Court Opinion

ID: 2796060
Source: CourtListenerOpinion
Date Created: 2015-04-23 14:02:56.043264+00
Date Added: 2024-06-11T11:19:08.299383
License: Public Domain

Apr 23 2015, 9:20 am

ATTORNEYS FOR APPELLANT                                     ATTORNEYS FOR APPELLEE
Mark J.R. Merkle                                            Henry J. Price
Marc T. Quigley                                             Joseph N. Williams
Libby Y. Goodknight                                         Price Waicukauski & Riley, LLC
Kay Dee Baird                                               Indianapolis, Indiana
Krieg DeVault LLP
Indianapolis, Indiana                                       William M. Sweetnam
                                                            Sweetnam LLC
ATTORNEYS FOR AMICUS CURIAE                                 Chicago, Illinois
INDIANA BANKERS ASSOCIATION
Thomas W. Dinwiddie
Maureen E. Ward
Wooden & McLaughlin LLP
Indianapolis, Indiana

                                             IN THE
    COURT OF APPEALS OF INDIANA

Old National Bank,                                          April 23, 2015

Appellant-Defendant,                                        Court of Appeals Case No.
                                                            82A01-1406-CT-234
        v.                                                  Appeal from the Vanderburgh
                                                            Circuit Court
                                                            The Honorable David D. Kiely,
Steven Kelly, Jon A. Cook, and                              Judge
Rebecca F. Cook, individually                               Cause No. 82C01-1012-CT-627
and on behalf of others similarly
situated,
Appellees-Plaintiffs

Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015                    Page 1 of 19
      Bailey, Judge.

                                             Case Summary
[1]   Old National Bank (“the Bank”) brings an interlocutory appeal challenging the

      trial court’s denial of the Bank’s motion for summary judgment upon breach of

      contract, conversion, and equitable claims of a certified class of depositors-

      plaintiffs who were charged overdraft fees stemming from debit card

      transactions (hereinafter, “Depositors”).1 We affirm in part and reverse in part.

                                                        Issue
[2]   The Bank presents a single (consolidated) issue: whether it is entitled to

      summary judgment upon each of Depositor’s claims because those claims are

      preempted by federal law or because the Bank, as movant for summary

      judgment, has negated essential elements of each of those claims.

                              Facts and Procedural History
[3]   Steven Kelly, Jon A. Cook, and Rebecca F. Cook, on behalf of themselves and

      a class of consumer checking account holders, brought a class action suit

      1
       The class consists of residents of the State of Indiana who were, within the applicable statute of limitation,
      and before August 15, 2010, charged an overdraft fee by Old National Bank for a debit card transaction made
      with an Old National Bank branded debit card. August 15, 2010 is the date upon which the Bank changed its
      practice, such that customers would no longer be automatically enrolled in the Bank’s overdraft protection
      program.

      Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015                          Page 2 of 19
      against the Bank.2 The Amended Class Action Complaint (“the Complaint”)

      challenged a bank bookkeeping device known as “high-to-low” posting,3 the

      delayed debiting of transactions, and the Bank’s alleged utilization of a so-

      called “shadow” line of credit.4 See Gutierrez v. Wells Fargo Bank, N.A., 730 F.

      Supp.2d 1080 (N.D. Cal. 2010) (“Gutierrez I”), aff’d. in part, rev’d. in part on other

      grounds 704 F.3d 712 (9th Cir. 2012) (“Gutierrez II”).

[4]   A copy of a Deposit Account Agreement between class members and the Bank

      was attached as Exhibit A. In relevant part, it provided:

               If there are available funds to cover some, but not all, of the
               withdrawals or other debits (such as charges) to your Account, we may
               post those withdrawals or other debits for which there are sufficient
               available funds in any order we may choose at our sole discretion. If
               there are insufficient available funds to cover some of the withdrawals
               or debits presented against your Account, such items will be handled
               in accordance with our overdraft procedures or in accordance with any
               other agreement you may have with us (such as an overdraft
               protection program). Even if we choose to pay one or more
               overdrafts, we are not obligated to cover any future overdrafts. We

