import os from pdfminer import high_level from langchain_astradb import AstraDBVectorStore from langchain_core.prompts import PromptTemplate from langchain_openai import OpenAIEmbeddings from langchain_anthropic import ChatAnthropic from langchain_google_genai import ChatGoogleGenerativeAI ASTRA_DB_API_ENDPOINT = os.environ["ASTRA_DB_API_ENDPOINT"] ASTRA_DB_APPLICATION_TOKEN = os.environ["ASTRA_DB_APPLICATION_TOKEN"] OPENAI_API_KEY = os.environ["OPENAI_API_KEY"] ANTHROPIC_API_KEY = os.environ["ANTHROPIC_API_KEY"] GOOGLE_API_KEY = os.environ["GOOGLE_API_KEY"] collection_name = "ilj_test" embedding = OpenAIEmbeddings(model="text-embedding-ada-002") models = { "claude-3": ChatAnthropic(model='claude-3-sonnet-20240229'), "gemini-pro": ChatGoogleGenerativeAI(model="gemini-pro") } def model_names(): return models.keys() def pipeline(file, model_name, balance_type, apsn_transactions, max_fees_per_day, min_overdrawn_fee, min_transaction_overdraft): disclosure_text = high_level.extract_text(file) astra = AstraDBVectorStore( api_endpoint=ASTRA_DB_API_ENDPOINT, token=ASTRA_DB_APPLICATION_TOKEN, collection_name=collection_name, embedding=embedding ) related_docs = astra.search(disclosure_text, search_type="similarity") prompt = PromptTemplate.from_template( """ law context: 20-cv-12061 08-23-2021 Veronica Gardner, Plaintiff, v. Flagstar Bank, FSB, Defendant. GERSHWIN A. DRAIN, UNITED STATES DISTRICT JUDGE OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS [#18] GERSHWIN A. DRAIN, UNITED STATES DISTRICT JUDGE I. Introduction On July 31, 2020, Plaintiff Veronica Gardner brought the instant action on behalf of herself and all others similarly situated against Defendant Flagstar Bank, FSB (“Flagstar” or “Bank”). ECF No. 1. Plaintiff filed her First Amended Complaint on October 6, 2020 and alleges that Defendant unlawfully assesses and collects overdraft fees on transactions, sometimes multiple times, in violation of the contract between the parties. Id. Plaintiff brings two state law claims for breach of contract and conversion. Id. Presently before the Court is Defendant's Motion to Dismiss. ECF No. 18. This matter is fully briefed. ECF Nos. 20, 23. Plaintiff also filed two Notices of Supplemental Authority. ECF Nos. 26, 1 28. A hearing on this matter was held on *1 August 11, 2021. For the reasons stated herein, the Court will GRANT IN PART and DENY IN PART Defendant's Motion to Dismiss [#18]. 2 20-cv-12061 United States District Court, E.D. Michigan, Southern Division Gardner v. Flagstar Bank, FSB Decided Aug 23, 2021 II. Factual Background Plaintiff Veronica Gardner has a checking account with Defendant Flagstar Bank. ECF No. 14, PageID.75. This relationship is governed by Account Agreement Documents (“Agreement”) that include definitions, policies, and procedures concerning Plaintiff's account. Id. Specifically, the Agreement contains various provisions regarding the assessment and payment of overdraft fees and insufficient funds fees (referred to by the parties as “OD/NSF Fees”). ECF No. 14, PageID.66; ECF No. 18, PageID.148. Plaintiff's claims derive from two related but distinct actions by Defendant, which she terms “fee maximization practices.” ECF No. 20, PageID.215. First, Plaintiff alleges that Defendant unlawfully charges overdraft fees on transactions referred to as “Authorize Positive, Purportedly Settle Negative Transactions” (“APPSN Transactions”). ECF No. 14, PageID.69. This occurs when an individual has made a transaction and a temporary authorization hold is placed on the account for the amount of that transaction. Id. This hold is in place while the merchant processes, and eventually settles, the transaction with Flagstar. Id.; ECF No. 18, PageID.149. In these APPSN Transactions, there are always positive funds available in the account balance that cover this transaction, even though subsequent *2 transactions put the account into a negative balance. Plaintiff emphasizes that “customers' accounts will always have sufficient funds available to cover” the initial transaction made with a positive balance “because Flagstar Bank has already sequestered these funds for payment.” 1 Gardner v. Flagstar Bank, FSB 20-cv-12061 (E.D. Mich. Aug. 23, 2021) ECF No. 14, PageID.69. Notwithstanding the initial positive balance when the funds were temporarily held, Plaintiff states that “Flagstar Bank later assesses OD Fees on those same transactions when they purportedly settle days later into a negative balance.” Id. at PageID.69-70. This practice, Plaintiff alleges, is barred by the terms of the Agreement with Flagstar regarding overdraft fee assessments. However, Defendant maintains that the Agreement makes clear that this process may occur, and that the customer's balance is not assessed “unless or until the payment is posted, which typically takes up to two days.” ECF No. 18, PageID.162. Thus, the parties dispute whether the Agreement indicates that OD/NSF Fees will be assessed either at the point of the transaction's (1) initial authorization or (2) payment when the hold is released and the transaction is settled days later. Second, Plaintiff alleges that Defendant assesses multiple NSF Fees “on the same (often small dollar) electronic transactions or checks when reprocessed again and again after being returned for insufficient funds.” ECF No. 20, PageID.215. This process occurs after the initial authorization when the temporary hold is placed on positive funds. In these cases, the transaction is repeatedly 3 processed by the bank *3 or a merchant, and an OD/NSF Fee is assessed per each processing request. ECF No. 14, PageID.82. This dispute between the parties centers around the definition of the term “item” in the Agreement. Plaintiff alleges that the Agreement “expressly states that [only] a singular NSF Fee can be assessed on checks, ACH debits, and electronic payments, ” and therefore the “same ‘item' on an account cannot conceivably become a new one each time it is rejected for payment then reprocessed, especially when-as here-Plaintiff Gardner took no action to resubmit them.” Id. at PageID.82, 84. Defendant maintains, however, that “the Agreement does not state that ‘item' means only one presentment of a transaction, ” so the multiple assessments of NSF Fees in this circumstance are permitted by the Agreement. ECF No. 18, PageID.152. Plaintiff accordingly filed the instant action against Flagstar Bank on July 31, 2020. ECF No. 1. On October 6, 2020, Plaintiff filed her First Amended Complaint and brings two claims for breach of contract, including breach of the covenant of good faith and fair dealing, and conversion under Michigan state law. ECF No. 14. III. Legal Standard Federal Rule of Civil Procedure 12(b)(6) allows a district court to make an assessment as to whether the plaintiff has stated a claim upon which relief may be granted. See Fed.R.Civ.P. 12(b)(6). To withstand a motion to dismiss pursuant to Rule 12(b)(6), a complaint must comply with the 4 pleading requirements of Federal *4 Rule of Civil Procedure 8(a)(2). See Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009). Rule 8(a)(2) requires “a short and plain statement of the claim showing that the pleader is entitled to relief, in order to give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quotation marks omitted) (quoting Fed.R.Civ.P. 8(a)(2); Conley v. Gibson, 355 U.S. 41, 47 (1957)). To meet this standard, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 570; see also Iqbal, 556 U.S. at 678-80 (applying the plausibility standard articulated in Twombly). When considering a Rule 12(b)(6) motion to dismiss, the Court must construe the complaint in a light most favorable to the plaintiff and accept all of his factual allegations as true. Lambert v. Hartman, 517 F.3d 433, 439 (6th Cir. 2008). While courts are required to accept the factual allegations in a complaint as true, Twombly, 550 U.S. at 556, the presumption of truth does not apply to a claimant's legal conclusions. See Iqbal, 556 U.S. at 678. Therefore, to survive a motion to 2 Gardner v. Flagstar Bank, FSB 20-cv-12061 (E.D. Mich. Aug. 23, 2021) dismiss, the plaintiff's pleading for relief must provide “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Ass'n of Cleveland Fire Fighters v. City of Cleveland, 502 F.3d 545, 548 (6th Cir. 2007) (quoting Twombly, 550 U.S. at 5 555) (internal citations and quotations omitted). *5 IV. Discussion In the present Motion, Defendant claims that Plaintiff's First Amended Complaint should be dismissed in its entirety because the Agreement does not contain ambiguous language or permit conduct in violation of Defendant's obligations such that either a breach of contract or conversion claim may stand. Plaintiff maintains that she has pled facts sufficient to survive dismissal on both of her claims at this stage. A. Breach of Contract (Count I) Count I of Plaintiff's First Amended Complaint alleges that Defendant has breached provisions of the Agreement regarding overdraft fee assessment timing and frequency. Specifically, this claim asserts that Defendant is (1) improperly charging OD/NSF Fees on APPSN Transactions in contravention of the Agreement's language regarding overdrafts and available balances, and (2) improperly charging multiple OD/NSF Fees on singular transactions with multiple merchant presentments on overdrawn accounts. As an initial matter, Defendant claims that “Plaintiff has not identified any contract provision 7 that has been violated by Flagstar, ” and thus her claim cannot be maintained for breach of contract. ECF No. 18, PageID.158. However, a review of Plaintiff's First Amended Complaint does not support this assertion. While the text of Count I does not list specific contractual language, the 6 First Amended Complaint *6 is replete with references to various provisions of the Agreement that were purportedly breached by Defendant when OD/NSF Fees were assessed against Plaintiff. See, e.g., ECF No. 14, PageID.75-77, 82- 84. Count I also expressly incorporates the preceding paragraphs of Plaintiff's First Amended Complaint prior to asserting the breach claim. Id. at PageID.91. The Court thus declines to adopt Defendant's argument that the breach of contract claim is improper for failure to identify which terms of the Agreement were breached. 1. APPSN Transactions In the First Amended Complaint, the Response, and the hearing on the matter, Plaintiff directs the Court to various provisions in the Agreement that are breached each time an APPSN Transaction occurs. One section broadly defines what balances and available funds include: Balance is the total amount of funds in your account from your posted transactions. Available Balance is your Balance minus any pending debit card transactions and/or any outstanding holds (for example, holds on deposited checks, fraud/legal holds, or temporary debit authorization holds). Any checks you may have written or ACH transactions that have not posted to your account, Bounce Protection funds, or any funds from accounts(s) you have linked for overdraft (for example, deposit overdraft protection and/or overdraft line of credit) are not reflected in your Balance or Available Balance. *7 ECF No. 14-1, PageID.99 (emphasis added). In other words, a customer's Available Balance, from which he or she could make purchases with positive funds, do not include outstanding holds. Temporary debit authorization holds are defined and explained as follows: 3 Gardner v. Flagstar Bank, FSB 20-cv-12061 (E.D. Mich. Aug. 23, 2021) A temporary debit authorization hold affects your Available Balance - On debit card purchases, merchants may request a temporary debit authorization hold on your account for an amount that may differ from the actual amount of your purchase. This temporary debit authorization hold 8 reduces your Available Balance unless and until: (1) we release it after two business days; or (2) before we release the temporary debit authorization hold, the merchant provides to us the actual amount of the purchase and we are able to adjust your account to reflect the actual purchase amount. Please note that adjustment may take more than two business days depending on when the merchant provides the actual amount of the purchase to us. If, at any time before the temporary debit authorization hold is released or the adjustment is made, a transaction is presented to us for payment in an amount greater than your then-existing Available Balance, the transaction presented for payment will be: (1) a non-sufficient funds (NSF) transaction if we do not pay it; (2) an overdraft transaction if we do pay it; or (3) declined if the transaction is a debit/ATM card purchase and you have not authorized us to pay overdrafts on your ATM and everyday debit card transactions. For nonsufficient funds or overdraft transactions, you will be charged an NSF fee according to the Fee Schedule. You will be charged the NSF fee even if you would have had sufficient funds in your account had the amount of the hold been equal to the actual amount of your transaction. Id. at PageID.101 (emphasis added). Another provision in the Agreement similarly discusses these temporary debit authorizations and how the held funds may or may not be accessed by an account holder: Purchases made using your Flagstar debit card or ATM card are subtracted from your designated Flagstar account. PIN based transactions generally are settled the same day. Signature based transactions, on the other hand, may *8 take longer to settle. Therefore, a temporary debit authorization creates a hold on the account that reduces your Available Balance by the amount of the authorization, even if the amount of the transaction is more or less when it is finally posted. While pending, the temporary debit authorization hold could lead to other pending or future transactions (1) being returned for non sufficient funds if we do not pay them, (2) contributing to an overdraft if we do pay them, or (3) being declined if the transaction is a debit/ATM card purchase and you have not authorized us to pay overdrafts for debit/ATM card transactions. Id. at PageID.117 (emphasis added). Plaintiff points to these provisions within the Agreement to illustrate how the temporary debit authorizations are described, specifically in relation to the hold authorizations with positive funds. Plaintiff explains that “available funds are immediately placed on ‘hold' for the transaction they were held for, and those held funds cannot be consumed by later made transactions-which is why Flagstar repeatedly warns accountholders that such later made transactions can [incur] OD Fees as a result of the held funds being unavailable.” ECF No. 20, PageID.231 (emphasis in original). The dispute in the instant matter, however, does not concern the assessment of OD Fees on subsequent transactions after a temporary debit authorization hold is placed; instead, Plaintiff asserts that nothing in the Agreement language permits Defendant to later charge an OD/NSF Fee 4 Gardner v. Flagstar Bank, FSB 20-cv-12061 (E.D. Mich. Aug. 23, 2021) on the funds that were sequestered within the temporary debit authorization hold when she makes her initial purchase, and thus the Agreement is ambiguous about overdraft fee 9 assessments. *9 In response, Defendant avers that Plaintiff is “contorting the Agreement's clear definitions of a customer's Balance and Available Balance[ and] twisting the Agreement's explanation of a ‘temporary debit authorization hold' to mean that money is physically set aside and depleted from Plaintiff's Balance.” ECF No. 18, PageID.161. Defendant disagrees with Plaintiff's characterization of the temporary holds placed upon pending transactions and emphasizes that “[n]owhere does the Agreement say that the hold removes money from the account, set aside money in that account, or posts the transaction to the Balance.” Id. at PageID.162. Instead, Defendant asserts, the temporary hold simply confirms that a customer has sufficient funds at the time of authorization by a merchant, and the balance is settled when the payment is posted up to two days later. Id. Further, the parties disagree about when the assessment of an OD/NSF Fee is warranted under the Agreement when a temporary hold is deployed by Flagstar. This dispute centers around whether the assessment of fees is permitted at authorization-when Plaintiff first makes her transaction and the temporary hold is placed-or whether the assessment occurs at settlement/payment-when Flagstar later settles the transaction with the third-party merchant, posts the transaction to the account, and removes the hold. Plaintiff claims that the Agreement contains a “clear promise to accountholders that authorization is the key moment when overdraft fees on debit card transactions are determined” 10 and cites to a provision in the Agreement *10 stating that Flagstar may “honor withdrawal requests that overdraw your account.” ECF No. 20, PageID.232; ECF No. 14-1, PageID.101. However, Defendant maintains that the Agreement is clear that OD/NSF Fees are determined at the point of payment, when Flagstar settles the transaction with the merchant and posts it in Plaintiff's balance. ECF No. 18, PageID.163. According to Defendant, this is expressly provided for in the Agreement: Your account is overdrawn when your Available Balance is less than zero. One way this can happen is if we pay an Item for more money than your Available Balance. ECF No. 14-1, PageID.104 (emphasis added). Thus, Defendant believes there are no ambiguities in the Agreement and Plaintiff is contorting clear contractual language about when OD/NSF Fees are assessed. Whether contract language is clear or ambiguous is a question of law. Collins v. National General Ins. Co., 834 F.Supp.2d 632 (E.D. Mich. 2011). A contract is ambiguous if it is subject to two reasonable interpretations. See Citizens Ins. Co. of America v. MidMichigan Health ConnectCare Network Plan, 449 F.3d 688 (6th Cir. 2006) (quoting Boyer v. Douglas Components Corp., 986 F.2d 999, 1003 (6th Cir.1993)). If the Court decides that the contract is ambiguous, then the meaning of the contract becomes a question of fact and dismissal of the claim is improper. See 51382 Gratiot Ave. Holdings, LLC v. Chesterfield Development Co., LLC, 835 F.Supp.2d 384, 391 11 (E.D. Mich. 2011). *11 Federal courts across the country have been presented with similar or identical APPSN Transaction claims and have overwhelmingly denied dismissal motions on the grounds brought by Defendant and other financial institutions. In Roberts v. Capital One, N.A., 719 Fed.Appx. 33 (2nd Cir. 2017), the Second Circuit found that the district court erred in dismissing a breach of contract claim that was predicated on a similar ambiguity about the timing of overdraft fee assessments by a bank. The Roberts court found unpersuasive the argument that the words “pay” or 5 Gardner v. Flagstar Bank, FSB 20-cv-12061 (E.D. Mich. Aug. 23, 2021) “payment” as used in the contract clearly meant that the overdraft fees would be assessed at payment and settlement, not at authorization. Id. at 36. Thus, the Second Circuit found that dismissal was improper because the definition of “payment” and when fees were assessed was ambiguous and subject to more than one interpretation. Id. (explaining that “it is equally reasonable to understand the term ‘Overdraft' as referring to Capital One's election to make a payment, which would occur at the time of authorization (as asserted by Roberts), or as referring to the payment itself, which would occur at the time of settlement (as asserted by Capital One).”). This Court is persuaded by the reasoning of the Second Circuit and other district courts who have recently considered this issue. For example, in Lloyd v. Navy Fed. Credit Union, No. 17-CV- 1280-BAS-RBB, 2018 WL 1757609 (S.D. Cal. Apr. 12, 2018), the court found that a similar contractual provision regarding debit holds and overdraft fees was ambiguous and thus precluded 12 dismissal of the breach *12 of contract claim. Id. at *7 (“The Account Agreements do not clearly identify how funds sequestered for a transaction authorized with positive funds are to be used when the transaction is paid . . . . [the contract] can thus be fairly read to include either a consumer's transaction with a merchant (i.e., authorization of the transaction) or Navy Federal's transaction with a merchant (i.e., settlement with the merchant).”). Other courts have notably arrived at similar conclusions. See, e.g., Lussoro v. Ocean Fin. Fed. Credit Union, 456 F.Supp.3d 474, 483 (E.D.N.Y. 2020) (finding that the plaintiff stated a breach of contract claim because “[a]t the very least, the Court finds that the language is ambiguous because the Contract does not define at what point in time an item ‘is presented,' i.e., whether an item is presented at the point of authorization, when a consumer is engaging in a transaction with a merchant, or at the point of settlement, when the merchant is seeking payment from the bank.”); see also Precision Roofing of N. Fla. Inc. v. CenterState Bank, No. 3:20-CV-352-J-39JRK, 2021 WL 3036354, at *2 (M.D. Fla. Feb. 22, 2021) (“In this case, Plaintiff sets forth a reasonable interpretation of the Terms and Conditions that would preclude Defendant from assessing overdraft charges on APPSN transactions. The language in other sections of the Terms and Conditions regarding how Defendant processes debit holds and imposes non-sufficient funds fees and overdraft fees arguably supports such an interpretation.”); Hash v. First Fin. Bancorp, No. 1:20-CV-1321 RLM-MJD, 2021 13 WL 859736, at *7 (S.D. Ind. Mar. 8, 2021) *13 (denying bank's dismissal motion and explaining that “[n]one of the contract sections cited by First Financial unambiguously establish that the contract allows First Financial to determine overdraft fees at settlement on the type of transactions on which Mr. Hash alleges he was improperly charged overdraft fees.”). The instant matter presents analogous ambiguities to the above-cited cases about when a transaction is “paid, ” and if that payment occurs at authorization or settlement. Contrary to Defendant's assertions, the Agreement is not unambiguously clear about whether an OD/NSF Fee may be assessed on an APPSN Transaction, and Plaintiff could reasonably understand the Agreement's terms to preclude Flagstar from assessing overdraft fees when the initial transaction is made with a positive account balance. While Defendant's interpretation of the Agreement may be plausible here, so is Plaintiff's interpretation. See Roberts, 719 Fed.Appx. at 3637 (“[I]t would hardly be implausible for a consumer to think that ‘a transaction' refers to the consumer's transaction with a merchant, such that the assessment of whether their account holds sufficient funds refers to the funds available at the time that the consumer-merchant transaction is authorized by” the defendant bank, not when the transaction is settled days later.). This Court must construe Plaintiff's First Amended Complaint in the light most favorable to her, Lambert, 517 F.3d 6 Gardner v. Flagstar Bank, FSB 20-cv-12061 (E.D. Mich. Aug. 23, 2021) at 439, and agrees that Flagstar's “preferred interpretation of the agreement makes little sense from the account-holder's point of view, as a 14 reasonable consumer likely *14 considers something to have been paid for when they swipe their debit card, not when their bank's back-office operations are completed, ” Roberts, 719 Fed.Appx. at 37. Further, it is well-established in this Circuit that a contract that is subject to two reasonable interpretations is ambiguous and create an issue of fact precluding dismissal at this stage. See Citizens Ins. Co. of Am., 449 F.3d at 694; See In re Fifth Third Early Access Cash Advance Litig., 925 F.3d 265, 276 (6th Cir. 2019); see also City of Wyandotte v. Consol. Rail Corp., 262 F.3d 581, 585 (6th Cir. 2001) (“The rule of law that has emerged from D'Avanzo, one which guides our consideration of this case, is that ‘[a] contract is ambiguous if the language is susceptible to two or more reasonable interpretations.'”) (citing D'Avanzo v. Wise & Marsac, P.C., 223 Mich.App. 314, 565 N.W.2d 915, 918 (1997)). Under this precedent, the Court finds that the Agreement may be reasonably interpreted to mean that overdraft fees are assessed at the time of authorization, under Plaintiff's argument, or at the time of payment and settlement, under Defendant's argument. Thus, the instant matter presents ambiguities about when OD/NSF Fees may be assessed in APPSN Transactions under the existing contractual language. And because ambiguities exist, dismissal of the breach of contract claim is improper. See Roberts, 719 Fed.Appx. at 36. The Court thus declines to dismiss the breach of contract claim in relation to 15 APPSN Transactions. *15 16 2. The Assessment of Multiple OD/NSF Fees on Single Transactions Plaintiff also challenges Defendant's assessment of multiple OD/NSF Fees on single transactions that are repeatedly processed by third-party merchants. Plaintiff alleges that Defendant's conduct is not permitted per the Agreement's provisions, and that only one overdraft fee may be assessed for the transaction made in a negative balance, not per each processing request. However, Defendant disputes this interpretation of the Agreement and states, “contrary to Plaintiff's assertion, each presentment of an Item can incur its own OD/NSF fee.” ECF No. 18, PageID.165. This claim rests upon the term “item” as it is defined and utilized throughout the Agreement. It is first referenced at the beginning of the Agreement: Items are intended to refer to any debits against your account and include, but are not limited to, withdrawal tickets, checks, transfers, electronic debits, imaged debits, wire transfers, ATM debits, ACH debits, bill pay debits, photo copy debits, bank generated debits, and debit card point of sale transactions[.] Posted transactions are Items and/or deposits reflected in your Balance. Pending transactions are Items (for example, electronic debits, ACH debits, bill pay debits, bank generated debits), electronic/ACH deposits, and debit card authorizations/holds that have been received by the bank but not yet posted to your Balance. ECF No. 14-1, PageID.100 (emphasis added). Defendant avers that this provision makes clear that an “item” can include two separate presentments of the same transaction. ECF No. 18, PageID.165 (“Based on the definition expressly provided *16 by the Agreement, an ‘item' can be an ACH debit, and then an entirely new ‘item' can be the same ACH debit presented as a new transaction.”). This argument is purportedly supported by additional language later in the Agreement: 7 Gardner v. Flagstar Bank, FSB 20-cv-12061 (E.D. Mich. Aug. 23, 2021) We may determine whether your Available Balance is sufficient to pay an Item at any point between (1) the time an Item is presented to us or we receive notice regarding the Item and (2) the time the Item is returned. ECF No. 14-1, PageID.104 (emphasis added). Under Defendant's interpretation, this provision clearly indicates that the presentment of an “item”-which may include the same transaction presented multiple times-may incur multiple OD/NSF Fees. Plaintiff, however, highlights other language that supports her claim that the Agreement's definition of “item” is ambiguous as to whether it becomes a new item upon reprocessing by a merchant. See ECF No. 20, PageID.228. The Agreement provides, for example, that: We may refuse to pay an overdraft item at any time even though we may have previously paid overdrafts for you. For example, we typically do not pay overdraft items if your account is not in good standing as defined above, or, if based upon our review of your account management, we determine that you are using Bounce Protection excessively. You will be charged an NSF fee for each item returned. ECF No. 14-1, PageID.108 (emphasis added). Additional provisions in the 17 Agreement also state: *17 Overdrafts above and beyond your established Bounce Protection Limit may result in checks or other items being returned to the payee. The NonSufficient Fee (NSF) will be charged per item and assessed to your account. An OD/NSF notice will be sent to notify you of items paid and/or returned. If the account is overdrawn, it may be subject to the current Consecutive Days Overdrawn (OD) fee. Id. at PageID.113. Plaintiff thus asserts that the “each item” and “per item” language presents, at the very least, an ambiguity as to whether Flagstar can charge multiple OD/NSF Fees on the same transaction. As with the APPSN Transactions litigation, numerous federal courts around the country have overwhelmingly permitted claims premised on ambiguous uses of the term “item” to proceed in cases against financial institutions. This Court finds particularly persuasive the analysis in Perks v. TD Bank, 444 F.Supp.3d 635 (S.D.N.Y. 2020), for example, which looked at an analogous contractual provision that stated “An ‘item' includes a[n] . . . ACH transaction . . . and any other instruction or order for the payment, transfer, deposit or withdrawal of funds.” Id. at 640 (emphasis added). The Perks court held that it was plausible to read this provision as authorizing the defendant bank to only charge a single OD/NSF Fee, even though the bank's interpretation permitting multiple OD/NSF Fees was also a reasonable interpretation. Id. Here, Flagstar attempts to make the same argument by emphasizing the word “any” in the definition of “item” as evidence that each presentment can be individually considered an “item.” ECF No. 18, PageID.164-165. However, the Court agrees with 18 the Perks analysis that Plaintiff's construction *18 of the Agreement is also reasonable, and “the definition of ‘item' is ambiguous with regard to whether a resubmission of an ACH transaction is a separate item or is a part of the same initial ACH transaction, and that ambiguity must be read in favor of Plaintiff[] at this stage.” Perks, 444 F.Supp.3d at 640. This conclusion has been repeatedly reached in additional cases that guide this Court's decision. See Chambers v. HSBC Bank USA, N.A., No. 19 CIV. 10436 (ER), 2020 WL 7261155, at *4 (S.D.N.Y. Dec. 10, 2020) (allowing a breach of contract claim to proceed because “the proposed interpretations of ‘item' by HSBC and Chambers are both reasonable based on” the contract 8 Gardner v. Flagstar Bank, FSB 20-cv-12061 (E.D. Mich. Aug. 23, 2021) between the parties.); Wilkins v. Simmons Bank, No. 3:20-CV-116-DPM, 2020 WL 7249030, at *1 (E.D. Ark. Dec. 9, 2020) (“The Court concludes that there is ambiguity in all this, and lurking in the Bank's ‘per item' fee in particular. Is each try an item? Or is the entire transaction one item even though multiple tries are involved?”); Coleman v. Alaska USA Fed. Credit Union, No. 3:19-CV- 0229-HRH, 2020 WL 1866261, at *4 (D. Alaska Apr. 14, 2020) (finding that “[b]oth parties' interpretations of the Account Agreement are plausible” as to whether the bank may charge multiple NSF fees each time a merchant presents the transaction for payment.). Here, the Court looks to the specific language of this Agreement between Gardner and Flagstar and finds that both interpretations of the Agreement and the definitional breadth of “item” are 19 plausible, and thus an ambiguity exists. While *19 Defendant argues that “Flagstar's assessment of an NSF/OD fee is tied to the circumstances surrounding each item (i.e., whether the item is returned), rather than the item itself, ” an ambiguity still exists as to whether “item” can mean more than one presentment. ECF No. 23, PageID.506 (emphasis in original). This is in contrast to Lambert v. Navy Fed. Credit Union, No. 1:19-CV-103-LO-MSN, 2019 WL 3843064 (E.D. Va. Aug. 14, 2019), cited by Defendant, which contained more express contractual language placing a customer on notice that multiple fees may be assessed on the same underlying transaction. Id. at *4 (“The next sentence warns: ‘A fee may be assessed in the amount shown on Navy Federal's current Schedule of Fees and Charges for each returned debit item.' Taken together, these sentences clearly provide that Navy Federal may return a debit item, such as an ACH debit, if there is not enough money in the account, and, if there is a return, Navy Federal may charge the member a fee for that returned debit transaction.”) (internal citations and parentheticals removed). Defendant's Agreement cannot be said to have the same clarity as the Lambert contract. Moreover, multiple courts have observed that when “‘other courts have found similar contractual language to be both unambiguous and ambiguous,' such case law is of limited guidance on a motion to dismiss.” Chambers, No. 19 CIV. 10436 (ER), 2020 WL 7261155 at *5 (citing Coleman, No. 19 Civ. 229 (HRH), 2020 WL 1866261 at *5). Thus, this Court maintains that the Agreement's 20 language in *20 the instant case lends itself to two reasonable interpretations of “item” and whether the Agreement permits multiple OD/NSF Fees on all presentments or resubmissions associated with a single transaction. Accordingly, a contractual ambiguity exists precluding dismissal of the breach of contract claim.1 See Citizens Ins. Co. of Am., 449 F.3d at 694. 