Walker v. People's United Bank, CIVIL NO: 3:17–cv–00304(AVC)
| Citation | 305 F.Supp.3d 365 |
| Decision Date | 30 March 2018 |
| Docket Number | CIVIL NO: 3:17–cv–00304(AVC) |
| Parties | Terriann WALKER, individually, and on behalf of others similarly situated, plaintiff, v. PEOPLE'S UNITED BANK, et al., defendants. |
| Court | United States District Courts. 2nd Circuit. United States District Court (Connecticut) |
Richard Eugene Hayber, The Hayber Law Firm LLC, Hartford, CT, Richard D. McCune, McCune Wright Arevalo, LLP, Ontario, CA, for plaintiff.
Adam S. Mocciolo, James T. Shearin, Pullman & Comley, Bridgeport, CT, for defendants.
RULING ON THE DEFENDANT'S MOTIONS TO DISMISS
This is a class action seeking damages and injunctive relief in connection with the defendants' alleged violations of Regulation E of the Electronic Fund Transfer Act (hereinafter "EFTA"),1 the Connecticut Unfair Trade Practices Act (hereinafter "CUTPA"),2 and alleged breach of contract. It is brought pursuant to EFTA, CUTPA, and common law tenets concerning breach of contract.
The defendant has filed the within motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure, asserting that counts one through six of the complaint fail to state claims upon which relief may be granted. The issues presented are: 1) whether the complaint states a cause of action for breach of the "Account Agreement"; 2) whether the complaint states a cause of action for breach of the "Opt–In Contract"; 3) whether the complaint states a cause of action for a violation of Regulation E of the EFTA; 4) whether the plaintiff's non-contract state law claims are preempted; 5) whether the complaint sufficiently alleges a breach of the covenant of good faith and fair dealing; 6) whether the complaint sufficiently alleges a claim of unjust enrichment; 7) whether the complaint sufficiently alleges a claim of money had and received; and 8) whether the complaint states a cause of action for a violation of CUTPA.
For the following reasons, the motion to dismiss counts one through six (document no. 18) is GRANTED in part and DENIED in part.
The complaint alleges the following facts:
The plaintiff, Terriann Walker (hereinafter "Walker"), was a customer of the defendant, People's United Bank (hereinafter "PUB") at all relevant times to this action.
PUB is a federally chartered stock savings bank. PUB's headquarters are located in Bridgeport, Connecticut. PUB operates over ten branches in the state of Connecticut. Defendants Does 1 through 100 include agents, partners, joint ventures, subsidiaries, and affiliates of PUB. Does 1 through 100 own and/or operate PUB branch locations.
Walker brings this class action to assert claims in her own right, and in her capacity as the class representative of all other persons similarly situated. The "class" is composed of two separate classes. The "Account Balance Class" includes "[a]ll United States residents who have or have had accounts with PUB who incurred an overdraft fee or overdraft fees when the balance in the checking account was sufficient to cover the transaction or transactions at issue during the period beginning six years preceding the filing of this Complaint and ending on November 1, 2016." The "Regulation E Class" includes "[a]ll United States residents who have or have had accounts with PUB who incurred an overdraft fee or overdraft fees for ATM or nonrecurring debit card transaction(s) during the period beginning August 15, 2010 and through the present."
The complaint alleges that PUB maintained a policy and practice of assessing an overdraft fee on transactions when there was enough money in the checking account to pay for the transactions presented for payment, and that these charges for overdraft fees breach PUB's contracts with its customers, including Walker and other members of the class.
PUB offers its consumer banking customers a checking account. One of the features of a PUB account is a debit card. Other features of a PUB checking account include the ability to write checks, withdraw money from ATMs, schedule recurring payments, and conduct other types of transactions that debit from a checking account.
In connection with its processing of debit transactions, PUB assesses overdraft fees to customer accounts when it determines that a customer has overdrawn his or her account. The complaint alleges that at all relevant times, PUB had an overdraft program that was contrary to the express terms of its contract with customers, contrary to PUB's representations about its overdraft program to its customers, and contrary to its customers' expectations regarding the assessment of overdraft fees.
