The opinion of the court was delivered by: Justice Cerda.
Appeal from the Circuit Court of Cook County Honorable John K. Madden, Judge Presiding.
Appeal from the Circuit Court of Cook County Honorable Ellis E. Reid, Judge Presiding.
Appeal from the Circuit Court of Cook County Honorable Robert V. Boharic, Judge Presiding.
In this consolidated appeal, plaintiffs, Daron A. Hill, Scott Shepard, and Maris V. Lidaka, appeal from the dismissal of their respective class action complaints alleging the illegality of the practice of defendants, St. Paul Federal Bank for Savings, Harris Bank Elk Grove N.A., and Corus Bank, N.A., respectively, in posting overdrawn checks in the order of highest to lowest amount, resulting in some cases in more overdraft fees than if the lowest checks were posted first. We affirm.
Plaintiff Shepard alleged that on January 20, 2000, he had $126.02 in his checking account when the bank received four of his checks, which were written in the amounts of $25.00, $13.00, $50.00, and $195.58. There were sufficient funds for Harris Bank to have paid three checks for the lower amounts; in that case, the bank would have assessed only one overdraft fee. Instead, the bank debited the check for $195.58 first, creating a larger overdraft. As a result, all four checks bounced, and four overdraft fees were assessed.
Plaintiff Shepard further alleged that it was Harris Bank's unstated policy to (a) treat all of the checks as creating an overdraft even though there were sufficient funds to pay one or more of them; and (b) debit them in such order as maximized rather than minimized the number of checks that did not clear and the number of overdraft fees the bank may impose. The bank programmed its computers to treat all checks received at one time as one amount and to sequence them from the highest dollar amount to the lowest dollar amount. Harris Bank allegedly never informed Shepard of this practice.
Count I alleged breach of contract/covenant of good faith and fair dealing. It alleged that the account agreement between plaintiff and the bank gave the bank complete control and discretion over the order in which the checks were debited. The high-to-low posting practice was allegedly inconsistent with the customer's reasonable expectations. The bank allegedly acted with improper motive because it posted the checks in this order merely to increase the number of fees it could charge.
Count II alleged violation of the Illinois Consumer Fraud Act (815 ILCS 505/1 et seq. (West 2000)). Shepard alleged that the practice of the bank was deceptive because the practice was undisclosed. Shepard also alleged that the practice was unfair because the bank took advantage of its complete control over the order of debiting items to increase its profits.
The allegations of the complaints of plaintiff Hill against St. Paul and plaintiff Lidaka against Corus Bank were similar.
The following are the relevant portions of the account agreements of the three banks.
"If a check is written for an amount greater than what is in the account, the account will be overdrawn and we have the right to return the check unpaid. We may, at our discretion, pay the check. In either case, a fee will apply and be charged to the account. If a check is written against uncollected funds *** we have the right to return the check unpaid or, at our discretion, pay the check. We may return a check for any reason checks are normally returned ***. In any case, a fee will apply and be charged to the account." (Corus Bank)
"If a check is presented to the Bank for payment at time when there is not a sufficient balance of available funds in your account, the Bank may either pay the check or refuse payment and return it unpaid.
You agree to deposit sufficient funds to cover any overdraft and any fee charged in connection with an overdraft.
Service charges may be imposed by the Bank in connection with these accounts *** and are shown in the Schedule of Fees." (St. Paul Federal Bank for Savings)
"If you write a check (or otherwise try to make a withdrawal) for more money than you have available in your account, you will be overdrawn. We reserve the right to return the check (or other item) or, at our discretion, we may pay the check (or other item). In either case, we may charge a fee to your account as disclosed [on the fee schedule]." (Harris Bank Elk Grove)
All the complaints were dismissed pursuant to section 2-615 of the Illinois Code of Civil Procedure (735 ILCS 5/2-615 (West 2000)). Plaintiffs ...