) (providing that the statute of
limitations for instruments under seal is 20 years).



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Consequently, the March 27, 2014 complaint was commenced within the

four-year limitations period of Section 5525(a)(7).5          Therefore, the trial

court did not err as a matter of law, and Lloyd’s first and second issues on

appeal are meritless. See Osprey, supra; Summers, supra.

       In Lloyd’s third issue on appeal, he contends that the trial court erred

by considering the “loan history” attached to the affidavit of Brenda Moores

because it was not a copy of business records or a compilation thereof.

Lloyd’s Brief at 30.        The trial court found that the affidavit would be

admissible under Section 6108 of the Judicial Code.        Trial Court Opinion,

5/12/15, at 2. The trial court further noted that it did not base its decision

exclusively on the affidavit. Id.

       Section 6108 provides, in relevant part, as follows.

              § 6108. Business records

              …

              (b) General rule.--A record of an act, condition or
              event shall, insofar as relevant, be competent
              evidence if the custodian or other qualified witness
              testifies to its identity and mode of its preparation,
              and if it was made in the regular course of business
              at or near the time of the act, condition or event,
              and if, in the opinion of the tribunal, the sources of
              information, method and time of preparation were
              such as to justify its admission.

____________________________________________


5
  Because we have concluded that the statute of limitations commenced
when Citizens Bank demanded payment in 2014, we need not address
Lloyd’s argument pertaining to the voluntariness of the June 2010 payment.



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             …

42 Pa.C.S.A. § 6108(b).

      Citizens Bank attached the affidavit of Brenda Moores, Vice President

of Citizens Bank, to its motion for summary judgment.       Attached to this

affidavit was the loan history document, which was a spreadsheet listing the

dates Lloyd took advances and the dates he made payments.             In the

affidavit, Moores explained that the loan history “truly and accurately sets

forth … the dates and amount of payments made by [Lloyd], the interest

accrued, the total amount outstanding and the per diem interest accrued.”

Affidavit of Brenda Moores, 10/29/14, at ¶ 5.    It also calculated the total

amount of indebtedness as $130,025.20. Id. at ¶ 6. Moores certified that

she made the affidavit on the basis of her personal knowledge. Id. at ¶ 7.

      We discern no abuse of discretion in the trial court’s conclusion that

the information contained in the loan history document would be admissible

at trial.   The spreadsheet was a compilation of information taken from

records of regular conducted activity, or business records, and would be

admissible at trial with the proper foundation. See 42 Pa.C.S.A. § 6108(b).

      Additionally, Lloyd admitted that he had defaulted on the loan

agreement and was unable to repay his obligation. Lloyd’s Answer and New

Matter to Motion for Summary Judgment, 12/3/14, at 2, ¶ 8.        He did not

contest the amount he owed.     Instead, he contended that Citizens Bank’s

collection action was barred by the statute of limitations. Id. at ¶¶ 10, 48.


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Therefore, even if the loan history was not admissible, Lloyd’s admissions

were sufficient to enable the trial court to conclude there were no issues of

material fact that would preclude summary judgment. Accordingly, the trial

court did not err as a matter of law or abuse its discretion in granting

summary judgment in favor of Citizens Bank. See Summers, supra.

      In his fourth issue on appeal, Lloyd argues that “[t]here were genuine

issues of material fact relating to when the statute of limitations began to

run as to [] Lloyd’s obligations [] and whether the alleged ‘payment’ of June

7, 2010 served to toll the running of the statute.”         Lloyd’s Brief at 34.

Moreover, he asserts that there were genuine issues of the admissibility of

the Moores’ affidavit.    Id.   He contends that the trial court improperly

resolved those evidentiary conflicts in favor of Citizens Bank, the moving

party, instead of in his favor as the nonmoving party.         Id.   While Lloyd

characterizes these issues as evidentiary, we have explained above that they

are legal, not factual, issues. The trial court did not misapply the standard

for summary judgment when resolving these legal issues. See Summers,

supra. Therefore, Lloyd’s fourth issue on appeal has no merit.

      Based on the foregoing, we conclude Lloyd’s issues do not warrant

relief, and the trial court did not abuse its discretion or err as a matter of law

in awarding summary judgment in favor of Citizens Bank.                  See id.

Accordingly, we affirm the trial court’s February 26, 2015 judgment.

      Judgment affirmed.


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Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 12/29/2015




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