Gale v. Hyde Park Bank

• Decision Date: 17 September 2004
• Docket Number: No. 04-1378.,04-1378.
• Citation: 384 F.3d 451
• Parties: Andrew GALE, Plaintiff-Appellant, v. HYDE PARK BANK, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 451

384 F.3d 451

Andrew GALE, Plaintiff-Appellant, v. HYDE PARK BANK, Defendant-Appellee.

No. 04-1378.

United States Court of Appeals, Seventh Circuit.

Submitted August 31, 2004.

Decided September 17, 2004.

Appeal from the United States District Court for the Northern District of Illinois, John W. Darrah, J.

Andrew Gale, Chicago, IL, pro se.

John W. Damisch, Damisch & Damisch, Chicago, IL, for Defendant-Appellee.

Before BAUER, EASTERBROOK, and ROVNER, Circuit Judges.

EASTERBROOK, Circuit Judge.

In April 2002 Andrew Gale overdrew his checking account at Hyde Park Bank. He blamed the Bank, asserting that its delay in posting to his account a transaction in December 2001 with his debit card led him to think that the account contained a greater balance. He sued under the Electronic Funds Transfer Act, contending that the delay in posting the debit-card transaction violated 15 U.S.C. § 1693h(a)(1), which requires banks to make electronic fund transfers in a "timely manner". He also contended that the Bank had failed to provide him with information required by 15 U.S.C. § 1693f. The district court dismissed the complaint under Fed.R.Civ.P. 12(b)(6) for failure to state a claim on which relief may be granted. The district court wrote that the Bank had posted the transaction within 48 hours of its arrival through the interbank network, and that the merchant (or perhaps the network) rather than the Bank had been responsible for the delay.

The court's assumption that 48 hours was "timely" may be tenable, though both the statute and the implementing regulations leave that word undefined. See Donald I. Baker & Roland E. Brandel, The Law of Electronic Fund Transfer Systems: Legal and Strategic Planning ¶ 17.03[3][a] (2004 ed.). But in supposing that the Bank acted promptly after notification, the court relied on a view of the facts adverse to the plaintiff, which Rule 12(b)(6) does not permit. See Hishon v. King & Spalding, 467 U.S. 69, 104 S.Ct. 2229, 81 L.Ed.2d 59 (1984). It is not as if Gale had himself pleaded that the debit did not find its way to the Bank for four months after the retail transaction. This is the Bank's view of matters, not Gale's. That the Bank said the same thing to Gale in email messages that Gale attached to the complaint does not amount to a concession; the plaintiff may tell the court what his adversary has said without throwing in the towel. See Carroll v. Yates, 362 F.3d 984, 986 (7th Cir.2004). Anyway, attributing significance to the emails should have led the judge to convert the Bank's motion to one for summary judgment, as Rule 12(b) itself provides. What actually happened should be resolved by summary judgment or trial, not by decision on the pleadings.

Still, the district court's disposition was at least partly correct. To recover under § 1693h the plaintiff must show that a violation of the law led to injury, and Gale has pleaded himself out of court on that subject by demonstrating that his errors rather than the Bank's caused all loss. (The only loss appears to be the fee for overdrawing the account.) Gale's complaint shows that his failure to keep the account adequately funded is the root of the problem. Had the debit been posted in December 2001, and everything else remained the same, Gale still would have overdrawn the account in April 2002.

Using a debit card is like writing a check: Gale's contract with the Bank required him to record all transactions and ensure that the balance supports each new one, even if transactions are not yet posted (just as some checks may not be cashed immediately). The Bank sent Gale statements showing that his purchase in December 2001 had yet to be deducted from his account. Gale needed to keep on hand funds to cover all outstanding transactions; he failed to do this and cannot shift responsibility to the Bank.

The timeliness requirement is principally for the benefit of the person entitled to receipt of the funds. In other words, transferees are in the zone of interests protected by this aspect of the statute. Cf. National Credit Union Administration v. First National Bank & Trust Co., 522 U.S. 479, 118 S.Ct. 927, 140 L.Ed.2d 1 (1998). Transferors usually are not, as delay gives them the benefit of the float. One can imagine an injury that transferors could suffer: if the merchant noticed the delay in payment and took steps that deprived the transferor of the benefit of the bargain, or adversely affected his credit rating, then there could be a compensable injury. Gale does not allege such events, however; his complaint and appellate brief show that his sole concern is ending up with an overdrawn account in April 2002. Failure to keep the account in funds cannot be a source of damages under § 1693h(a).

This leaves the claim based on §...