United States Court of Appeals

For the Seventh Circuit

Chicago, Illinois  60604

Argued December 16, 2008

Decided February 20, 2009

Before

TERENCE T. EVANS, Circuit Judge

ANN CLAIRE WILLIAMS, Circuit Judge

DIANE S. SYKES, Circuit Judge

No. 08‐2217 Appeal from the

United States District Court

DONALD ASHER, for the Northern District of Illinois,

Plaintiff‐Appellant, Eastern Division.

v. No. 05 C 6225

CHASE BANK USA, N.A., Elaine E. Bucklo,

Defendant‐Appellee. Judge.

ORDER

Donald Asher’s personal secretary used her position to incur and conceal fraudulent

charges on Asher’s credit card over the course of three years during which Asher paid his

bills in full.  When he discovered the fraud and asked for reimbursement from Chase Bank,

which issued the credit card, Chase eventually refused after a lengthy investigation.  Asher

sued Chase approximately eighteen months after discovering the fraud and eight months

after receiving final notice that Chase would not reimburse him.  Asher claimed that the

bank’s refusal to repay him violated the Truth in Lending Act and, as the district court

understood his complaint, constituted a breach of his cardholder agreement with Chase.

The district court granted summary judgment for Chase, reasoning that the federal statutory

claim was barred by the relevant statute of limitations and the state‐law contract claim

NONPRECEDENTIAL DISPOSITION

To be cited only in accordance with

Fed. R. App. P. 32.1
No. 08‐2217                                                                                                                             Page 2

lacked evidentiary support.  Asher appeals.  Although the district court’s statute‐of‐

limitations analysis is questionable, we affirm the judgment because a jury could not

reasonably find for Asher on either his federal or his state claim.

I. Background

For over twenty years, Asher employed Carol MacKenzie as a secretary for his

family and the family business.  He gave her the responsibility of preparing his credit‐card

statements for his review, including the statements for a VISA card issued by Chase (the

card initially was issued by another bank and through a succession of ownership changes,

was reissued by Bank One and then by Chase).  If McKenzie possessed receipts for

individual charges appearing on the statements, she was to attach them and draw a line

through the corresponding entry on the statement so that Asher could focus his review on

those charges MacKenzie had not substantiated.  When she presented the statements to

Asher, MacKenzie also prepared a check in the amount of the bill for Asher to sign or, more

frequently, for his mother or brother to sign on his behalf.  MacKenzie abused her position

by using the Chase VISA account number to incur fraudulent charges and then crossing out

those entries on the corresponding statements in hopes that Asher would not notice them.

Specifically, MacKenzie had opened a sign‐making business, A Sign of the Tymes, which

she was running out of her house.  She had entered into a merchant agreement with

PMT/Imperial Bank that allowed her to accept credit cards in payment for her signs, and in

2001 she began posting fictitious charges from Tymes to Asher’s card as though he was

buying signs from her company.  She did not create receipts for these transactions, but

Asher did not question her about them.  Asher paid his bills in full and did not discover the

charges until 2004, by which time MacKenzie had collected $77,655.  The most recent

charges were incurred just days before Asher discovered the fraud.

Asher got wind of MacKenzie’s fraud in March 2004 when Chase (at that time the

card issuer was still Bank One, but for simplicity we use “Chase” throughout) notified him

about “excessive charges” on his account.  Asher then reviewed his prior statements and

discovered the Tymes charges going back to 2001.  He notified Chase about the fraudulent

charges, and by letter dated March 8, 2004, Chase acknowledged his fraud claim.  Asher

fired MacKenzie on March 23.

The following month Chase notified Asher that it would not reimburse him because

after investigating his fraud claim, the bank had concluded that he was liable for the Tymes

charges.  But when Asher protested, Chase continued to evaluate his claim and on

September 15, 2004, requested that he provide another affidavit of fraud.  Finally, in a letter
No. 08‐2217                                                                                                                             Page 3

dated October 15, 2004, but apparently postmarked January 28, 2005, Chase gave final

notice that it considered Asher liable for the Tymes charges.  Chase had previously credited

Asher’s account $16,785 as partial reimbursement for the Tymes charges, so it rebilled those

transactions on his statement for the period ending in February 2005, for which payment

was due on March 14, 2005.

