The opinion of the court was delivered by: Jacob P. Hart Magistrate Judge
FINDINGS OF FACT AND CONCLUSIONS OF LAW
This case was brought by plaintiffs John Marquess, as the executor for the estate of William Marquess, and Jason Marquess to recover money that was withdrawn from a bank account created by William Marquess. The plaintiffs have asserted claims under the Electronic Funds Transfer Act, 15 U.S.C. § 1693 et seq. ("EFTA"), and for breach of contract.
A bench trial took place in this case before the undersigned on July 13, 2010. As explained in the following findings of fact and conclusions of law, which are set forth in narrative style, I have found that defendant, the Pennsylvania State Employees Credit Union ("PSECU") is liable to plaintiffs under EFTA. I will also award treble damages, as directed by the statute. However, I find in favor of PSECU on the breach of contract claims.
II. Factual and Procedural Background
PSECU is a state-chartered credit union. See Exhibit D-1. Persons who fit within certain fields of membership may become members and hold accounts at PSECU. Trial Transcript ("Transcript") at 65. Each PSECU account has an account number and a Personal Identification Number ("PIN"). Id. Accounts that are accessible online also have a password. Transcript at 66.
PSECU offers an online home banking service and a self-service telephone line. Transcript at 66-67. In order to conduct a self-service telephone banking transaction, a person must know the account number and PIN. Id.
Plaintiff Jason Marquess is the son of defendant William Marquess. Transcript at 9. In August, 2004, an application was submitted to PSECU to open an account in the name of Jason Marquess. Exhibit D-1. The application contained Jason Marquess's name, birth date, and social security number, although the Philadelphia address and phone number listed were not correct. Transcript at 34-36, 40. The Howell Street address which was listed, and the phone number, actually belonged to William Marquess. Transcript at 34, 40. A Florida identification card with Jason Marquess's picture and signature was also submitted in connection with the application. Exhibit D-1. PSECU opened the account. Id.
On August 27, 2004, an "Account to Account Transfer Authorization" form was submitted to PSECU authorizing transfers to be made from the account in the name of Jason Marquess to a PSECU account held by his father, William Marquess. Exhibit D-3. It appeared to be signed by Jason Marquess. For some reason, a second Account to Account Transfer Authorization form, also authorizing transfers from Jason's to William's account was submitted on September 15, 2005. Exhibit D-4. That, too, bore what purported to be Jason's signature. Id.
On November 25, 2005, a form naming William Marquess as a joint owner of Jason's account was submitted to PSECU. