Citibank N.A. v. Svetlana L. Dayal

Case Number

25CV02873

Case Type

Hearing Date / Time

Wed, 01/21/2026 - 10:00

Nature of Proceedings

1) Citigroup, Inc.’s Motion to Set Aside Entry of Default; 2) Citibank N.A.’s Motion to Compel Arbitration

Tentative Ruling

For Plaintiff and Cross-Defendant Citibank N.A. and Cross-Defendants Citigroup, Inc. and Jane Fraser: Adam Taryle, Mathew A. Morr, Ballard Spahr LLP

                            

For Cross Defendant Suttell & Hammer, APC: Luke K. Chamberlain, Messer Strickler Burnette, Ltd.

                            

For Defendant Svetlana Dayal: Self-represented

RULING

(1) For all reasons stated herein, Citigroup, Inc.’s motion to set aside entry of default is granted. Citigroup, Inc., shall file a responsive pleading to the first amended cross-complaint on or before February 18, 2026.

(2) For all reasons stated herein, Citibank N.A.’s motion to compel arbitration is denied.

Background

On May 7, 2025, Plaintiff Citibank N.A. (Citibank) initiated this action by filing a complaint against Defendant Svetlana Dayal (Dayal) alleging one cause of action for breach of contract.

As alleged in the complaint: On June 14, 2017, Citibank entered into a written agreement with Dayal. (Compl., ¶ BC-1 & Ex. A.) The attached agreement is a “Card Agreement” for payment on a credit card account. (Compl., Ex. A.) On January 7, 2025, Dayal breached the agreement by failing to make payments when due. (Compl., ¶ BC-2.) Citibank suffered damages in the unpaid amount due for a total of $16,761.33. (Compl., ¶¶ BC-2, BC-4.)

On August 27, 2025, Dayal filed an answer generally denying the allegations in the complaint and asserting nine affirmative defenses.

On August 27, 2025, Dayal filed a verified cross-complaint against cross-Defendants Citibank, Jane Fraser (Fraser), and Suttell & Hammer, APC (SHA).

On September 4, 2025, Dayal filed her operative verified first amended cross-complaint (FACC) against Citibank, Citigroup, Inc. (Citigroup), Fraser, and SHA, alleging five causes of action for (1) violation of the Fair Dept Collection Practices Act (FDCPA) against Citibank and SHA (15 U.S.C. §§ 1692e, 1692f & 1692g), (2) violation of the Fair Credit Reporting Act (FCRA) against Citibank and Fraser (15 U.S.C. § 1681s-2(b)), (3) defamation per se against Citibank and Fraser, (4) restitution against Citibank and Fraser, and (5) unfair competition against Citibank and Fraser. Although Citigroup was a named cross-Defendant in the caption of the FACC, no cause of action was asserted against Citigroup in the body of the FACC.

As alleged in the FACC: Citibank and SHA violated the FDCPA by attempting to collect on a disputed debt without validating the debt in violation of federal law. (FACC, ¶¶ 11-17.) Citibank and Fraser violated the FCRA by falsely publishing an account as an obligation owed by Dayal when such obligation had been assigned to the account of the United States under the Trading with the Enemy Act (TWEA) (50 U.S.C. § 4301 et seq.). (FACC, ¶¶ 18-23.) Citibank and Fraser are liable for defamation for publishing such false information to the credit bureaus. (FACC, ¶¶ 24-28.) Citibank and Fraser have been unjustly enriched at the expense of Dayal because the account over which Citibank sued Dayal in this action has been assigned to the account of the United States under the TWEA. (FACC, ¶¶ 29-33.) Citibank and Fraser’s actions in violation of the FDCPA and FCRA also constituted unfair competition. (FACC, ¶¶ 34-37.)

On October 9, 2025, Citibank filed a motion to compel arbitration.

On October 15, 2025, Dayal filed a proof of service indicating Citigroup’s registered agent was served via substituted service on September 11, 2025, with a declaration that mailing occurred on September 15, 2025.

On October 28, 2025, default was entered against Citigroup.

On November 12, 2025, Citigroup and Fraser joined Citibank’s motion to compel arbitration.

On December 2, 2025, Citigroup filed a motion to set aside the entry of default.

The motions to set aside entry of default and to compel arbitration are opposed.

Analysis:

(1)       Citigroup’s Motion to Set Aside Default

Citigroup moves to set aside the entry of default based on a mistake of counsel. Dayal argues that this mistake was not excusable and resulted from intentional acts pertaining to an earlier stipulation filed in this action.