      2
       The original complaint, by Steven Kelly, was filed on November 9, 2010. The Cooks were added as named
      plaintiffs on May 1, 2012. On March 20, 2013, the trial court certified the case as a class action pursuant to
      Indiana Trial Rule 23.
      3
       “Posting” is the procedure banks use to process debit items which have been presented for payment against
      accounts. Gutierrez v. Wells Fargo Bank, N.A., 704 F.3d 712, 716 (9th Cir. 2012).
      4
        The Gutierrez I court explained the practice of allowing a “shadow” line of credit as follows: “Wells Fargo
      implemented a practice involving a secret bank program called ‘the shadow line.’ Before, the bank declined
      debit-card purchases when the account’s available balance was insufficient to cover the purchase amount.
      After, the bank authorized transactions into overdrafts, but did so with no warning that an overdraft was in
      progress. Specifically, this was done without any notification to the customer standing at the checkout stand
      that the charge would be an overdraft and result in an overdraft fee. Thus, a customer purchasing a two-
      dollar coffee would unwittingly incur a $30-plus overdraft fee.” 730 F. Supp. 2d at 1085.

      Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015                          Page 3 of 19
                may determine the balance of your account in connection with
                determining whether payment of an item will create an overdraft at
                any time between the time we receive the item and the deadline for us
                to take action on the item. We are not required to determine your
                account balance more than one (1) time during this period. An
                NSF/overdraft item fee may be assessed on any item that will
                overdraw the available account balance, regardless of whether we pay
                or dishonor (return) the item.
      (App. 95-96.)

[5]   The common factual allegations included an allegation that the Bank

      manipulated customers’ electronic debits 5 from highest to lowest dollar amount,

      thereby depleting customer funds and maximizing the occurrences of $35.00

      overdraft fees.6 (App. 13.) Depositors also alleged that the Bank grouped

      together transactions from multiple days, defying a reasonable contractual

      expectation of the consumer that instantaneous electronic transactions would

      be posted in chronological order. According to Depositors, “customer accounts

      may not have been actually overdrawn at the time the overdraft fees were

      charged, or at the time of the debit transaction.” (App. 6.) Finally, Depositors

      alleged that the Bank failed to provide accurate and timely information to

      Depositors regarding their balances or to warn that an overdraft was in

      progress.

      5
          These included point-of-sale (“POS”) purchases and Automated Teller Machine (“ATM”) withdrawals.
      6
        For example, if a customer makes ten deductions of $10, followed in time by an eleventh deduction of $101
      from a $100 account, the bank would re-sequence the transaction to deduct the $101 first. This would
      overdraw the account, such that each of the eleven charges would incur an overdraft charge. Had the bank
      processed the transactions chronologically, only the eleventh transaction (for $101) would be overdrawn, and
      the customer would incur one fee.

      Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015                        Page 4 of 19
[6]   Count I, captioned “Breach of Contract and Breach of the Covenant of Good

      Faith and Fair Dealing,” was premised upon the contention that the Bank,

      “through its overdraft policies and practices,” breached the Deposit Agreement

      and its implied covenant of good faith and fair dealing. (App. 24.) Count II

      alleged that the Bank committed civil conversion by taking specific and readily

      identifiable funds without consent and with intent to permanently deprive

      Depositors of those funds. Count III alleged that the Bank was unjustly

      enriched when it retained funds under circumstances making it inequitable to

      do so.

[7]   Count IV alleged that the Bank’s “overdraft policies and practices were

      substantively and procedurally unconscionable.” (App. 27.) In particular, it

      was alleged that the Bank automatically enrolled customers in overdraft

      protection service; the Bank did not obtain affirmative consent prior to

      processing a transaction that would result in an overdraft charge; the Bank did

      not provide an opportunity for transaction cancellation before fee assessment;

      the Deposit Agreement was a contract of adhesion; the fee schedule was not

      signed by the customers; and the Deposit Agreement failed to unambiguously

      reveal the re-ordering process. Depositors asserted that a fee in excess of the

      amount overdrawn “is itself unconscionable.” (App. 28.)

[8]   Count V alleged that the Bank had violated the Indiana Crime Victim Relief

      Act, Indiana Code Section 34-24-3-1, et seq. (“the Act”). In their prayer for

      relief, Depositors sought restitution of all overdraft fees and actual damages

      trebled (together with attorney’s fees and costs) pursuant to the Act.

      Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015   Page 5 of 19
[9]    On June 11, 2013, the Bank moved for summary judgment upon each of the

       Depositors’ claims. A summary judgment hearing was conducted on

       September 16, 2013. The Bank did not assert the existence of an issue of

       material fact as to whether the Bank engaged in the conduct alleged, that is,

       batching and re-ordering of transactions and providing overdraft coverage

       without an opt-out policy. Rather, the Bank claimed entitlement to judgment

       as a matter of law due to preemption by federal banking law and the non-

       viability of state claims. Depositors conceded that re-ordering of transactions

       was not “per-se” unlawful, but argued that its state claims should proceed

       because the Bank’s printed materials were misleading in that they suggested

       instantaneous account for instantaneous transactions. (Tr. 52, 60.)

[10]   The motion for summary judgment was denied on April 14, 2014. The trial

       court granted the Bank’s request to certify the order for interlocutory appeal.

       On July 11, 2014, this Court accepted jurisdiction.

                                   Discussion and Decision

                      Summary Judgment Standard of Review
[11]   In Sargent v. State, No. 49S02-1312-MI-790 (Ind. Mar. 24, 2015), our Indiana

       Supreme Court summarized the summary judgment standard of review:

               When reviewing a grant or denial of a motion for summary judgment
               our standard of review is the same as it is for the trial court. Kroger Co.
               v. Plonski, 930 N.E.2d 1, 4 (Ind. 2010). The moving party “bears the
               initial burden of making a prima facie showing that there are no

       Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015          Page 6 of 19
               genuine issues of material fact and that it is entitled to judgment as a
               matter of law.” Gill v. Evansville Sheet Metal Works, Inc., 970 N.E.2d
633, 637 (Ind. 2012) (citations omitted). Summary judgment is
               improper if the movant fails to carry its burden, but if it succeeds, then
               the nonmoving party must come forward with evidence establishing
               the existence of a genuine issue of material fact. Id. In determining
               whether summary judgment is proper, the reviewing court considers
               only the evidentiary matter the parties have specifically designated to
               the trial court. See Ind. Trial R. 56(C)(H). We construe all factual
               inferences in the non-moving party’s favor and resolve all doubts as to
               the existence of a material issue against the moving party. Plonski, 930
N.E.2d at 5.
       Slip op. at 3-4.

[12]   When the defendant is the moving party, the defendant must show that the

       undisputed facts negate at least one element of the plaintiff’s cause of action or

       that the defendant has a factually unchallenged affirmative defense that bars the

       plaintiff’s claim. First Farmers Bank & Trust Co. v. Whorley, 891 N.E.2d 604, 608

       (Ind. Ct. App. 2008). Although Indiana Trial Rule 56 employs language nearly

       identical to Federal Rule of Civil Procedure 56, Indiana’s summary judgment

       procedure diverges from federal summary judgment practice. Pearman v.

       Jackson, 25 N.E.3d 772, 777 (Ind. Ct. App. 2015). While federal practice

       permits the moving party to merely show that the party carrying the burden of

       proof lacks evidence on a necessary element, we impose a more onerous

       burden: to affirmatively negate an opponent’s claim. Id. Summary judgment is

       not a summary trial and Indiana consciously errs on the side of letting marginal

       cases proceed to trial on the merits. Id.

                                                  Preemption
       Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015         Page 7 of 19
[13]   The designated materials – taken in the light most favorable to Depositors, as

       the non-movant for summary judgment – reveal that the Bank issued to

       Depositors debit/ATM cards accompanied by overdraft protection. The Bank

       was instantly notified of debit card transactions and could immediately

       determine whether customers had sufficient account funds to cover

       transactions. The Bank could then accept or decline transactions.

[14]   The Bank did not agree to honor transactions in the event of insufficient funds

       but had discretion to do so; however, customers were not offered an opt-out of

       such “courtesy” overdraft coverage. The Bank did not post electronic

       transactions in real-time, but rather in batches. The batched transactions,

       which might include transactions from more than one calendar day, were not

       posted in chronological order, but based on amount – from high to low. This

       maximized revenue for the Bank, because customers incurred additional

       overdraft fees that would not have been imposed had the transactions been

       posted either chronologically or in a “low to high” order.

