Natour v. Bank of Am.
| Docket Number | Civil Action 4:21-CV-00331 |
| Decision Date | 08 June 2022 |
| Parties | NICK NATOUR and ENCLARE, LLC, v. BANK OF AMERICA, N.A., et al. |
| Court | U.S. District Court — Eastern District of Texas |
Pending before the Court is Defendant Bank of America, N.A.'s Motion for Summary Judgment (Dkt. #136). Having considered the motion and relevant pleadings, the Court finds the motion should be GRANTED.
Plaintiff Nick Natour (“Natour”) owns a Dallas restaurant called Mignon. Mignon operates under the legal name Enclare LLC (“Enclare”). On September 25, 2019, Enclare entered a Merchant Processing Application and Agreement (the “Agreement”) with First Data Merchant Services LLC (“First Data”), which enabled Enclare to accept payment through credit cards from its restaurant customers.
In March of 2020, Ali Hamdan (“Hamdan”) placed a catering order with Mignon that cost $170, 528.35 (the “Order”). Hamdan used a Bank of America debit card, across two transactions, to pay for the Order (the “Transactions”). The Transactions were initially declined due to fraud concerns. Notably, the account associated with the Bank of America debit card was closed in April of 2018 (the “Bank of America Account”).
Natour allegedly spoke to Defendant Bank of America, N.A (“Bank of America”), obtained a valid authorization code for the Transactions, and proceeded with the sale. However eight days later, Plaintiffs' account statement from One Payment (the “One Payment Account”) reflected an adjustment (the “Adjustment”) of the same amount of the Transactions under the heading “Electronic Deposit Rejects.” As a result of the Adjustment Plaintiffs never received payment for the Order.
On February 9, 2022, Bank of America moved for summary judgment, asserting Plaintiffs have no evidence to sustain their claims for violation of the Electronic Funds Transfer Act, conversion, violation of the Texas Theft Liability Act, and civil conspiracy (Dkt. #126). Plaintiffs responded on February 28, 2022 (Dkt. #142). Bank of America replied on March 7, 202 (Dkt. #145).
The purpose of summary judgment is to isolate and dispose of factually unsupported claims or defenses. Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). Summary judgment is proper under Rule 56(a) of the Federal Rules of Civil Procedure “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a). A dispute about a material fact is genuine when “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby Inc., 477 U.S. 242, 248 (1986). Substantive law identifies which facts are material. Id. The trial court “must resolve all reasonable doubts in favor of the party opposing the motion for summary judgment.” Casey Enters., Inc. v. Am. Hardware Mut. Ins. Co., 655 F.2d 598, 602 (5th Cir. 1981).
The party seeking summary judgment bears the initial burden of informing the court of its motion and identifying “depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials” that demonstrate the absence of a genuine issue of material fact. FED. R. CIV. P. 56(c)(1)(A); Celotex, 477 U.S. at 323. If the movant bears the burden of proof on a claim or defense for which it is moving for summary judgment, it must come forward with evidence that establishes “beyond peradventure all of the essential elements of the claim or defense.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986). Where the nonmovant bears the burden of proof, the movant may discharge the burden by showing that there is an absence of evidence to support the nonmovant's case. Celotex, 477 U.S. at 325; Byers v. Dall. Morning News, Inc., 209 F.3d 419, 424 (5th Cir. 2000).
Once the movant has carried its burden, the nonmovant must “respond to the motion for summary judgment by setting forth particular facts indicating there is a genuine issue for trial.” Byers, 209 F.3d at 424 (citing Anderson, 477 U.S. at 248-49). A nonmovant must present affirmative evidence to defeat a properly supported motion for summary judgment. Anderson, 477 U.S. at 257. Mere denials of material facts, unsworn allegations, or arguments and assertions in briefs or legal memoranda will not suffice to carry this burden. Rather, the Court requires “significant probative evidence” from the nonmovant to dismiss a request for summary judgment. In re Mun. Bond Reporting Antitrust Litig., 672 F.2d 436, 440 (5th Cir. 1982) (quoting Ferguson v. Nat'l Broad. Co., 584 F.2d 111, 114 (5th Cir. 1978)). The Court must consider all of the evidence but “refrain from making any credibility determinations or weighing the evidence.” Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007).
