Opinion
CIVIL ACTION NO. 5:18-cv-37-JCG
03-05-2020
REDSANDS ENERGY, LLC and James Sidney Roberts, Plaintiffs v. REGIONS BANK, Defendant
John H. Ott, Ott Law Firm, McComb, MS, for Plaintiffs. John H. Dollarhide, Caroline B. Smith, Butler Snow LLP, Ridgeland, MS, for Defendant.
John H. Ott, Ott Law Firm, McComb, MS, for Plaintiffs.
John H. Dollarhide, Caroline B. Smith, Butler Snow LLP, Ridgeland, MS, for Defendant.
MEMORANDUM OPINION AND ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
JOHN C. GARGIULO, UNITED STATES MAGISTRATE JUDGE
BEFORE THE COURT is a Motion for Summary Judgment [33], filed by Defendant Regions Bank ("Regions'). The Motion has been fully briefed. Having considered the submissions of the parties, the record, and relevant law, the Court finds that Regions' Motion for Summary Judgment should be granted. No genuine issue of material fact prevents the Court from concluding that the claims of Plaintiffs Redsands Energy, LLC (Redsands) and James Sidney Roberts are contractually precluded by the terms of a deposit agreement.
I. BACKGROUND
In 2012, Roberts opened two checking accounts with Regions and signed signature cards. A provision on the signature cards provided that "[b]y signing, I acknowledge receiving and agree to each and every term, condition, and provision of the Deposit Agreement...." [33-2] at 4-7. One of the accounts was opened in Roberts' name. The other was opened in the name of Roberts' company, Redsands. Roberts submits that, "[l]ike everyone else, [he] neither requested a copy of the deposit agreement nor did he read it. If he wanted to open [an] account, he actually had no choice but to sign the signature card without knowing or understanding the 48-page agreement, its terms and conditions." [37] at 1.
In February 2017, Redsands' office manager, Amanda Wallace, began forging checks. The first check was paid February 16, 2017. [34] at 11. The account statement containing this transaction was dated March 15, 2017. Id. Regions mailed account statements to Plaintiffs "on a monthly basis ..., with statements being generated and mailed shortly after the statement closing date." [33-2] at 3. Transactional data was available to Plaintiffs through internet banking, and statements were available to Plaintiffs upon request at a Regions' branch or by contacting customer service. Id.
Wallace eventually pleaded guilty to grand larceny. [37-2].
On July 7, 2017, months after the initial forgery by Wallace, Roberts visited Regions and notified Todd Thompson, a Regions' senior financial consultant, that he suspected unauthorized transactions on his accounts. Thompson and Roberts met on several occasions. Thompson provided account statements and check images that Roberts reviewed. Thompson prepared forms and affidavits for Roberts to sign, and these were formally submitted to Regions on July 21, 2017. In the affidavits, Roberts specifically identified approximately 55 checks as forgeries by Wallace.
Roberts alleges that Thompson assured him that Regions would reimburse Plaintiffs. Thompson testified at his deposition that he made no such assurances because he had no authority to determine whether a claim was paid or denied. [1-1] at 6; [37-2] at 12-14. Ultimately, Regions denied roughly $70,000 in claims as untimely because the account statement reflecting the first forgery transaction was dated March 15, 2017, but Plaintiffs did not report the first forgery by Wallace to Regions until July 2017. [37] at 8.
Redsands and Roberts filed a Complaint against Regions in the Circuit Court of Pike County, Mississippi, seeking $74,000, punitive damages, "plus incidental and consequential damages, as well and [sic] mental and emotional distress." [1-1] at 6. The Complaint alleges that Regions failed to exercise reasonable and ordinary care in debiting Plaintiffs' checking accounts, failed to exercise good faith before debiting Plaintiffs' checking accounts, and breached its contract with Plaintiffs by honoring checks without Plaintiffs' authorization. Regions removed the suit to this Court on the basis of diversity jurisdiction.
