Star Financial Services, Inc. v. Cardtronics USA, Inc.
2:16-cv-12537
E.D. La.Mar 21, 2017Background
- Star Financial Services, d/b/a Advanced ATM Services (Star) contracted with ATM Deployer Services/Columbus Data Services, which later merged into Cardtronics, for Cardtronics to arrange processing of transactions at Star’s ATMs.
- Star alleged Cardtronics failed to correct inaccurate terminal/ACH account information for two ATMs, causing $250,900 to be erroneously credited to a third party over five months.
- The parties’ operative contract (Agent Agreement) contains §4.2 stating the agent (Star) is responsible for verifying terminal setup and ACH information and that ADS (predecessor) has no responsibility to verify such information.
- Cardtronics moved for summary judgment, arguing it is a successor-in-interest and that the contract unambiguously placed verification responsibility on Star.
- Star argued Cardtronics breached its contractual duty by not correcting inaccurate terminal information; no fraud was alleged.
- The district court granted summary judgment for Cardtronics, holding the contract unambiguous and that Star bore the verification obligation, so no breach occurred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Cardtronics breached the Agent Agreement by failing to correct ATM account info | Star: Cardtronics was obligated to correct inaccurate terminal/ACH setup info | Cardtronics: §4.2 unambiguously assigns verification duty to the agent (Star); Cardtronics had no contractual duty to verify or correct | Court: No breach — contract language places verification responsibility on Star; summary judgment for Cardtronics |
| Whether ambiguities or extrinsic evidence permit a different interpretation of §4.2 | Star: contract should be read to impose corrective duties when Cardtronics set up terminals | Cardtronics: language is clear; no need for further interpretation; no allegations of fraud | Court: Contract is clear under La. Civ. Code art. 2046; no reinterpretation warranted |
| Whether genuine factual dispute exists to avoid summary judgment | Star: facts show erroneous credits and alleged failure to act | Cardtronics: pointed to contract language and lack of proof of contractual duty; moved under Celotex framework | Court: Star failed to produce competent summary-judgment evidence creating a triable issue; summary judgment proper |
| Whether damages analysis affects summary judgment disposition | Star: damages resulted from alleged breach | Cardtronics: merits threshold issue is absence of contractual duty; damages need not be reached if no breach | Court: Did not reach damages merits because no breach established |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (summary judgment burden-shifting rule)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (standard for genuine issue of material fact)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (nonmovant must produce evidence to create genuine issue)
- Webb v. Cardiothoracic Surgery Assocs. of N. Texas, 139 F.3d 532 (Fifth Circuit on summary judgment evidence standards)
- Lindsey v. Sears Roebuck & Co., 16 F.3d 616 (movant may point to absence of evidence when nonmovant bears burden)
- Travelers Ins. Co. v. Liljeberg Enter., Inc., 7 F.3d 1203 (conclusory rebuttals insufficient to avoid summary judgment)
- Favrot v. Favrot, 68 So.3d 1099 (La. App. 4th Cir.) (elements of breach of contract under Louisiana law)