Dearth v. Fifth Third Bank

[Cite as Dearth v. Fifth Third Bank, 2013-Ohio-2686.]
IN THE COURT OF APPEALS OF OHIO
FOURTH APPELLATE DISTRICT
ROSS COUNTY
CHARLES E. DEARTH, : Case No. 12CA3335
DBA CANDLE SENSE, LLC, :
:
Plaintiff-Appellant, :
: DECISION AND
v. : JUDGMENT ENTRY
:
FIFTH THIRD BANK, :
: RELEASED 6/26/13
Defendant-Appellee. :
______________________________________________________________________
APPEARANCES:
Joseph P. Sulzer, Chillicothe, Ohio, for appellant.
James E. Burke, Drew M. Micks, Keating Muething & Klekamp PLL, Cincinnati, Ohio,
and James L. Mann, Mann & Preston, LLP, Chillicothe, Ohio, for appellee.
______________________________________________________________________
Harsha, J.
{¶1} Charles Dearth appeals an entry granting summary judgment to Fifth Third
Bank (Fifth Third) and initially contends that certain affidavits attached to the motion do
not comply with Civ.R. 56(E). Originally, Dearth contested his membership in a federal
class action lawsuit that was based on the same re-sequencing of debit card
transactions that is the subject of this case. However, the federal court subsequently
denied his petition to withdraw as a member of the class and Dearth conceded his
membership. Because the affidavits he complains of relate solely to his status as a
member of the class action in federal court, and he has conceded his membership in
that class, any irregularities in those affidavits are now irrelevant.
{¶2} He also argues that the fourth cause of action in his complaint is not
barred by the doctrine of res judicata because it is not a claim that could have been
Ross App. No. 12CA3335 2
litigated in the class action suit. However, even if we assume that to be true, his claim
is subject to a release. As part of the settlement agreement in the class action, every
member released Fifth Third from any claims relating in any way to the re-sequencing of
debit card transactions and overdraft fees. And because his fourth cause of action
relates to the closure of his checking account due to overdraft fees from the re-
sequencing of Dearth’s debit card transactions, the trial court did not err by granting
summary judgment in favor of Fifth Third on the basis of release.
I. FACTS
{¶3} This action arises from a business checking account Charles Dearth
opened with Fifth Third Bank. In his amended complaint, Dearth alleged that Fifth Third
improperly re-sequenced transactions in his checking account in order to maximize
overdraft fees. Dearth alleged that Fifth Third would hold checking account transactions
until the end of the day and thereafter post the transactions from the largest dollar
amount to the smallest, regardless of when the charges were actually made. He also
alleged this practice maximized the number of overdraft fees Fifth Third could charge
him. In response Fifth Third filed an answer and motion to stay pending final approval
of a nationwide class action in federal court. It asserted that the class action was also
based on re-sequencing of debit card transactions and as a member Dearth would be
precluded from independently pursuing the claims in his complaint.
{¶4} After the court denied the motion, Fifth Third filed amended motions for
summary judgment based on the federal court’s approval of the class action settlement.
The trial court granted Fifth Third’s motion for summary judgment finding that Dearth
was a member in the class and therefore he released Fifth Third from any claims
Ross App. No. 12CA3335 3
relating to the re-sequencing of debit card transactions. Dearth now appeals that
judgment.
II. ASSIGNMENT OF ERROR
{¶5} Dearth raises one assignment of error for our review:
1. THE TRIAL COURT’S GRANTING SUMMARY JUDGMENT FOR THE
DEFENDANT-APPELLEE WAS AGAINST THE MANIFEST WEIGHT OF
THE EVIDENCE.
III. LAW AND ANALYSIS
A. Affidavits Submitted In Support of Summary Judgment
{¶6} Initially Dearth argues that certain affidavits submitted by Fifth Third along
with its amended motion for summary judgment do not comply with Civ.R. 56(E)
because they did not include “the required documents that were allegedly mailed to
Appellant, the best evidence,” or “any verified copies or records actually maintained by
Appellee’s Affiant which demonstrates mailings, phone calls, etc., regarding the
Appellant.”
