Tims v. LGE Community Credit Union
Filing
199
OPINION AND ORDER denying 190 Motion to Enforce Judgment. Signed by Judge Thomas W. Thrash, Jr. on 06/15/2023. (jkb) Modified on 6/15/2023 (jkb).
Case 1:15-cv-04279-TWT Document 199 Filed 06/15/23 Page 1 of 11
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
CAROL TIMS, individually, and on
behalf of all others similarly situated,
Plaintiffs,
v.
LGE COMMUNITY CREDIT UNION,
CIVIL ACTION FILE
NO. 1:15-CV-4279-TWT
Defendant.
OPINION AND ORDER
This is a breach of contract class action. It is before the Court on the
Defendant’s Motion to Enforce Judgment [Doc. 190]. For the reasons set forth
below, the Defendant’s Motion to Enforce Judgment [Doc. 190] is DENIED.
I.
Background
In 2015, the Plaintiff initiated this action alleging that the Defendant
was improperly assessing overdraft fees on its customer accounts for
transactions where the customer maintained a sufficient account balance to
cover the transaction. (See, e.g., First Am. Compl. ¶ 1). The Plaintiff alleged
that these overdraft fees constituted a breach of the Defendant’s consumer
contracts with its customers. (Id.). In her First Amended Complaint, the
Plaintiff asserted claims for breach of contract, breach of the covenant of good
faith and fair dealing, unjust enrichment, money had and received, and
violation of the Electronic Fund Transfer Act. (Id. ¶¶ 43-69). After years of
litigation, the parties reached a binding settlement, and on February 12, 2022,
Case 1:15-cv-04279-TWT Document 199 Filed 06/15/23 Page 2 of 11
the Court entered an order granting final approval to the parties’ Settlement
Agreement. [Doc. 187 (Final Approval Order); Doc. 144-1 (Settlement
Agreement)]. Under the terms of the Settlement Agreement, the “Settlement
Class” was divided into two sub-classes known as the “Regulation E Class” and
the “Sufficient Funds Class.” (Settlement Agreement ¶ 1(cc),(dd), (gg)). The
Regulation E Class includes “members of Defendant who opted in to the
overdraft program, and who were charged an overdraft fee on an ATM or debit
card transaction on a non-business account between August 15, 2010 and
September 18, 2015.” (Id. ¶ 1(cc)). The Sufficient Funds Class includes
“members of Defendant who received an overdraft fee on a non-business
account when, at the time the transaction posted to the member’s account, the
ledger balance was equal to or greater than the transaction causing the
overdraft between December 9, 2009 and September 18, 2015.” (Id. ¶ 1(gg)).
The Settlement Agreement also contained a release provision, which provided
that:
[e]xcept as to the rights and obligations provided for under the
terms of this [Settlement] Agreement, Named Plaintiff, . . and
each of the Class Members . . . hereby release and forever
discharge Defendant . . . from any and all charges, complaints,
claims, debts, liabilities, demands, obligations, costs, expenses,
actions, and causes of action of every nature, character, and
description, whether known or unknown, asserted or unasserted,
suspected or unsuspected, fixed or contingent, which Named
Plaintiff and Class Members who do not opt out now have, own,
or hold against any of the Defendant Releasees that arise out of
and/or relate to the facts and claims alleged by Named Plaintiff
in this case.
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(Id. ¶ 16).
On January 18, 2023, Class Member Ryan Pincott filed a class action
complaint in Cobb County Superior Court against the Defendant alleging that
he and others were improperly assessed overdraft fees authorized on accounts
with sufficient funds. (Mot. to Enforce Judgment, Doc. 190, Ex. 4 ¶¶ 1, 17-20).
Pincott further alleged that the Defendant’s practice of collecting overdraft fees
violated its standard customer agreement. (Id. ¶¶ 2, 19, 36). In particular,
Pincott alleged that “[i]n December 2018, [he] was assessed $30.00 [overdraft]
Fees on debit card transactions that settled that day, even though the
transactions had been previously authorized on a sufficient available balance.”
(Id. ¶ 74). Pincott asserted claims for breach of contract and unjust enrichment.
(Id. at19-21). Pincott never opted out of the settlement in this action. (See Final
Approval Order at 2).
On March 1, 2023, the Defendant filed the Motion to Enforce Judgment
[Doc. 190] that is presently before the Court, seeking to enforce the Settlement
Agreement against Pincott by asking this Court to enjoin him from prosecuting
his state court action. (Br. in Supp. of Mot. to Enforce Judgment, at 1). The
Defendant relies on injunctive language in the Court’s Final Judgment, which
stated:
All Class Members are bound by the Settlement, the release
contained therein, and this Final Judgment. . . . The Defendant
Releasees are forever discharged and released from all released
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claims. . . . Class Members are permanently barred and enjoined
from instituting or continuing the prosecution of any action
asserting released claims against Defendant Releasees.