PUB entered into a contract with Walker and its other customers known as the "Opt–In Contract." This contract governs the terms under which PUB may assess overdraft fees for ATM and non-recurring debit card transactions. The "Opt–In Contract" states, "[a]n overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway." The complaint alleges that the "Opt–In Contract" does not describe PUB's actual overdraft practice, and, therefore, that it fails to comply with the requirements of Regulation E of EFTA.
PUB entered into a second contract with Walker and its other customers known at the "Account Agreement." The "Account Agreement" contains a promise that PUB will not charge overdraft fees for any type of transaction where there is enough money in the account to pay for the transaction. The terms of the version of the "Account Agreement" dated March 2016 state, "[a]n Overdraft Fee will be charged against your account if there are insufficient funds in your account to pay an Item drawn against your account." The "Account Agreement" also states, "[a]n overdraft takes place on an account when an Item is presented for payment on the account and there are insufficient funds or insufficient available funds to pay the Item in full." The complaint alleges that these two sections are "potentially in contradiction... creating a possible ambiguity in this second contract within its own terms." Furthermore, the complaint alleges that nowhere in the "Account Agreement" does it state that, for purposes of an overdraft fee, that PUB would deduct the funds in the account holds for pending debit card transactions, or that pending debit card transactions would be subtracted from the balance to create a "lower artificial balance" different from the "real balance" for purposes of assessing an overdraft fee. The complaint alleges that PUB did not include such a clause in the "Account Agreement" until November 2016.
In November 2016, PUB changed its "Account Agreement," and stated that PUB would place holds on pending debit card transactions and thereby reduce the balance available for purposes of assessing when an overdraft would occur. PUB defined "available balance" to account for holds on pending debit card transactions. The complaint alleges that only after the November 2016 Account Agreement went into effect was there consideration of placing holds on pending debit card transactions and deducting those holds from the funds in a customer's account to determine whether an overdraft fee may be assessed.
The complaint alleges that PUB's policy and practice was to assess overdraft fees based on an "artificial internal calculation by which it deducts holds it has placed on either pending debit card transactions or deposits, rather than use the actual money in the account... or the funds in the account... without deduction for pending debit card transactions to determine whether an overdraft has occurred." Furthermore, the complaint alleges that PUB charged Walker and its other customers overdraft fees for ATM and non-recurring card purchases without obtaining consent to do so. The complaint alleges that Walker was harmed by PUB's policy and practice of charging overdraft fees when there was money in her account to cover the transaction.
In count one, the complaint alleges that PUB breached the "Opt–In Contract." Specifically, the complaint alleges that, in the "Opt–In Contract," PUB promised that it would assess overdraft fees "only when there was not enough money in the account to cover the transaction," and that PUB breached the express terms of the contract by "assessing overdraft fees when there was money in the account to cover the transaction or transactions at issue."
In count two, the complaint alleges that PUB breached the "Account Agreement Contract." Specifically, the complaint alleges that, in the "Account Agreement Contract," PUB promised that it would assess overdraft fees "when there were ‘insufficient funds’ in the account to cover the transaction," and that "[n]owhere did the Account Agreement contract state it would deduct pending debit card transactions for purposes of determining ‘sufficient funds’ when assessing an overdraft fee." The complaint alleges that PUB breached the express terms of the "Account Agreement Contract" by "assessing overdraft fees when there were sufficient funds in the account to cover the transaction or transactions at issue."
In count three, the complaint alleges that PUB breached the implied covenant of good faith and fair dealing. Specifically, the complaint alleges that PUB breached the implied covenant of good faith and fair dealing "based on its practices of assessing fees when there was enough money in the account to cover the transaction, failing to provide an accurate description of its overdraft program in its Account Agreement contract, and failing to provide an accurate description of its overdraft program for non-recurring debit and ATM transactions in its Opt–In Contract." The complaint alleges that PUB "executed a contractual obligation in bad faith, depriving [the] [p]laintiff and the [c]lass members of the full benefit of the contract." In count three, the complaint also alleges that
In count four, the complaint alleges that PUB "has...
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