Majestic Building Maintenance, Inc. v. Huntington Bancshares Inc.
864 F.3d 455
| 6th Cir. | 2017Background
- Majestic Building Maintenance opened a business checking account with Huntington in 2010 and received a Master Services Agreement containing a provision describing optional anti-fraud products and disclaiming liability if the customer declined them.
- In November 2014 four forged checks (duplicative numbers, lacking Plaintiff’s hologram) were cashed against Majestic’s account for $3,973.96; Plaintiff promptly sought reimbursement and Huntington refused, citing Majestic’s failure to enroll in its fraud-prevention services.
- Plaintiff filed a putative class action alleging Huntington breached U.C.C. § 4-401 (O.R.C. § 1304.30) by charging the account for unauthorized items and violated U.C.C. § 4-103(a) (O.R.C. § 1304.03) by disclaiming its duty of good faith and ordinary care via the Agreement.
- The district court granted Huntington’s Rule 12(b)(6) motion, finding the Agreement did not manifestly disclaim duties of good faith/ordinary care and dismissed the complaint.
- The Sixth Circuit reversed, holding the complaint plausibly alleged the contested provision unreasonably disclaimed Huntington’s statutory duties and that dismissal was premature absent opportunity to amend and conduct discovery.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Agreement’s anti‑fraud provision unlawfully disclaims the bank’s duty of good faith and ordinary care under O.R.C. § 1304.03(A) | The provision absolves Huntington of liability for any frauds the optional products were "designed to discover or prevent," effectively contracting out of statutory duties, with no detail on products, eligibility, or cost | The clause merely limits liability for losses that would have been prevented had the customer enrolled; it does not disclaim the bank’s statutory duties | Reversed: plaintiff plausibly alleged the clause may be manifestly unreasonable and could improperly disclaim statutory duties; dismissal premature |
| Whether Huntington may charge the customer’s account for forged, unauthorized checks under O.R.C. § 1304.30(A) | Huntington charged Majestic for four forged checks that were not properly payable; bank breached § 1304.30(A) | Enforcement of the Agreement’s liability limitation bars recovery because plaintiff declined optional fraud products | Reversed as to dismissal: complaint sufficiently alleges unauthorized payments and breach; factual issues remain for discovery |
Key Cases Cited
- Ass’n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545 (6th Cir.) (standard of review for Rule 12(b)(6))
- Hill v. Blue Cross & Blue Shield of Mich., 409 F.3d 710 (6th Cir.) (construing complaint in plaintiff’s favor on motion to dismiss)
- In re Comshare, Inc. Sec. Litig., 183 F.3d 542 (6th Cir.) (appellate affirmance may rest on any ground in the record)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (plausibility standard for pleading)
- Ashcroft v. Iqbal, 556 U.S. 662 (complaints must plead factual content allowing inference of liability)
- Cumis Ins. Soc’y v. Girard, 522 F. Supp. 414 (E.D. Pa.) (district‑court treatment of bank contract clauses regarding forged checks)