[15]   The Deposit Account Agreement did not specifically advise of the procedure to

       be employed and in some instances used language suggestive of real-time

       transactions. According to Depositors, they were sometimes penalized for

       having an overdrawn account when there were actually funds available to pay

       most transactions.

[16]   The Bank does not directly dispute its use of procedures that maximized

       overdraft fees. The Bank (and amicus Indiana Bankers Association) contend

       Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015   Page 8 of 19
       that Depositors’ claims are preempted by the National Bank Act of 1864, 12

       U.S.C. § 1 et seq. Depositors counter that the National Bank Act does not

       preempt state law claims based on contracts, torts, or criminal law, provided

       those laws do not significantly impair federally-authorized deposit-taking

       powers. Although Depositors agree that principles of preemption prevent a

       state court’s review of the propriety of a particular posting method, they

       contend that they should have their day in court on state claims that derive

       from misrepresentations and bad faith.

[17]   The Supremacy Clause of the United States Constitution states that the laws of

       the United States “shall be the supreme Law of the Land; … any Thing in the

       Constitution or Laws of any State to the Contrary notwithstanding.” U.S.

       Const. art. VI, cl 1. Courts have recognized three scenarios where federal law

       preempts state law: (1) express preemption (based on explicit language from

       Congress, (2) field preemption (based on a pervasive regulatory scheme leaving

       no room for state supplementation; and (3) conflict preemption (where state

       and federal law directly conflict). Barnett Bank of Marion Cnty., N.A. v. Nelson,

       517 U.S. 25, 31 (1996). Conflict has been found where compliance with both

       federal and state law is a “physical impossibility;” or when the state law stands

       “as an obstacle to the accomplishment and execution of the full purposes and

       objectives of Congress.” Id.

[18]   The Bank is a national bank federally chartered by the Office of the Comptroller

       of the Currency (“OCC”) under the National Bank Act. OCC is the federal

       agency charged by Congress with supervision of the National Bank Act and has

       Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015   Page 9 of 19
       promulgated federal banking regulations. Watters v. Wachovia Bank, N.A., 550
U.S. 1, 6 (2007). The National Bank Act vests in nationally chartered banks

       enumerated powers, such as the power to make contracts, to receive deposits,

       and to make loans, together with such incidental powers as shall be necessary to

       carry on the business of banking. Id. at 11. Litigants cannot bring state law

       claims against national banks in an effort to impact how the bank operates,

       “except in so far as Congress may see proper to permit.” Id. at 11.

[19]   In enacting the National Banking Act, Congress created a regime in which the

       Federal Government exercises general oversight while leaving state substantive

       law in place. In re HSBC Bank, USA, N.A., Debit Card Overdraft Fee Litigation, 1
F. Supp. 3d 34, 44 (E.D. NY 2014). Federal regulations have no less preemptive

       effect than federal statutes. Id. Efforts to hold banks liable for practices that

       purportedly violate state law “are void if they conflict with federal law, frustrate

       the purposes of the National Bank Act, or impair the efficiency of national

       banks to discharge their duties.” Bank of Am. v. City & Cnty. of San Francisco, 309
F.3d 551, 561 (9th Cir. 2002). Nonetheless, federally chartered banks are subject

       to state laws of general application to the extent that there is not a conflict with

       the letter or general purposes of the National Banking Act. Watters, 550 U.S. at

       11. Causes of action sounding in contract, consumer protection statutes and

       tort have been found by federal courts not to be preempted. In re HSBC, 1
F. Supp. 3d at 46.

[20]   When a Court reviews a claim of preemption, the relevant inquiry is “whether

       the state law claims, as alleged, more than incidentally affect the exercise of the

       Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015   Page 10 of 19
       banks’ deposit taking power.” Id. at 48. In King v. Carolina First Bank, 26
F. Supp. 3d 510, 515 (2014), the Court observed: “In general, state laws on

       contract or torts ‘are not inconsistent with the deposit-taking powers of national

       banks and apply to national banks to the extent consistent with the decision of

       the Supreme Court in Barnett Bank of Marion County, N.A. v. Nelson, Florida

       Insurance Commissioner, et al., 517 U.S. 25 (1996).’” (quoting 12 C.F.R. §

       7.4007.)