1 Plaintiff also pleads a breach of the implied covenant of good faith and fair dealing in the alternative to her breach of contract claim. See ECF No. 14, PageID.91. At this stage of the litigation, the Court will allow Plaintiff to proceed with this claim in the alternative as permitted by Federal Rule of Civil Procedure 8. FED. R. CIV. P. 8(a)(2). The Court declines to engage in a merits determination of the alternative claim at this time. B. Conversion (Count II) Plaintiff's second claim alleges that Defendant has unlawfully withdrawn funds and converted it for personal gain in its assessment of OD/NSF Fees on various transactions. Conversion is defined under Michigan law as “any distinct act of domain wrongfully exerted over another's personal property in denial of or inconsistent with the rights therein.” Foremost Ins. Co. v. Allstate Ins. Co., 439 Mich. 378, 391 (1992). Defendant argues that Plaintiff cannot maintain this claim because Michigan law precludes conversion claims when the parties are in a debtor-creditor relationship, 9 Gardner v. Flagstar Bank, FSB 20-cv-12061 (E.D. Mich. Aug. 23, 2021) and there is no tort duty established separate from the existing contractual duties. The Court agrees 21 with Defendant Flagstar. *21 Here, Plaintiff's First Amended Complaint alleges that the “money Defendant held for Plaintiff and class members were held in identifiable accounts and was still the property of Plaintiff and class members, ” and that “[t]hese deposits were bailments and the Defendant was a bailee.” ECF No. 14, PageID.94. However, as Defendant points out, the Sixth Circuit has held that conversion claims may not be maintained between a financial institution, like Defendant, and a depositor, like Plaintiff: Under Michigan law, a breach of a contractual obligation cannot support an action in tort absent the “violation of a legal duty separate and distinct from the contractual obligation.” Rinaldo's Constr. Corp. v. Michigan Bell Tel. Co., 454 Mich. 65, 559 N.W.2d 647, 658 (1997). The relationship between a bank and its depositor is one of a debtor-creditor. Citizens Ins. Co. of Am. v. Delcamp Truck Ctr., Inc., 178 Mich.App. 570, 444 N.W.2d 210, 213 (1989). Accordingly, a claim of conversion is only sustainable if the defendant bank obtained the money without the owner's consent to the creation of that debtorcreditor relationship. Comerica Bank v. Allied Commc'ns, Inc., 1997 WL 33353282, at *2 (Mich.Ct.App. Mar. 14, 1997) (holding that a defendant bank could not be held liable for a claim of conversion arising from its allegedly improper set-off of funds from the customer's bank account to pay down a debt owed to the bank where the customer had consented to the creation of a debtor- creditor relationship by depositing money with the bank). Spizizen v. Nat'l City Corp., 516 Fed.Appx. 426, 429 (6th Cir. 2013). The cases cited by Plaintiff do not support the argument that her conversion claim can be maintained under Michigan law. The Michigan cases referenced in her Response discuss conversion claims that may arise from separate and distinct legal duties outside contractual obligations-which is not the case here. See Check Reporting Servs., Inc. v. Michigan Nat. Bank- 22 Lansing, 191 Mich.App. 614, 617, 22 *22 478 N.W.2d 893, 896 (1991) (affirming grant of summary judgment on the conversion claim when the defendant “had the right to use the funds on deposit in [the plaintiff's] check purchase account as a setoff against [the plaintiff's] obligations.”); Hansman v. Imlay City State Bank, 121 Mich.App. 424, 426, 328 N.W.2d 653, 654 (1982) (discussing the right to set off a plaintiff's checking account funds against the plaintiff's indebtedness to the financial institution and holding that questions of fact exist about the plaintiff's account ownership). In the instant matter, Plaintiff's cause of action does not involve Flagstar's right to set-off funds. Instead, her claims clearly stem from an alleged breach of contractual obligations under the Agreement, and there are no duties separate and distinct from these obligations to support a conversion claim arising in tort. Further, courts within this District have dismissed conversion claims in nearly identical cases. In Lossia, for example, the district court found that the plaintiffs consented to the creation of a debtor- creditor relationship when they opened and deposited money into a checking account at the financial institution. Lossia v. Flagstar Bancorp, Inc., No. 15-12540, 2016 WL 520867, at *3 (E.D. Mich. Feb. 10, 2016) (Steeh, J.). The district court noted that even though “plaintiffs contend that they did not consent to a debtor-creditor relationship regarding the monies on which the fees were assessed[, ]” the “proper focus of the 23 consent is not the particular *23 monies deposited, but the intent to form a debtor-creditor relationship by depositing money with the bank.” Id. 10 Gardner v. Flagstar Bank, FSB 20-cv-12061 (E.D. Mich. Aug. 23, 2021) The same is true here; Plaintiff entered into a debtor-creditor relationship with Flagstar when she opened her checking account, deposited money into her account, and proceeded to make various transactions using those funds. Furthermore, the claims within Plaintiff's First Amended Complaint are predicated on the Agreement between the parties, which forms the basis of Defendant's contractual obligations. Plaintiff has failed to plead a tort duty owed by Defendant that is separate and distinct from the parties' contractual relationship. Because “a tort action will not lie when based solely on the nonperformance of a contractual duty, ” Plaintiff's conversion claim must therefore be dismissed. Lossia v. Flagstar Bancorp, Inc., No. 15-12540, 2016 WL 520867, at *3 (E.D. Mich. Feb. 10, 2016) (quoting Fultz v. Union-Com. Assocs., 470 Mich. 460, 466, 683 N.W.2d 587, 591 (2004)). Accordingly, Defendant's Motion to Dismiss will 24 be granted as to Plaintiff's conversion claim. *24 V. Conclusion For the reasons discussed herein, Defendant's Motion to Dismiss [#18] is GRANTED IN PART and DENIED IN PART. 25 IT IS SO ORDERED. *25 11 Civil No. 21-cv-00534-LM 2021-11-08 Rita GRENIER and Edwin Grenier, Individually and on Behalf of All Others Similarly Situated v. GRANITE STATE CREDIT UNION, Does 1 through 5 Elaine Kusel, Sherief Morsy, McCune Wright Arevalo LLP, Newark, NJ, Christine M. Craig, Shaheen & Gordon PA, Dover, NH, for Rita Grenier, Edwin Grenier. Bethany P. Minich, Litchfield Cavo, Lynnfield, MA, James R. Branit, Jason E. Hunter, Litchfield Cavo, Chicago, IL, for Granite State Credit Union. Landya McCafferty, United States District Judge 20 *20 Elaine Kusel, Sherief Morsy, McCune Wright Arevalo LLP, Newark, NJ, Christine M. Craig, Shaheen & Gordon PA, Dover, NH, for Rita Grenier, Edwin Grenier. Bethany P. Minich, Litchfield Cavo, Lynnfield, MA, James R. Branit, Jason E. Hunter, Litchfield Cavo, Chicago, IL, for Granite State Credit Union. ORDER Landya McCafferty, United States District Judge Plaintiffs Rita and Edwin Grenier bring this putative class action against Granite State Credit Union ("Granite") and "Does 1 through 5," alleging injuries stemming from Granite's overdraft fees and policies. Plaintiffs allege that— by not properly informing consumers how overdrafts are assessed—Granite has violated, and continues to violate, the Electronic Funds Transfer Act's, 15 U.S.C. § 1693 ("EFTA"), implementing regulations, 12 C.F.R. § 1005 et seq. ("Regulation E"). Pending before the court is Granite's motion to dismiss (doc. no. 9) under Fed. R. Civ. P. 12(b)(6). For the following reasons, the motion is denied. STANDARD OF REVIEW Under Rule 12(b)(6), the court must accept the factual allegations in the complaint as true, construe reasonable inferences in the plaintiff's favor, and "determine whether the factual allegations in the plaintiff's complaint set forth a plausible claim upon which relief may be granted." Foley v. Wells Fargo Bank, N.A., 772 F.3d 63, 71 (1st Cir. 2014) (internal quotation marks omitted). A claim is facially plausible "when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct 21 alleged." *21 Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009). BACKGROUND Regulators, private litigants, and the courts have recently devoted significant attention to overdraft fees. See Chambers v. NASA Fed. Credit Union, 222 F. Supp. 3d 1, 5-7 (D.D.C. 2016) (thoroughly outlining history). In 2009, the Federal Reserve Board1 revised Regulation E to add a provision intended to "assist consumers in understanding how overdraft services provided by their Civil 21-cv-00534-LM United States District Court, D. New Hampshire Grenier v. Granite State Credit Union 570 F. Supp. 3d 18 (D.N.H. 2021) Decided Nov 8, 2021 1 Grenier v. Granite State Credit Union 570 F. Supp. 3d 18 (D.N.H. 2021) institutions operate and to ensure that consumers have the opportunity to limit the overdraft costs associated with ATM and one-time debit card transactions where such services do not meet their needs." Electronic Fund Transfers, Final Rule, 74 Fed. Reg. 59,033, 59,033 (Nov. 17, 2009). 1 Congress reassigned responsibility for enforcing the EFTA from the Federal Reserve Board to the Consumer Financial Protection Bureau in 2010. See Dodd- Frank Wall Street Reform and Consumer Protection Act of 2010, Pub. L. No. 111- 203, Title X, § 1084, 124 Stat. 1376, 2081– 83. Thus, Regulation E now requires financial institutions to obtain a customer's "affirmative consent" before charging overdraft fees on ATM or one-time debit card transactions. 12 C.F.R. § 1005.17(b)(1)(iii). To secure consent, institutions must use an opt-in notice that "describe[s] the institution's overdraft service." Id. at 1005.17(b) (1)(i). The notice must be "segregated from all other information," and "substantially similar" to a model form (Model Form A-9) provided by the Consumer Financial Protection Bureau. Id. at 1005.17(b)(1)(i); (d). All disclosures must be "clear and readily understandable." 12 C.F.R. § 1005.4(a)(1). Issues occur when a disclosure does not adequately convey how overdraft fees are assessed. There are two balances financial institutions can use to calculate whether the amount of money in an account dips below zero: either the "actual balance"2 or the "available balance." The "actual balance" is the actual amount of money in an accountholder's account at any particular time. The "available balance," in contrast, is the actual amount of money in the account minus any "holds" on deposits and pending debits that have not yet been posted. For this reason, calculating overdrafts based on the available balance "often leads to more frequent overdrafts because there is less money available in the account due to holds and pending 22 transactions." Domann v. Summit Credit Union, No. 18-cv-1670-slc, 2018 WL 4374076 (W.D. Wis. Sept. 13, 2018) (citation omitted). 2 Courts also refer to "actual balance" as the "ledger balance" or "current balance." Thus, plaintiffs across America have filed a number of "virtually identical lawsuits" challenging institutions that use the available balance method where the opt-in notice does not explain how it assesses overdraft fees. Id.; see, e.g., Tims v. LGE Cmty. Credit Union, 935 F.3d 1228, 1239-40 (11th Cir. 2019) ; Adams v. Liberty Bank, No. 3:20-cv-01601(MPS), 2021 WL 3726007 (D. Conn. Aug. 23, 2021) ; Wellington v. Empower Fed. Credit Union, 533 F. Supp. 3d 64 (N.D.N.Y. 2021) ; Bettencourt v. Jeanne D'Arc Credit Union, 370 F. Supp. 3d 258 (D. Mass. 2019) ; Walbridge v. Northeast Credit Union, 299 F. Supp. 3d 338 (D.N.H. 2018) ; Walker v. People's United Bank, 305 F. Supp. 3d 365 (D. Conn. 2018) ; Salls v Digital Fed. Credit Union, 349 F. Supp. 3d 81 (D. Mass. 2018) ; Domann, 2018 WL 4374076 ; *22 Ramirez v. Baxter Credit Union, No. 16-CV-03765-SI, 2017 WL 1064991 (N.D. Cal. Mar. 21, 2017) ; Pinkston-Poling v. Advia Credit Union, 227 F. Supp. 3d 848 (W.D. Mich. 2016) ; Chambers, 222 F. Supp. 3d 1. Plaintiffs in this case bring one such lawsuit. They allege that Granite used a one-page notice entitled "What You Need to Know about Overdrafts and Overdraft Fees" (the "Opt-in Disclosure"). The Opt-in Disclosure states that an overdraft "occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway." It does not outline the distinction between the actual balance method and the available balance method. Thus, Plaintiffs allege that Granite has violated, and continues to violate, Regulation E because the phrase "enough money" does not specify whether Granite calculates overdrafts based on the actual balance or the available balance. Essentially, they argue that the Opt-in Disclosure does not provide a "clear and 2 Grenier v. Granite State Credit Union 570 F. Supp. 3d 18 (D.N.H. 2021) readily understandable" explanation of "the institution's overdraft service." See 12 C.F.R. § 1005.4(1)(1) ; 1005.17(b)(1)(i). DISCUSSION Granite moves to dismiss on the grounds that, first, it did not violate Regulation E and, second, that the EFTA's safe harbor provision, 15 U.S.C. § 1693m(d)(2), insulates it from liability. I. Regulation E Violation Granite first argues that when the Opt-in Disclosure is read in conjunction with a document entitled "Terms and Conditions of Your Account" (the "Membership Agreement"), Granite satisfies Regulation E's disclosure requirements. Granite attaches the five-page Membership Agreement to its motion, and alleges it is the operative agreement governing Plaintiffs’ relationship with Granite. The Membership Agreement states that Granite assesses overdrafts based on the available balance: Determining your available balance – We use the "available balance" method to determine whether your account is overdrawn, that is, whether there is enough money in your account to pay for a transaction. Importantly, your "available" balance may not be the same as your account's "actual" balance. This means an overdraft or an NSF [nonsufficient funds] transaction could occur regardless of your account's actual balance. Doc. no. 9-3 at 1. It then proceeds to describe in further detail the difference between actual balance and available balance. See id. The Membership Agreement was not attached to—or referenced in—the complaint.3 3 Granite alleges that Plaintiffs referred to the Membership Agreement in their complaint when they referenced a "Granite agreement." Doc. no. 9 at 2 n.1. As Plaintiffs clarify, the "Granite agreement" referenced in the complaint is actually the Opt-in Disclosure. Doc. no. at 11 n.4. Even assuming that the Membership Agreement could be considered at the motion to dismiss stage, Plaintiffs have still plausibly alleged violations of Regulation E. Regulation E requires financial institutions to provide disclosures about their overdraft policies "segregated from all other information," i.e. in a standalone document. 12 C.F.R. § 1005.17(b)(1)(i). Because Plaintiffs allege that the Opt-in Disclosure is the segregated document, only it is relevant to Plaintiffs’ claim. The Membership Agreement is extraneous information, irrelevant to whether the Opt-in Disclosure itself—i.e., the segregated document— adequately explains Granite's overdraft policy. See Adams, 2021 WL 3726007, at *4 (refusing to 23 consider extraneous *23 documents such as an Account Agreement on Rule 12(b)(6) motion, but holding that even if it could consider those documents, they would not make plaintiff's Regulation E claim any less plausible because Regulation E requires notice to be "segregated from all other information"); see also Wellington, 533 F.Supp.3d at 69 (holding that even assuming extraneous evidence should be considered on a Rule 12(b)(6) motion, the plaintiff still plausibly alleged violations of Regulation E). The cases Granite cites in support of its argument that the Opt-in Disclosure and the Membership Agreement should be read together are not persuasive. Those cases are all in the context of contract claims, for which it may be appropriate to construe multiple documents together. See, e.g., Tims, 935 F.3d at 1238 n.5 (citing state contract law for the proposition that "where multiple documents are executed at the same time in the course of a single transaction, they should be construed together"); Domann, 2018 WL 4374076, at *6-7 ; Chambers, 222 F. Supp. 3d at 11-12. Yet in cases where plaintiffs allege both a contract claim and a Regulation E claim, courts will read the documents together for the contract 3 Grenier v. Granite State Credit Union 570 F. Supp. 3d 18 (D.N.H. 2021) claim only, because Regulation E requires notice to be "segregated." See Ramirez v. Baxter Credit Union, 2017 WL 118859, at *8 (N.D.Cal. Jan. 12, 2017). Thus, Tims, Domann, and Chambers do not help Granite's argument because here Plaintiffs do not allege breach of contract, and in fact specifically disavow any such claim. See doc. no. 11 at 10. Looking only at the Opt-in Disclosure, then, Plaintiffs plausibly state a claim that the phrase "enough money" does not adequately provide a "clear and readily understandable" explanation of "the institution's overdraft service." 12 C.F.R. § 1005.4(1)(1) ; 1005.17(b)(1)(i). Countless courts examining virtually identical language have agreed. See, e.g., Tims, 935 F.3d at 1238 (ambiguous whether disclosure that overdraft occurs "when you do not have enough money in your account to cover a transaction, but we pay it anyway" uses actual balance or available balance method); Wellington, 533 F.Supp.3d at 71 ; Bettencourt, 370 F. Supp. 3d at 262, 265 ; Walbridge, 299 F. Supp. 3d at 343 ; Salls, 349 F. Supp. 3d at 90 ; Pinkston-Poling, 227 F. Supp. 3d at 857 ; Walker, 305 F. Supp. 3d at 376. Thus, Plaintiffs plausibly state a claim that Granite's Opt-in Disclosure violates Regulation E. II. Safe Harbor Provision Granite next argues that the EFTA's safe harbor provision insulates it from liability. The EFTA protects financial institutions from liability for "any failure to make disclosure in proper form if a financial institution utilized an appropriate model clause issued by the Bureau or the Board." 15 U.S.C. § 1693m(d)(2). Regulation E requires that notice "shall be substantially similar to Model Form A-9," which is promulgated by the Consumer Financial Protection Bureau. 12 C.F.R. § 1005.17(d). Model Form A-9 states: "An overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway." § 1005, App. A (emphasis in original). Courts across the country have addressed arguments identical to Granite's argument here, and the vast majority have held that that using language identical to that in Model Form A-9 does not necessarily insulate a financial institution from liability. See Tims, 935 F.3d at 1244 ; Adams, 2021 WL 3726007, at *6-*8 ; Bettencourt, 370 F. Supp. 3d at 266 ; Salls, 349 F. Supp. 3d at 90-91 ; Walbridge, 299 F. Supp. 3d at 349 ; Smith, 2017 24 WL 3597522, at *8 ; *24 Gunter v. United Fed. Credit Union, No. 3:15-cv-00483-MMD-WGC, 2017 WL 4274196, at *3 (D. Nev. Sept. 25, 2017) ; Ramirez, 2017 WL 118859, at *7 ; Pinkston- Poling, 227 F. Supp. 3d at 852. As one court reasoned, the safe harbor provision requires the use of an "appropriate model clause." Adams, 2021 WL 3726007, at *7 (citing 15 U.S.C. § 1693m(d)(2) ). If the language in Model Form A-9 does not accurately describe a particular institution's overdraft service, then it is not "appropriate." Id. Indeed, "[i]f use of a model clause were, by itself, an impenetrable shield, a consumer would have no redress" when Model Form A-9 does not actually provide a "clear and readily understandable" description, 12 C.F.R. § 1005.5, of an institution's overdraft services. Id. Granite cites two unreported district court cases holding otherwise. See Rader v. Sandia Lab. Fed. Credit Union, No.20-559 JAP/JHR, 2021 WL 1533664, at *13-*14 (D.N.M. April 19, 2021) ; Tilley v. Mountain Am. Fed. Credit Union, No. 2:17-cv-01120-JNP-BCW, 2018 WL 4600655, at *4-*6 (D. Utah Sept. 25, 2018). The court does not find the reasoning of these cases to be persuasive. Tilley, for example, cited a Northern District of Georgia case for the proposition the phrase "enough money" from the model form is not inaccurate when the financial institution calculates overdrafts based on an account's available balance. Tilley, 2018 WL 4600655, at *5 (citing Tims v. LGE Cmty. Credit Union, No. 1:15-cv-4279-TWT, 2017 WL 5133230, at *6 (N.D. Ga. Nov 6, 2017), rev'd and remanded by 935 F.3d 1228 (11th Cir.2019) ). But the Eleventh 4 Grenier v. Granite State Credit Union 570 F. Supp. 3d 18 (D.N.H. 2021) Circuit later overturned that case on appeal, holding that using language from a model clause "does not shield [a financial institution] for claims based on their failure to make adequate disclosures." Tims, 935 F.3d at 1243. The other case Granite cited, Rader, relied exclusively on Tilley’s reasoning, without acknowledging that Tilley was predicated in part on reasoning that the Eleventh Circuit had overturned. See 2021 WL 1533664, at *13-*14. Rather than following either of these cases, this court agrees with the sound reasoning of the Eleventh Circuit and the previously cited district court cases holding that the safe harbor provision did not defeat plaintiffs’ claims. Thus, Plaintiffs have plausibly stated a claim that the clause from Model Form A-9 was not "appropriate" because the language did not describe Granite's overdraft policy in a "clear and readily understandable" way. See Adams, 2021 WL 3726007, at *8. CONCLUSION For these reasons, Granite's motion to dismiss (doc. no. 9) for failure to state a claim is denied. SO ORDERED. 5 Nos. 10–16959 10–17468 10–17689. 2012-12-26 Veronica GUTIERREZ; Erin Walker; William Smith, individually and on behalf of all others similarly situated, Plaintiffs–Appellees, v. WELLS FARGO BANK, NA, Defendant–Appellant. Veronica Gutierrez; Erin Walker; William Smith, individually and on behalf of all others similarly situated, Plaintiffs–Appellees, v. Wells Fargo Bank, NA, Defendant–Appellant. Veronica Gutierrez; Erin Walker, Plaintiffs–Appellants, and William Smith, individually and on behalf of all others similarly situated, Plaintiff, v. Wells Fargo Bank, NA, Defendant–Appellee. West's Ann.Cal.Bus. & Prof.Code § 17200 Jordan Elias, Richard M. Heimann, Roger N. Heller, Michael W. Sobol (argued), and Alison M. Stocking, Lieff Cabraser Heimann & Bernstein, LLP, San Francisco, CA; Jae K. Kim and Richard D. McCune, McCune & Wright, LLP, Redlands, CA, for Plaintiffs–Appellees. McKEOWN Limited on Preemption Grounds 715 West's Ann.Cal.Bus. & Prof.Code § 17200*715 Jordan Elias, Richard M. Heimann, Roger N. Heller, Michael W. Sobol (argued), and Alison M. Stocking, Lieff Cabraser Heimann & Bernstein, LLP, San Francisco, CA; Jae K. Kim and Richard 716 D. McCune, McCune & Wright, LLP, Redlands, CA, for Plaintiffs–Appellees. Robert A. Long, Jr. (argued), Mark William Mosier, Keith A. Noreika, and Stuart C. Stock, Covington & Burling LLP, Washington, D.C.; David M. Jolley and Sonya D. Winner, Covington & Burling, LLP, San Francisco, CA; Emily Johnson Henn, Covington & Burling LLP, Redwood Shores, CA, for Defendant–Appellant. Julia B. Strickland, Lisa M. Simonetti, and David W. Moon, Stroock & Stroock & Lavan LLP, Los Angeles, CA, for Amici Curiae American Bankers Association and California Bankers Association. Nina F. Simon, Washington, D.C., for Amici Curiae Center for Responsible Lending, Consumer Federation of America, California Reinvestment Coalition, and Law Foundation of Silicon Valley. Appeal from the United States District Court for the Northern District of California, William Alsup, District Judge, Presiding. 3:07–cv–05923–WHA. Before: SIDNEY R. THOMAS, M. MARGARET McKEOWN, and WILLIAM A. FLETCHER, Circuit Judges. OPINION McKEOWN, Circuit Judge: Bank fees, like taxes, are ubiquitous. And, like taxes, bank fees are unlikely to go away any time soon. The question we *716consider here is the Nos. 10-16959 United States Court of Appeals, Ninth Circuit. Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) Decided Dec 26, 2012 1 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) extent to which overdraft fees imposed by a national bank are subject to state regulation. At issue is a bookkeeping device, known as “high- to-low” posting, which has the potential to multiply overdraft fees, turning a single overdraft into many such overdrafts. The revenue from overdraft fees is massive. Between 2005 and 2007, Wells Fargo Bank (“Wells Fargo”) assessed over $1.4 billion in overdraft fees. Disturbed by the number of overdrafts caused by small, everyday debit-card purchases, Veronica Gutierrez and Erin Walker (collectively “Gutierrez”) sued Wells Fargo under California state law for engaging in unfair business practices by imposing overdraft fees based on the high-to-low posting order and for engaging in fraudulent business practices by misleading clients as to the actual posting order used by the bank. The district court found that “the bank's dominant, indeed sole, motive” for choosing high-to-low posting “was to maximize the number of overdrafts and squeeze as much as possible out of what it called its ‘ODRI customers' (overdraft/returned item).” The district court also found that Wells Fargo had “affirmatively reinforced the expectation that transactions were covered in the sequence [the purchases were] made while obfuscating its contrary practice of posting transactions in high-to-low order to maximize the number of overdrafts assessed on customers.” The court issued a permanent injunction against “high-to-low” posting and ordered $203 million in restitution. On appeal, Wells Fargo seeks refuge from state law on the ground of federal preemption. It also challenges the district court's factual and legal findings. We conclude that federal law preempts state regulation of the posting order as well as any obligation to make specific, affirmative disclosures to bank customers. Federal law does not, however, preempt California consumer law with respect to fraudulent or misleading representations 717 concerning posting. As a consequence, we affirm in part, reverse in part, and remand for further proceedings. Background1 1 This background is drawn from the district court's Findings of Fact and Conclusions of Law After Bench Trial. “Posting” is the procedure banks use to process debit items presented for payment against accounts. During the wee hours after midnight, the posting process takes all debit items presented for payment during the preceding business day and subtracts them from the account balance. These items are typically debit-card transactions and checks. If the account balance is sufficient to cover all items presented for payment, there will be no overdrafts, regardless of the bookkeeping method used. If, however, the account balance is insufficient to cover every debit item, then the account will be overdrawn. When an account is overdrawn, the posting sequence can have a dramatic effect on the number of overdrafts incurred by the account (even though the total sum overdrawn will be exactly the same). The number of overdrafts drives the amount of overdraft fees. Before April 2001, Wells Fargo used a low-to- high posting order. Under this system, the bank posted settlement items from lowest-to-highest dollar amount. Low-to-high posting paid as many items as the account balance could cover and thus minimized the number of overdrafts. Beginning in April of 2001, Wells Fargo did an about-face in California and began posting debit-card purchases in order of highest-to-lowest*717dollar amount. This system had the immediate effect of maximizing the number of overdrafts. The customer's account was now depleted more rapidly than would be the case if the bank posted transactions in low-to-high order or, in some cases, chronological order. 2 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) As an illustration, consider a customer with $100 in his account who uses his debit-card to buy ten small items totaling $99, followed by one large item for $100, all of which are presented to the bank for payment on the same day. Under chronological posting or low-to-high posting, only one overdraft would occur because the ten small items totaling $99 would post first, leaving $1 in the account. The $100 charge would then post, causing the sole overdraft. Using high-to-low sequencing, however, these purchases would lead to ten overdraft events because the largest item, $100, would be posted first—depleting the entire account balance—followed by the ten transactions totaling $99. Overdraft fees are based on the number of withdrawals that exceed the balance in the account, not on the amount of the overdraft. When high-to-low sequencing is used, the fees charged by the bank for the overdrafts can dramatically exceed the amount by which the account was actually overdrawn. For example, Gutierrez incurred $143 in overdraft fees as a consequence of a $49 overdraft, and Erin Walker incurred $506 in overdraft fees for exceeding her account balance by $120. Gutierrez claims that Wells Fargo made the switch to high-to-low processing in order to increase the amount of overdraft fees by maximizing the number of overdrafts. The bank amplified the effect of its fee maximization plan, which it named “Balance Sheet Engineering,” through several related practices that are not at issue here. California's Unfair Competition Law allows individual plaintiffs to bring claims for unfair, unlawful, or fraudulent business practices. Cal. Bus. & Prof.Code § 17200. 2 Although remedies under the Unfair Competition Law are limited to injunctive relief and restitution, the law's scope is “sweeping.” Cel–Tech Commc'ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163, 180, 83 Cal.Rptr.2d 548, 973 P.2d 527 (1999). Gutierrez sued on behalf of a class, alleging independent violations of both the law's “unfair” and “fraudulent” prongs. Gutierrez alleged that Wells Fargo's “resequencing” practices are unfair because they contradict the legislative policy expressed in California Commercial Code § 4303(b) 1992 Amendment cmt. 7, which provides that “items may be accepted, paid, certified, or charged to the indicated account of its customer in any order” so long as the bank “act[s] in good faith” and not “for the sole purpose of increasing the amount of returned check fees charged to the customer.” 2 .Section 17200 of the California Business and Professions Code provides that “unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice.” The California Supreme Court has held that the law's coverage is sweeping, encompassing “anything that can properly be called a business practice and that at the same time is forbidden by law.” Rubin v. Green, 4 Cal.4th 1187, 1200, 17 Cal.Rptr.2d 828, 847 P.2d 1044 (1993). It governs “anti-competitive business practices as well as injuries to consumers, and has as a major purpose the preservation of fair business competition.” Cel–Tech Commc'ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163, 180, 83 Cal.Rptr.2d 548, 973 P.2d 527 (1999) (citation and internal quotation marks omitted). 