In September 2005 Asher filed suit in state court against Chase and MacKenzie, and

the following month the bank removed the action to federal court.  MacKenzie later pleaded

guilty to state theft charges and was dropped from the lawsuit.  In Count I of his complaint,

Asher claimed that by refusing to reimburse him, Chase had violated the Truth in Lending

Act (“TILA”), 15 U.S.C. §§ 1601‐1667f, which provides in relevant part that “a cardholder

incurs no liability from the unauthorized use of a credit card” beyond at most $50.

Id. § 1643.  In Count II of his complaint, Asher alleged that Chase had “contracted and

agreed with Plaintiff that it would only pay and allow payments on charges and

applications for reimbursement in accord with the authority set forth in the credit card

agreements.”  He claimed that the bank had “breached its duty to the Plaintiff” by allowing

his VISA account to be charged for forged applications for payment, and by failing “to

determine the authority by which fraudulent charges and applications for payments were

allowed to be made.”

In October 2007 Chase moved for summary judgment.  The bank, however, ignored

Count II of Asher’s complaint and addressed its motion solely to his TILA claim.  As to that

claim, Chase first asserted that it was untimely under 15 U.S.C. § 1640(e), which provides

that a civil action alleging a violation of TILA must be brought “within one year from the

date of the occurrence of the violation.”  The “occurrence of the violation,” Chase argued, is

the date on which a card issuer “consummates” an allegedly unauthorized charge by

posting it to the cardholder’s account.  It follows, Chase reasoned, that Asher’s claim was

too late because all of the Tymes charges were processed more than a year before he filed

suit.  Alternatively, Chase argued that Asher’s claim would fail on the merits because

according to the bank, the charges made by MacKenzie were not “unauthorized.”  For

purposes of § 1643, TILA defines “unauthorized use” of a credit card as use “by a person

other than the cardholder who does not have actual, implied, or apparent authority for such

use and from which the cardholder receives no benefit.”  15 U.S.C. § 1602(o).  The use of

Asher’s account by MacKenzie, the bank asserted, was not “unauthorized” because Asher’s

repeated payments of her transactions evidenced her apparent authority to charge

purchases to the account.

The district court agreed with Chase’s statute‐of‐limitations argument and did not

discuss the merits.  The court reasoned, without citing authority, that the limitations period

for the § 1643 claim began to run at the time of the transactions or, at the latest, when Asher
No. 08‐2217                                                                                                                             Page 4

discovered the fraudulent Tymes charges in March 2004.  Either way, the court continued,

Asher’s claim under TILA was untimely because he did not file suit until September 2005.

In reaching this conclusion, the court apparently overlooked Asher’s contention that his

claim under § 1643 did not even accrue until early 2005 when Chase definitively rejected his

claim for reimbursement.  And although its reasoning is difficult to discern, the court also

rejected Asher’s contention that principles of equitable tolling or equitable estoppel

rendered his TILA claim timely.

As for Count II of the complaint, however, the district court noted that Chase had

said nothing about it in its motion for summary judgment.  Chase then moved for summary

judgment on Count II, which it characterized as a claim for breach of the cardholder

agreement between Chase and Asher.  Asher asked for and received more time to respond,

but he did not assert by affidavit, see FED. R. CIV. P. 56(f), that he needed additional

discovery.  He then responded to Chase’s motion and filed his own cross‐motion for

summary judgment, arguing in both submissions that Chase had breached not only the

cardholder agreement (which according to Asher the bank had refused to produce) but also

agreements between VISA and the bank that, in Asher’s view, gave him rights as a third‐

party beneficiary.  The district court once again granted summary judgment for Chase,

explaining that Asher could not prove a breach of contract because he “concedes” that he

“failed to provide copies of any agreement or other record to support the alleged contract.”

The court did not specifically mention Asher’s theory that he was a third‐party beneficiary

of agreements between VISA and Chase.

II. Discussion

A.  TILA Statute of Limitations

Asher argues that the district court improperly granted summary judgment on his

TILA claim because, he contends, the court erred in determining when the claim accrued

and should have applied tolling doctrines.  The district court proposed two possible accrual

dates—the time of the transactions or when Asher discovered them—but concluded that

both were outside the limitations period.  The court also rejected Asher’s tolling theories.

