Opinion
02-23-00311-CV
08-29-2024
The Law Office of Olu Asekun, P.C., Fairdeal Home Investment,Inc., and Olu Asekun, Appellants v. Bank of America Corporation, Appellee
On Appeal from the 236th District Court Tarrant County, Texas Trial Court No. 236-334560-22
Before Sudderth, C.J.; Birdwell and Wallach, JJ.
MEMORANDUM OPINION
WADE BIRDWELL, JUSTICE
Former customers who held accounts at a bank appeal a summary judgment in favor of the bank. At the heart of this appeal is a dispute over whether the deposit agreement executed between the customers and the bank authorized the bank to freeze (and later close) the customers' accounts without advance notice and without "a lawful court order." We hold that the deposit agreement expressly authorized the bank to freeze and close the accounts, and we affirm the summary judgment.
I. Background
Appellants The Law Office of Olu Asekun, P.C.; Fairdeal Home Investment, Inc.; and Olu Asekun had checking accounts with Appellee Bank of America, N.A. (BANA). The accounts were governed by a "Deposit Agreement and Disclosures," the terms of which Appellants had agreed to by signing a signature card for each account. The terms of the deposit agreement included specific provisions for "Account Closures, Transaction Delays and Conversions/Changes to Account Settings" and "'Freezing' [Customer's] Account and Delayed Transactions."
Appellants initially sued the wrong entity, Bank of America Corporation, which is "a holding company and the ultimate parent of [BANA], the national banking association at which [Appellants] maintained their checking accounts." Appellants' amended petition names the correct entity.
Appellants maintained their accounts with BANA for several years and used BANA's electronic bill paying service. On July 8, 2022, BANA sent an email to Appellants stating, "We're letting you know that due to changes in the status of your account(s), your Bill Pay service has been inactivated." BANA then closed Appellants' accounts effective July 11, 2022. During the closure process, BANA froze Appellants' accounts and denied certain transactions on the accounts. It is not clear from the record why BANA decided to close Appellants' accounts.
Appellants sued BANA for breach of contract, violation of the Texas Deceptive Trade Practices Act (DTPA), libel, intentional infliction of emotional distress (IIED), and unjust enrichment. According to Appellants, checks and payments they had issued on July 8, 2022, to third-party payees were returned unpaid, causing Appellants to default on certain bill payments. Appellants alleged that BANA was required to provide "at least 30 days' notice of accounts closure to be able to make alternative financial arrangement[s]" and that BANA "had no legal authority or basis to freeze [Appellants'] accounts without a lawful court order."
BANA filed a motion for traditional summary judgment asserting that the deposit agreement authorized it to close Appellants' accounts and to decline to process transactions after the account closure. In response, Appellants argued that a fact issue existed as to whether BANA had "blocked or froze[n] [their] account[s] without lawful authority." Appellants also "forcefully urged" the trial court to find that BANA had represented to third parties that it froze or blocked the accounts.
BANA subsequently filed a motion for no-evidence summary judgment. Appellants responded that the trial court should deny the no-evidence motion because the traditional motion was still pending.
The trial court heard BANA's motions and granted both a traditional and no-evidence summary judgment in favor of BANA. This appeal followed.
II. Standard of Review
When a party files both a no-evidence and a traditional motion for summary judgment, we typically address the no-evidence motion first. Ford Motor Co. v. Ridgway, 135 S.W.3d 598, 600 (Tex. 2004). Here, however, we will review the propriety of granting the traditional summary judgment first because it is dispositive of Appellants' claims. See D.R. Horton-Tex., Ltd. v. Savannah Props. Assocs., L.P., 416 S.W.3d 217, 225 n.7 (Tex. App-Fort Worth 2013, no pet.) (addressing traditional summary judgment first because movant's affirmative defense was dispositive); Reynolds v. Murphy, 188 S.W.3d 252, 258 (Tex. App.-Fort Worth 2006, pet. denied) (op. on reh'g) (reviewing propriety of grant of traditional summary judgment before that of no-evidence summary judgment "because it is dispositive of the majority of [appellant's] claims").