Regions has now moved for summary judgment, relying on the terms of the deposit agreement and Article 4 of the Uniform Commercial Code. Regions submits that this case is resolved by a straightforward application of Mississippi Code Annotated § 75-4-406 as modified by the deposit agreement. Regions argues that Plaintiffs' claims are precluded as untimely by two provisions in the deposit agreement. The first provision references UCC § 4-406(f) and provides that "[w]ithout regard to the care or lack of care of either of you or us, if you fail within 30 calendar days after the statement or item is sent or made available to discover and report" a forged item, "you shall be precluded from asserting against us" a claim on that item. [37-1] at 9, ¶ 10.
The second provision Regions relies on references UCC § 4-406(d) and provides:
[I]f your claim involves a series of items containing unauthorized signatures or alterations by the same wrongdoer, you shall be precluded from asserting against us any unauthorized signature or alteration by the same wrongdoer on any item paid in good faith on or after 10 calendar days after the first statement describing the first altered or unauthorized
item was sent or made available to you.
Id.
In their response in opposition, Plaintiffs contend that the deposit agreement is unenforceable because it is unconscionable, both procedurally and substantively. [37] at 1. Plaintiffs assert that Regions cannot rely on a defense of untimeliness because Regions failed to act with ordinary care and in good faith when it paid the items forged by Wallace. Id. at 4. Plaintiffs submit that the deposit agreement is not clear regarding when and how a customer must submit a claim and when the reporting period starts. Id. at 2-7. Plaintiffs contend that Regions' drastically shortened reporting periods are unlawful attempts by Regions to disclaim Regions' responsibility to exercise ordinary care and act in good faith. Id. at 11. Plaintiffs allege that a 10-day-reporting period is "manifestly unreasonable." Id. at 14.
Roberts stresses that he did not see his statements for several months because they were intercepted by Wallace. He asserts that he "was not able to identify persons who made fraudulent transactions by simply looking at the statement" because Regions did not provide check images with his statements. Id. at 6. Roberts submits that he "is an elderly gentleman who does not bank online," and Regions cannot avoid liability "by pleading the self-serving defense of ‘electronic banking’ in not sufficiently protecting its customers from fraudulent instruments." Id. at 11.
II. DISCUSSION
A. Summary Judgment Standard
Federal Rule of Civil Procedure 56 provides that summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The United States Supreme Court has held that this language "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a sufficient showing to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett , 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; see also Moore v. Miss. Valley State Univ. , 871 F.2d 545, 549 (5th Cir. 1989) ; Washington v. Armstrong World Indus. , 839 F.2d 1121, 1122 (5th Cir. 1988).
The party moving for summary judgment bears the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the record which it believes demonstrate the absence of a genuine issue of material fact. Celotex , 477 U.S. at 323, 106 S.Ct. 2548. The movant need not, however, support the motion with materials that negate the opponent's claim. Id. As to issues on which the non-moving party has the burden of proof at trial, the moving party need only point to portions of the record that demonstrate an absence of evidence to support the non-moving party's claim. Id. at 323-24, 106 S.Ct. 2548. The non-moving party must then go beyond the pleadings and designate "specific facts showing that there is a genuine issue for trial." Id. at 324, 106 S.Ct. 2548.
Summary judgment can be granted only if everything in the record demonstrates that no genuine issue of material fact exists. It is improper for the district court to "resolve factual disputes by weighing conflicting evidence, ... since it is the province of the jury to assess the probative value of the evidence." Kennett-Murray Corp. v. Bone , 622 F.2d 887, 892 (5th Cir. 1980). Summary judgment is also improper where the court merely believes it unlikely that the non-moving party will be able to prevail at trial. Nat'l Screen Serv. Corp. v. Poster Exchange, Inc. , 305 F.2d 647, 651 (5th Cir. 1962).