Although the Truth in Lending Act does not state explicitly that a cardholder can

bring a suit claiming a violation of 15 U.S.C. § 1643, the majority of other circuit and district

courts faced with such a claim have assumed, on similar facts, the existence of a cardholder

claim under § 1643.  See DBI Architects, P.C. v. Am. Express Travel‐Related Servs. Co., 388 F.3d

886, 892‐93 (D.C. Cir. 2004) (implicitly recognizing § 1643 claim by cardholder); Minskoff v.
No. 08‐2217                                                                                                                             Page 5

1 Our opinion in Lawyers Title Ins. Corp. v. Dearborn Title Corp., 118 F.3d 1157, 1166‐67 (7th

Cir. 1997), suggests agreement with several circuits that § 1640(e) does not limit a district court’s

jurisdiction to entertain claims brought outside the limitations period and thus equitable tolling is

available.  E.g., Ellis v. Gen. Motors Acceptance Corp., 160 F.3d 703 (11th Cir. 1998); Ramadan v. Chase

Manhattan Corp., 156 F.3d 499 (3d Cir. 1998); King v. California, 784 F.2d 910 (9th Cir. 1986); Jones v.

TransOhio Sav. Ass’n, 747 F.2d 1037 (6th Cir. 1984).  The parties do not argue to the contrary, and in

Lawyers Title we declined to follow the one case that disagrees, Hardin v. City Title & Escrow Co.,

797 F.2d 1037, 1039‐40 & n.4 (D.C. Cir. 1986).  

Am. Express Travel Related Servs. Co., 98 F.3d 703, 708‐10 (2d Cir. 1996) (same); Draiman v.

Am. Express Travel Related Servs. Co., 892 F. Supp. 1096, 1098‐1100 (N.D. Ill. 1995) (same); see

also Permobil, Inc. v. Am. Express Travel Related Servs. Co., 571 F. Supp. 2d 825, 830‐36 (M.D.

Tenn. 2008); Carrier v. Citibank (S.D.) N.A., 383 F. Supp. 2d 334, 338‐41 (D. Conn. 2005), aff’d,

180 Fed. App’x 296 (2d Cir. 2006). But see Sovereign Bank v. BJʹs Wholesale Club, Inc., 533 F.3d

162, 174‐75 (3d Cir. 2008) (concluding, without discussing other authority, that card issuer’s

claim of indemnification against merchant and acquirer failed because § 1643 does not

impose duty on card issuer to reimburse cardholder for unauthorized charges).  Like Chase

and the majority of these courts, we also assume that a cardholder can bring a claim under

§ 1643.  And like all TILA claims, a claim under § 1643 is subject to a one‐year statute of

limitations.  See 15 U.S.C. § 1640(e) (“Any action under this section may be brought in any

United States district court, or in any other court of competent jurisdiction, within one year

from the date of the occurrence of the violation.”); Draiman, 892 F. Supp. at 1098 (applying

one‐year limitations period to § 1643 claim).  

Unless Congress has provided otherwise, a claim arising under federal law accrues

when the plaintiff has discovered or reasonably should have discovered the injury.

In re Copper Antitrust Lit., 436 F.3d 782, 789 (7th Cir. 2006); Cada v. Baxter Healthcare Corp.,

920 F.2d 446, 450 (7th Cir. 1990).  In his brief in this court, Asher contends that he discovered

his injury in March 2004 when he first learned of the fraudulent charges, but as the district

court noted, that was still more than a year before he filed suit in September 2005.  Asher

had argued in opposing summary judgment that his claim under § 1643 accrued in March

2005 when the fraudulent charges that Chase rebilled to his account became due, which was

six months before he filed suit.  But Chase has taken him at his word that he now intends

2004, and he did not assert in his reply brief or at argument that he made a mistake.

Asher then seems to concede that his TILA claim accrued in March 2004 when he

discovered MacKenzie’s fraud, and for the moment we also will assume that the statute of

limitations started to run at that point.  Because Asher did not file suit until more than a

year later, though, he is left to argue that the statute of limitations was tolled,1 either by

equitable tolling or equitable estoppel (he conflates the two doctrines), until Chase told him
No. 08‐2217                                                                                                                             Page 6

once and for all that it would not reimburse him for the fraudulent charges.  Asher contends

that Chase deceived him by saying it was investigating his claim when in fact it was not.

