United States District Court, S.D. West Virginia, Huntington Division
R. R. FREDEKING, II and DEBBIE FREDEKING, Plaintiffs,
JPMORGAN CHASE BANK, N.A., Defendant.
MEMORANDUM OPINION AND ORDER
C. CHAMBERS, UNITED STATES DISTRICT JUDGE.
before the Court are three motions for partial summary
judgment. ECF Nos. 105, 107, 110. For the foregoing reasons,
the Court finds the following: for Defendant's Motion for
Partial Summary Judgment on Counts One and Two (ECF No. 107),
the Court GRANTS IN PART,
DISMISSES Count Two in its entirety and
Debbie Fredeking as a Plaintiff from Count One of the
Complaint, and DENIES IN PART for the
remainder; for Defendant's Motion for Partial Summary
Judgment on Count Three (ECF No. 105), the Court
GRANTS IN PART, DISMISSES
Debbie Fredeking as a Plaintiff in Count Three of the
Complaint and all claims under West Virginia Code Articles
Six and Seven, and DENIES IN PART for the
remainder; for Plaintiffs' Motion for Partial Summary
Judgment (ECF No. 110), the Court DENIES the
April 13, 2016, Plaintiff R. R. Fredeking, II (“Mr.
Fredeking”) signed a rental contract with Rainbow
Rentals for the use of a boat while in the Bahamas.
Rental Agreement, ECF No. 107-1; R. R. Fredeking
Depo., p. 147, ECF. 107-2. In the Agreement, Mr.
Fredeking assumed total responsibility “for damage to
the boat or loss of any items.” Rental
Agreement, ¶ 10. After signing the Rental
Agreement, Mr. Fredeking signed a credit card authorization
slip. R. R. Fredeking Depo., at 29-30. Mr. Fredeking
claims he was told the slip was an authorization for a charge
up to $2500.00 and he would only need to cover the insurance
deductible in the event of any damage or loss. Id.
at 33. Mr. Fredeking did not read the contract and does not
recall the written amount on the credit card authorization
slip. Id. at 29-33.
boat was rented with a credit card issued by Defendant Chase
Bank USA, N.A. (“Chase”). Compl., ¶
12, ECF No. 1-1; First Interrog., pp. 3-4, ECF No.
107-4. This credit card account is governed by the Cardmember
Agreement between Mr. Fredeking and Chase, and serves as the
basis for the breach of contract claim. Compl.,
¶ 8; R. R. Fredeking Depo., at 143. The
Cardmember Agreement imposes a “credit line”, or
“credit limit”, but any charges that exceed the
credit line may be allowed by Chase. Cardmember
Agreement, p. 1, ECF No. 107-9. The Cardmember Agreement
envisions a class of persons, “authorized users”,
who may have access to the line of credit created by the
Agreement, but explicitly states the primary cardmember is
solely responsible for all authorized users' charges to
the account. In the event a cardmember disputes a
charge that appears on the billing statement, the cardmember
can contact Chase, which will trigger an investigation by
Chase. Id. at 4. If Chase believes there
was no error in processing the disputed charge, the
cardmember is obligated to pay the disputed amount.
the course of Mr. Fredeking's rental period, the boat
rented from Rainbow Rentals was stolen. R. R. Fredeking
Depo, at 30. Mr. Fredeking's Chase credit card was
charged separate transactions of $2500.00 and $60, 931.00 by
Rainbow Rentals on April 18, 2016. Billing
Statements, pp. 22, 25, ECF No. 114-1. On the same day,
Chase received a fraud claim from Plaintiffs regarding the
$60, 931.00 charge with Rainbow Rentals. O'Malley
Depo., p. 52, ECF No. 114-4. The account used in the
transaction was closed and Mr. Fredeking was sent a letter
dated April 24, 2016, from Chase's Fraud Department
notifying him of the investigation. Chase Letters,
p. 3, ECF No. 107-11. This included a summary of the disputed
charges, which listed both the $2500.00 and the $60, 931.00
charges by Rainbow Rentals. Id.