B. UCC § 4 -406/ Miss. Code Ann. § 75-4-406
Because this case arises under the Court's diversity jurisdiction, it is governed by the substantive law of the forum state, Mississippi. See State Farm Mut. Auto. Ins. Co. v. LogistiCare Sols., LLC , 751 F.3d 684, 688 (5th Cir. 2014) (citing Erie R.R. Co. v. Tompkins , 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) ). Mississippi has adopted Article 4 of the Uniform Commercial Code, which is codified in Mississippi Code Annotated sections 75-4-101 through 504. Article 4 governs bank deposits and collections, and specific to this action, sets forth the duties and liabilities of banks and their customers regarding the discovery and reporting of forged checks. See Union Planters Bank, Nat. Ass'n v. Rogers , 912 So.2d 116, 117 (Miss. 2005).
UCC § 4-406, as codified in Miss. Code Ann. § 75-4-406, governs this dispute and reflects an underlying policy that furthers the UCC's "objective of promoting certainty and predictability in commercial transactions." Id. at 121. Section 75-4-406 "allocate[es] responsibility among the parties according to whomever is best able to prevent a loss." Id.
Section 4–406 acknowledges that the customer is best situated to detect unauthorized transactions on his own account by placing the burden on the customer to exercise reasonable care to discover and report such transactions. The customer's duty to exercise this care is triggered when the bank satisfies its burden to provide sufficient information to the customer. As a result, if the bank provides sufficient information, the customer bears the loss when he fails to detect and notify the bank about unauthorized transactions. See, e.g. , Am. Airlines Employees Fed. Credit Union v. Martin , 29 S.W.3d 86, 92 (Tex. 2000).
Id.
Under Article 4's liability scheme, a bank is liable to its customer if it charges the customer's account for an item that is not properly payable from that account. Miss. Code Ann. § 75-4-401(a). An item with an unauthorized signature is not properly payable. The bank, however, has statutory defenses if it makes account statements available to the customer:
If a bank sends or makes available a statement of account or items ... the customer must exercise reasonable promptness in examining the statement or the items to determine whether any payment was not authorized because of an alteration of an item because of a purported signature by or on behalf of the customer was not authorized.....
Miss. Code Ann. § 75-4-406(c).
Miss. Code Ann. § 75-4-406(d)(2) imposes on the customer a risk of loss for serial forgeries by the same wrongdoer. If the bank proves that the customer failed to exercise reasonable promptness in examining his statements as required by § 75-4-406(c), the customer is precluded from asserting against the bank
[t]he customer's unauthorized signature or alteration by the same wrongdoer on any other item paid in good faith by the bank if the payment was made before the bank received notice from the customer of the unauthorized signature or alteration and after the customer had been afforded a reasonable period of time, not exceeding thirty (30) days, in
which to examine the item or statement of account and notify the bank.
Miss. Code Ann. § 75-4-406(d)(2).
If the customer establishes lack of ordinary care on the part of the bank, the "same wrongdoer" preclusion is converted to a comparative fault defense. Miss. Code Ann. § 75-4-406(e). "Ordinary care ... means observance of reasonable commercial standards, prevailing in the area in which the person is located, with respect to the business in which the person is engaged." Miss. Code Ann. § 75-3-103. Reasonable commercial standards are, in turn, defined as "general banking usage not disapproved by" other provisions of the UCC. Id.
Miss. Code Ann. § 75-4-406(e) provides that if the customer proves that the bank paid an item in bad faith, the loss falls completely on the bank. "Good faith" means "honesty in fact and the observance of reasonable commercial standards of fair dealing." Miss. Code Ann. § 75-1-201(b)(20). Bad faith "requires a showing of more than bad judgment or negligence; rather, ‘bad faith’ implies some conscious wrongdoing." Univ. of S. Mississippi v. Williams , 891 So. 2d 160, 170 (Miss. 2004). To prove bad faith, the customer bears a heavy burden of demonstrating that the bank had actual knowledge of the scheme, and its conduct amounted to dishonesty or complicity in the scheme. See Wells v. Bank of New York Co., Inc. , 181 Misc. 2d 574, 694 N.Y.S.2d 570 (Sup. Ct. N.Y. Cnty. 1999).
