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Walbridge v. Northeast Credit Union

United States District Court, D. New Hampshire

March 7, 2018

Joseph Walbridge, Individually and on Behalf of All Others Similarly Situated
v.
Northeast Credit Union and Does 1 through 100

          Christine M. Craig, Esq.

          Andrew J. Demko, Esq.

          Russell F. Hilliard, Esq.

          Tara Kick, Esq.

          Jae K. Kim, Esq.

          Brook Louis Lovett Shilo, Esq.

          Richard D. McCune, Esq.

          Sean T. O'Connell, Esq.

          Stuart M. Richter, Esq.

          ORDER

          Joseph A. DiClerico, Jr. United States District Judge

         Joseph Walbridge brings a putative class action to challenge the practices of Northeast Credit Union to charge overdraft fees when customers' accounts held funds to cover the transactions. He alleges claims for breach of contract, breach of the implied duty of good faith and fair dealing, unjust enrichment, money had and received, and violation of Regulation E, 12 C.F.R. § 1005.17, of the Electronic Fund Transfers Act ("EFTA"), 15 U.S.C. § 1693, et seq. Northeast moves to dismiss all claims.

         Standard of Review

         In considering a motion to dismiss, the court accepts all well-pleaded facts as true, disregarding legal conclusions, and resolves reasonable inferences in the plaintiff's favor. Galvin v. U.S. Bank, N.A., 852 F.3d 146, 155 (1st Cir. 2017). To avoid dismissal, the complaint must state sufficient facts to support a plausible claim for relief. In re Curran, 855 F.3d 19, 25 (1st Cir. 2017). The plausibility standard is satisfied if the factual allegations in the complaint, along with reasonable inferences, show more than a mere possibility of liability. Germanowski v. Harris, 854 F.3d 68, 71 (1st Cir. 2017).

         Background

         Walbridge had a checking account and a debit card with Northeast Credit Union that was originated by the Share Account Agreement ("Account Agreement"). Walbridge also completed the Opt In Form for overdraft transactions ("Opt In Agreement"). His claims in this case arise from overdraft fees charged by Northeast based on the "available balance" in his account rather than the balance shown on the account, called the "ledger balance" or "actual balance."

         The difference between the available balance and the actual balance results from the way Northeast credits deposits made to an account and reduces the balance by debits that are pending but not yet paid. As a result, the available balance can be less, and even considerably less, than the actual balance, depending on the delay in crediting deposits and the anticipatory deductions of pending debits. Northeast then assesses an overdraft fee when the available balance is insufficient to cover a transaction, even though the actual balance shows enough money to cover the transaction.[1]

         Walbridge alleges that on March 15, 2016, he had an actual balance in his Northeast checking account of $111.09. He made a debit card payment of $32.43, which left a balance of $78.66. Northeast, however, determined that he had insufficient funds and charged an overdraft fee of $32.00. Northeast then assessed additional overdraft fees of $32.00 on March 29 and March 30, 2016. Walbridge believes that subsequent improper overdraft fees were charged but provides no allegations in support.

         Walbridge alleges that Northeast breached the Account and Opt In Agreements and the implied duty of good faith and fair dealing by charging him overdraft fees when the actual balance showed there was money in his account to cover the transactions. He also brings equitable claims for unjust enrichment and money had and received. In addition, Walbridge alleges that Northeast violated Regulation E of EFTA by failing to disclose its overdraft policy.

         Discussion

         Northeast moves to dismiss Walbridge's breach of contract claims and EFTA claim on the grounds that it did not promise to use the actual balance for its overdraft service and instead properly explained its overdraft policy based on the available balance. Northeast moves to dismiss the EFTA claim on the merits and asserts that the claim is barred by the statute of limitations and the "safe harbor" provision. Northeast moves to dismiss the equitable claims because valid contracts control the issues raised. Walbridge objects to the motion to dismiss.

         A. Breach of Contract

         Walbridge contends that Northeast breached the Opt In Agreement by assessing overdraft fees when there was enough money in his account to cover the transaction. He contends that Northeast breached the Account Agreement because it promised to assess overdraft fees only when there were insufficient funds in the account to cover a transaction but instead assessed overdraft fees based on the available balance. Northeast asserts that no breach occurred.

         Under New Hampshire law, "[a] breach of contract occurs when there is a failure without legal excuse to perform any promise which forms the whole or part of a contract." Audette v. Cummings, 165 N.H. 763, 767 (2013) (internal quotation marks omitted). The meaning of a written contract is a question of law for the court. Holloway Auto. Gr. v. Giacalone, 169 N.H. 623, 628 (2017). "When interpreting a written agreement, [the court gives] the language used by the parties its reasonable meaning, reading the document as a whole, and considering the circumstances and the context in which the agreement was negotiated." Id.

         "The language of a contract is ambiguous if the parties to the contract could reasonably disagree as to the meaning of that language." Found, for Seacoast Health v. Hosp. Corp. of Am., 165 N.H. 168, 172 (2013) (internal quotation marks omitted). To determine whether an ambiguity exists, the "court should examine the contract as a whole, the circumstances surrounding execution and the object intended by the agreement, while keeping in mind the goal of giving effect to the intentions of the parties." Id. The process of applying that standard generally involves factual issues although in some cases an ambiguity may be resolved as a matter of law. Sunapee Difference, LLC v. State, 164 N.H. 778, 790 (2013).

         1. Opt ...


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