718 3 Id. *718 3 The district court held that proof of an unfair business practice under § 17200 requires an unfair policy or practice tethered to a legislatively declared policy or the demonstration of an actual or threatened impact on competition. As described above, Gutierrez “tethered” the claim to the legislative comment expressed in California Commercial Code § 4303(b). The extent to which claims brought under the Unfair Competition Law must be tethered to a legislatively declared policy is a question of debate in California courts 3 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) that need not be addressed here. See Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1169–70 (9th Cir.2012); Durell v. Sharp Healthcare, 183 Cal.App.4th 1350, 1364–65, 108 Cal.Rptr.3d 682 (2010). The district court certified a class of “all Wells Fargo customers from November 15, 2004 to June 30, 2008, who incurred overdraft fees on debit- card transactions as a result of the bank's practice of sequencing transactions from highest to lowest.” After a two-week bench trial, the district court issued a comprehensive 90–page decision and found that Wells Fargo's “decision to post debit-card transactions in high-to-low order was made for the sole purpose of maximizing the number of overdrafts assessed on its customers.” The court also concluded that Wells Fargo led customers “to expect that the actual posting order of their debit-card purchases would mirror the order in which they were transacted” while hiding its actual practice of posting transactions in high- to-low order so that the bank could “maximiz[e] the number of overdrafts assessed on customers.” The district court rejected Wells Fargo's numerous defenses—federal preemption pursuant to various statutes and regulations, Gutierrez's lack of standing, and the impropriety of class certification —and held Wells Fargo's actions to be both unfair and fraudulent under the Unfair Competition Law. As a remedy, the court entered a permanent injunction requiring Wells Fargo to “cease its practice of posting in high-to-low order for all debit-card transactions” and “either reinstate a low-to-high posting method or use a chronological posting method (or some combination of the two methods) for debit-card transactions.” It also imposed various related disclosure requirements. In addition to injunctive relief, the district court ordered Wells Fargo to pay $203 million in restitution. Both parties appealed. Wells Fargo's appeal focuses on its preemption argument and on the merits of Gutierrez's Unfair Competition Law 719 claims. Gutierrez's cross-appeal is directed to the district court's denial of prejudgment interest and punitive damages. Analysis I. Arbitration As a threshold matter, we consider whether this dispute should be arbitrated. Although the contract between the parties contained a permissive arbitration clause, neither party requested arbitration, and consequently the district court did not consider the issue. On appeal, Wells Fargo seeks to compel arbitration and claims that its enforceable right to arbitration did not mature until the Supreme Court's 2011 decision in AT&T Mobility LLC v. Concepcion, ––– U.S. ––––, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011). Wells Fargo asks us to vacate the judgment and remand so that the district court can dismiss the case or stay it pending arbitration. Gutierrez argues that Wells Fargo has waived any claim to arbitration. After considering the terms of the arbitration agreement, the conduct of the parties, and the course of the litigation, along with the traditional benchmarks regarding waiver of arbitration and the purpose of the Federal Arbitration Act (“FAA”), we conclude that the district court judgment should not be vacated on the basis of Concepcion. To do so at this stage would undermine the parties' agreement regarding arbitration, severely prejudice Gutierrez*719 and the certified class members, and result in a waste of judicial resources. This is an unusual, perhaps sui generis, case in which the specific circumstances counsel this result. In Concepcion, the Supreme Court held that the FAA preempted California's Discover Bank rule, id. at 1753, which rendered class-wide arbitration waivers unenforceable if it was “alleged that the party with the superior bargaining power has carried out a scheme to deliberately cheat large numbers of consumers out of individually small 4 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) sums of money,” Discover Bank v. Superior Court, 36 Cal.4th 148, 162–63, 30 Cal.Rptr.3d 76, 113 P.3d 1100 (2005). The central purpose of the FAA “is to ensure that ‘private agreements to arbitrate are enforced according to their terms.’ ” Stolt–Nielsen S.A. v. AnimalFeeds Int'l Corp., ––– U.S. ––––, 130 S.Ct. 1758, 1773, 176 L.Ed.2d 605 (2010) (quoting Volt Info. Sci., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 479, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989)). Section 2 of the FAA provides that an agreement to arbitrate “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. Although the FAA's savings clause “permits agreements to arbitrate to be invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability,” it does not allow “defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.” Concepcion, 131 S.Ct. at 1746 (citation and internal quotation marks omitted). In Concepcion, the Court struck down the Discover Bank rule because it was applied in a manner that disfavored arbitration and interfered with the enforcement of private arbitration agreements, thus standing “as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Id. at 1753 (quotation marks and citation omitted). The effect of Concepcion, as intervening Supreme Court law, on a judgment on appeal after trial, is an issue of first impression. The mine run of cases claiming waiver of arbitration stem from situations where, before trial, a party belatedly asserts a clear right to arbitration. See, e.g., Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1123–26 (9th Cir.2008) (declining to find that defendant's initial refusal to arbitrate employee's complaints constituted waiver of right to arbitrate subsequent legal action). But we have not found, nor have the parties cited, any cases involving waiver of a permissive arbitration right where the applicability of the right was not clear-cut, arbitration was never demanded, and the claim was first asserted on appeal following trial. Our analysis begins with the Customer Account Agreement (“CAA”) between Wells Fargo and the class members, which provides: Either of us may submit a dispute to binding arbitration at any reasonable time notwithstanding that a lawsuit or other proceeding has been commenced. If either of us fails to submit to binding arbitration following a lawful demand, the one who fails to submit bears all costs and expenses incurred by the other compelling arbitration. The CAA further states that “[e]ach of us agrees that any arbitration we have shall not be consolidated with any other arbitration and shall not be arbitrated on behalf of others without the consent of each of us.” 4 720 *720 This arbitration clause stands in contrast to the mandatory arbitration provision found in many consumer contracts, such as the provision in Concepcion. To begin, it is a permissive clause in which either party may demand arbitration. The penalty for failing to consent to arbitration upon demand is bearing the costs involved in compelling arbitration. Four points stand out: 1) an arbitration demand is required; 2) the agreement contemplates that the parties may decide to remain within the judicial system to settle their disputes; 3) the agreement permits class arbitration on consent; and 4) any demand for arbitration must be made within a “reasonable time.” 4 We assume without deciding that the arbitration agreement is valid and that the dispute is within the scope of the arbitration agreement. Neither issue is on appeal. 5 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) The procedural posture of this case is reflective of the parties' intentions and expectations. Notably, Wells Fargo never made a demand for arbitration, raised it as a defense, or even mentioned it until after the Concepcion decision, at which point the trial was over and the district court had issued its judgment. Although the FAA allows for interlocutory appeals of orders denying motions to compel arbitration, see9 U.S.C. § 16(a)(1)(B), unlike the defendant in Concepcion, Wells Fargo undertook no such tack. See131 S.Ct. at 1744– 45;see also Franceschi v. Hosp. Gen. San Carlos, Inc., 420 F.3d 1, 4 (1st Cir.2005) (arbitration right is forfeited where no interlocutory appeal was filed because “it would prejudice plaintiffs to have a full trial and then determine by a post-trial appeal that the whole matter should have been arbitrated and so [should] start again” (internal quotation marks omitted)). The timing of the arbitration demand is informative. The certiorari petition in Concepcion was filed on January 25, 2010, three months before the bench trial began in April 2010. Petition for Writ of Certiorari, Concepcion, 131 S.Ct. 1740 (No. 09–893). On May 24, 2010, the Supreme Court accepted review. AT & T Mobility LLC v. Concepcion, ––– U.S. ––––, 130 S.Ct. 3322, 176 L.Ed.2d 1218 (2010). At that stage, final argument in the district court was more than a month away, no decision had been issued, and the parties were exchanging proposed findings. The arbitration issue was, however, squarely before the Supreme Court. The district court's decision was not issued until August 2010. Even in that interim period, Wells Fargo was silent as to arbitration and did not seek a stay pending the Supreme Court's decision in Concepcion. Instead, Wells Fargo proceeded full steam ahead with this litigation in federal court. Only in April 2011, after an unfavorable result in the district court and the Supreme Court opinion did Wells Fargo seek to vacate the district court's judgment via a motion to compel arbitration filed with this court. The Appellate Commissioner denied the motion without prejudice to renewing the arguments in the brief on cross-appeal. See Order, July 15, 2011. Gutierrez argues that Wells Fargo “was driven by its preference to litigate this case in federal court in order to obtain favorable rulings from the district court on federal preemption and other issues.” The record is devoid of Wells Fargo's motives for its chosen course of action, although Wells Fargo offered only argument, not evidence or declarations, as to the rationale for its litigation strategy. We make no judgment about Wells Fargo's motives. Against this background, we consider Gutierrez's argument that Wells Fargo waived any rights to arbitration given the belated nature of its request. For such a waiver to occur, there must be: “(1) knowledge of an existing right to compel 721 arbitration; (2) acts inconsistent with that *721 existing right; and (3) prejudice to the party opposing arbitration resulting from such inconsistent acts.” Fisher v. A.G. Becker Paribas Inc., 791 F.2d 691, 694 (9th Cir.1986). Wells Fargo claims that any “existing right” arose only after Concepcion and thus it did not act inconsistently with that “existing right” because it would have been futile to seek arbitration earlier. See Fisher, 791 F.2d at 695. The futility of an arbitration demand, however, is not clear cut here. In contemporaneous consumer litigation, litigants did succeed in compelling arbitration despite the existence of the Discover Bank rule. See, e.g., Dalie v. Pulte Home Corp., 636 F.Supp.2d 1025, 1027 (E.D.Cal.2009) (recognizing that “under California law a class action waiver is only unenforceable in a narrow set of circumstances”); McCabe v. Dell, Inc., No. CV 06–7811, 2007 WL 1434972, at *3–4 (C.D.Cal. Apr. 12, 2007) (compelling arbitration after finding the arbitration clause enforceable under California law); Galbraith v. Resurgent Capital Servs., No. CIV S 05–2133, 2006 WL 2990163, at *2 (E.D.Cal. Oct. 19, 2006) (same). Especially because the CAA did 6 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) not prohibit class arbitration, a motion to compel arbitration was not inevitably futile under the prescribed case-by-case analysis. See Douglas v. U.S. Dist. Court for Cent. Dist. of Cal., 495 F.3d 1062, 1068 (9th Cir.2007) (whether arbitration can be compelled “depends on the facts and circumstances developed during the course of litigation”). Given the differing circumstances in our case and Fisher with respect to the first two prongs of Fisher, we focus on prejudice. We reject Wells Fargo's attempt to collapse all three Fisher prongs into one. Adopting this course would ignore the procedural posture of the case and also the court's approach in Fisher, which laid out the waiver analysis. Although Fisher held that the defendant there had not acted inconsistently with an existing right, it went on to discuss the prejudice that the Fishers would suffer if the court were to order arbitration. See791 F.2d at 698–99. We do the same. Ordering arbitration post-appeal would severely prejudice Gutierrez. The CAA requires the demand to be made at a “reasonable time.” The series of dispositive motions, voluminous discovery, preparation for trial, two-week bench trial, post-trial briefing, and appellate proceedings amply demonstrate the resources both the parties and the courts have already expended, all of which would be undone if arbitration is now required. The prejudice to Gutierrez and the class stemming from Wells Fargo's invocation of arbitration five years into this litigation—time, expense, delay and uncertainty—is apparent. See Nat'l Found. for Cancer Research v. A.G. Edwards & Sons, Inc., 821 F.2d 772, 776 (D.C.Cir.1987) (“To give [defendant] a second bite at the very questions presented to the court for disposition squarely confronts the policy that arbitration may not be used as a strategy to manipulate the legal process.”). 722 Independent of the Fisher analysis, arbitration at this juncture would frustrate the purposes of the FAA. “The overarching purpose of the FAA, evident in the text of §§ 2, 3, and 4, is to ensure the enforcement of arbitration agreements according to their terms so as to facilitate streamlined proceedings.” Concepcion, 131 S.Ct. at 1748. Far from facilitating streamlined proceedings, sending this case to arbitration post- appeal would be wholly duplicative and lead to further delay and expense for both parties. Nor would arbitration at this late stage serve any contractual purpose. The CAA calls for all claims to be resolved through either litigation or arbitration, if timely *722 demanded by one of the parties. Because the CAA does not require arbitration, Gutierrez's prejudice is in no way self- inflicted. Ordering arbitration would undercut her contractual expectations, be inconsistent with the parties' agreement, and contradict their conduct throughout the litigation. See Concepcion, 131 S.Ct. at 1752 (“Arbitration is a matter of contract, and the FAA requires courts to honor parties' expectations.”). Because we reject Wells Fargo's belated effort to invoke arbitration, we proceed to the parties' remaining arguments. II. Federal Preemption We next consider whether the National Bank Act of 1864, 13 Stat. 99 (codified at 12 U.S.C. § 1 et seq.), preempts application of California's Unfair Competition Law. Consistent with the principles of federalism, the United States has a “dual banking system.” See, e.g., Atherton v. F.D.I.C., 519 U.S. 213, 221–23, 117 S.Ct. 666, 136 L.Ed.2d 656 (1997). During the first century of the nation's existence, “state-chartered banks were the norm and federally chartered banks an exception.” Id. at 221, 117 S.Ct. 666. After the Civil War, Congress passed the National Bank Act to ensure that national and state banks could coexist on a basis of “competitive equality.” First Nat'l Bank of Logan, Utah v. Walker Bank & Trust Co., 385 U.S. 252, 261, 87 S.Ct. 492, 17 L.Ed.2d 343 (1966). 7 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) The Act vests nationally chartered banks with enumerated powers, such as the power to make contracts, to receive deposits, and to make loans, together with “all such incidental powers as shall be necessary to carry on the business of banking.” 12 U.S.C. § 24 (Third, Seventh). In addition to the National Bank Act, the activities of national banks are governed by related regulations promulgated by the Office of the Comptroller of the Currency (the “OCC”). See12 U.S.C. §§ 24, 93a, 371(a). In analyzing preemption, we ask whether the state law “prevent[s] or significantly interfere[s] with the national bank's exercise of its powers.” Barnett Bank of Marion Cnty., N.A. v. Nelson, 517 U.S. 25, 33, 116 S.Ct. 1103, 134 L.Ed.2d 237 (1996). Although states cannot exercise “visitorial” oversight over national banks, state laws of general application continue to apply to national banks when “doing so does not prevent or significantly interfere with the national bank's exercise of its powers.” Id. at 33, 116 S.Ct. 1103;see also Watters v. Wachovia Bank, N.A., 550 U.S. 1, 11, 127 S.Ct. 1559, 167 L.Ed.2d 389 (2007) (“Federally chartered banks are subject to state laws of general application in their daily business to the extent such laws do not conflict with the letter or purposes of the NBA.”). As the Supreme Court explained in Cuomo v. Clearing House Ass'n, LLC, 557 U.S. 519, 530, 129 S.Ct. 2710, 174 L.Ed.2d 464 (2009), this balance of authority preserves “a regime of exclusive administrative oversight by the Comptroller while honoring in fact rather than merely in theory Congress's decision not to pre-empt substantive state law. This system echoes many other mixed state/federal regimes in which the Federal Government exercises general oversight while leaving state substantive law in place.” Indeed, “[s]tates ... have always enforced their general laws against national banks.” Id. at 534, 129 S.Ct. 2710. Against the framework of extensive federal statutory and regulatory oversight of national banks, the question is whether Wells Fargo's implementation of high-to-low posting is subject to California's Unfair Competition Law, a consumer protection statute of general applicability. Cal. Bus. & Prof.Code § 17200. We do not tackle the Unfair Competition Law 723 generally*723 vis-a-vis federal banking regulation. Rather, reviewing de novo, we analyze each Unfair Competition Law claim separately, Martinez v. Wells Fargo Home Mortg., Inc., 598 F.3d 549, 553 (9th Cir.2010), though as a practical matter, the remedy ordered by the district court boils down to a complete prohibition on the high- to-low-sequencing method. A. Unfair Business Practices and High–to–Low Posting The district court deemed Wells Fargo's high-to- low posting method an unfair practice in violation of the Unfair Competition Law because it was imposed in bad faith, in contravention of the policy reflected in California Commercial Code § 4303(b). 5 In terms of remedy, the district court permanently enjoined Wells Fargo's use of high- to-low posting. The court ordered Wells Fargo to “either reinstate a low-to-high posting method or use a chronological posting method (or some combination of the two methods).” With respect to disclosures, the court required “all agreements, disclosures, websites, online banking statements, and promotional materials” to conform to the new posting system. Finally, the court ordered $203 million in restitution because it found that Wells Fargo acted in bad faith when it decided to post debit-card transactions in high-to-low order. The appeal of this claim turns on whether state law can dictate Wells Fargo's choice of posting method. We hold that it cannot. 5 The commentary to § 4303 explains that: Subsection (b) provides that a payor bank may accept or pay items in any order.... The only restraint on the discretion given to the payor bank under subsection (b) is that the bank act in good faith. For 8 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) example, the bank could not properly follow an established practice of maximizing the number of returned checks for the sole purpose of increasing the amount of returned check fees charged to the customer. Cal. Com.Code § 4303, 1992 Amendment cmt. 7. Under the National Bank Act, key powers of national banks include the authority to receive deposits, as well as “all such incidental powers as shall be necessary to carry on the business of banking.” 12 U.S.C. § 24 (Seventh). The deposit and withdrawal of funds “are services provided by banks since the days of their creation. Indeed, such activities define the business of banking.” 6 Bank of Am. v. City and Cnty. of San Francisco, 309 F.3d 551, 563 (9th Cir.2002). Both the “business of banking” and the power to “receiv[e] deposits” necessarily include the power to post transactions— i.e., tally deposits and withdrawals —to determine the balance in the customer's account. See12 U.S.C. § 24 (Seventh). 6 The incidental powers reserved for national banks are “not limited to activities deemed essential to the exercise of enumerated powers but include activities closely related to banking and useful in carrying out the business of banking.” Bank of Am. v. City and Cnty. of San Francisco, 309 F.3d 551, 562 (9th Cir.2002); see also12 C.F.R. § 7.4007(a) (“A national bank may receive deposits and engage in any activity incidental to receiving deposits.”). The ability to choose a method of posting transactions is not only a useful, but also a necessary, component of a posting process that is integrally related to the receipt of deposits. Designation of a posting method falls within the type of overarching federal banking regulatory power that is “not normally limited by, but rather ordinarily pre-empt[s], contrary state law.” Watters, 550 U.S. at 12, 127 S.Ct. 1559 (quotation marks omitted). In addition to the broad power vested by statute, federal banking regulations adopted by the OCC 724 specifically delegate *724 to banks the method of calculating fees. 12 C.F.R. § 7.4002(b). As the agency charged with administering the National Bank Act, the OCC has primary responsibility for the surveillance of the “business of banking” authorized by the National Bank Act. NationsBank of N.C., N.A. v. Variable Annuity Life Ins. Co., 513 U.S. 251, 256, 115 S.Ct. 810, 130 L.Ed.2d 740 (1995). The OCC is authorized to define the “incidental powers” of national banks beyond those specifically enumerated. See12 U.S.C. § 93a (authorizing the OCC “to prescribe rules and regulations to carry out the responsibilities of the office”). The OCC has interpreted these incidental powers to include the power to set account terms and the power to charge customers non-interest charges and fees, such as the overdraft fees at issue here. 12 C.F.R. § 7.4002(a). 7 More specifically, the OCC has determined that “[t]he establishment of non-interest charges and fees, their amounts, and the method of calculating them are business decisions to be made by each bank, in its discretion, according to sound banking judgment and safe and sound banking principles.” 12 C.F.R. § 7.4002(b)(2) (emphasis added). 7 .Section 7.4002(a) provides that a “national bank may charge its customers non-interest charges and fees, including deposit account service charges.” 12 C.F.R. § 7.4002(a). OCC letters interpreting § 7.4002 specifically consider high-to-low posting and associated overdraft fees to be a “pricing decision authorized by Federal law” within the power of a national bank. OCC Interpretive Letter No. 916, 2001 WL 1285359, at *2 (May 22, 2001); see also OCC 9 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) Interpretive Letter No. 997, 2002 WL 32872368, at *3 (Apr. 15, 2002); OCC Interpretive Letter No. 1082, 2007 WL 5393636, at *2 (May 17, 2007). The OCC has opined that “a bank's authorization to establish fees pursuant to 12 C.F.R. 7.4002(a) necessarily includes the authorization to decide how they are computed.” OCC Interpretive Letter No. 916, 2001 WL 1285359, at *2 (May 22, 2001). Accordingly, the OCC has determined that a national bank “may establish a given order of posting as a pricing decision pursuant to section 24 (seventh) and section 7.4002.” Id. In sum, federal law authorizes national banks to establish a posting order as part and parcel of setting fees, which is a pricing decision. The district court held that the bank's determination of posting order did not constitute a pricing decision because Wells Fargo did not follow the four factor decision making process for safe and sound banking principles mandated by the OCC. 12 C.F.R. § 7.4002(b). 8 The National Bank Act gives to the OCC the exclusive authority to exercise visitorial oversight over national banks, and it entrusts the OCC with the supervision of national banks' activities that are authorized by federal law. 12 U.S.C. § 484(a); 12 C.F.R. § 7.4000; see also Cuomo, 557 U.S. at 524, 129 S.Ct. 2710. Whether Wells Fargo's internal decision-making processes regarding posting orders complied with the “safe and sound banking principles” under § 7.4002(b)(2) is an 725 inquiry that falls *725squarely within the OCC's supervisory powers. The district court's findings with regard to Wells Fargo's compliance with the OCC regulation, then, are both “inapposite to the issue of preemption” and “fruitless.” Martinez, 598 F.3d at 556 n. 8 (citing Watters, 550 U.S. at 13, 127 S.Ct. 1559). In Martinez, we addressed whether Wells Fargo had followed safe and sound banking principles in making a pricing decision and emphasized that the determination of the bank's compliance with these principles “is within the exclusive purview of the OCC.” Id. 8 .Section 7.4002(b) provides that: [a] national bank establishes non-interest charges and fees in accordance with safe and sound banking principles if the bank employs a decision-making process through which it considers the following factors, among others: (i) The cost incurred by the bank in providing the service; (ii) The deterrence of misuse by customers of banking services; (iii) The enhancement of the competitive position of the bank in accordance with the bank's business plan and marketing strategy; and (iv) The maintenance of the safety and soundness of the institution. 12 C.F.R. § 7.4002(b). Wells Fargo's decision to resequence the posting order falls within the OCC's definition of a pricing decision authorized by federal law. The district court is not free to disregard the OCC's determinations of what constitutes a legitimate pricing decision, nor can it apply state law in a way that interferes with this enumerated and incidental power of national banks. The restriction that the district court imposed on posting is akin to the fee restriction addressed in the Eleventh Circuit's recent preemption ruling. See Baptista v. JPMorgan Chase Bank, N.A., 640 F.3d 1194, 1197 (11th Cir.2011). The court in Baptista held that a state statute that disallowed banks from charging non-customers for cashing a check was preempted because it significantly reduced the banks' latitude in deciding how to charge fees. Id. at 1197–98. The same logic applies here. We hold that a “good faith” limitation applied through California's Unfair Competition Law is preempted when applied in a manner that prevents or significantly interferes with a national bank's federally authorized power to choose a posting order. See Barnett, 517 U.S. at 37, 116 S.Ct. 1103 (state statute could not bar small town national banks from selling insurance where federal statute 10 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) gave the banks such authority); Bank of Am., 309 F.3d at 561–64 (federal regulations allowing banks to collect non-interest charges preempted a local law governing what ATM fees a bank could charge). The federal court cannot mandate the order in which Wells Fargo posts its transactions. Therefore, we vacate the permanent injunction and the $203 million restitution award. The district court premised both of these remedies on only a violation of the “unfair” business practice prong of the Unfair Competition Law tethered to the “good faith” requirement of California Commercial Code § 4303(b). B. Fraudulent Business Practices and Wells Fargo's Representations The district court found not only a violation of the “unfair” prong of the Unfair Competition Law with regard to the posting order, but also a violation of the “fraudulent” prong of the Unfair Competition Law with regard to Wells Fargo's representations about posting. The Unfair Competition Law authorizes injunctive relief and restitution as remedies against a person or entity engaging in unfair competition, including fraudulent business practices. Cal. Bus. & Prof.Code § 17203; see also Cel–Tech Commc'ns, Inc., 20 Cal.4th at 180, 83 Cal.Rptr.2d 548, 973 P.2d 527 (each of the three Unfair Competition Law prongs constitutes a separate and independent cause of action). The district court faulted Wells Fargo both for its failure to disclose the effects of high-to-low posting and for its misleading statements. The district court concluded that Wells Fargo “did not tell customers that frequent use of a debit-card for small-valued purchases could result in an avalanche of overdraft fees for each of those purchases due to the high-to-low posting order.” Instead, Wells Fargo “directed misleading propaganda at the class that likely led class 726 members to *726expect that the actual posting order of their debit-card purchases would mirror the order in which they were transacted.” We have determined that the district court's injunction ordering a particular kind of posting and ordering $203 million in restitution under the “unfair” prong of California's Unfair Competition Law is preempted. The question arises whether we need to address preemption under the “fraudulent” prong as well. We conclude that we do because, on remand, the district court may determine that appropriate relief is available to the extent a claim for fraudulent misrepresentation is not preempted. The requirement to make particular disclosures falls squarely within the purview of federal banking regulation and is expressly preempted: “A national bank may exercise its deposit-taking powers without regard to state law limitations concerning,” among other things, “disclosure requirements.” 