Kelly v. Community Bank N.A.

MEMORANDUM DECISION AND ORDER I. INTRODUCTION   Plaintiff, Charles Kelly (“Plaintiff”), an account-holder at Community Bank, commenced this putative class action on July 26, 2019, alleging multiple causes of action stemming from Community Bank’s policy and practice regarding the assessment of overdraft fees and insufficient funds fees (collectively referred to as “overdraft fees”). See Dkt. No. 1 at 21-22. On November 11, 2019, Defendant Community Bank, N.A. (“Defendant” or “the Bank”), filed a motion to dismiss pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure. See Dkt. No. 35. Plaintiff opposed Defendant’s motion to dismiss and filed a cross-motion to amend his complaint, submitting a proposed amended complaint in support of his motion. See Dkt. No. 39. Presently before the Court is Defendant’s motion to dismiss the complaint in its entirety and Plaintiff’s cross-motion to amend his complaint. See Dkt. Nos. 35, 39. II. BACKGROUND In his original complaint, Plaintiff alleged two causes of action: (1) breach of contract and breach of the covenant of good faith and fair dealing, and (2) violations of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (the “UTPCPL”). See Dkt. No. 1 at 21-22. Plaintiff seeks to amend the complaint to include two additional named plaintiffs, Tina Thompson (“Ms. Thompson”) and Scott Doxey (“Mr. Doxey”), include allegations regarding overdraft fees on so-called “phantom transactions,” bring a claim under the New York General Business Law, and add a class and subclass. See Dkt. No. 39-1. Both Plaintiff Kelly and the proposed Plaintiffs allege that they hold accounts with the Bank which are governed by the Account Agreement, Overdraft Practices Disclosure, and Electronic Fund Transfer Act Disclosure.¹ See Dkt. No. 39-1 at

9-11; Dkt. No. 39-2. The claims in the proposed amended complaint are based on the theory that Defendant breached the Account Agreements by (1) assessing overdraft fees on debit card transactions that were authorized when the account holder’s balance was positive but settled when the available balance was negative (“APPSN transactions”), (2) assessing overdraft fees on transfers from one account with the Bank to another (“intrabank transfers”), and (3) assessing overdraft fees on micro-deposit verification transactions, or so-called “phantom transactions.” See Dkt. No. 39-1 at