TRAVERSE CITY — 4Front Credit Union here is seeking to have a court dismiss a court decision that it pay $1 million to John M. Floyd & Associates.
The credit union is arguing that in the litigation JMFA did not prove it deserved such a hefty payment, according to the Traverse City Record Eagle.
As CUToday.info reported here, 4Front Credit Union was ordered in March to pay $1.132 million in damages to John M. Floyd & Associates, the Texas-based provider of overdraft services to credit unions.
A jury assessed the penalty after a trial here over a contract dispute that lasted nearly a year, according to the Record Eagle. The trial followed two rounds of unsuccessful mediation.
At issue was a contract signed by the former Members First Credit Union, which merged with Bay Winds CU in 2015 to create 4Front, CEO David Leusink told the Record Eagle.
Floyd & Associates had argued that the contract was to be extended through 2017 if the credit union shared the company’s services with another entity, according to records filed in 13th Circuit Court.
“The Agreement provides that JMFA would be compensated for another 36 months beginning on the date of the merger,” the amended complaint states, the Record Eagle reported.
Floyd & Associates contended in its suit that 4Front benefitted from Floyd & Associates’ overdraft and courtesy pay program but that the credit union was not paying for them.
"To allow the jury verdict to stand would amount to a miscarriage of justice," attorneys for 4Front wrote the court, according to the Record Eagle.
4Front attorneys are calling on 13th Circuit Court Judge Kevin Elsenheimer to toss the decision and arguing the damages should be limited to $382,571. They filed a motion requesting a new trial, an overturned verdict or a ruling for reduced damages on June 7 in 13th Circuit Court, according to the publication.