There is no evidence, says Asher, that Chase actually undertook an investigation complying

with 12 C.F.R. § 226.13(e), a regulation concerning billing errors by creditors that is one of a

group of regulations (known collectively as “Regulation Z”) issued by the Federal Reserve

Board in carrying out its mandate to enforce TILA.  See 12 C.F.R. § 226.1‐.36.  It follows, says

Asher, that a genuine issue of material fact still remains concerning whether the limitations

period was tolled.  MacKenzie’s final fraudulent transaction was made only a few days

before Asher discovered her scheme, so regardless which accrual date is correct, some

portion of Asher’s claim under § 1643 would be timely if, as he contends, the limitations

period was tolled while Chase was purportedly investigating.

Asher’s discussion of tolling, both in the district court and here, is convoluted, and it

is understandable if the district court had trouble following his reasoning.  Equitable

estoppel, a subset of which is fraudulent concealment, applies when the plaintiff shows that

the defendant misled him or took active steps to prevent him from filing suit before the

statutory period expired.  Smith v. Potter, 445 F.3d 1000, 1010 (7th Cir. 2006); In re Copper

Antitrust Lit., 436 F.3d at 790‐91; Cada, 920 F.2d at 450‐51.  Equitable tolling, by contrast,

applies when the plaintiff, though diligent, could not have obtained the information

necessary to file a claim before the end of the limitations period.  Lewis v. City of Chicago,

528 F.3d 488, 493 (7th Cir. 2008); Cada, 920 F.2d at 451.  The latter doctrine does not require

fault on the part of the defendant, but it is used sparingly and only when the plaintiff shows

extraordinary circumstances.  Bensman v. U.S. Forest Serv., 408 F.3d 945, 964 (7th Cir. 2005);

Modrowski v. Mote, 322 F.3d 965, 967 (7th Cir. 2003).  The plaintiff bears the burden of

proving his entitlement to either doctrine.  See Hamilton v. Komatsu Dresser Indus., Inc.,

964 F.2d 600, 606 (7th Cir. 1992); Stark v. Dynascan Corp., 902 F.2d 549, 551 (7th Cir. 1990).

Neither doctrine quite fits here.  With regard to equitable estoppel, Asher has the

burden backwards: At summary judgment Chase had no obligation to establish the

propriety of its investigation of Asher’s fraud claim.  Asher did not produce concrete

evidence that Chase had misled him or actively sought to prevent him from suing in time.

Asher has a better argument for equitable tolling, but it is still a rough fit.  Equitable tolling

usually demands “extraordinary circumstances,” and here the lengthy period it took Chase

to resolve a $77,655 claim of three years’ worth of fraudulent charges does not seem

altogether extraordinary.  Besides, the ongoing investigation did not prevent Asher from

going ahead with his lawsuit even before he received a definitive answer from Chase.

But was he required to do that?  A rule that would compel the cardholder to sue

while the card issuer is still investigating a claim could lead to wasteful litigation; had

Chase resolved Asher’s claim in his favor, there would have been no reason to sue.  Chase,
No. 08‐2217                                                                                                                             Page 7

after all, did not defraud Asher, MacKenzie did, and it is difficult to see how Chase

wronged Asher by investigating whether the disputed charges were in fact unauthorized.

Chase has taken the position that a card issuer violates § 1643 when it posts allegedly

unauthorized charges.  Logically, though, it would seem that the card issuer violates § 1643

not when it initially posts a transaction that it has no reason to believe is unauthorized, but

instead when it rejects the cardholder’s fraud claim and insists that the cardholder is liable.

Asher comes close to realizing this point when he asserts, albeit in his discussion of tolling

rather than accrual, that “Chase made a conclusive decision in January, 2005—effective in

February, 2005—that caused the accrual of the time for prosecuting a claim under TILA.”

We have not found a published appellate decision, in this or any circuit, that

addresses when a claim under § 1643 accrues.  Section 1643 limits a cardholder’s liability for

“unauthorized use” of the cardholder’s credit card.  Unauthorized use is defined as use “by

a person other than the cardholder who does not have actual, implied, or apparent

authority for such use and from which the cardholder receives no benefit.”  15 U.S.C.

