299 F. Supp. 3d 338
D.N.H.2018Background
- Plaintiff Joseph Walbridge had a Northeast Credit Union checking account and signed an Opt‑In form for overdraft payment service; he was charged overdraft fees even though his ledger/"actual" balance showed funds to cover some transactions.
- Northeast determines overdrafts using an "available balance" (which discounts pending debits and delays in crediting deposits), and charged $32 fees on March 15, 29, and 30, 2016.
- Walbridge sued as a putative class, asserting breach of the Account Agreement and Opt‑In Agreement, breach of the implied covenant of good faith and fair dealing, unjust enrichment and money had and received, and violation of Regulation E (12 C.F.R. §1005.17) of EFTA for allegedly inaccurate Opt‑In disclosures.
- Northeast moved to dismiss all claims, arguing contracts permitted use of available balance, the EFTA claim is untimely and/or protected by the model‑form safe harbor, and equitable claims are barred by existing contracts.
- The court treated contract language ambiguity as the central factual/legal dispute and resolved procedural defenses (statute of limitations, safe harbor) for the EFTA claim at the motion stage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract: meaning of "enough money"/"insufficient funds" | "Enough money"/"insufficient funds" should be read as actual/ledger balance; charging based on available balance breached agreements | Agreements (read together) show overdrafts tied to available funds; no breach | Denied dismissal: language ambiguous; reasonable reading supports plaintiff that fees should be charged only when actual balance is insufficient, so breach claims survive |
| Breach of implied covenant of good faith and fair dealing | Charging fees based on available balance despite actual funds is contrary to the agreements' intent | No breach because practices comport with agreements' meaning | Denied dismissal: survives insofar as contract interpretation remains ambiguous |
| Unjust enrichment / money had and received | Equitable relief available in the alternative because fees were improperly taken | Equitable claims barred where contract governs the dispute | Granted dismissal: equitable claims dismissed because they arise from the contract and are not outside its scope |
| EFTA / Regulation E (Opt‑In accuracy; defenses: safe harbor, statute of limitations) | Opt‑In failed to accurately describe overdraft service (ambiguous "enough money"); each fee could trigger a new violation or discovery rule saves claim | Used model Form A‑9 (safe harbor); claim untimely (first fee March 2016; complaint Sept 2017) | Partial: EFTA claim dismissed as time‑barred under 1‑year statute; safe harbor does not shield inaccuracies in substance, but limitations period ran from first alleged improper fee and discovery rule not pled to avoid dismissal |
Key Cases Cited
- Galvin v. U.S. Bank, N.A., 852 F.3d 146 (1st Cir. 2017) (motion‑to‑dismiss plausibility/pleading standard)
- In re Curran, 855 F.3d 19 (1st Cir. 2017) (plausibility standard for complaints)
- Lass v. Bank of Am., N.A., 695 F.3d 129 (1st Cir. 2012) (permitting alternative pleading of equitable claims at pleading stage)
- Chambers v. NASA Fed. Credit Union, 222 F. Supp. 3d 1 (D.D.C. 2016) (Opt‑In/Account language linking overdrafts to available balance where examples and "available balance" used)
- Jelmoli Holding, Inc. v. Raymond James Fin. Servs., Inc., 470 F.3d 14 (1st Cir. 2006) (equivalence of money‑had‑and‑received and unjust enrichment elements)