EverBank Class Action
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On April 13, 2011, the Court ruled on the parties' cross summary judgment motions

Q:  What was the ruling?  Did we win or lose?

Like many things in the law, it was a mixed bag.

We'll start with the bad news.  The primary focus of the competing motions was obtaining a context for the meaning of Terms and Conditions provision 2.7.1 .  That provision states:

2.7.1. Conversion Information: This account will be used to hold funds denominated in a currency other than U.S. dollars. If you request funds in this account to be denominated in a currency other than the currency sent to us to fund the account, we will convert your funds using a then current conversion rate set by us. Your currency conversion rate will be within 1% of the wholesale spot price we pay for your currency. Exceptions may occur when a specific conversion rate is agreed upon between you and us.

Plaintiff's argument was that that the third sentence (in bold) only applied to conversions into krona and not conversions out of krona into dollars.  The defense contended that this rate applied to both sides of the transaction.

The Court agreed with the defense on this point.  The Court's primary reasoning was found by reference to section 2.7.7 ("Lock-In Alternative") which allows CD holders to contact Everbank and ask that their foreign currency CD immediately be locked-in at the prevailing conversion rate so that, upon maturity, the customer is guaranteed a precise conversion rate.  The Court found that because 2.7.7 provided an "Alternative" method of calculating the exit currency conversion rate, there should logically be a primary method which is normally used unless the "Alternative" is invoked.  Plaintiff argued that the primary method was to be found in the favorable wording of Florida law itself (and not the contract).  However, the Court found that "Read in context, the agreement unambiguously provides that the currency conversion rate previously defined in section 2.7.1 stands as that alternative to the lock-in rate."

The court then concluded as follows:

In short, the parties' agreement unambiguously provides that EverBank will apply the currency conversion rate provided in section 2.7.1 of the Terms and Condition to a WorldCurrency CD account, including upon its closure. Thus, assuming EverBank did not breach the contract by declining to renew Vathana's CDs, then it committed no breach of contract in paying him at a rate within 1% of the wholesale spot price it obtained. Vathana's motion for summary judgment is denied and EverBank's counter-motion, that the conversion rate it applied upon closure in and of itself did not breach the contract, is granted.

Thus, the Court is saying that all class members should have known that whenver EverBank rightfully closes a foreign currency CD, it has the absolute right to convert it into U.S. dollars at 1% of whatever EverBank paid.

The court then addressed the defense's second point, which did not go so well for them.  EverBank argued that even if it breached the contract by failing to renew the CD and converting plaintiff into dollars, plaintiff suffered no loss because EverBank converted plaintiff's krona into dollars within 1% of the wholesale spot price EverBank on the day of the breach as provided by provision 2.7.1.

The Court found, however, that in a case of fluctuating conversion values, a breaching defendant does not necessarily get to choose the day on which to measure the value of the item it wrongfully converted. 

Thus, Vathana's demand for payment in króna, stated another way, is simply an argument that the appropriate measure of damages should be based on the retail purchase price of króna, such that he could have obtained and held an equivalent króna-denominated account on the day of breach. On its motion for summary judgment, EverBank has not presented authority establishing that this argument is indisputably meritless.

The Court then denied EverBank's motion for summary judgment to the extent EverBank was arguing that, in the event of breach, plaintiff could not have sustained any damages as a matter of law.

Notes of Interest