Opinion
Civil Action No. 04-2174 (RWR).
July 5, 2005
MEMORANDUM OPINION
Plaintiff filed a complaint for breach of contract in the Superior Court for the District of Columbia. Defendant removed the action to this court and moved for summary judgment, arguing that it had acted within the express terms of the contract. Because there is no genuine issue of material fact, and the defendant is entitled to judgment as a matter of law, its motion will be granted.
BACKGROUND
Plaintiff Aliakbar Taalohi Moineddin owns and operates Alamoot Rent A Car Systems. Defendant, BA Merchant Services ("BAMS"), is in the business of processing credit card transactions for merchants. In late 2000 or early 2001, defendant and plaintiff, acting for Alamoot, entered into a contract ("the Agreement") consisting of a form Card Processing Agreement and the following additional statement signed by plaintiff:
I hereby declare that I will use the credit card terminal solely for Rental Car related business. I will not submit cards for payment for merchandise such as rugs or carpets through my Rental Car Merchant account.
The Agreement expressly provides that the merchant may be assessed a chargeback when it appears to BAMS that a sale has been transacted contrary to any of the terms of the Agreement. A chargeback is the term applied to charging the merchant the amount of the sale. The Agreement further provides that BAMS may terminate the Agreement without notice in the event of excessive chargebacks or the merchant's material default in performing or observing any term of the Agreement.
According to defendant's statement of material facts and supporting documents, Alamoot executed three specific credit card sales transactions between October 1 and October 6, 2003, in the amount of $1,100, $1,200, and $1,025.64, which related not to car rentals but to sales of computers shipped to Indonesia. These transactions resulted in chargebacks by BAMS. The amount of the chargebacks from those three transactions in early October constituted 23% of Alamoot's year-to-date processing volume. A few days later, on October 23, 2004, BAMS terminated the Agreement, which resulted in Alamoot's credit card transactions being rejected.
Plaintiff filed this complaint alleging that for unknown reasons, defendant had blocked his car rental business' credit card transaction privileges since 2003. Defendant filed a motion for summary judgment, arguing that the termination was expressly authorized by the terms of the Agreement in response to Alamoot's unauthorized transactions involving sales not related to the car rental business.
DISCUSSION
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see Aka v. Washington Hosp. Ctr., 156 F.3d 1284, 1288 (D.C. Cir. 1998). The record must be viewed in the light most favorable to the plaintiff. See Aka, 156 F.3d at 1288.
Plaintiff has not disputed any of the material facts alleged by the defendant. Under the express terms of the Agreement, plaintiff, on behalf of Alamoot, had agreed to restrict the use of the credit card terminal to transactions involving his car rental business and not to execute any credit card transactions except in accordance with the provisions of the Agreement. The three transactions involving sales of computers shipped to Indonesia, which were not related to the car rental business, violated the express terms of the Agreement, and each violation constituted a default of the Agreement for which termination without notice is expressly authorized. In addition, BAMS considered the chargebacks to be excessive within the meaning of the Agreement because they equaled 23% of the merchant's year-to-date processing volume. Termination of the Agreement without notice is expressly authorized for excessive chargebacks. Thus, the merchant's conduct provided the defendant with multiple grounds for terminating the contract without notice, and defendant's termination of the Agreement was authorized by the express terms of the Agreement.
CONCLUSION
The defendant has shown by undisputed facts that it did not commit a breach of its contract with plaintiff, and that it is entitled to judgment as a matter of law. Accordingly, defendant's motion for summary judgment will be granted. A final judgment accompanies this memorandum opinion.