{¶7} However, we need not address the merits of Dearth’s argument because
the affidavits he complains of deal solely with his notification and membership in the
class action. In both affidavits the Claims Administrator discusses the initial post card
sent to Dearth notifying him of the pending class action and Dearth’s subsequent
request for additional information. Although initially Dearth denied that he was a
member of the class, on appeal Dearth concedes his membership in the class.
Presumably this is so because the United States District Court of the Northern District of
Illinois denied his petition to withdraw from the class and determined that Dearth
received timely notification of the class action. Thus, any affidavit concerning his
Ross App. No. 12CA3335 4
notification and membership in the class was only relevant to an issue he now
concedes. Even if we assume it was error to consider the affidavits, their consideration
could not possibly be prejudicial in light of his concession.
B. Res Judicata
{¶8} The remainder of Dearth’s assignment of error involves the doctrine of res
judicata. Dearth argues that although Fifth Third’s motion for summary judgment
“centers on the issue of res judicata,” count four of his complaint is not barred by his
participation in the class action lawsuit because count four is not the type of claim he
could have litigated there. Dearth contends that “cause of action number four is not
based solely and strictly upon the ‘re-sequencing’ of debit card transactions,” but rather
“relates to the conduct of the Appellee’s agents and their malicious conduct[.]” 1
{¶9} We review the trial court's decision on a motion for summary judgment de
novo. Smith v. McBride, 130 Ohio St.3d 51, 2011-Ohio-4674, 955 N.E.2d 954, ¶ 12.
“Accordingly, we afford no deference to the trial court’s decision and independently
review the record to determine whether summary judgment is appropriate.” Snyder v.
Stevens, 4th Dist. No. 12CA3465, 2012-Ohio-4120, ¶ 11.
{¶10} Under Civ.R. 56(C), summary judgment is appropriate only if “‘(1) no
genuine issue of any material fact remains[;] (2) the moving party is entitled to judgment
as a matter of law[;] and (3) it appears from the evidence that reasonable minds can
come to but one conclusion, and construing the evidence most strongly in favor of the
nonmoving party, that conclusion is adverse to the party against whom the motion for
1
Dearth alleges three other causes of action in this complaint: (1) violations of the Ohio Consumer Sales
Practice Act; (2) breach of contract; and (3) unjust enrichment. Dearth does not present any arguments
on appeal concerning the other causes of action in his complaint. Likewise, we do not address them.
Ross App. No. 12CA3335 5
summary judgment is made.’” DIRECTV, Inc. v. Levin, 128 Ohio St.3d 68, 2010-Ohio-
6279, 941 N.E.2d 1187, ¶ 15, quoting State ex rel. Duncan v. Mentor City Council, 105
Ohio St.3d 372, 2005-Ohio-2163, 826 N.E.2d 832, ¶ 9.
{¶11} “[A] party seeking summary judgment, on the ground that the nonmoving
party cannot prove its case, bears the initial burden of informing the trial court of the
basis for the motion, and identifying those portions of the record that demonstrate the
absence of a genuine issue of material fact on the essential element(s) of the
nonmoving party’s claims.” Dresher v. Burt, 75 Ohio St.3d 280, 293, 662 N.E.2d 264(1996). To meet this burden, the moving party must be able to specifically point to the
pleadings, depositions, answers to interrogatories, written admissions, affidavits,
transcripts of evidence, and written stipulations of fact, if any, timely filed in the action,
which affirmatively demonstrate that the nonmoving party has no evidence to support
the nonmoving party’s claims. Id.; Civ.R. 56(C).
{¶12} “If the moving party fails to satisfy its initial burden, the motion for
summary judgment must be denied. However, if the moving party has satisfied its initial
burden, the nonmoving party then has a reciprocal burden outlined in Civ.R. 56(E) to set
forth specific facts showing that there is a genuine issue for trial * * *.” Dresher at 293.
{¶13} In count four of his complaint Dearth alleges that Fifth Third “malicious[ly]”
intended “to deprive [him] of the opportunity to conduct his business” by “notif[ying]
other financial institutions that [he] was not trustworthy and/or a good risk to open any
account with other financial institutions,” and advising them not to conduct business with
him. Furthermore Dearth alleges that as a result of Fifth Third’s improper conduct, the
credit card company he used for his business withdrew its services.
