                          STATE OF MICHIGAN

                            COURT OF APPEALS



LINDA R. GLASKE,                                                     UNPUBLISHED
                                                                     January 21, 2016
               Plaintiff-Appellee,

v                                                                    No. 323167
                                                                     Wayne Circuit Court
INDEPENDENT BANK CORPORATION,                                        LC No. 13-009983-CZ

               Defendant-Appellant.


Before: BECKERING, P.J., and GLEICHER and M. J. KELLY, JJ.

PER CURIAM.

        Linda R. Glaske, filed a class action complaint in Wayne Circuit Court against her former
bank, Independent Bank Corporation. Like many other disgruntled bank customers around the
country, Glaske challenged a short-lived banking policy of batching and reordering customers’
transactions so as to maximize overdraft charges. Glaske’s legal claims mirror those made in
federal multi-district litigation involving more than a dozen national banks that ultimately settled
for more than $1 billion. Independent sought summary disposition pursuant to MCR 2.116(C)(8)
very soon after Glaske filed suit, before any discovery could be obtained. The circuit court
denied the motion, leading to Independent’s interlocutory application for leave to appeal. We
now affirm.

                                       I. BACKGROUND

        Glaske formerly maintained a checking account at defendant Independent Bank. She
objected to the bank’s policy of posting items to her account at the end of each business day in
order from highest value to lowest. (Independent Bank has since stopped the practice, as have
banks nationwide.) Many banks used this procedure to increase the insufficient fund and
overdraft fees they could charge their customers. For example, if a customer had $300 in her
checking account and had three outstanding checks or debits for $75, $60, and $250, the bank
would post the $250 item first so it could charge an overdraft fee for the remaining two items. If
it posted the items from lowest to highest value, the bank would only be able to collect one fee.
In another effort to increase profits, many banks stopped alerting their customers of impending
overdrafts. Similarly, the banks deliberately elected against declining debit card transactions




                                                -1-
when the transaction would overdraw the account. These actions permitted the banks to charge
fees to customers when they made an overdraft purchase without giving the customers the option
to forego the sale and the attendant fee.1

        After closing her account, Glaske filed suit against Independent. In her lengthy
complaint, Glaske described Independent’s practices in great detail.              She compared
Independent’s actions to those of the various banks previously sued in federal court, a
consolidated lawsuit that resulted in over $1 billion in settlements.2 Overall, Glaske challenged
Independent’s decision to wait until the end of the business day to post pending items to her
checking account despite that point-of-sale (POS) and ATM transactions were automatically
relayed to the bank. As a result, customers could not access real-time, accurate balance
information. Further, when posting items Independent reordered them from highest value to
lowest, paring down the account balance more quickly and thereby imposing multiple fees for
overdrawn accounts. Glaske emphasized that Independent approved ATM withdrawals and POS
transactions knowing that the transactions would result in an overdraft, without notifying the
customer and offering an opportunity to cancel the withdrawal of funds. She further complained
that Independent failed to provide its customers with adequate and accurate information about its
overdraft policies.

        Glaske’s complaint included three counts: breach of contract, unconscionability, and
unjust enrichment. In Count I, Glaske alleged that Independent breached its contract with her
and other customers, and breached its covenant of good faith and fair dealing. Glaske contended
that Independent’s actions violated contract provisions allowing overdraft fees “only on returned
items” and promising that “checks will be posted in check number order.” Glaske continued that
Independent breached the covenant of good faith and fair dealing “through its overdraft policies
and practices.”


1
  This general background information is drawn from In Re Checking Account Overdraft
Litigation, 694 F Supp 2d 1302 (SD Fla, 2010). This case involved several consolidated class
action lawsuits filed in federal courts against numerous banks nationwide.
2
  We accept the settlement figure cited by Glaske in her pleadings. Although the settlement
documents themselves are confidential, media outlets have reported that Wells Fargo Bank paid
over $200 million, Bank of America $410 million, and Capital One $31.8 million. See
“Excessive Bank Overdraft Fees,” Lawyers and Settlements.com, <https://www.lawyersand
settlements.com/lawsuit/excessive-bank-overdraft-fees.html?fp=1&utm_expid=3607522-10.7z
QgoaZSRC-6j_IrrLlOsA.1&utm_referrer=https%3A%2F%2Fwww.google.com
%2F#.VnLH2_krJpg> (accessed December 17, 2015). Many banks have created websites to
assist the class members and report the settlement figures. Citizens Bank/Charter One reached a
settlement for $137.5 million. See < https://www.citizensoverdraftsettlement.com/> (accessed
December 17, 2015). U.S. Bank settled for $55 million.
<http://www.usbankoverdraftsettlement.com/> (accessed December 17, 2015). PNC Bank
settled for $90 million. See <https://www.pncbankoverdraftsettlement.com/en> (accessed
December 17, 2015). These settlements alone amount to over $900 million. As numerous other
large, national banks were included in the litigation, Glaske’s allegation appears plausible.