We review a traditional summary judgment de novo. Travelers Ins. v. Joachim, 315 S.W.3d 860, 862 (Tex. 2010). We consider the evidence presented in the light most favorable to the nonmovant, crediting evidence favorable to the nonmovant if reasonable jurors could, and disregarding evidence contrary to the nonmovant unless reasonable jurors could not. Mann Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848 (Tex. 2009). We indulge every reasonable inference and resolve any doubts in the nonmovant's favor. 20801, Inc. v. Parker, 249 S.W.3d 392, 399 (Tex. 2008). A defendant that conclusively negates at least one essential element of a plaintiff's cause of action is entitled to summary judgment on that claim. Frost Nat'l Bank v. Fernandez, 315 S.W.3d 494, 508 (Tex. 2010); see Tex. R. Civ. P. 166a(b), (c).
III. Analysis
Appellants contend that the trial court erroneously granted BANA's motions for summary judgment. All of Appellants' causes of action were predicated on the same alleged misconduct: BANA's freezing (and later closing) of Appellants' bank accounts without the authority to do so and without advance notice to Appellants.
Appellants also contend that the trial court erred by granting BANA's traditional motion for summary judgment because, according to Appellants, the motion did not address "one of the major issues of [their] claim." Because the record establishes otherwise, we reject Appellants' contention.
A. The Deposit Agreement
Appellants assert that the deposit agreement did not authorize BANA to freeze or block their bank accounts. The record, however, does not support this assertion.
A deposit agreement is enforceable as a contract between a banking institution and its customer. Am. Airlines Emps. Fed. Credit Union v. Martin, 29 S.W.3d 86, 96 (Tex. 2000). Signature cards, like those executed by Appellants, establish the contract between the parties, "regardless of whether the customer reads all the provisions to which he is agreeing." Id. When construing a contract, we must look to the language of the parties' agreement. Barrow-Shaver Res. Co. v. Carrizo Oil & Gas, Inc., 590 S.W.3d 471, 479 (Tex. 2019). We give contract terms their plain and ordinary meanings unless the contract indicates that the parties intended different meanings. Farmers Grp., Inc. v. Geter, 620 S.W.3d 702, 709 (Tex. 2021); Kachina Pipeline Co. v. Lillis, 471 S.W.3d 445, 450 (Tex. 2015) (op. on reh'g). "A contract's plain language controls, not 'what one side or the other alleges they intended to say but did not.'" Great Am. Ins. Co. v. Primo, 512 S.W.3d 890, 893 (Tex. 2017) (quoting Gilbert Tex. Constr., L.P. v. Underwriters at Lloyd's London, 327 S.W.3d 118, 127 (Tex. 2010) (op. on reh'g)). We examine the entire agreement and give effect to each provision so that none is rendered meaningless. Sundown Energy LP v. HJSA No. 3, Ltd. P'ship, 622 S.W.3d 884, 888 (Tex. 2021); Pathfinder Oil & Gas, Inc. v. Great W. Drilling, Ltd., 574 S.W.3d 882, 889 (Tex. 2019); Kachina Pipeline, 471 S.W.3d at 450.
Here, the deposit agreement includes the following relevant provisions:
You or we may close your checking or savings account at any time without advance notice, except that we may require you to give us seven days['] advance notice when you intend to close your savings or interest-bearing checking account by withdrawing your funds. . . .
. . . .
Sometimes after an account is closed, we receive a deposit for credit to the account or a check or other item for payment from the account. If this happens, we may at our option and without any liability to you: either return the deposit, check or other item; or we may reopen the account and accept the deposit, check or other item for you, even if this overdraws your account.
Sometimes after an account which had funds in it is closed, and while we are still holding the funds from the account, we receive a withdrawal request, check or other item for payment from the account. We may refuse the withdrawal request and return the check or other item. We are not liable for any losses or damage that may result from refusing the withdrawal or dishonoring the check or other item, even if we are still holding funds that would cover the withdrawal, check or other item.
. . . .
If we decide to close your account, we may freeze it. If we do this, we may in our discretion either accept or return deposits, checks and other items that we receive after we freeze your account without being liable to you.