Finally, Miss. Code Ann. § 75-4-406(f) is a statute of repose that places an absolute time limit on the right of a customer to make claim for payment of a forged item. If a customer fails to report the item within a one-year period, the customer is precluded from objecting to the item "without regard to care or lack of care of either the customer or the bank." Miss. Code Ann. § 75-4-406(f). Section 75-4-406(f) "clearly limits the liability of the bank to one year after the statement was made available to the customer." Century Const. Co., LLC v. Bancorpsouth Bank , 117 So. 3d 345, 348 (Miss. Ct. App. 2013).
The provisions of Miss. Code Ann. § 75-4-406 may be varied by agreement, but the parties to the agreement cannot disclaim a bank's responsibility for its lack of good faith or failure to exercise ordinary care or limit the measure of damages for the lack or failure. However, the parties may determine by agreement the standards by which the bank's responsibility is to be measured if those standards are not manifestly unreasonable.
Courts routinely enforce deposit agreements that modify the reporting periods in UCC § 4-406 within which a customer may claim that a signature or alteration is unauthorized. See Century Const. Co., LLC. 117 So. 3d at 348-49 ; Rogers , 912 So. 2d at 121.
C. Mississippi Code Annotated § 75-4-406 as Modified by the Deposit Agreement Precludes Plaintiffs' Claims
The deposit agreement executed by Roberts modified the reporting periods in Miss. Code Ann. § 75-4-406. The deposit agreement shortened the statute of repose period in Miss. Code Ann. § 75-4-406(f) from one year to 30 calendar days. [37-1] at 9, ¶10. A "same wrongdoer" provision in the deposit agreement modified Miss. Code Ann. § 75-4-406(d)(2) and defined "a reasonable period of time, not exceeding thirty (30) days" as "10 calendar days after the first statement describing the first altered or unauthorized item was sent or made available to you." Id. Plaintiffs' argument that the deposit agreement does not explain when the reporting period begins is without merit because both provisions, as well as the statutory provisions they modify, are clear that a reporting period begins when the bank "sends or makes available" a statement. "The word ‘receive’ is absent." Rogers , 912 So. 2d at 122 (emphasis supplied).
Regions has provided evidence that account statements were "generated and mailed shortly after the statement date" and mailed to Plaintiffs on a monthly basis to Plaintiffs' designated address. [33-2] at 3. Regions has provided evidence that transactional data was available to Plaintiffs through internet banking and that statements were available to Plaintiffs upon request at a Regions' branch or by contacting customer service. Id. Plaintiffs have submitted no evidence to the contrary. Roberts did not provide Regions with notice until several months after the March 15, 2017 account statement containing the first forged check was sent or made available. Plaintiffs provided Regions notice far outside both the 10-day and 30-day reporting requirements in the deposit agreement, as well as the 30-day maximum reporting period for same wrongdoer forgeries allowed under Miss. Code Ann. § 75-4-406(d)(2).
Plaintiffs' argument that the deposit agreement is unconscionable fails for a lack of evidence. A banking customer's signature on what is commonly known as a "signature card" constitutes acceptance of terms and conditions in a separate depository agreement. Regions Bank v. Herrington , 630 F. Supp. 2d 722, 726 (S.D. Miss. 2009). While Roberts submits that he was not provided a copy of the deposit agreement before he signed the signature card, this assertion is contrary to and foreclosed by the unambiguous language of the signature card, which plainly recites, "[b]y signing, I acknowledge receiving and agree to each and every term, condition, and provision in the Deposit Agreement...." [33-2] at 4-6. Plaintiffs are not relieved of the reporting requirements in the deposit agreement on the basis that they were unaware that the that the deposit agreement contained them. On the contrary, under Mississippi law,
[p]arties to a contract have an inherent duty to read the terms of a contract prior to signing; that is, a party may neither neglect to become familiar with the terms and conditions and then later complain of lack of knowledge, nor avoid a written contract merely because he or she failed to read it or have someone else read and explain it.