                                               -2-
        In Count II, Glaske contended that Independent’s overdraft policies and practices were
unconscionable because the bank did not 1) adequately inform customers of their right to opt out
of the overdraft program, 2) require customers’ affirmative consent to the program, and 3) alert
customers that a transaction would create an overdraft and give them the option to cancel the
transaction.

       The third and final count raised in Glaske’s complaint was for unjust enrichment. Glaske
contended that if Independent’s contract was found unenforceable, the doctrine of unjust
enrichment “will dictate that Independent disgorge all improperly assessed overdraft fees.”

        As noted, Independent sought summary dismissal of Glaske’s complaint pursuant to
MCR 2.116(C)(8) (failure to state a claim upon which relief can be granted) before any
discovery could be had. Independent insisted that its actions were fully compliant with its
contractual duties. The bank contended that Michigan does not recognize an independent cause
of action for breach of the covenant of good faith and fair dealing, requiring the dismissal of
much of Glaske’s breach-of-contract claim.                 Similarly, Independent argued that
unconscionability is a defense to the enforcement of a contract, but cannot be raised as an
affirmative cause of action. Finally, Independent sought dismissal of Glaske’s equitable unjust
enrichment claim as such relief is not available in the face of an express contract.

        Glaske responded by discussing the combined, multidistrict litigation heard in the
southern district of Florida regarding the various class actions filed nationwide—In re Checking
Account Overdraft Litigation. Glaske emphasized that the district court judge had denied the
various defendant banks’ motions for summary judgment in that case, and approved the
certification of various classes and subsequent settlements. Glaske further highlighted that the
Northern District of California had conducted a trial in a similar case and found the very
practices complained of here to be “gouging and profiteering.” See Gutierrez v Wells Fargo
Bank, NA, 730 F Supp 2d 1080, 1104 (ND Cal, 2010), aff’d in part, rev’d in part, and remanded
704 F3d 712 (CA 9, 2012).

        Glaske continued that as discovery was ongoing, it was unclear whether the documents
she attached to her complaint were the full contract between the parties. It was similarly unclear
whether all the necessary documents were actually given to customers. And those documents
that were available were ambiguous at best. In relation to her unconscionability count, Glaske
asserted that she raised the claim to invalidate the contract and seek equitable relief, not as a
separate ground for reparation. The unjust enrichment claim was an alternative count that would
only support relief if the contract were invalidated, Glaske concluded.

        The circuit court rejected Independent’s bid for summary disposition in most respects.
The court found the contract documents ambiguous and therefore in need of interpretation,
although it agreed that Michigan does not recognize actions for breach of the covenant of good
faith and fair dealing. The court discerned no ground to dismiss the unconscionability count and
found unjust enrichment a properly raised alternative ground for relief. This appeal followed.




                                               -3-
                                 II. BREACH OF CONTRACT

       The circuit court properly rejected in part Independent’s bid to dismiss Glaske’s breach-
of-contract claim.3

               We review a trial court’s decision on a motion for summary disposition de
       novo. Wayne Co v Wayne Co Retirement Comm, 267 Mich App 230, 243; 704
       NW2d 117 (2005). A motion under MCR 2.116(C)(8) “tests the legal sufficiency
       of the complaint on the basis of the pleadings alone to determine if the opposing
       party has stated a claim for which relief can be granted.” Begin v Mich Bell Tel
       Co, 284 Mich App 581, 591; 773 NW2d 271 (2009). We must accept all well-
       pleaded allegations as true and construe them in the light most favorable to the
       nonmoving party. Id. The motion should be granted only if no factual
       development could possibly justify recovery. Id. [Zaher v Miotke, 300 Mich App
       132, 139; 832 NW2d 266 (2013).]

