              Case: 17-14968     Date Filed: 08/27/2019    Page: 1 of 29


                                                                           [PUBLISH]



                IN THE UNITED STATES COURT OF APPEALS

                         FOR THE ELEVENTH CIRCUIT
                           ________________________

                                  No. 17-14968
                            ________________________

                       D.C. Docket No. 1:15-cv-04279-TWT



CAROL TIMS,
Individually, and on behalf of all others similarly situated,

                                                            Plaintiff – Appellant,


                                        versus


LGE COMMUNITY CREDIT UNION,

                                                            Defendant - Appellee.

                            ________________________

                    Appeal from the United States District Court
                       for the Northern District of Georgia
                          ________________________

                                  (August 27, 2019)

Before MARTIN, JILL PRYOR and JULIE CARNES, Circuit Judges.

JILL PRYOR, Circuit Judge:
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      According to Carol Tims, when she opened an account at LGE Community

Credit Union, LGE promised to use one account balance calculation method in

assessing overdraft fees against her account, but then used a different one, which

resulted in more fees. Tims alleged that LGE agreed to impose overdraft fees only

when her ledger balance—the amount of money in her account without considering

pending debits—was insufficient to cover a transaction. She alleged that LGE

broke that promise by assessing overdraft fees when, based on her ledger balance,

there was enough money in her account to cover the transaction in question, but

based on her available balance—the money in her account after considering

pending debits and deposits—there was not.

      Tims sued LGE in district court for breach of contract, breach of the implied

covenant of good faith and fair dealing, and violation of the Electronic Fund

Transfer Act (EFTA), 15 U.S.C. §§ 1693-1693r. The district court dismissed her

claims under Federal Rule of Civil Procedure 12(b)(6) after determining that the

two parties’ agreements unambiguously permitted LGE to assess overdraft fees

using the available balance calculation method.

      We disagree with the district court’s interpretation of the contracts. Because

we conclude that the agreements are ambiguous as to whether LGE could rely on

an account’s available balance, rather than its ledger balance, to assess overdraft




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fees, we reverse the district court’s dismissal of the case and remand for further

proceedings consistent with our opinion.

                               I.      BACKGROUND

A. Congressional Regulation of Overdraft Fees After the Advent of Online
   Banking

      “Overdraft” is a banking term describing a deficit in a bank account caused

by drawing more money than the account holds. Before the development of

electronic fund transfer (EFT) systems, banks generally provided overdraft

coverage for check transactions only. See Electronic Fund Transfers, 74 Fed. Reg.

59,033, 59,033 (Nov. 17, 2009). When a bank customer overdrew her account by

writing a check in an amount that exceeded the amount of funds in the account, her

financial institution applied its discretion in deciding whether to honor the

customer’s draft, in effect extending a small line of credit to its customer and

imposing a small fee for the convenience. Id.

      Online banking transformed how financial institutions handled overdrafts

and overdraft fees. New EFT systems provided customers with more ways to

make payments from their accounts, including automatic teller machine (ATM)

withdrawals, debit card transactions, online purchases, and transfers to other

accounts. Id. Most financial institutions chose to extend their overdraft coverage

to all EFT transactions. Some further decided to cover automatically all overdrafts

their customers might generate from their EFTs. Id. These changes had the
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benefit to financial institutions of “reduc[ing] cost[s]” from manually reviewing

individual transactions and furthering “consistent treatment of consumers.” Id. at

59,033-34. But they came at a significant and sometimes unexpected cost to

consumers: financial institutions generally assessed a flat fee each time an

overdraft occurred, sometimes charging additional fees—for each day an account

remained overdrawn, for example, or incrementally higher fees as the number of

overdrafts increased. Id. at 59,033.

      Congress enacted EFTA with the aim of outlining the rights, responsibilities,

and obligations of individuals and institutions using EFT systems. Id. In EFTA’s

implementing regulations (Regulation E, 12 C.F.R. pt. 1005), Congress set out to

“assist consumers in understanding how overdraft services provided by their

institutions operate and to ensure that consumers have the opportunity to limit the

overdraft costs associated with ATM and one-time debit card transactions where

such services do not meet their needs.” Id. at 59,035. Doing away with the

practice of automatic enrollment of consumers in overdraft coverage, Regulation E

required financial institutions to secure consumers’ “affirmative consent” to

overdraft services through an opt-in notice. Id. at 59,036. The opt-in notice was to

be “segregated from all other information[] describing the institution’s overdraft

service,” 12 C.F.R. § 1005.17(b)(1)(i), and be “substantially similar” to a model

form (Model Form A-9) provided by the Federal Reserve, id. § 1005.17(d).


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      “But the opt-in requirement and model form have not dispelled all the

controversy and confusion surrounding overdraft fees.” Chambers v. NASA Fed.

Credit Union, 222 F. Supp. 3d 1, 6 (D.D.C. 2016). Model Form A-9 does not

address which account balance calculation method a financial institution should

use to determine whether a transaction results in an overdraft. See 12 C.F.R. pt.

