Cite as 2011 Ark. App. 756
ARKANSAS COURT OF APPEALS
DIVISION II
No. CA11-473
Opinion Delivered
ROBERT DAVID LEWIS
APPELLANT
December 7, 2011
APPEAL FROM THE PULASKI
COUNTY CIRCUIT COURT,
THIRD DIVISION
[NO. CV-2008-4913]
V.
AT&T MOBILITY and
METROPOLITAN NATIONAL BANK
APPELLEES
HONORABLE JAY MOODY,
JUDGE
AFFIRMED
DAVID M. GLOVER, Judge
This is an appeal from the grant of summary judgment. Appellant David Lewis
sued Brandy Phillips, Cody Boyd, AT&T Mobility, LLC, and Metropolitan National
Bank for Phillips’s use of Lewis’s VISA debit card.1 Specifically, Lewis alleged that AT&T
allowed Phillips to use his debit card number on numerous occasions to purchase items or
to pay her debts without presentation of the debit card, a PIN number, any identification,
or his signature. Lewis asserted that this conduct was negligent on the part of AT&T and
that AT&T was liable under the theories of negligence and unjust enrichment for the
amount of $6486.69. AT&T filed a motion for summary judgment; Lewis filed a cross-
1
Lewis obtained a default judgment against Phillips in the amount of $20,000 in March
2009, and his claims against Metropolitan were dismissed with prejudice in an order filed
January 24, 2011. In the order granting summary judgment to AT&T, which is the subject
of this appeal, the trial court noted that Cody Boyd was not served within the required 120
days and therefore Lewis’s complaint against Boyd was dismissed without prejudice.
Cite as 2011 Ark. App. 756
motion against AT&T for summary judgment. The trial court granted AT&T’s motion
for summary judgment. Lewis now appeals, arguing that the trial court erred in granting
summary judgment to AT&T because “[a] retailer which charges a bank customer’s debit
card when its online computer takes only the card owner’s name, address, date of
expiration and three-digit security code off the back of the card by the retailer has no view
of the identity thief, no signature, no view of the presenter’s driver’s license and no pin
number should not be able to keep the money when sued by the bank customer for
negligence and unjust enrichment when the charges are unauthorized by the card holder.”
We affirm.
Our supreme court has set forth the following view, procedure, and disposition
mechanism of motions for summary judgment by parties and courts:
Summary judgment is no longer viewed by this court as a drastic remedy; rather, it
is viewed simply as one of the tools in a circuit court’s efficiency arsenal. It should
be granted only when it is clear that there are no genuine issues of material fact to
be litigated and the moving party is entitled to judgment as a matter of law. All
proof must be viewed in the light most favorable to the nonmoving party, and any
doubts must be resolved against the moving party. Once the moving party has
established a prima facie entitlement to summary judgment, the opposing party must
meet proof with proof and demonstrate the existence of a material issue of fact.
Marlar v. Daniel, 368 Ark. 505, 507, 247 S.W.3d 473, 475 (2007) (citations omitted).
Prologue
This case was presented both to the trial court and on appeal on the common-law
theories of negligence and unjust enrichment. There was no attempt to develop state or
federal consumer-credit legislation usurping the marketplace, i.e., commerce, in the realm
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of electronic-fund transfers. As best we can determine, using the parlance of current
federal consumer-credit-protection legislation, we have a cardholder (Lewis/Brandy
Phillips with apparent authority), his card company (VISA) acting for the benefit of his
bank, the card issuer (Metropolitan Bank), and the merchant (AT&T Mobility). From the
record, it appears that both Lewis, the card holder, and AT&T, the merchant, had separate
contracts with Metropolitan, the card issuer, since a debit card was used. In this alignment
of parties, within the field of electronic-fund transfers, there is no direct accounting
between AT&T and Lewis; that is, both are contractually bound to their transactions and
deal through Metropolitan.
