In re Checking Account Overdraft Litig.
| Decision Date | 24 October 2013 |
| Docket Number | N.D. Fla. Case No. 1:10-00090-SPM-AK,S.D. Fla. Case No. 1:10-cv-23872-JLK,CASE NO. 1:09-MD-02036-JLK |
| Parties | IN RE: CHECKING ACCOUNT OVERDRAFT LITIGATION MDL No. 2036 THIS DOCUMENT RELATES TO: FOURTH TRANCHE ACTION Swift v. BancorpSouth, Inc. |
| Court | U.S. District Court — Southern District of Florida |
THIS CAUSE comes before the Court upon Plaintiffs' Motion for Summary Judgment as to Certain Affirmative Defenses (DE # 2997), and Defendant BancorpSouth Bank's ("BancorpSouth" or "Bank") Motion for Summary Judgment (DE # 2999).1 The Court held oral argument on September 18, 2013. Having reviewed the motions, oppositions and replies, and considered the arguments of counsel, the Court now enters this Order.
Plaintiffs seek summary judgment as to a number of the affirmative defenses asserted in BancorpSouth's Amended Answer and Defenses to Plaintiff's Second Amended Complaint. (DE # 1693). BancorpSouth seeks summary judgment as to all claims asserted in Plaintiffs' Second Amended Complaint. (DE # 994). For the reasons discussed below, the Court concludes that numerous disputed issues of fact exist concerning Plaintiffs' claims, precluding summary judgment on BancorpSouth's motion, as well as the affirmative defenses of ratification and waiver that BancorpSouth raises in its motion. In contrast, Plaintiffs have demonstrated that theyare entitled to summary judgment as to certain of BancorpSouth's affirmative defenses, including the ratification defense BancorpSouth pursues in its own motion.2 Therefore, BancorpSouth's motion is denied in its entirety, and Plaintiffs' motion is granted in part, and denied in part, as described below.
Plaintiff Shane Swift, individually and on behalf of all others similarly situated ("Plaintiffs"), commenced this action on May 18, 2010. On October 18, 2010, over BancorpSouth's opposition, the Judicial Panel on Multidistrict Litigation transferred this action to this Court to be made part of MDL 2036, finding that it shared ' (DE # 847). On December 6, 2010, Plaintiffs filed their Second Amended Complaint. (DE # 994). BancorpSouth, like most other bank defendants in MDL 2036, filed a motion to dismiss. (DE # 1068). Following full briefing and oral argument, the Court denied BancorpSouth's motion to dismiss. (DE # 1305). Thereafter, BancorpSouth filed an Amended Answer and Defenses to Plaintiffs Second Amended Complaint. (DE # 1693).
On December 20, 2011, Plaintiffs moved for class certification. (DE # 2271). After thorough briefing of the class certification issues, the Court granted Plaintiffs' motion and certified that following Class:3
All BancorpSouth customers in the United States who had one or more consumer accounts and who, from applicable statutes of limitation through August 13, 2010 (the "Class Period"), incurred an overdraft fee as a result of BancorpSouth's practice of sequencing debit card transactions from highest to lowest.
(DE # 2673 at 22). BancorpSouth's Fed.R.Civ.P. 23(f) original petition for interlocutory review was denied by the United States Court of Appeals on March 4, 2013. After this Court denied BancorpSouth's motion to decertify (DE # 2540), the Eleventh Circuit denied the Bank's second Rule 23(f) petition on September 13, 2013.
The parties conducted extensive discovery in this case, including seventeen fact and expert depositions and the production of thousands of pages of internal bank documents and data. Following the close of discovery, the parties filed the instant motions for summary judgment. (DE # 2997, 2999). The Court deferred ruling on the summary judgment motions until class notice was disseminated to the certified class and the time for opting-out had passed. Class notice was disseminated pursuant to the Order Approving Class Notice Plan. (DE # 3342, 3589). A total of 238 individuals timely excluded themselves from the certified class. (DE # 3589). Therefore, the Court now resolves the parties' summary judgment motions.