      We also review de novo questions of contract interpretation. Klapp v United Ins Group
Agency, Inc, 468 Mich 459, 468; 663 NW2d 447 (2003).

       In interpreting a contract, it is a court’s obligation to determine the intent of the
       parties by examining the language of the contract according to its plain and
       ordinary meaning. If the contractual language is unambiguous, courts must
       interpret and enforce the contract as written, because an unambiguous contract
       reflects the parties’ intent as a matter of law. [In re Smith Trust, 480 Mich 19, 24;
       745 NW2d 754 (2008) (citations omitted).]

If a contract is ambiguous, however, the rules of construction come into play. Our Supreme
Court has emphasized that a finding of ambiguity must rest on a determination that the words
used in the contract are “equally susceptible to more than a single meaning.” Stone v
Williamson, 482 Mich 144, 150-151; 753 NW2d 106 (2008). An ambiguity may also be found
when two contractual provisions “irreconcilably conflict with each other.” Klapp, 468 Mich at
467. See also In re Application of the Detroit Edison Co to Increase Rates, 495 Mich 884
(2013).

                               A. SCOPE OF THE CONTRACT

        Glaske attached several documents to her complaint that are part of her contract with
Independent Bank. Glaske correctly argues that other documents may also form part of the
contract and that discovery is necessary to flesh out the totality of the agreement. The
documents attached to the complaint incorporate other documents by reference and do not
clearly define the scope of the writings that complete the contract.



3
 Glaske did not file a counter-application for leave to appeal the court’s dismissal of her claims
based on the covenant of good faith and fair dealing.


                                               -4-
       Glaske attached to her complaint the 2007 and 2010 Deposit Account Agreements
applicable to her account. In the “general agreement” provisions, the agreements provided that
the documents “govern[] your account” “along with any other documents applicable to your
account” (2007 agreement) and advised, “Your account is also governed by other applicable
documents” (2010 agreement). Glaske also attached the Deposit Account Terms and Conditions,
which states:

                The following sections are applicable to all Accounts except as otherwise
       specified. All of the following terms and conditions, together with the Account
       Agreement, Schedule of Services and Fees, and any applicable supplements or
       amendments, including changes caused by new or modified laws or regulations
       . . . provided at Account opening or thereafter will govern the operation of your
       Account. You agree to all of these Terms when you sign the Account Agreement
       and when you keep your Account open after you receive the Terms or subsequent
       amendments.

Finally, Glaske included an Electronic Fund Transfer Agreement (EFTA), which instructs, “Your
account is also governed by the terms and conditions of other applicable agreements between
you and the bank.”

         These quoted provisions highlight the need for discovery before summary disposition of
Glaske’s contract claim should be considered. The Deposit Account Agreements emphasize that
additional documents govern the parties’ relationship. Each version contains a nonexhaustive
list of examples of other applicable documents, meaning that other documents likely exist. The
Terms and Conditions go a step further and describe that the documents forming the parties’
agreement will evolve and could be sent to the customer at any time. A motion under (C)(8)
cannot be granted if “factual development could possibly justify recovery.” Zaher, 300 Mich
App at 139, citing Begin, 284 Mich App at 591. It is likely that discovery will reveal additional
documents governing Glaske’s account. Accordingly, the circuit court properly determined that
summary disposition was improper, or at least premature, when requested.

                       B. CONFLICTING DOCUMENT PROVISIONS

       In addition, Glaske alleged facts which, if proven, could support her underlying legal
claim. As aptly noted by Independent, Glaske alleged that the bank breached its contract with
her by posting checks (not electronic transactions) in order from highest to lowest value and by
charging fees on items paid that caused an overdraft, rather than just on items that were returned
for insufficient funds. The documents attached to Glaske’s complaint revealed inconsistent
terms sufficient to overcome the (C)(8) motion in these regards.

       In relation to the posting order of checks, Independent’s Deposit Account Terms and
Conditions provide:




                                               -5-
       NON-SUFFICIENT FUNDS – Checks will be posted to your Account in check
       number order upon day of presentment, however certain transactions, such as
       items cashed at the Bank, ACH items, ATM [illegible], and wire transfers, may be
       posted before checks. We reserve the right to change this posting order without
       notice. [Emphasis added.]