If at any time we believe that your account may be subject to irregular, unauthorized, fraudulent or illegal activity, we may, in our discretion, freeze some or all of the funds in the account and in other accounts you maintain with us, and/or delay transactions . . . until such time as we are able to complete our investigation of the account and transactions. If we do freeze your account funds or delay transactions, we will provide notice to you as soon as reasonably possible. . . . We may not provide this notice to you prior to freezing the account or delaying transactions if we believe that such notice could result in a security risk to us or to the owner of the funds in the account.
The plain language of these provisions-not Appellants' assertion-controls. See Primo, 512 S.W.3d at 893.
Examining the entire agreement and giving effect to each provision, we conclude that the deposit agreement expressly authorized BANA to close Appellants' bank accounts without advance notice and to freeze or decline transactions on the accounts in the process.
With the plain language of the deposit agreement in mind, we review Appellants' individual claims.
B. Breach of Contract
Appellants alleged that BANA breached the deposit agreement by "failing, refusing[,] and[/]or neglecting to pay checks issued by [Appellants] when [they] had money in their account." According to Appellants, BANA was not authorized to freeze or block their bank accounts "without a lawful court order."
In its traditional motion for summary judgment, BANA argued that it was entitled to summary judgment because it did not breach the deposit agreement. Rather, the deposit agreement permitted BANA to close the accounts without advance notice and to decline, delay, reverse, or cancel transactions on the accounts after the closure process was initiated.
The deposit agreement was enforceable as a contract between BANA and Appellants. See id. By executing signature cards for each respective bank account, Appellants agreed to all the provisions in the deposit agreement, regardless of whether Appellants read them. See id. Among the deposit agreement's provisions were those authorizing BANA to close Appellants' accounts without advance notice and, during the account closure process, to freeze the accounts and return any deposits, checks, or other items. Not among the deposit agreement's provisions was the requirement that BANA obtain a court order to do so. The plain language of the deposit agreement controls. See id. Appellants have not cited any authority-and we have found none- requiring us to ignore the plain language of the deposit agreement.
While the deposit agreement also authorized BANA to freeze "some or all of the funds in the account[s]" to investigate any suspected irregular, unauthorized, fraudulent, or illegal activity, the record does not indicate, and the parties do not assert, that BANA froze Appellants' accounts for this reason. Notably, in their response to BANA's traditional motion, Appellants specifically stated that "[t]here is no fraud in [this] case." In any event, the plain language of this provision, if applicable, still would not have required BANA to obtain a court order or to provide advance notice before it froze or close Appellants' accounts. See id.
Because the deposit agreement authorized BANA, without advance notice and without a court order, to (1) close Appellants' bank accounts and (2) freeze the accounts during the account-closure process, BANA is entitled to summary judgment on Appellants' breach-of-contract claim.
C. DTPA
Under their DTPA claim, Appellants alleged that BANA "engaged in an unconscionable action" when it "froze [their] bank accounts without any court order authorizing [it] to do so" and when it "froze and later closed [the] accounts without notice."
In its traditional motion for summary judgment, BANA argued that it was entitled to summary judgment on Appellants' DTPA claim because (1) Appellants are not consumers under the DTPA and (2) even if they were consumers, BANA did not commit any act in violation of the DTPA because the deposit agreement provided BANA the authority to close Appellants' bank accounts "without any advance notice" and to "decline any transactions on the account[s] during the closure process."
Without determining whether Appellants reached consumer status under the DTPA, we conclude that their DTPA claim fails as a matter of law. The purpose of the DTPA is to "protect consumers against false, misleading, and deceptive trade practices, unconscionable actions, and breaches of warranty." Tex. Bus. & Com. Code Ann. § 17.44(a). To maintain a DTPA cause of action, the plaintiff must establish that (1) it is a consumer of the defendant's goods or services; (2) the defendant committed a false, misleading, or deceptive act in connection with the lease or sale of goods or services, breached an express or implied warranty, or engaged in an unconscionable action or course of action; and (3) such actions were the producing cause of the claimant's economic damages. Id. § 17.50(a)-(b); see Fix v. Flagstar Bank, FSB, 242 S.W.3d 147, 159 (Tex. App.-Fort Worth 2007, pet. denied).