12 C.F.R. § 7.4007(b)(3). In Martinez, plaintiffs' claim that the bank “engaged in ‘fraudulent’ practices by failing to disclose actual costs of its underwriting and tax services” was expressly preempted by the OCC regulation preempting state disclosure requirements in real estate transactions. Martinez, 598 F.3d at 554, 557;see also12 C.F.R. § 34.4(a)(9). Similarly, the Unfair Competition Law cannot impose liability simply based on the bank's failure to disclose its chosen posting method. See Rose v. Chase Bank USA, N.A., 513 F.3d 1032, 1038 (9th Cir.2008) (the National Bank Act preempts affirmative disclosure requirements of a California statute, insofar as those requirements apply to national banks); Parks v. MBNA Am. Bank, N.A., 54 Cal.4th 376, 386–87, 142 Cal.Rptr.3d 837, 278 P.3d 1193 (2012) (state law directed at credit card issuers, which prescribed specific disclosures on convenience checks, was preempted). Imposing liability for the bank's failure to sufficiently disclose its posting method leads to the same result as mandating specific disclosures. Both remedies are tantamount to state regulation of disclosure requirements. We turn now to the different question of state law liability based on Wells Fargo's misleading statements about its posting method. Notably, the 11 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) Unfair Competition Law itself does not impose disclosure requirements but merely prohibits statements that are likely to mislead the public. As a non-discriminating state law of general applicability that does not “conflict with federal law, frustrate the purposes of the National Bank Act, or impair the efficiency of national banks to discharge their duties,” the Unfair Competition Law's prohibition on misleading statements under the fraudulent prong of the statute is not preempted by the National Bank Act. Bank of Am., 309 F.3d at 561. Wells Fargo's position—that § 7.4007(b)(2) dictates preemption—is conclusively undercut by the OCC itself, which, far from concluding that the Unfair Competition Law is expressly preempted under its regulations, “has specifically cited [California's Unfair Competition Law] in an advisory letter cautioning banks that they may be subject to such laws that prohibit unfair or deceptive acts or practices.” Martinez, 598 F.3d at 555. The advisory letter warns that the “consequences of engaging in practices that may be unfair or deceptive under federal or state law can include litigation, enforcement actions, monetary judgments, and harm to the institution's reputation.” OCC Advisory Letter, Guidance on Unfair or Deceptive Acts or Practices, 2002 WL 521380, at *1 (Mar. 22, 2002). The OCC recognizes that state laws that withstand 727 preemption “typically do not regulate the *727 manner or content of the business of banking authorized for national banks, but rather establish the legal infrastructure that makes practicable the conduct of that business.” Bank Activities and Operations, 69 Fed.Reg.1904, 1913 (Jan. 13, 2004). By prohibiting fraudulent business practices, the Unfair Competition Law does exactly that—it establishes a legal infrastructure. Although Wells Fargo insists that a state law prohibiting misleading statements necessarily touches on “checking accounts,” such an expansive interpretation—with no limiting principle—“would swallow all laws.” Aguayo v. U.S. Bank, 653 F.3d 912, 925 (9th Cir.2011). We recently declined a bank's invitation to interpret the term “lending operations” expansively because “every action by the bank, due to the nature of its business, affects its ability to attract, manage, and disburse capital, and could be said to ‘affect’ its lending operations.” Id. California's prohibition of misleading statements does not significantly interfere with the bank's ability to offer checking account services, choose a posting method, or calculate fees. Nor does the Unfair Competition Law mandate the content of any nonmisleading and nonfraudulent statements in the banking arena. On the flip side, the National Bank Act and other OCC provisions do not aid Wells Fargo, as neither source regulates deceptive statements vis- a-vis the bank's chosen posting method. Where, as here, federal laws do not cover a bank's actions, states “are permitted to regulate the activities of national banks where doing so does not prevent or significantly interfere with the national bank's or the national bank regulator's exercise of its powers.” Watters, 550 U.S. at 12, 127 S.Ct. 1559;see also Gibson v. World Sav. & Loan Ass'n, 103 Cal.App.4th 1291, 1299, 128 Cal.Rptr.2d 19 (2002) (the “state cannot dictate to the Bank how it can or cannot operate, but it can insist that, however the Bank chooses to operate, it do so free from fraud and other deceptive business practices”). Other than an argument regarding the cost of modifying its published materials, Wells Fargo does not articulate how abiding by the Unfair Competition Law's prohibition of misleading statements would prevent or significantly interfere with its ability to engage in the business of banking. Wells Fargo's inability to demonstrate a significant interference is unsurprising—the district court found that when it chose to, the bank could accurately explain the posting process to customers: “Wells Fargo provided its tellers and phone-bank employees with a clear script to respond to customers who protested after receiving multiple overdraft fees caused by high- 12 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) to-low resequencing. These explanations were in plain English.” The limitation on fraudulent representations in California's Unfair Competition Law does not subject Wells Fargo's ability to receive deposits, to set account terms, to implement a posting method, or to calculate fees to surveillance under a rival oversight regime, nor does it stand as an obstacle to the accomplishment of the National Bank Act's purposes. See Barnett, 517 U.S. at 31, 116 S.Ct. 1103. In Martinez, we expressed the principle that controls here: “State laws of general application, which merely require all businesses (including national banks) to refrain from fraudulent, unfair, or illegal behavior, do not necessarily impair a bank's ability to exercise its ... powers.” 598 F.3d at 555. Accordingly, we hold that Gutierrez's claim for violation of the fraudulent prong of the Unfair Competition Law by making misleading misrepresentations with regard to its posting method is not preempted, and we affirm the district court's finding to this extent. Consistent with the foregoing, the district court 728 may provide injunctive relief *728and restitution against Wells Fargo. Although the court cannot issue an injunction requiring the bank to use a particular system of posting or requiring the bank to make specific disclosures, it can enjoin the bank from making fraudulent or misleading representations about its system of posting in the future. Restitution is available for past misleading representations. We make no judgment as to whether it is warranted here. On remand, the district court will be in a position to determine whether, subject to the limitations in this opinion, restitution is justified by the pleadings and the evidence in this case. III. Remaining Issues Finally, we consider Wells Fargo's challenge to standing, class certification, and the finding that Wells Fargo made misleading statements. Upon reviewing the trial record and the district court's extensive findings, we conclude that the district court did not err. See Lyon v. Gila River Indian Cmty., 626 F.3d 1059, 1071 (9th Cir.2010) (the district court's conclusions of law are reviewed de novo and its findings of fact are reviewed for clear error). A. Standing To establish standing to seek class-wide relief for fraud-based Unfair Competition Law claims, the named plaintiffs must prove “actual reliance” on the misleading statements. Specifically, “a class representative proceeding on a claim of misrepresentation as the basis of his or her UCL action must demonstrate actual reliance on the allegedly deceptive or misleading statements, in accordance with well-settled principles regarding the element of reliance in ordinary fraud actions.” In re Tobacco II Cases, 46 Cal.4th 298, 306, 93 Cal.Rptr.3d 559, 207 P.3d 20 (2009). The district court found that Gutierrez and Walker read portions of the “Welcome Jacket,” “which stated that ‘[e]ach purchase is automatically deducted from your primary checking account.’ ” The district court next found that Gutierrez and Walker each “relied upon the bank's misleading marketing materials that reinforced her natural assumption that debit-card transactions would post chronologically.” The district court determined that both Gutierrez and Walker were misled by Wells Fargo's statements because the extent of the falsity of the statements was not known to either of them until they incurred hefty fees for having overdrawn their checking accounts. These findings are well supported by the evidence and are not clearly erroneous. Gutierrez and Walker therefore have standing. See Bates v. United Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir.2007) (en banc) (“In a class action, standing is satisfied if at least one named plaintiff meets the requirements.”). 9 9 Gutierrez's and Walker's harm was not all caused by their lack of oversight of their own account balances. The misunderstanding that Wells Fargo's misleading statements sowed among customers about its posting scheme was a 13 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) significant cause of the magnitude of the harm experienced by Gutierrez and Walker. B. Class Certification Next, class certification under Fed.R.Civ.P. 23(b) (3) requires that “questions of law or fact common to class members predominate over any questions affecting only individual members.” With respect to marketing materials, the district court found that: A Wells Fargo marketing theme was that debit- card purchases were “immediately” or “automatically” deducted from an account. This likely led the class to believe: (1) that the funds would be deducted from their checking accounts 729 in the order transacted, and (2) that the *729 purchase would not be approved if they lacked sufficient available funds to cover the transaction. This language was present on Wells Fargo's website (TX 129), on Wells Fargo's Checking, Savings and More brochures from 2001 and 2005 (TX 88, 89), and Wells Fargo's New Account Welcome Jacket from 2004 (TX 82). The pervasive nature of Wells Fargo's misleading marketing materials amply demonstrates that class members, like the named plaintiffs, were exposed to the materials and likely relied on them. See Tobacco II, 46 Cal.4th at 312, 93 Cal.Rptr.3d 559, 207 P.3d 20 (to establish fraud under the Unfair Competition Law, plaintiffs must show “that members of the public are likely to be deceived”). In addition, the district court found that Wells Fargo knew that “new accounts generate the bulk of OD [overdraft] revenue.” Wells Fargo's speculation—that “some class members would have engaged in the same conduct irrespective of the alleged misrepresentation”—does not meet its burden of demonstrating that individual reliance issues predominate. Unlike McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 223 (2d Cir.2008) (partially abrogated on other grounds by Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639, 128 S.Ct. 2131, 170 L.Ed.2d 1012 (2008)), where individual class members could have had different motives for choosing “light” cigarettes, we are hard pressed to agree that any class member would prefer to incur multiple overdraft fees. C. Misleading Statements Finally, the district court's finding that Wells Fargo made misleading statements is amply supported by the court's factual findings. Wells Fargo told customers that “[c]heck card and ATM transactions generally reduce the balance in your account immediately” and that “the money comes right out of your checking account the minute you use your debit-card.” The bank also misleadingly admonished customers to “[r]emember that whenever you use your debit-card, the money is immediately withdrawn from your checking account. If you don't have enough money in your account to cover the withdrawal, your purchase won't be approved.” According to the district court, the “account activity” information provided to customers through online banking—a service made available to all Wells Fargo depositors— displayed “pending” debit-card transactions in chronological order ( i.e., the order in which the transactions were authorized by Wells Fargo). When it came time to post them during the settlement process, however, the same transactions were not posted in chronological order but were posted in high-to-low order. The findings go on: Misleading marketing materials promoted the same theme of chronological subtraction. A number of Wells Fargo marketing materials, including the Wells Fargo Welcome Jacket that was customarily provided to all customers who opened a consumer checking account, contained misleading representations regarding how debit- card transactions were processed. Specifically, these various materials—covered in detail in the findings of fact—communicated that debit-card POS purchases were deducted “immediately” or “automatically” from the user's checking 14 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) account.... Such representations would lead reasonable consumers to believe that the transactions would be deducted from their checking accounts in the sequence transacted. Based on these findings, the district court concluded that “Wells Fargo affirmatively 730 reinforced the expectation that transactions*730 were covered in the sequence made while obfuscating its contrary practice of posting transactions in high-to-low order to maximize the number of overdrafts assessed on customers.” Wells Fargo's alternate interpretation of the word “automatically” is insufficient to render the district court's findings clearly erroneous. Accordingly, the district court's holding that Wells Fargo violated the Unfair Competition Law by making misleading statements likely to deceive its customers is affirmed. Conclusion Given the terms of the arbitration agreement and the parties' conduct throughout litigation, the Supreme Court's decision in Concepcion does not require that this dispute be arbitrated at this late stage—post-trial, post-judgment, and post-appeal. As to preemption, we hold that a national bank's decision to post payments to checking accounts in a particular order is a federally authorized pricing decision. The National Bank Act preempts the application of the unfair business practices prong of California's Unfair Competition Law to dictate a national bank's order of posting. See12 U.S.C. § 24; 12 C.F.R. § 7.4002. Similarly, both the imposition of affirmative disclosure requirements and liability based on failure to disclose are preempted by 12 U.S.C. § 24 and 12 C.F.R. § 7.4007. The National Bank Act, however, does not preempt Gutierrez's claim for affirmative misrepresentations under the “fraudulent” prong of the Unfair Competition Law. Although the injunctive relief ordered by the district court is based on both the unfair and fraudulent prongs of the Unfair Competition Law, the injunction is vacated because each of its terms dictates relief relating to the posting order, which is preempted. The restitution order, which is predicated on liability for Wells Fargo's choice of posting method and thus also preempted, is vacated as well. The district court's finding of liability for Wells Fargo's violations of the “fraudulent” prong of California's Unfair Competition Law is affirmed, and we remand for the district court to determine what relief, if any, is appropriate and consistent with this opinion. 10 10 In light of the decision to vacate the restitution award, we do not reach the parties' arguments as to the amount of restitution awarded, prejudgment interest, and punitive damages. AFFIRMED in part, REVERSED in part, and REMANDED. Each party shall pay its own fees on appeal. 15 Gutierrez v. Wells Fargo Bank, NA 704 F.3d 712 (9th Cir. 2012) 16 Cause No. 1:20-cv-1321 RLM-MJD UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF INDIANA INDIANAPOLIS DIVISION Hash v. First Fin. Bancorp Cause No. 1:20-cv-1321 RLM-MJD 03-08-2021 GREGORY HASH on behalf of himself and all others similarly situated, Plaintiff v. FIRST FINANCIAL BANCORP, Defendant Robert L. Miller, Jr. Judge, United States District Court ORDER Plaintiff Gregory Hash, a checking accountholder at defendant First Financial Bancorp, sues First Financial on behalf of himself and a putative class for breach of contract (including breach covenant of good faith and fair dealing), and violation of the Indiana Deceptive Consumer Sales Act, Ind. Code § 24-5-0.5-1 et seq. The court has jurisdiction under the Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d)(2) & (6), and the parties agree that Indiana law provides the rule of decision. Mr. Hash alleges that First Financial improperly charged him overdraft fees that weren't authorized by his checking account contract with First Financial. First Financial has moved to dismiss Mr. Hash's complaint for failure to state a claim upon which relief can be granted. The court heard argument on the motion on March 4 and now DENIES First Financial's motion [Doc. No. 17]. 2 *2 I. Background Mr. Hash's complaint alleges that debit-card transactions occur in two parts. First, when a debit-card holder uses a debit card at the point of sale to complete a transaction, the merchant presents the transaction in real time to First Financial for authorization. If First Financial authorizes the transaction, the transaction will be completed at the point-of-sale. Whether First Financial authorizes or declines a transaction depends on whether (1) enough funds are available in the accountholder's checking account to cover the transaction, or (2) the accountholder elects to have First Financial cover the transaction (causing an overdraft).1 1 First Financial includes an overdraft disclosure in their account contract that says First Financial will authorize and pay overdrafts for transactions made using a checking account number and automatic bill payments, but not for ATM transactions and ATH debit card transactions. First Financial will only authorize and pay overdrafts for ATM transactions and ATH debit card transactions if the accountholder is enrolled in the Courtesy Cash Plus service. Mr. Hash was enrolled in the Courtesy Cash Plus service. Once First Financial authorizes the transaction, the amount of the transaction will be subtracted from the accountholder's available balance, meaning the balance that is available for immediate use. The available balance might differ from an accountholder's current balance, which is the amount of money actually in the account. When a transaction is authorized at the point of sale, a "debit hold" in the amount of the transaction is placed on the accountholder's account and subtracted from the accountholder's available Decided Mar 8, 2021 1 Hash v. First Fin. Bancorp Cause No. 1:20-cv-1321 RLM-MJD (S.D. Ind. Mar. 8, 2021) balance. However, the amount of the debit hold isn't subtracted from his current balance during 3 authorization. *3 Second, the transaction "settles" after it is authorized, meaning that the funds are actually transferred from the accountholder's account to the merchant. The transaction (the amount of the debit hold) is then subtracted from and reflected in the accountholder's current balance. First Financial charges a $37 overdraft fee if an accountholder overdraws his available balance. According to the parties' account contract, overdrafts "occur when [an accountholder does] not have enough money in [his] account to cover a transaction, but [First Financial] pay[s] it anyway." Mr. Hash filed his complaint challenging First Financial's practice of charging overdraft fees on Authorize Positive, Settle Negative Transactions ("APSN transactions"). An APSN transaction occurs when a transaction is authorized and there are enough funds in the accountholder's available balance to cover the transaction at the point of sale, but later the transaction overdraws the account at settlement, triggering an overdraft fee. Mr. Hash alleges that these types of transactions should never occur on an account with a positive available balance because debit holds are placed on authorized transactions (effectively sequestering the funds needed to pay the transaction), so there should always be enough money in the account to cover the transactions when they settle. Compl. ¶¶ 11-17. According to the complaint, First Financial breaches the contract because the contract promises to only charge overdraft fees on transactions with insufficient available funds, yet First Financial charges overdraft fees on transactions "for which there are sufficient funds available to cover the transactions throughout their lifecycle." Compl. ¶ 4 *4 37. Regarding APSN transactions specifically, Mr. Hash alleges that First Financial uses the same debit-card transaction twice—once at authorization and once at settlement—to determine if the transaction overdraws an account. Compl. ¶ 41-43. This practice allows First Financial to charge overdraft fees on transactions that shouldn't have caused an overdraft because there were sufficient available funds at the time of authorization; as Mr. Hash sees it, the later "pseudo-event" of settlement has no bearing on whether there were sufficient available funds to cover a transaction when it was authorized. Mr. Hash alleges that he was assessed overdraft fees for debit-card transactions even though they were authorized when he had enough funds to pay for them. These overdraft fees are alleged to have violated the parties' contract, the implied duty of good faith and fair dealing, and the Indiana Deceptive Consumer Sales Act. Mr. Hash attached a copy of the contract to his complaint. To illustrate how a transaction could authorize positive but settle negative, assume you have $10 in your bank account. On day one, you make a $7 purchase that is authorized at the point of sale. The $7 is immediately deducted from your available balance, bringing the available balance to $3, but the transaction will take three days to settle, so your current balance remains at $10. On day two, you make a purchase for $112 that settles within hours, bringing your available balance to $-8 and 5 your current balance to $-1. The *5 second transaction prompts an overdraft fee of $37,3 leaving your available balance at the end of day two at $-45 and your current balance at $-38. On day three, the first $7 purchase finally settles, and the available and current balances are the same at $-45. At this point, First Financial charges another overdraft fee because the $7 transaction settled negative. Mr. Hash challenges this second overdraft fee on the $7 transaction because, at the time of the transaction, he had sufficient funds to pay for the purchase. 2 This transaction would still authorize (the purchase wouldn't be declined; it would just overdraw the account) if the 2 Hash v. First Fin. Bancorp Cause No. 1:20-cv-1321 RLM-MJD (S.D. Ind. Mar. 8, 2021) accountholder was enrolled in Courtesy Cash Plus. Mr. Hash was enrolled in Courtesy Cash Plus. 3 Mr. Hash doesn't dispute the assessment of this first overdraft fee. -------- Mr. Hash says that the contract actually doesn't allow what the contract calls "Authorize Positive —Settle Negative" transactions; it bars them because First Financial promises to determine overdrafts at the moment of authorization. If overdrafts are determined at the time of authorization, APSN transactions should never trigger an overdraft fee because they are authorized on a positive balance. Mr. Hash also argues that the contract is ambiguous at best as to whether overdraft fees are assessed at authorization or settlement, and because the meaning of an ambiguous contract term is a question of fact that must be answered in favor of the plaintiff at the motion to dismiss stage, Mr. Hash states a claim for breach of contract. First Financial is steadfast that the contract clearly explains that an overdraft occurs if the customer's balance is too low when transactions are presented for permanent payment and settlement, even of there was enough when the transaction was 6 initially authorized. *6 II. Standard of Review A court considering a defendant's motion to dismiss for failure to state a claim on which relief can be granted "take[s] as true all well-pleaded facts and allegations in the plaintiff's complaint, . . . and the plaintiff is entitled to all reasonable inferences that can be drawn from the complaint." Bontkowski v. First Nat. Bank of Cicero, 998 F.2d 459, 461 (7th Cir. 1993). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Factual allegations must give the defendant fair notice of the claims being asserted and the grounds upon which they rest and "be enough to raise a right to relief above the speculative level on the assumption that all of the complaint's allegations are true." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 545 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. at 678. In other words, a complaint must give "enough details about the subject-matter of the case to present a story that holds together." McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011). A pleading that merely offers "labels and conclusions" or "a formulaic recitation of the elements of a cause of action will not do." 7 Ashcroft v. Iqbal, 556 U.S. at 678. *7 III. Breach of Contract Claim Under Indiana law, "[t]he essential elements of a breach of contract action are the existence of a contract, the defendant's breach thereof, and damages." McVay v. Store House Comp., 289 F. Supp. 3d 892, 896 (S.D. Ind. 2017) (citing McCalment v. Eli Lilly & Co., 860 N.E.2d 884, 894 (Ind. Ct. App. 2007)). To the extent that the allegations in a complaint contradict a contract that is attached to the complaint, the contract "trumps the allegations" and "the court is not required to credit the unsupported allegations." N. Ind. Gun & Outdoor Shows, Inc. v. City of S. Bend, 163 F.3d 449, 454 (7th Cir. 1998). "In fact, a plaintiff may plead himself out of court by attaching documents to the complaint that indicate that he or she is not entitled to judgment." Id. at 455. The parties agree that a contract exists, but dispute the defendant's breach of the parties' contract. Whether Mr. Hash has alleged a claim upon which relief can be granted depends on whether the contract allows First Financial's challenged conduct. First Financial determined that an overdraft occurred when Mr. Hash's debit-card transactions settled negative even though those transactions authorized positive. So, whether Mr. 3 Hash v. First Fin. Bancorp Cause No. 1:20-cv-1321 RLM-MJD (S.D. Ind. Mar. 8, 2021) Hash has stated a claim upon which relief can be granted depends on whether the contract allows First Financial to determine overdrafts when transactions settle. A court's primary objective when interpreting a contract is "to give effect to the intentions of the parties as expressed in the four corners of the instrument." Allen v. Cedar Real Estate Group, LLP, 236 F.3d 374, 381 (7th Cir. 2001) (citing Fetz v. Phillips, 591 N.E.2d 644, 647 (Ind. Ct. 8 App.1992)). *8 Interpretation of a contract is primarily a question of law. USA Life One Ins. Co. of Indiana v. Nuckolls, 682 N.E.2d 534, 538 (Ind. 1997). If the contract is "clear and unambiguous, then it should be given its plain and ordinary meaning." Id. "The meaning of a contract is to be determined from an examination of all of its provisions, not from a consideration of individual words, phrases, or even paragraphs read alone." Art Country Squire, L.L.C. v. Inland Mortg. Corp., 745 N.E.2d 885, 889 (Ind. Ct. App. 2001). A "contract term is not ambiguous merely because the parties disagree about the term's meaning." Roy A. Miller & Sons, Inc. v. Industrial Hardwoods Corp., 775 N.E.2d 1168, 1173 (Ind. Ct. App. 2002). "An ambiguity exists only where reasonable people could come to different conclusions about the contract's meaning." Id.; see also Abbey Villas Dev. Corp. v. Site Contrs., Inc., 716 N.E.2d 91, 100 (Ind. Ct. App. 1999) ("A contract is ambiguous when it is susceptible to more than one interpretation and reasonably intelligent persons would honestly differ as to its meaning."). If the contract contains language that is ambiguous, "then the court may apply the rules of construction in interpreting the language." Id. A patent ambiguity is one that "is apparent on the face of the instrument and arises from an inconsistency or inherent uncertainty of language used so that it either conveys no definite meaning or a confused meaning." Oxford Financial Group, Ltd. v. Evans, 795 N.E.2d 1135, 1143 (Ind. Ct. App. 2003). If the ambiguity in the contract is a patent one, then extrinsic evidence isn't admissible to explain or remove the ambiguity, and the ambiguity presents a question of law. Id. A latent ambiguity is an "ambiguity that arises only upon 9 attempting to implement *9 the contract, and the meaning of which can only be determined by reference to extrinsic evidence." Id. at 1144. If the ambiguity can't be resolved without the aid of a factual determination, then "the trier of fact must ascertain the facts necessary to construe the contract." E.g., Arrotin Plastic Materials of Indiana v. Wilmington Paper Corp., 865 N.E.2d 1039, 1041 (Ind. Ct. App. 2007); see also Felker v. Sw. Emergency Med. Serv., Inc., 521 F. Supp. 2d 857, 867 (S.D. Ind. 2007) ("[T]he fact finder resolves latent ambiguity as a question of fact."). When there is ambiguity in a contract, it is construed against its drafter. MPACYT Const. Group, LLC v. Superior Concrete Constructors, Inc., 802 N.E.2d 901, 910 (Ind. 2004). First Financial identifies several sections of the contract that it argues unambiguously allow them to charge overdraft fees at settlement on all types of APSN transactions. These sections are analyzed in the sections that follow. 1. "Authorize Positive - Settle Negative" Section First Financial's primary argument is that the contract's "Authorize Positive - Settle Negative" section makes it clear that overdrafts are determined at the time of settlement. That section reads in relevant part: 4 Hash v. First Fin. Bancorp Cause No. 1:20-cv-1321 RLM-MJD (S.D. Ind. Mar. 8, 2021) In order to determine whether your account is overdrawn, we use the Available Balance. . . . When you make a point-of- sale transaction, a hold is placed on those funds at the time the transaction is authorized. If a point-of-sale hold expires and the point-of-sale transaction has not yet been paid, the amount being held is then returned to your Available Balance. If the point-of-sale transaction then comes through after the hold expires, because we have already authorized that transaction previously, we will honor the transaction. If you do not have sufficient funds in your account at the time we honor the transaction, the point-of-sale transaction 10 *10 The section goes on to provide an example of how a transaction could be authorized on positive funds yet still settle negative and incur an overdraft fee because a debit hold expired. Mr. Hash argues that, while the section warns that a certain type of ASPN transaction can incur an overdraft fee, it does so only in the limited circumstance of when the hold expires before the transaction settles. That isn't the only way an ASPN transaction can occur, and that wasn't the type of ASPN transaction Mr. Hash experienced. The holds on Mr. Hash's positively authorized transactions never expired, but were nevertheless charged with an overdraft fee when they settled. The "Authorize Positive - Settle Negative" section doesn't make it clear that First Financial can charge overdraft fees at settlement on all types of APSN transactions, and the factual scenario in which the section allows First Financial to assess overdraft fees at settlement doesn't apply to Mr. Hash's situation. Furthermore, the section states that First Financial uses the available balance to determine whether an account is overdrawn. The available balance is the balance that is immediately affected when a point-of-sale transaction is authorized. Using the available balance to determine overdrafts implies that overdrafts are determined at authorization, not settlement. The "Authorize Positive - Settle Negative" section of the contract doesn't unambiguously allow First Financial to charge overdraft fees at settlement on every APSN 11 transaction. *11 2. "Authorize and Pay" Terms Next, the parties address the meaning of First Financial's use of the terms "authorize and pay." For example, a portion of the contract reads: You understand that we may, at our discretion, honor withdrawal requests that overdraw your account as part of our Courtesy Cash service. However, we will only authorize and pay overdrafts for ATM transactions or debit transactions if you specifically opted-in to Courtesy Cash Plus service, or there are available funds at the time of authorization. Mr. Hash argues these terms link authorization with paying overdrafts, appear many times in the contract and tell consumers that transactions are "paid"—creating overdrafts—at the time of authorization. First Financial says that "[t]his language simply details how First Financial's Courtesy Cash overdraft programs work and explains that First Financial will only 'authorize' ATM transactions and debit-card transactions and 'pay overdrafts' for those transactions in two circumstances: (1) if the customer 'opted-in to Courtesy Cash Plus' or (2) if the customer has sufficient available funds at the time of authorization." This language doesn't help the customer understand whether overdrafts are determined at the time of authorization or settlement. The sentence might explain either of two scenarios. will cause you to overdraw and, if you are opted into Courtesy Cash Plus, or the debit transaction is a recurring transaction, you may still incur an overdraft fee. 5 Hash v. First Fin. Bancorp Cause No. 1:20-cv-1321 RLM-MJD (S.D. Ind. Mar. 8, 2021) First, if an accountholder opted into Courtesy Cash Plus, First Financial will authorize and pay overdrafts on ATM and debit transactions (instead of declining the transaction at the point of sale). The "benefit" of Courtesy Cash Plus is that ATM and debit transactions that overdraw an account will be authorized instead of being declined. But 12 that doesn't shed *12 light on whether overdraft fees are determined at the time of authorization or settlement. Second, if an accountholder has sufficient 13 available funds at the time of authorization, First *13 Financial will authorize and pay overdrafts on ATM and debit transactions, regardless of whether an accountholder opted-in to Courtesy Cash Plus. The "and pay overdrafts" portion could imply that overdrafts can occur on ATM and debit transactions authorized on sufficient funds, meaning that overdrafts would be determined at settlement. But the "and pay overdrafts" also could reasonably be read as only applying to the first scenario—when an accountholder opted into Courtesy Cash Plus. The terms are ambiguous and unhelpful in determining if overdrafts are determined at authorization or settlement. 