In any action which involves a consumer’s liability for an unauthorized electronicfund transfer, the burden of proof is upon the financial institution:
In any action which involves a consumer’s liability for an unauthorized electronic
fund transfer, the burden of proof is upon the financial institution to show that the
electronic fund transfer was authorized or, if the electronic fund transfer was
unauthorized, then the burden of proof is upon the financial institution to establish
that the conditions of liability set forth in subsection (a) of this section have been
met, and, if the transfer was initiated after the effective date of section 1693c of this
title, that the disclosures required to be made to the consumer under section
1693c(a)(1) and (2) of this title were in fact made in accordance with such section.
15 U.S.C.A. § 1693g(b). This is for Lewis’s exclusive benefit as the consumer.
Here, Lewis’s claims against Metropolitan were dismissed with prejudice from this
lawsuit. The record does not reflect the terms of dismissal. However, it is unnecessary for
us to discuss the obligations between AT&T and Metropolitan, as Metropolitan is no
longer a party to this case.
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Negligence
The law of negligence requires as an essential element that the plaintiff show that a
duty of care was owed. Young v. Gastro-Intestinal Center, 361 Ark. 209, 205 S.W.3d 741
(2005).
Duty is a concept arising out of the recognition that “relations between
individuals may impose upon one a legal obligation for the other.” Tackett v. Merchant’s
Security Patrol, 73 Ark. App. 358, 362, 44 S.W.3d 349, 352 (2001).The issue of whether a
duty exists is always a question of law, not to be decided by a trier of fact. Lacy v. Flake &
Kelley, 366 Ark. 365, 235 S.W.3d 894 (2006). If no duty of care is owed, summary
judgment is appropriate. Id.
AT&T attached as an exhibit to its motion for summary judgment copies of a
booklet produced by Lewis’s card company entitled “Rules for Visa Merchants Card
Acceptance and Chargeback Management Guidelines.” The guidelines define the business
relationship between the card company and the merchant. On page forty of that booklet
are the fraud-prevention guidelines for card-not-present transactions.
The guidelines
provide that authorization is required on all card-not-present transactions; that whenever
possible, card-not-present merchants should ask customers for their card expiration, or
“good thru,” date and include it in the authorization request; and that the Card
Verification Value 2 (CVV2), the three-digit security number printed on the back of Visa
cards to help validate that a customer is in possession of a legitimate card at the time of an
order, should be requested from card-not-present customers. AT&T also attached the
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affidavit of Patti Hancock, the manager of AT&T’s payment-fraud department during the
relevant times. Hancock stated that credit-card and debit-card companies establish the
information required to process card-not-present transactions, which typically require the
name of the cardholder, the cardholder’s billing address and zip code, the expiration date
of the card, and the CVV number, which is the three-digit security code on the back of a
credit or debit card. Hancock stated that Brandy Phillips had an account with AT&T; that
beginning in March 2007 and continuing through March 2008, Phillips paid her monthly
mobile-phone bill with Lewis’s Visa card through the online account manager; and that
AT&T
accepted
this
payment
because
Phillips
had
all
of
the
information
necessary—Lewis’s name, billing address and zip code, the card’s expiration date, and the
CVV number—to process a card-not-present payment. She further stated that Lewis did
not report Phillips’s unauthorized use until April 2008.
Lewis’s response to AT&T’s motion for summary judgment merely stated that
AT&T took money out of his account without his signature or permission or without
hearing a voice or seeing a face; that it was difficult to discover the transactions because he,
too, had his own AT&T cell-phone bill that was also paid monthly; and that identity theft
was rampant and it was because companies such as AT&T did not take reasonable steps to
ascertain whether the debit from the account was authorized by the owner of the account.
Lewis fails to establish that AT&T owed him a duty to obtain his permission or his
signature to process a card-not-present transaction. Lewis does not contend that AT&T
failed to obtain the information necessary to process a card-not-present transaction, and he
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concedes in his brief that a merchant need only obtain the information AT&T obtained to
verify a card-not-present transaction. In fact, he admitted in his brief that he had used the
card-not-present transaction option himself. Lewis cites to no authority that mandates a
duty upon AT&T greater than what was required (and what was performed) when
processing a card-not-present transaction.