The 2007 and 2010 Deposit Account Agreements provide, in relevant part, “We may process
checks and any other debit activity in any order, including from highest dollar amount to lowest
dollar amount.” (Emphasis added.)

        These provisions include two key verbs: “will” and “may.” It is well established under
Michigan law that “may” is a permissive term. See In re Bail Bond Forfeiture, 496 Mich 320,
328; 852 NW2d 747 (2014). “Will” has several meanings, however. Of relevance here, “will”
can “express futurity” and can also “express a command, exhortation, or injunction.” Merriam-
Webster’s Collegiate Dictionary (11th ed, p 1433). The phrasing is also important. “Checks will
be posted” is passive future tense. Its active equivalent would read, “Independent will post
checks.”      See Passive Verb Tenses, Purdue Online Writing Lab, available at
<https://owl.english.purdue.edu/owl/resource/601/02/> (accessed December 7, 2015).

        Accordingly, the non-sufficient funds provision in the Deposit Account Terms and
Conditions incorporates Independent’s promise to post checks in numeric order on the day of
presentment. This is a mandatory contractual term. Independent reserved the right to change
that policy without notice. Although Independent claims it decided to change the posting order,
it never revised its written materials and continued to present these same terms and conditions to
its customers, advising new customers that it was required to post checks in numeric order on the
date of presentment. The pleadings therefore suffice to allege a cognizable claim that
Independent breached its written promise to post in numeric order by instead posting checks in
high-to-low order.

        Moreover, Glaske established a contractual ambiguity by citing the 2007 and 2010
Deposit Agreements which indicated, “We may process checks and any other debit activity in
any order, including from highest dollar amount to lowest dollar amount.” At the same time that
Independent was informing its customers that “[c]hecks will be posted” in numeric order,
(emphasis added) the bank indicated that it was permitted to post checks (as well as other items)
in any order. At the very least, this creates a contractual ambiguity, as the agreements appear to
irreconcilably conflict. In resolving that ambiguity, the court could rely on the precept that more
specific provisions, like that expressly covering only checks, govern over more general
provisions, like the permissive provision governing all debit activity. See Restatement 2d
Contracts, § 203(c), p 93 (“[S]pecific terms and exact terms are given greater weight than
general language[.]”); 5 Corbin, Contracts, § 24.23, p 253 (“If the apparent inconsistency is
between a clause that is general and broadly inclusive in nature and one that is more limited and
specific in its coverage, the more specific term should usually be held to prevail over the more
general term.”); 11 Williston, Contracts (4th ed), § 32:10, pp 739-740 (“When general and
specific clauses conflict, the specific clause governs the meaning of the contract.”).




                                                -6-
        Given the conflicting contract terms, that Independent never amended its Terms and
Conditions and continued to inform customers that it would post checks in numeric order, and
that other documents may exist that are part of the parties’ contract, the circuit court correctly
determined that summary disposition was inappropriate in relation to the posting order of checks.

       The contract documents attached to Glaske’s complaint are not quite as inconsistent with
regard to when overdrafted items can be paid and when overdraft fees can be charged. The
attached Deposit Account Terms and Conditions provide:

       If the Account lacks sufficient available funds to pay a check, in-person
       withdrawal, ATM withdrawal, or other electronic means presented for payment,
       at the Bank’s complete discretion, we may elect to pay such check, in-person
       withdrawal, ATM withdrawal, or other electronic means OR return or refuse to
       pay such check, in-person withdrawal, ATM withdrawal, or other electronic
       means for non-sufficient funds (NSF). The Bank will assess a fee for each check,
       in-person withdrawal, ATM withdrawal, or other electronic means that is returned
       or refused due to NSF or if paid causes an overdraft on your Account, as provided
       in the Schedule of Fees applicable to the Account. . . .

       The 2007 Deposit Agreement provides:

       12. Fees, Service Charges and Balance Requirements. You agree you are
       responsible for any fees, charges, balance, or deposit requirements as stated in the
       Disclosures.

       13. Non-Sufficient Funds. If your account lacks sufficient available funds to
       pay a check, preauthorized transfer, or other debit activity presented for payment,
       we may return such item for non-sufficient funds and will charge you a fee as
       provided in the Disclosures, subject to our Overdraft Policy, if any. . . .

