PNC Bank, N.A. v. Sullivan

Filing 14

OPINION: the Plaintiff's Motion for Summary Judgment 11 is ALLOWED. The final pretrial conference and bench trial are Canceled. A Judgment shall be entered declaring that the claim in the Defendant's Demand for Arbitration is not arbitrable. CASE CLOSED. (SEE WRITTEN OPINION) Entered by Judge Richard Mills on 3/25/2015. (GL, ilcd)

E-FILED

Thursday, 26 March, 2015 08:58:03 AM
Clerk, U.S. District Court, ILCD

IN THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF ILLINOIS
SPRINGFIELD DIVISION
PNC BANK, N.A.,

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Plaintiff,
v.
BRIAN SULLIVAN,
Defendant.

NO. 13-3410

OPINION
RICHARD MILLS, U.S. District Judge:
This is an action for declaratory judgment pursuant to 28 U.S.C. §
2201, wherein the Plaintiff seeks entry of a declaration that Defendant’s
claim is not arbitrable.
Pending is the Plaintiff’s Motion for Summary Judgment.
In short, there is nothing to arbitrate.
Judgment for Plaintiff.
This case is closed.
I. BACKGROUND
On November 13, 2013, Defendant Brian Sullivan filed with the

American Arbitration Association (“AAA”) a Demand for Arbitration,
requesting an in-person arbitration of the Defendant’s claim for violation
of the Illinois Consumer Fraud and Deceptive Business Practices Act (“the
Act) against Plaintiff PNC Bank, N.A.
On October 4, 2013, the Plaintiff mailed the Defendant a notice
stating that “your deposit account referenced above (xxx895) has been
overdrawn for 15 days and is currently reflecting a negative balance of
$10.00. . . We request that you immediately make a deposit to return your
account to a positive balance . . . Please be advised that a continued failure
to pay may result in additional fees, Account closure and the overdraft
amount being reported as a delinquency to Chex Systems.”
On October 15, 2013, the Defendant visited the Plaintiff’s branch
located at One Old Capitol Plaza North, Springfield, IL and made a deposit
of $20 into account xxxx895.
In his Demand for Arbitration, the Defendant claimed that Plaintiff
violated the Act by telling him he was a PNC customer, when he was not,
in order to obtain $20 from him. The Demand seeks the return of the $20,

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plus $900 that Defendant says he lost in the form of his “billable hours” at
his job; $100,000 in punitive damages; and $15,050 in “current” legal fees.
Although he contends that he never entered into any agreement with
the Defendant, and is not a PNC Bank customer, the Defendant
nevertheless asserts in his Demand for Arbitration that PNC is required to
attend arbitration pursuant to the language of a document entitled
“Account Agreement for Personal Checking, Savings and Money market
Accounts,” which the Defendant apparently believes the Plaintiff has
entered into with other unidentified, non-party individuals.
Although he contends that he never entered into this or any other
agreement with the Plaintiff and is not its customer, the Defendant also
asserts in his Demand for Arbitration that PNC Bank must pay his
attorney’s fees pursuant to the language of the “Account Agreement for
Personal Checking, Savings and Money Market Accounts.”
On December 12, 2013, the Plaintiff filed this action, seeking entry
of a declaration pursuant to the Declaratory Judgment Act, 28 U.S.C. §
2201, that Defendant’s claim made in the Demand for Arbitration is not

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arbitrable. On December 17, 2013, the Defendant’s counsel sent a letter
to the AAA requesting that the AAA move forward with the demand for
arbitration.

In response, the AAA noted that it would proceed with

arbitration on December 23, 2013.
On December 18, 2013, the Plaintiff filed an emergency motion for
an Order staying the Arbitration. The same day, this Court granted the
Plaintiff’s emergency motion and entered an Order staying the arbitration
pending the resolution of this action.
The Plaintiff filed its First Set of Discovery Requests to Defendant on
April 16, 2014, which included Requests for Admissions. The Defendant
served his Responses to the Plaintiff’s Discovery Requests on April 25,
2014. In relevant part, the Defendant stated as follows:
I did not enter into any agreement with PNC in connection
with PNC account no. [xx-xxxx]-0895
I did not open PNC account no. [xx-xxxx]-0895
To the best of my memory, I have never opened any account
with PNC.
I am not a PNC customer.

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Therefore, the parties agree that Defendant has not entered into any
agreement with Plaintiff PNC, has never opened a PNC account and is not
a PNC customer.
The Plaintiff claims it is entitled to summary judgment and the Court
should enter an Order declaring the parties are not required to proceed to
arbitration. The Defendant alleges the Plaintiff should be estopped from
claiming there is no agreement to arbitrate and, moreover, his claims fall
within the scope of the arbitration agreement.
II. DISCUSSION
A. Legal standard
Summary judgment is appropriate if the motion is properly supported
and “there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law.” See Fed. R. Civ. P. 56(a). The
Declaratory Judgment Act provides in part:
[A]ny court of the United States, upon the filing of an
appropriate pleading, may declare the rights and other legal
relations of any interested party seeking such declaration,
whether or not further relief is or could be sought. Any such
declaration shall have the force and effect of a final judgment or
decree and shall be reviewable as such.
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28 U.S.C. § 2201(a); see also Fed. R. Civ. P. 57 (“These rules govern the
procedure for obtaining a declaratory judgment under 28 U.S.C. § 2201").
B. Analysis
Arbitration agreements are enforced to the same extent as other
contracts and must therefore be construed according to their terms. See
Hasbro, Inc. v. Catalyst USA , Inc., 367 F.3d 689, 692 (7th Cir. 2004). A
party seeking to compel arbitration must show: “(1) an agreement to
arbitrate, (2) a dispute within the scope of the arbitration agreement, and
(3) a refusal by the opposing party to proceed to arbitration.” Zurich
American Ins. Co. v. Watts Indus., Inc., 466 F.3d 577, 580 (7th Cir. 2006).
The parties agree that Defendant Brian Sullivan was not a customer
of Plaintiff PNC Bank. Accordingly, the Plaintiff contends it is entitled to
a declaration that the claim asserted in the Defendant’s Demand for
Arbitration is not “arbitrable” because the Defendant cannot meet its
burden of establishing the existence of an agreement to arbitrate.
The Defendant asserts the Plaintiff is equitably estopped from
claiming there was no agreement to arbitrate. Because the Defendant