1005, app. A. Without any such provision in the model form, “some financial

institutions have failed to disclose the balance calculation method that they use to

determine whether a transaction results in an overdraft.” Chambers, 222 F. Supp.

3d at 6.

      In determining whether a customer has made a withdrawal or incurred a

debit that exceeds the balance in her account—an overdraft—financial institutions

typically use one of two methods of calculating the balance in a customer’s

account: the “ledger” balance method or the “available” balance method. The

ledger balance method considers only settled transactions; the available balance

method considers both settled transactions and authorized but not yet settled

transactions, as well as deposits placed on hold that have not yet cleared.

Consumer Fin. Prot. Bureau, Supervisory Highlights 8 (Winter 2015), available at

https://files.consumerfinance.gov/f/201503_cfpb_supervisory-highlights-winter-

2015.pdf (last visited May 24, 2019). These two competing methods of calculating




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a consumer’s balance and charging overdraft fees based on that balance lie at the

heart of this case.

B. Factual Background

      LGE allegedly charged Tims overdraft fees of $30.00 each on two

occasions. Tims’s complaint alleged that at the time LGE assessed the overdraft

fees, her ledger balance was sufficient to cover each transaction. She alleged that

LGE agreed to use the ledger balance calculation method in assessing overdraft

fees, and so LGE’s use of the available balance calculation method breached her

agreements with LGE.

      LGE argues that its agreements with Tims unambiguously provided that

LGE would use the available balance calculation method in imposing overdraft

fees. LGE thus asserts that it did not breach its agreements by imposing fees based

on Tims’s available balance.

      There were two agreements between Tims and LGE: the “Opt-In

Agreement” and the “Account Agreement.” LGE asked consumers to sign the

Opt-In Agreement to obtain their consent to LGE’s overdraft policies. The Opt-In

Agreement said little about which balance calculation method LGE employs,

stating only that “[a]n overdraft occurs when you do not have enough money in

your account to cover a transaction, but we pay it anyway.” Doc. 29 at 44. 1

      1
          All citations in the form “Doc. #” refer to numbered entries on the district court docket.

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      LGE adopted the Opt-In Agreement to comply with Regulation E, 12 C.F.R.

§ 1005.17. Again, Regulation E requires financial institutions to secure a

consumer’s “affirmative consent” before charging overdraft fees and stipulates that

consent can be secured through use of an opt-in form “substantially similar” to

Model Form A-9. Id. § 1005.17(b)(1)(iii), (d). LGE’s Opt-In Agreement is nearly

an exact copy of Model Form A-9. Compare id. pt. 1005, app. A, with Doc. 29 at

44.

      The second agreement between Tims and LGE, the Account Agreement,

contained a “Payment Order” provision explaining that in processing items drawn

on a consumer’s account, LGE’s “policy is to pay [the items] as we receive them.”

Doc. 29 at 31. The Account Agreement went on to say, “[i]f an item is presented

without sufficient funds in your account to pay it” or “if funds are not available to

pay all of the items” presented for payment, LGE “may, at [its] discretion, pay” the

item or items, creating an overdraft for which LGE will charge a fee. Id. at 32.

      A separate provision in the Account Agreement, the “Funds Availability

Disclosure,” addressed the conditions under which funds were available for

consumers’ use. Id. at 37. In this provision, LGE explained that its general policy

was “to make funds from your deposits available to you on the same business day

that [LGE] receive[s] your deposit,” but certain deposits would not be “available”

to consumers until the second business day at the earliest. Id.


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C. Procedural History

       Tims brought this case as a consumer class action, asserting three claims

against LGE that are the subject of this appeal. 2 First, Tims alleged that LGE

breached its Opt-In and Account Agreements by assessing overdraft fees using the

available balance calculation method. Second, she alleged that LGE violated the

implied covenant of good faith and fair dealing implicit in every contract under

Georgia law. 3 Third, she alleged that LGE’s practices failed to accurately describe

its overdraft service as required by Regulation E, thus violating EFTA.

       LGE filed a Rule 12(b)(6) motion to dismiss all claims, which the district

court granted. Using Georgia’s canons of contract construction, the district court

determined that the agreements unambiguously permitted LGE to assess overdraft

fees using the available balance calculation method. The court concluded that

LGE had neither breached the parties’ contract nor the covenant of good faith and

fair dealing and that no EFTA violation had occurred. Tims timely appealed.




       2
         Tims also asserted claims against LGE for unjust enrichment and money had and
received. On appeal, she does not argue that the district court erred in dismissing these claims,
so we do not address their merits. See Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1330
(11th Cir. 2004) (stating that a legal claim or argument that has not been briefed on appeal is
“deemed abandoned and its merits will not be addressed”).
       3
         The Account Agreement provided that Georgia law governs the contract. Because the
parties agree that Georgia law applies here, we assume that it does. See Bahamas Sales Assoc.,
LLC v. Byers, 701 F.3d 1335, 1342 (11th Cir. 2012) (“If the parties litigate the case under the
assumption that a certain law applies, we will assume that law applies.”).
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                         II.    STANDARD OF REVIEW

      We review de novo a district court’s grant of a motion to dismiss for failure

to state a claim under Federal Rule of Civil Procedure 12(b)(6). See Glover v.

