227 F. Supp. 3d 848
W.D. Mich.2016Background
- Plaintiff Becky Pinkston-Poling sues Advia Credit Union for breach of contract and EFTA violations based on overdraft fee practices.
- Plaintiff alleges Advia charges overdraft fees using the available balance rather than the actual/ledger balance as described in agreements and disclosures.
- Overdrafts are charged under Advia's Courtesy Pay program; an Opt-in Agreement governs overdraft fees for ATM and one-time debit transactions.
- Plaintiff claims Advia’s use of available balance contradicts the Member Account Agreement and the Opt-in Agreement, and violates Regulation E.
- Court previously ordered briefing on whether EFTA safe harbor (§ 1693m(d)(2)) bars the claim and CAFA jurisdiction; the court now denies the motion to dismiss.
- Claims are allowed to proceed: breach of contract (including implied covenant) and EFTA claim based on allegedly inaccurate descriptions of overdraft service.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the EFTA safe harbor applies | Pinkston-Poling argues the safe harbor does not protect the claim because it challenges content, not form. | Advia contends the Opt-in Agreement and Model Form A-9 trigger safe harbor protection for disclosures. | Safe harbor does not bar the EFTA claim. |
| Whether Plaintiff states a valid breach of contract claim | Ambiguity in the contract allows use of available balance to assess overdrafts; Plaintiff seeks relief for misdescribed overdraft service. | Language about triggering Courtesy Pay does not define balance determination and may defeat the claim. | Plaintiff states a viable breach of contract claim (and implied covenant) based on ambiguity. |
| Whether Opt-in Agreement is a separate contract supporting breach claims | Opt-in Agreement governs overdraft description and is a contract independent of the Member Account Agreement. | Opt-in and Member Account Agreement are read together as one contract with opt-in mandatory for certain transactions. | Opt-in Agreement is a separate contract; breach theory survives. |
| Whether Plaintiff states a valid EFTA claim | Opt-in language is ambiguous about whether available or actual balance governs overdrafts; thus, insufficient disclosure. | Opt-in is substantially similar to Model Form A-9 and compliant. | Plaintiff states a viable EFTA claim based on ambiguity in Opt-in disclosure. |
Key Cases Cited
- Clemmer v. Key Bank Nat’l Ass’n, 539 F.3d 349 (6th Cir. 2008) (remedial construction of EFTA; favors consumer)
- Gunter v. United Federal Credit Union, 2016 WL 3457009 (D. Nev. 2016) (ambiguous balance method can support contract claim)
- In re TD Bank, N.A., 150 F.Supp.3d 593 (D.S.C. 2015) (breach claim sustained despite 'available balance' references)
- Chambers v. NASA Federal Credit Union, 222 F.Supp.3d 1 (D.D.C. 2016) (opt-in language compared to available balance; varied outcomes)
- Jacks v. Schneider Securities, Inc., 217 F.3d 525 (7th Cir. 2000) (form vs. content distinction in documents)
- Ellison v. N.H. Dep’t of Corr., 2009 WL 424535 (D.N.H. 2009) (prisoner exhaustion; form considerations referenced)