Chavez v. Bank of America Corp.
| Decision Date | 04 May 2012 |
| Docket Number | No. C-10-0653 JCS,C-10-0653 JCS |
| Parties | STEVEN M. CHAVEZ, Plaintiff, v. BANK OF AMERICA CORPORATION ET. AL., Defendants. |
| Court | U.S. District Court — Northern District of California |
Plaintiff Steven Chavez ("Plaintiff") filed a class action complaint against Bank of America Corporation, FIA Card Services, National Association, Intersections Inc., Bank of America, N.A (hereafter "Defendants") on February 16, 2010, alleging that Defendants had enrolled him in an identity theft protection and credit monitoring service called "Privacy Assist" without his knowledge or consent. Subsequently, Plaintiffs filed a Third Amended Complaint ("TAC") adding additional plaintiffs, (Patricia Vanhorn, Richard Albaugh, Patrick Mulcahy, hereafter "Plaintiffs") and removing Steven Chavez as Plaintiff. The TAC asserts claims under the California Business and Professions Code §17200, et. seq., Consumer Legal Remedies Act ("CLRA"), § 1750 et seq., the Electronic Funds Transfer Act ("EFTA"), 15 U.S.C. § 1693, et. seq., as well as common law unjust enrichment and conversion claims. The parties have consented to the jurisdiction of the undersigned magistrate judge pursuant to 28 U.S.C. § 636(c).
Defendants Bank of America, N.A. and FIA Card Services filed a Motion to Dismiss Third Amended Complaint. See Docket No. 122.1 In the Motion, Defendants assert that all of Plaintiffs' claims in the Third Amended Complaint are defective for failure to state a claim upon which relief can be granted and based upon the "law of the case" doctrine. Plaintiffs oppose the motion.
For the reasons stated below, the Defendants' Motion to Dismiss is GRANTED IN PART AND DENIED IN PART. The Defendants' Request for Judicial Notice is DENIED.2
Plaintiff has brought this action against Defendants Bank of America Corporation (BAC), FIA Card Services, N.A. ("FIA"), Bank of America, N.A. ("BANA") and Intersections, Inc., for unfair competition, violation of the Consumers Legal Remedies Act, violation of the Electronic Funds Transfer Act, conversion and unjust enrichment. All three Plaintiffs assert claims for violation of the UCL, unjust enrichment and conversion. Plaintiff Vanhorn alone asserts a violation of the EFTA, and Albaugh alone claims a violation of the CLRA. Plaintiffs represent "all persons who had funds electronically transferred from their credit and debit accounts for 'Privacy Assist' without their explicit knowing authorization or permission in the four years preceding the filing of this Complaint and continuing until final disposition of this action." TAC ¶ 24.
The allegations specifically pertaining to each Plaintiff are as follows:
Patricia Vanhorn. Patricia Vanhorn alleges that she had a checking account with BANA. Id. ¶ 33. She alleges that she was charged for several months of the Privacy Assist service before she noticed the charges after incurring overdraft charges as a result of the unauthorized charges. Id. She called BANA to ask about the charges. Id. She alleges that she was not informed that it was anadd-on service, nor was she informed as to who was the provider of the service. Id. ¶ 34. Some time later, Vanhorn closed her BANA account. Id., ¶ 35. She called BANA again in order to ask a BANA associate about the Privacy Assist Charges, and was told that BANA had nothing to do with Privacy Assist so they could not issue Privacy Assist refund requests; she would have to contact the Privacy Assist service provider directly. Id. ¶ 35. She was given an 800 number for the Privacy Assist service provider. Id. ¶ 35. When she called the 800 number, a customer service representative identified himself as being with Privacy Assist, which "worked with" BANA Id. ¶ 36. Vanhorn alleges that she asked for a refund of the Privacy Assist charges, and was told that she could either have a one month refund or wait for a copy of her recorded voice authorization for the service. She opted to wait for the recording because she was certain that she had not enrolled in Privacy Assist. Id. ¶ 37. She alleges that as of the date of the TAC, she had not yet received a copy of the recording. Id. ¶ 38.3
Richard Albaugh. Plaintiff Albaugh alleges that he has a credit card "issued and administered by FIA." Id. ¶ 39. He alleges that he was charged for several months of the Privacy Assist service before he noticed the charges on his account statement in August 2010. Id. ¶¶ 39-40. Albaugh called a Privacy Assist phone number that he found online and spoke to a supervisor, who told him that he had signed up for Privacy Assist several months earlier via an inbound call. Id. ¶ 42. Albaugh alleges that he does not remember calling Privacy Assist, Intersections, BANA or FIA for any reason. Id. ¶ 43. He claims that he "does not have any recollection of any communications with Privacy Assist prior to noticing the charges on his credit card statement, and did not affirmatively or knowingly authorize his enrollment in the Privacy Assist service." Id. ¶ 46. Albaugh alleges that he asked for a refund of the Privacy Assist charges, and was told that Privacy Assist would refund half the charges. He refused this offer, and canceled Privacy Assist the sameday. Id. at 45. Albaugh does not allege any interaction with BANA or FIA related to Privacy Assist.