Liggett Grp., Inc., 459 F.3d 1304, 1308 (11th Cir. 2006). We accept factual

allegations in the complaint as true and construe them in the light most favorable to

the plaintiff. See Hill v. White, 321 F.3d 1334, 1335 (11th Cir. 2003). To

withstand a motion to dismiss under Rule 12(b)(6), a complaint must include

“enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp.

v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the

plaintiff pleads factual content that allows the court to draw the reasonable

inference that the defendant is liable for the misconduct alleged.” Ashcroft v.

Iqbal, 556 U.S. 662, 678 (2009).

      We review de novo the issue of whether a contract is ambiguous. See Frulla

v. CRA Holdings, Inc., 543 F.3d 1247, 1252 (11th Cir. 2008). Questions of

contract interpretation are pure questions of law, also reviewed de novo. Gibbs v.

Air Canada, 810 F.2d 1529, 1532 (11th Cir. 1987).

                                III.   DISCUSSION

      Tims challenges the district court’s dismissal of her claims against LGE for

(1) breach of contract; (2) breach of the implied covenant of good faith and fair




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dealing; and (3) violation of Regulation E of EFTA. We consider these claims in

turn.

A. Tims Stated a Claim for Breach of Contract.

        To state a claim for breach of contract under Georgia law, Tims had to

plausibly allege that LGE owed her a contractual obligation, then breached it,

causing her damages. Norton v. Budget Rent a Car Sys., Inc., 705 S.E.2d 305, 306

(Ga. Ct. App. 2010). Tims alleged that LGE promised to calculate her account

balance—and assess overdraft fees in light of that balance—by considering only

the ledger balance, then breached that promise by considering the available balance

instead. We must interpret the two agreements between Tims and LGE to decide

whether LGE had a contractual obligation to use the available balance calculation

method or the ledger balance calculation method for unsettled withdrawals 4 in

imposing overdraft fees.

        Under Georgia law, courts interpret contracts in three steps: first, the court

determines whether the contract language is clear and unambiguous. If the

language is clear, the court applies its plain meaning; if it is unclear, the court


        4
         The parties appear to agree that, as to deposits, the Funds Availability Disclosure
permits LGE to place holds on some types of deposits pending clearance of the deposit (ledger
balance method), but that as to other types of deposits, LGE has agreed that the deposit will be
made immediately available to the customer (available balance method). The dispute here
concerns how debit transactions are to be treated under the Opt-In Agreement and the Account
Agreement, with Tims arguing that the relevant documents indicate that the ledger method will
be used and LGE arguing that the terms of the agreements provide for use of the available
balance method.
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proceeds to step two. At step two, the court attempts to resolve the ambiguity

using Georgia’s canons of contract construction. If the ambiguity cannot be

resolved using the canons, then the court proceeds to step three, where the parties’

intent becomes a question of fact for the jury. City of Baldwin v. Woodward &

Curran, Inc., 743 S.E.2d 381, 389 (Ga. 2013).

      “The cardinal rule of construction is to ascertain the intention of the parties.”

Maiz v. Virani, 253 F.3d 641, 659 (11th Cir. 2001) (alteration adopted) (internal

quotation marks omitted). A contract is ambiguous when it “leave[s] the intent of

the parties in question—i.e., that intent is uncertain, unclear, or is open to various

interpretations.” Capital Color Printing, Inc. v. Ahern, 661 S.E.2d 578, 583 (Ga.

Ct. App. 2008) (internal quotation marks omitted). A contract is unambiguous

when, after examining the contract as a whole and affording its words their plain

meaning, “the contract is capable of only one reasonable interpretation.” Id.

(internal quotation marks omitted).

   1. The Plain Language of the Opt-In and Account Agreements Is
      Ambiguous as to Which Account Balance Calculation Method LGE
      Uses to Assess Overdraft Fees.

      Both parties argue that the Opt-In and Account Agreements are

unambiguous, but they disagree about which account balance calculation method

the agreements unambiguously promised to use. Each party contends that the

agreements’ plain language clearly supports its own interpretation of LGE’s


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balance calculation method. After careful review, we disagree with both parties

that the agreements are unambiguous.

       We turn to the language of the Opt-In and Account Agreements and begin

with the Opt-In Agreement. 5 In relevant part, the Opt-In Agreement explained that

“[a]n overdraft occurs when you do not have enough money in your account to

cover a transaction, but we pay it anyway.” Doc. 29 at 44. Each party contends

that this language plainly supports its own interpretation of LGE’s balance

calculation method. Tims argues that the phrase “enough money in your account”

unambiguously referred to the ledger balance because the term “account” is

presented without limitation or modification, such as a reference to “available”

funds. LGE argues that “enough” unambiguously referred to the available balance.

