Childs v. Synovus Bank
883 F. Supp. 2d 1244
S.D. Fla.2012Background
- MDL proceeding In re Checking Account Overdraft Litig. (MDL No. 2036) includes this action against Synovus Bank, Synovus Financial, and Columbus Bank and Trust (CB&T).
- Plaintiffs are current or former Synovus Bank checking account customers governed by a Deposit Account Agreement.
- Plaintiffs allege excessive overdraft fees resulted from Defendants' alleged manipulation and reordering of debit transactions from largest to smallest to maximize fees.
- Counts: breach of contract implied covenant, unconscionability, conversion, and unjust enrichment under Georgia law.
- The court denied in part and granted in part the motion to dismiss: CB&T dismissed; Synovus Bank and Synovus Financial survive.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of implied covenant viability | Synovus breached the implied covenant by discretionary postings. | No breach tied to Deposit Account Agreement provisions; implied covenant invalid. | Survival of the implied covenant claim against Synovus Bank |
| CB&T as a separate party | CB&T participated in reordering and should be liable. | CB&T is a division of Synovus Bank, not a separate entity. | CB&T dismissed as not a separate legal entity |
| Liability of Synovus Financial | Plaintiffs plead sufficient facts to hold Synovus Financial liable through its control. | No specific wrongdoing pleaded against Synovus Financial. | Plausible claims against Synovus Financial survive |
| Unconscionability, and related claims | Unconscionability should stand given posting practices and statutory analysis. | Unconscionability should be dismissed as governed by statute and contract terms. | Unconscionability claim survives |
Key Cases Cited
- White v. Wachovia Bank, N.A., 563 F.Supp.2d 1358 (N.D. Ga. 2008) (reliance on statutory interpretation not wholesale dismissal of unconscionability)
- Harrell v. Bank of the South, N.A., 174 Ga.App. 384, 330 S.E.2d 147 (Ga. Ct. App. 1985) (division not a separate legal entity for suit)
- Western Beef, Inc. v. Compton Inv. Co., 611 F.2d 587 (5th Cir. 1980) (division of defendant case; relevance to corporate liability)
- Bonner v. City of Prichard, 661 F.2d 1206 (11th Cir. 1981) (binding precedent for circuit court decisions on similar matters)