The essence of Appellants' DTPA claim is that BANA represented to them that it would perform under the deposit agreement-by obtaining a court order and providing notice before it froze their bank accounts-and that BANA's nonperformance indicates that it had misrepresented that it would perform under the deposit agreement. The first problem with Appellants' reasoning is that, contrary to their misguided assertion, the deposit agreement contained no such provision requiring BANA either to obtain a court order or to provide advance notice before it froze or closed the accounts. Rather, the deposit agreement explicitly authorized BANA to close the accounts "at any time without advance notice" and to freeze the accounts during the closure process. Thus, as we have already concluded, BANA did not fail to perform under or otherwise breach the deposit agreement.
The second problem with Appellants' reasoning is that it "would convert every breach of contract into a DTPA claim." Crawford v. Ace Sign, Inc., 917 S.W.2d 12, 14 (Tex. 1996). Appellants cannot restructure their breach-of-contract claim into a DTPA claim because "[a]n allegation of breach of contract, without more, does not constitute a false, misleading, or deceptive act in violation of the DTPA." Canfield v. Bank One, Tex., N.A., 51 S.W.3d 828, 839 (Tex. App.-Texarkana 2001, pet. denied) (citing Crawford, 917 S.W.2d at 14). Thus, even if we were to conclude that BANA had breached the deposit agreement, a mere failure to perform a promise, without more, is not a violation of the DTPA. See Rocky Mountain Helicopters, Inc. v. Lubbock Cnty. Hosp. Dist., 987 S.W.2d 50, 53 (Tex. 1998); cf. Crawford, 917 S.W.2d at 14-15 (distinguishing representations arising outside the contract from those arising within the contract).
We conclude that BANA is entitled to summary judgment on Appellants' DTPA claim.
D. Libel
Appellants' libel claim is based on BANA's allegedly representing to third parties that Appellants' bank accounts had been frozen, which according to Appellants, "imput[ed] some wrongdoing/illegal activities to [Appellants]."
Because "libel is a defamation expressed in written or other graphic form," Tex. Civ. Prac. & Rem. Code Ann. § 73.001, we use the terms libel and defamation interchangeably.
In its traditional motion for summary judgment, BANA argued that it was entitled to summary judgment on Appellants' libel claim because the complained-of statements were true statements, which cannot form the basis of a defamation claim. Appellants' response to the motion included documents that "constitute evidence that [BANA] ha[d] been representing to third parties that it ha[d] blocked or frozen [Appellants'] bank accounts." Assuming that BANA had, in fact, communicated to Appellants' payees that certain payments were denied because Appellants' bank accounts had been frozen or blocked, Appellants cannot sustain a libel action based on these communications.
These documents appear to be various letters or notifications from other financial institutions to Appellants regarding returned payments, with each noting the return reason as "Frozen" or "Blocked" account.
To sustain a cause of action for defamation, the plaintiff must establish: (1) the defendant published a false statement about the plaintiff; (2) that was defamatory; (3) with the requisite degree of fault-negligence if the plaintiff was a private individual; and (4) damages, in some cases. Innovative Block of S. Tex., Ltd. v. Valley Builders Supply, Inc., 603 S.W.3d 409, 417 (Tex. 2020). True statements cannot form the basis of a defamation claim. Randall's Food Mkts., Inc. v. Johnson, 891 S.W.2d 640, 646 (Tex. 1995); see Tex. Civ. Prac. & Rem. Code Ann. § 73.005(a) (providing truth of published statement is defense to libel action); Mitcham v. Bd. of Regents, Univ. of Tex. Sys., 670 S.W.2d 371, 373 (Tex. App.-Texarkana 1984, no writ) (holding appellants could not sustain libel action based on statements published in university newspaper where appellants admitted that all of such published statements were true).
Here, the parties do not dispute that BANA froze Appellants' bank accounts during the account-closure process. All of Appellants' claims are based upon their own assertion that BANA froze Appellants' bank accounts "without lawful authority." If BANA communicated to third parties that Appellants' bank accounts had been frozen or blocked, those statements would be true and thus cannot form the basis of Appellants' libel claim.