LGE consults the dictionary definition of the word “enough”—“occurring in such

quantity, quality, or scope as to satisfy fully the demands, wants, or needs of a

situation or of a proposed use or end” 6—then points out that “enough” is

synonymous with “available.” Because “enough” and “available” are synonyms,

       5
         Under Georgia law, “‘where multiple documents are executed at the same time in the
course of a single transaction, they should be construed together.’” Curry v. State, 711 S.E.2d
314, 317 (Ga. Ct. App. 2011) (quoting Martinez v. DaVita, Inc., 598 S.E.2d 334, 337 (Ga. Ct.
App. 2004)). Neither party disputes that Tims entered into the Opt-In and Account Agreements
at the same time when she opened an account with LGE.
       6
         Enough, Webster’s Third New International Dictionary 755 (2002). In Georgia,
“[w]hen interpreting a contract, the language must be afforded its literal meaning and plain
ordinary words given their usual significance,” and “[d]ictionaries may supply the plain and
ordinary meaning of a word.” Grange Mut. Cas. Co. v. Woodard, 861 F.3d 1224, 1231 (11th
Cir. 2017) (internal quotation marks omitted).

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LGE argues, a consumer would understand merely by reading the word “enough”

that LGE would take only a consumer’s available funds into account in calculating

the account’s balance.

      We find neither argument persuasive. The Opt-In Agreement sheds no light

on what “enough money in [an] account” means in the context of determining

when an overdraft has occurred. Id. Both parties’ arguments raise the question of

how LGE determines what “enough money” is—is it enough money to cover only

settled transactions or to cover authorized but not yet settled transactions as well?

The Opt-In Agreement is thus ambiguous concerning the account balance

calculation method LGE’s overdraft service uses for unsettled debit transactions.

      The plain language of the Account Agreement is no more helpful. In

describing LGE’s overdraft service, the Account Agreement’s Payment Order

section stated that an overdraft occurs “[i]f an item is presented without sufficient

funds in your account to pay it” or “if funds are not available to pay all of the

items.” Id. at 32. The conditions under which deposits would be available for

consumers’ use were set forth in a separate section, the Funds Availability

Disclosure. The Funds Availability Disclosure explained that LGE’s “policy is to

make funds from [the consumer’s] deposits available to [the consumer] on the

same business day” that LGE receives the deposit. Id. at 37. It stipulated that

consumers can immediately “withdraw funds” for most deposits, including cash,


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wire transfers, and money order deposits; however, consumers must wait to

“withdraw funds” under certain limited circumstances, including deposits of

checks exceeding $5,000 and deposits into repeatedly and recently overdrawn

consumer accounts. Id. The Funds Availability Disclosure made no mention of

debit transactions specifically, referring only to “withdrawals” generally. Id.

       Each party contends the language of this agreement, too, clearly requires the

use of its favored account balance calculation method in charging overdraft fees.

Tims argues that the phrase “sufficient funds,” by itself, plainly refers to the ledger

balance. She also argues that even though the Funds Availability Disclosure said

some deposited funds will be considered unavailable to consumers for a period of

time, it did not say whether or how the funds’ unavailability relates to the financial

institution’s account balance calculation method for overdraft purposes. Finally,

Tims points out that even though the Funds Availability Disclosure explained that

certain deposits could not immediately be withdrawn by consumers, it said nothing

about whether pending debits affected consumers’ ability to withdraw funds.

       In an argument similar to the one it makes about the Opt-In Agreement,

LGE asserts that “sufficient” is synonymous with “available,” 7 and so a consumer




       7
          “Sufficient” is defined as “[a]dequate; of such quality, number, force, or value as is
necessary for a given purpose.” Sufficient, Black’s Law Dictionary 1661 (10th ed. 2014).
“Available” is defined as “capable of use for the accomplishment of a purpose: immediately
utilizable.” Available, Webster’s Third New International Dictionary 150 (2002).
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reading the word “available” and then the term “sufficient” in adjacent sentences

would understand the Account Agreement as clearly referring to the available

balance calculation method. LGE also notes that the Funds Availability Disclosure

stipulated that consumers could use funds only when they were “available,” a word

also used in the Payment Order subsection of the Account Agreement describing

when an overdraft occurs. See Doc. 29 at 32 (stating that an overdraft occurs “if

funds are not available to pay all of the items”).

      Neither argument persuades us. We cannot say the Account Agreement

unambiguously articulated the account balance calculation method LGE uses for

unsettled debit transactions. Nothing in the Account Agreement explained how

LGE determines whether funds are “sufficient.” Nor did the mere presence of the

word “available” in the Account Agreement, in two separate subsections, clearly

communicate that LGE would calculate a consumer’s account balance for the

purpose of assessing overdraft fees based on unsettled transactions. LGE

“apparently assumes that the [consumer] will read the word ‘available’ in [two

separate] sections spanning the [12]-page Account Agreement” and conclude that

the financial institution uses the available balance calculation method in its

overdraft service just because the agreement uses the term “available.” Smith v.

