Sanchez v. American Exp. Travel

• Citation: 865 N.E.2d 410
• Decision Date: 29 March 2007
• Docket Number: No. 1-06-0878.,1-06-0878.
• Parties: Edward SANCHEZ, Individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC., Defendant-Appellee.
• Court: United States Appellate Court of Illinois

865 N.E.2d 410

Edward SANCHEZ, Individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. AMERICAN EXPRESS TRAVEL RELATED SERVICES COMPANY, INC., Defendant-Appellee.

No. 1-06-0878.

Appellate Court of Illinois, First District, Fourth Division.

March 29, 2007.

Johnson & Bell, Ltd. (Howard W. Foster and Matthew A. Galin, of counsel) and Diab & Bock (Malik R. Diab, of counsel), Chicago, for Appellant.

Sonnenschein Nath & Rosenthal, LLP, Chicago (James A. Klenk and Julie Samuels, of counsel) and Stroock & Stroock & Lavan, LLP, Los Angeles, CA (Julia B. Strickland, Stephen J. Newman, Andrew W. Moritz and Marcos D. Sasso, of counsel), for Appellee.

Presiding Justice QUINN delivered the opinion of the court:

Plaintiff Edward Sanchez appeals from the circuit court's order granting summary judgment for defendant American Express Travel Related Services, Inc. In this court, Sanchez contends that a genuine issue of material fact existed and, thus, the circuit court erred in granting summary judgment. For the reasons that follow, we affirm.

BACKGROUND

Defendant operates a currency exchange service to consumers in branches across the United States through which defendant converts foreign currency into United States dollars and vice versa. Defendant charges consumers a fee to convert their currency.

The record discloses that on September 16, 2004, plaintiff entered defendant's office at 55 West Monroe Street in Chicago, Illinois to exchange 1,050 Mexican pesos for U.S. dollars. The rate displayed on the office electronic board was 0.080936652 United States dollars for each Mexican peso. The board did not disclose the exchange rate at which defendant exchanged the currency. The financial service representative (FSR) informed plaintiff as to the exchange rate posted on the board and explained that plaintiff would be charged a $3 service fee for the transaction. Plaintiff agreed to the exchange rate and the service fee.

The FSR then processed plaintiff's transaction and provided plaintiff with a receipt of the transaction. The receipt disclosed that at an exchange rate of 0.080936652 United States dollars per Mexican peso, plaintiff's 1,050 Mexican pesos yielded him $84.98. The receipt further showed that after defendant subtracted its $3 processing service fee, plaintiff received a total of $81.98. The $3 service fee was listed twice on the receipt, once as "fee" and once as "total fees." Plaintiff reviewed this receipt before leaving defendant's office.

On December 30, 2004, plaintiff filed a complaint against defendant in which he alleged that defendant operated a "Money Skimming Scheme." The complaint stated:

"In addition to profiting by charging each of its customers a 'fee' for the Service, American Express also profits by skimming the difference between the exchange rate it receives and the exchange rate it uses to convert a customer's currency. The difference between the two exchange rates is a hidden, undisclosed charge it assesses to each of its customers that use the Service (hereafter `the Money Skimming Scheme')."

Plaintiff argued that this alleged practice violated the Illinois Consumer Fraud and Deceptive Business Practices Act (Act) (815 ILCS 505/1 et seq. (West 2004)). Plaintiff further asserted that "the receipt was designed to conceal the fact that American Express actually received a significantly higher exchange rate for itself than the 0.080936652 United States dollars per Mexican Peso it exchanged [plaintiff's] 1,050 Pesos for." Plaintiff concluded that defendant received more than the $84.98 United States dollars that it disbursed to plaintiff for his 1,050 Mexican pesos prior to the $3 service fee. Thus, plaintiff argued that defendant received a hidden fee in addition to the $3 service fee it listed on the receipt.

Thereafter, defendant filed a motion to dismiss pursuant to section 2-615 of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2004)) and a memorandum of law in support of its motion on March 8, 2004. Relying on In re Mexico Money Transfer Litigation, 267 F.3d 743 (7th Cir.2001), defendant contended that, as a matter of law, it was not required "to disclose the rates at which it purchases foreign currency or its profits from the 'spread.'" Thus, defendant argued that plaintiff could not state a claim for fraud under the Act because it could not establish that defendant committed a deceptive practice. In addition, defendant argued that plaintiff could not adequately plead proximate cause or damages.