“The Court may … relieve a party or the party’s legal representative from a judgment, dismissal, order, or other proceeding taken against the party through the party’s mistake, inadvertence, surprise, or excusable neglect…. Notwithstanding any other requirements of this section, the Court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney’s sworn affidavit attesting to the attorney’s mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against the attorney’s client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against the attorney’s client, unless the Court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect….” (Code Civ. Proc., § 473, subd. (b).)

“[T]he provisions of section 473 of the Code of Civil Procedure are to be liberally construed and sound policy favors the determination of actions on their merits. [Citation.] ‘[B]ecause the law strongly favors trial and disposition on the merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default.’ ” (Maynard v. Brandon (2005) 36 Cal.4th 364, 371-372.) “Under the … mandatory relief provision of section 473 relief must be granted regardless of whether the attorney’s neglect is excusable.” (Cisneros v. Vueve (1995) 37 Cal.App.4th 906, 909.) “Section 473’s provision for mandatory relief … upon a declaration of attorney error does not require a determination the error was excusable. It applies even when the attorney has no excuse. ‘Relief is mandatory when a complying affidavit is filed, even if the attorney’s neglect was inexcusable.’ ” (Abers v. Rohrs (2013) 217 Cal.App.4th 1199, 1210.)

Here, Citigroup moves to set aside the default entered against it on the grounds that Citigroup’s failure to timely respond to the FACC was the result of excusable neglect and inadvertence. (Declaration of Adam A. Taryle (Taryle Decl.), ¶¶ 2-9.) Citibank responded to the FACC by filing a motion to compel arbitration. (Taryle Decl., ¶ 3.) Citigroup’s counsel inadvertently neglected to sign off as counsel for both Citibank and Citigroup. (Taryle Decl., ¶¶ 5-6.) As a result of this inadvertence, a default was entered against Citigroup. (Taryle Decl., ¶ 9.)

Citigroup has established that default was entered against it based on the mistake of counsel. The Court will grant the requested relief and vacate the entry of default. (Code Civ. Proc., § 473, subd. (b).)

(2)       Citibank’s Motion to Compel Arbitration

Citibank moves to compel arbitration pursuant to the terms in its card agreement. Citigroup and Fraser join this motion. Dayal opposes this motion. The parties dispute whether there was mutual consent to arbitrate this matter.

“Private arbitration is a matter of agreement between the parties ….” (Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 313.) “There is no public policy favoring arbitration of disputes which the parties have not agreed to arbitrate…. Whether the parties formed a valid agreement to arbitrate is determined under general California contract law. [Citation.] Hence, when ruling on a petition to compel arbitration, the superior Court may consider evidence on factual issues such as contract formation bearing on the threshold issue of arbitrability.” (City of Vista v. Sutro & Co. (1997) 52 Cal.App.4th 401, 407.) “Under ‘both federal and state law, the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate.’ ” (Fleming v. Oliphant Financial, LLC (2023) 88 Cal.App.5th 13, 19 (Fleming).)

“The party seeking to compel arbitration bears the burden of proving by a preponderance of the evidence an agreement to arbitrate a dispute exists.” (Trinity v. Life Ins. Co. of North America (2022) 78 Cal.App.5th 1111, 1120.) “It is essential to the existence of a contract that there should be: [¶] 1. Parties capable of contracting; [¶] 2. Their consent; [¶] 3. A lawful object; and, [¶] 4. A sufficient cause or consideration.” (Civ. Code, § 1550.)

“The consent of the parties to a contract must be: [¶] 1. Free; [¶] 2. Mutual; and, [¶] 3. Communicated by each to the other.” (Civ. Code, § 1565.) “Consent is not mutual, unless the parties all agree upon the same thing in the same sense….” (Civ. Code, § 1580.) “The existence of mutual consent is determined by objective rather than subjective criteria, the test being what the outward manifestations of consent would lead a reasonable person to believe. [Citation.] Accordingly, the primary focus in determining the existence of mutual consent is upon the acts of the parties involved.” (Monster Energy Co. v. Schechter (2019) 7 Cal.5th 781, 789.) When “there [is] the indication [of] conflicting evidence on this issue … [w]hether parties have reached a contractual agreement and on what terms are questions for the fact finder ….” (Hebberd-Kulow Enterprises, Inc. v. Kelomar, Inc. (2013) 218 Cal.App.4th 272, 283.)