3. "Payment Order of Items" Section First Financial argues that the "Payment Order of Items" section explains its policy is to pay when items are presented for "permanent payment" and explains the order in which various types of transactions are paid, stating repeatedly explains that transactions are paid "on the day presented for permanent payment." The section reads: PAYMENT ORDER OF ITEMS - The order in which items are paid from your account is important if there is not enough money in your account to pay all of the items that are presented. The payment order can affect the number of items overdrawn or returned unpaid and the amount of the fees you may be assessed. To assist you in managing your account, we are providing you with the following information regarding how we pay items. ? Our policy is to pay items being presented for permanent payment in the following order. 6 Hash v. First Fin. Bancorp Cause No. 1:20-cv-1321 RLM-MJD (S.D. Ind. Mar. 8, 2021) 1. Wire transfers - in low to high dollar amount order on the day presented for permanent payment 2. ATM transactions - in low to high dollar amount order on the day presented for permanent payment 3. Debit Card transactions authorized with a PIN (appears as "DBT CRD" on your statement) or a person-to-person payment - in low to high dollar amount order on the day presented for permanent payment 4. Debit Card transactions authorized as a credit transaction (appears as "POS DEB" on your statement) - in low to high dollar amount order on the day presented for permanent payment 5. Recurring Debit Card transactions - in low to high dollar amount order on the day presented for permanent payment 6. Electronic Fund Transfers - in low to high dollar amount order on the day presented for permanent payment 7. Checks paid at the teller window or to an FFB loan - in check number order on the day presented for permanent payment 8. ACH transactions - in low to high dollar amount order on the day presented for permanent payment 9. All other checks - in check number order on the day presented for permanent payment ? Note: Items that are temporarily presented as a debit to your account may not permanently be paid in the same order as temporarily presented. If a check, item or transaction is presented without sufficient funds in your account to pay it, we may, at our discretion, pay the item(s) (creating an overdraft). The section doesn't unambiguously establish that First Financial can assess overdraft fees at settlement; the section describes the order in 14 which items *14 presented for permanent payment will be paid. The order in which transactions of the same category are paid is determined by their amount at settlement, but that doesn't clarify whether First Financial determines overdraft fees at authorization or settlement. The Payment Order of Items Section doesn't unambiguously allow First Financial to charge overdraft fees at settlement on every type of APSN transaction. 7 Hash v. First Fin. Bancorp Cause No. 1:20-cv-1321 RLM-MJD (S.D. Ind. Mar. 8, 2021) First Financial also argues that the last sentence of the cited section shows that overdrafts are created when a transaction is presented with too little a balance in the customer's account to pay it. This, First Financial says, is exactly what happens in an APSN transaction. The strength of this argument depends on whether the word "presented" means "presented at settlement" as opposed to "presented for authorization." Ambiguities exists when reasonable people could differ as to the meaning of a contract. Abbey Villas Dev. Corp. v. Site Contrs., Inc., 716 N.E.2d 91, 100 (Ind. Ct. App. 1999). Because reasonable people can differ as to what "presented" means, this section of the contract doesn't unambiguously allow First Financial to charge overdraft fees at settlement on every APSN transaction. 4. Overdraft Disclosure The overdraft disclosure provides that: "An overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyways." First Financial argues that this language makes it clear that overdrafts are determined at settlement. Mr. Hash argues that the 15 words "to *15 cover" are ambiguous because the sentence doesn't clarify whether an accountholder would need enough money to cover the transaction when it is authorized, or later when it settles. The overdraft disclosure isn't helpful in determining whether overdrafts are assessed at authorization or settlement. When an account is determined to be overdrawn is left unspecified, and it can't be said one way or the other from the context in which the section appears. The overdraft disclosure doesn't unambiguously establish that First Financial can assess overdraft fees at settlement on every APSN transaction. 5. "Withdrawals" Section First Financial cites language in the contract's "Withdrawals" section that it says allows First Financial to assess overdraft fees at settlement. The section reads in relevant part: An item may be returned after the funds from the deposit of that item are made available for withdrawal. In that case, we will reverse the credit of the item. We may determine the amount of available funds in your account for the purpose of deciding whether to return an item for insufficient funds at any time between the time we receive the item and when we return the item or send a notice in lieu of return. We need only make one determination, but if we choose to make a subsequent determination, the account balance at the subsequent time will determine whether there are insufficient available funds. First Financial argues that this section allows First Financial to determine the sufficiency of the customer's available funds at any time, or at many multiple times, between First Financial's receipt of the item and First Financial's return of the item or payment and notification to the customer, and 16 specifies that, in *16 any event, the account balance at the later time decides whether there are insufficient available funds. The court doesn't read this section the way First Financial does. The section describes how an account's available balance is determined in a very specific context: when an item, once deposited in an account, is returned after the funds from the deposit were already made available for withdrawal. That scenario doesn't apply to Mr. Hash's situation; Mr. Hash didn't allege that he deposited an item that was subsequently returned after the funds of that item were already made available for withdrawal. The "withdrawals" section doesn't unambiguously allow First Financial to determine overdraft fees at settlement on every type of APSN transaction. ** * 8 Hash v. First Fin. Bancorp Cause No. 1:20-cv-1321 RLM-MJD (S.D. Ind. Mar. 8, 2021) None of the contract sections cited by First Financial unambiguously establish that the contract allows First Financial to determine overdraft fees at settlement on the type of transactions on which Mr. Hash alleges he was improperly charged overdraft fees. The court must draw every reasonable inference in favor of the plaintiff on a motion to dismiss, and because the contract is ambiguous as to when First Financial can assess overdraft fees on Mr. Hash's transactions, that ambiguity must be resolved in favor of Mr. Hash. The contract doesn't foreclose Mr. Hash's complaint, Mr. Hash states a claim upon which relief can be granted, and First Financial's motion to dismiss Mr. Hash's breach of 17 contract claim must be denied. *17 IV. Breach of the Covenant of Good Faith and Fair Dealing Mr. Hash alleges that First Financial breach the covenant of good faith and fair dealing in the contract. Compl. ¶ 82. According to the complaint, First Financial "exploits contractual discretion to the detriment of accountholders" by "unfairly [extracting overdraft] Fees on transactions that no reasonable accountholder would believe could cause [overdraft] Fees." Compl. ¶ 47, 49. Indiana law imposes a generalized duty of good faith and fair dealing on bank account contracts because banks "offer customers contracts of adhesion, often with terms not readily discernable to a layperson. If the contract is ambiguous . . . then the courts will impose such a duty of good faith and fair dealing." Old Nat. Bank v. Kelly, 31 N.E.3d 522, 531 (Ind. Ct. App. 2015). The implied duty of good faith and fair dealing "requires that a party perform its obligations and exercise its discretion under the contract in good faith. But it does not require a party to undertake a new, affirmative obligation that the party never agreed to undertake." Acheron Med. Supply, LLC v. Cook Med. Inc., 958 F.3d 637, 645 (7th Cir. 2020). First Financial argues that Mr. Hash's claim for breach of the implied duty of good faith and fair dealing must be dismissed simply because Mr. Hash hasn't stated a claim for breach of contract, and the implied duty of good faith and fair dealing doesn't require First Financial to do anything that the contract doesn't require it to do. First Financial argues that the implied duty of good faith and fair dealing doesn't revise the contract's plain terms. 18 *18 As already discussed, Mr. Hash's complaint states a claim for breach of contract, and the law requires First Financial to perform its contractual obligations in good faith. Because all well-pleaded facts are assumed true and all reasonable inferences on a motion to dismiss are drawn in favor of the plaintiff, Mr. Hash has stated a claim upon which relief can be granted, and First Financial's motion to dismiss Mr. Hash's claim for breach of the implied duty of good faith and fair dealing must be denied. V. Indiana Deceptive Consumer Sales Act Claim The complaint's second claim alleges that Mr. Hash suffered monetary damages as a result of First Financial's "unfair and deceptive acts and practices in violation of the [Indiana Deceptive Consumer Sales Act]." Compl. ¶ 96. Mr. Hash alleges that First Financial made representations about how it assessed overdraft fees on debit card transactions that didn't accurately reflect its true fee practices, and that these violations of the Indiana Deceptive Consumer Sales Act ("the Act") were "done as a part of a scheme, artifice, or device with intent to defraud or mislead, and therefore are incurable deceptive acts under [the Act]." Compl. ¶¶ 91-92. The Deceptive Consumer Sales Act is "a remedial statute that must be liberally construed and applied to promote its purposes and policies of protecting consumers from deceptive or unconscionable sales practices." Castagna v. Newmar Corp., 2016 WL 3413770, at *6 (N.D. Ind. June 22,2016) (quoting 9 Hash v. First Fin. Bancorp Cause No. 1:20-cv-1321 RLM-MJD (S.D. Ind. Mar. 8, 2021) 20 Kesling v. Hubler Nissan, 997 N.E.2d 327, 332 19 (Ind. 2013); Ind. Code § 24-5- *19 0.5-1(a). The Act provides in relevant part that "[a] supplier may not commit an unfair, abusive, or deceptive act, omission, or practice in connection with a consumer transaction. Such an act, omission, or practice by a supplier is a violation of this chapter whether it occurs before, during, or after the transaction. An act, omission, or practice prohibited by this section includes both implicit and explicit misrepresentations." Ind. Code § 24- 5-0.5-3(a). The Act defines these representations as deceptive acts: (1) That such subject of a consumer transaction has sponsorship, approval, performance, characteristics, accessories, uses, or benefits it does not have which the supplier knows or should reasonably know it does not have. (2) That such subject of a consumer transaction is of a particular standard, quality, grade, style, or model, if it is not and if the supplier knows or should reasonably know that it is not. Ind. Code § 24-5-0.5-3(b). The Act recognizes two types of deceptive acts: "uncured" deceptive acts, and "incurable" deceptive acts. Ind. Code § 24-5- 0.5-2(a)(6)-(7). Mr. Hash alleges an incurable deceptive act, which is defined as "a deceptive act done by a supplier as part of a scheme, artifice, or device with intent to defraud or mislead." Ind. Code § 24-5-0.5-2(a)(8). "[F]or actions under the Act that are 'grounded in fraud,' the specificity requirement of Rule 9(B) must be met." McKinney v. State, 693 N.E.2d 65, 71 (Ind. 1998). The pleading requirements of Indiana Trial Rule 9(B) and Federal Rule of Civil Procedure 9(b) are the same. Fed. R. Civ. P. 9(b); Ind. Trial R. 9(B). Federal Rule of Civil Procedure 9(b) states: "In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person's mind may be alleged generally." *20 "The primary purpose of the rule is to give the defendant 'fair notice' of the allegations against it." Thornton v. CMB Entm't, LLC, 309 F.R.D. 465, 468 (S.D. Ind. 2015) (citing Vicom, Inc. v. Harbridge Merch. Servs., Inc., 20 F.3d 771, 777 (7th Cir. 1994)). "This means as a practical matter that [a plaintiff] must identify the 'who, what, when, where, and how' of the alleged fraud." Benson v. Fannie May Confections Brands, Inc., 944 F.3d 639, 646 (7th Cir. 2019). "Conclusory allegations do not satisfy the requirements of Rule 9(b) and subject the pleader to dismissal." Veal v. First Am. Bank, 914 F.2d 909, 913 (7th Cir. 1990). A claim under the Act "may not be brought more than two (2) years after the occurrence of the deceptive act." Ind. Code § 24-5-0.5-5(b). "Dismissing a complaint as untimely at the pleading stage is an unusual step, since a complaint need not anticipate and overcome affirmative defenses, such as the statute of limitations. But dismissal is appropriate when the plaintiff pleads himself out of court by alleging facts sufficient to establish the complaint's tardiness." Cancer Found, Inc. v. Cerberus Capital Mgmt., L.P., 559 F.3d 671, 674-675 (7th Cir. 2009). The Act's statute of limitations is governed by an occurrence rule that is "'triggered by the date of each occurrence' of a deceptive act." Elward v. Electrolux Home Products, Inc., 264 F. Supp. 3d 877, 892 (N.D. Ill. 2017) (quoting State v. Classic Pool & Patio, Inc., 777 N.E.2d 1162, 1166 (Ind. Ct. App. 2002)). However, "the doctrine of fraudulent concealment can toll the statute of limitations when the defendant has "committed concealment or fraud of such character as to prevent inquiry, to elude investigation, or to 21 mislead the plaintiff, *21 such as by concealing material facts so as to prevent the plaintiff from discovering a potential cause of action." Id. at 890 (citing Doe v. Shults-Lewis Child and Services, Inc., 718 N.E.2d 738 (Ind. 1999)). 10 Hash v. First Fin. Bancorp Cause No. 1:20-cv-1321 RLM-MJD (S.D. Ind. Mar. 8, 2021) 22 *22 First Financial argues that Mr. Hash's claim for violations under the Act should be dismissed for three reasons. First, First Financial argues that assessing overdraft fees on ASPN transactions can't be a deceptive act because the contract allows First Financial to assess overdraft fees on APSN transactions. But as discussed in Part III, the contract's plain terms don't unambiguously make it clear that First Financial can assess overdraft fees on all APSN transactions. Second, First Financial argues that the complaint lacks the particularity needed to plead a plausible claim for an incurable' deceptive act, and that Mr. Hash substitutes conclusory and legal conclusions for the factual allegations Rule 9(b) requires. But the complaint provides: 43. Upon information and belief, something more is going on: at the moment a debit card transaction is getting ready to settle, [First Financial] does something new and unexpected during its nightly batch posting process. Specifically, [First Financial] releases the hold placed on funds for the transaction for a split second, putting money back into the account, then re-debits the same transaction a second time. 44. This secret step allows [First Financial] to charge OD Fees on transactions that never caused an overdraft—transactions that were authorized into sufficient funds and for which [First Financial] specifically set aside money to pay them. 45. This discrepancy between [First Financial's] actual practices and the contract causes accountholders to incur more OD Fees than they should. 46. In sum, there is a huge gap between practices as described in the account documents and [First Financial's] actual practices. A plaintiff generally can't satisfy the particularity requirement of Rule 9(b) with a complaint filed on information and belief, but that rule isn't ironclad: "the practice is permissible, so long as (1) the facts constituting the fraud are not accessible to the plaintiff and (2) the plaintiff provides 'the grounds for his suspicions.'" Pirelli Armstrong Tire Corp. Retiree Med. Benefits Tr. v. Walgreen Co., 631 F.3d 436, 442 (7th Cir. 2011). Mr. Hash satisfies both requirements because the method by which First Financial actually determines and assesses overdraft fees isn't accessible to him, and he has provided grounds for his suspicions—namely, that he was charged overdraft fees on transactions even though he had sufficient available funds to pay for those transactions. *23 ¦ a detailed explanation of the fee practice challenged (Compl. ¶¶ 11-17); ¦ a detailed overview of the way First Financial allegedly processes debit-card transactions (Compl. ¶¶ 23-28); ¦ citations to contractual representations at issue (Compl. ¶ 30-31); ¦ descriptions of the way First Financial's actual practices allegedly differ from those representations (Compl. ¶ 37-45, 91); and ¦ specific transactions for which First Financial allegedly charged improper overdraft fees (Compl. ¶ 60). The complaint's factual allegations are more than sufficient to identify the who, what, when, where, and how of Mr. Hash's fraud claim, giving First Financial fair notice. In particular, paragraphs 43- 46 read: 23 11 Hash v. First Fin. Bancorp Cause No. 1:20-cv-1321 RLM-MJD (S.D. Ind. Mar. 8, 2021) Finally, First Financial argues that Mr. Hash's claim is based on overdraft fees assessed in 2015, nearly five years before he filed suit, so the Deceptive Consumer Sales Act's two-year statute of limitations bars his claim. Mr. Hash responds that the Act's statute of limitations should be tolled because First Financial committed incurable deceptive acts with the intent to defraud. He says, too, that tolling is proper because First Financial's violations of the Act are ongoing and continue to occur into the present because the allegedly improper overdraft fees are part of a larger scheme that continued from month-to-month and was deceptive. With respect to Mr. Hash's first argument, he alleges a "scheme to defraud" that involved a "secret step" that allowed First Financial to charge improper overdraft fees. Compl. ¶ 43-46, 92. But the assessment of overdraft fees at settlement wasn't hidden; overdraft fees were allegedly determined at settlement and charged in violation of what was allowed under the contract. If the court were to find that "concealment" was sufficiently pleaded to toll the statute of limitations, the concealment would have to lie in the mechanics of how exactly First Financial assessed overdraft fees at settlement, not that overdraft fees assessed at settlement were unknown or hidden. It's too great a stretch to say that this is "concealment or fraud of such character as to prevent inquiry, to elude investigation, or to mislead the plaintiff, such as by concealing material facts so as to prevent the plaintiff from discovering a potential cause of action." Elward v. Electrolux Home Products, Inc., 264 F. Supp. at 890 (citing Doe v. Shults-Lewis Child and 24 Services, Inc., 718 N.E.2d 738 (Ind. 1999)). *24 Mr. Hash's other argument supporting that his claims aren't time-barred is more availing: First Financial's violations of the Act are ongoing and 25 continue to occur into the present because the improper overdraft fees are part of an ongoing scheme to defraud. The two relevant paragraphs from the complaint pertaining to an ongoing scheme are: 92. [First Financial's] violations were willful and were done as part of a scheme, artifice, or device with intent to defraud or mislead, and therefore are incurable deceptive acts under the DCSA. *** 97. Plaintiff and members of the Class seek actual damages plus interest on damages at the legal rate, as well as all other just and proper relief afforded by the DCSA. As redress for Defendant's repeated and ongoing violations, Plaintiff and members of the Class are entitled to, inter alia, actual damages, treble damages, attorneys' fees, and injunctive relief. Compl. ¶¶ 92, 97. This is enough to plead an ongoing scheme that would toll the two-year statute of limitations. See, e.g., IUE-CWA Local 901 v. Spark Energy, LLC, 440 F. Supp. 3d 969, 975 (N.D. Ind. 2020). First Financial responds that, by pleading an ongoing scheme, Mr. Hash has created a different problem—that he hasn't sufficiently pleaded the "when" requirement of Rule 9(b). Whether the "when" requirement of Rule 9(b) is pleaded with sufficient particularity depends on whether Mr. Hash's pleadings that he was charged improper and fraudulent overdraft fees in October 2015 in conjunction with his pleadings in paragraphs 92 and 97 are specific enough to allege that the fraud occurred within the past two years. Because Mr. Hash is entitled to every reasonable inference on a motion to dismiss, and because the Act is "a remedial statute that must be liberally construed and applied to promote its purposes and policies of protecting *25 consumers from deceptive or unconscionable sales practices," Mr. Hash has met the pleading requirements of Rule 9(b) to state a claim for 12 Hash v. First Fin. Bancorp Cause No. 1:20-cv-1321 RLM-MJD (S.D. Ind. Mar. 8, 2021) fraud upon which relief can be granted. Castagna v. Newmar Corp., 2016 WL 3413770, at *6 (N.D. Ind. June 22,2016) (quoting Kesling v. Hubler Nissan, 997 N.E.2d 327, 332 (Ind. 2013)); see also Ind. Code § 24-5-0.5-1(a). VI. Conclusion For the foregoing reasons, the court DENIES First Financial's motion to dismiss [Doc. No. 17]. SO ORDERED. ENTERED: March 8, 2021 /s/ Robert L. Miller, Jr. Judge, United States District Court Distribution: All electronically registered counsel of record 13 CIVIL 3:21cv726 (DJN) 04-07-2022 CASSANDRA MAWYER, individually and on behalf of all others similarly situated Plaintiff, v. ATLANTIC UNION BANK, Defendant. David J. Novak, United States District Judge. MEMORANDUM OPINION (GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS) David J. Novak, United States District Judge. Plaintiff Cassandra Mawyer ("Plaintiff) brings this class action on behalf of herself and all individuals similarly situated against Defendant Atlantic Union Bank ("Defendant"). Plaintiffs suit stems from a contract dispute regarding Defendant's fee practices for overdrafts. Plaintiff alleges that Defendant violates the terms of its agreement with accountholders by charging multiple fees for multiple attempts to process a single payment instruction. This matter now comes before the Court on Defendant's Motion to Dismiss Plaintiffs Class Action Petition (ECF No. 6). For the reasons set forth below, the Court hereby GRANTS IN PART and DENIES IN PART Defendant's 1 Motion.1 *1 1 Defendant has requested oral argument on the instant Motion, because of the parties' contradictory readings of the contract at issue. (Notice of Request for Hrg. (ECF No. 18).) The Court hereby DENIES Defendant's request and dispenses with oral argument, because the materials before it adequately present the facts and legal contentions, and argument would not aid the decisional process. I. BACKGROUND At this stage of the proceedings, the Court must accept as true the facts set forth in the Petition. Against this backdrop, the Court accepts the following facts as alleged for purposes of resolving the instant Motion. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A. Factual Background Defendant is one of the largest banks based in Virginia, with locations spanning Virginia, Maryland and North Carolina. (Pet. ¶ 7.) Plaintiff maintains a checking account with Defendant. (Pet. ¶ 6.) Plaintiffs account with Defendant is governed by a uniform contract entitled "Terms and Conditions of Your Account." (Account Agreement (ECF No. 1-1).) Plaintiffs account is also governed by a fee schedule, which outlines fees that Defendant may charge when certain enumerated events occur. (Fee Schedule (ECF No. 1-2).) One of those events occurs when an accountholder lacks sufficient funds in her account to cover a transaction. In that situation, Defendant has two options: (1) it can cover the transaction and charge the accountholder a $38.00 "overdraft" fee, or, (2) it can return the payment request to the merchant and charge the accountholder a $38.00 "non-sufficient funds" ("NSF") fee. (Account Agreement at 7; Fee Schedule at 1.) CIVIL 3:21cv726 (DJN) United States District Court, Eastern District of Virginia Mawyer v. Atl. Union Bank Decided Apr 7, 2022 1 Mawyer v. Atl. Union Bank CIVIL 3:21cv726 (DJN) (E.D. Va. Apr. 7, 2022) The parties dispute whether the contract2 allows Defendant to charge multiple fees on a single overdrawn transaction. The Fee Schedule states that a fee may be charged "per item": 2 The Account Agreement and the Fee Schedule are collectively the "contract." OVERDRAFT FEES: Applies to overdrafts created by check, in-person withdrawal, ATM withdrawal, or other electronic means. Non-Sufficient Funds2 (Per Item)............................................$38.00 Overdraft2 (Per/tem)..................................................... ..........$38.00 The order in which items are paid is important if there is not enough money in your account to pay all of the items that are presented.... If an item is presented without sufficient funds in your account to pay it, we may, at our discretion, pay the item (creating an overdraft) or return the item (resulting in a NSF). (Account Agreement at 6-7.) Plaintiff alleges that Defendant charges a fee each time a merchant presents an item for payment - regardless of whether Defendant previously returned it and charged a fee. (Pet. ¶ 13.) For example, on October 1, 2021, Plaintiff made five payments in varying amounts, but Defendant returned them unpaid due to insufficient funds in Plaintiffs account and charged a total fee of $190. (Oct. 1 Account Statement (ECF No. 7-1).) Then, on October 15, 2021, those five payments were presented again without Plaintiffs knowledge, and Defendant again returned them due to insufficient funds and charged another $190. (Oct. 15 Account Statement (ECF No. 7-2); Pet. ¶ 36.) Plaintiff contends that the second fee is not only contractually prohibited, but also "deceptive." (Pet. ¶ 12.) B. Procedural History On November 18, 2021, Plaintiff filed a Class Action Petition against Defendant based on the above allegations. The Petition raises one count of breach of contract but advances two claims in support of the count. (Pet. ¶ 57-68.) First, Plaintiff alleges that Defendant breached the express terms of the contract by charging multiple fees for each transaction. (Pet. ¶ 60.) *3 Second, Plaintiff maintains that Defendant's conduct breached the implied covenant of good faith and fair dealing. (Pet. ¶¶ 61-66.) In response to Plaintiffs Petition, Defendant filed the instant Motion to Dismiss (ECF No. 6) on December 21, 2021. Plaintiff filed her Response in Opposition on January 21, 2022. (Pl.'s Resp. in Transfers to Overdrafts................................................$ 12.50 (Non-sufficient funds and overdraft fees are not charged for items $1.00 or less or for items that cause an account balance to be overdrawn by $1.00 or less) 2 *2 (Fee Schedule at 1.) The Account Agreement includes the following provision discussing "items": The law permits us to pay items (such as checks or drafts) drawn on your account in any order.... To assist you in handling your account with us, we are providing you with the following information about how we process items: In general, ATM and debit card transactions will be posted in order of the date and time on which they occurred, if known, and before any checks written by you; certain other non-check transactions such as overdraft protection fees will be posted in order of dollar amount, from highest to lowest; and checks will be paid in order of check number .... Cover 3 2 Mawyer v. Atl. Union Bank CIVIL 3:21cv726 (DJN) (E.D. Va. Apr. 7, 2022) Opp'n To Def.'s Mot. to Dismiss ("Opp'n") (ECF No. 13).) Defendant filed its Reply on February 7, 2022. (Reply in Supp. of Mot. to Dismiss Pl.'s Compl. ("Reply") (ECF No. 17).) Defendant asserts that the Court must dismiss Plaintiffs Petition, because "the plain language of the contract" permits its fee practice. (Def.'s Brief in Supp. of Mot. to Dismiss ("Def.'s Mem.") at 7 (ECF No. 7).) Defendant further contends that Plaintiffs implied covenant of good faith and fair dealing claim should be dismissed because "her argument goes to the express terms of the contract," not the implied covenant of good faith and fair dealing. (Reply at 13.) II. STANDARD OF REVIEW A motion to dismiss pursuant to Rule 12(b)(6) tests the sufficiency of a complaint or counterclaim; it does not serve as the means by which a court will resolve contests surrounding the facts, determine the merits of a claim, or address potential defenses. Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992). In considering a motion to dismiss, the Court will accept a plaintiffs well-pleaded allegations as true and view the facts in a light most favorable to the plaintiff. Mylan Lab 'ys, Inc. v. Matkari, 7 F.3d 1130, 1134 (4th Cir. 1993). However, "the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Iqbal, 556 U.S. 4 at 678. *4 Under the Federal Rules of Civil Procedure, a complaint or counterclaim must state facts sufficient to "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Bell All Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)) (internal quotation marks omitted). As the Supreme Court opined in Twombly, a complaint or counterclaim must state "more than labels and conclusions" or a "formulaic recitation of the elements of a cause of action," though the law does not require "detailed factual allegations." Id. (citations omitted). Ultimately, the "[f]actual allegations must be enough to raise a right to relief above the speculative level," rendering the right "plausible on its face" rather than merely "conceivable." Id. at 555, 570. Thus, a complaint must assert more facts than those "merely consistent with" the other party's liability. Id. at 557. And the facts alleged must suffice to "state all the elements of [any] claim[s]." Bass v. E.I. DuPont de Nemours & Co., 324 F.3d 761, 765 (4th Cir. 2003) (first citing Dickson v. Microsoft Corp., 309 F.3d 193, 213 (4th Cir. 2002); and then citing Iodice v. United States, 289 F.3d 270, 281 (4th Cir. 2002)). For the purposes of deciding a motion to dismiss, the Court considers the factual allegations set forth in the Complaint. Phillips v. LCI Int'l, Inc., 190 F.3d 609, 618 (4th Cir. 1999). Additionally, the Court may consider documents attached to the Complaint, Fed.R.Civ.P. 10(c), as well as "documents incorporated into the complaint by reference, and matters of which a court may take judicial notice," Tellabs, Inc. v. Makor Issues & Rts., Ltd., 551 U.S. 308, 322 (2007). Where, as here, the Complaint expressly relies upon a document integral to the Complaint that the plaintiff did not attach, the Court can also consider 5 that document on a motion *5 to dismiss.3 See Am. Chiropractic Ass'n v. Trigon Healthcare, Inc., 367 F.3d 212, 234 (4th Cir. 2004) ("[W]hen a defendant attaches a document to its motion to dismiss, 'a court may consider it in determining whether to dismiss the complaint [if] it was integral to and explicitly relied on in the complaint and [if] the plaintiffs do not challenge its authenticity.'" (quoting Phillips, 190 F.3d at 618)). Where the bare allegations of the Complaint conflict with any document incorporated therein, the document prevails. Fayetteville Invs. v. Com. Builders, Inc., 936 F.2d 1462, 1465 (4th Cir. 1991). 