Opinion ID: 2981149
Heading Depth: 3
Heading Rank: 3

Heading: The EFTA’s provisions

Text: 21 Nos. 10-6258/10-6507, Jack Henry & Associates, Inc. v. BSC, Inc. BSC’s final argument is that, even if an award of prejudgment interest is proper, it was error for the district court to use an 18% interest rate. That rate, it argues, applies only to outstanding charges for products and processing services, not to the early-termination fee. We disagree. The EFTA provides the same interest rate for all payments, whether for products, services, early-termination fees, or anything else: 18%. Section 9 of the EFTA is entitled “Payments.” It provides: Client agrees to pay upon presentation by [Jack Henry] of an electronic funds transfer debit for such amount, the then applicable charges for the Products covered thereby. Unless specified otherwise, all amounts are due when the Processing Services have been completed or other Products provided. [Jack Henry] shall provide an invoice to the Client for review prior to initiation of the electronic funds transfer debit. Setup fees and annual fees will be invoiced and are payable in advance. Amounts outstanding after the due date are subject to an interest charge to date or payment of the lesser of 18% per annum or the highest legally allowable rate. Thus, the “Payments” section of the EFTA discusses numerous types of payments, sometimes defining the payment and sometimes not. It mentions products, processing services, set-up fees, and annual fees—but it also discusses payment “amounts outstanding” in general. The most natural reading of the provision as a whole and the final sentence in particular is that it pertains, as it is labeled, to payments of whatever type. BSC asserts that “the early termination fee is addressed in an entirely different section of the EFTA,” i.e., Section 3. That section indeed discusses the fee, but provides no interest rate. BSC seems to argue that only Section 3 applies where the fee is at issue, but the more reasonable reading of the contract is that Section 3 and Section 9 discuss the earlytermination fee—the former in general, and the latter with regard to how that fee is treated under the contract’s payment scheme. 22 Nos. 10-6258/10-6507, Jack Henry & Associates, Inc. v. BSC, Inc. In light of the foregoing, we affirm the district court’s award and calculation of prejudgment interest on the early-termination fee.