Chase conducted an investigation involving several members of
their Fraud Department. An initial investigation was
conducted by Kirill Grinash, who determined the charge was
valid on June 6, 2016. Grinash Rebill, ECF No.
114-6. The basis for this conclusion was Mr. Fredeking's
past business with Rainbow Rentals, the existence of a valid
rental contract, and the admission that the boat was stolen
during the course of its rental. Id. This report was
reviewed by Tracey Dowdle, who sent the report back to Mr.
Grinash because Mr. Fredeking had not been reached by phone
during the investigation. Id. However, reaching a
customer by phone is not determinative of the outcome of a
fraud investigation. Grinash Depo., p. 115, ECF No.
fraud investigation continued when the claim was reviewed by
Tracie Olson. Olsen Rebill, ECF No. 114-9. Ms. Olson
did not make contact Mr. Fredeking during her investigation.
Id.; Pl. Mem. Sup. Summ. J., at 3. On June
20, 2016, she determined the charge was valid based on the
cardmember's history with Rainbow Rentals and a match
between the signature on the charge slip and the one Chase
had on file for Mr. Fredeking. Id.; see also
Charge Slip, ECF No. 114-1. Ms. Olson was assisted by
Ms. Jody Casas during this review. Casas Depo., p.
40, ECF No. 114-8. After their determination, the dispute was
moved from the Fraud Department to the Merchant Dispute
Department, based on the admission that Mr. Fredeking
participated in the transaction. Id. at 17.
22, 2016, Mr. Fredeking's Chase account was again billed
for the disputed $60, 931.00. Billing Statements, at
25. In response, Mr. Fredeking called Chase and stated that
he spoke with Chase employees “Beverly” and
“Ray” to further dispute this charge. R. R.
Fredeking Depo., at 119. Mr. Fredeking followed up with
a letter to Chase dated July 1, 2016. In it, he outlined that
he had only authorized a charge to cover the cost of the
rental and a charge of $2500.00 to cover the insurance
deductible, which would be refunded once the boat was
returned. July 1 Letter, p. 1, ECF No.
115-11. Mr. Fredeking's letter further stated
he had become aware of Ms. Casas billing dispute review
through a conversation she had with Ms. Fredeking.
Id. It appears that no conversations took place
between the Chase Fraud investigators and the Fredekings.
Subsequently, Mr. Fredeking received a letter dated July 8,
2016 that Chase's Fraud Department determined both the
charges of $2500.00 and $60, 931.00 were valid. Chase
Letters, at 6. Beside each listed charge the letter
stated that “[Mr. Fredeking] notified [Chase] that this
transaction is valid.” Id. Chase claims Mr.
Fredeking provided notice that these charges were valid
because of the contract between him and Rainbow Rentals.
O'Malley Depo., at 54. However, Chase submitted
no evidence that it ever talked directly to the merchant, or
anyone else, about Mr. Fredeking's alleged oral
modification of the Rental Agreement, limiting his liability
to the $2500 deductible.
18, 2016, the Merchant Disputes Department also determined
the charge was valid on the basis of the Rental Agreement.
Stump Depo., p. 86, ECF No. 114-3. In a letter dated
July 19, 2018, Chase wrote to Mr. Fredeking and notified him
of its determination of the validity of the $60, 931.00
charge. Chase Letters, at 7. In that letter, Chase
told Mr. Fredeking it had “requested additional
information so that [Chase] could move forward with [its]
review, but [Chase] ha[d]n't received that information to
date.” Id. However, the Merchant Disputes
Department had not actually requested any additional
information. Stump Depo., at 108.
present action was filed in the Circuit Court of Cabell
County on November 9, 2016 and removed to this Court on
December 21, 2016. Notice of Removal, ECF No. 1. In
their Complaint, Plaintiffs allege common law breach of
contract based on the Cardmember Agreement, request a
declaratory judgment stating the charge itself is invalid,
and claim violations of the West Virginia Consumer Credit
Protection Act (“WVCCPA”). Compl., at
4-7. All of the instant motions for summary judgment were
filed on November 21, 2018. ECF Nos. 105, 107, 110.
obtain summary judgment, the moving party must show there is
no genuine issue as to any material fact and the movant is
entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a).
