United States District Court, N.D. Illinois
January 15, 2004.
ANDREW GALE, Plaintiff,
HYDE PARK BANK, Defendant
The opinion of the court was delivered by: JOHN W. DARRAH, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiff, Andrew Gale ("Gale"), filed an Amended Complaint*fn1
against Defendant, Hyde Park Bank, alleging a violation of
15 U.S.C. § 1693 et al. Gale's previous Complaint was dismissed
without prejudice for failure to state a claim. Presently pending before
the Court is Defendant's Motion to Dismiss and to Strike.
In reviewing a motion to dismiss, the court reviews all facts alleged
in the complaint and any reasonable inferences drawn therefrom in the
light most favorable to the plaintiff. See Marshall-Mosby v.
Corporate Receivables, Inc., 205 F.3d 323, 326 (7th Cir. 2000).
Dismissal is only warranted if the plaintiff can prove no set of facts in
support of its claims that would entitle it to relief. See Conley v.
Gibson, 355 U.S. 41, 45-46 (1957).
A reading of the Amended Complaint supports the following summary of
the alleged conduct of the parties.
In early December 2001, Gale used his debit card to make a purchase
with a merchant. The amount of the transaction was $352.35. Defendant
failed to process the transaction at that time and failed to notify Gale
of any error in the transaction. On April 3, 2002, the vendor
submitted a request for payment to Defendant. Defendant paid the
request without the knowledge and consent of Gale.
Gale attached several exhibits to his Complaint which support the
following additional facts.
Gale's bank statement for transactions occurring between November 16,
2001 and December 14, 2001, does not include an entry for the amount of
$352.35. The $352.35 was transferred from Gale's account once, in April
On April 9, 2002, Gale submitted a request to Defendant for an
explanation for the error since his account now had a negative balance,
and he was being charged overdraft charges.
On April 12, 2002, Defendant responded to Gale's inquiry. Defendant
informed Gale that debit card purchases are not returnable and must be
posted to an account. The delay in this transaction may have been caused
by any number of reasons. The merchant may have delayed submitting the
purchase to VISA or the item may have been lost or may have been rejected
by the system for one reason or another and needed to be reconciled
before submission. The delay in the instant transaction was between the
merchant and VISA. Furthermore, regulation allows 120 days for a debit
card item to be posted to an account. The authorization for the December
3 purchase is a temporary hold only and may or may not be followed by an
actual purchase. Therefore, Defendant did not post anything until VISA
sent a debit.
On April 16, 2002, Gale filed a complaint with the Federal Deposit
Insurance Corporation ("FDIC") regarding the December/April transaction.
Defendant responded to the FDIC, stating that Gale authorized a
transaction in the amount of $352.35, using his debit card in December
2001. On April 3, 2002, the $352.35 transaction was posted to Gale's
causing an overdraft. Defendant had no indication that this was an
old transaction that had never been posted.
On April 18, 2002, Defendant informed Gale via letter that a
provisional credit in the amount of $352.35 had been credited to his
On May 14, 2002, Defendant responded to additional inquiries by Gale
via e-mail. Defendant informed Gale that no agency had asked Defendant to
monitor his credit and that such a request by a federal agency would be
inappropriate. Defendant also informed Gale that the transaction in
question was processed electronically and that Defendant does not review
them for dates of authorization because the authorization is granted by
the consumer to the creditor. Defendant had no way of knowing about the
delay in the transaction until it was brought to the Defendant's
attention, and it conducted an investigation.
Defendant argues that Gale's Complaint should be dismissed because it
fails to state a claim, In response, Gale argues that the funds were not
timely transferred. Section 1693h states that a financial institute is
liable for damages proximately caused by the financial institution's
failure to make an electronic fund transfer in a timely manner when
properly instructed to do so by the consumer. 15 U.S.C. § 1693h. In
his Amended Complaint, Gale alleges that he made a request to Defendant
to transfer funds to a merchant in December 2001 and that Defendant did
not make such transfer. Subsequently, Defendant received a request for
transfer of funds in April 2002 to the same merchant; this transfer was
made. These allegations support Gale's claim under Section 1693h.
However, the exhibits that Gale attached to his Complaint negate these
allegations. If a plaintiff attaches documents to his complaint and
relies upon such documents for the basis of his claim or part of a claim,
dismissal is appropriate if the documents
negate the claim. See Thompson v. Illinois Dept. of Prof'l
Regulation, 300 F.3d 750, 754 (7th Cir. 2002).
The exhibits attached to Gale's Complaint show that Defendant was not
made aware of the transaction between Gale and the merchant until April
2002. At that time, Defendant had no knowledge that the actual
transaction took place in December 2001 and that the merchant was tardy
in submitting the authorized purchase. Upon Gale's notification of the
delay, the Defendant immediately undertook an investigation and credited
Gale's account the disputed amount and all fees associated with the
transaction. Defendant also timely responded to all of Gale's inquiries
as well as Gale's complaint to the FDIC. These exhibits negate Gale's
claim that Defendant was aware of the request to transfer funds in
December 2001 and that it failed to process such transaction. They also
negate that Defendant failed to timely transfer funds after receiving an
authorized request for such transfer. The Defendant was unaware of the
delay in the merchant's submission of the transaction and was unable to
have knowledge of the delay absent notification by Gale and the
undertaking of an investigation. Accordingly, Gale has not stated a claim
under Section 1693h.
Gale also alleges that the Defendant failed to provide proof of records
of its investigation.
The exhibits attached to Gale's Complaint negate these allegations. The
Defendant made a timely investigation and provided Gale with the
information known to it Defendant assisted Gale in further investigating
the transaction by providing explanations of how debit card transactions
proceed and information about VISA. Furthermore, the April request for a
transfer of funds was authorized by Gale. It was authorized in December
2001 but not submitted to Defendant until April 2002.
Lastly, Gale argues that Defendant's actions caused harm to Gale's
credit rating. There are no allegations in the Amended Complaint that
Defendant's actions harmed Gale's credit rating. Gale cannot amend his
complaint via a response to a motion to dismiss. See Car Carriers,
Inc. v. Ford Motor Co., 745 F.2d 1101, 1107 (7th Cir. 1984).
For the foregoing reasons, Gale's Amended Complaint fails to plead a
cause of action. Accordingly, Defendant's Motion to Dismiss is granted;
and Gale's Amended Complaint is dismissed without prejudice. Gale is
granted leave to file an amended complaint, if any, within twenty-eight
days of this Order only if he can do so consistent with his obligations
under Fed.R.Civ.Proc. 11. In light of this ruling, Defendant's Motion
to Strike, is denied as moot.