INDIANAPOLIS–A credit union’s “persistent disavowal” of rehearing arguments has led this state’s Supreme Court to uphold an original decision in a case involving Indiana University Credit Union and overdraft fees, according to a new report.
But the ruling comes with a caveat, the Indiana Lawyer reported.
The Indiana Supreme Court has reaffirmed its prior ruling that the credit union cannot compel arbitration in a member’s class-action.
“However, the justices left open the possibility of one day revising the standard governing the offer and acceptance of unilateral contracts between businesses and consumers,” Indiana Lawyer said in its analysis, noting that as he did in October, Justice Christopher Goff wrote for the high court in Tonia Land, individually and on behalf of all others similarly situated v. IU Credit Union, 23S-CP-115.
The Allegation
At issue is the class-action lawsuit that Tonia Land filed against IU Credit Union alleging wrongful assessment of overdraft fees, breach of contract, breach of duty of good faith and fair dealing, unjust enrichment, and a violation of Indiana’s Deceptive Consumer Sales Act, the report explained.
“The credit union moved to compel individual arbitration, arguing that Land had accepted an arbitration requirement when she did not opt out of that requirement within 30 days of receiving notice of it via email and mail,” Indiana Lawyer reported.
Earlier, the report added, the Monroe Circuit Court agreed, but the Court of Appeals of Indiana reversed. In their original opinion, the majority justices also found that the arbitration requirement was not binding, Indiana Lawyer stated.
“Even assuming Land was aware of the offer to arbitrate (which she disputes), there’s no evidence of her ‘definite and substantial’ reliance on the proposed arbitration Addendum,” Goff wrote in October, according to the Indiana Lawyer report. “In fact, by filing a class-action complaint with the trial court, Land’s actions point in the opposite direction.”
The credit union then sought rehearing, arguing that the Supreme Court failed to address certain legal authorities and arguments raised on appeal and transfer, according to Indiana Lawyer.
CU ‘Faulted the Court’
Indiana Lawyer noted that the credit union “faulted” the court for failing to consider those authorities in its opinion, “prompting the justices to offer some advice in a footnote.”
“While we appreciate vigorous legal advocacy,” the footnote states, “we strongly caution IUCU’s counsel against the indecorous tone of argument in their rehearing petition.”
In terms of the merits of the case—and an issue that faces credit unions nationally—Indiana Lawyer noted that in a ruling by the Arizona Supreme Court, it adopted Section 3 of the Restatement of Consumer Contracts, but only as to “on-going, at-will, consumer-business relationships” that “consist of the day-to-day offer and acceptance of unilateral contracts.”
‘The Issue in This Case’
“It would certainly be fair to characterize the relationship between Land and IUCU as an ‘on-going, at-will, consumer-business relationship,’” Goff wrote. “But IUCU, in that section of its appellee’s brief referred to in its notice of additional authorities, disclaimed — repeatedly — its authority under the original agreement’s change-in-terms clauses to ‘unilaterally impose the Arbitration [Addendum] on anyone.’ Those agreements, IUCU emphasized instead, were ‘necessarily bilateral,’ and the issue in this case, IUCU insisted, was ‘whether the parties can enter into a new contractual amendment regarding arbitration by establishing the three essential elements of any contract under standard contract law — offer, acceptance, and consideration.”
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