Bank of Hawaii, No. 16-00513 JMS-RLP, 2017 WL 3597522, at *7 (D. Haw. Apr.

13, 2017). LGE assumes too much. As Tims points out, although the Account


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Agreement explained that certain deposits would not immediately be available to

consumers, it did not explain that a pending debit would render funds unavailable

to consumers.

      In the absence of anything in the Account Agreement addressing the account

balance calculation method LGE used in its overdraft service for unsettled

transactions and given the ambiguity of the terms “sufficient funds” and

“available,” the Account Agreement failed to clearly indicate which balance

calculation method LGE was using to determine when an unsettled debit

transaction would result in an assessment of overdraft fees. Other courts,

confronting similar terms across subsections of similar account agreements, have

agreed. See, e.g., Pinkston-Poling v. Advia Credit Union, 227 F. Supp. 3d 848,

854-56, 856 n.4 (W.D. Mich. 2016) (deciding that the terms “enough money” and

“sufficient funds” did not clearly indicate that an available balance method would

be used in imposing overdraft fees); see also Walbridge v. Ne. Credit Union, 299

F. Supp. 3d 338, 343-46 (D.N.H. 2018) (determining that the terms “enough

money,” “insufficient funds,” and “nonsufficient funds” did not clearly indicate

that an available balance method would be used in charging overdraft fees).

      Neither the Opt-In Agreement nor the Account Agreement clearly

articulated which balance calculation method LGE was using to determine when

unsettled transactions would trigger an overdraft. The contracts are ambiguous.


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   2. The Agreements Remain Ambiguous After Considering Georgia’s
      Canons of Contract Construction.

       Having determined that the language of the Opt-In and Account Agreements

is susceptible to two different constructions, we turn to the second step of contract

interpretation under Georgia law and attempt to resolve the ambiguity using

Georgia’s canons of construction.8 Applying these canons, the district court



       8
          Tims also asks us to construe the agreements as contracts of adhesion. In Georgia,
contracts of adhesion are “standardized contract[s] offered on a ‘take it or leave it’ basis and
under such conditions that a consumer cannot obtain the desired product or service except by
acquiescing in the form contract,” and are “construed strictly against the drafter.” Walton Elec.
Membership Corp. v. Snyder, 487 S.E.2d 613, 617 n.6 (Ga. Ct. App. 1997). Because she failed
to clearly present this argument before the district court, we will not assess its merits here. See
In re Pan Am. World Airways, Inc., Maternity Leave Practices & Flight Attendant Weight
Program Litig., 905 F.2d 1457, 1462 (11th Cir. 1990). Tims contends that she presented the
argument to the district court because her complaint stated that LGE drafted the agreements,
which were adhesive in nature. Tims does not argue, but we note, that she subsequently
mentioned the Georgia canon of construction regarding contracts of adhesion once, in a footnote
in her opposition to LGE’s motion to dismiss, without advancing any argument that her
agreement with LGE was a contract of adhesion. Tims’s description of the agreements and her
brief reference without argument in a footnote was insufficient to preserve the argument for
appeal. See U.S. Sec. & Exchange Comm’n v. Big Apple Consulting USA, Inc., 783 F.3d 786,
812 (11th Cir. 2015) (explaining that a litigant’s “fleeting footnote explaining” an argument to
the district court “in one sentence . . . is insufficient to properly assert a claim on appeal”).
        In addition, Tims argues that we should apply the doctrine of contra proferentem, a canon
of contract construction “that counsels in favor of construing ambiguities in contract language
against the drafter.” Allen v. Thomas, 161 F.3d 667, 671 (11th Cir. 1998). Tims likewise failed
to preserve this argument for appellate review. She mentioned the doctrine of contra
proferentem only once, in the aforementioned footnote, without advancing any argument that it
applied. See Doc. 31 at 15 n.3 (noting only that “ambiguities in a contract will be construed
against the drafter” (alterations adopted) (internal quotation marks omitted)). Tims’s fleeting
reference in a footnote to the doctrine of contra proferentem was insufficient to preserve her
argument for appeal, and we thus do not address it. See Big Apple Consulting USA, Inc., 783
F.3d at 812.
        Our conclusion that Tims failed to preserve these arguments for purposes of our review
of the motion to dismiss does not foreclose her from raising these arguments in the district court
at the summary judgment stage.

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determined that any ambiguity in the contracts could be resolved. The district

court concluded that the use of the word “available” in the Account Agreement

plainly referred to the available balance method for two reasons: first, based on the

close proximity of the words “available” and “sufficient” in the Payment Order

subsection, and second, because “available” must be interpreted consistently

throughout the Account Agreement, which uses the word in different subsections.

We find neither reason compelling.