Independent Bank’s 2010 Deposit Account Agreement includes identical provisions. The
Overdraft Policy, however, was not attached to the complaint and likely will be obtained during
discovery.

       The attached documents permit the Bank to pay items despite that payment could cause
an overdraft and to assess a fee against the account holder, despite Glaske’s insistence to the
contrary. The deposit account agreements grant Independent the discretion—“may”—to refuse
items but does not preclude payment of items that could cause an overdraft. The Deposit
Agreements include a proviso that decisions to honor overdraft items will be “subject to our
Overdraft Policy.” Because that policy has not yet been produced, it is impossible to determine
whether it, too, creates an ambiguity. Although this ground is not as likely to succeed in the
end, Glaske’s allegations and the attached documents were sufficient to state a claim upon which
could be granted and summary disposition would have been improper.




                                               -7-
                                  III. UNCONSCIONABILITY

       We further discern no error in the circuit court’s denial of Independent’s motion to
summarily dispose of Glaske’s unconscionability claim. It is important to note at the outset that
Glaske alleges that Independent’s contract provisions relating to checks and debit card activity
were unconscionable, unlike in her breach-of-contract claim.

        Contrary to Independent’s argument, Glaske’s unconscionability count does not
constitute a separate ground for damages. Rather, it is a ground to invalidate the contract and
seek reparation under the unjust enrichment count. Other courts in similar cases have equated a
plaintiff’s unconscionability claim with a request for a declaratory judgment that the contract is
unconscionable, opening the door for the crafting of equitable relief. See Hanjy v Arvest Bank,
94 F Supp 3d 1012, 1031-1032 (ED Ark, 2015); In re Checking Account Overdraft Litigation,
694 F Supp 2d at 1318. Although Glaske did not use the term “declaratory judgment,” we are
not bound by the labels used by a party and must identify a claim by its substance. See In re
Bradley Estate, 494 Mich 367, 388; 835 NW2d 245 (2013). And Michigan courts permit
plaintiffs to raise unconscionability as a ground to invalidate a contract in their complaints, not
just as a defense when the other party seeks to enforce the contract. See Davis v LaFontaine
Motors, Inc, 271 Mich App 68, 80; 719 NW2d 890 (2006).

        Moreover, Glaske alleged sufficient facts to overcome Independent’s summary
disposition motion on the merits. As described by this Court in Allard v Allard, 308 Mich App
536, 553; 867 NW2d 866 (2014):

              An unconscionable contract is not enforceable. “In order for a contract or
       contract provision to be considered unconscionable, both procedural and
       substantive unconscionability must be present.”

               Procedural unconscionability exists where the weaker party had no
          realistic alternative to acceptance of the term. If, under a fair appraisal of
          the circumstances, the weaker party was free to accept or reject the term,
          there was no procedural unconscionability. Substantive unconscionability
          exists where the challenged term is not substantively reasonable. However,
          a contract or contract provision is not invariably substantively
          unconscionable simply because it is foolish for one party and very
          advantageous to the other. Instead, a term is substantively unreasonable
          where the inequity of the term is so extreme as to shock the conscience. [Id.
          at 144 (citations omitted).]

        In In re Checking Account Overdraft Litigation, 694 F Supp 2d at 1319-1320, the federal
district court for the southern district of Florida denied the banks’ motions for summary
disposition of the plaintiff customers’ unconscionability claim, finding that the customers
adequately pleaded procedural unconscionability. We find that analysis instructive:

       Although Plaintiffs do not allege they were coerced into accepting the overdraft
       protection terms, the disparity in sophistication and bargaining power between
       Plaintiffs and Defendants is obvious. The terms at issue were contained in

                                                -8-
       voluminous boilerplate language drafted by the bank. If Plaintiffs did disagree
       with the terms, there was no meaningful opportunity to negotiate with the bank;
       rather, the bank would simply refuse to open an account for the customer as
       Defendants’ counsel orally argued: (“That’s why these terms are nonnegotiable,
       because it’s automated.”). . . . Moreover, Plaintiffs have alleged that they were
       not notified they had the option to decline the overdraft protection service (in
       which case the bank would simply decline to pay the merchant who presented the
       item for payment, rather than paying and charging the customer an overdraft fee),
       when in fact they did have that option. Thus, the Court concludes the Plaintiffs
       have sufficiently alleged procedural unconscionability. [Id.]