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requested and accepted $20.00 from the Plaintiff, the Plaintiff contends the
Defendant cannot now deny the existence of an Agreement in order to
circumvent the arbitration requirement.
A party asserting equitable estoppel must show: (1) misrepresentation
or concealment of material facts by the party against whom estoppel is
asserted; (2) the other party’s knowledge that the representations were
false; (3) the claimant’s lack of knowledge of such falsity; (4) the other
party’s expectation of the claimant’s resulting action; (5) the claimant’s
reasonable reliance to his detriment on the misrepresentations; and (6) the
likelihood of prejudice to the claimant if the other party is not equitably
estopped.

Prestwick Capital Management, Ltd. v. Peregrine Financial

Group, Inc., 727 F.3d 646, 663 (7th Cir. 2013) (citing Maniez v. Citibank,
F.S.B., 404 Ill. App.3d 941, 949-50 (1st Dist. 2010)). The Court concludes
that Defendant cannot meet each element of equitable estoppel.
It is undisputed that Plaintiff made a misrepresentation when it told
the Defendant he was a PNC customer and must make a deposit in order
to keep his account current. However, the Defendant cannot meet the

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third element because he knew that the representation was false. The
Defendant knew he did not have a PNC Bank account and did not enter
into an agreement with the Plaintiff in connection with PNC account no.
[xx-xxxx]-0895. The Defendant admitted he was not then a PNC Bank
customer and, to the best of his knowledge, had never opened any account
with the Plaintiff. Accordingly, the Court concludes that Defendant did
not have a “lack of knowledge” of the falsity of the Plaintiff’s
representation.
The Defendant also cannot establish that he reasonably relied on the
misrepresentation to his detriment. Because the Defendant knew he was
not a PNC Bank customer and did not owe it any money, the Court
concludes that he did not reasonably rely on the misrepresentations to his
detriment.

Instead, the Defendant’s reliance was unreasonable.

The

Defendant did pay the Plaintiff $20.00, apparently without reservation,
even though he knew he was not an account holder with a negative balance.
Because of his unreasonable reliance, the Court concludes that the payment
does not constitute detriment to the Defendant.

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Based on the foregoing, the Defendant is unable to meet each element
of equitable estoppel. Accordingly, he cannot rely on equitable estoppel in
compelling arbitration.
The Defendant further contends that his claims fall within the
arbitration agreement.

However, there was no agreement to arbitrate

between the Plaintiff and the Defendant. The Defendant notes that the
arbitration provision provides that “you and we may elect to arbitrate any
Claim.” A “Claim” is then defined to include:
[A]ny demand, cause of action, complaint, claim, asserted right,
or request for monetary or equitable relief, whether past,
present or future, and based upon any legal theory, including
contract, tort, consumer protection law, fraud, statute,
regulation, ordinance, or common law, which arises out of or
relates to this Agreement, your Account or Accounts, the events
leading up to you becoming an Account holder (for example,
advertisements or promotions), any feature or service provided
in connection with Your Account or Accounts, or any
transaction conducted with us related to your Accounts.
The Defendant did not sign the Agreement. He is not and has never been
an account holder at PNC Bank. Therefore, the words “you” and “your”
do not refer to Defendant Brian Sullivan. The Defendant provides no
authority for the assertion that he may compel arbitration when he did not
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sign the Agreement and, to the extent that Defendant is alleging he is a
third-party beneficiary, he has not identified a contractual relationship
existing between the Plaintiff and any other signatory.

A third-party

beneficiary of an agreement is entitled to enforce it and obtain damages
upon its breach. See Thomas v. UBS AG, 706 F.3d 846, 852 (7th Cir.
2013). “A third-party beneficiary is someone whom the contracting parties
wanted to have the right to enforce the contract.” Id. The Defendant is
not a third-party beneficiary.
The Defendant was not a party to an agreement with the Plaintiff.
He cannot rely on equitable estoppel in claiming there was an agreement to
arbitrate.
Finally, the Defendant’s claims do not fall within the scope of the
arbitration agreement.
For all of these reasons, the allegations of the Defendant are not
arbitrable.
Ergo, the Plaintiff’s Motion for Summary Judgment [d/e 11] is
ALLOWED.

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The final pretrial conference and bench trial are Canceled.
A Judgment shall be entered declaring that the claim in the
Defendant’s Demand for Arbitration is not arbitrable.
CASE CLOSED.
ENTER: March 25, 2015
FOR THE COURT:
s/Richard Mills
Richard Mills
United States District Judge

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