Ross App. No. 12CA3335 6
{¶14} In its amended motion for summary judgment and supplemental amended
motion for summary judgment, Fifth Third asserted that the settlement agreement in the
class action contained a broad release that forever barred any claims based on
overdraft fees from debit card use, including the re-sequencing of transactions; it also
argued that as a member of the class, res judicata precluded Dearth from asserting the
claims in his complaint. In his response Dearth, denied that res judicata precluded the
claims in his complaint, but failed to address Fifth Third’s argument regarding the
settlement agreement. The trial court agreed with Fifth Third and found that as a
member of the class Dearth was subject to the settlement agreement, which released
any and all claims relating in any way to the re-sequencing of debit card transactions.
And because the court also found that all of Dearth’s claims related to the re-
sequencing of debit card transactions, summary judgment was appropriate. The trial
court further found that to the extent Dearth’s claims related to the re-sequencing of
paper checks, rather than debit card transactions, Fifth Third was entitled to summary
judgment because the Uniform Commercial Code, adopted by Ohio law, explicitly
permits banks to pay paper checks from the largest to smallest amount.
{¶15} In its motion for summary judgment Fifth Third attached the federal court’s
entry denying Dearth’s petition to withdraw from the class. As already mentioned
Dearth concedes on appeal he was member of settlement class in the federal class
action. Thus, there is no genuine issue of fact about Dearth’s membership in the class.
And we agree with the trial court that he is bound by the terms of the settlement
agreement, which states:
Plaintiff and each and every Settlement Class Member shall be deemed to
have fully released and forever discharged Fifth Third * * * of and from any
Ross App. No. 12CA3335 7
and all rights, claims, actions, causes of action, demands and remedies,
known or unknown, liquidated or unliquidated, legal, statutory, or
equitable, that result from, arise out of, are based upon, or relate to in any
way the conduct, omissions, duties or matters alleged in the Complaints,
including claims relating to any or all of the following matters, provided
such claims result from, arise out of, or are based, in any way, upon the
use of a Fifth Third Debt Card by the cardholder or by an authorized user
of the debit card that led to the assessment of one or more Overdraft
Fees: (a) the order or manner in which Fifth Third Debit Card and other
transactions are posted to and debited from Fifth Third Accounts; (b) the
authorization, approval and handling of any Fifth Third Debit Card
Transactions, including ATM transactions; (c) any fees or charges
resulting from or relating to Fifth Third Debit Card Transactions, including
ATM transactions; (d) any failure to warn when Fifth Third Debit Card
Transactions, including ATM transactions, would cause a Fifth Third
Account to be overdrawn or a fee assessed * * *.
{¶16} This language makes it clear that every member of the settlement class,
including Dearth, has fully released Fifth Third from any cause of action that relates in
any way to the order in which debit card transactions are debited from checking
accounts and any fees resulting from debit card transactions. And it is also clear that
count four of Dearth’s complaint relates to the re-sequencing of his debit card
transactions as he alleges that Fifth Third closed his checking account due to excessive
overdraft fees that were incurred at least in part, to the re-sequencing of his debit card
transactions. Thus Fifth Third’s “improper conduct” was based, at least in part, on
Dearth’s debit card transactions and resulting overdraft fees. The release in the
settlement agreement therefore precludes Dearth from bringing count four of his
complaint.
{¶17} Even when construing the evidence in Dearth’s favor, no genuine issue of
fact remains. Based on the very broad release in the settlement agreement, we agree
that Fifth Third is entitled to judgment as a matter of law regarding count four of the
Ross App. No. 12CA3335 8
complaint. Therefore, the trial court correctly granted summary judgment to Fifth Third
and we affirm its judgment.
JUDGMENT AFFIRMED.
Ross App. No. 12CA3335 9
JUDGMENT ENTRY
It is ordered that the JUDGMENT IS AFFIRMED and that Appellant shall pay the
costs.
The Court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this Court directing the Ross
County Common Pleas Court to carry this judgment into execution.
Any stay previously granted by this Court is hereby terminated as of the date of
this entry.
A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of
the Rules of Appellate Procedure.
Abele, J. & Hoover, J.: Concur in Judgment and Opinion.
For the Court
BY: ________________________________
William H. Harsha, Judge
NOTICE TO COUNSEL
Pursuant to Local Rule No. 14, this document constitutes a final judgment
entry and the time period for further appeal commences from the date of filing
with the clerk.