He has failed to meet proof with proof
regarding the summary-judgment motion; without proof of a duty owed to Lewis by
AT&T, a grant of summary judgment to AT&T was appropriate.
Furthermore, as AT&T points out, federal law protects consumers. A consumer
shall be liable for any unauthorized electronic fund transfer involving his account only if
the card was an accepted card and the issuer of such card has provided a means whereby
the user of the card can be identified as the person authorized to use it, such as by
signature, photograph, or fingerprint or by electronic or mechanical confirmation;
however, in no event shall a consumer’s liability for an unauthorized transfer exceed the
lesser of $50 or the amount of money or value of property or services obtained in such
unauthorized electronic fund transfer prior to the time the financial institution is notified
of, or otherwise becomes aware of, circumstances which lead to the reasonable belief that
an unauthorized electronic fund transfer involving the consumer’s account has been or
may be effected. 15 U.S.C.A. § 1693g(a). However, reimbursement need not be made to
the consumer for losses the financial institution establishes would not have occurred but
for the failure of the consumer to report within sixty days of transmittal of the statement
any unauthorized electronic fund transfer or account error which appears on the periodic
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statement. Id. Here, Lewis failed to report the unauthorized charges until a year after
they began occurring. Still yet, such reports would be made to the financial institution, not
the individual merchant.
Unjust Enrichment
“To find unjust enrichment, a party must have received something of value, to
which he was not entitled and which he must restore. There must also be some operative
act, intent, or situation to make the enrichment unjust and compensable. The basis for
recovery under this theory is the benefit that the party has received and it is restitutionary
in nature.” Dews v. Halliburton Indus., Inc., 288 Ark. 532, 536–37, 708 S.W.2d 67, 69
(1986) (citations omitted). In this case, AT&T did receive something of value—money
for mobile-telephone services provided to Brandy Phillips. However, AT&T was entitled
to be paid for those services it provided. In this case, AT&T was not the party unjustly
enriched by Phillips’s use of Lewis’s Visa to pay her phone bill—Phillips was unjustly
enriched.
Affirmed.
MARTIN, J., agrees.
HART, J., concurs.
JOSEPHINE LINKER HART, Judge, concurring. In his amended complaint, Robert
David Lewis alleged that appellee AT&T Mobility was negligent because it allowed
Brandy Phillips to use Lewis’s debit-card number on numerous occasions to purchase
items or pay her debts without presentation of the debit card, the card’s pin number, or
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Lewis’s signature or identification. I note that negligence turns on duty. Duty arises out of
the recognition that relations between individuals may impose upon one a legal obligation
for another. See, e.g., Mans v. Peoples Bank of Imboden, 340 Ark. 518, 10 S.W.3d 885
(2000). The question of what duty is owed to the plaintiff alleging negligence is one of
law, and if no duty is owed, the negligence count is decided as a matter of law. Id.
If, for instance, Lewis had intended to assert that AT&T owed him a duty because
he and AT&T were in a fiduciary relationship, he would have had to present factual
underpinnings to establish a relationship of trust—a special relationship—between himself
and AT&T. Id. For example, to establish a duty in the context of a bank and a customer,
the relationship between them must be more than a debtor and creditor relationship, and
for the relationship to be more, the customer must present the factual underpinnings for
that special relationship. Id.
AT&T submitted an affidavit asserting that it had obtained all the information
necessary to process a “card-not-present payment.” While Lewis provided an affidavit
setting forth the circumstances surrounding his discovery of the transactions between
Phillips and AT&T, he did not present the factual underpinnings to establish that he and
AT&T were in a special relationship such that any legal obligation was imposed upon
AT&T. Thus, the circuit court properly granted summary judgment as a matter of law.
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