On April 12, 2005, plaintiff filed a response to defendant's motion to dismiss in which he argued that Covarrubias v. Bancomer, 351 Ill.App.3d 737, 286 Ill.Dec. 721, 814 N.E.2d 947 (2004), governed the outcome of the case at bar. His contention was that according to this court's ruling in Bancomer, defendant's failure to disclose that it received a greater profit than the $3 service transaction fee constituted a deceptive practice under the Act. Plaintiff also contended that he sufficiently pled proximate cause and damages.

On May 13, 2005, the circuit court denied defendant's motion to dismiss. Thereafter, plaintiff filed a motion for class certification and defendant filed its response. The circuit court never ruled on this motion, and thus it is not a matter before this court.

On November 14, 2005, defendant filed a motion for summary judgment. In support, defendant attached the affidavits of Linda Teter and Vicki Norton dated November 10, 2005, and November 11, 2005, respectively. Both Teter and Norton were employees of defendant.

Teter averred that she was the director of service delivery for defendant and was working on special projects until her retirement at the end of 2005. She then stated:

"American Express charges customers that utilize the Exchange Service a fee per currency exchange transaction. Each individual [travel service office] TSO manager has the ability to decide at what amount to set the fee. This decision is based upon, among other things, the level of competition from other Exchange Service vendors in the area. Accordingly, the fees charged by each individual TSO vary by market and location. In setting the fee, American Express always takes care to ensure that its fee is competitive from a customer perspective."

She further explained that the transaction fee on September 16, 2004, at the Monroe Street TSO was $3, which employees were trained to communicate to customers.

Teter then averred:

"American Express does not state what its net 'profit' is in providing the Exchange Service. In addition, American Express does not state to the customer what its 'cost' is for what is sold (in this case, the cost of the currency that it sells to customers). The fee listed on the customer's receipt is not identified as a 'net fee' and there is no language on the receipt advising or indicating to customers what American Express's `profit' is on any individual transaction. Rather, American Express accurately discloses the cost to the customer—that is, the retail exchange rate applied and the fee."

Teter further explained that American Express could not anticipate its "profit" for each individual transaction. She stated:

"In processing each customer transaction, American Express does not take the currency exchanged in an individual transaction by a customer at a retail exchange rate and convert such currency at a wholesale rate in an individual transaction. Rather, American Express buys foreign currencies in bulk at a wholesale rate, and uses these bulk funds to pay out the selected currency, as the individual transactions occur. American Express FSRs have no information regarding the wholesale rate at which American Express buys and sells currency in bulk, and FSRs have no information regarding any potential profit from any individual transaction. Because customers do not trade currency in these large volumes, wholesale currency rates are not available to them."

Norton averred that her position with defendant was manager, personal travel and financial services. In that position, she was responsible for overall operations of owned American Express TSOs in Illinois, including the TSO located at 55 West Monroe Street in Chicago. She confirmed that on September 16, 2004, plaintiff exchanged 1,050 Mexican pesos for United States dollars at a "buy" exchange rate of 0.080936652 United States dollars per Mexican peso. That exchange rate yielded plaintiff $81.98 after a $3 transaction fee was subtracted. Norton stated that the $3 fee was noted twice on plaintiff's receipt, once as a "fee" and once as "total fees." She further explained:

"The fee is not, and was not, intended to lead customers to believe that American Express only makes a profit of $3 for the Exchange Service, and American Express agents make no such representation to customers. Rather, the fee is clearly disclosed as a charge separate and apart from, and in addition to, the retail exchange rate that is quoted to the customer and applied to the transaction."

On November 3, 2005, the parties deposed plaintiff. Plaintiff testified that he decided to bring this suit when he learned that defendant "[makes] money off of the exchange, the currency exchange." He added, "They stated one fee and there was a bigger fee." Upon further questioning, plaintiff stated, "They charged more for my exchange than they told me they were charging."

Plaintiff acknowledged that he previously worked for Legal Helpers. During that time, he shared office space at 444 North Wells Street in Chicago with the attorney representing him in this case.

Plaintiff then testified that on September 16, 2004, he sought to exchange Mexican pesos left over from a vacation for United States dollars. Although he knew of other currency exchanges in the city, he did not visit another foreign currency exchange merchant prior to entering defendant's office.

Plaintiff remembered seeing an exchange rate...