Batlle et al v. Wachovia Bank, N.A.
Filing
112
ORDER granting in part and denying in part 74 Motion for Summary Judgment. Signed by Judge Marcia G. Cooke on 6/29/2011. (tm)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No.: 10-21782-Civ-COOKE/BANDSTRA
MAURICE A. BATLLE, et al.,
Plaintiffs
vs.
WACHOVIA BANK, N.A.,
Defendant.
/
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT WACHOVIA BANK, N.A.’S MOTION FOR SUMMARY JUDGMENT
THIS MATTER is before me on Defendant Wachovia Bank, N.A.’s Motion for
Summary Judgment. (ECF No. 74). I have reviewed the parties’ arguments, the record, and the
relevant legal authorities. For the reasons explained in this Order, the Defendant’s Motion is
granted in part and denied in part.
I. BACKGROUND
This is an action for breach of contract.1 Plaintiffs, Maurice A. Batlle and Maria Carmen
Castelbon Velao, seek to recover monies deposited in a bank account opened with Defendant,
Wachovia Bank, N.A. (“Wachovia”).
Unless otherwise noted, the following facts are undisputed.2 Ms. Velao maintained a
bank account with Wachovia, which is subject to this action. Wachovia’s Deposit Agreement
1
On March 21, 2011, I entered an Order dismissing without prejudice Plaintiffs’ claims based on
conversion, civil theft, and common law money had and received, for failure to sufficiently state a claim
for which relief may be granted. Plaintiffs never sought to amend their Complaint.
2
The facts set forth in the Defendant’s Statement of Undisputed Facts are deemed admitted to the extent
that they are supported by evidence in the record, and Plaintiffs do not specifically dispute them in an
opposing statement of facts. S.D. Fla. L.R. 7.5(D); see also Gossard v. JP Morgan Chase & Co., 612 F.
Supp. 2d 1242, 1245-1246 (S.D. Fla. 2009).
and Disclosure for Personal Accounts (the “Deposit Agreement” or “Agreement”) governs the
account.3
On January 6, 2010, an unknown person deposited a 20,000.00 check from CarMax made
out to Lilliam Perez Batlle (the “CarMax check”) into the Plaintiffs’ Wachovia account. The
CarMax check represented proceeds from the sale of Lilliam Batlle’s vehicle. Lilliam Batlle was
neither an account holder of, nor an authorized signer on, the Plaintiff’s account. On January 8,
2010, Janou Batlle, Maurice Batlle’s sister, deposited a $139,986.55 check from Wells Fargo
Home Mortgage made out to Lilliam Perez Batlle (the “Wells Fargo check”) into the Plaintiffs’
account. The Wells Fargo check represented proceeds from a reverse mortgage on certain real
property. Lilliam Batlle passed away on January 15, 2010.
Wachovia subsequently put a hold on the account. Wachovia states that it did so because
Lilliam Batlle was not a signer on the Plaintiffs’ account, and the endorsement on the CarMax
and Wells Fargo checks did not match the signature that Wachovia had on file for Lilliam Batlle.
Wachovia states that its “policies and procedures” require the payee of a check deposited in a
non-payee’s account to execute a Release Agreement. Lilliam Batlle never executed a Release
Agreement for the CarMax or Wells Fargo checks before she passed away.
Wachovia eventually returned the proceeds from the Wells Fargo check to Wells Fargo
Home Mortgage, which applied the funds to the balance due on Lilliam Batlle’s reverse
mortgage. Wachovia has retained all other funds in the account.
3
In their Complaint, Plaintiffs state they are both owners of the account at issue, but Mr. Battle contends
he never signed any document incorporating the Deposit Agreement. Plaintiffs therefore dispute the
applicability of the Agreement as to Mr. Batlle. There is no dispute, however, that the Agreement applies to
Ms. Velao, who admits she owned and maintained the subject bank account.
2
II. LEGAL STANDARDS
A court “shall grant summary judgment “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). “[T]he plain language of [Rule 56(a)] mandates the entry of summary
judgment, after adequate time for discovery and upon motion, against a party who fails to make
a showing sufficient to establish the existence of an element essential to that party’s case, and
on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U .S.
317, 322 (1986).
“The moving party bears the initial burden to show the district court, by reference to
materials on file, that there are no genuine issues of material fact that should be decided at trial.
Only when that burden has been met does the burden shift to the non-moving party to
demonstrate that there is indeed a material issue of fact that precludes summary judgment.”
Clark v. Coats & Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). Rule 56(c) “requires the
nonmoving party to go beyond the pleadings and by her own affidavits, or by the ‘depositions,
answers to interrogatories, and admissions on file,’ designate ‘specific facts showing that there is
a genuine issue for trial.” Celotex, 477 U.S. at 324. Thus, the nonmoving party “may not rest
upon the mere allegations or denials of his pleadings, but . . . must set forth specific facts
showing that there is a genuine issue for trial.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248 (1986). The inferences drawn from the underlying facts must be viewed in the light most
favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007).