Patrick Mulcahy. Plaintiff Mulcahy has a small business credit card "issued and administered by FIA." Id. ¶ 49. He was charged for 16 months of Privacy Assist services. Id. ¶¶ 49-50. Mulcahy recalls that he received a telephone solicitation "from BANA around the time the charges for Privacy Assist commenced," but he alleges that the "sales pitch was incredibly misleading and deceptive." Id. ¶ 52. He does not allege what was said to him during the call nor are there specific allegations as to how it was misleading or deceptive. He alleges that he subsequently received mail from Privacy Assist, but alleges that it was not "clearly labeled as such" and that he had "no way of knowing it was related to a monthly-fee service." Id. ¶ 53. When he finally noticed the Privacy Assist charges on his statement, Mulcahy called Privacy Assist and was told that he could receive a refund of two months of charges. Id., ¶ 51. Mulcahy alleges that he was told that "if he had issues with BANA, he would have to contact BANA." Id. He does not allege that he called BANA. He also alleges no interaction with or conduct by FIA in connection with Privacy Assist.
On February 16, 2010, original plaintiff Steven Chavez filed this putative class action lawsuit against defendants Bank of America Corporation, Intersections and FIA regarding allegedly unfair charges for the Privacy Assist "identity theft protection and credit monitoring service." Compl. ¶ 2, Docket No. 1. Plaintiff Chavez asserted violations of California's Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq. ("UCL"); the CLRA, Cal. Civ. Code §§ 1750 et. seq.; and the Federal Electronic Funds Transfer Act, 15 U.S.C. § 1693 ("EFTA"); as well as unjust enrichment and conversion. He added new defendant BANA in a First Amended Complaint. See FAC, Docket No. 41.
On January 10, 2011, the Court granted Defendants' motion to dismiss the First Amended Complaint as to Bank of America Corporation and FIA, with leave to amend. Order, Docket No. 62. On February 2, 2011, Chavez filed a Second Amended Complaint, which dropped Bank ofAmerica Corporation as a defendant. SAC, Docket No. 66. The counts remained the same as in the previous pleadings. Defendants moved to dismiss, but later stipulated to take the motion off calendar while Chavez was substituted by other named plaintiffs. See Docket No. 83.
On April 18, 2011, Plaintiffs filed a Third Amended Complaint, which introduced new plaintiffs Vanhorn, Mulcahy and Albaugh. These plaintiffs allege the following: "Privacy Assist is a service that has three levels of identity protection available to BANA customers," including but not limited to free unlimited access to credit reports, internet monitoring of personal information from the credit bureaus, identity theft insurance, and credit monitoring and alerts. TAC ¶ 6. Intersections is the company that provides the Privacy Assist service to BANA customers. Id., ¶ 3. Plaintiffs allege that "FIA is part of Bank of America Corporation's 'Bank of America Card Services' organization, which provides credit cards ... including issuing and administering credit cards on behalf of BANA." Id., ¶ 2. Plaintiffs further allege that BANA's website "indicates that FIA is directly responsible for the Privacy Assist service." Id., ¶ 4.
On October 7, 2011, the Court granted Intersections' motion to stay the litigation pending arbitration as against plaintiffs Vanhorn and Mulcahy, finding that plaintiffs Vanhorn and Mulcahy consented to enroll in Privacy Assist and to the written terms of the Privacy Assist agreement:
There is no disputed issue of material fact with respect to whether Plaintiffs VanHorn and Mulcahy consented to a contract with Defendants by phone. [...] As a result of their consent to the contract, and the receipt of the terms, VanHorn and Mulcahy are bound by the arbitration provision.
"Order Granting in Part Defendant Intersection Inc.'s Motion to Stay Litigation Pending Arbitration" at 11:19-20, 12:12-13.
In connection with its ruling on the motion, the Defendants submitted a voice recording of Vanhorn's enrollment to the Court. The Court reviewed the voice recording and concluded that, "[d]uring this telephone conversation, Vanhorn agree[d] to enroll in Privacy Assist." Id. at 10:5-6. The Court further concluded that Vanhorn received the written Terms of Use for Privacy Assist, which "explicitly ... identifies Intersections as the provider of the service being offered to BANA'scustomers." Id. at 8:2-4, 12:12-13. The Court also...
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