The state Supreme Court will not review a lower court’s decision
to allow a class action lawsuit accusing National Penn Bank of improperly
assessing overdraft fees. The Court let stand a ruling that found that
an updated bank account agreement without an arbitration clause replaces
an earlier agreement that required arbitration.
National Penn Bank’s request to compel arbitration was struck down
in November 2015 by a unanimous three-judge panel. The panel also rejected
the defendant’s appeal of an order overruling its demurrer on the
grounds that it did not have jurisdiction to review the matter.
The Supreme Court agreed with the lower court’s decision, pointing
out that the plain language of the 2010 updated bank account agreement
clearly indicated that it was meant to supersede the agreement from 2008,
which relied on “available balance” rather than “ledger
balance” when determining when to impose overdraft fees.
Plaintiff Jennifer Collier, represented by
Ruben Honik of Golomb & Honik, P.C., originally brought the lawsuit against the
bank over allegations that the bank improperly assessed overdraft fees
by reordering her transactions from largest to smallest. The bank argued
that the fees were properly assessed based on the 2008 agreement, but
was unable to compel arbitration based on the terms of that agreement
while the later agreement was in effect.
Judge Mary Jane Bowes also pointed out that the 2008 agreement did not
reference any particular type of bank account, as was also the case with
the 2010 agreement. Bowes agreed that the agreement applied to
any past, present, or future account with the bank.
According to Bowes, there is absolutely no suggestion that applying federal
law would remove liability from National Penn for violations of tort and
state contract law.
The Legal Intelligencer online for more information on this case.