Schertzer v. Bank of Am., N.A.
Decision Date | 04 March 2020 |
Docket Number | Case No.: 19cv264 JM(MSB) |
Citation | 445 F.Supp.3d 1058 |
Court | U.S. District Court — Southern District of California |
Parties | Kristen SCHERTZER, et al., on behalf of themselves and all others similarly situated, Plaintiffs, v. BANK OF AMERICA, N.A., et al., Defendants. |
445 F.Supp.3d 1058
Kristen SCHERTZER, et al., on behalf of themselves and all others similarly situated, Plaintiffs,
v.
BANK OF AMERICA, N.A., et al., Defendants.
Case No.: 19cv264 JM(MSB)
United States District Court, S.D. California.
Signed March 4, 2020
Jae Kook Kim, Todd D. Carpenter, Carlson Lynch, LLP, San Diego, CA, Jeffrey Douglas Kaliel, Sophia Goren Gold, Kaliel PLLC, Washington, DC, for Plaintiffs.
Amanda Leigh Groves, Winston & Strawn LLP, San Francisco, CA, Shawn Rieko Obi, Winston & Stawn LLP, Los Angeles, CA, for Defendant Bank of America, N.A.
David A. Vogel, Douglas P. Lobel, Cooley LLP, Reston, VA, Leo P. Norton, Michelle C. Doolin, Cooley Godward Kronish LLP, San Diego, CA, for Defendant Cardtronics, Inc.
Benjamin Taliaferro Morton, Jeffrey D. Cawdrey, Kristen Sweaney McLeod, Shelby Poteet, Yan Ren, Gordon Rees Scully Mansukhani, San Diego, CA, for Defendant FCTI, Inc.
Eileen M. Ahern, Willenken LLP, Los Angeles, CA, for Defendant Cash Depot LTD.
ORDER ON MOTIONS TO DISMISS
Hon. Jeffrey T. Miller, United States District Judge
I. INTRODUCTION
Plaintiffs Kristen Schertzer, Meagan Hicks and Brittany Covell have brought
this putative class action case, on behalf of themselves and all others similarly situated, against Bank of America, N.A., Cardtronics Inc., ATM National, LLC. FCIT, Inc., and Cash Depot Ltd. (collectively "Defendants") essentially claiming deceptive, misleading, and unwarranted practices have been employed in the charging and collecting of bank balance inquiry and transaction fees.
Presently before the court are five motions to dismiss filed pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(2) and 12(b)(6). (Doc. Nos. 59, 60, 61, 66, 68.) The motions have been fully briefed and the court finds them suitable for submission on the papers and without oral argument in accordance with Civil Local Rule 7.1(d)(1). For the reasons set forth below, Defendants' motions are granted with leave to amend.
II. PROCEDURAL AND FACTUAL BACKGROUND
On February 5, 2019, Plaintiffs initiated this proposed (or putative) class action by filing suit. (Doc. No. 1.) On May 31, 2019, a second amended complaint ("SAC") was filed alleging original jurisdiction under the Class Action Fairness Act of 2005 and, specifically under 28 U.S.C. § 1332(d)(2) and setting forth a total of thirteen1 claims against the defendants individually and collectively. (Doc. No. 56, "SAC".) Combined, the claims are for: (1) violation of California's Unfair Competition Law ("UCL"), CAL. BUS. & PROF. CODE § 17200, et seq ; (2) conversion; (3) negligence; (4) violation of the California's False Advertising Law ("FAL"), CAL. BUS. & PROF. CODE § 17500, et seq ; (5) violation of the California Consumer Legal Remedies Act ("CLRA"), CAL. CIV. CODE § 1770, et seq ; (6) breach of contract; and (7) breach of the covenant of good faith and fair dealing. (Id. at 58-78.)
The allegations in the complaint center around three distinct categories. First, Plaintiffs allege a scheme by Bank of America ("BofA") to charge its customers unwarranted fees for using out-of-network ("OON") Automatic Teller Machines ("ATMs") for balance inquiries. (SAC at ¶ 1, 8-11, 77, 88, 113, 114, 125-.) Second, Plaintiffs assert that the independent ATM operators Cardtronics, Cash Depot and FCTI (collectively, the "ATM Defendants") made deceptive and misleading representations on the screens and on signs at ATMs they operate regarding the fees that would be charged for balance inquiries. (Id. ¶¶ 1, 9, 12-15, 33-45, 46-79, 86-124, 125-161.) Third, Plaintiff Schertzer alleges the fees BofA charges for International Transactions are in violation of the governing account documents. (SAC at ¶¶ 1, 16-22, 162-181.)
Attached to the SAC are the Deposit Agreement and Disclosures (Doc. No. 56-1, Ex.1 "The Agreement") and the Personal Schedule of Fees (Doc. No. 56-2, Ex.2 "Fee Schedule"). No party disputes that these are the contract documents between BofA and the Plaintiffs. The electronic bank services fee provision of the Agreement provides:
ATM Fees When you use an ATM that is not prominently branded with the Bank of America name and logo, you may be charged a fee by the ATM operator or any network used and you may be charged a fee for a balance inquiry even if you do not complete a fund transfer. We may also charge you fees.
