Camp v. Ala. Telco Credit Union
| Decision Date | 13 May 2013 |
| Docket Number | 2:12-cv-2237-LSC |
| Parties | RACHEL CAMP and BEN BURGESS, Plaintiffs, v. ALABAMA TELCO CREDIT UNION, Defendant. |
| Court | U.S. District Court — Northern District of Alabama |
This case is based on Alabama state law. Rachel Camp and Ben Burgess (collectively, "Plaintiffs") allege that Alabama Telco Credit Union ("Telco") has illegally charged them overdraft fees on their Joint Checking Accounts for the last several years. The Court has for its consideration Telco's Motion to Dismiss Plaintiffs' Amended Complaint. (Doc. 12.) The motion has been fully briefed and is ripe for decision.
Plaintiffs are joint checking account holders with Telco, a state-chartered, federally insured, Alabama credit union with all of its branches in Alabama. As a creditunion, Telco is a non-profit banking organization owned and operated by its members. Plaintiffs are Telco members pursuant to a Membership and Account Agreement ("Account Agreement").
Since August 15, 2010, Telco has charged Plaintiffs overdraft fees for ATM and daily debit card purchases as a part of its overdraft protection plan (hereinafter "Courtesy Pay"), despite Plaintiffs never affirmatively opting in to Courtesy Pay, and Plaintiff Burgess even attempting to opt out of Courtesy Pay. In addition, one of Telco's Courtesy Pay practices is to reorder transactions from the largest amount to smallest before they are processed. This practice causes members to incur more overdraft fees than they would if the transactions were posted in chronological order because the larger amounts deplete the account funds quicker.
Plaintiffs filed a Class Action Complaint on June 21, 2012 (Doc. 1), and a Second Amended Class Action Complaint (the "Amended Complaint") on August 13, 2012. (Doc. 11.) Plaintiffs assert four claims against Telco: (1) breach of contract, (2) conversion, (3) unconscionability, and (4) unjust enrichment and restitution.1
A defendant may move to dismiss a complaint pursuant to Federal Rule of Civil Procedure 12(b)(6) if the plaintiff has failed to state a claim upon which relief may be granted. "When considering a motion to dismiss, all facts set forth in the plaintiff's complaint 'are to be accepted as true and the court limits its consideration to the pleadings and exhibits attached thereto.'" Grossman v. Nationsbank, N.A., 225 F.3d 1228, 1231 (11th Cir. 2000) (quoting GSW, Inc. v. Long County, 999 F.2d 1508, 1510 (11th Cir. 1993)). Further, all "reasonable inferences" are drawn in favor of the plaintiff. St. George v. Pinellas County, 285 F.3d 1334, 1337 (11th Cir. 2002).
While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the "grounds" of his "entitle[ment] to relief" requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do. Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact).
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal citations omitted).2 The plaintiff must plead "enough facts to state a claim that is plausible on its face." Id. at 570. Unless a plaintiff has "nudged [his] claims across the line from conceivable to plausible, [the] complaint must be dismissed." Id.
"[U]nsupported conclusions of law or of mixed fact and law have long been recognized not to prevent a Rule 12(b)(6) dismissal." Dalrymple v. Reno, 334 F.3d 991, 996 (11th Cir. 2003) (quoting Marsh v. Butler County, Ala., 268 F.3d 1014, 1036 n.16 (11th Cir. 2001)). And, "where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not 'show[n]'—'that the pleader is entitled to relief." Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1950 (2009) (quoting Fed. R. Civ. P. 8(a)(2)). Therefore, the Supreme Court suggested that courts adopt a "two-pronged approach" when considering motions to dismiss: "1) eliminate any allegations in the complaint that are merely legal conclusions; and 2) where there are well-pleaded factual allegations, 'assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.'" American Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir. 2010) (quoting Iqbal, 129 S. Ct. at 1950).
Importantly, "courts may infer from the factual allegations in the complaint 'obvious alternative explanation[s],' which suggest lawful conduct rather than the unlawful conduct the plaintiff would ask the court to infer." Id. (quoting Iqbal, 129 S. Ct. at 1951-52). However, "[a] complaint may not be dismissed because the plaintiff's claims do not support the legal theory he relies upon since the court must determineif the allegations provide for relief on any possible theory." Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997).