§ 1602(o).  The TILA statute of limitations begins to run when a “violation” of TILA occurs,

see 15 U.S.C. § 1640(e), but neither § 1640 nor § 1643 identify which date that is or what

action constitutes the “violation” of § 1643.  Cf. Nash v. First Fin. Sav. & Loan Ass’n, 703 F.2d

233, 237‐39 (7th Cir. 1983) (analyzing when “violation” occurred under another provision of

TILA to determine when statute accrued).

Neither Asher, nor Chase, nor the district court has articulated a persuasive theory

about when a violation of § 1643 occurs.  Asher, who does not maintain a consistent position

about the date of accrual, goes so far as to suggest that the statute of limitations never began

to run because the charges were fraudulent and so he was never contractually obligated to

pay them.  As the district court observed, if this reading was correct, then § 1643 would be

superfluous: Cardholders would not need the protections provided in § 1643 because they

would never be obligated to pay unauthorized charges.  Chase barely addresses the

question of accrual in its brief here, but asserts in a footnote that a violation occurs on the

date the credit transaction “is consummated and the consumer becomes contractually

obligated.”  Chase does not elaborate on this sentence and as authority cites only an

unpublished decision from the Northern District of Illinois, see Durham v. Loan Store, Inc.,

No. 04 C 6627, 2006 WL 3422183, at *4 (N.D. Ill. Nov. 27, 2006) (unpublished), and the

Regulation Z definition of “consummation,” see 12 C.F.R. § 226.2(a)(13).  The district court

suggested that violations of § 1643 occur “at the time of the transactions” or perhaps when

the cardholder discovers them.

This existing case law is unpersuasive because a conclusion that § 1643 is violated

when a sale transaction is “consummated” is inconsistent with TILA’s statutory scheme, the

Federal Reserve Board’s interpretation of its Regulation Z, and the text of § 1643.  The Sixth
No. 08‐2217                                                                                                                             Page 8

Circuit, in an unpublished and nonprecedential decision, and the Northern District of

Illinois have both concluded, without much explanation, that a violation of § 1643 occurs

when the unauthorized charge is made or posted.  Borg v. Chase Manhattan Bank USA, 247

Fed. App’x 627, 635 (6th Cir. 2007) (unpublished); Draiman, 892 F. Supp. at 1098.  The case

Chase cites for the proposition that a violation occurs when the transaction is consum‐

mated does not involve an action under § 1643 but rather the disclosures required for a

mortgage loan.  Durham, 2006 WL 3422183.  Durham states that “[a] violation occurs when

the credit transaction is consummated” and concludes that the transaction was

consummated at the plaintiff’s first closing on the loan.  Id. at *4.  The Durham court did not

provide a citation for this proposition, perhaps because it is so well established in the

context of loan contracts.  See Nash, 703 F.2d at 238.  Tracing it back through the caselaw,

however, the proposition stems from a provision in Regulation Z, Subpart C, on “closed‐

ended credit,” and within the section addressing when a creditor must make disclosures

required by TILA: “The creditor shall make disclosures before consummation of the

transaction.” 12 C.F.R. § 226.17(b).  

But a creditor does not violate § 1643 by failing to make required disclosures, so a

provision governing when they must be made is inapplicable.  Indeed, the Federal Reserve

Board specifically provides in its commentary to the definition of “consummation,” 12

C.F.R. § 226.2(a)(13), that the term does not apply to “sales”: “[C]onsummation does not

occur when the consumer becomes contractually committed to a sale transaction, unless the

consumer also becomes legally obligated to accept a particular credit arrangement.”

Federal Reserve Board Truth in Lending Official Staff Commentary to Regulation Z, 12

C.F.R. pt. 226, Supp. I § 226.2(a)(13)(2) (distinguishing consummation of credit versus sale

transaction); see Anderson Bros. Ford v. Valencia, 452 U.S. 205, 219 (1981) (directing courts to

defer to Board’s regulations implementing TILA legislation and to its interpretation of those

regulations).  Moreover, § 1643 is within Subpart B of Regulation Z, which governs “open‐

ended credit,” and has a separate set of rules from those in Subpart C governing “closed‐

ended credit” (and an entirely different disclosure provision, though neither disclosure

provision applies here).  See 12 C.F.R. § 226.12(b) (concerning “Special Credit Card

Provisions” corresponding to the text of § 1643 and located within Subpart B of Regulation

Z); see also 12 C.F.R. pt. 226, Table of Contents.