In considering this motion, the Court will not “weigh
the evidence and determine the truth of the matter[.]”
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249
(1986). Instead, the Court will draw any permissible
inference from the underlying facts in the light most
favorable to the nonmoving party. Matsushita Elec. Indus.
Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587-88
the Court will view all underlying facts and inferences in
the light most favorable to the nonmoving party, the
nonmoving party nonetheless must offer some “concrete
evidence from which a reasonable juror could return a verdict
in his [or her] favor[.]” Anderson, 477 U.S.
Summary judgment is appropriate when the nonmoving party has
the burden of proof on an essential element of his or her
case and does not make, after adequate time for discovery, a
showing sufficient to establish that element. Celotex
Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). The
nonmoving party must satisfy this burden of proof by offering
more than a mere “scintilla of evidence” in
support of his or her position. Anderson, 477 U.S.
their motion, Plaintiffs request the Court grant partial
summary judgment on the claims in Counts One and Three.
Pl. Mot. Part. Summ. J., p. 1, ECF No. 110.
Conversely, Chase's bifurcated motions cumulatively seek
summary judgment on all three counts and raise the issue of
standing as to Plaintiff Debbie Fredeking (“Ms.
Fredeking”) for the breach of contract claim, as well
as both Plaintiffs' standing to raise claims under the
WVCCPA. Def. Mot. Part. Summ. J. I, p. 1-3, ECF No.
107; Def. Mot. Part. Summ. J. II, p. 1-2, ECF No.
105. For the sake of comprehensibility, the Court will first
address the issues of standing, followed by the arguments on
each of the counts alleged in the Complaint.
supporting memoranda, Chase challenges the standing of Ms.
Fredeking on the breach of contract claim, as well as both of
the Plaintiffs' standing to bring a claim under the
WVCCPA. Def. Mem. Supp. Summ. J. I, pp. 3-4, ECF No.
108, ; Def. Mem. Sup. Summ. J. II, pp. 12-15, ECF
No. 106. As a threshold matter, the Court must address the
choice of law issue before determining standing. See
Felman Prod., Inc. v. Bannai, 476 F.Supp.2d 585, 586
(S.D. W.Va. 2007).
Choice of Law
exercising diversity jurisdiction, a federal district court
must apply the choice-of-law rules of the state in which it
sits.” Cavcon, Inc. v. Endress ± Hauser,
Inc., 557 F.Supp.2d 706, 719 (S.D. W.Va. 2008) (citing
Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S.
487, 496 (1941). Accordingly, the conflicts rules of West
Virginia apply here.
West Virginia courts are deferential to the choice of law
provision in a contract. However, “[a] choice of law
provision in a contract will not be given effect when the
contract bears no substantial relationship with the
jurisdiction whose laws the parties have chosen to govern the
agreement, or when the application of that law would offend
the public policy of this state.” General Electric
Company v. Keyser, 275 S.E.2d 289, Syl. Pt. 1 ( W.Va.
1981). Here, the Cardmember Agreement calls for Delaware law
to apply. Cardmember Agreement, at 4. Chase is a
Delaware corporation and neither party has made a challenge
on the basis of public policy. Notice of Removal,
¶ 12. As such, the Court finds Delaware law applies to
the breach of contract claim.
claims under the WVCCPA are alleged as independent causes of
action and seek remedy for conduct after the breach.
Compl., ¶¶ 35-42. Since Plaintiffs argue
their WVCCPA claims as independent state law violations, they
are construed under West Virginia law. See Bishop v.
Ocwen Loan Servicing, LLC, No. 3:10-CV-0468, 2010 WL
4115463, at *7 (S.D. W.Va. July 9, 2013) (holding that claims
under the WVCCPA can be pleaded as remedies in contract law
or independent causes of action); compare Harrison v. PNC
Bank, Nat. Ass'n, No. 3:13-19944, 2015 WL 2171632
(S.D. W.Va. May 8, 2015) (granting summary judgment for the
defendant on WVCCPA claims that a loan contract was
unconscionable, because Ohio law governed the loan).
Standing - ...