3 The Petition alleges that, in October 2021, Plaintiff was charged $ 1, 216 in NSF fees, according to her account statements. (Pet. ¶ 3 Mawyer v. Atl. Union Bank CIVIL 3:21cv726 (DJN) (E.D. Va. Apr. 7, 2022) 36.) Although the statements do not provide specifics, Plaintiff asserts "upon information and belief that the majority of her fees came from re-presented items that Defendant had previously returned and charged a fee. (Pet.¶ 36.) Defendant, for its part, has provided Plaintiffs account statements from October 2021 for the Court to consider. (October 1 Account Statement; October 15 Account Statement; Def.'s Mem. at 4), and Plaintiff does not appear to challenge their authenticity. Thus, the Court may consider such evidence at this stage. III. ANALYSIS The Court will first address Defendant's argument that Plaintiffs breach of contract claim must be dismissed, because the contract expressly permits its multiple fee practice. The Court will then evaluate Plaintiffs claim that Defendant breached the implied covenant of good faith and fair 6 dealing.4 *6 4 When adjudicating state law claims, a federal court must apply the law of the state in which they sit. United States v. Little, 52 F.3d 495, 498 (E.D. Va. 1995) (citing Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)). In so doing, federal courts must use state law according to how the state's highest court has interpreted the law or anticipate how that court would rule. Horace Mann Ins. Co. v. Gen. Star Nat 7 Ins. Co., 514 F.3d 327, 329 (4th Cir. 2008). Here, Plaintiff brings claims for breach of contract and breach of the covenant of good faith and fair dealing, two state law claims, on behalf of herself and the putative class, so the Court must apply Virginia law. (Compl. ¶¶ 57-68.) A. Plaintiff Has Stated a Claim for Breach of Contract. "The elements of a breach of contract action are (1) a legally enforceable obligation of a defendant to a plaintiff; (2) the defendant's violation or 7 breach of that obligation; and (3) injury or damage to the plaintiff caused by the breach of obligation." Filak v. George, 594 S.E.2d 610, 619 (Va. 2004). Defendant asserts that Plaintiffs breach of contract claim fails on the first element because the contract "expressly permits the fees she challenges." (Def.'s Mem. at 1.) According to Defendant, because "checks" and "drafts" are "items" under the contract, and because the contract imposes a fee "per item," Defendant may charge a fee each time a merchant submits check or draft and the account has insufficient funds. (Def.'s Mem. at 8-10.) Stated differently, Defendant contends that an "item" is merely a "request for payment" submitted by a merchant. (Def.'s Mem. at 10 (emphasis added).) Under this reading, each resubmission of a check or draft by a merchant constitutes a distinct "item" that Defendant can decide to pay (resulting in an overdraft) or return (resulting in an NSF). In response, Plaintiff cautions that such a reading would permit Defendant to impose enormous fees on accountholders without their knowledge, as a merchant could have multiple requests returned before an accountholder becomes aware of what happened. In her view, an "item" does not constitute a request for payment, but rather "an accountholder's instruction for payment." (Opp'n at 9 (emphasis added).) Under this interpretation, Defendant cannot charge multiple fees on a single returned check or draft, because a merchant's resubmission does not constitute a new "item." Thus, at its core, the parties' dispute turns on what "item" means. If the Court finds its meaning ambiguous - that is, both Plaintiff and Defendant's interpretations are reasonable - then the Court cannot dismiss Plaintiffs breach of contract claim. *7 See Martin Marietta Corp. v. Int'l Telecomms. Satellite Org., 991 F.2d 94, 97 (4th Cir. 1992) (" [T]he construction of ambiguous contract provisions is a factual determination that precludes dismissal on a motion for failure to state a claim."); Info. Applications Grp., Inc. v. Shkolnikov, 836 F.Supp.2d 400, 419 (E.D. Va. 4 Mawyer v. Atl. Union Bank CIVIL 3:21cv726 (DJN) (E.D. Va. Apr. 7, 2022) 2011) (denying a motion to dismiss because the defendant's argument required "the interpretation of ambiguous terms" in a contract). "Contractual provisions are ambiguous if they may be understood in more than one way or if they may be construed to refer to two or more things at the same time." Nextel Wip Lease Corp. v. Saunders, 666 S.E.2d 317, 321 (Va. 2008). However, "[a] contract is not ambiguous simply because the parties to the contract disagree about the meaning of its language." Pocahontas Mining LLC v. Jewell Ridge Coal Corp., 556 S.E.2d 769, 771 (Va. 2002). Conflicting interpretations reveal an ambiguity only if the interpretations are "reasonable." Erie Ins. Exch. v. EPCMD 15, LLC, 822 S.E.2d 351, 355 (Va. 2019). An interpretation is reasonable when it serves as one of two "equally possible" interpretations "given the text and context of the disputed provision." Id. at 356 (citation and internal quotation marks omitted). When determining the reasonableness of an interpretation, the court must "construe the contract as a whole." Landsdowne Dev. Co. v. Xerox Realty Corp., 514 S.E.2d 157, 161 (Va. 1999). The court should not emphasize isolated terms at the expense of the "larger contractual context." Babcock & Wilcox Co. v. Areva NP, Inc., 788 S.E.2d 237, 244 (Va. 2016). In the event that the contract bears an ambiguity, the court must construe it "against the drafter of the agreement." Martin & Martin, Inc. v. Bradley Enters., Inc., 504 S.E.2d 849, 851 (Va. 1998). After careful consideration, the Court finds that the contract is ambiguous as to whether an item functions as a request for payment (as Defendant argues) or an accountholder's instruction to pay (as Plaintiff argues). The contract does not make clear 8 whether the *8 resubmission of a previously returned item constitutes a new item, which would enable Defendant to charge another fee. (See Fee Schedule at 1 (imposing a fee "per item").) That an item could be a check or draft, as Defendant argues, does not resolve whether the same check or draft presented again is a separate item. See Fludd v. S. State Bank, 2021 WL 4691587, at *11- 12 (D.S.C. Oct. 7, 2021) (concluding that an account agreement was ambiguous, because its examples of "item" did not resolve whether a re- presentment of a previously returned item constituted a new item). Indeed, the contract here reveals little about what makes an item distinct. It does not state that each request for payment by a merchant creates a new item, or that each instruction by the accountholder creates a new item; it merely permits the assessment of a fee " [i]f an item is presented without sufficient funds in your account to pay it." (Account Agreement at 7 (emphasis added).) Defendant suggests that difficulty distinguishing between new submissions and resubmissions can arise, resulting in multiple items. (Def.'s Mem. at 2.) However, the contract indicates that each item has a date, amount, payee and unique identifying number (Account Agreement at 4), demonstrating that Defendant can discriminate between new submissions and resubmissions. At bottom, the Court finds Plaintiffs and Defendant's arguments equally persuasive and plausible. Thus, an ambiguity exists, and the Court must read it against Defendant, as the drafter of the agreement.5 9 Martin & Martin, Inc., 504 S.E.2d at 851. *9 Defendant argues that Plaintiffs reading is not reasonable, because it relies on cases where "the contract at issue equated 'items' with 'transactions' for purposes of assessing overdraft or NSF fees." (Reply at 9.) In particular, Defendant targets Plaintiffs reliance on Fludd, where the district court found a similar account agreement ambiguous. 2021 WL 4691587, at *11-12. According to Defendant, "[alternating the use of the terms 'item' and 'transaction' in the contract at issue in Fludd resulted in ambiguity that simply does not exist under [Defendant]'s contract." (Reply at 9.) The Court disagrees. Both the contract in Fludd and the contract here use item and transaction interchangeably, creating an ambiguity. In Fludd, the contract stated, "if we do not authorize and pay an item then we will decline or return the transaction unpaid." 2021 WL 5 Mawyer v. Atl. Union Bank CIVIL 3:21cv726 (DJN) (E.D. Va. Apr. 7, 2022) 4691587, at *11 (emphasis omitted). Here, the contract conflates "items" with "ATM and debit transactions" and "non-check transactions" right before it states that overdraft and NSF fees may be imposed on an "item." (Account Agreement at 6.) While such fact is not dispositive, it lends further credence to the Court's finding that Plaintiffs interpretation is reasonable. 5 Plaintiff relies on several pieces of extrinsic evidence to support her breach of contract claim. The Petition cites to account agreements from three other financial institutions to establish that account agreements ordinarily specify that multiple NSF fees may be imposed on a single transaction. (Pet. ¶¶ 31-33.) And Plaintiffs Opposition cites both the Uniform Commercial Code and the National Automated Clearing House Association rules to bolster her her interpretation of "item." (Opp'n at 9-10.) While courts may consider extrinsic evidence if a contract provision bears ambiguity, the resolution of that ambiguity yields a question of fact, Online Res. Corp. v. Lawlor, 736 S.E.2d 886, 894 (Va. 2013), and courts may not resolve such questions at the motion to dismiss stage, Martin Marietta Corp., 991 F.2d at 97. Accordingly, because the contract here is ambiguous, the Court will not consider Plaintiffs extrinsic evidence at this stage to resolve that ambiguity. Defendant relies heavily on Lambert v. Navy Federal Credit Union, 2019 WL 3843064 (E.D. Va. Aug. 14, 2019), to argue that the contract here unambiguously supports its reading (Def.'s Mem. at 12-15; Reply at 4-5, 10-11), but Lambert provides limited guidance. Although the court in Lambert concluded that similar contract language unambiguously permitted the multiple-fee practice at issue here, the parties there agreed that item meant a request for payment, so it logically followed that each request for payment by a merchant created a distinct item under the contract. 2019 WL 3843064, at *3. Here, by contrast, the parties vigorously dispute whether item means a request for payment by a merchant 10 or an instruction to pay by the *10 accountholder. And as noted above, the contract language does not unambiguously resolve the dispute. Because of the lack of clarity regarding resubmission of a previously returned item constitutes the same or a separate item under the contract, and because the Court finds Plaintiffs and Defendant's interpretations equally plausible, the allegations supporting Plaintiffs breach of contract claim can withstand Defendant's Motion to Dismiss. Therefore, the Court will deny the Motion as to Plaintiffs breach of contract claim. B. Plaintiff Has Not Stated a Claim for Breach of the Implied Covenant of Good Faith and Fair Dealing. The Court turns next to Plaintiffs contention that Defendant breached the implied covenant of good faith and fair dealing. "Under Virginia law, every contract contains an implied covenant of good faith and fair dealing." Rogers v. Decrne, 992 F.Supp.2d 621, 633 (E.D. Va. Jan. 22, 2014). A breach of the implied covenant, however, "only gives rise to a breach of contract claim, not a separate cause of action."6 Frank Brunckhorst Co. v. Coastal Atl., Inc., 542 F.Supp.2d 452, 462 (E.D. Va. 2008). A claim for breach of the implied covenant of good faith and fair dealing requires " (1) a contractual relationship between the parties, and (2) a breach of the implied covenant." Enomoto v. Space Adventures, Ltd., 624 F.Supp.2d 443, 450 (E.D. Va. 2009). Here, it is undisputed that a contractual relationship existed between the parties, so the only question is whether Plaintiff has properly alleged a breach of the implied 11 covenant. *11 6 Because a claim for breach of the implied covenant of good faith and fair dealing does not furnish an independent cause of action, a party cannot raise it as a separate count in a complaint. Rogers, 992 6 Mawyer v. Atl. Union Bank CIVIL 3:21cv726 (DJN) (E.D. Va. Apr. 7, 2022) F.Supp.2d at 633. But a party can raise the claim as part of a count for breach of contract. Goodrich Corp. v. BaySys Techs., LLC, 873 F.Supp.2d 736, 742 (E.D. Va. 2012). Here, Plaintiff alleges breach of the implied covenant of good faith and fair dealing as part of her breach of contract count. (Pet. ¶¶ 57-68.) Thus, Plaintiff has raised the claim in the appropriate context. The implied covenant of good faith and fair dealing exists to protect a party's right "to receive the benefits of the agreement." Drummond Coal Sales, Inc. v. Norfolk S. Ry. Co., 3 F.4th 605, 611 (4th Cir. 2021) (quoting 23 Williston on Contracts § 63:22 (4th ed. 2021)) (internal quotation marks omitted). To this end, the implied covenant prohibits a party from exercising "contractual discretion in bad faith, even when such discretion is vested solely in that party." Va. Vermiculite, Ltd. v. W.R. Grace & Co.-Conn., 156 F.3d 535, 542 (4th Cir. 1998). The implied covenant does not, however, "prevent a party from exercising its explicit contractual rights." Id. Accordingly, if a party possesses a discretionary power under the contract, "that party cannot act arbitrarily or unfairly" in exercising that discretion. Stoney Glen, LLC v. S. Bank & Trust Co., 944 F.Supp.2d 460, 466 (E.D. Va. 2013). But if a party has a contract right, then "that party is only forbidden from acting dishonestly." Id. Plaintiff contends that Defendant "uses its contractual discretion" to define "item" in a way "that violates common sense and reasonable consumer expectations" to charge more fees. (Pet. ¶ 44.) Plaintiff further describes such practice as deceptive, given the contract's express terms. (Pet. ¶ 12.) Defendant, for its part, asserts that Plaintiffs implied covenant claim must be dismissed because her argument goes to the "express language in the contract, not any implied discretion."7 (Reply at 13 (emphasis omitted).) Given the language in the contract and the nature of Plaintiff s claim, the Court agrees with Defendant that Plaintiffs claim pertains to Defendant's express contractual rights and will dismiss her implied covenant claim. 7 Defendant also alleges that the Court must dismiss Plaintiffs claim, because the contract expressly permitted its multiple- fee practice. (Def.'s Mem. at 16-18.) But as this Court has already concluded, the contract is ambiguous on that issue. The contract does not just vest mere discretion in Defendant to define what qualifies as an item before charging a fee. Indeed, "every exercise of a 12 contractual right involves some *12 exercise of discretion." Stoney Glen, 944 F.Supp.2d at 467. However, the legal distinction between the two terms hinges on whether a contract requires that a party make a finding before exercising its contractual right. See, e.g., Id. at 469 (finding that plaintiff stated a plausible claim for breach of the implied covenant, because the contract gave defendant the right to terminate the agreement if it found that plaintiff made a misrepresentation); Va. Vermiculite, 156 F.3dat 541- 42 (holding that the district court erred in dismissing plaintiffs implied covenant claim, because the contract granted "sole discretion" to defendant to determine whether to mine the land at issue and thus remit profits to plaintiffs). Here, the contract states: "If an item is presented without sufficient funds in your account to pay it, we may, at our discretion, pay the item (creating an overdraft) or return the item (resulting in a NSF)." (Account Agreement at 7.) Nothing in the contract tasks Defendant with the power to determine what qualifies as an item. It does not say, for instance, "If, as determined by Defendant, an item is presented." Nor does it say, "Defendant reserves the right to determine if a submission is an item." In fact, the contract attempts to define "item," suggesting that a submission either does or does not constitute an item - and if a submission does not qualify as an item, Defendant violates the express terms of the contract if it charges a fee, not a discretionary power. (Account Agreement at 6 7 Mawyer v. Atl. Union Bank CIVIL 3:21cv726 (DJN) (E.D. Va. Apr. 7, 2022) (using "checks," "drafts," "ATM and debit card transactions," and "non-check transactions" as examples of "items.").) Importantly, the contract gives Defendant discretion in other areas related to processing items, but by contrast, it does not furnish Defendant discretion over what constitutes an item. The contract confers discretion on Defendant to choose what to do with an item once it is presented: pay the item (resulting in an overdraft fee) or return the item (resulting in an NSF fee). But Plaintiff does not allege that Defendant 13 exercised this discretion in bad faith, as would *13 conceivably be the case if Defendant exclusively returned items to maximize fees. (See Pet. f 12 (alleging that Defendant will charge "an NSF fee followed by an overdraft fee" on an item).) The contract also gives Defendant "unilateral and absolute discretion" to decide the order in which it processes items. (Account Agreement at 6 (emphasis added).) But Plaintiff does not allege that Defendant employs an ordering method that unfairly triggers more overdrafts. See, e.g., Fludd, 2021 WL 4691587, at * 1 (alleging that the defendant employed an "available balance bookkeeping method" that "routinely [led] to an overdraft fee even though sufficient money remain[ed] in the account after a transaction [was] paid"). That the contract explicitly gives Defendant discretion in such areas but does not state that Defendant has discretion to decide what constitutes an item further confirms that the contract does not vest Defendant with such discretion. Because Plaintiffs claim does not turn on whether Defendant abused its discretion, but instead turns on whether Defendant has a contractual right to charge multiple fees (i.e., whether "item" means a request for payment or an instruction to pay), Plaintiff can properly state a claim for breach of the implied duty of good faith and fair dealing only through alleging that Defendant acted dishonestly. See Stoney Glen, 944 F.Supp.2d at 466 ("The duty can also be breached if the purported exercise of a contractual right is dishonest, as opposed to merely arbitrary." (citation omitted)). The Petition, however, is devoid of factual allegations suggesting that Defendant acted dishonestly. First, the brunt of the Petition's allegations on this point are conclusory. (See Pet. ¶¶ 2, 5, 44, 46 (accusing Defendant of "misleadingly and deceptively misrepresent[ing]" its fee practices, orchestrating an "improper scheme," violating "common sense and reasonable consumer expectations," and acting in "bad faith")); see also Iqbal, 556 U.S. at 681 (noting that "conclusory" allegations are "not entitled to 14 be assumed true"). Second, *14 the fact that the contract is not as specific as other account agreements is not dishonest. See (Pet. ¶¶ 31-33 (describing the contractual provisions that other banks include in their account agreements)); Stoney Glen, 944 F.Supp.2d at 466 (holding that contravening standard business practices is not dishonest). And finally, the mere fact the Court finds the term "item" ambiguous does not provide the Court with sufficient reason to infer that Defendant intended to deceive accountholders to charge more fees - particularly when the contract attempts to define the term. Accordingly, the Court will grant Defendant's Motion to Dismiss with respect to Plaintiffs breach of the implied covenant of good faith and fair dealing claim.8 8 On March 9, 2022, Plaintiff filed a Notice of Supplemental Authority, in which she brings Watson v. Suffolk Federal Credit Union, 2022 WL 523543 (E.D.N.Y.Feb. 22, 2022) to the Court's attention. (Pl.'s Notice of Supplemental Authority ("Pl.'s Notice") (ECF No. 22).) In Watson, the plaintiff sued Suffolk Federal Credit Union for, among other claims, breach of contract and breach of the covenant of good faith and fair dealing, alleging the same sort of multiple-fee claims at issue in the instant case. Watson, 2022 WL 523543, at *l-2. As Defendant points out in its Response to the Notice, the Eastern District of New York's rulings do not bind this Court, and the 8 Mawyer v. Atl. Union Bank CIVIL 3:21cv726 (DJN) (E.D. Va. Apr. 7, 2022) Watson court interpreted the claims in that case under New York law - two factors that render Watson largely irrelevant to the instant case. (Resp. to Pl.'s Notice of Supplemental Authority at 1 (ECF No. 23).) At any rate, the outcome in Watson does not change the Court's analysis, because, as here, the Watson court deemed the term "item" ambiguous and allowed the breach of contract claim to survive the motion to dismiss. Watson, 2022 WL 523543, at *4. The court also dismissed her implied covenant claim, as in this case, but did so because New York law does not permit implied covenant claims that simply duplicate breach of contract claims. Watson, 2022 WL 523543, at *4-5. IV. CONCLUSION Plaintiff has pled sufficient facts to support her claim for breach of contract, but she has not pled sufficient facts to support her claim for breach of the implied covenant of good faith and fair dealing. Therefore, the Court hereby GRANTS IN PART AND DENIES IN PART Defendant's Motion to Dismiss. The Motion is GRANTED with respect to Plaintiffs implied covenant of good faith and fair dealing claim and DENIED with respect to Plaintiffs breach of contract claim. 15 16 Additionally, the Court hereby DENIES Defendant's request for oral argument *15 on the Motion (ECF No. 18). Let the Clerk file a copy of this Memorandum Opinion electronically and notify all counsel of record. An appropriate Order will issue. It is so ORDERED. *16 9 NO. CIV-15-0913-HE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA NO. CIV-15-0913-HE 07-14-2016 SARAH LEE GOSSETT PARRISH, Plaintiff, v. ARVEST BANK, Defendant. JOE HEATON CHIEF U.S. DISTRICT JUDGE ORDER According to the complaint, plaintiff Sarah Lee Gossett Parrish ("Parrish") is a customer of defendant Arvest Bank ("Arvest") who has one or more accounts with Arvest. Parrish has filed this suit against Arvest on behalf of herself and all others similarly situated, alleging that Arvest deliberately sequences its transaction processing to maximize the bank's collection of fees for overdraft service or non-sufficient funds, to the detriment of its customers. Based on this, Parrish asserts seven claims:1 (1) actual fraud, (2) constructive fraud, (3) false representation/deceit, (4) violation of the Oklahoma Consumer Protection Act, 15 Okla. Stat. § 751 et seq., (5) breach of fiduciary duty, (6) breach of contract, and (7) unjust enrichment. Arvest has moved to dismiss all of these claims under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. 1 The complaint purports to assert an eighth claim for punitive and exemplary damages, but that is not a separate cause of action. When evaluating a motion to dismiss for failure to state a claim under Rule 12(b)(6), the court accepts all well-pleaded factual allegations as true and views them in the light most favorable to the plaintiff as the nonmoving party. S.E.C. v. Shields, 2 744 F.3d 633, 640 (10th *2 Cir. 2014). Generally, the complaint need only present "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). The complaint must, however, contain "enough facts to state a claim to relief that is plausible on its face" and "raise a right to relief above the speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 555 (2007). "'A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.'" Shields, 744 F.3d at 640 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). Some claims, however, are subject to the pleading requirements of Rule 9(b), which requires a party alleging fraud or mistake to "state with particularity the circumstances constituting fraud or mistake." Although the claimant may generally allege the other party's state of mind in connection with the fraud or mistake, the complaint must still "set forth the time, place, and contents of the false representation, the identity of the party making the false statements and the consequences thereof." Toone v. Wells Fargo Bank, N.A., 716 F.3d 516, 522 (10th Cir. 2013). The complaint alleges that Arvest provides ATM and check cards for customers to use in drawing on their accounts through point-of-sale transactions, and that it allows customers to complete electronic fund transfers and other banking activities through Arvest's website and mobile banking technology. It generally alleges Parrish v. Arvest Bank Decided Jul 14, 2016 1 Parrish v. Arvest Bank NO. CIV-15-0913-HE (W.D. Okla. Jul. 14, 2016) that Arvest represents to its customers, through marketing materials and customer agreements, that these transactions post to customer accounts in the same order in which the transactions are made 3 (i.e., *3 chronologically). The complaint further asserts that Arvest represents to customers that they can rely on the account information reflected on the bank's website or accessed by phone in determining whether they have sufficient funds for debit transactions. However, according to the complaint, transactions are actually posted to accounts in batches by transaction type at the end of each day, and those batches are deliberately sequenced so that transaction types with larger median amounts are debited earlier than smaller amounts. The complaint further alleges that, as a result, accounts incur more fees for overdrafts or for having insufficient funds (collectively, "Overdraft Fees") than would be the case if the transactions were posted in chronological order. The first four claims in the complaint are for actual fraud, constructive fraud, deceit, and violation of the Oklahoma Consumer Protection Act (OCPA). Each of them rely on some form of alleged fraud and are hence subject to the pleading requirements of Rule 9(b) referenced above. The complaint generally alleges that Arvest made false representations by "stat[ing] to its customers that it would only apply [Overdraft Fees] when a customer overdrew his or her account and had insufficient funds in his or her account," and by representing that their reported account balances would be accurate. The complaint also asserts that Arvest made false representations in its standard Electronic Fund Transfers Agreement by stating debit card transactions would be applied to accounts "each time" the card is used instead of in batches at the end of the day. Further, the complaint states that Arvest made misrepresentations by stating in marketing and 4 promotional materials that customers can *4 avoid fees by "immediately record[ing]" each transaction they make. Id. General allegations like those involved here are insufficient to state a claim under Rule 9. Some of the alleged representations do not even arguably constitute a false representation such as might be a basis for a fraud claim. For example, advice to customers that they can minimize fees by immediately recording transactions in their own records is not only self-evidently accurate but, more importantly for present purposes, represents nothing about the way the bank books the transactions. A statement that a transaction will be posted "each time" a card is used does not say or imply that the posting will be instantaneous. Other allegations in the complaint assert fraud, but do so only in conclusory fashion, and are not specific representations sufficient to meet the heightened pleading standard of the rule. See Jensen v. America's Wholesale Lender, 425 F. App'x 761, 763 (10th Cir. 2011) (requiring more to satisfy Rule 9(b) than general allegations of a defendant's "pattern and practice" of harming plaintiff through false representations). Moreover, the complaint does not set forth with particularity how Parrish relied on the alleged false representations or how that reliance led to injury. See Olds v. Bank of America N.A., 573 F. App'x 710, 711 (10th Cir. 2014) (memorandum). Therefore, the claims for fraud, constructive fraud, deceit, and violation of the OCPA will be dismissed for failure to plead them with the particularity required by Rule 9(b), but with leave to amend granted except as to the 5 OCPA claim.2 *5 2 Arvest argues that amendment would be futile, as the claims are preempted by federal law. However, while preemption principles might preclude claims directly challenging the posting order of items or similar matters subject to federal law, those principles do not extend to preempting claims based on false or fraudulent representations about those 2 Parrish v. Arvest Bank NO. CIV-15-0913-HE (W.D. Okla. Jul. 14, 2016) practices. See Gutierrez v . Wells Fargo Bank, NA , 704 F.3d 712, 726 (9th Cir. 2012). Arvest's argument that the Oklahoma Uniform Commercial Code, 12A Okla. Stat. § 4-101 et seq ., allows posting of items in any order similarly fails to preclude these claims, which are directed to alleged misrepresentations about the posting practices rather than the practices themselves. As to the OCPA claim, the statute does not extend to "[a]ctions or transactions regulated under laws administered by the Corporation Commission or any other regulatory body or officer acting under statutory authority of this state or the United States . . . ." 