[21]   The OCC has “implicitly” permitted national banks to use high-to-low posting

       for checks in certain circumstances. In re HSBC, 1 F. Supp. 3d at 45. The OCC

       has determined that “[t]he establishment of non-interest charges and fees, their

       amounts, and the method of calculating them are business decisions to be made

       by each bank, in its discretion, according to sound banking judgment and safe

       and sound banking principles.” 12 C.F.R. § 7.4002(b)(2). Moreover, the OCC

       interpretations of its own regulations are controlling unless plainly erroneous or

       inconsistent with the regulation. In re HSBC, 1 F. Supp. 3d at 46. “A national

       bank may exercise its deposit-taking powers without regard to state law

       limitations concerning,” among other things, “disclosure requirements.” 12

       C.F.R. § 7.4007(b)(3).

[22]   The Bank claims that Depositors have only made allegations that invoke the

       deposit-taking powers and disclosure obligations of a bank, and are accordingly

       preempted. In asserting its preemption argument, the Bank relies heavily upon

       Gutierrez II (holding that the National Bank Act preempts state regulation of the

       Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015   Page 11 of 19
       posting order of debit card transactions as well as any obligation to make

       specific, affirmative disclosures to bank customers).

[23]   The Gutierrez case concerned Wells Fargo’s “bookkeeping device” of posting

       debit transactions from high-to-low in order to maximize overdraft charges;

       failure to disclose this policy to consumers; and misleading statements to the

       effect that debit transactions would be posted chronologically. See Gutierrez I,
730 F. Supp. 2d at 1082. The district court found that the National Banking Act

       did not preempt unfair competition law claims and enjoined the practice. The

       district court also ordered restitution. The Ninth Circuit reversed in part and

       affirmed in part, considering “the extent to which overdraft fees imposed by a

       national bank are subject to state regulation.” Gutierrez II, 704 F.3d at 716. The

       Ninth Circuit held that 12 C.F.R. § 7.4002(b) preempted the challenge to Wells

       Fargo’s posting order. With reference to OCC letters interpreting that

       provision, the Court reasoned that “federal law authorizes national banks to

       establish a posting order as part and parcel of setting fees, which is a pricing

       decision.” Id. at 724. The district court could not disregard the OCC’s

       determination of what constitutes a legitimate pricing decision. Id. at 725.

       However, the allegation regarding misleading statements was not preempted;

       California’s prohibition on misleading statements did not significantly interfere

       with the bank’s ability to offer checking account services, choose a posting

       method, or calculate fees. See id. at 727.

[24]   As the Bank points out, the language of the Complaint focused at length upon

       the utilization of high-to-low posting. Depositors strenuously argued that the

       Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015   Page 12 of 19
       Bank should have employed procedures more in line with consumer

       expectations, and also claimed that they were given insufficient disclosures. To

       the extent that the right to employ a particular posting practice and the content

       of Bank disclosures are challenged, these are within the preemption categories

       recognized in Gutierrez II. See Gutierrez II, (wherein the Ninth Circuit Court

       succinctly stated that state law cannot “dictate” a bank’s “choice of posting

       method.”) 704 F.3d at 723. However, Depositors do not seek an outright

       prohibition of high-to-low posting. They claim, in essence, that the Bank

       combined measures of delayed debiting, batching, and posting such that the

       Bank abused its contractual discretion and violated a duty of good faith and fair

       dealing. According to Depositors, the Bank triggered overdrafts where funds

       were actually available for payment.

[25]   Where an attack has been made not upon the right to charge overdraft fees but

       upon an allegedly unlawful manipulation of the overdraft program to maximize

       fees, it has been held that the allegations “do no more than incidentally affect

       the banks’ exercise of their deposit taking power and are therefore not

       preempted.” In re Checking Account Overdraft Litig., 694 F. Supp. 2d 1302, 1313

       (S.D. Fla. 2010). See also King, 26 F. Supp. 3d at 515 (declining to find

       preemption as a matter of law where plaintiffs were attempting to recover for

       past conduct inconsistent with contractual obligations as well as assessment of

       improper overdraft fees assessed when accounts were not overdrawn). Here,

       upon examination of the broad allegations made by Depositors, and mindful of

       our summary judgment standard, we cannot conclude as a matter of law that

       Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015   Page 13 of 19
       the state laws implicated by the Complaint stand as “an obstacle to the

       accomplishment and execution of the purposes and objectives of Congress.”

