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Tanya Freeman v. Wachovia Bank


February 8, 2011


On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. DC-000039-08.

Per curiam.


Submitted January 25, 2011

Before Judges Espinosa and Skillman.

This case, involving plaintiff's attempt to recover an unauthorized $757.50 deduction from her debit card account by defendant Wachovia Bank, is before us for the second time.

Plaintiff used her debit card to pay an $800 deposit for the rental of a limousine from Bergen Limousine Company (Bergen Limo) for her son's prom. Plaintiff's contract provided for payment of the balance of the price for the rental in cash.

The prom was held on a hot night in late May 2007, and the limousine that Bergen Limo sent to plaintiff's home was not air conditioned. Although Bergen Limo provided approximately one hour of service to plaintiff by driving her son and his date to the prom in Staten Island, plaintiff terminated her contract with Bergen Limo at that point because the limousine was uncomfortably hot, and she hired another limousine company to drive her son and his date for the remainder of the evening.

Although plaintiff never authorized Bergen Limo to make any additional charges on her Wachovia debit card, Bergen Limo charged the $757.50 balance of the price for rental of the limousine to the debit card plaintiff had used for the $800 deposit. Plaintiff protested this charge, and Wachovia provisionally credited plaintiff's account while the bank researched the disputed transaction. However, in a subsequent letter dated September 19, 2007, Wachovia advised plaintiff as follows:

After researching your dispute further, we have determined that no error occurred to your account because the merchant was willing and able to provide the service.

You decided to cancel after the merchant arrived therefore resulting in no refund being due. It will now be necessary to redebit your account five business days from the date of this notification.

Thus, even though Wachovia's investigation failed to ascertain that Bergen Limo was authorized to charge the sum of $757.50 to plaintiff's debit card, Wachovia removed this sum from plaintiff's checking account because it concluded that she was liable to Bergen Limo for that amount.

Plaintiff filed a multi-count complaint against Wachovia. Plaintiff's complaint alleged that she "did not authorize the [$757.50 charge to her debit account] at any point." Plaintiff's complaint also asserted a claim under the Consumer Fraud Act, N.J.S.A. 56:8-1 to -20, for which she sought treble damages and attorney's fees, and a claim for gross negligence, for which she sought both compensatory and punitive damages.

The case was tried in a bench trial, which resulted in a judgment dismissing plaintiff's complaint.

On appeal, we reversed in a short unpublished opinion. Freeman v. Wachovia Bank, No. A-5290-07T2 (June 4, 2009). Our opinion concluded: "[T]he record does not support the trial court's finding that the second payment to Bergen Limo in the amount of $757.50 was authorized." Based on this conclusion, we reversed and remanded to the trial court "for further proceedings consistent with this opinion."

On the remand, the trial court conducted a second trial at which plaintiff gave substantially the same testimony as at the first trial. In addition, Wachovia presented as a witness a bank employee who had not testified at the first trial.

The trial court decided the case by a written opinion. Apparently recognizing that it was bound by the determination in our prior opinion that the record in the first trial did not support its finding that "the second payment to Bergen Limo was authorized," the court found that "the second debit was unauthorized in the sense that Freeman did not grant actual authority to Bergen Limo to charge her the $757.50 balance." Nevertheless, the court entered judgment dismissing plaintiff's complaint because plaintiff failed to show that Wachovia was negligent in its investigation of the contractual dispute between plaintiff and Bergen Limo. The court also concluded that plaintiff had failed to prove a cause of action under the Consumer Fraud Act or the Electronic Funds Transfer Act, 15 U.S.C.A. § 1693g(a).

Plaintiff again appeals. We reverse the judgment of no cause of action for plaintiff's claim based on Wachovia's charging of her account $757.50 for an unauthorized transaction. We affirm the dismissal of plaintiff's other claims.

The relationship between a bank and one of its depositors is contractual. See Lor-Mar/Toto, Inc. v. 1st Constitution Bank, 376 N.J. Super. 520, 536 (App. Div. 2005). Plaintiff signed a debit card agreement under which she agreed that Wachovia could make deductions from her checking account for any "authorized transaction." Thus, Wachovia's right to make a deduction from plaintiff's account was wholly dependent on whether a particular transaction was "authorized." In the absence of a showing of an authorized charge, Wachovia had no right to debit plaintiff's account based on its finding that she owes money to Bergen Limo.

We concluded in our original opinion that Bergen Limo's $757.50 charge to plaintiff's debit card for the additional amount it claimed to be owed was "unauthorized." It follows that Wachovia breached the debit card agreement with plaintiff in charging that $757.50 to her account and that she is entitled to judgment against Wachovia in that amount. The trial court correctly concluded that plaintiff's proofs did not establish any of her other claims.

Accordingly, we reverse the part of the judgment that dismissed plaintiff's breach of contract claim and remand for entry of a judgment in her favor for $757.50 plus costs. We affirm the dismissal of plaintiff's other claims.


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