Hassler v. Sovereign Bank
| Decision Date | 12 June 2009 |
| Docket Number | Civil No. 08-5800 (JBS/KMW). |
| Parties | Cortney D. HASSLER on behalf of himself and all others similarly situated, Plaintiffs, v. SOVEREIGN BANK, Defendant. |
| Court | U.S. District Court — District of New Jersey |
Benjamin F. Johns, Esq., Joseph G. Sauder, Esq., Chimicles & Tikellis, LLP, Haverford, PA, for Plaintiff.
Darryl J. May, William J. Desantis, Esq., Rosemary Bates Walsh, Esq., Ballard Spahr Andrews & Ingersoll, LLP, Voorhees, NJ, for Defendant.
I. INTRODUCTION
This matter is before the Court upon Defendant's motion to dismiss the Complaint [Docket Item 6]. In this putative class action, Plaintiff Cortney D. Hassler seeks to challenge a practice of Defendant Sovereign Bank ("Sovereign") relating to the bank's processing of its customers' electronic debit transactions. According to Plaintiff, Sovereign does not process its customers' debit transactions in the order in which the transactions occur, but, rather, it reorders transactions from the highest dollar amount to the lowest dollar amount before processing the transactions, resulting in a greater likelihood of depleting account funds and a corresponding increase in the imposition of insufficient fund, or "overdraft," fees. Although the terms of the "Personal Deposit Account Agreement" governing deposit accounts at Sovereign make clear that the bank reserved the right to process debit transactions in precisely the manner Plaintiff complains of, Plaintiff alleges that Sovereign violated New Jersey's Consumer Fraud Act, breached the covenant of good faith and fair dealing, and was unjustly enriched.
Defendant has moved to dismiss, arguing, inter alia, that Plaintiff has failed to state a claim for which relief may be granted. For the reasons explained below, the Court agrees, and will grant Defendant's motion to dismiss.
II. BACKGROUND
The facts of this matter, taken from the Complaint and from the indisputably authentic copy of the agreement governing the parties' relationship attached to Plaintiff's opposition brief,1 are as follows. Plaintiff, a New Jersey resident, has had a free personal checking account with Sovereign since 2001. (Compl. ¶¶ 5, 18.) According to the Complaint, between August 28, 2008 and September 2, 2008, Plaintiff incurred two overdraft fees that he would not have incurred had Sovereign processed his debit transactions chronologically in the order in which Plaintiff made the transactions. (Id. at ¶¶ 28-31.) Specifically, on the morning of August 28, 2008, Plaintiff had an account balance of $112.35, and initiated a payment of $39.58. (Id. at ¶ 28.) Later that day, Plaintiff made a debit card purchase of $140.00. (Id.) Had Sovereign processed Plaintiff's transactions in the order in which they occurred, Plaintiff would have had sufficient funds to complete his first transaction but not his second transaction, and would thus have incurred only one overdraft fee. Instead, Sovereign "intentionally manipulated these transactions by rearranging them from largest to smallest so as to levy two insufficient fund fees against Plaintiff's checking account." (Id. at ¶ 29.) That is, Sovereign processed Plaintiff's transactions for August 28, 2008 in descending monetary order rather than in chronological order, causing Plaintiff to incur overdraft fees for both his morning and afternoon transactions.
Similarly, on September 2, 2008, Plaintiff had an account balance of $126.52, and made two transactions: a purchase of $80.00 in the early evening, and a cash withdrawal of $404.50 later that evening. (Id. at ¶ 30.) Rather than processing these transactions in chronological order, which would have resulted in the imposition of a single overdraft fee for only the second transaction, Sovereign processed the transactions in descending monetary order, causing Plaintiff to incur two overdraft fees, one for each transaction. (Id. at ¶ 31.)