15 Okla. Stat. § 754(2). The alleged activity at issue here is part of the business of banking, an activity that is heavily regulated by the Board of Governors of the Federal Reserve System, see 15 U.S.C. § 1693c (Electronic Fund Transfer Act); see also 12 C.F.R. § 205.7 (Regulation E), the FDIC, and state banking authorities. The statute's "regulated activity" exemption is therefore applicable and bars plaintiff's OCPA claim. In light of that legal conclusion, amendment of the complaint as to that claim would be futile. Plaintiff's fifth claim alleges Arvest breached its fiduciary duty to plaintiff and its other customers by its conduct. Under Oklahoma law, the relationship between a bank and its customer is that of debtor and creditor. Beshara v. S. Nat'l Bank, 928 P.2d 280, 288 (Okla. 1996). The relationship between a bank and its customer is not viewed as fiduciary in nature unless there is an express written agreement to that effect, 6 Okla. Stat. § 425, or other special circumstances exist which support such a conclusion. Beshara, 928 P.2d at 288. No basis for either exception is alleged here. As to the sixth claim, the complaint alleges that Arvest breached the contract which was formed when Parrish became a customer of Arvest and 6 enrolled in electronic fund *6 transfer service (the "EFT Agreement"). The EFT agreement attached to the complaint imposes on Arvest a contractual duty to provide access to telephone, online, and mobile banking services. It does not include a promise to post transactions in any particular order or to display account balances reflecting transactions posted in a particular order. The complaint asserts that Arvest breached the contract by providing inaccurate account balances, but it is not apparent what makes the balances inaccurate. Plaintiff's argument is essentially that an "accurate" balance is only one which reflects instantaneous posting of transactions. But the agreement promises no such thing and there is no apparent reason for concluding that transactions posted by size or by some other batching process result in balances that are other than "accurate" for purposes of the agreement. Plaintiff also asserts a claim for unjust enrichment. Unjust enrichment results from a party's retention of a benefit that, "in equity and good conscience, it should not be allowed to retain." Harvell v. Goodyear Tire and Rubber Co., 164 P.3d 1028, 1035 (Okla. 2006). In other words, a party seeking to recover for unjust enrichment must show "enrichment to another, coupled with a resulting injustice." City of Tulsa v. Bank of Oklahoma, N.A., 280 P.3d 314, 319 (Okla. 2011) (internal citation and quotation marks omitted). Here, Parrish alleges that Arvest collected Overdraft Fees as a result of banking practices that were "unfair, unconscionable, and oppressive." Doc. No. 17, at 18. However, the complaint does not state a plausible basis for inferring that defendant's conduct meets that standard. As noted above, there is no basis alleged for concluding that Arvest breached its contract with its customers by the challenged practices, nor is there a basis stated 7 for *7 treating its representations as to those practices as fraudulent. There is no basis alleged for finding a fiduciary duty between the parties that Arvest's conduct has arguably violated. Finally, there is no basis alleged for concluding that Arvest's procedures are contrary to applicable 3 Parrish v. Arvest Bank NO. CIV-15-0913-HE (W.D. Okla. Jul. 14, 2016) regulations or customary banking practice. In these circumstances, an unjust enrichment claim is not stated. For the reasons indicated, the motion to dismiss [Doc. No. 30] is GRANTED and plaintiff's claims are DISMISSED. As the deficiencies in the claims other than the OCPA claim are potentially subject to being remedied by amendment, plaintiff is granted leave to file an amended complaint within twenty-one (21) days addressing the deficiencies if she can do so. IT IS SO ORDERED. Dated this 14th day of July, 2016. /s/_________ JOE HEATON CHIEF U.S. DISTRICT JUDGE 4 Case 1:21-cv-00534-LM Document 20 Filed 11/08/21 Page 1 of 10 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE Rita Grenier and Edwin Grenier, Individually and on Behalf of All Others Similarly Situated v. Granite State Credit Union, Does 1 through 5 Civil No. 21-cv-00534-LM Opinion No. 2021 DNH 172 P OR D ER Plaintiffs Rita and Edwin Grenier bring this putative class action against Granite State Credit Union (“Granite”) and “Does 1 through 5,” alleging injuries stemming from Granite’s overdraft fees and policies. Plaintiffs allege that—by not properly informing consumers how overdrafts are assessed—Granite has violated, and continues to violate, the Electronic Funds Transfer Act’s, 15 U.S.C. § 1693 (“EFTA”), implementing regulations, 12 C.F.R. § 1005 et seq. (“Regulation E”). Pending before the court is Granite’s motion to dismiss (doc. no. 9) under Fed. R. Civ. P. 12(b)(6). For the following reasons, the motion is denied. STANDARD OF REVIEW Under Rule 12(b)(6), the court must accept the factual allegations in the complaint as true, construe reasonable inferences in the plaintiff’s favor, and “determine whether the factual allegations in the plaintiff’s complaint set forth a plausible claim upon which relief may be granted.” Foley v. Wells Fargo Bank, N.A., 772 F.3d 63, 71 (1st Cir. 2014) (internal quotation marks omitted). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to Case 1:21-cv-00534-LM Document 20 Filed 11/08/21 Page 2 of 10 draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). BACKGROUND Regulators, private litigants, and the courts have recently devoted significant attention to overdraft fees. See Chambers v. NASA Fed. Credit Union, 222 F. Supp. 3d 1, 5-7 (D.D.C. 2016) (thoroughly outlining history). In 2009, the Federal Reserve Board1 revised Regulation E to add a provision intended to “assist consumers in understanding how overdraft services provided by their institutions operate and to ensure that consumers have the opportunity to limit the overdraft costs associated with ATM and one-time debit card transactions where such services do not meet their needs.” Electronic Fund Transfers, Final Rule, 74 Fed. Reg. 59,033, 59,033 (Nov. 17, 2009). Thus, Regulation E now requires financial institutions to obtain a customer’s “affirmative consent” before charging overdraft fees on ATM or one-time debit card transactions. 12 C.F.R. § 1005.17(b)(1)(iii). To secure consent, institutions must use an opt-in notice that “describe[s] the institution’s overdraft service.” Id. at 1005.17(b)(1)(i). The notice must be “segregated from all other information,” and “substantially similar” to a model form (Model Form A-9) provided by the Consumer 1 Congress reassigned responsibility for enforcing the EFTA from the Federal Reserve Board to the Consumer Financial Protection Bureau in 2010. See Dodd- Frank Wall Street Reform and Consumer Protection Act of 2010, Pub. L. No. 111- 203, Title X, § 1084, 124 Stat. 1376, 2081–83. 2 Case 1:21-cv-00534-LM Document 20 Filed 11/08/21 Page 3 of 10 Financial Protection Bureau. Id. at 1005.17(b)(1)(i); (d). All disclosures must be “clear and readily understandable.” 12 C.F.R. § 1005.4(a)(1). Issues occur when a disclosure does not adequately convey how overdraft fees are assessed. There are two balances financial institutions can use to calculate whether the amount of money in an account dips below zero: either the “actual balance”2 or the “available balance.” The “actual balance” is the actual amount of money in an accountholder’s account at any particular time. The “available balance,” in contrast, is the actual amount of money in the account minus any “holds” on deposits and pending debits that have not yet been posted. For this reason, calculating overdrafts based on the available balance “often leads to more frequent overdrafts because there is less money available in the account due to holds and pending transactions.” Domann v. Summit Credit Union, No. 18-cv-1670- slc, 2018 WL 4374076 (W.D. Wis. Sept. 13, 2018) (citation omitted). Thus, plaintiffs across America have filed a number of “virtually identical lawsuits” challenging institutions that use the available balance method where the opt-in notice does not explain how it assesses overdraft fees. Id.; see, e.g., Tims v. LGE Cmty. Credit Union, 935 F.3d 1228, 1239-40 (11th Cir. 2019); Adams v. Liberty Bank, No. 3:20-cv-01601(MPS), 2021 WL 3726007 (D. Conn. Aug. 23, 2021); Wellington v. Empower Fed. Credit Union, -- F. Supp. 3d. --, 2021 WL 1377789 (N.D.N.Y. Apr. 13, 2021); Bettencourt v. Jeanne D’Arc Credit Union, 370 F. Supp. 2 Courts also refer to “actual balance” as the “ledger balance” or “current balance.” 3 Case 1:21-cv-00534-LM Document 20 Filed 11/08/21 Page 4 of 10 3d 258 (D. Mass. 2019); Walbridge v. Northeast Credit Union, 299 F. Supp. 3d 338 (D.N.H. 2018); Walker v. People’s United Bank, 305 F. Supp. 3d 365 (D. Conn. 2018); Salls v Digital Fed. Credit Union, 349 F. Supp. 3d 81 (D. Mass. 2018); Domann, 2018 WL 4374076; Ramirez v. Baxter Credit Union, No. 16-CV-03765-SI, 2017 WL 1064991 (N.D. Cal. Mar. 21, 2017); Pinkston-Poling v. Advia Credit Union, 227 F. Supp. 3d 848 (W.D. Mich. 2016); Chambers, 222 F. Supp. 1. Plaintiffs in this case bring one such lawsuit. They allege that Granite used a one-page notice entitled “What You Need to Know about Overdrafts and Overdraft Fees” (the “Opt-in Disclosure”). The Opt-in Disclosure states that an overdraft “occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway.” It does not outline the distinction between the actual balance method and the available balance method. Thus, Plaintiffs allege that Granite has violated, and continues to violate, Regulation E because the phrase “enough money” does not specify whether Granite calculates overdrafts based on the actual balance or the available balance. Essentially, they argue that the Opt-in Disclosure does not provide a “clear and readily understandable” explanation of “the institution’s overdraft service.” See 12 C.F.R. § 1005.4(1)(1); 1005.17(b)(1)(i). DISCUSSION Granite moves to dismiss on the grounds that, first, it did not violate Regulation E and, second, that the EFTA’s safe harbor provision, 15 U.S.C. § 1693m(d)(2), insulates it from liability. 4 Case 1:21-cv-00534-LM Document 20 Filed 11/08/21 Page 5 of 10 I. Regulation E Violation Granite first argues that when the Opt-in Disclosure is read in conjunction with a document entitled “Terms and Conditions of Your Account” (the “Membership Agreement”), Granite satisfies Regulation E’s disclosure requirements. Granite attaches the five-page Membership Agreement to its motion, and alleges it is the operative agreement governing Plaintiffs’ relationship with Granite. The Membership Agreement states that Granite assesses overdrafts based on the available balance: Determining your available balance – We use the “available balance” method to determine whether your account is overdrawn, that is, whether there is enough money in your account to pay for a transaction. Importantly, your “available” balance may not be the same as your account’s “actual” balance. This means an overdraft or an NSF [nonsufficient funds] transaction could occur regardless of your account’s actual balance. Doc. no. 9-3 at 1. It then proceeds to describe in further detail the difference between actual balance and available balance. See id. The Membership Agreement was not attached to—or referenced in—the complaint.3 Even assuming that the Membership Agreement could be considered at the motion to dismiss stage, Plaintiffs have still plausibly alleged violations of Regulation E. Regulation E requires financial institutions to provide disclosures about their overdraft policies “segregated from all other information,” i.e. in a 3 Granite alleges that Plaintiffs referred to the Membership Agreement in their complaint when they referenced a “Granite agreement.” Doc. no. 9 at 2 n.1. As Plaintiffs clarify, the “Granite agreement” referenced in the complaint is actually the Opt-in Disclosure. Doc. no. at 11 n.4. 5 Case 1:21-cv-00534-LM Document 20 Filed 11/08/21 Page 6 of 10 standalone document. 12 C.F.R. § 1005.17(b)(1)(i). Because Plaintiffs allege that the Opt-in Disclosure is the segregated document, only it is relevant to Plaintiffs’ claim. The Membership Agreement is extraneous information, irrelevant to whether the Opt-in Disclosure itself—i.e., the segregated document—adequately explains Granite’s overdraft policy. See Adams, 2021 WL 3726007, at *4 (refusing to consider extraneous documents such as an Account Agreement on Rule 12(b)(6) motion, but holding that even if it could consider those documents, they would not make plaintiff’s Regulation E claim any less plausible because Regulation E requires notice to be “segregated from all other information”); see also Wellington, 2021 WL 1377789, at *4 (holding that even assuming extraneous evidence should be considered on a Rule 12(b)(6) motion, the plaintiff still plausibly alleged violations of Regulation E). The cases Granite cites in support of its argument that the Opt-in Disclosure and the Membership Agreement should be read together are not persuasive. Those cases are all in the context of contract claims, for which it may be appropriate to construe multiple documents together. See, e.g., Tims, 935 F.3d at 1238 n.5 (citing state contract law for the proposition that “where multiple documents are executed at the same time in the course of a single transaction, they should be construed together”); Domann, 2018 WL 3474076, at *6-7; Chambers, 222 F. Supp. 3d at 11- 12. Yet in cases where plaintiffs allege both a contract claim and a Regulation E claim, courts will read the documents together for the contract claim only, because Regulation E requires notice to be “segregated.” See Ramirez, 2017 WL 118859, at 6 Case 1:21-cv-00534-LM Document 20 Filed 11/08/21 Page 7 of 10 *8. Thus, Tims, Domann, and Chambers do not help Granite’s argument because here Plaintiffs do not allege breach of contract, and in fact specifically disavow any such claim. See doc. no. 11 at 10. Looking only at the Opt-in Disclosure, then, Plaintiffs plausibly state a claim that the phrase “enough money” does not adequately provide a “clear and readily understandable” explanation of “the institution’s overdraft service.” 12 C.F.R. § 1005.4(1)(1); 1005.17(b)(1)(i). Countless courts examining virtually identical language have agreed. See, e.g., Tims, 935 F.3d at 1238 (ambiguous whether disclosure that overdraft occurs “when you do not have enough money in your account to cover a transaction, but we pay it anyway” uses actual balance or available balance method); Wellington, 2021 WL 1377789, at *5; Bettencourt, 370 F. Supp. 3d at 262, 265; Walbridge, 299 F. Supp. 3d at 343; Salls, 349 F. Supp. 3d at 90; Pinkston-Poling, 227 F. Supp. 3d at 857; Walker, 305 F. Supp. 3d at 376. Thus, Plaintiffs plausibly state a claim that Granite’s Opt-in Disclosure violates Regulation E. II. Safe Harbor Provision Granite next argues that the EFTA’s safe harbor provision insulates it from liability. The EFTA protects financial institutions from liability for “any failure to make disclosure in proper form if a financial institution utilized an appropriate model clause issued by the Bureau or the Board.” 15 U.S.C. § 1693m(d)(2). Regulation E requires that notice “shall be substantially similar to Model Form A- 9,” which is promulgated by the Consumer Financial Protection Bureau. 12 C.F.R. 7 Case 1:21-cv-00534-LM Document 20 Filed 11/08/21 Page 8 of 10 § 1005.17(d). Model Form A-9 states: “An overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway.” §1005, App. A (emphasis in original). Courts across the country have addressed arguments identical to Granite’s argument here, and the vast majority have held that that using language identical to that in Model Form A-9 does not necessarily insulate a financial institution from liability. See Tims, 935 F.3d at 1244; Adams, 2021 WL 3726007, at *6-*8; Bettencourt, 370 F. Supp. 3d at 266; Salls, 349 F. Supp. 3d at 90-91; Walbridge, 299 F. Supp. 3d at 349; Smith, 2017 WL 3597522, at *8; Gunter v. United Fed. Credit Union, No. 3:15-cv-00483-MMD-WGC, 2017 WL 4274196, at *3 (D. Nev. Sept. 25, 2017); Ramirez, 2017 WL 118859, at *7; Pinkston-Poling, 227 F. Supp. 3d at 852. As one court reasoned, the safe harbor provision requires the use of an “appropriate model clause.” Adams, 2021 WL 3726007, at *7 (citing 15 U.S.C. § 1693m(d)(2)). If the language in Model Form A-9 does not accurately describe a particular institution’s overdraft service, then it is not “appropriate.” Id. Indeed, “[i]f use of a model clause were, by itself, an impenetrable shield, a consumer would have no redress” when Model Form A-9 does not actually provide a “clear and readily understandable” description, 12 C.F.R. § 1005.5, of an institution’s overdraft services. Id. Granite cites two unreported district court cases holding otherwise. See Rader v. Sandia Lab. Fed. Credit Union, No.20-559 JAP/JHR, 2021 WL 1533664, at *13-*14 (D.N.M. April 19, 2021); Tilley v. Mountain Am. Fed. Credit Union, No. 8 Case 1:21-cv-00534-LM Document 20 Filed 11/08/21 Page 9 of 10 2:17-cv-01120-JNP-BCW, 2018 WL 4600655, at *4-*6 (D. Utah Sept. 25, 2018). The court does not find the reasoning of these cases to be persuasive. Tilley, for example, cited a Northern District of Georgia case for the proposition the phrase “enough money” from the model form is not inaccurate when the financial institution calculates overdrafts based on an account’s available balance. Tilley, 2018 WL 4600655, at *5 (citing Tims v. LGE Cmty. Credit Union, No. 1:15-cv-4279- TWT, 2017 WL 5133230, at *6 (N.D. Ga. Nov 6, 2017), rev’d and remanded by 934 F.3d 1228). But the Eleventh Circuit later overturned that case on appeal, holding that using language from a model clause “does not shield [a financial institution] for claims based on their failure to make adequate disclosures.” Tims, 935 F.3d at 1243. The other case Granite cited, Rader, relied exclusively on Tilley’s reasoning, without acknowledging that Tilley was predicated in part on reasoning that the Eleventh Circuit had overturned. See 2021 WL 1533664, at *13-*14. Rather than following either of these cases, this court agrees with the sound reasoning of the Eleventh Circuit and the previously cited district court cases holding that the safe harbor provision did not defeat plaintiffs’ claims. Thus, Plaintiffs have plausibly stated a claim that the clause from Model Form A-9 was not “appropriate” because the language did not describe Granite’s overdraft policy in a “clear and readily understandable” way. See Adams, 2021 WL 3726007, at *8. 9 Case 1:21-cv-00534-LM Document 20 Filed 11/08/21 Page 10 of 10 CONCLUSION For these reasons, Granite’s motion to dismiss (doc. no. 9) for failure to state a claim is denied. SO ORDERED. __________________________ Landya McCafferty United States District Judge November 8, 2021 cc: Counsel of Record 10 No. 17-14968 08-27-2019 Carol TIMS, Individually, and on behalf of all others similarly situated, Plaintiff – Appellant, v. LGE COMMUNITY CREDIT UNION, Defendant - Appellee. Edward Adam Webb, G. Franklin Lemond, Jr., Webb Klase & Lemond, LLC, Atlanta, GA, Richard D. McCune, McCune Wright, LLP, Redlands, CA, Taras Kihiczak, The Kick Law Firm, APC, Santa Monica, CA, for Plaintiff - Appellant. Stephen Paul Dunn, Brandon J. Wilson, Howard & Howard Attorneys, PLLC, Royal Oak, MI, Kevin A. Maxim, The Maxim Law Firm, PC, Atlanta, GA, for Defendant - Appellee. Howard R. Rubin, Katten Muchin Rosenman, LLP, Washington, DC, for Amicus Curiae. JILL PRYOR, Circuit Judge 1233 *1233 Edward Adam Webb, G. Franklin Lemond, Jr., Webb Klase & Lemond, LLC, Atlanta, GA, Richard D. McCune, McCune Wright, LLP, Redlands, CA, Taras Kihiczak, The Kick Law Firm, APC, Santa Monica, CA, for Plaintiff - Appellant. Stephen Paul Dunn, Brandon J. Wilson, Howard & Howard Attorneys, PLLC, Royal Oak, MI, Kevin A. Maxim, The Maxim Law Firm, PC, Atlanta, GA, for Defendant - Appellee. Howard R. Rubin, Katten Muchin Rosenman, LLP, Washington, DC, for Amicus Curiae. Before MARTIN, JILL PRYOR and JULIE CARNES, Circuit Judges. JILL PRYOR, Circuit Judge: According to Carol Tims, when she opened an account at LGE Community Credit Union, LGE promised to use one account balance calculation method in assessing overdraft fees against her account, but then used a different one, which resulted in more fees. Tims alleged that LGE agreed to impose overdraft fees only when her ledger balance—the amount of money in her account without considering pending debits—was insufficient to cover a transaction. She alleged that LGE broke that promise by assessing overdraft fees when, based on her ledger balance, there was enough money in her account to cover the 1234transaction in question, but based on her *1234 available balance—the money in her account after considering pending debits and deposits—there was not. Tims sued LGE in district court for breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of the Electronic Fund Transfer Act (EFTA), 15 U.S.C. §§ 1693 - 1693r. The district court dismissed her claims under Federal Rule of Civil Procedure 12(b)(6) after determining that the two parties' agreements unambiguously permitted LGE to assess overdraft fees using the available balance calculation method. No. 17-14968 UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT Tims v. LGE Cmty. Credit Union 935 F.3d 1228 (11th Cir. 2019) Decided Aug 27, 2019 1 Tims v. LGE Cmty. Credit Union 935 F.3d 1228 (11th Cir. 2019) We disagree with the district court's interpretation of the contracts. Because we conclude that the agreements are ambiguous as to whether LGE could rely on an account's available balance, rather than its ledger balance, to assess overdraft fees, we reverse the district court's dismissal of the case and remand for further proceedings consistent with our opinion. I. BACKGROUND A. Congressional Regulation of Overdraft Fees After the Advent of Online Banking "Overdraft" is a banking term describing a deficit in a bank account caused by drawing more money than the account holds. Before the development of electronic fund transfer (EFT) systems, banks generally provided overdraft coverage for check transactions only. See Electronic Fund Transfers, 74 Fed. Reg. 59,033, 59,033 (Nov. 17, 2009). When a bank customer overdrew her account by writing a check in an amount that exceeded the amount of funds in the account, her financial institution applied its discretion in deciding whether to honor the customer's draft, in effect extending a small line of credit to its customer and imposing a small fee for the convenience. Id. Online banking transformed how financial institutions handled overdrafts and overdraft fees. New EFT systems provided customers with more ways to make payments from their accounts, including automatic teller machine (ATM) withdrawals, debit card transactions, online purchases, and transfers to other accounts. Id. Most financial institutions chose to extend their overdraft coverage to all EFT transactions. Some further decided to cover automatically all overdrafts their customers might generate from their EFTs. Id. These changes had the benefit to financial institutions of "reduc[ing] cost[s]" from manually reviewing individual transactions and furthering "consistent treatment of consumers." Id. at 59,033 -34. But they came at a significant and sometimes unexpected cost to consumers: financial institutions generally assessed a flat fee each time an overdraft occurred, sometimes charging additional fees—for each day an account remained overdrawn, for example, or incrementally higher fees as the number of overdrafts increased. Id. at 59,033. Congress enacted EFTA with the aim of outlining the rights, responsibilities, and obligations of individuals and institutions using EFT systems. Id . In EFTA's implementing regulations (Regulation E, 12 C.F.R. pt. 1005), Congress set out to "assist consumers in understanding how overdraft services provided by their institutions operate and to ensure that consumers have the opportunity to limit the overdraft costs associated with ATM and one-time debit card transactions where such services do not meet their needs." Id. at 59,035. Doing away with the practice of automatic enrollment of consumers in overdraft coverage, Regulation E required financial institutions to secure consumers' "affirmative consent" to overdraft services through an opt-in notice. Id. at 59,036. The opt-in notice was to be "segregated 1235from *1235 all other information[ ] describing the institution's overdraft service," 12 C.F.R. § 1005.17(b)(1)(i), and be "substantially similar" to a model form (Model Form A-9) provided by the Federal Reserve, id. § 1005.17(d). "But the opt-in requirement and model form have not dispelled all the controversy and confusion surrounding overdraft fees." Chambers v. NASA Fed. Credit Union , 222 F. Supp. 3d 1, 6 (D.D.C. 2016). Model Form A-9 does not address which account balance calculation method a financial institution should use to determine whether a transaction results in an overdraft. See 12 C.F.R. pt. 1005, app. A. Without any such provision in the model form, "some financial institutions have failed to disclose the balance calculation method that they use to determine whether a transaction results in an overdraft." Chambers , 222 F. Supp. 3dat6. 2 Tims v. LGE Cmty. Credit Union 935 F.3d 1228 (11th Cir. 2019) In determining whether a customer has made a withdrawal or incurred a debit that exceeds the balance in her account—an overdraft—financial institutions typically use one of two methods of calculating the balance in a customer's account: the "ledger" balance method or the "available" balance method. The ledger balance method considers only settled transactions; the available balance method considers both settled transactions and authorized but not yet settled transactions, as well as deposits placed on hold that have not yet cleared. Consumer Fin. Prot. Bureau, Supervisory Highlights 8 (Winter 2015), available at https://files.consumerfinance.gov/f/201503_cfpb_ supervisory-highlights-winter-2015.pdf (last visited May 24, 2019). These two competing methods of calculating a consumer's balance and charging overdraft fees based on that balance lie at the heart of this case. B. Factual Background LGE allegedly charged Tims overdraft fees of $ 30.00 each on two occasions. Tims's complaint alleged that at the time LGE assessed the overdraft fees, her ledger balance was sufficient to cover each transaction. She alleged that LGE agreed to use the ledger balance calculation method in assessing overdraft fees, and so LGE's use of the available balance calculation method breached her agreements with LGE. LGE argues that its agreements with Tims unambiguously provided that LGE would use the available balance calculation method in imposing overdraft fees. LGE thus asserts that it did not breach its agreements by imposing fees based on Tims's available balance. There were two agreements between Tims and LGE: the "Opt-In Agreement" and the "Account Agreement." LGE asked consumers to sign the Opt-In Agreement to obtain their consent to LGE's overdraft policies. The Opt-In Agreement said little about which balance calculation method LGE employs, stating only that "[a]n overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway." Doc. 29 at 44.1 1 All citations in the form "Doc. #" refer to numbered entries on the district court docket. LGE adopted the Opt-In Agreement to comply with Regulation E, 12 C.F.R. § 1005.17. Again, Regulation E requires financial institutions to secure a consumer's "affirmative consent" before charging overdraft fees and stipulates that consent can be secured through use of an opt-in form "substantially similar" to Model Form A-9. Id. § 1005.17(b)(1)(iii), (d). LGE's Opt-In Agreement is nearly an exact copy of Model Form A-9. Compare id. pt. 1005, app. A, with Doc. 29 at 44. The second agreement between Tims and LGE, 1236 the Account Agreement, contained *1236 a "Payment Order" provision explaining that in processing items drawn on a consumer's account, LGE's "policy is to pay [the items] as we receive them." Doc. 29 at 31. The Account Agreement went on to say, "[i]f an item is presented without sufficient funds in your account to pay it" or "if funds are not available to pay all of the items" presented for payment, LGE "may, at [its] discretion, pay" the item or items, creating an overdraft for which LGE will charge a fee. Id. at 32. A separate provision in the Account Agreement, the "Funds Availability Disclosure," addressed the conditions under which funds were available for consumers' use. Id. at 37. In this provision, LGE explained that its general policy was "to make funds from your deposits available to you on the same business day that [LGE] receive[s] your deposit," but certain deposits would not be "available" to consumers until the second business day at the earliest. Id. C. Procedural History 3 Tims v. LGE Cmty. Credit Union 935 F.3d 1228 (11th Cir. 2019) Tims brought this case as a consumer class action, asserting three claims against LGE that are the subject of this appeal.2 First, Tims alleged that LGE breached its Opt-In and Account Agreements by assessing overdraft fees using the available balance calculation method. Second, she alleged that LGE violated the implied covenant of good faith and fair dealing implicit in every contract under Georgia law.3 Third, she alleged that LGE's practices failed to accurately describe its overdraft service as required by Regulation E, thus violating EFTA. 2 Tims also asserted claims against LGE for unjust enrichment and money had and received. On appeal, she does not argue that the district court erred in dismissing these claims, so we do not address their merits. See Access Now, Inc. v. Sw. Airlines Co. , 385 F.3d 1324, 1330 (11th Cir. 2004) (stating that a legal claim or argument that has not been briefed on appeal is "deemed abandoned and its merits will not be addressed"). 3 The Account Agreement provided that Georgia law governs the contract. Because the parties agree that Georgia law applies here, we assume that it does. See Bahamas Sales Assoc., LLC v. Byers , 701 F.3d 1335, 1342 (11th Cir. 2012) ("If the parties litigate the case under the assumption that a certain law applies, we will assume that law applies."). LGE filed a Rule 12(b)(6) motion to dismiss all claims, which the district court granted. Using Georgia's canons of contract construction, the district court determined that the agreements unambiguously permitted LGE to assess overdraft fees using the available balance calculation method. The court concluded that LGE had neither breached the parties' contract nor the covenant of good faith and fair dealing and that no EFTA violation had occurred. Tims timely appealed. II. STANDARD OF REVIEW We review de novo a district court's grant of a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). See Glover v. Liggett Grp., Inc. , 459 F.3d 1304, 1308 (11th Cir. 2006). We accept factual allegations in the complaint as true and construe them in the light most favorable to the plaintiff. See Hill v. White , 321 F.3d 1334, 1335 (11th Cir. 2003). To withstand a motion to dismiss under Rule 12(b) (6), a complaint must include "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 1237(2009).*1237 We review de novo the issue of whether a contract is ambiguous. See Frulla v. CRA Holdings, Inc. , 543 F.3d 1247, 1252 (11th Cir. 2008). Questions of contract interpretation are pure questions of law, also reviewed de novo . Gibbs v. Air Canada , 810 F.2d 1529, 1532 (11th Cir. 1987). III. DISCUSSION Tims challenges the district court's dismissal of her claims against LGE for (1) breach of contract; (2) breach of the implied covenant of good faith and fair dealing; and (3) violation of Regulation E of EFTA. We consider these claims in turn. A. Tims Stated a Claim for Breach of Contract. To state a claim for breach of contract under Georgia law, Tims had to plausibly allege that LGE owed her a contractual obligation, then breached it, causing her damages. Norton v. Budget Rent a Car Sys., Inc. , 307 Ga.App. 501, 705 S.E.2d 305, 306 (2010). Tims alleged that LGE promised to calculate her account balance— and assess overdraft fees in light of that balance— by considering only the ledger balance, then breached that promise by considering the available 4 Tims v. LGE Cmty. Credit Union 935 F.3d 1228 (11th Cir. 2019) balance instead. We must interpret the two agreements between Tims and LGE to decide whether LGE had a contractual obligation to use the available balance calculation method or the ledger balance calculation method for unsettled withdrawals4 in imposing overdraft fees. 4 The parties appear to agree that, as to deposits, the Funds Availability Disclosure permits LGE to place holds on some types of deposits pending clearance of the deposit (ledger balance method), but that as to other types of deposits, LGE has agreed that the deposit will be made immediately available to the customer (available balance method). The dispute here concerns how debit transactions are to be treated under the Opt-In Agreement and the Account Agreement, with Tims arguing that the relevant documents indicate that the ledger method will be used and LGE arguing that the terms of the agreements provide for use of the available balance method. Under Georgia law, courts interpret contracts in three steps: first, the court determines whether the contract language is clear and unambiguous. If the language is clear, the court applies its plain meaning; if it is unclear, the court proceeds to step two. At step two, the court attempts to resolve the ambiguity using Georgia's canons of contract construction. If the ambiguity cannot be resolved using the canons, then the court proceeds to step three, where the parties' intent becomes a question of fact for the jury. City of Baldwin v. Woodward & Curran, Inc ., 293 Ga. 19, 743 S.E.2d 381, 389 (2013). "The cardinal rule of construction is to ascertain the intention of the parties." Maiz v. Virani , 253 F.3d 641, 659 (11th Cir. 2001) (alteration adopted) (internal quotation marks omitted). A contract is ambiguous when it "leave[s] the intent of the parties in question—i.e., that intent is uncertain, unclear, or is open to various interpretations." Capital Color Printing, Inc. v. Ahern , 291 Ga.App. 101, 661 S.E.2d 578, 583 (2008) (internal quotation marks omitted). A contract is unambiguous when, after examining the contract as a whole and affording its words their plain meaning, "the contract is capable of only one reasonable interpretation." Id. (internal quotation marks omitted). 