As a threshold matter, Plaintiffs argue that the issues before the Court are not appropriate grounds for dismissal under Rule 12(b)(6). Telco has provided a copy of an Account Agreement (Doc. 13-1), and website pages describing Courtesy Pay, with its motion to dismiss. (Doc. 13-2.) Plaintiffs contend that it is unlikely that the Account Agreement provided by Telco covered the entire six-year liability period, and the Account Agreement references several other documents that may or may not be attached to the motion. In light of this, Plaintiffs argue that Telco's motion to dismiss is more akin to a motion for summary judgment and—prior to any discovery—is inappropriate at this early stage. (Doc. 21 at 6.)
In the Amended Complaint, Plaintiffs reference both an Account Agreement (Doc. 11, ¶ 59-60), and the website pages describing Courtesy Pay. (Id., ¶ 66.) "[W]here the plaintiff refers to certain documents in the complaint and those documents are central to the plaintiff's claim, then the Court may consider the documents part of the pleadings for purposes of Rule 12(b)(6) dismissal, and the defendant's attaching such documents to the motion to dismiss will not requireconversion of the motion into a motion for summary judgment." Brooks, 116 F.3d at 1369. Furthermore, even if the attached Account Agreement was not the actual Account Agreement during the entire six-year liability period, the Court's rationale for granting or denying Telco's motion to dismiss does not turn on its interpretation. Thus, the issues before the Court are appropriately considered in a motion to dismiss under Rule 12(b)(6).
In the first count of the Amended Complaint, Plaintiffs allege that Telco breached the Account Agreement by breaching the duty of good faith and fair dealing, what Plaintiffs contend is an element of every contract under Alabama law. (Doc. 11, ¶¶ 81-94.) In response, Telco argues that Alabama law does not recognize a claim for breach of the duty of good faith and fair dealing. (Doc. 13 at 11.)
"'The elements of a breach-of-contract claim under Alabama law are (1) a valid contract binding the parties; (2) the plaintiff's performance under the contract; (3) the defendant's nonperformance; and (4) resulting damages.'" Shaffer v. Regions Fin. Corp., 29 So. 3d 872, 880 (Ala. 2009) (quoting Reynolds Metals Co. v. Hill, 825 So. 2d 100, 105 (Ala. 2002)). Under Alabama law, every contract imposes an obligation of good faith in its performance and enforcement. Ala. Code § 7-1-304 (originally enactedas Ala. Code § 7-1-203). See also Tanner v. Church's Fried Chicken, Inc., 582 So. 2d 449, 451-52 (Ala. 1991). However, the violation of this obligation does not give rise to a cause of action as the statute was intended to be directive, not remedial. Tanner, 582 So. 2d at 452 (citing Chandler v. Hunter, 340 So. 2d 818, 821 (Ala. Civ. App. 1976)). See also Government Street Lumber Co., Inc. v. AmSouth Bank, N.A., 553 So. 2d 68, 72 (Ala. 1989) (). Thus, in order to prove a breach of contract on the part of the defendant, a plaintiff must prove that the defendant expressly breached a specific term of the contract. Tanner, 582 So. 2d at 452.
Plaintiffs offer Tanner in support of their assertion that a claim of breach of the duty of good faith and fair dealing is actionable when a defendant has breached specific terms of the contract. (Doc. 21 at 7.) However, in Tanner the Alabama Supreme Court determined that there was no cause of action for breach of the duty of good faith. 582 So. 2d at 452. Thus, Plaintiffs' claim for breach of the duty of good faith and fair dealing is due to be dismissed.
Plaintiffs next argue in their brief that Telco breached specific terms of the Account Agreement in three ways: (1) by charging overdraft fees even though Plaintiffs did not consent to the overdraft charges; (2) by charging overdraft fees whensufficient funds were available to cover the transaction; and (3) by ordering and posting transactions according to "amount," rather than "type" or "time." (Doc. 21 at 7-21.) Plaintiffs make this argument despite the fact that they only included a claim for breach of contract through a breach of the duty of good faith and fair dealing in their Amended Complaint. Regardless, the factual allegations in the Amended Complaint may support a claim for relief under these theories of breach of contract. Accordingly, the Court will not dismiss Plaintiffs' first count; however, Plaintiffs will be directed to further amend their complaint for the limited purpose of clarifying their breach of contract claim.
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