Finally, a conclusion that § 1643 is violated when the card is used or the transaction

is posted is inconsistent with the text of § 1643.  That section provides that a cardholder is

liable for “unauthorized use” of the card only in specific circumstances.  It seems a stretch to

conclude that a card issuer violates the statute even before the cardholder has claimed that a

particular use was unauthorized, much less before that claim has been investigated and

rejected.  It is more logical to conclude that a violation occurs when the card issuer notifies

the cardholder that despite the cardholder’s claim of fraud, the card issuer will not
No. 08‐2217                                                                                                                             Page 9

reimburse the cardholder for the disputed amount.  Here, the violation occurred and the

limitations period commenced when Chase notified Asher that it deemed him liable—for

the final time, in January 2005.  Asher’s suit in September 2005 therefore is not time‐barred.

B.  Merits of the TILA Claim

We can affirm the grant of summary judgment on any basis that Chase asserted

previously, see Wis. Cent., Ltd. v. Shannon, 539 F.3d 751, 761 (7th Cir. 2008), and in this court

Chase reasserts its contention that MacKenzie possessed apparent authority to incur the

Tymes charges.  We agree, and for that reason the charges were not “unauthorized.”   

Chase argues that MacKenzie’s charges to Asher’s card, although fraudulent, were

not “unauthorized” within the meaning of § 1643 and § 1602(o) because MacKenzie had

apparent authority to use the account.  See DBI Architects, 388 F.3d 886.  Section 1602(o)

defines “unauthorized use” as use “by a person other than the cardholder who does not

have actual, implied, or apparent authority for such use.”  Courts have concluded that

Congress intended agency law to govern whether use by someone other than the cardholder

was authorized, DBI Architects, 388 F.3d at 890; Towers World Airways Inc. v. PHH Aviation

Sys. Inc., 933 F.2d 174, 176‐77 (2d Cir. 1991), and in its commentary to Regulation Z, the

Federal Reserve Board has made explicit that “whether authority exists must be determined

under state or other applicable law,” Federal Reserve Board Truth in Lending Official Staff

Commentary to Regulation Z, 12 C.F.R. pt. 226, Supp. I § 226.12(b)(1).  Illinois law and

federal common law are in accord with the Restatement (Second) of Agency on the issue of

apparent authority.  Opp v. Wheaton Van Lines, Inc., 231 F.3d 1060, 1064 (7th Cir. 2000).

Apparent authority arises when the principal’s words or conduct cause a third person to

reasonably believe that the putative agent’s conduct on the principal’s behalf is authorized.

See Moriarty v. Glueckert Funeral Home, Ltd., 155 F.3d 859, 866 & n.15 (7th Cir. 1998); York v.

Rush‐Presbyterian‐St. Luke’s Med. Ctr., 854 N.E.2d 635, 655‐60 (Ill. 2006); RESTATEMENT 2D OF

AGENCY §§ 8, 27 (1958); see also RESTATEMENT 3D OF AGENCY § 2.03 (2006).  The principal may

not then deny the agent’s authority to a third party who has relied upon it.  See Minskoff, 98

F.3d at 708; Harrison v. Dean Witter Reynolds, Inc., 974 F.2d 873, 883‐84 (7th Cir. 1992)

(applying Illinois agency law); York, 854 N.E.2d at 655‐60; State Sec. Ins. Co. v. Burgos, 583

N.E.2d 547, 551 (Ill. 1991); RESTATEMENT 2D OF AGENCY §§ 8B, 8 cmt. d; see also RESTATEMENT

3D OF AGENCY § 2.03.