III. ANALYSIS
Wachovia argues that there are no genuine issues of material fact relating to Plaintiffs’
breach of contract claims because Plaintiffs have not (i) established the existence of a contract,
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nor (ii) identified what terms of the contract Wachovia has allegedly breached. For issues on
which the non-movant would bear the burden of proof at trial, the moving party must show “that
there is an absence of evidence to support the non-moving party’s case” or set forth “affirmative
evidence demonstrating that the non-moving party will be unable to prove its case at trial.”
Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115-16 (11th Cir. 1993).
Plaintiffs do not dispute that the Deposit Agreement applies to Ms. Velao. Ms. Velao
signed a Customer Access Agreement that states, “I agree to be bound by the terms and
conditions [of] . . . Wachovia’s Deposit Agreement and Disclosures . . ..” As to her, Plaintiffs
have established the existence of a contract with Wachovia. As to Mr. Batlle, Plaintiffs fail to
establish the existence of a contract with Wachovia. In fact, Plaintiffs adamantly argue that Mr.
Batlle has no contract with Wachovia. Therefore, Plaintiffs’ breach of contract claim fails as to
Mr. Batlle and summary judgment is granted in favor of Wachovia.
As to Wachovia’s second argument—that Plaintiffs fail to identify what terms of the
contract Wachovia has breached—Plaintiffs do not dispute that the Deposit Agreement permits
Wachovia to hold any deposit, but they argue that Wachovia cannot do so arbitrarily or in bad
faith. “[W]hen one party is given discretion to act under a contract, said discretion must be
exercised in good faith.” In re Checking Account Overdraft Litig., 694 F. Supp. 2d 1302, 1314
(S.D. Fla. 2010); N. American Van Lines, Inc. v. Lexington Ins. Co., 678 So. 2d 1325, 1333 (Fla.
Dist. Ct. App. 1996) (“[T]he bad faith action is essentially one for breach of contract, which
includes, under the case law, an implied good faith obligation.”); Rest. 2d Contracts § 205
(“Every contract imposes upon each party a duty of good faith and fair dealing in its performance
and its enforcement.”).
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Under the Deposit Agreement, Wachovia has discretion to determine when to charge
back an account and when to hold a deposit. See Deposit Agmt. I.D.1, 5. Plaintiffs argue that
Wachovia breached the Deposit Agreement because it acted in bad faith when it decided, in its
discretion, to place a hold on their deposits and close their account.
There are genuine issues of material fact regarding whether Wachovia exercised good
faith. Plaintiffs put forth evidence that indicates they notified Wachovia in advance of at least
one of Lilliam Batlle’s deposits, informing the bank that they authorized the deposit. On January
6, 2010, Mr. Batlle and Lilliam Batlle sent a letter to Wachovia informing the bank of an
upcoming $139,986.55 deposit from Lilliam Batlle into the account at issue. On January 22,
2010, a Wachovia representative sent a fax to Tomika Abrams, Wachovia’s fraud investigator,
stating that Lilliam Batlle personally signed the letter in his presence on January 6, 2010.
Viewed in light most favorable to Plaintiffs, this evidence provides support that Wachovia had at
least some evidence that the deposit was legitimate and may not have had grounds to hold this
deposit.
Further, there are genuine issues of material fact as to whether Wachovia exercised good
faith in requiring Plaintiffs to provide a Release Agreement to release the funds in their account.
Wachovia states that its policy is to require a Release Agreement where a payee deposits a check
in a non-payee’s account. It notes that Lilliam Batlle never signed a Release Agreement before
she passed away. Wachovia has not pointed this Court to any provision in the Deposit
Agreement or any other document provided to Plaintiffs that expressly states that this is
Wachovia’s policy. A genuine issue of material fact exists regarding whether Plaintiffs had any
notice of the policy before the checks were deposited. See MJZ Corp. v. Gulfstream First Bank
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& Trust, N.A., 420 So. 2d 396, 398 (Fla. Dist. Ct. App. 1982) (“we hold that [a bank] a policy,
without notice to the customer, cannot bind the customer.”).
IV. CONCLUSION
For the foregoing reasons, it is ORDERED and ADJUDGED that Defendant Wachovia
Bank, N.A.’s Motion for Summary Judgment (ECF No. 74) is GRANTED IN PART AND
DENIED IN PART, as follows:
1.
Defendant’s Motion is GRANTED as to Maurice E. Batlle. Mr. Batlle is
DISMISSED from this case.
2.
Defendant’s Motion is DENIED as to Maria Carmen Catelbon Velao.
DONE and ORDERED in chambers, at Miami, Florida, this 29th day of June 2011.
Copies furnished to:
William C. Turnoff, U.S. Magistrate Judge
Counsel of record
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