MS Credit Ctr., Inc. v. Horton , 926 So. 2d 167, 177 (Miss. 2006) ; see Equifirst Corp. v. Jackson , 920 So.2d 458, 464 (Miss. 2006).
To allow a party to admit that he signed a contract "but to deny that it expresses the agreement he made or to allow him to admit that he signed it but did not read it or know its stipulations would absolutely destroy the value of all contracts." Busching v. Griffin , 542 So.2d 860, 865 (Miss. 1989) (citation omitted). An individual's failure to inform himself of what he signs "does not make the agreement unconscionable or unenforceable." Smith v. EquiFirst Corp. , 117 F.Supp.2d 557, 565 (S.D. Miss. 2000).
It is not necessary that contracts contain "mutual promises that give the parties identical rights and obligations, or that the parties must be bound in the exact same manner." Caplin Enterprises, Inc. v. Arrington , 145 So. 3d 608, 615 (Miss. 2014) (internal citations omitted). That one party to a contract lacks sufficient bargaining power to negotiate changes to the contract drafted by the other party does not alone make the contract unenforceable. Id. Even if the deposit agreement was a contract of adhesion, presented on a take it or leave it basis, that is not enough to render the deposit agreement void. Bell v. Koch Foods of Miss. , LLC, No. 3:08-cv-697-WHB-LRA, 2009 WL 1259054, at *6 (S.D. Miss. May 5, 2009), aff'd, 358 F. App'x 498 (5th Cir. 2009). Plaintiffs cannot prevail on their theory of unconscionability because they have presented no evidence that they were prevented by market factors, timing or other pressures from being able to contract with another party on more favorable terms or to refrain from contracting at all. Bell , 358 F. App'x at 503 ; see Horton , 926 So.2d at 178. Plaintiffs cannot prevail on their theory of unconscionability because they were not "deprived of all the benefits of the agreement or left without a remedy for another party's nonperformance or breach[.]" Covenant Health & Rehab. of Picayune, LP v. Estate of Moulds ex rel. Braddock , 14 So. 3d 695, 700 (Miss. 2009) (internal citations omitted).
That Wallace intercepted the account statements does not excuse Roberts from failing to fulfill his duty to exercise reasonable promptness in examining his account statements. Rogers , 912 So. 2d at 122. The law presumes that "[a] reasonable person who has not received a monthly statement from the bank would promptly ask the bank for a copy of the statement." Id. That Regions did not include check images with Plaintiffs' account statements is immaterial because the deposit agreement did not require this, and neither does the UCC. "The statement of account provides sufficient information if the item is described by item number, amount, and date of payment." Miss. Code Ann. § 75-4-406(a). There is no evidence that Plaintiffs' account statements failed to contain descriptions "by item number, amount, and date of payment."
While Plaintiffs allege that the deposit agreement contains confusing and conflicting terms, the wording and structure of the provision at issue follows the wording and structure of UCC § 4-406. The Court cannot find that a deposit agreement following the language of the governing statute, which modifies the reporting dates as allowed by the UCC, is unenforceable as confusing and conflicting. The Fifth Circuit has recognized that
At first glance, the U.C.C. may appear to be a compendium of confusing and seemingly contradictory rules enacted to govern myriad business transactions. Upon closer scrutiny, the U.C.C. is found to be a finely tuned statutory mechanism containing interlocking provisions designed to provide certainty in commercial transactions. Once the pieces of this puzzle are correctly aligned, the U.C.C. furnishes an answer to almost any question involving the rights and liabilities of the parties to a covered transaction.