       The only mention in the attached documents that Independent’s overdraft protection was
optional is found in the EFTA. In the EFTA, Independent informed customers that they were
required to contact the bank to opt out of the overdraft plan:

       NOTICE REGARDING EFT CARD SERVICES – The Bank may honor any card
       based transaction that may overdraw your Account including ATM withdrawals
       and transfers as well as any PIN-based, PIN-less transaction or VISA transaction
       (signed, internet, or telephonic). The Bank may assess a fee for each paid debit
       transaction resulting in an overdraft as provided in the Schedule of Fees
       applicable to the Account. Additionally, you agree to reimburse the Bank
       immediately, upon demand, for the daily fee for Accounts that are not promptly
       repaid. Purchases and/or cash withdrawals may be subject to prior authorization
       from the Bank. Authorization may be denied if the amount of all outstanding
       authorizations exceeds daily or other limits established by us. If you elect to have
       the Bank decline all ATM withdrawals and transfers as well as a PIN-based, PIN-
       less transaction or VISA transaction (signed, internet, or telephonic) if your
       Account does not have a sufficient balance to cover the requested transaction, you
       are responsible for contacting us. . . . [Emphasis added.]

The EFTA is but one of several documents that form “voluminous boilerplate language drafted
by the bank” that the customer must accept in order to do business with Independent. As in the
federal suit, there is no room for negotiation. As not all customers accept and use a debit card,
and therefore have no reason to review the EFTA, there is no guarantee that all customers are
advised of their ability to opt out of the overdraft plan. Moreover, as noted in Glaske’s general
allegations, requiring a customer to opt out rather than opt in, especially absent the provision of a
clear program description, is against banking best practices. See American Banking Association,
Overdraft Protection a Guide for Bankers (May 23, 2012), p 18.

      We also find instructive the federal court’s analysis of a similar substantive
unconscionability claim:

               The standard for substantive unconscionability has been articulated in
       slightly different ways, but one representative formulation is the following: A
       term is substantively unconscionable if it is so “outrageously unfair as to shock
       the judicial conscience,” or it is one that “no man in his senses and not under
       delusion would make on the one hand, and as no honest and fair man would

                                                -9-
accept on the other.” [Bland v Health Care & Retirement Corp of America, 927
So 2d 252, 256 (Fla Ct App, 2006)] (quotations and citations omitted). To make
that determination, courts should consider “the commercial reasonableness of the
contract terms, the purpose and effect of the terms, the allocation of the risks
between the parties, and similar public policy concerns.” Jenkins v First
[America] Cash Advance of [Georgia], LLC, 400 F3d 868, 876 ([CA 11], 2005)
(quotations and citations omitted). Defendants argue that the high-to-low posting
practice cannot be substantively unconscionable because it is a standard industry
practice that is expressly endorsed by the UCC. See [White v Wachovia Bank,
NA, 563 F Supp 2d 1358, 1370 (ND Ga, 2008)] (high to low posting practice not
substantively unconscionable because the practice is consistent with the UCC);
Daniels v PNC Bank, NA, 137 Ohio App 3d 247[;] 738 NE2d 447, 451 ([]2000)
(“[B]ecause the practice of high-low posting is allowed by [the UCC], it cannot be
said to be itself unconscionable.”). In response, Plaintiffs argue that no
reasonable person would have agreed to allow the banks to post debits in a
manner designed solely to maximize the number of overdraft fees. They also
argue that the amount of overdraft fees is unconscionably excessive because the
fees are not reasonably related to the costs or risks associated with providing
overdraft protection. See Maxwell v Fidelity Fin Servs, 184 Ariz 82[;] 907 P2d
51, 58 ([]1995) (“Indicative of substantive unconscionability are contract terms so
one-sided as to oppress or unfairly surprise an innocent party, an overall
imbalance in the obligations and rights imposed by the bargain, and significant
cost-price disparity.”). Finally, Plaintiffs argue that this analysis is highly fact
dependent and cannot be resolved on a motion to dismiss.