As to the credit card account ending in 2810, Citibank submits a declaration from authorized employee Kyle Mitchell stating in part: “Citibank’s records reflect that on or about November 5, 2021, a Home Depot branded credit card account ending in 2810 (the ‘2810 Account’) was issued to Dayal.” (Mitchell Decl., ¶ 5.) “Based upon my review of the records pertaining to the 2810 Account, I have determined that it is subject to an arbitration provision that is contained in the written terms and conditions reflected in the Card Agreement, as amended from time to time.” (Id. at ¶ 6.) “Attached as Exhibit 1 is an exemplar Home Depot Card Agreement available to Dayal when she opened the 2810 Account in November of 2021. The Card Agreement contains an arbitration provision.” (Id. at ¶ 7.)

As to the second credit card account ending in 7603: “Citibank’s records reflect that on or about June 14, 2017, a Home Depot branded credit card account ending in 7603 (the ‘7603 Account’) was issued to Dayal.” (Mitchell Decl., ¶ 8.) “Based upon my review of the records pertaining to the 7603 Account, I have determined that it is subject to an arbitration provision that is contained in the written terms and conditions reflected in the Card Agreement, as amended from time to time.” (Id. at ¶ 9.) “Attached as Exhibit 2 is an exemplar Home Depot Card Agreement whose terms were made available to Dayal when she opened the 7603 Account in June of 2017. The Card Agreement contains an arbitration provision.” (Id. at ¶ 10.)

Mitchell states that the Home Depot Card Agreements (Card Agreements), which contained the arbitration clause at issue, were “available” to Dayal when these accounts were opened. (Mitchell Decl., ¶¶ 7 & 10.) However, Mitchell does not establish the context of such availability, including what steps were needed for Dayal to access the Card Agreements at the time of application or thereafter, if or how the Card Agreements were referenced in any text presented to Dayal at the time of application or thereafter, whether Dayal confirmed the arbitration provision in the Card Agreements at the time of application or thereafter, or whether Dayal was ever provided a copy of the Card Agreements or received other notice of them.

As to the 7603 Account, Mitchell attaches a Consumer Paperless Credit Card Application (Card Application) containing Dayal’s signature. (Mitchell Decl., ¶ 13, Ex. 3.) Mitchell states that “Card applicants confirm that they have read and agreed to the Credit Card Disclosures and Terms and Conditions of Offer by signing the signature page of the … Card Application.” (Id. at ¶¶ 12-13, Ex. 3.) Dayal does not dispute that her electronic signature is on this document.

Upon reviewing the “TERMS AND CONDITIONS OF OFFER” and “THE HOME DEPOT CONSUMER CREDIT CARD DISCLOSURES” within Exhibits 1 and 2 to the Mitchell declaration, these sections do not contain an arbitration provision. (Mitchell Decl., Exs. 1-2.) The Mitchell declaration does not establish that the arbitration provision in the Card Agreements was included within the information that Dayal confirmed by signing the Card Application. (Id. at ¶¶ 7, 10, 12-13.)

Dayal submits a declaration stating in part: “I did not sign, see, receive, or assent to any arbitration agreement with Citibank, N.A., and deny all allegations to the contrary. Citibank has never produced a signed agreement, nor any authenticated proof that I received, accepted; or agreed to the terms it now seeks to enforce.” (Dayal Decl., ¶ 2.) Dayal also argues that the Mitchell declaration lacks foundation, does not properly establish the business records exception to the hearsay rule, does not declare or affirm personal knowledge of mailing procedures, and fails to show Dayal received any agreement or that the proffered exemplars are the operative agreements.

Based on the evidence submitted by the parties, the Court cannot determine that Dayal consented to the arbitration provision in the Card Agreements. Mitchell “determined” that the 2810 Account and 7603 Account were “subject to an arbitration provision,” but one party’s subjective determination does not establish mutual consent. That the arbitration provision was “available” to Dayal at the time of application, without more, does not demonstrate mutual consent. Citibank did not demonstrate that Dayal ever received a copy of the arbitration agreement or indicated her consent to it. Dayal submitted testimony that she never received a copy of the arbitration agreement and did not consent to it.

 “ ‘Absent evidence of mutual assent, Defendant cannot show that the cardmember agreements are enforceable arbitration agreements.… “[D]efendant does not explain how Plaintiff could have consented to any agreement that he was not provided.” … “While both the Federal Arbitration Act ... and California law favor arbitration, a party is not required to arbitrate his or her claims absent consent. [Citations].” (Fleming, supra, 88 Cal.App.5th at pp. 21-22.) Citibank has the burden of proof on this issue but failed to demonstrate objective, mutual consent to arbitrate this controversy.

For all these reasons, the Court will deny Citibank’s motion to compel arbitration.