At the heart of this case, Plaintiffs allege that BancorpSouth re-sequenced debit-card and ATM transactions from highest to lowest dollar amount when it posted those transactions to consumer accounts, thereby increasing the number of overdraft transactions and, consequently, the number of overdraft fees incurred by members of the class. Since 2003, BanorpSouth has posted all debits to checking accounts highest to lowest, using computer software to re-sequence its customers' debit card and ATM transactions. According to Plaintiffs, the high to low posting of these transactions caused Plaintiffs' accounts to be depleted more rapidly than if the transactions had been posted in the order in which they were actually initiated and authorized, resulting in more overdrafts and, consequently, more overdraft fees. Plaintiffs also allege that many overdraft fees were levied when, but for BancorpSouth's re-sequencing, Plaintiffs hadsufficient funds in their accounts when they conducted the transactions. BancorpSouth's overdraft policy did not cap the number overdraft fees that could be charged to a consumer, and the overdraft fee would be assessed even if the account balance was negative by a single penny.
Plaintiffs assert claims for breach of the implied covenant of good faith and fair dealing, unjust enrichment, unconscionability, and under the Arkansas' Deceptive Trades Practice Act.4 Plaintiffs seek a declaration that BancorpSouth's overdraft policies and practices were wrongful, unfair, and unconscionable; restitution of all overdraft fees received by BancorpSouth, as a result of its re-sequencing scheme; disgorgement of the ill-gotten gains derived from BancorpSouth's misconduct; actual damages; prejudgment interest; costs; and attorney's fees pursuant to applicable law. (DE # 994 at 31-32). BancorpSouth denies liability and asserts fifteen affirmative defenses. Plaintiffs' summary judgment motion addresses certain of the affirmative defenses.
Summary judgment is appropriate where the pleadings and supporting materials establish that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). "One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses." Celotex, 477 U.S. at 323-24.
The moving party bears the burden of pointing to the part of the record that shows the absence of a genuine issue of material fact. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970); Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir.1997). Once the moving party establishes the absence of a genuine issue of material fact, the burden shifts to the nonmoving party to go beyond the pleadings and designate "specific facts showing that there is a genuine issue for trial." Celotex, 477 U.S. at 324; see also Chanel, Inc. v. Italian Activewear of Fla., Inc.,931 F.2d 1472, 1477 (11th Cir.1991) ().
"Summary judgment may be inappropriate even where the parties agree on the basic facts, but disagree about the factual inferences that should be drawn from these facts." Warrior Tombigbee Transp. Co., Inc. v. M/V Nan Fung, 695 F.2d 1294, 1296 (11th Cir.1983). On a motion for summary judgment, the court must view the evidence and resolve all inferences in the light most favorable to the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). "If reasonable minds could differ on the inferences arising from undisputed facts, then a court should deny summary judgment." Miranda v. B & B Cash Grocery Store, Inc., 975 F.2d 1518, 1534 (11th Cir. 1992) (citing Mercantile Bank & Trust v. Fidelity and Deposit Co., 750 F.2d 838, 841 (11th Cir. 1985)).
Plaintiffs seek summary judgment as to BancorpSouth's affirmative defenses of statute of limitations, laches, accord and satisfaction, ratification, acceptance, release, voluntary payment doctrine, and course of dealing. As to the statute of limitations defense, the parties have stipulated that, consistent with the Class notice, Plaintiffs are only pursuing damages that fall within the applicable statute of limitations for each of the states covered in this case. (DE # 3667). The Court addresses the remaining affirmative defenses in turn.
The Court grants Plaintiffs' Motion for Summary Judgment as to Defendant's laches affirmative defense. A laches defense is predicated on the contention that a plaintiff has unreasonably delayed the filing of a claim in a manner making it inequitable or unjust to allow the plaintiff to seek the relief. See Royal Oaks Vista, L.L.C. v. Maddox, 271 S.W.3d 479, 483 (Ark. 2008). Accordingly, "[t]he laches defense requires a detrimental change in the position ofthe one asserting the doctrine, as well as an unreasonable delay by the one asserting his or her rights against whom laches is invoked." Id. Plaintiffs argue, and the Court agrees, that laches is inapplicable to Plaintiffs' claims for breach of contract and breach of the convent of good faith and fair dealing and violations of the Arkansas Deceptive Trades Practice Act ("ADTPA"), because laches does not apply to actions at law. See Warford v. Union Bank of Benton, No. CA 09-1301, 2010 WL...
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