(Final Judgment, Doc. 188, ¶¶ 3-4, 8). With regard to separate suits, the Final
Judgment provided that:
In the event that the provisions of the Settlement, the Order
Granting Final Approval of Class Settlement, or this Judgment
are asserted by Defendant or other Defendant Releasees as a
ground for a defense, in whole or in part, to any claim or cause of
action, or are otherwise raised as an objection in any other suit,
action, or proceeding by a Class Member or Defendant Releasees,
the Defendant Releasees shall be entitled to an immediate stay of
that suit, action, or proceeding until after this Court has entered
an order or judgment determining any issues relating to the
defense or objections based on such provisions, and no further
judicial review of such order or judgment is possible.
(Id. ¶ 9). Thus, in the Court’s view, the first issue to be decided is whether the
claims asserted by Pincott in the state court action were released in the
Settlement Agreement. Second, the Court will consider whether the claims
Pincott brought in his state court action are barred by res judicata.
II.
Legal Standards
The All Writs Act provides that federal courts “may issue all writs
necessary or appropriate in aid of their respective jurisdictions and agreeable
to the usages and principles of law.” 28 U.S.C. § 1651(a). Through the All Writs
Act, Congress codified “the long recognized power of courts of equity to
effectuate their decrees by injunctions or writs of assistance and thereby avoid
relitigation of questions once settled between the same parties.” Wesch v.
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Folsom, 6 F.3d 1465, 1470 (11th Cir. 1993). The Anti-Injunction Act, by
contrast, acts as a restraint on the broad powers granted to federal courts by
the All Writs Act. See id. Under the Anti-Injunction Act, a federal court may
not enjoin state court proceedings except “[1] as expressly authorized by Act of
Congress, or [2] where necessary in aid of its jurisdiction, or [3] to protect or
effectuate its judgments.” 28 U.S.C. § 2283. Only the second and third
exceptions are relevant to this case.
Under Georgia law, a “settlement agreement is a contract subject to
construction by the court.” Bulford v. Verizon Bus. Network Servs., Inc., 564
F. App’x 449, 451-52 (11th Cir. 2014) (citing Darby v. Mathis, 212 Ga. App.
444, 444-45 (1994)). However, “no construction is required or even permissible
when the language employed by the parties in the contract is plain,
unambiguous, and capable of only one reasonable interpretation.” Id. at 452.
“Res judicata, or claim preclusion, will prohibit a party from re-litigating
a claim where a judgment on the merits (involving the same claim and the
same parties) exists from a prior action. The principles of claim preclusion
apply to judgments in class actions as in other cases.” Adams v. S. Farm
Bureau Life Ins. Co., 493 F.3d 1276, 1289 (11th Cir. 2007) (quotation marks
and citation omitted). The four elements of claim preclusion are: “(1) a final
judgment on the merits; (2) rendered by a court of competent jurisdiction;
(3) identity of the parties; (4) identity of the causes of action.” Id. Claim
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preclusion further applies to “all legal theories and claims arising out of the
same operative nucleus of fact.” Id.
III.
Discussion
In its brief, the Defendant argues that the present case was still pending
at the time that Pincott alleges the Defendant improperly assessed overdraft
fees in December 2018. (Br. in Supp. of Mot. to Enforce Judgment, at 10). The
Defendant contends that the All Writs Act gives this Court the authority to
enjoin the state court action in order to effectuate the Final Judgment in this
case. (Id. at 11-12). In particular, the Defendant argues that because res
judicata precludes the claims Pincott seeks to litigate in the state court action,
an injunction under the All Writs Act is appropriate. (Id. at 12-15). The
Defendant further asserts that an injunction is appropriate because Pincott’s
claims were released in the Settlement Agreement. (Id. at 13-16).
Pincott responds that the Settlement Agreement’s plain terms do not
extend to his claims, which arose after the end date of the claim release period.
(Pincott’s Resp. in Opp. to Mot. to Enforce Judgment, at 2, 6-10). Pincott also
argues that his claims concern a distinct theory of liability and rely on different
portions of the Defendant’s customer agreement than did the claims at issue
in the present case, and that the two sets of claims do not share the identical
factual predicate necessary to invoke res judicata. (Id. at 10-27).
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A. Release of Claims in the Settlement Agreement
The Court begins its analysis with the release provisions of the
Settlement Agreement. That analysis begins and ends with the definitions of
the two class member groups—the very same definitions which brought Pincott
into the purview of this action in the first place. The definitions placed an upper
time-limit on class membership to customers of the Defendant who had
incurred overdraft fees by September 18, 2015. (Settlement Agreement
¶ 1(cc),(dd), (gg)). The Settlement Agreement also confirms that these class
members were members of the “Settlement Class” bound by the release
provisions. (Id. ¶ 1(dd)). Importantly, the release provision has a qualifier that
in order for a claim against the Defendant to be released, it had to “arise out of
and/or relate to the facts and claims alleged by Named Plaintiff” in this action.
(Id. ¶ 16). The Court finds that Pincott’s claim could not have arisen out of or
sufficiently related to the facts in this case for two reasons.
First and foremost, Pincott alleges in his state court complaint that his
claim accrued over three years after the latest possible claim accrual date
plainly stated in the Settlement Agreement, which was September 18, 2015.
