492 F. App'x 518
6th Cir.2012Background
- Northampton sued FirstMerit Bank for breach of contract, conversion, and EFAA violations on behalf of itself and classes.
- Northampton maintained a deposit account and a credit line for overdraft protection with FirstMerit.
- Discrepancies began in January 2007 as the bank allegedly used the credit line to cover overdrafts despite available funds.
- Northampton alleged resequencing paid large items first, leading to overdraft and finance fees.
- Bank contracts expressly allowed resequencing; Ohio law also permits order of payment, undermining the breach claim.
- District court dismissed all claims under Rule 12(b)(6); on appeal, court affirms dismissal after de novo review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Northampton plausibly pleads breach of contract without contract language. | Northampton contends breach shown by resequencing contrary to contract. | FirstMerit shows contracts allowed resequencing; no breach. | No plausible breach; contract terms or statutory authorization support resequencing. |
| Whether absence of contract terms in the complaint bars claim despite discovery. | Northampton seeks discovery to obtain contracts showing breach. | Discovery cannot cure lacking contract terms under Iqbal; must plead plausible terms. | Dismissal proper; need explicit contractual terms or language. |
| Whether resequencing claims fail under Ohio law and are unsupported by contract. | Resequencing violated agreement and caused fees. | Ohio Rev. Code § 1304.29(B) allows resequencing; no breach. | No breach; resequencing authorized. |
| Whether conversion and EFAA claims survive based on alleged resequencing. | Resequencing wrongfully converted funds and violated EFAA. | Claims fail as would-be conversion and EFAA violations are not shown by facts. | Claims insufficient as a matter of law. |
Key Cases Cited
- New Albany Tractor, Inc. v. Louisville Tractor, Inc., 650 F.3d 1046 (6th Cir. 2011) (may deny discovery to establish discriminatory pricing in breach context)
- Harris v. American Postal Workers Union, 199 F.3d 245 (6th Cir. 1999) (contract breach requires specific terms; discovery not allowed to obtain them)
- Platsis v. E.F. Hutton & Co., Inc., 829 F.2d 13 (6th Cir. 1986) (breach claim requires identification of actual contract language)
- Western Indus., Inc. v. Newcor Canada, Ltd., 739 F.2d 1198 (7th Cir. 1984) (contract interpretation and sequencing contexts)
- Daniels v. PNC Bank, N.A., 738 N.E.2d 447 (Ohio Ct. App. 2000) (Ohio authority permitting bank order in account transactions)
- Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 426 (6th Cir. 2008) (composite pleadings and exhibit considerations in Rule 12(b)(6))
- Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009) (pleading standard requiring plausible claims)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (claims must be plausible, not merely possible)