       Barnett Bank, 517 U.S. at 31. The Bank has not shown an irreconcilable conflict

       or that the state laws do more than incidentally affect the bank’s deposit-taking

       power. The Bank is not entitled to a declaration of preemption in these

       summary judgment proceedings.

[26]   Because the Bank has additionally argued that it has negated each of the state

       law claims and is, on that basis, entitled to summary judgment, we turn to an

       examination of the viability of those claims.

                                            State Law Claims
[27]   Breach of Contract. The relationship between a depositor and a bank is

       contractual in nature. Wells v. Stone City Bank, 691 N.E.2d 1246, 1249 (Ind. Ct.

       App. 1998), trans. denied. “[T]he essential elements of any breach of contract

       claim are the existence of a contract, the defendant’s breach thereof, and

       damages.” Holloway v. Bob Evans Farms, Inc., 695 N.E.2d 991, 995 (Ind. Ct.

       App. 1998). According to the Bank, it has negated an element of Depositors’

       claim, that is, it performed all its duties in accordance with the contractual

       provisions. Moreover, the Bank insists that Indiana courts simply do not

       recognize an implied covenant of good faith and fair dealing in bank contracts

       with depositors. Depositors have not alleged a breach of a specific contract

       term. Their claim with respect to performance of the contract is that the Bank

       Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015   Page 14 of 19
       did not carry out its discretionary procedures as contemplated by the implied

       covenant of good faith and fair dealing.

[28]   Indiana law does not impose a generalized duty of good faith and fair dealing

       on every contract; the recognition of an implied covenant is generally limited to

       employment contracts and insurance contracts. Allison v. Union Hosp., Inc., 883
N.E.2d 113, 123 (Ind. Ct. App. 2008). See Wells, 691 N.E.2d at 1251 (declining

       “to hold that the relationship between a bank and a checking account holder is

       always necessarily a fiduciary one”) (emphasis added). Nonetheless, there is no

       absolute restriction to employment and insurance contracts. See id. (stating “we

       do believe the relationship invokes a duty of good faith and fair dealing to at

       least the same extent as does a buyer-seller relationship” as “a bank is

       inherently in a position superior to its checking account holders”). We discern

       no crucial difference between insurance companies and banks, as each – from a

       superior vantage point – offer customers contracts of adhesion, often with terms

       not readily discernable to a layperson.

[29]   “If the contract is ambiguous or expressly imposes such a duty on the parties,

       then the courts will impose such a duty [of good faith and fair dealing].” Id.

       (citing First Fed. Sav. Bank of Ind. v. Key Mkts., Inc., 559 N.E.2d 600, 604 (Ind.

       1990)). As explained by our Indiana Supreme Court in First Federal Savings

       Bank of Indiana:

               It may well be that in limited and particular cases the court may be
               required to presume the parties were acting reasonably and in good
               faith to discern the intention of the parties and resolve the ambiguity or
               uncertainty. In other words, courts are bound to recognize and
       Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015       Page 15 of 19
               enforce contracts where the terms and the intentions of the parties can
               be readily determined from the language in the instrument. It is not
               the province of courts to require a party acting pursuant to such a
               contract to be ‘reasonable,’ ‘fair,’ or show good faith cooperation.
               Such an assessment would go beyond the bounds of judicial duty and
               responsibility. . . . It is only where the intentions of the parties cannot
               be readily ascertained because of ambiguity or inconsistency in the
               terms of a contract or in relation to extrinsic evidence that a court may
               have to presume the parties were acting reasonably and in good faith
               in entering into the contract.
559 N.E.2d at 604.

[30]   In accordance with this guidance, in order to show that Depositors’ breach of

       contract claim could not survive, the Bank would be obliged to show that its

       contract is not ambiguous and is not inconsistent in its terms or in relation to

       extrinsic evidence. See id. We cannot, by examination of the contract and with

       reference to undisputed facts, conclude that the Deposit Agreement

       unambiguously and consistently provides for the sums actually charged by the

       Bank. Summary judgment is inappropriate where, as here, a factfinder could

       infer from the designated materials that the Bank breached its duty of good faith

       and fair dealing.