      First, the proximity of the word “available” to the word “sufficient” in the

Payment Order subsection of the Account Agreement does not clearly

communicate that LGE would use an available balance calculation method when

considering unsettled transactions in its overdraft service. As discussed above, the

Account Agreement’s Payment Order provision stated that LGE would assess

overdraft fees if there were not “sufficient funds in your account to pay [an item]”

and just after noting that its “payment policy . . . may reduce the amount of

overdraft . . . fees you have to pay if funds are not available to pay all of the

items.” Doc. 29 at 32 (emphasis added). The district court concluded that the

proximity of “sufficient” to “available” meant the words are somehow linked. See

Doc. 67 at 11 (“By including the term ‘available’ in such close proximity to the

term ‘sufficient,’ the parties indicate that they view both terms to be related.”). No




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Georgia canon of contract construction supports this conclusion, however.9 There

is no rule that words in close proximity should be construed as related to one

another without considering word order and context. And even if we agreed that

the terms were related to one another, the related terms still did not unambiguously

specify that LGE would apply the available balance calculation method to

unsettled transactions in assessing overdrafts. A consumer could reasonably

understand the phrase “available . . . sufficient funds” to refer to her ledger

balance: that available funds are those in her account and sufficient to cover her

draft. Thus, even read together, the terms “available” and “sufficient” fail to

clearly communicate how unsettled transactions are treated in the balance

calculation method LGE employs in its overdraft services. So the contract remains

capable of two reasonable constructions.

       Second, we disagree that the Account Agreement was necessarily referring

to an available balance calculation method for unsettled debit transactions based on

the use of the word “available” in a Funds Availability Disclosure provision that


       9
         The most comparable Georgia canon of contract construction is the last antecedent
canon, which provides that “[r]eferential and qualifying words and phrases, where no contrary
intention appears, refer solely to the last antecedent.” Deal v. Coleman, 751 S.E.2d 337, 342
(Ga. 2013) (internal quotation marks omitted); see also Key v. Ga. Dep’t of Admin. Servs., 798
S.E.2d 37, 41 (Ga. Ct. App. 2017) (canon applicable in contract as well as statutory
construction). But the last antecedent rule does not apply here because “sufficient funds” is not a
limiting clause or phrase and “available” is not a noun. See Barnhart v. Thomas, 540 U.S. 20, 26
(2003) (explaining that the doctrine applies to “limiting clause[s] or phrase[s]” that are “read as
modifying only the noun or phrase that [they] immediately follow[]”).

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addresses a completely different matter: the availability of deposited funds. The

Funds Availability Disclosure provision used variations of the word “available”

more than 20 times—in nearly every sentence. But “available” was never used in

conjunction with the word “balance.” And “available” was never defined to

exclude unsettled debit transactions for overdraft purposes. At best, this section

equated “available” with “able to be withdrawn.” See, e.g., Doc. 29 at 37 (“This

disclosure describes your ability to withdraw funds at LGE . . . . Our policy is to

make funds from your deposits available to you on the same business day we

receive your deposit.”). LGE’s explanation in the Funds Availability Disclosure

provision for when deposited funds became “available” to consumers for

withdrawal simply did not address how LGE would treat unsettled debits when it

calculated a consumer’s balance for overdraft fee purposes.

      LGE’s argument that the agreements clearly promised to use the available

balance calculation method does not convince us, either. LGE asserts that the

repeated use of the word “available” unambiguously communicated that overdraft

fees would be assessed using the available balance method. To support its

interpretation of the word “available,” LGE cites to Chambers. 222 F. Supp. 3d at

1. The dispute in Chambers, as in this case, concerned whether a credit union’s

Opt-In and Account Agreements obligated the credit union to use the ledger or the

available balance method in its overdraft service. Id. at 10. The court dismissed


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Chambers’s breach of contract claims after concluding that the Opt-In Agreement

unambiguously stated that the credit union would use the available balance

calculation method. Id.

      Several significant details distinguish Chambers from this case, however.

Importantly, in Chambers, the Opt-In Agreement used the phrase “available

balance.” Id. In addition, the Account Agreement in Chambers contained a

subsection addressing “Available Balances to Make Transactions,” which linked

the concept of available balance to the mechanics of when and how the bank would

assess overdrafts. Id. at 10-11. Finally, the Opt-In Agreement in Chambers

provided examples illustrating when an account would not have “enough money”

and thus be subject to an overdraft. Id. at 10.

      None of those factors is present in this case. The agreements here did not

use the phrase “available balance”; the Account Agreement nowhere explained the

mechanics of how and when LGE would assess overdrafts, nor linked the concept

of an “available balance” to those mechanics; and the Opt-In Agreement provided

no examples illustrating when a consumer would not have “enough money” to

cover a transaction and thereby trigger an overdraft. Because of these three

distinctions, we cannot say the Opt-In and Account Agreements in this case clearly

demonstrated the parties’ intent that LGE would use the available balance

calculation method when assessing overdraft fees. See Walbridge, 299 F. Supp. 3d


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at 345-46 (concluding based on the same three factors that the financial institution

did not clearly communicate an intent to use the available balance in charging

overdraft fees).