See Bulford, 564 F. App’x at 451-52 (noting that a contract cannot be construed
by the Court when the language is “plain, unambiguous, and capable of only
one reasonable interpretation.”). Plainly, the Defendant’s attempts to read the
Settlement Agreement to broadly encompass any claim that a class member
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had against the Defendant at the time the Settlement Agreement was executed
clearly belie the parties’ intentions in settling this matter, as evidenced by the
terms of the Settlement Agreement. If the parties truly intended to release
claims pending up until the date that the Settlement Agreement was executed,
nearly seven years after the latest possible claim accrual date specified in the
Class Member definitions, they could have written that into the release
provision.
Second, the mechanism by which Pincott alleges the Defendant
improperly overdrafted his account in December 2018 also differs from what
the Plaintiff alleged in the present case. The Plaintiff here alleged that the
Defendant improperly relied on its customers’ available balances to determine
whether an overdraft fee should be assessed on a transaction, rather than the
ledger balance as promised in its customer agreement. (See First. Am. Compl.
¶¶ 17-20). In contrast, in his state court complaint, Pincott alleges that the
Defendant improperly assessed overdraft fees on transactions known as
“authorize positive, settle negative” or APSN transactions. (Mot. to Enforce
Judgment, Ex. 4 ¶¶ 17-18). Among the differences between these two methods
is that in the Plaintiff’s case, she alleged that an overdraft fee was charged
when her available balance was less than needed to cover the transaction
presented at the time of authorization, but her ledger balance would not have
resulted in an overdraft on the account for the same transaction. (See First.
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Am. Compl. ¶ 26). But Pincott alleges almost the opposite; he asserts that the
Defendant charged him an overdraft fee when his actual balance was positive
at the time the transaction was authorized and the funds were held from his
available balance, but later when the same transaction was settled, the
account balance was negative. (Mot. to Enforce Judgment, Ex. 4 ¶¶ 17-24).
Suffice it to say that Pincott’s state court complaint asserts that the Defendant
breached the customer agreement in a different manner than the Plaintiff
alleged in the present matter and that the Defendant was unjustly enriched as
a result. For these reasons, the Court finds that Pincott’s claims in the state
court complaint do not “arise out of and/or relate to the facts and claims
alleged” by the Plaintiff in this case and were therefore not released by Pincott
as part of the Settlement Agreement.
B. Res Judicata
The Defendant’s second argument—that Pincott could have asserted his
claim in the present action—presents a tougher question.
The first three
elements of res judicata are not disputed by the parties and the Court will
therefore only address the fourth—whether the present action and the one
Pincott brought in state court share the same operative nucleus of fact. See
Adams, 493 F.3d at 1289. More recently, the Eleventh Circuit has rephrased
the shared nucleus of fact requirement as requiring “the same factual
predicate.” TVPX ARS, Inc. v. Genworth Life and Annuity Ins. Co., 959 F.3d
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1318, 1325 (11th Cir. 2020). That analysis leads the Court to the same
conclusion it came to on the settlement release question: Pincott’s claims do
not share the same factual predicate as the Plaintiff’s claims in the present
action. See id. at 1326 (noting that in assessing the res judicata effect of a prior
action, the Court can “consider the parties’ settlement documents to determine
the claims at issue in a prior action.”). The Court’s comparison of the two
complaints at issue, which revealed the time discrepancies and the differing
overdraft determination methods, provides substantial support for the
determination that the two suits do not arise from the same factual predicate.
But a review of the class notice submitted to class members in the present
action seals the Defendant’s fate. The top, bolded heading of the notice reads
as follows:
If you had a checking account with LGE Community Credit Union
(“LGE”) and you were charged an overdraft fee between December
9, 2009 and September 18, 2015, then you may be entitled to a
payment from a class action settlement[.]
(Settlement Agreement at 19). The time-limiting language of this notice sent
to class members, including Pincott, further emphasizes the parties’ intent to
limit the claims at issue (and settled) in the present action to those incurred
before September 18, 2015. Therefore, because Pincott’s state court claims
were incurred in December 2018 and involved a different method of overdraft
determination, his state court action does not share the same factual predicate
as the present action, and res judicata does not apply.
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Finally, although the Defendant argues that Pincott could have raised
his claim in the present action, the Defendant fails entirely to address the
procedural vehicle by which Pincott, a class member, could have asserted his
own claim in this class action. But even assuming in the Defendant’s favor that
Pincott could have permissively intervened in this action to assert his own
claims, res judicata still would not bar Pincott’s state court action. Whether or
not the claim could have been brought previously would be an appropriate
consideration if all four res judicata factors were met in the first place; here,
for the reasons explained above, they were not. See TVPX ARS, Inc., 959 F.3d
at 1326. (“[I]t is not enough that the prior action encompassed the same
primary rights and duties as the subsequent complaint. The plaintiff must
have also been capable of bringing the same claims in the first action.”).
IV.
Conclusion
For the reasons set forth above, the Defendant’s Motion to Enforce
Judgment [Doc. 190] is DENIED.
SO ORDERED, this
15th
day of June, 2023.
______________________________
THOMAS W. THRASH, JR.
United States District Judge
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