                                                             NOT PRECEDENTIAL

                      UNITED STATES COURT OF APPEALS
                           FOR THE THIRD CIRCUIT
                                ____________

                                     No. 10-3877
                                   ____________

  JOHN MARQUESS, ADMINISTRATOR OF THE ESTATE OF WILLIAM MARQUESS,
                    DECEASED; JASON MARQUESS

                                          v.

               PENNSYLVANIA STATE EMPLOYEES CREDIT UNION,
                                       Appellant
                                   ____________

            APPEAL FROM THE UNITED STATES DISTRICT COURT
              FOR THE EASTERN DISTRICT OF PENNSYLVANIA
                            (D.C. No. 09-cv-04256)
                   Magistrate Judge: Honorable Jacob P. Hart
                                 ____________

                     Submitted Under Third Circuit LAR 34.1(a)
                                  April 29, 2011
                                  ____________

            Before: BARRY, HARDIMAN and TASHIMA, * Circuit Judges

                            (Opinion Filed: May 12, 2011)
                                   ____________

                                     OPINION
                                   ____________




  *
    Honorable A. Wallace Tashima, Senior Judge of the United States Court of Appeals
for the Ninth Circuit, sitting by designation.
TASHIMA, Circuit Judge

       The Electronic Fund Transfers Act (EFTA) and its implementing regulations

impose, in certain situations, liability on banks for unauthorized electronic fund transfers

(EFTs) drawn against their customers’ accounts. 15 U.S.C. § 1693 et seq.; 12 C.F.R. §

205.6 et seq. The question is whether the EFTA applies to bank accounts opened through

forgery.

       After a bench trial, the District Court made factual findings that neither party

challenges. William Marquess, now deceased, opened a bank account at Pennsylvania

State Employees Credit Union (PSECU) in the name of his adult son, Jason, by forging

Jason’s signature. William never told Jason about the forgery or the account. William

used his own Philadelphia address for the account instead of Jason’s Florida address.

Later, William made himself a joint holder of the account by forging Jason’s signature on

another form. Later still, William authorized electronic transfers from the joint

Jason/William account to an account in the name of David Marquess, William’s other

son, by forging Jason’s signature on yet another form.

       When William died, the joint Jason/William account held over $25,000, although

Jason still had no idea that the account existed. David, however, learned of the account

through a letter that PSECU sent to William’s home. David then called PSECU,

impersonated Jason, obtained the account’s PIN number and on-line banking password,

and stole the $25,000 balance. When Jason finally learned what had happened after



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receiving notice that he owed inheritance tax on the joint account, PSECU refused to

refund the stolen money.

       William’s estate and Jason sued PSECU for violation of the EFTA and breach of

contract. The district court found for Jason on the EFTA claim, but found for PSECU on

all other claims. PSECU appeals. We have jurisdiction under 28 U.S.C. §1291. We

review the district court’s findings of fact for clear error and its conclusions of law de

novo. Feesers, Inc. v. Michael Foods, Inc., 591 F.3d 191, 194 (3d Cir. 2010).

       Under the Federal Reserve Board’s official staff interpretation, the EFTA does not

apply unless the consumer has entered an agreement for EFT services:

     1. Accounts covered. The requirements of the regulation apply only to an
     account for which an agreement for EFT services to or from the account has
     been entered into between:

     i. The consumer and the financial institution (including an account for which
     an access device has been issued to the consumer, for example);

     ii. The consumer and a third party (for preauthorized debits or credits, for
     example), when the account-holding institution has received notice of the
     agreement and the fund transfers have begun.

12 C.F.R. Pt. 205, Supp. I § 205.3. We credit this interpretation because it is not

“demonstrably irrational.” Chase Bank USA, N.A. v. McCoy, 131 S. Ct. 871, 882 (2011)

(quoting Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 565 (1980)); Aronson v.

Peoples Natural Gas Co., 180 F.3d 558, 563 (3d Cir. 1999). Only subsection (i) of the

interpretation applies to this case, because the unauthorized transfer did not involve

preauthorized debits or credits by a third party.

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       No agreement for EFT services existed between PSECU and either Jason or

William. Obviously Jason never entered any such agreement; he did not even know that

the account existed until after David stole the money. As for William, he purported to

establish an EFT agreement by forging Jason’s signature on the PSECU form, but this

agreement – like the antecedent account-opening agreement – was forged and is therefore

void. See Tonkin v. Tonkin, 94 A.2d 192, 196 (Pa. Super. Ct. 1953) (“[T]he legal effect

of [forgery] is to void the instrument.”); FDA Packaging Inc. v. Advance Personnel

Staffing, Inc., 73 Pa. D. & C. 4th 420, 430 n.4 (Ct. Com. Pl. 2005) (“Void contracts

generally arise in cases of forgery of a party’s name or unauthorized execution of an

agreement on behalf of another party.”).

       Plaintiffs argue, incorrectly, that PSECU somehow created an agreement with

Jason by treating him as the account owner after William’s death. One cannot, however,

ratify a contract that never existed. Long v. Sears Roebuck & Co., 105 F.3d 1529, 1535

n.10 (3d Cir. 1997).

       Because no agreement existed between any plaintiff and PSECU, the EFTA does

not apply. See 12 C.F.R. Pt. 205, Supp. I § 205.3 (1)(i).

                                     CONCLUSION

       Accordingly, we will reverse the judgment of the District Court against PSECU.




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