1. The Plain Language of the Opt-In and Account Agreements Is Ambiguous as to Which Account Balance Calculation Method LGE Uses to Assess Overdraft Fees. Both parties argue that the Opt-In and Account 1238 Agreements are unambiguous, *1238 but they disagree about which account balance calculation method the agreements unambiguously promised to use. Each party contends that the agreements' plain language clearly supports its own interpretation of LGE's balance calculation method. After careful review, we disagree with both parties that the agreements are unambiguous. We turn to the language of the Opt-In and Account Agreements and begin with the Opt-In Agreement.5 In relevant part, the Opt-In Agreement explained that "[a]n overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway." Doc. 29 at 44. Each party contends that this language plainly supports its own interpretation of LGE's balance calculation method. Tims argues that the phrase "enough money in your account" unambiguously referred to the ledger balance because the term "account" is presented without limitation or modification, such as a reference to "available" funds. LGE argues that "enough" unambiguously referred to the available balance. LGE consults the dictionary definition of the word "enough"—"occurring in such quantity, quality, or scope as to satisfy fully the demands, wants, or needs of a situation or of a proposed use or end"6 —then points out that "enough" is synonymous with "available." Because "enough" and "available" are synonyms, 5 Tims v. LGE Cmty. Credit Union 935 F.3d 1228 (11th Cir. 2019) LGE argues, a consumer would understand merely by reading the word "enough" that LGE would take only a consumer's available funds into account in calculating the account's balance. 5 Under Georgia law, " ‘where multiple documents are executed at the same time in the course of a single transaction, they should be construed together.’ " Curry v. State , 309 Ga.App. 338, 711 S.E.2d 314, 317 (2011) (quoting Martinez v. DaVita, Inc. , 266 Ga.App. 723, 598 S.E.2d 334, 337 (2004) ). Neither party disputes that Tims entered into the Opt-In and Account Agreements at the same time when she opened an account with LGE. 6 Enough , Webster's Third New International Dictionary 755 (2002). In Georgia, "[w]hen interpreting a contract, the language must be afforded its literal meaning and plain ordinary words given their usual significance," and " [d]ictionaries may supply the plain and ordinary meaning of a word." Grange Mut. Cas. Co. v. Woodard , 861 F.3d 1224, 1231 (11th Cir. 2017) (internal quotation marks omitted). We find neither argument persuasive. The Opt-In Agreement sheds no light on what "enough money in [an] account" means in the context of determining when an overdraft has occurred. Id. Both parties' arguments raise the question of how LGE determines what "enough money" is—is it enough money to cover only settled transactions or to cover authorized but not yet settled transactions as well? The Opt-In Agreement is thus ambiguous concerning the account balance calculation method LGE's overdraft service uses for unsettled debit transactions. The plain language of the Account Agreement is no more helpful. In describing LGE's overdraft service, the Account Agreement's Payment Order section stated that an overdraft occurs "[i]f an item is presented without sufficient funds in your account to pay it" or "if funds are not available to pay all of the items." Id. at 32. The conditions under which deposits would be available for consumers' use were set forth in a separate section, the Funds Availability Disclosure. The Funds Availability Disclosure explained that LGE's "policy is to make funds from [the consumer's] deposits available to [the consumer] on the same business day" that LGE receives the deposit. Id. at 37. It stipulated that consumers can immediately "withdraw funds" for most deposits, including cash, wire transfers, and money order deposits; 1239however, consumers must wait to *1239 "withdraw funds" under certain limited circumstances, including deposits of checks exceeding $ 5,000 and deposits into repeatedly and recently overdrawn consumer accounts. Id. The Funds Availability Disclosure made no mention of debit transactions specifically, referring only to "withdrawals" generally. Id. Each party contends the language of this agreement, too, clearly requires the use of its favored account balance calculation method in charging overdraft fees. Tims argues that the phrase "sufficient funds," by itself, plainly refers to the ledger balance. She also argues that even though the Funds Availability Disclosure said some deposited funds will be considered unavailable to consumers for a period of time, it did not say whether or how the funds' unavailability relates to the financial institution's account balance calculation method for overdraft purposes. Finally, Tims points out that even though the Funds Availability Disclosure explained that certain deposits could not immediately be withdrawn by consumers, it said nothing about whether pending debits affected consumers' ability to withdraw funds. In an argument similar to the one it makes about the Opt-In Agreement, LGE asserts that "sufficient" is synonymous with "available,"7 and so a consumer reading the word "available" and then the term "sufficient" in adjacent sentences would understand the Account Agreement as clearly referring to the available balance 6 Tims v. LGE Cmty. Credit Union 935 F.3d 1228 (11th Cir. 2019) calculation method. LGE also notes that the Funds Availability Disclosure stipulated that consumers could use funds only when they were "available," a word also used in the Payment Order subsection of the Account Agreement describing when an overdraft occurs. See Doc. 29 at 32 (stating that an overdraft occurs "if funds are not available to pay all of the items"). 7 "Sufficient" is defined as "[a]dequate; of such quality, number, force, or value as is necessary for a given purpose." Sufficient , Black's Law Dictionary 1661 (10th ed. 2014). "Available" is defined as "capable of use for the accomplishment of a purpose: immediately utilizable." Available , Webster's Third New International Dictionary 150 (2002). Neither argument persuades us. We cannot say the Account Agreement unambiguously articulated the account balance calculation method LGE uses for unsettled debit transactions. Nothing in the Account Agreement explained how LGE determines whether funds are "sufficient." Nor did the mere presence of the word "available" in the Account Agreement, in two separate subsections, clearly communicate that LGE would calculate a consumer's account balance for the purpose of assessing overdraft fees based on unsettled transactions. LGE "apparently assumes that the [consumer] will read the word ‘available’ in [two separate] sections spanning the [12]-page Account Agreement" and conclude that the financial institution uses the available balance calculation method in its overdraft service just because the agreement uses the term "available." Smith v. Bank of Hawaii , No. 16-00513 JMS-RLP, 2017 WL 3597522, at *7 (D. Haw. Apr. 13, 2017). LGE assumes too much. As Tims points out, although the Account Agreement explained that certain deposits would not immediately be available to consumers, it did not explain that a pending debit would render funds unavailable to consumers. In the absence of anything in the Account Agreement addressing the account balance calculation method LGE used in its overdraft service for unsettled transactions and given the ambiguity of the terms "sufficient funds" and "available," the Account Agreement failed to clearly indicate which balance calculation method LGE was using to determine when an unsettled debit transaction would result in an assessment 1240*1240 of overdraft fees. Other courts, confronting similar terms across subsections of similar account agreements, have agreed. See, e.g. , Pinkston- Poling v. Advia Credit Union , 227 F. Supp. 3d 848, 854-56, 856 n.4 (W.D. Mich. 2016) (deciding that the terms "enough money" and "sufficient funds" did not clearly indicate that an available balance method would be used in imposing overdraft fees); see also Walbridge v. Ne. Credit Union , 299 F. Supp. 3d 338, 343-46 (D.N.H. 2018) (determining that the terms "enough money," "insufficient funds," and "nonsufficient funds" did not clearly indicate that an available balance method would be used in charging overdraft fees). Neither the Opt-In Agreement nor the Account Agreement clearly articulated which balance calculation method LGE was using to determine when unsettled transactions would trigger an overdraft. The contracts are ambiguous. 2. The Ambiguous Georgia's Construction. Having determined that the language of the Opt-In and Account Agreements is susceptible to two different constructions, we turn to the second step of contract interpretation under Georgia law and attempt to resolve the ambiguity using Georgia's canons of construction.8 Applying these canons, the district court determined that any ambiguity in the contracts could be resolved. The district court concluded that the use of the word "available" in the Account Agreement plainly referred to the Agreements Remain After Canons Considering of Contract 7 Tims v. LGE Cmty. Credit Union 935 F.3d 1228 (11th Cir. 2019) available balance method for two reasons: first, based on the close proximity of the words "available" and "sufficient" in the Payment Order 1241subsection, *1241 and second, because "available" must be interpreted consistently throughout the Account Agreement, which uses the word in different subsections. We find neither reason compelling. 8 Tims also asks us to construe the agreements as contracts of adhesion. In Georgia, contracts of adhesion are "standardized contract[s] offered on a ‘take it or leave it’ basis and under such conditions that a consumer cannot obtain the desired product or service except by acquiescing in the form contract," and are "construed strictly against the drafter." Walton Elec. Membership Corp. v. Snyder , 226 Ga.App. 673, 487 S.E.2d 613, 617 n.6 (1997). Because she failed to clearly present this argument before the district court, we will not assess its merits here. See In re Pan Am. World Airways, Inc., Maternity Leave Practices & Flight Attendant Weight Program Litig. , 905 F.2d 1457, 1462 (11th Cir. 1990). Tims contends that she presented the argument to the district court because her complaint stated that LGE drafted the agreements, which were adhesive in nature. Tims does not argue, but we note, that she subsequently mentioned the Georgia canon of construction regarding contracts of adhesion once, in a footnote in her opposition to LGE's motion to dismiss, without advancing any argument that her agreement with LGE was a contract of adhesion. Tims's description of the agreements and her brief reference without argument in a footnote was insufficient to preserve the argument for appeal. See U.S. Sec. & Exchange Comm'n v. Big Apple Consulting USA, Inc. , 783 F.3d 786, 812 (11th Cir. 2015) (explaining that a litigant's "fleeting footnote explaining" an argument to the district court "in one sentence ... is insufficient to properly assert a claim on appeal"). In addition, Tims argues that we should apply the doctrine of contra proferentem , a canon of contract construction "that counsels in favor of construing ambiguities in contract language against the drafter." Allen v. Thomas , 161 F.3d 667, 671 (11th Cir. 1998). Tims likewise failed to preserve this argument for appellate review. She mentioned the doctrine of contra proferentem only once, in the aforementioned footnote, without advancing any argument that it applied. See Doc. 31 at 15 n.3 (noting only that "ambiguities in a contract will be construed against the drafter" (alterations adopted) (internal quotation marks omitted)). Tims's fleeting reference in a footnote to the doctrine of contra proferentem was insufficient to preserve her argument for appeal, and we thus do not address it. See Big Apple Consulting USA, Inc. , 783 F.3d at 812. Our conclusion that Tims failed to preserve these arguments for purposes of our review of the motion to dismiss does not foreclose her from raising these arguments in the district court at the summary judgment stage. First, the proximity of the word "available" to the word "sufficient" in the Payment Order subsection of the Account Agreement does not clearly communicate that LGE would use an available balance calculation method when considering unsettled transactions in its overdraft service. As discussed above, the Account Agreement's Payment Order provision stated that LGE would assess overdraft fees if there were not "sufficient funds in your account to pay [an item]" and just after noting that its "payment policy ... may reduce the amount of overdraft ... fees you have to pay if funds are not available to pay all of the items." Doc. 29 at 32 (emphasis added). The district court concluded that the proximity of "sufficient" to "available" meant the words are somehow linked. See Doc. 67 at 11 ("By including the term 8 Tims v. LGE Cmty. Credit Union 935 F.3d 1228 (11th Cir. 2019) ‘available’ in such close proximity to the term ‘sufficient,’ the parties indicate that they view both terms to be related."). No Georgia canon of contract construction supports this conclusion, however.9 There is no rule that words in close proximity should be construed as related to one another without considering word order and context. And even if we agreed that the terms were related to one another, the related terms still did not unambiguously specify that LGE would apply the available balance calculation method to unsettled transactions in assessing overdrafts. A consumer could reasonably understand the phrase "available ... sufficient funds" to refer to her ledger balance: that available funds are those in her account and sufficient to cover her draft. Thus, even read together, the terms "available" and "sufficient" fail to clearly communicate how unsettled transactions are treated in the balance calculation method LGE employs in its overdraft services. So the contract remains capable of two reasonable constructions. 9 The most comparable Georgia canon of contract construction is the last antecedent canon, which provides that "[r]eferential and qualifying words and phrases, where no contrary intention appears, refer solely to the last antecedent." Deal v. Coleman , 294 Ga. 170, 751 S.E.2d 337, 342 (2013) (internal quotation marks omitted); see also Key v. Ga. Dep't of Admin. Servs. , 340 Ga.App. 534, 798 S.E.2d 37, 41 (2017) (canon applicable in contract as well as statutory construction). But the last antecedent rule does not apply here because "sufficient funds" is not a limiting clause or phrase and "available" is not a noun. See Barnhart v. Thomas , 540 U.S. 20, 26, 124 S.Ct. 376, 157 L.Ed.2d 333 (2003) (explaining that the doctrine applies to "limiting clause[s] or phrase[s]" that are "read as modifying only the noun or phrase that [they] immediately follow[ ]"). Second, we disagree that the Account Agreement was necessarily referring to an available balance calculation method for unsettled debit transactions based on the use of the word "available" in a Funds Availability Disclosure provision that addresses a completely different matter: the availability of deposited funds. The Funds Availability Disclosure provision used variations of the word "available" more than 20 times—in nearly every sentence. But "available" was never used in conjunction with the word "balance." And "available" was never defined to exclude unsettled debit transactions for overdraft purposes. At best, this section equated "available" with "able to be withdrawn." See, e.g. , Doc. 29 at 37 ("This disclosure describes your ability to withdraw funds at LGE .... Our policy is to make funds from your deposits available to you on the same business day we receive your deposit."). LGE's explanation in the Funds Availability Disclosure provision for when deposited funds became 1242"available" to consumers for withdrawal *1242 simply did not address how LGE would treat unsettled debits when it calculated a consumer's balance for overdraft fee purposes. LGE's argument that the agreements clearly promised to use the available balance calculation method does not convince us, either. LGE asserts that the repeated use of the word "available" unambiguously communicated that overdraft fees would be assessed using the available balance method. To support its interpretation of the word "available," LGE cites to Chambers . 222 F. Supp. 3d at 1. The dispute in Chambers , as in this case, concerned whether a credit union's Opt-In and Account Agreements obligated the credit union to use the ledger or the available balance method in its overdraft service. Id. at 10. The court dismissed Chambers's breach of contract claims after concluding that the Opt-In Agreement unambiguously stated that the credit union would use the available balance calculation method. Id. 9 Tims v. LGE Cmty. Credit Union 935 F.3d 1228 (11th Cir. 2019) Several significant details distinguish Chambers from this case, however. Importantly, in Chambers , the Opt-In Agreement used the phrase "available balance." Id. In addition, the Account Agreement in Chambers contained a subsection addressing "Available Balances to Make Transactions," which linked the concept of available balance to the mechanics of when and how the bank would assess overdrafts. Id. at 10-11. Finally, the Opt-In Agreement in Chambers provided examples illustrating when an account would not have "enough money" and thus be subject to an overdraft. Id . at 10. None of those factors is present in this case. The agreements here did not use the phrase "available balance"; the Account Agreement nowhere explained the mechanics of how and when LGE would assess overdrafts, nor linked the concept of an "available balance" to those mechanics; and the Opt-In Agreement provided no examples illustrating when a consumer would not have "enough money" to cover a transaction and thereby trigger an overdraft. Because of these three distinctions, we cannot say the Opt-In and Account Agreements in this case clearly demonstrated the parties' intent that LGE would use the available balance calculation method when assessing overdraft fees. See Walbridge , 299 F. Supp. 3d at 345-46 (concluding based on the same three factors that the financial institution did not clearly communicate an intent to use the available balance in charging overdraft fees). Neither the Opt-In Agreement nor the Account Agreement read separately, nor the two agreements read together, clearly articulated LGE's balance calculation method for charging overdraft fees. Applying the Georgia canons of construction does nothing to clarify the contracts' ambiguity. Because the language remains ambiguous after considering both the plain language of the contracts and the Georgia canons of construction before us,10 the parties' intent will become a question for the jury should neither party be granted summary judgment. The district court therefore erred in dismissing Tims's claim for breach of contract. 10 In note 8, supra , we noted that the doctrine of contra proferentem had not been preserved for purposes of our review but Tims could advance it during the summary judgment stage of litigation. B. Tims Stated a Claim Against LGE for Breach of the Covenant of Good Faith and Fair Dealing. Tims next argues that the district court erred in dismissing her claim that LGE breached the implied covenant of good faith and fair dealing 1243under Georgia law. We agree.*1243 Under Georgia law, "[e]very contract imposes upon each party a duty of good faith and fair dealing in its performance and enforcement." Brack v. Brownlee , 246 Ga. 818, 273 S.E.2d 390, 392 (1980) (internal quotation marks omitted). That implied promise "becomes a part of the provisions of the contract, but the covenant cannot be breached apart from the contract provisions [that] it modifies and therefore cannot provide an independent basis for liability." Myung Sung Presbyterian Church v. N. Am. Assoc. of Slavic Churches & Ministries , 291 Ga.App. 808, 662 S.E.2d 745, 748 (2008). A plaintiff "must set forth facts showing a breach of an actual term of an agreement" to state a claim for breach of the implied duty of good faith and fair dealing. Am. Casual Dining, L.P. v. Moe's Sw. Grill, L.L.C. , 426 F. Supp. 2d 1356, 1370 (N.D. Ga. 2006). Given our conclusion on the breach of contract claim, Tims's allegations sufficiently "set forth facts showing a breach of an actual term of [the] agreement." Id. Tims alleged that LGE had a contractual obligation to use the ledger balance calculation method and breached that promise; therefore, Tims's claim for breach of the implied covenant of good faith and fair dealing has been properly pled. The district court erred in dismissing this claim. 10 Tims v. LGE Cmty. Credit Union 935 F.3d 1228 (11th Cir. 2019) C. Tims Stated a Claim Against LGE for Violating EFTA. Tims alleges, and we think it plausible, that LGE violated EFTA Regulation E. Under EFTA, Congress charged the Federal Reserve Board— and, later, the Consumer Financial Protection Bureau (CFPB)—with promulgating regulations to carry out EFTA's purposes. 15 U.S.C. § 1693b(a)(1) ; see also id. § 1693a(4).11 One of EFTA's central features is a requirement that financial institutions disclose "[t]he terms and conditions of electronic fund transfers involving a consumers account ... in accordance with the regulations of the" CFPB. Id. § 1693c(a). 11 Congress reassigned responsibility for enforcing EFTA from the Federal Reserve Board to the CFPB in 2010. See Dodd- Frank Wall Street Reform and Consumer Protection Act of 2010, Pub. L. No. 111- 203, Title X, § 1084, 124 Stat. 1376, 2081– 83. Regulation E is part of the CFPB's implementation of this requirement. Regulation E requires financial institutions to give consumers a "notice ... describing the institution's overdraft service." 12 C.F.R. § 1005.17(b)(1)(i). The notice must be "substantially similar to Model Form A-9" and describe the "financial institution's overdraft service" in a "clear and readily understandable" way. Id. § 1005.17(d)(1), 1005.4(a)(1). See also 15 U.S.C. § 1693c (requiring financial institutions to make disclosures "in accordance with the regulations of the" CFPB "in readily understandable language"). Before financial institutions may charge overdraft fees, they must give consumers "a reasonable opportunity ... to affirmatively consent, or opt in, to the service." 12 C.F.R. § 1005.17(b)(1)(ii). Congress created a private right of action for consumers against financial institutions that fail to provide proper notice describing their overdraft service. See 15 U.S.C. § 1693m. Congress further directed the CFPB to draft boilerplate language to help financial institutions "compl[y] with the disclosure requirements" for overdraft services. 15 U.S.C. § 1693(b). Model Form A-9, the template for LGE's Opt-In Agreement, was issued pursuant to this directive. As we have explained, the Opt-In Agreement LGE gave Tims is ambiguous because it could describe either the available or the ledger balance calculation method for unsettled debits. As a result, it is plausible that the notice does not 1244describe *1244 the overdraft service in a "clear and readily understandable" way. 12 C.F.R. § 1005.4(a)(1). It is also plausible that Tims had no reasonable opportunity to affirmatively consent to LGE's overdraft services. Id. § 1005.17(b)(1)(ii). Affirmative consent requires "plain and clear consent ... before certain acts or events, such as changes in policies that could impair an individual's rights or interests." Affirmative- Consent Requirement, Black's Law Dictionary (11th ed. 2019). A notice that does not adequately convey the circumstances in which a financial institution will charge overdraft fees may not provide a consumer all the information she needs to give plain and clear consent. Here, Tims plausibly did not have a reasonable opportunity to affirmatively consent because the notice gave her no way to know whether LGE would use the available balance or the ledger balance method to charge her overdraft fees. But that is not the end of the matter. Congress provided a safe harbor from EFTA liability for "any failure to make disclosure in proper form if a financial institution utilized an appropriate model clause issued by the" CFPB. 15 U.S.C. § 1693m(d)(2).12 The CFPB interprets the safe harbor to preclude liability "for failure to make disclosures in proper form" provided the institution "uses [the model form's] clauses accurately to reflect its services." 12 C.F.R. pt. 1005, app. A ( Supp. I ). 12 The safe-harbor provision also shields financial institutions from liability for "any act done or omitted in good faith in 11 Tims v. LGE Cmty. Credit Union 935 F.3d 1228 (11th Cir. 2019) conformity with any rule, regulation, or interpretation thereof." 15 U.S.C. § 1693m(d)(1). LGE does not argue this provision precludes liability here, and we express no view on the matter. -------- In its notice defining the term "overdraft," LGE copied verbatim the definition of that term provided in Model Form A-9: "[a]n overdraft occurs when you do not have enough money in your account to cover a transaction, but we pay it anyway." LGE seeks refuge in the safe harbor because, it argues, it used an appropriate model form to describe its overdraft service. We disagree that LGE is protected from liability by the safe harbor. LGE emphasizes that its form is accurate, and that may be so. After all, we have concluded it could correctly refer to either the ledger balance or the available balance method. But that does not conclude the inquiry. The relevant question is whether the claim Tims asserts is one for LGE's "failure to make disclosure in proper form." The answer must be no. The statute's text, which is where all statutory interpretation must begin, makes that much plain. See BedRoc Ltd., LLC v. United States , 541 U.S. 176, 183, 124 S.Ct. 1587, 158 L.Ed.2d 338 (2004). "Form" has many meanings, but it is best read here to refer to "[p]rocedure as determined or governed by custom or regulation," as distinct from content or substance. Webster's New College Dictionary 448 (3d ed. 2008); see also Form, Black's Law Dictionary (11th ed. 2019) (defining "form" as "[t]he outer shape, structure or configuration of something, as distinguished from its substance or matter" or an "[e]stablished ... procedure"); Form, Oxford English Dictionary (2d ed. 1989) (defining "in due or proper form" to mean "according to the rules or prescribed methods"). Thus, making disclosure in proper form means making the disclosure according to proper procedures. The safe-harbor provision insulates financial institutions from EFTA claims based on the means by which the institution has communicated its overdraft policy. But it does not shield them for claims based on their failure to make adequate disclosures. A financial institution 1245thus strays beyond the safe harbor when *1245 communications within its overdraft disclosure inadequately inform the consumer of the overdraft policy that the institution actually follows. See Berenson v. Nat'l Fin. Servs., LLC , 403 F. Supp. 2d 133, 151 (D. Mass. 2005) (holding the safe harbor "insulates an institution only from a challenge as to the form—not the adequacy—of the disclosure"). Regulation E sets out procedures for how financial institutions must present their disclosures. To comply with the regulation, financial institutions must make the disclosure "in writing, or if the consumer agrees, electronically" and must further "segregate[ ]" the notice "from all other information." 12 C.F.R. § 1005.17(b)(1)(i). The format of the notice required by § 1005.17(b)(1)(i) must be "substantially similar to Model Form A- 9." Id. § 1005.17(d). Financial institutions must also "[p]rovide[ ] the consumer with confirmation of the consumer's consent in writing, or if the consumer agrees, electronically." Id. § 1005.17(b) (1)(iv). These provisions set out the "proper form" for presenting a disclosure. Tims does not allege LGE failed to do any of that. Instead, she challenges the substance of the Opt-In Agreement, which she says failed to give her enough information to give affirmative consent to LGE's overdraft service. As its text makes clear, the safe-harbor provision LGE invokes does not preclude liability when, as in this case, the content of the Regulation E disclosure is at issue. Because Tims challenges only LGE's failure to make an adequate disclosure, and not its failure to make the disclosure "in proper form," LGE cannot seek refuge under the safe harbor provision. This is so whether or not the form accurately describes the overdraft service. In this, our ruling is consistent with the great weight of district court authority to 12 Tims v. LGE Cmty. Credit Union 935 F.3d 1228 (11th Cir. 2019) have considered the matter. See Salls v. Dig. Fed. Credit Union , 349 F. Supp. 3d 81, 91 (D. Mass 2018) (collecting cases). Tims's complaint challenged the substance of LGE's Opt-In Agreement. Because the safe harbor does not protect financial institutions from challenges to the substance of Opt-In Agreements, Tims's EFTA claim survives a motion to dismiss, and the district court erred in granting the motion. IV. CONCLUSION For the foregoing reasons, we reverse the district court's order granting LGE's motion to dismiss and remand for further proceedings consistent with this opinion. REVERSED AND REMANDED. 13 -------- above are several cases and a bank disclosure. Using the cases, please provide changes to the disclosure and keep as much formatting as possible and to ensure there are no legal contradictions between the content of the disclosure and the cases and please provide reasoning for each proposed change. Please also integrate the bank's policies into the disclosure. In the first sentence, please include a reference to the account agreement "for more information on overdrafts" and a placeholder for a URL. Here are the answers to the bank's policy questions: Do you charge on available balance or ledger balance?: {balance_type} Do you charge for APSN transactions?: {apsn_transactions} How many overdraft fees per day can be charged?: {max_fees_per_day} What is the minimum amount overdrawn to incur a fee?: {min_overdrawn_fee} What is the minimum transaction amount to trigger an overdraft?: {min_transaction_overdraft} Please output in the following format: {updated_disclosure_text} ------ {reasons_for_changes} """ val = prompt.format( context=related_docs, disclosure=disclosure_text, balance_type=balance_type, apsn_transactions=apsn_transactions, max_fees_per_day=max_fees_per_day, min_overdrawn_fee=min_overdrawn_fee, min_transaction_overdraft=min_transaction_overdraft, ) ) chat_response = models[model_name].invoke(input=val) return chat_response.content