United States District Court, S.D. Ohio, Western Division
CARNELL SMITH, on behalf of himself and all others similarly situated LENOX MAGEE, on behalf of himself and all others similarly situated Plaintiffs,
FIFTH THIRD BANK Defendant.
Stephanie K. Bowman, Magistrate Judge
DECISION AND ENTRY ADOPTING THE REPORT AND
RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE (DOC.
Timothy S. Black, United States District Judge
case is before the Court pursuant to the Order of General
Reference to United States Magistrate Judge Stephanie K.
Bowman. Pursuant to such reference, the Magistrate Judge
reviewed the pleadings filed with this Court and, on April
18, 2019, submitted a Report and Recommendation recommending
that the Court grant in part and deny in part Defendant Fifth
Third Bank (“Fifth Third”)'s motion to
dismiss Plaintiff Carnell Smith's amended complaint (Doc.
55) and motion to dismiss Plaintiff Lenox Magee's
complaint (Doc. 70). (Doc. 83). More specifically, the
Magistrate Judge recommended denying both motions to dismiss
with respect to Plaintiffs' claims that Fifth Third
improperly charged fees for “balance inquiries”
made using out-of-network ATMs. (Id.). Fifth Third
filed objections to that portion of the Report and
Recommendation (Doc. 87), to which Plaintiffs filed a joint
response (Doc. 97) as well as a notice of supplemental
authority (Doc. 98).
action consists of two consolidated lawsuits; one filed by
Plaintiff Carnell Smith and another filed by Plaintiff Lenox
Magee. (See Doc. 64). Both cases were filed as
putative class actions, and both assert breach of contract
claims alleging that Defendant Fifth Third improperly charged
a $2.75 fee for balance inquiries at out-of-network ATMs.
(Docs. 1, 52). Plaintiffs attached to their pleadings Fifth
Third's Deposit Account Rules and Regulations, as well as
Fifth Third's Debit Card Disclosure and Card Agreement,
which together constitute the “Agreement” between
Plaintiffs and Defendant. (See Docs. 52-1,
52-2). In their respective complaints, Plaintiffs
argue that a balance inquiry is not a
“transaction” subject to the
“transactions” fees noticed in the Agreement.
Plaintiffs alternatively argue that a balance inquiry made in
conjunction with a withdrawal of funds should be viewed as a
single transaction, with a single $2.75 fee assessed.
Agreement contains the following general language regarding
fees that may be imposed in relation to the use of an ATM:
Fees: We reserve the right to impose a fee
and to charge fees upon notice to you. A fee may be imposed
by an automated teller machine (ATM), and by any network used
to complete the transaction, when you initiate an electronic
fund transfer or make a balance inquiry.
(Doc. 52-1 at 23). Elsewhere in the Agreement is an
accountholder's agreement “to pay all fees we
charge in connection with the Electronic Banking services you
obtain.” (Doc. 52-2 at ¶ 8). The term
“Electronic Banking” is defined in the Agreement
as “services that allow you to access the Account using
ATMs . . . to make deposits, transfers or withdrawals to or
from the Account.” (Id. at 2). In addition,
the Agreement includes a “fee schedule” listing a
$2.75 fee “for U.S. transactions” and noting that
“[o]ther ATM network owners may also assess a usage
fee.” (Doc. 52-1 at 28). A “2.75 [fee] per
transaction” for any “Non-Fifth Third ATM
transaction[s]” is similarly noted in the Debit Card
Disclosure Agreement. (Doc. 52-2 at ¶ 8).
Fifth Third filed two motions to dismiss aimed at each of the
Plaintiff's complaints. (Docs. 55, 70). The Magistrate
Judge issued a Report and Recommendation recommending that
the Court grant in part and deny in part Defendants'
motions to dismiss, finding that the Court should deny the
motions with respect to Plaintiffs' claims asserting
breach of contract for improperly charging a $2.75
“transaction” fee for balance inquiries. (Doc. 83
at 27). In doing so, the Magistrate Judge found that in
reviewing the Agreement as a whole, the term
“transaction” is “at least” ambiguous
as to whether the term encompasses balance inquiries.
(Id. at 7-14). Defendant filed objections to this
portion of the Report and Recommendation (Doc. 87), which the
Court will address in turn.
Defendant states generally that the Magistrate Judge did not
“fully consider” certain provisions contained in
the Agreement that “identif[y] a balance inquiry as a
separate transaction from a funds transfer.” (Doc. 87
at 5 n.6). Defendant specifically refers to certain
provisions in the Agreement governing fees that may be
imposed by third parties (not Fifth Third), which expressly
mention potential fees associated with balance inquiries.
such provision that Defendant notes is the statement from the
Rules and Regulations that:
Fifth Third “reserve[s] the right to impose a fee and
to charge fees upon notice to you. A fee may be imposed
by an automated teller machine (ATM), and by any
network used to complete the transaction, when you
initiate an electronic fund transfer or make a
(Doc. 52-1 at 20) (emphasis added). Defendant also points to
the following language from the Debit Card Agreement:
“when you use an ATM not owned by us, you may be
charged a fee by the ATM operator or any network used (and
you may be charged a fee for a balance inquiry even if you ...