Union Bank of Benton, Ark. v. First Nat. Bank in Mt. Pleasant, Tex. , 621 F.2d 790, 792 (5th Cir. 1980).
Plaintiffs allege that Regions cannot assert untimeliness as a defense because Regions failed to exercise ordinary care and good faith in its processing of the forged checks. Plaintiffs have not offered evidence that could meet their burden of proving that Regions failed to exercise ordinary care because Plaintiffs have not submitted evidence establishing reasonable commercial standards in banking prevailing in the area. "The mere fact that a forgery of a signature on a check is not detected does not prove that a bank's signature verification procedures are not in accordance with reasonable commercial standards of the banking industry." Grodner & Assocs. v. Regions Bank , 766 F. App'x 12, 15 (5th Cir. 2019) (internal citations omitted).
Plaintiffs insist that Regions should have detected the fraud by comparing the unauthorized checks to the signature card on file. However, the UCC acknowledges that banking is now largely automated:
In the case of a bank that takes an instrument for processing for collection or payment by automated means, reasonable commercial standards do not require the bank to examine the instrument if the failure to examine does not violate the bank's prescribed procedures and the bank's procedures do not vary unreasonably from general banking usage not disapproved by this chapter or Chapter 4.
Miss. Code Ann. § 75-3-103(a)(9).
Nothing in the record indicates that Regions deviated from its own procedures or reasonable commercial standards when processing the checks forged by Wallace. As for Plaintiffs' allegation of bad faith by Regions, nothing in the record indicates that Regions knew of Wallace's forgeries before Roberts reported them. There is no evidence in the record of dishonesty or complicity by Regions in Wallace's scheme.
Plaintiffs argue that the 30-day statute of repose provision in the deposit agreement unlawfully disclaims liability for Regions' own lack of good faith and ordinary care. Courts have consistently disagreed with this position and enforced provisions that substantially shorten the one-year statute of repose period in UCC § 4-406(f). See generally Freese v. Regions Bank, N.A. , 284 Ga. App. 717, 644 S.E.2d 549 (2007). The notice requirement of UCC § 4-406(f) is similar to a condition precedent – the customer's ability to recover for unauthorized transactions is conditioned upon his discovering and reporting those transactions within the specified time period. See Martin , 29 S.W.3d at 95. The UCC draws a careful distinction between disclaiming liability, which it does not permit the bank to do, and limiting the time period during which a bank can be charged with liability for paying unauthorized items, which the UCC permits banks to do. Id. at 97.
The Mississippi Court of Appeals enforced a deposit agreement that shortened the one-year reporting period in Miss. Code Ann. § 75-4-406(f) to sixty days. Century Const. Co. , LLC , 117 So. 3d at 351. In doing so, the Mississippi Court of Appeals cited favorably to precedent from other jurisdictions where courts had enforced shortening the statute of repose period to as little as fourteen days. Id. at 349. Plaintiffs have not cited to any jurisdiction that has found a reporting period modifying UCC § 4-406(f) to be manifestly unreasonable. Based on Century Const. Co. , LLC , and the precedent cited favorably therein, the Court concludes as a matter of law that the thirty-day reporting period modifying Miss. Code. Ann. § 75-4-406(f) does not disclaim Regions' liability for its own lack of good faith or ordinary care and is not manifestly unreasonable. The wording of the provision is consistent with the wording and structure of UCC § 4-406(f) and case law analyzing contractual modifications of UCC § 4-406(f). Plaintiffs allege that the 10-day "same wrongdoer" reporting period is so unreasonably short that it, in effect, disclaims the bank's liability for lack of ordinary care and good faith. [37] at 3. The statute governing same wrongdoer forgeries provides that the customer must be afforded "a reasonable period of time, not exceeding thirty (30) days, in which to examine the item or statement of account and notify the bank. Miss. Code Ann. § 75-4-406(d)(2). "The 30-day period is an outside limit only." Rogers , 912 So. 2d at 122. Courts have routinely enforced deposit agreements modifying UCC § 4-406(d)(2) with reporting requirements of substantially less than thirty days.