        The Court finds that Plaintiffs have sufficiently pled substantive
unconscionability. The Complaints state that deposit agreements contained
contractual terms regarding overdraft protection that had the purpose and effect of
allowing Defendants to re-order the posting of debit transactions to maximize the
number and amount of overdraft fees charged to Plaintiffs, and that the fees bear
no reasonable commercial relationship to the costs or risks associated with
providing the overdraft service. Moreover, Defendants are not entirely correct
when they state that high-to-low posting is expressly condoned by the UCC. As
discussed in the above section, the provision they rely on, section 4-303(b),
applies only to paper checks, not the electronic debits that are the subject of this
lawsuit. Although the Court recognizes that the UCC commentary suggests that
courts may apply the UCC provisions by analogy, this is the exact set of
circumstances in which the analogy breaks down. With paper checks, the
customer gives a check to the merchant and leaves with the merchandise. The
merchant then, at some unspecified time in the future, takes the check to his or her
bank, which then presents the check to the customer’s bank for payment. This
guaranteed time lapse increases the risk to the bank, the merchant, and the
customer that, in the intervening time period, there will not be sufficient funds in
the account to cover the check. Thus, banks are far more justified in adopting a
specific check posting order, providing overdraft services, and charging the
customer an overdraft fee to account for the risk of insufficient funds. With
electronic debit cards, however, the banks can know, at least in many
                                       -10-
       circumstances, instantly whether there are sufficient funds and can decline the
       transaction immediately, decreasing the risk to all parties and obviating the need
       to “hold” the debit transactions for a period of time and then post them in a
       specific order. Thus, Defendants’ reliance on UCC section 4-303(b) to defeat
       substantive unconscionability is misplaced. [In re Checking Account Overdraft
       Litigation, 694 F Supp 2d at 1320-1321.]

        Similarly, following a trial, a federal district court found that a bank’s “true motivations
behind the high-to-low switch” and related policies were “gouging and profiteering.” Such
policies, that court found, were adopted to boost overdraft fee revenue at the expense of
unsuspecting customers. Gutierrez, 730 F Supp 2d at 1104.

        There is no real difference between the allegations raised in Glaske’s complaint and the
allegations underlying In re Checking Account Overdraft Litigation and Gutierrez. Glaske
alleged that Independent made several policy decisions to boost overdraft fee revenue and failed
to keep its customers adequately informed of those policies. The allegations were sufficient to
state a claim on which relief may be granted, and the circuit court properly refused to dismiss
this count.

                                  IV. UNJUST ENRICHMENT

        Finally, the circuit court properly refused to dismiss Glaske’s alternative claim for
equitable relief. In Michigan, a party is permitted to plead inconsistent claims. MCR
2.111(A)(2)(b). It is well established that a plaintiff may raise a breach-of-contract claim and
allege in the alternative that a contract is invalid, meriting equitable relief. See Morris Pumps v
Centerline Piping, Inc, 273 Mich App 187, 199; 729 NW2d 898 (2006). Accordingly,
Independent’s claim that the presence of an express contract requires dismissal of Glaske’s
unjust enrichment claim at this early point in the proceedings is misguided. If the contract is
found unconscionable and thereby invalidated, Glaske may be able to establish entitlement to
relief under the doctrine of unjust enrichment.

      On the substantive merits of Glaske’s allegations, we again find instructive In re
Checking Account Overdraft Litigation, 694 F Supp 2d at 1321-1322:

               Defendants’ second argument is that Plaintiffs fail to allege circumstances
       under which it would be unjust for Defendants to retain the benefit that they have
       allegedly received, chiefly because the overdraft fees are specifically provided for
       in the contracts. The Court disagrees. Plaintiffs have alleged sufficient facts—
       that, among other things, Defendants manipulated the posting order of debit
       transactions in bad faith so as to maximize the number of overdraft fees
       incurred—which could lead a reasonable factfinder to conclude that it would be
       unjust to retain the benefit of those fees.

       Glaske raised the same claim here. She asserted that Independent manipulated its
customers’ accounts to unconscionably rack up fees. Just as in the federal suit, if Glaske
successfully challenges the validity of the contract, there are potential grounds for equitable



                                               -11-
relief. Accordingly, there was no support for dismissing this alternative basis for relief at the
onset of the proceedings.

       We affirm.




                                                           /s/ Jane M. Beckering
                                                           /s/ Elizabeth L. Gleicher
                                                           /s/ Michael J. Kelly




                                              -12-
