Court Opinion

ID: 9882879
Source: CourtListenerOpinion
Date Created: 2023-10-05 22:21:22.316526+00
Date Added: 2024-06-11T15:01:05.622878
License: Public Domain

[Cite as Patel v. Huntington Banc Shares Fin. Corp., 2023-Ohio-3218.]

                 IN THE COURT OF APPEALS OF OHIO
                           ELEVENTH APPELLATE DISTRICT
                                  LAKE COUNTY

YOGESH H. PATEL,                                      CASE NO. 2023-L-036

                 Plaintiff-Appellant,
                                                      Civil Appeal from the
        - vs -                                        Court of Common Pleas

HUNTINGTON BANC SHARES
FINANCIAL CORPORATION,                                Trial Court No. 2021 CV 001299

                 Defendant-Appellee.

                                             OPINION

                                   Decided: September 11, 2023
                                        Judgment: Affirmed

Jonathan P. Blakely, P.O. Box 217, Middlefield, OH 44062 (For Plaintiff-Appellant).

Karen L. Giffen, Courtney L. Bow, and Kerin L. Kaminski, Perez & Morris, LLC, 1300
East Ninth Street, Suite 1600, Cleveland, OH 44114 (For Defendant-Appellee).

ROBERT J. PATTON, J.

        {¶1}     Appellant, Yogesh Patel (“Mr. Patel”), appeals the order of the Lake County

Court of Common Pleas granting summary judgment in favor of appellee, Huntington

Banc Shares, Financial Corp. (“Huntington Bank”). For the following reasons, we affirm

the judgment of the lower court.

        {¶2}     On November 1, 2021, Mr. Patel filed a complaint against Huntington Bank

after two of his accounts were accessed and funds were transferred without his
authorization.1 In count one of the complaint, Mr. Patel alleged breach of contract,

claiming Huntington Bank breached its implied duty of good faith and duty to use ordinary

care. In count two of the complaint, Mr. Patel sought a declaratory judgment that he is

entitled to payment due to Huntington Bank’s breach.2

        {¶3}    The facts set forth in the trial record are as follows. In February of 2016,

without his knowledge, the email address associated with Mr. Patel’s Huntington Bank

accounts were changed, and from that point forward, Mr. Patel received no online

statements from Huntington Bank through email. The previous email address associated

with the accounts, however, still allowed Mr. Patel to access his statements online.

Huntington Bank claims that Mr. Patel was notified of the changed email address by SMS

text message. Mr. Patel claims he has no record of ever receiving that text notification.

        {¶4}    In a series of transactions spanning over approximately six months, funds

were transferred from Mr. Patel’s savings account, first into his checking account with

Huntington Bank, and then from Mr. Patel’s checking account into the accounts at Wells

Fargo and Capital One. Harry Ferraro and James Nguyen are the names associated with

accounts owned at Wells Fargo and Capital One Bank. Each transaction moving funds

from savings to checking was for $5,000, and each transaction transferring funds from

Mr. Patel’s checking to the Wells Fargo and Capital One Bank accounts was for a sum

1. Mr. Patel filed a complaint on September 25, 2018, for negligence, breach of implied contract, and unjust
enrichment. The complaint was derived from the same set of facts as the instant case. Patel v. Huntington
Banc Shares Financial Corporation, et al., Lake C.P. No. 21CV001299 (Mar. 6, 2023). Mr. Patel voluntarily
dismissed that case and then filed for breach of contract and declaratory judgment against Huntington Bank
on November 1, 2021. Summary judgment for Huntington Bank was granted in that case, which is the basis
of this appeal.

2. The accounts accessed were initially owned by FirstMerit Bank, however, FirstMerit Bank merged with
Huntington Bank after the unauthorized transfers took place.
                                                     2

Case No. 2023-L-036
slightly less than $5,000. The first unauthorized transaction took place on March 3, 2016,

and the last on September 28, 2016. Over the course of 11 transactions, $54,614.00 was

transferred from Mr. Patel’s accounts into the accounts owned by Mr. Ferraro and Mr.

Nguyen.

       {¶5}   Mr. Patel monitored the activity of his accounts approximately once every

six months due to their limited business purpose. Thus, he did not discover the

unauthorized transfers until he made an impromptu check of the accounts online on

September 28, 2016. Mr. Patel reported the unauthorized transfers to Huntington Bank

the same day.

       {¶6}   Huntington Bank investigated the unauthorized transactions upon Mr.

Patel’s report of the activity. The investigation concluded four and a half months later with

a letter addressed to Mr. Patel, dated January 31, 2017. The letter explained that none of

the payments would be reversed because Mr. Patel reported the transactions outside of

the 60-day window required under the Electronic Fund Transfer Act (“EFTA”), and outside

of the 14-day required reporting period under Huntington Bank’s Deposit Accounts Terms

and Conditions & Arbitration Provision Agreement (“Account Agreement”). Further, the

letter explained that Huntington Bank had deemed the transactions authorized.