Plaintiff alleges that he "depend[ed] on Sovereign to ensure that charges [were] posted to [his] account[] in the chronological order in which Sovereign receive[d] them." (Id. at ¶ 19.) Notwithstanding such alleged reliance, Plaintiff appears to acknowledge that Sovereign's "Personal Deposit Account Agreement" (the "Agreement"), which "contains the terms and conditions that apply to personal deposit Accounts at Sovereign,"2 (Pl.'s Opp'n Br. Ex. 1 at 1), discloses the bank's policy of not processing debit transactions in chronological order. (Compl. ¶ 20.) Specifically, under the heading "Withdrawals" and in bold print, the Agreement provides:
We reserve the right to pay the withdrawals you make from your Account regardless of the method of withdrawal in any order we determine. This includes withdrawals made at an ATM or by computer, POS purchases, checks, pre-authorized payments and by any other means we make available to you. The order in which you make withdrawals from your Account may not be the same as the order in which we post those transactions to your Account each business day. Generally, we post your payment transactions each business day in descending order, starting with the largest payment order that is presented for payment. This means, for example, that your $900 mortgage payment will be paid before the $100 purchase you made at the supermarket. The order in which we post your transactions may affect whether you incur fees for insufficient or unavailable funds.
(Pl.'s Opp'n Br. Ex. 1 at 4-5.)
In addition, under the heading "Overdrafts and Unavailable Funds," the Agreement states:
If you write a check or other order or otherwise request a withdrawal from your Account, such as by using an ATM or making a purchase using a Visa CheckCard or ATM Card, for more money than you have available for withdrawal from your Account, we may either permit you to withdraw the funds by complying with the payment order or we may refuse to honor the payment order. You may incur a fee for each payment order that is presented against your account when you do not have sufficient available funds.
(Id. at 10.) Finally, under the heading "Sovereign Visa CheckCard or ATM Card," the Agreement provides:
You may . . . use your Visa CheckCard to pay for purchases at any merchant displaying the Visa or Visa debit symbol. When you make a purchase using your Card, the amount of your purchase is automatically deducted from your checking Account.
(Id. at 19.)
Plaintiff filed this lawsuit against Sovereign pursuant to 28 U.S.C. § 1332(d)(2)(A) on behalf of himself and others similarly situated [Docket Item 1]. Plaintiff alleges that Sovereign violated New Jersey's Consumer Fraud Act, N.J.S.A. 56:8-1, et seq. (Count I), breached its covenant of good faith and fair dealing with Plaintiff (Count II), and was unjustly enriched (Count III). Defendant thereafter filed the motion to dismiss presently under consideration [Docket Item 6], to the merits of which the Court now turns.
III. DISCUSSION
On a Rule 12(b)(6) motion to dismiss for failure to state a claim for which relief may be granted, the Court must "accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 231 (3d Cir.2008) (quoting Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n. 7 (3d 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." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965, 167 L.Ed.2d 929 (2007) (quoting Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986)). "In deciding motions to dismiss pursuant to Rule 12(b)(6), courts generally consider only the allegations in the complaint, exhibits attached to the complaint, matters of public record, and documents that form the basis of a claim." Lum v. Bank of America, 361 F.3d 217, 222 n. 3 (3d Cir. 2004) (citation omitted). Courts may also, as noted above, look to "indisputably authentic documents underlying the plaintiff's claims," Sentinel Trust Co., 316 F.3d at 216.
In its motion to dismiss, Sovereign argues that Plaintiff has failed to state a claim for which relief may be granted, arguing in essence that Plaintiff's claims are undermined by his failure to allege that Sovereign engaged in any conduct that was not expressly authorized by the plain language of the parties' Agreement.3 For the reasons that follow, the Court will grant Defendant's motion to dismiss.
The Court first addresses Defendant's argument that Plaintiff has failed to state a claim under New Jersey's Consumer Fraud Act (the "CFA" or "Act"). The CFA provides in relevant part:
The act, use or employment by any person of any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any merchandise or real estate, or with the subsequent performance of such person as aforesaid, whether or not any person has in fact been misled, deceived or damaged thereby, is declared to be an unlawful practice[.]
N.J.S.A. 56:8-2. In order to state a CFA claim, a plaintiff must allege "1) unlawful conduct by defendant; 2) an ascertainable loss by plaintiff; and 3) a causal relationship between the unlawful conduct and the ascertainable loss." Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557, 964 A.2d 741 (2009) (citation...
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