In reaching this conclusion, we necessarily reject Appellants' contention that BANA's communications to third parties "imput[ed] some wrongdoing/illegal activities to [Appellants]." Nothing in the record supports this contention. BANA's statements, according to Appellants' own summary judgment evidence, merely communicated to other financial institutions that Appellants' payments had been returned due to a frozen or blocked account. BANA did not accuse Appellants of any wrongdoing or illegal activities. Cf. Randall's Food Mkts., 891 S.W.2d at 646 (holding statements that store employee left store without paying for an item were not accusations of theft or of having intent to steal); Meisel v. U.S. Bank, N.A., 396 S.W.3d 675, 679-80 (Tex. App.-Dallas 2013, no pet.) (rejecting appellant's contention that bank's statements to third party that appellant's accounts were closed for "transactions involving items or checks belonging to another party" falsely accused appellant of theft or fraud).
Because no fact issue exists on whether the complained-of statements were true, BANA is entitled to summary judgment on Appellants' libel claim.
E. IIED
Appellants asserted an IIED cause of action against BANA for the emotional distress it had caused Appellant Asekun, individually. Appellants claimed that BANA's refusing to pay Appellants' "previously issued checks" to third parties, preventing Appellants from "cashing money," and closing the bank accounts "without notice" were "extreme" and "caused [him] emotional distress."
In their brief, Appellants assert that BANA prevented Asekun from withdrawing money in person at the bank.
In its traditional motion for summary judgment, BANA argued that it was entitled to summary judgment on Appellants' IIED claim because they had failed to allege IIED facts independent of their other causes of action. Appellants did not address this argument in response to BANA's motion, nor do they address it on appeal.
IIED is considered a "gap-filler" tort that was "judicially created for the limited purpose of allowing recovery in those rare instances in which a defendant intentionally inflicts severe emotional distress in a manner so unusual that the victim has no other recognized theory of redress." Hoffman-La Roche, Inc. v. Zeltwanger, 144 S.W.3d 438, 447 (Tex. 2004) (citing Standard Fruit & Vegetable Co. v. Johnson, 985 S.W.2d 62, 68 (Tex. 1998)). IIED's "clear purpose" is "'to supplement existing forms of recovery by providing a cause of action for egregious conduct' that might otherwise go unremedied." Id. (quoting Johnson, 985 S.W.2d at 68). Thus, if the "gravamen" of a complaint is really another cause of action, IIED should not be available. Id.
Here, Appellants' IIED claim must fail because it is based on the same conduct as their other causes of action against BANA: refusing to pay checks issued by Appellants to third parties, closing Appellants' bank accounts "without notice," representing to third parties that Appellants' bank accounts had been frozen, and refusing to release Appellants' money. The gravamen of Appellants' IIED claim was therefore the same as that of their other claims, and there is no "gap" to fill. See Patel v. Patel, No. 14-18-00771-CV, 2020 WL 2120313, at *10 (Tex. App.-Houston [14th Dist.] May 5, 2020, no pet.) (mem. op.). Accordingly, we conclude that BANA is entitled to summary judgment on Appellants' IIED claim.
F. Unjust Enrichment
Appellants' unjust enrichment claim is based on the conclusory assertion that BANA "held [Appellants'] money and refused to release to [them] when [they] demanded the same."
In its traditional motion for summary judgment, BANA argued that it was entitled to summary judgment because Appellants' theory of recovery was based on the issue of account closure, which was expressly covered by the deposit agreement. Appellants did not address this argument in response to BANA's motion.
"[P]arties should be bound by their express agreements." Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 2000). When a valid, express contract covers the subject matter of the parties' dispute, there can be no recovery under a quasi-contract theory. Id. Here, the issue of BANA's freezing or closing Appellants' accounts is covered by the deposit agreement. Appellants agreed to be bound by the terms of the deposit agreement when they executed signature cards with BANA at the time that each account was opened. Recovery under a theory of unjust enrichment would be inconsistent with that express agreement. See id. Therefore, BANA is entitled to summary judgment on Appellants' unjust enrichment claim.
IV. Conclusion
Because BANA is entitled to summary judgment on all of Appellants' claims, we affirm the summary judgment.