Chase explains that in DBI Architects the court held that the company clothed its

employee with apparent authority to use its AMEX account, despite the fact that the

employee added herself as a cardholder without the management’s knowledge or approval,

because for ten months the company paid without protest all of the employee’s fraudulent

charges after receiving statements that identified the employee as a cardholder and itemized
No. 08‐2217                                                                                                                             Page 10

her charges.  388 F.3d at 888, 893‐94.  The court declined to hold that the plaintiff created

apparent authority in the employee solely by failing to review the account statements, id. at

891‐93, as the Second Circuit had held in Minskoff, 98 F.3d 703, although this is a rather fine

distinction.  The court reasoned that the Federal Reserve Board’s official staff interpretation

of 12 C.F.R. § 226.12(b)(3) supports the conclusion that a consumer could still be entitled to

protection under § 1643 even if the consumer did not exercise his right to protest an

inaccurate billing statement under the Fair Credit Billing Act, see 15 U.S.C. § 1666, and that

failing to contest charges would not create apparent authority.  DBI Architects, 388 F.3d at

892‐93.  On the other hand, the court continued, the company’s repeated payment of its

employee’s fraudulent charges led the card issuer to reasonably believe that she had the

authority to make charges on the account.  Id. at 893‐94.  The court concluded that this result

would obtain under both D.C. agency law and the federal common law because they were

the same.  Id. at 890.

Asher offers no meaningful response to this argument; in his briefs he does not even

discuss DBI Architects.  The situation discussed in that decision, as well as in the case it

draws support from, Minskoff, 98 F.3d 703, is similar to what happened here.  Both of those

decisions involved a corporate cardholder that over a period spanning many months paid

its bills without protest even though those bills included charges made by an employee who

did not have the company’s approval to use the account.  DBI Architects, 388 F.3d at 888;

Minskoff, 98 F.3d at 706‐07.  If anything, Chase has a stronger argument for apparent

authority because in DBI Architects and Minskoff the employees who made the fraudulent

charges were the same ones paying the bills on behalf of the cardholders, whereas in this

case Asher or his brother or mother were at least signing off on the checks to Chase.  Asher

paid his bills in full, including the Tymes charges, for three years without protest.  This

scenario makes a compelling case for concluding that MacKenzie had apparent authority to

make charges on Asher’s account.  And while in DBI Architects the court remanded for

further proceedings concerning the point at which the employee’s apparent authority arose,

388 F.3d at 894, Asher makes no argument that a similar determination is necessary in this

case.

C.  State‐law Contract Claim

Finally, Asher contends that the district court improperly granted Chase’s motion for

summary judgment on his state‐law contract claim and instead should have granted his

cross‐motion for summary judgment.  The district court apparently understood Asher to be

claiming only that Chase breached its cardholder agreement with Asher, and on that theory

the court held that Chase was entitled to summary judgment because Asher had not even

produced the cardholder agreement and thus could not point to any provision that was

breached.  The court’s conclusion is unassailable to the extent that Asher’s contract theory
No. 08‐2217                                                                                                                             Page 11

concerns his cardholder agreement with Chase, and Asher does not even attempt to

undermine the court’s reasoning.

Instead, Asher focuses on his theory that he was a third‐party beneficiary to

contracts between Chase and VISA, and between Mackenzie and PMT/Imperial, her

acquiring bank for credit‐card transactions at A Sign of the Tymes.  Those contracts were

produced at summary judgment, but the district court did not address this theory of

purported liability.  As between Chase and VISA, Asher seems to argue that Chase was

obligated by its agreement with VISA to determine whether there were signed receipts for

the disputed charges, that Chase did not adequately investigate his claim of fraud, and that

Chase should have charged the Tymes transactions back to PMT/Imperial.  As far as

MacKenzie’s contract with PMT/Imperial, however, it is not clear how Asher thinks that he

has rights under that contract.

Asher failed to produce any evidence at summary judgment that could establish he

is a third‐party beneficiary of any of these contracts.  Asher sought to link himself to Chase’s

agreement with VISA by pointing in his statement of material facts to a provision defining

the process of “issuing cards” to include entering “direct contractual relationships as the

principal party with holders of cards.”  That provision does not suffice to show that the

parties entered the VISA agreement for the benefit of individual cardholders, and it does

not overcome the strong presumption in Illinois law (which the parties agree applies here)

against recognizing third‐party beneficiaries.  See Estate of Willis v. Kiferbaum Constr. Corp.,

830 N.E.2d 636, 643 (Ill. App. Ct. 2005).  On this record, Asher’s theory of contract liability is

meritless.

Accordingly, we AFFIRM the grant of summary judgment for Chase on the TILA

claim but on the alternate ground that MacKenzie’s use of Asher’s credit card was not

“unauthorized” because she had apparent authority.  We also AFFIRM the grant of

summary judgment for Chase on Asher’s state‐law contract claim.