citing Freese , 284 Ga. App. at 717, 644 S.E.2d 549 (thirty days); Napleton v. Great Lakes Bank, N.A. , 408 Ill. App. 3d 448, 453, 348 Ill.Dec. 804, 945 N.E.2d 111, 116 (2011) (thirty days); Stowell v. Cloquet Co-op Credit Union , 557 N.W.2d 567, 574 (Minn. 1997) (twenty days); Borowski v. Firstar Bank Milwaukee, N.A. , 217 Wis.2d 565, 579 N.W.2d 247, 251 (Wis. Ct. App. 1998) (fourteen days); Parent Teacher Ass'n, Pub. Sch. 72 v. Manufacturers Hanover Tr. Co. , 138 Misc. 2d 289, 290, 524 N.Y.S.2d 336 (Civ. Ct. 1988) (fourteen days).
--------
The Supreme Court of Mississippi enforced a deposit agreement modifying the reporting period in Miss. Code Ann. § 75-4-406(d)(2) to fifteen days. Union Planters , 912 So. 2d at 122. The Fifth Circuit enforced an agreement which modified the reporting provision in Louisiana's codification of UCC 4-406(d)(2) to ten days. Grodner , 766 F. App'x at 14-15. Plaintiffs have not cited to any jurisdiction that has found a reporting period modifying UCC § 4-406(d)(2) to be manifestly unreasonable. Based on Union Planters and the persuasive authority of Grodner , the Court concludes as a matter of law that the ten-day reporting period modifying § 75-4-406(d)(2) is not manifestly unreasonable.
Finally, Plaintiffs claim that Thompson assured Roberts that Regions would reimburse Plaintiffs for the unauthorized transactions, which orally modified the deposit agreement. Plaintiffs contend that Thompson had apparent authority "since he was the bank officer who undertook the procedure to get Mr. Roberts reimbursed, and he gave no indication otherwise." [37] at 14. Plaintiffs admit that Thompson "testified at his deposition that he did not have the authority to approve such reimbursements." Id.
Plaintiffs' oral modification argument is foreclosed by the terms of the deposit agreement. Whether or not Plaintiffs read the deposit agreement, constructive knowledge of its contents is imputed to Plaintiffs. The deposit agreement provides:
You acknowledge and agree that no practice or course of dealing between you and us, nor any oral representations or communications by you and/or any of our agents, employees or representatives or communications by you and/or any of our agents, employees, or representatives, which vary the terms and conditions of this Agreement shall constitute a modification or amendment of the terms and conditions.
[37-1] at 16.
In the face of the express provision prohibiting oral representations by Regions' employees from varying the terms and conditions of the deposit agreement, Roberts' professed reliance on Thompson's alleged oral representations was per se unreasonable. See Leonard v. Nationwide Mut. Ins. Co. , 499 F.3d 419, 438 (5th Cir. 2007) ("a party's reliance on representations by an insurance agent that contradict the policy language is unreasonable"); Rainwater v. Lamar Life Ins. Co. , 207 F.Supp.2d 561, 568 (S.D. Miss. 2002) ) (Where the terms of a contract are made available to the contracting party, any reliance on alleged misrepresentations of those terms is, as a matter of law, unreasonable."). There is no evidence that Regions and Plaintiffs engaged in a pattern of conduct that could waive the provision. In sum, the deposit agreement is enforceable and precludes Plaintiffs' claims.
III. CONCLUSION
IT IS, THEREFORE, ORDERED that Regions' Motion for Summary Judgment [33] is GRANTED . Plaintiffs' claims against Regions are dismissed with prejudice. A separate judgment will be entered in accordance with Federal Rule of Civil Procedure 58.
SO ORDERED , this the 5th day of March, 2020.