STAR FINANCIAL SERVICES, INCORPORATED, doing business as Advanced ATM Services, Plaintiff - Appellant
CARDTRONICS USA, INCORPORATED, Defendant-Appellee
from the United States District Court for the Eastern
District of Louisiana
HIGGINBOTHAM, JONES, and GRAVES, Circuit Judges.
Star Financial Services, Inc., an ATM operator, having
executed a contract with Defendant Cardtronics, USA, Inc. in
which Cardtronics agreed to process the electronic transfer
of funds associated with operating ATMs, initiated this
breach-of-contract action alleging that Cardtronics failed to
correct certain account information-an error that resulted in
approximately $250, 000 of misdirected funds. The district
court granted summary judgment in favor of Cardtronics,
finding that Star Financial failed to establish that
Cardtronics had an obligation under the contract to correct
the specified account information. We reverse and remand.
Financial operates a large network of ATMs,
("Terminals"), in Maryland, the District of
Columbia, and Virginia. In February 2012, Star Financial
executed an agreement, (the "Contract"), with ATM
Deployer Services, LLC-succeeded by Columbus Data Services
and subsequently Cardtronics by merger-to process the
electronic transfer of funds associated with operating ATMs.
commence, a Star Financial ATM must be "set up" in
Cardtronics's system. This requires Star Financial to
provide Cardtronics with a "Terminal Set-up Form, "
through which Star Financial, among other things, designates
a bank account into which Cardtronics is to credit amounts
withdrawn from a particular terminal. When a customer
withdraws cash from a Star Financial ATM, Cardtronics debits
the amount withdrawn from the customer's bank account and
then credits that amount back to the account that Star
Financial designated on the Terminal Set-up Form. Star
Financial designates its "Settlement Account" as
the bank account for Star Financial-funded ATMs.
Contract captures this process in sections 2.1, 4.1, and 4.2.
Section 2.1 sets forth the services that Cardtronics provides
to Star Financial. Section 4.1 explains Star Financial's
obligation to provide Cardtronics with a Terminal Set-up Form
[Star Financial] shall provide [Cardtronics] with a fully and
accurately completed . . . Terminal Set-up Form . . . for
each Terminal subject to this Agreement prior to the date on
which Services are to commence . . . [Star Financial]
represents and warrants that all information in each . . .
Terminal Set-up Form . . . shall be correct and complete.
[Star Financial] must immediately notify [Cardtronics] in
writing of any change in the information set forth in a
Terminal Set-up Form . . . .
section 4.2 places the "responsibility" on Star
Financial to "verify that all information contained in a
Terminal Set-up Form . . . is correct and complete."
August 19, 2015, Star Financial submitted Terminal Set-up
Forms for three ATMs-Terminals A282694, A282696, and
A282697-to be activated on November 1, 2015. When filling out
the Terminal Set-up Forms, Star Financial mistakenly
designated an account for a merchant-owned ATM belonging to
third-party DC Stars, LLC, rather than Star Financial's
Settlement Account. The next day, Star Financial notified
Cardtronics of its mistake and provided updated Terminal
Set-up Forms with the correct account number for all three
terminals. Cardtronics confirmed receipt of the updated
Terminal Set-up Forms but only corrected the account
information for Terminal A282697. Consequently, Cardtronics
credited amounts withdrawn from Terminals A282694 and A282696
to DC Stars's account, rather than to Star
Financial's Settlement Account.
March 17, 2016, Star Financial noticed an abnormal shortage
of funds in its Settlement Account. Using Cardtronics's
web portal, Star Financial learned that Cardtronics's
failure to correct the account information for Terminals
A282694 and A282696 caused that shortage and misdirected
$250, 900 to DC Stars's account. Within twenty-four hours
of this discovery, Star Financial notified Cardtronics of the
error. Star Financial recovered $95, 163.69 from DC Stars but
has not recovered the remaining $155, 736.32.
Financial sued to recover the remaining funds from
Cardtronics, alleging, among other things, that Cardtronics
breached its obligations under the Contract "when it
failed to correct the account information of Terminals
A282694 and A282696, and when it failed to reimburse Star
Financial for the resulting misdirected funds." Shortly
thereafter, the ...