Court Opinion

ID: 183607
Source: CourtListenerOpinion
Date Created: 2011-01-26 01:08:04+00
Date Added: 2024-06-11T17:26:04.314723
License: Public Domain

[DO NOT PUBLISH]

               IN THE UNITED STATES COURT OF APPEALS

                       FOR THE ELEVENTH CIRCUIT
                        ________________________           FILED
                                                  U.S. COURT OF APPEALS
                               No. 09-13148         ELEVENTH CIRCUIT
                                                        JAN 25, 2011
                           Non-Argument Calendar
                                                         JOHN LEY
                         ________________________          CLERK

                      D. C. Docket No. 08-61133-CV-JIC

CUNEYT DURU,
an individual,
                                                            Plaintiff-Appellant,

                                    versus

HSBC CARD SERVICES, INC.,
a foreign corporation authorized
to do business in the State of
California, et al.,

                                                                   Defendants,

HSBC BANK NEVADA, N.A.,
formerly known as
Household Bank (SB), N.A.,

                                                           Defendant-Appellee.

                         ________________________

                  Appeal from the United States District Court
                      for the Southern District of Florida
                        _________________________

                               (January 25, 2011)
Before BLACK, CARNES and WILSON, Circuit Judges.

PER CURIAM:

       Cuneyt Duru appeals the district court’s grant of HSBC Card Services,

Inc.’s motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure

to state a claim in her class action complaint against HSBC. Duru’s complaint

alleged among other theories that HSBC breached the implied covenant of good

faith and fair dealing under Nevada law that arose from Duru’s credit card

customer agreement with HSBC.1 She contends that her complaint sufficiently

alleges that the credit card agreement is ambiguous and that HSBC used that

ambiguity to deliberately contravene the intention and spirit of the contract and

breach its implied covenant of good faith and fair dealing.

       We review de novo the district court’s grant of a Rule 12(b)(6) motion to

dismiss. Edwards v. Prime, Inc., 602 F.3d 1276, 1291 (11th Cir. 2010). “We take

the factual allegations in the complaint as true and construe them in the light most

favorable to the plaintiffs.” Id. But we are not required to accept the legal

conclusions in the complaint as true. Sinaltrainal v. Coca-Cola Co., 578 F.3d

1252, 1260 (11th Cir. 2009). And “the factual allegations in a complaint must

possess enough heft to set forth a plausible entitlement to relief.” Fin. Sec.

       1
         The choice-of-law provision in the credit card agreement states it is governed by Nevada
law, the district court applied Nevada law, and no one contests its application in this Court.

                                               2
Assurance, Inc. v. Stephens, Inc., 500 F.3d 1276, 1282 (11th Cir. 2007) (quotation

marks omitted) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 557–58, 127

S.Ct. 1955, 1966–67 (2007)).

      Under Nevada contract law, “[a] contract is ambiguous only when it is

subject to more than one reasonable interpretation,” State ex rel. Masto v. Second

Judicial Dist. Court ex rel. County of Washoe, 199 P.3d 828, 832 (Nev. 2009), and

courts are not free to modify or vary the terms of an unambiguous agreement,

Kaldi v. Farmers Ins. Exch., 21 P.3d 16, 21 (Nev. 2001). But a party may still

breach the implied covenant of good faith and fair dealing where “the terms of a

contract are literally complied with but one party to the contract deliberately

contravenes the intention and spirit of the contract.” Hilton Hotels Corp. v. Butch

Lewis Prods., Inc., 808 P.2d 919, 922–23 (Nev. 1991). To prove a contractual

claim for a breach of the implied covenant of good faith and fair dealing, a

plaintiff must show that the plaintiff and defendant were parties to a contract, the

defendant breached its implied duty by performing in a manner unfaithful to the

purpose of the contract, and the plaintiff’s justified expectations were denied. See

Perry v. Jordan, 900 P.2d 335, 338 (Nev. 1995).

      Duru’s complaint alleges that the provision in the credit card agreement

defining “daily periodic rate” is ambiguous. The credit card agreement defines the

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daily periodic rate as “the corresponding [annual percentage rate] divided by 365.”

She alleges that “365” is ambiguous because, in addition to being read as a

number, it could also be reasonably read as the number of days in a year. She

further alleges that HSBC used that ambiguity to unfaithfully calculate the daily

periodic rate to its advantage during leap years, which contain 366 days, and

overcharge its customers during those years.

      Duru’s allegations do not support a contractual claim of breach of the

implied covenant of good faith and fair dealing under Nevada law. The credit card

agreement is not ambiguous. The plain language of the credit card agreement sets

the denominator for the daily periodic rate interest calculation at 365, not a

variable based on the number of days in the year. The purpose of the credit card

agreement was to extend credit to Duru in exchange for the payment of interest at

rates agreed on by the parties. Both parties agreed that the daily periodic rate

would be calculated by dividing the annual percentage rate by 365. HSBC’s

calculation of that agreed-to interest rate during leap years was not unfaithful to

the purpose of the agreement and Duru makes no factual allegations that HSBC’s

performance denied her justified expectations.

      AFFIRMED.

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