       {¶7}   Mr. Patel’s action for breach of contract against Huntington Bank is based

on the implied duty of good faith in all contracts and the duty of good faith and ordinary

care articulated in Huntington Bank’s Account Agreement. Mr. Patel claims that

Huntington Bank failed to meet those contractual obligations when it neglected to alert

Mr. Patel of the unusual activity on his account. Mr. Patel’s complaint also sought a

declaratory judgment from the trial court as to whether the Account Agreement is

                                             3

Case No. 2023-L-036
enforceable and whether he is entitled to reimbursement for his funds lost. Huntington

Bank filed a motion for summary judgment claiming that Mr. Patel failed to set forth

specific facts creating a genuine issue of material fact regarding Huntington Bank’s failure

to exercise good faith and ordinary care. Huntington Bank also argued in their brief that

Mr. Patel’s claims are barred by the reporting limitations under the EFTA and additional

time limitations set forth by the Account Agreement. It should be noted that in his brief,

Mr. Patel argues that his claim is for recovery under breach of contract principles and not

under the standards set forth by the EFTA. Therefore, although Mr. Patel concedes he

reported the unauthorized transactions to Huntington Bank outside of the EFTA 60-day

window for reporting, he is not precluded from bringing a claim for breach of contract.

       {¶8}   The Lake County Court of Common Pleas granted summary judgment in

favor of Huntington Bank in an order filed March 6, 2023. The trial court based its decision

in part on the fact that Mr. Patel did not meet his reporting obligations under the Account

Agreement, or the EFTA, because he did not report the unauthorized transactions until

six months after the first transaction took place. Additionally, the trial court determined

that an expert opinion is needed to determine whether Huntington Bank breached its duty

of good faith and ordinary care.

       {¶9}   Appellant raises one assignment of error: “The trial court erred in granting

summary judgment by finding that Plaintiff-Appellant failed to set forth specific facts

creating genuine issues of material facts that Defendant-Appellee Huntington Bank failed

to exercise ordinary care and act in good faith.”

                                             4

Case No. 2023-L-036
         {¶10} An appellate court reviews a trial court’s decision to grant summary

judgment under a de novo standard of review. Grafton v. Ohio Edison Co., 77 Ohio St.3d

102, 105, 671 N.E.2d 241 (1996).

         {¶11} “Pursuant to Civ.R. 56(C), summary judgment is appropriate when there is

no genuine issue of material fact and the moving party is entitled to judgment as a matter

of law.” Holik v. Richards, 11th Dist. Ashtabula No. 2005-A-0006, 2006-Ohio-2644, ¶12,

662 N.E., citing Dresher v. Burt (1996), 75 Ohio St.3d 280, 293, 662 N.E.2d 264. “In

addition, it must appear from the evidence and stipulations that reasonable minds can

come to only one conclusion, which is adverse to the nonmoving party.” Id. citing Civ.R.

56(C).

         {¶12} Breach of contract is shown when a party can prove existence of a binding

contract or agreement, that the non-breaching party performed its contractual obligations,

the breaching party failed to fulfill its contractual obligations without excuse, and that the

non-breaching party suffered damages as a result. Utz v. Stovall, 11th Dist. Portage No.

2012-P-0135, 2013-Ohio-4299, ¶ 28.

         {¶13} Appellant bases his breach of contract claim on the implied duty of good

faith in all contracts, and on the “duty to care for your account” and “ordinary care”

language contained within Huntington Bank Account Agreement which states:

               The Bank will meet its duty to care for your account, provided
               it exercises ordinary care in the transaction at issue. When the
               Bank takes an item for processing by automated means,
               “ordinary care” does not require that the Bank examine the
               Item. “Ordinary care” requires only that the Bank follow
               standards that do not vary unreasonably from the general
               standards followed by similarly situated banks.

                                              5

Case No. 2023-L-036
      {¶14} A definition of ordinary care in the banking context is also articulated in R.C.

1303.01(A)(11) which provides:

             “Ordinary care” in the case of a person engaged in business
             means observance of the reasonable commercial standards
             that are prevailing in the area in which the person is located
             with respect to the business in which the person is engaged.
             In the case of a bank that takes an instrument for processing
             for collection or payment by automated means, reasonable
             commercial standards do not require the bank to examine the
             instrument if the failure to examine does not violate the bank's
             prescribed procedures, and the bank's procedures do not vary
             unreasonably from general banking usage not disapproved by
             this chapter or Chapter 1304. of the Revised Code.

      {¶15} R.C. 1303.01(A)(6) explains that “good faith” has the same meaning as in

section 1301.201 which provides:

             “Good faith,” except as otherwise provided in Chapter 1305.
             of the Revised code, means honesty in fact and the
             observance of reasonable commercial standards of fair
             dealing.

      {¶16} Mr. Patel argues that the Account Agreement between he and Huntington

Bank constitutes a binding and enforceable contract. One provision within the Account

Agreement requires that Mr. Patel, as the account owner, to regularly examine each

statement and promptly notify Huntington Bank of unauthorized transfers within 14 days

of making the statement available. Mr. Patel admits that he reported the unauthorized

transfers outside of this window. Mr. Patel further acknowledges that he was at all times

able to access his online account statements using his original email address, even after

his statements were rerouted to a different email address. Mr. Patel explained in his brief

that he discovered the unauthorized transfers by accessing his online statement through

his account online, using his original email address associated with the accounts.

                                            6

Case No. 2023-L-036
      {¶17} Mr. Patel did not provide evidence to support the claim that Huntington Bank

breached their obligation pursuant to the Account Agreement to “follow standards that do

not vary unreasonably from the general standards followed by similarly situated banks.”

The monitoring practices and safeguarding techniques employed by the banking industry

are not generally known to the average lay person. Mr. Patel provided no expert testimony

or any other evidence to demonstrate what the standards of similarly situated banks are,

and how Huntington Bank strayed from those standards.

      {¶18} For these reasons, the trial court’s grant of summary judgment was

appropriate, and the judgment of the Lake County Court of Common Pleas is affirmed.

MATT LYNCH, J.,

EUGENE A. LUCCI, J.,

concur.

                                           7

Case No. 2023-L-036