Bank of America contends all of Plaintiffs' claims against it should be dismissed for the total lack of any supporting evidence. Plaintiffs have brought claims for violation of the Electronic Fund Transfer Act, 15 U.S.C. § 1693 (“EFTA”), conversion, violation of the Texas Theft Liability Act, and civil conspiracy against Bank of America. The Court will begin its analysis with the EFTA claim.
Bank of America argues Plaintiffs' claim for violation of the EFTA fails as a matter of law because the EFTA is a consumer protection act and Plaintiffs are not “consumers” within the definition of the statute. Further, Bank of America contends no account existed at the time of the Transactions.[1] Plaintiffs assert Natour is a consumer and that an account did exist at the time of the Transactions.
The EFTA defines “consumer” as “a natural person.” 15 U.S.C. § 1693a(6). “Corporations or other business entities are not ‘consumers' for the purposes of EFTA.” Ironforge.com v. Paychex, Inc., 747 F.Supp.2d 384, 402 (W.D.N.Y. 2010) (citing Kashanchi v. Texas Com. Med. Bank, N.A., 703 F.2d 936, 939-42 (5th Cir. 1983). Thus, there is no doubt Enclare is not a consumer. Id. Plaintiffs appear to concede this point by only addressing whether Natour qualifies as a consumer.
Bank of America argues Natour is not a consumer because of the nature of his involvement in the Transactions. Specifically, Natour was acting as “a merchant or business who sold goods to the consumer” rather than for personal, family, or household purposes (Dkt. #136 at p. 11). This argument is only relevant to whether the Bank of America Account qualifies as an “account” under the EFTA. Because Natour is a natural person, he meets the EFTA's definition of “consumer.”
There is confusion as to the relevant account for the Court's analysis under the EFTA. On the one hand, Bank of America focuses its arguments on the Bank of America Account. On the other hand, Plaintiffs argue the One Payment Account is a consumer account. Regardless, Plaintiffs have submitted no evidence that either account meets the EFTA's definition.
The EFTA defines an “account” as a:
demand deposit, savings deposit, or other asset account (other than an occasional or incidental credit balance in an open end credit plan as defined in section 1602(i) of this title), as described in regulations of the Bureau, established primarily for personal, family, or household purposes, but such term does not include an account held by a financial institution pursuant to a bona fide trust agreement.
15 U.S.C. § 1693a(2) (emphasis added). The EFTA defines “account” by means of the purpose for which the account is “established.” 15 U.S.C. § 1693a(2). The EFTA “asks only for what the account was established.” Frey v. First Nat'l Bank Sw., 602 Fed. App'x. 164, 169 (5th Cir. 2015). With this in mind, the Court will now turn to whether the One Payment Account meets the EFTA's definition.
In reviewing the record, Plaintiffs have provided no evidence to suggest that the One Payment Account was established for personal, family, or household purposes. Plaintiffs have not provided the Court with the application to open the One Payment Account, which would indicate whether Natour opened the One Payment Account in his individual capacity, or as the owner of Enclare, a business entity. Cf. Ironforge.com, 747 F.Supp.2d at 402 (). Further, Plaintiffs have not alleged the One Payment Account was established primarily for personal, family, or household purposes. Contra Mabary v. Hometown Bank, N.A., 276 F.R.D. 196, 209 (S.D. Tex. June 27, 2011) (). Thus, Plaintiffs provide neither evidence nor allegations to show for what purpose Plaintiffs opened the One Payment Account.
In fact, the evidence Plaintiffs submitted undermines any contention that the One Payment Account was used for anything other than business purposes. The One Payment Account's statement from March of 2020 lists a “Merchant Number” and includes summaries of gross sales categorized by card type (Dkt. #103, Exhibit 2). Further, the statement reflects the Adjustment for the Order, which was placed with Mignon, a business. Such evidence leads the Court to infer the One Payment Account was likely established for commercial purposes. Cf. Maynard v. PayPal, Inc. No. 18-CV-259, 2019 WL 3552432,...
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