In Re: Checking Account Overdraft Litigation, 2013 WL 5774287 (S.D. FL. Oct. 24, 2013), a federal judge has held that genuine issues of material fact exist regarding allegations that BancorpSouth Inc. sequenced debit and ATM transactions from highest to lowest dollar amount in order to maximize overdraft fees. Plaintiffs argue that if transactions had been processed in the order they had occurred, far fewer fines would have been assessed. Plaintiffs seek damages for beach of contract, breach of implied covenant of good faith and fair dealing, unjust enrichment, unconscionability, and violations of the Arkansas Deceptive Trade Practices Act (ADTPA).
Plaintiffs sought summary judgment for BancorpSouth's affirmative defenses of statute of limitations, laches, accord and satisfaction, ratification, acceptance, release, voluntary payment doctrine, and course of dealing. Before the court's ruling, parties stipulated that plaintiffs would only seek damages that fell within each state's applicable statute of limitations.
The court granted plaintiffs' motion for summary judgment as to defendant's defenses of laches, accord and satisfaction, ratification, acceptance, release, and course of dealing. The court held that laches was not applicable to the breach of contract, breach of good faith and fair dealing, ADTPA or to equitable claims seeking only monetary damages. Furthermore, the court found that plaintiffs neither delayed filing a claim, nor did defendant rely on any inaction on plaintiffs' part since "BancorpSouth continues to engage in resequencing to this day, despite the filing of this action over three years ago." The court held that as a matter of law defendant could not prove accord and satisfaction because there was no indication that a "meeting of the minds" had occurred whereby plaintiffs agreed to pay a sum to discharge the debt. Though usually an issue of fact, the court found the defense of ratification and acceptance was inapplicable because the key element - an agency relationship between plaintiff and defendant - did not exist. The court offered a mixed reading of plaintiffs' motion for summary judgment for the defense of course of dealing. Defendant maintained that a course of dealing had been established whereby Defendant paid the overdraft charges in exchange for plaintiffs' agreement to pay overdraft fees. The court concluded that BancorpSouth could not rely on this defense for the contract claims because the terms of the contract expressly contradicted BankcorpSouth's claim. The court, however, denied summary judgment for the unjust enrichment, unconscionability, and ADTPA claims which did not rely on the terms of the contract.
The court denied plaintiffs' motion for summary judgment regarding defendant's defense of voluntary payment. Defendant argues that because plaintiff was notified of the overdraft fees, did not dispute them, and took affirmative action to deposit funds into the accounts to bring them back to a positive balance, that payment of the fees was voluntary. Plaintiff counters that even though they were notified of the fees, they were not told that the fees were based upon a resequencing of transactions. Therefore, any acceptance of payment was done without the "full knowledge of the facts." As such plaintiffs' contend that voluntary payment is inapplicable because any payment occurred under mistake of fact. The court found that a genuine issue of material fact existed regarding whether the overdraft fees were voluntarily paid.
The court denied all of defendant's motions for summary judgment as to all claims plaintiffs asserted, finding there were genuine issues of material fact "surrounding (a) Plaintiffs' initiation of debit card transactions, (b) BancorpSouth's assessment and collection of overdraft fees, (c) whether Plaintiffs' knew BancorpSouth's re-sequencing policy, and (d) the undisputed evidence that BancorpSouth did not disclose its Overdraft Matrix Limit to its customer.