Smith v. Fifth Third Bank
1:18-cv-00464
| S.D. Ohio | Apr 18, 2019Background
- Plaintiffs Carnell Smith and Lenox Magee (consolidated) challenge Fifth Third Bank’s assessment of $2.75 "per transaction" out‑of‑network (OON) ATM fees, alleging the bank charged separate $2.75 fees for balance inquiries (and, for Smith, additional international fees).
- The operative contract consists of Fifth Third’s Deposit Account Rules & Regulations and Debit Card Disclosure/Card Agreement, which set a $2.75 "Non‑Fifth Third ATM" fee and state fees apply "per transaction," but do not define "transaction."
- The Agreement separately defines "Electronic Banking services" as deposits, transfers, or withdrawals, and elsewhere warns that third‑party ATM operators may charge for balance inquiries.
- Plaintiffs assert breach of contract and breach of the implied covenant; Magee also asserted an Illinois Consumer Fraud Act (ICFA) claim and unjust enrichment; Smith alleged improper international transaction fees.
- Fifth Third moved to dismiss, arguing (1) "transaction" unambiguously includes balance inquiries, (2) plaintiffs failed to give contractually required notice, (3) international fee provisions are unambiguous, and (4) choice‑of‑law precludes ICFA and unjust enrichment claims.
- Magistrate Judge Bowman recommended: deny dismissal of the balance‑inquiry breach claims; deny dismissal based on notice; grant dismissal of Smith’s international‑fee claims; apply Ohio choice‑of‑law to bar Magee’s ICFA claim; and dismiss Magee’s unjust enrichment claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a "transaction" in the fee schedule includes a balance inquiry | "Transaction" is ambiguous; given definition of "Electronic Banking services" (deposits, transfers, withdrawals) a balance inquiry is not a transaction subject to a separate $2.75 fee | "Transaction" plainly includes balance inquiries (fee language references EFTs or balance inquiries) so separate fees are authorized | Court: "transaction" is ambiguous as to Fifth Third’s own fees; denied dismissal of balance‑inquiry breach claims |
| Whether plaintiffs’ failure to give contract notice (30/60 days) bars suit | Notice provision does not clearly apply to bank’s own fee charges and is unconscionable/hypertechnical as applied | Notice provision is a condition precedent and short time bars claims | Court: refus es to dismiss on notice ground at Rule 12(b)(6) stage; denial of dismissal based on notice provision |
| Whether international transaction fee provisions permit fees assessed by location or currency and whether percentage fee applies to total debited amount | Smith: no international fee if withdrawal denominated in USD; 3% fee should apply only to cash amount, not to cash plus any usage fee | Fifth Third: definition of foreign transaction is location‑based; transaction amount includes total debited amount (including usage/usage‑fee) | Court: provisions unambiguous; foreign fee applies based on location and 3% applies to total debited transaction amount; dismissed Smith’s international claims |
| Whether Ohio choice‑of‑law bars Magee’s ICFA and unjust enrichment claims | Magee: ICFA governs consumer‑protection torts; claim distinct from contract; choice clause should be read narrowly | Fifth Third: choice‑of‑law clause governs "this Card Agreement" and related disputes; ICFA claim is closely related to contract | Court: applied Ohio choice‑of‑law to bar ICFA claim; also dismissed unjust enrichment because claim is duplicative of express contract |
Key Cases Cited
- Lincoln Elec. Co. v. St. Paul Fire & Marine Ins. Co., 210 F.3d 672 (6th Cir.) (contract interpretation and ambiguity are initially questions of law)
- Savedoff v. Access Group, Inc., 524 F.3d 754 (6th Cir.) (contractual ambiguity requires construing language from four corners; ambiguous terms construed against drafter)
- Eastham v. Chesapeake Appalachia, L.L.C., 754 F.3d 356 (6th Cir.) (examine contract as whole; give plain meaning absent contrary showing)
- Dubay v. Wells, 506 F.3d 422 (6th Cir.) (pleading standards — accept well‑pleaded factual allegations on Rule 12(b)(6))
- Arlington Video Prods. v. Fifth Third Bankcorp., [citation="569 F. App'x 379"] (6th Cir.) (skepticism about applying short contractual notice provisions to consumer fee disputes)
- Moses v. Bus. Card Express, Inc., 929 F.2d 1131 (6th Cir.) (choice‑of‑law contractual clauses can apply to closely related tort claims)
- Wuliger v. Manufacturers Life Ins. Co., 567 F.3d 787 (6th Cir.) (unjust enrichment is an equitable remedy operating where no express contract governs)
- Ferrando v. Auto‑Owners Mut. Ins. Co., 781 N.E.2d 927 (Ohio) (in insurance context, failure to give contract notice bars only if insurer prejudiced)