Dill v. JPMorgan Chase Bank, N.A.

Background

Harold R. Dill, Edward M. Appleby, and Kari Garber brought a proposed class action against JPMorgan Chase Bank, N.A. The complaint alleged that the bank failed to follow federal and state abandoned-property laws when handling millions of dollars payable on uncashed cashier’s checks. The plaintiffs sought, among other relief, recovery of funds payable on checks owned by them and members of the proposed classes.

Dill purchased four cashier’s checks from JPMorgan Chase in Connecticut in December 2012, totaling $12,786.53. Appleby purchased several cashier’s checks from a California branch in approximately 2013, each for $10,000. The plaintiffs alleged that the checks were never cashed, that JPMorgan Chase paid no funds on them, and that the funds eventually became abandoned property. They further alleged that the bank sent the funds to Ohio instead of following applicable abandoned-property laws and failed to give proper notice that the checks had been treated as abandoned.

The complaint asserted claims for conversion, negligence per se, negligence, and unjust enrichment. It also included state-law claims under Connecticut’s Unfair Trade Practices Act for Dill and California’s Unfair Competition Law for Appleby.

Arbitration Agreement

JPMorgan Chase moved under the Federal Arbitration Act to compel arbitration and stay the court case. The bank relied on its 2012 Deposit Account Agreement, which Dill and Appleby had acknowledged receiving in connection with their accounts. The agreement stated that, unless a customer opted out, disputes relating in any way to an account or transactions would be resolved through binding arbitration rather than litigation in court, except for qualifying individual small-claims matters.

The agreement covered claims about deposit accounts, transactions involving deposit accounts, related services, and claims arising from or relating to the agreement or prior account agreements. It also stated that claims were covered regardless of their legal theory or whether they sought legal or equitable relief. Customers had 60 days to opt out. JPMorgan Chase’s records did not show that Dill or Appleby opted out.

The plaintiffs did not challenge whether an arbitration agreement existed. They argued instead that their claims fell outside the agreement’s scope because they concerned the bank’s abandoned-property obligations and cashier’s checks, not conduct involving their deposit accounts.

Court’s Analysis

The court explained that a motion to compel arbitration requires determining whether the parties agreed to arbitrate and whether the claims fall within that agreement. Because the plaintiffs did not dispute the agreement’s existence, the court addressed only its scope.

The court held that the arbitration provision was broad. It covered “any dispute relating in any way” to the plaintiffs’ accounts or transactions and claims about deposit accounts, transactions, and related services. Under the governing legal standard, a broad arbitration clause creates a presumption that disputes are arbitrable unless it is clear that the clause cannot cover them.

The court concluded that the plaintiffs’ claims fell within the provision because the cashier’s checks were purchased using funds from their JPMorgan Chase accounts. The court rejected the plaintiffs’ argument that the claims were solely about abandoned-property laws. It also rejected their argument that cashier’s checks became disconnected from their deposit accounts because the funds for the checks would ultimately come from the bank’s resources rather than the plaintiffs’ accounts. The court found it important that the plaintiffs used their accounts to purchase the checks.

The court also rejected arguments that the dispute was not foreseeable when the agreement was formed or that the dispute could have arisen without the plaintiffs’ accounts. It concluded that the plaintiffs had not shown that the agreement could not cover their claims.

Disposition

The court granted JPMorgan Chase’s motion to compel arbitration. It ordered that Dill’s and Appleby’s claims be submitted to arbitration and stayed the action solely as to those plaintiffs. The court ordered the parties to update it by January 29, 2021, about the status of arbitration.

The order did not stay Kari Garber’s claims. It directed JPMorgan Chase to answer, move, or otherwise respond to Garber’s claims by August 19, 2020. The opinion decided whether Dill’s and Appleby’s claims had to be arbitrated; it did not decide the underlying abandoned-property claims on their merits.