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Claunch v. Bank of America Corporation

United States District Court, S.D. Mississippi, Southern Division

August 18, 2014




BEFORE THE COURT is a Motion for Summary Judgment [43] filed by Defendants, Bank of America Corporation ("BAC") and FIA Card Services, N.A. ("FIA"). Plaintiff Robert W. Claunch, proceeding pro se, has filed a Response [46]. Defendants filed a Supplemental Motion for Summary Judgment [48], and Plaintiff filed a Response [50] to the Supplemental Motion for Summary Judgment. Defendant filed a Rebuttal [52]. The Court, having considered the pleadings on file, the briefs and arguments of the parties, the record, and relevant legal authorities, finds that Defendants' Motion for Summary Judgment [43] and Defendants' Supplemental Motion for Summary Judgment [48] should be granted.


A. Plaintiff's Enrollment in "Credit Protection Plus"

This dispute centers on a credit card debt cancellation product called "Credit Protection Plus" ("CPP"), issued by Defendant FIA Card Services, N.A. ("FIA"). Dec. of Chambers [43-1] at p. 1, Ex. A to Defs.' Mot. for Summ. J. [43].[1] Defendant FIA is an indirect subsidiary of BAC, and is the sole issuer of CPP. Id. CPP is an "optional fee-based debt cancellation product that can cancel a card holder's obligation to make minimum payments in whole or in part in the event of certain contingencies described in the plan." Id. at p. 2. These contingencies may include hospitalization, disability, involuntary unemployment, death, or other life events. Id. FIA charges a monthly fee for enrollment in the plan, which is calculated based upon a percentage of the customer's outstanding credit card loan balance. Id. Plaintiff Robert W. Claunch is the holder of a credit card account issued by FIA (the "7020 account") and is listed as an authorized user on the account of his wife, Ms. Louise Claunch (the "1215 account"). Id. Both of these accounts were enrolled in CPP. The 7020 account was enrolled in CPP in the period between October 3, 2007, and October 29, 2007. Id. The 1215 account was enrolled in CPP in the period between October 3, 2007, and November 15, 2011, but was not charged any fees associated with CPP until February 7, 2011, when the account carried a balance. Id.

Plaintiff filed this lawsuit on March 19, 2012. Plaintiff alleges that Defendants "slammed" his account with CPP without his authorization. Pl.'s Am. Compl. [15] at p. 6.[2] He contends that he did not agree to purchase the "protection plan, " nor would he have qualified for CPP, as he was already "100% disabled." Id. Plaintiff claims that CPP caused his high credit score to lower in addition to negatively affecting his health and heart pacemaker. Id. at pp. 9-12.

B. Class Action Settlement

Around the time that Plaintiff filed this suit, FIA credit card holders instituted class action litigation in the United States District Court for the Northern District of California, styled In re Bank of America Credit Protection Marketing & Sales Practices Litigation, Case No. 3:11-md-02269-TEH (N.D. Cal.)("CPP class action"). The class plaintiffs alleged Defendants BAC and FIA engaged in fraudulent and unlawful conduct with regard to the Defendants' product, CPP. MDL Compl. [43-5] at pp. 1-2, Ex. E to Defs.' Mot. for Summ. J. [43]. The factual allegations included imposing Credit Protection on customers who did not approve of the charge ("slamming") and fraudulently enrolling costumers in the program for whom the product is "virtually worthless." Id. at pp. 7-9. The case involved lengthy motions practice and settlement negotiations.

On January 16, 2013, the Court in the Northern District of California entered an order granting final approval of a class action settlement. MDL Final Order [43-6], Ex. F to Defs.' Mot. for Summ. J. [43]. The Court certified the class as follows:

all people in the United States who were enrolled in a Credit Protection program issued by FIA Card Services, N.A., a subsidiary of Bank of America Corporation, between January 1, 2006 and July 17, 2012. These programs include, but are not limited to: Credit Protection Plus, Cardholder Security Plan, Credit Protection Plan, Credit Protection Deluxe, and Credit Protection Fleet (collectively, "CPP").

Id. at ¶ 2.

The Court concluded that the notice procedures employed satisfied the requirements of Rule 23 of the Federal Rules of Civil Procedure, satisfied the requirements of due process, and constituted the best notice practicable under the circumstances. Id. at ¶ 7. The approved notice procedures included mailing out short-form notices of the settlement to all class members as well as publishing notice of the settlement in a national newspaper and settlement website. MDL Settlement [43-4] at pp. 8-9, Ex. D to Defs.' Mot. for Summ. J. [43]. Plaintiff and his wife were both identified as class members and were mailed notices to their most recent known mailing address between the dates of October 3, 2012, and October 29, 2012. Dec. of Wyatt [43-3] at ¶ 3-4, Ex. C to Defs.' Mot. for Summ. J. [43]. The notice provided details of the settlement and advised class members of their right to opt out of the settlement class by December 13, 2012. Id. at ¶ 4. No request for exclusion by Plaintiff or his wife was received by Defendants, and the notices were not returned as undeliverable mail. Id. at ¶ 5. Plaintiff maintains that he did not receive notice of the CPP class action until April 8, 2014. Res. [50] to Supp. Mot. for Summ. J. [48] at p. 2.[3]

As a part of the settlement order, the Court approved a release and waiver which provided that any class member who had not opted out of the class settlement and any authorized user of their account

will be deemed to have completely released and forever discharged Defendants... from any claim, right, demand, charge, complaint, action, cause of action, obligation, or liability of any and every kind, including without limitation those known and unknown from the beginning of the world until today, that arise out of common law, state law, or federal law, including but not limited to the claims asserted in the MDL litigation, whether by Constitution, statute, contract, common law, or equity, whether known or unknown, suspected or unsuspected, asserted or unasserted, foreseen or unforeseen, actual or contingent, liquidated or unliquidated, as of the Effective Date that: (a) arise out of, relate to, or are in connection with (i) any Settlement Class Member's enrollment in, (ii) ...

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