       Neither the Opt-In Agreement nor the Account Agreement read separately,

nor the two agreements read together, clearly articulated LGE’s balance calculation

method for charging overdraft fees. Applying the Georgia canons of construction

does nothing to clarify the contracts’ ambiguity. Because the language remains

ambiguous after considering both the plain language of the contracts and the

Georgia canons of construction before us,10 the parties’ intent will become a

question for the jury should neither party be granted summary judgment. The

district court therefore erred in dismissing Tims’s claim for breach of contract.

B. Tims Stated a Claim Against LGE for Breach of the Covenant of Good
   Faith and Fair Dealing.

       Tims next argues that the district court erred in dismissing her claim that

LGE breached the implied covenant of good faith and fair dealing under Georgia

law. We agree.

       Under Georgia law, “[e]very contract imposes upon each party a duty of

good faith and fair dealing in its performance and enforcement.” Brack v.



       10
           In note 8, supra, we noted that the doctrine of contra proferentem had not been
preserved for purposes of our review but Tims could advance it during the summary judgment
stage of litigation.
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Brownlee, 273 S.E.2d 390, 392 (Ga. 1980) (internal quotation marks omitted).

That implied promise “becomes a part of the provisions of the contract, but the

covenant cannot be breached apart from the contract provisions [that] it modifies

and therefore cannot provide an independent basis for liability.” Myung Sung

Presbyterian Church v. N. Am. Assoc. of Slavic Churches & Ministries, 662 S.E.2d

745, 748 (Ga. Ct. App. 2008). A plaintiff “must set forth facts showing a breach of

an actual term of an agreement” to state a claim for breach of the implied duty of

good faith and fair dealing. Am. Casual Dining, L.P. v. Moe’s Sw. Grill, L.L.C.,

426 F. Supp. 2d 1356, 1370 (N.D. Ga. 2006).

      Given our conclusion on the breach of contract claim, Tims’s allegations

sufficiently “set forth facts showing a breach of an actual term of [the] agreement.”

Id. Tims alleged that LGE had a contractual obligation to use the ledger balance

calculation method and breached that promise; therefore, Tims’s claim for breach

of the implied covenant of good faith and fair dealing has been properly pled. The

district court erred in dismissing this claim.

C. Tims Stated a Claim Against LGE for Violating EFTA.

      Tims alleges, and we think it plausible, that LGE violated EFTA Regulation

E. Under EFTA, Congress charged the Federal Reserve Board—and, later, the

Consumer Financial Protection Bureau (CFPB)—with promulgating regulations to




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carry out EFTA’s purposes. 15 U.S.C. § 1693b(a)(1); see also id. § 1693a(4).11

One of EFTA’s central features is a requirement that financial institutions disclose

“[t]he terms and conditions of electronic fund transfers involving a consumers

account . . . in accordance with the regulations of the” CFPB. Id. § 1693c(a).

      Regulation E is part of the CFPB’s implementation of this requirement.

Regulation E requires financial institutions to give consumers a “notice . . .

describing the institution’s overdraft service.” 12 C.F.R. § 1005.17(b)(1)(i). The

notice must be “substantially similar to Model Form A-9” and describe the

“financial institution’s overdraft service” in a “clear and readily understandable”

way. Id. § 1005.17(d)(1), 1005.4(a)(1). See also 15 U.S.C. § 1693c (requiring

financial institutions to make disclosures “in accordance with the regulations of

the” CFPB “in readily understandable language”). Before financial institutions

may charge overdraft fees, they must give consumers “a reasonable opportunity . . .

to affirmatively consent, or opt in, to the service.” 12 C.F.R. § 1005.17(b)(1)(ii).

Congress created a private right of action for consumers against financial

institutions that fail to provide proper notice describing their overdraft service. See

15 U.S.C. § 1693m. Congress further directed the CFPB to draft boilerplate

language to help financial institutions “compl[y] with the disclosure requirements”


      11
          Congress reassigned responsibility for enforcing EFTA from the Federal Reserve
Board to the CFPB in 2010. See Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010, Pub. L. No. 111-203, Title X, § 1084, 124 Stat. 1376, 2081–83.
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for overdraft services. 15 U.S.C. § 1693(b). Model Form A-9, the template for

LGE’s Opt-In Agreement, was issued pursuant to this directive.

      As we have explained, the Opt-In Agreement LGE gave Tims is ambiguous

because it could describe either the available or the ledger balance calculation

method for unsettled debits. As a result, it is plausible that the notice does not

describe the overdraft service in a “clear and readily understandable” way. 12

C.F.R. § 1005.4(a)(1). It is also plausible that Tims had no reasonable opportunity

to affirmatively consent to LGE’s overdraft services. Id. § 1005.17(b)(1)(ii).

Affirmative consent requires “plain and clear consent . . . before certain acts or

events, such as changes in policies that could impair an individual’s rights or

interests.” Affirmative-Consent Requirement, Black’s Law Dictionary (11th ed.