[31]   Conversion. Depositors alleged that the Bank converted their funds and sought

       recovery pursuant to Indiana Code Section 34-24-3-1, which permits victims of

       certain crimes, including theft and conversion, to bring a civil action for treble

       damages and attorney’s fees. To show that the Bank committed the crime of

       conversion, Depositors would need to establish that the Bank knowingly or

       intentionally exerted unauthorized control over Depositors’ property. Ind.

       Code § 35-43-4-3; Breining v. Harkness, 872 N.E.2d 155, 159 (Ind. Ct. App. 2007)
       Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015         Page 16 of 19
       trans. denied. In a criminal conversion action, criminal intent is an essential

       element to be proven. Schrenker v. State, 919 N.E.2d 1188, 1193 (Ind. Ct. App.

       2010). Such intent is established when a plaintiff shows the defendant was

       aware of a high probability his control over the plaintiff’s property was

       unauthorized. Id. at 1194.

[32]   Here, the parties entered into a contractual relationship. The designated

       materials disclose that funds deposited into customer funds were commingled;

       from the amount credited to an individual depositor, electronic debits and

       withdrawals could be made. “A general deposit vests the property in the bank

       or trust company for all purposes, but a special deposit is limited for specific

       purposes.” Sindlinger v. Dep’t of Fin. Insts. of Ind., 210 Ind. 83, 199 N.E. 715, 725

       (Ind. 1936). The character as a general deposit is presumed. See id.

       Accordingly, “well-grounded” Indiana law provides that money deposited in a

       general account becomes the property of the bank and the depositor becomes

       the bank’s creditor to the extent of the deposit. First Bank of Whiting v. Samocki

       Bros. Trucking Co., 509 N.E.2d 187, 198 (Ind. Ct. App. 1987). As a general

       principle, a bank owes sums deposited in its accounts “as with any ordinary

       debt.” Id.

[33]   “[T]he failure to pay a debt does not constitute criminal conversion as a matter

       of law.” Tobin v. Ruman, 819 N.E.2d 78, 89 (Ind. Ct. App. 2004). The Bank is

       entitled to summary judgment upon the civil and criminal conversion claims.

       Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015   Page 17 of 19
[34]   Unconscionability. A contention that a contract is unconscionable is something

       typically raised as a defense. A litigant might also seek a declaratory judgment

       of unenforceability because a contract or certain provisions were

       unconscionable. Weaver v. American Oil Co., 257 Ind. 458, 276 N.E.2d 144

       (1971). Here, however, Depositors did not expressly seek a declaratory

       judgment. They sought damages. We are aware of no substantive cause of

       action in Indiana to recover monetary damages for drafting or enforcing an

       unconscionable contract term. The Bank is entitled to summary judgment upon

       a free-standing claim of unconscionability.

[35]   Unjust Enrichment. Here, the parties’ relationship as depositors and depositary

       was governed by a contract, the existence of which is not disputed by either

       party. “The existence of express terms in a valid contract precludes the

       substitution of and the implication in law of terms regarding the subject matter

       covered by the express terms of the contract.” Keystone Carbon Co. v. Black, 599
N.E.2d 213, 216 (Ind. Ct. App. 1992), trans. denied. The equitable remedy of

       unjust enrichment is not available to Depositors. Again, the Bank is entitled to

       summary judgment upon this claim.

                                                 Conclusion
[36]   C.F.R. § 7.4002 authorizes a bank to charge overdraft fees, but does not

       authorize banks to ignore state contract or tort law. Depositors have alleged

       that the Bank acted inconsistent with its contractual obligations and assessed

       improper overdraft fees. The Bank has not negated Depositors’ state law claim

       Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015   Page 18 of 19
       for a breach of a duty of good faith and fair dealing. However, Depositors’

       claims for conversion, unconscionability,7 and unjust enrichment have been

       negated. We remand for further proceedings consistent with this opinion.

[37]   Affirmed in part; reversed in part; and remanded.

       Robb, J., and Brown, J., concur.

       7
         Summary judgment is appropriate to the extent that Depositors seek damages, as opposed to declaratory
       relief, for allegedly unconscionable contract terms.

       Court of Appeals of Indiana | Opinion 82A01-1406-CT-234 | April 23, 2015                     Page 19 of 19