Other Fees For other fees that apply to electronic banking services, please review the Schedule of Fees for your account and each agreement or disclosure
that we provide to you for the specific electronic banking service, including the separate agreement for Online and Mobile Banking services and the separate agreement for ATM and debit cards.
Id. at 35. The Fee Schedule that was in effect beginning May 18, 2018, allows for the following ATM fees:
Fee Category Fee Name/Description Fee Other Important Information About This Fee Amount ATM Fees Withdrawals, deposits, transfers, No TM fee • Deposits and payments may not be payments and balance inquiries at available at some ATMs Bank of America a Bank of America ATM Transaction fees may apply to ATM — an ATM some accounts. See account that prominently descriptions in this schedule displays the Bank Non-Bank of America ATM Fee $2.50 each • When you use a non-Bank of of America name for: America ATM, you may also be and logo on the charged a fee by the ATM operator ATM Withdrawals, transfers and or any network used and you may balance inquiries at a non-Bank of be charged a fee for a balance Non-Bank of America ATM in the U.S. inquiry even if you do not complete America ATM — a funds transfer an ATM that • The non-Bank of America ATM does not fees do not apply at some ATMs prominently located outside the United States display the Bank • See the disclosure information that of America name accompanied your card for other and logo on the fees that may apply. ATM • Non-Bank of America ATM fees are in addition to other account fees that may apply to the transaction, such as a Withdrawal Limit Fee for savings. • Preferred Rewards Platinum customers using a Bank of America Debit or ATM card are not charged the non-Bank of America ATM fee for one withdrawal, transfer and balance inquiry per statement cycle from a non-Bank of America ATM in the U.S., and receive a refund of the ATM operator fee for one withdrawal, transfer and balance inquiry per statement cycle from a no-Bank of America ATM in the U.S. • Preferred Rewards Platinum Honors customers using a Bank of America Debit or ATM card are not charged the non-Bank of America ATM fee for withdrawals, transfers and balance inquiries from non-Bank of America ATMs in the U.S. and receive a refund of the ATM operator fee for withdrawals, transfers and balance inquiries from non-Bank of America ATMs in the U.S.
Fee Schedule at 10.
Additionally, the Fee Schedule provides the following information regarding International Transaction Fees:
Fee Category | Fee Name/Description | Fee Amount | Other Important Information About This Fee |
ATM Card and Debit Card Fees | International Transaction Fee | 3% of the U.S. Dollar amount of the transaction | • Fee applies if you use your card to purchase goods or services in a foreign currency or in U.S. dollars with a foreign merchant (a "Foreign Transaction"). Foreign Transactions include internet transactions made in the U.S. but with a merchant who processes the transaction in a foreign country. |
Id. at 9.
On June 1, 2018, Plaintiff Schertzer used her BofA ATM Payment Card at a Cardtronics ATM located at 817 West Washington Street, San Diego, California, 92103, to withdraw $60, for which she was charged a total of $8.75 in fees – $3.75 cash withdrawal fee by Cardtronics, $2.50 OON fee by BofA for making a balance inquiry and $2.50 by BofA for making a cash withdrawal. (SAC at ¶ 182.) Ms. Schertzer is only challenging the fee for the balance inquiry. (Id. ) On May 29, 2018, Plaintiff Covell used her BofA ATM Debit Card at a FCTI ATM at a Seven Eleven (7-11) convenience store located at 592 Santa Fe Drive, Encinitas, California to withdraw $20, for which she was charged a total of $10.50 in fees – $3.00 cash withdrawal fee by FCTI, $2.50 OON fee by BofA for making a balance inquiry, and $2.50 by BofA for making a cash withdrawal, and a second balance inquiry fee from BofA. (Id. at ¶ 183.) Ms. Covell is challenging the two balance inquiry fees charged by BofA. On June 2, 2018, Plaintiff Hicks, a BofA account holder, withdrew $20 from a Cash Depot ATM in Walmart located at 4840 Shawline Street, San Diego, California, 92111, for which she was charged a total of $7.00 in fees – $2.50 cash withdrawal fee by Cash Depot, $2.50 fee by BofA for making a balance inquiry and $2.50 by BofA for making a cash withdrawal. (Id. at ¶ 185.) Ms. Hicks is only challenging the balance inquiry fee. (Id. )
Plaintiff Schertzer seeks to represent the "California Cardtronics Class" and the "National Cardtronics Class." (Id. at 51-52.) Plaintiff Covell seeks to represent the "California FCTI Class" and the "National FCTI Class" (Id. at 52.) Plaintiff Hicks seeks to represent the "California Cash Depot Class" and the "National Cash Depot Class." (Id. ) Each of these classes consists of:
All holders of a checking account in California who, within the applicable statute of limitations preceding the filing of this lawsuit, were assessed one or more fees for purportedly undertaking a balance inquiry as part of a cash withdrawal at a [ATM Defendant Name] ATM (the "California [ATM Defendant Name] Class")
All holders of a checking account in California who, within the applicable statute of limitation preceding the filing of this lawsuit, were assessed one or more fees for purportedly undertaking a balance inquiry as part of a cash withdrawal at a [ATM Defendant Name] ATM (the "National [ATM Defendant Name] Class")
Id. at 51-52. All three Plaintiffs seek to represent a Nationwide...
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