2019). A notice that does not adequately convey the circumstances in which a

financial institution will charge overdraft fees may not provide a consumer all the

information she needs to give plain and clear consent. Here, Tims plausibly did

not have a reasonable opportunity to affirmatively consent because the notice gave

her no way to know whether LGE would use the available balance or the ledger

balance method to charge her overdraft fees.

      But that is not the end of the matter. Congress provided a safe harbor from

EFTA liability for “any failure to make disclosure in proper form if a financial

institution utilized an appropriate model clause issued by the” CFPB. 15 U.S.C.


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§ 1693m(d)(2).12 The CFPB interprets the safe harbor to preclude liability “for

failure to make disclosures in proper form” provided the institution “uses [the

model form’s] clauses accurately to reflect its services.” 12 C.F.R. pt. 1005, app.

A (Supp. I).

       In its notice defining the term “overdraft,” LGE copied verbatim the

definition of that term provided in Model Form A-9: “[a]n overdraft occurs when

you do not have enough money in your account to cover a transaction, but we pay

it anyway.” LGE seeks refuge in the safe harbor because, it argues, it used an

appropriate model form to describe its overdraft service. We disagree that LGE is

protected from liability by the safe harbor.

       LGE emphasizes that its form is accurate, and that may be so. After all, we

have concluded it could correctly refer to either the ledger balance or the available

balance method. But that does not conclude the inquiry.

       The relevant question is whether the claim Tims asserts is one for LGE’s

“failure to make disclosure in proper form.” The answer must be no. The statute’s

text, which is where all statutory interpretation must begin, makes that much plain.

See BedRoc Ltd., LLC v. United States, 541 U.S. 176, 183 (2004). “Form” has




       12
         The safe-harbor provision also shields financial institutions from liability for “any act
done or omitted in good faith in conformity with any rule, regulation, or interpretation thereof.”
15 U.S.C. § 1693m(d)(1). LGE does not argue this provision precludes liability here, and we
express no view on the matter.
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many meanings, but it is best read here to refer to “[p]rocedure as determined or

governed by custom or regulation,” as distinct from content or substance.

Webster’s New College Dictionary 448 (3d ed. 2008); see also Form, Black’s Law

Dictionary (11th ed. 2019) (defining “form” as “[t]he outer shape, structure or

configuration of something, as distinguished from its substance or matter” or an

“[e]stablished . . . procedure”); Form, Oxford English Dictionary (2d ed. 1989)

(defining “in due or proper form” to mean “according to the rules or prescribed

methods”). Thus, making disclosure in proper form means making the disclosure

according to proper procedures. The safe-harbor provision insulates financial

institutions from EFTA claims based on the means by which the institution has

communicated its overdraft policy. But it does not shield them for claims based on

their failure to make adequate disclosures. A financial institution thus strays

beyond the safe harbor when communications within its overdraft disclosure

inadequately inform the consumer of the overdraft policy that the institution

actually follows. See Berenson v. Nat’l Fin. Servs., LLC, 403 F. Supp. 2d 133, 151

(D. Mass. 2005) (holding the safe harbor “insulates an institution only from a

challenge as to the form—not the adequacy—of the disclosure”).

      Regulation E sets out procedures for how financial institutions must present

their disclosures. To comply with the regulation, financial institutions must make

the disclosure “in writing, or if the consumer agrees, electronically” and must


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further “segregate[]” the notice “from all other information.” 12 C.F.R.

§ 1005.17(b)(1)(i). The format of the notice required by § 1005.17(b)(1)(i) must

be “substantially similar to Model Form A-9.” Id. § 1005.17(d). Financial

institutions must also “[p]rovide[] the consumer with confirmation of the

consumer’s consent in writing, or if the consumer agrees, electronically.” Id.

§ 1005.17(b)(1)(iv). These provisions set out the “proper form” for presenting a

disclosure.

      Tims does not allege LGE failed to do any of that. Instead, she challenges

the substance of the Opt-In Agreement, which she says failed to give her enough

information to give affirmative consent to LGE’s overdraft service. As its text

makes clear, the safe-harbor provision LGE invokes does not preclude liability

when, as in this case, the content of the Regulation E disclosure is at issue.

Because Tims challenges only LGE’s failure to make an adequate disclosure, and

not its failure to make the disclosure “in proper form,” LGE cannot seek refuge

under the safe harbor provision. This is so whether or not the form accurately

describes the overdraft service. In this, our ruling is consistent with the great

weight of district court authority to have considered the matter. See Salls v. Dig.

Fed. Credit Union, 349 F. Supp. 3d 81, 91 (D. Mass 2018) (collecting cases).

      Tims’s complaint challenged the substance of LGE’s Opt-In Agreement.

Because the safe harbor does not protect financial institutions from challenges to


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the substance of Opt-In Agreements, Tims’s EFTA claim survives a motion to

dismiss, and the district court erred in granting the motion.

                               IV.   CONCLUSION

      For the foregoing reasons, we reverse the district court’s order granting

LGE’s motion to dismiss and remand for further proceedings consistent with this

opinion.

      REVERSED AND REMANDED.




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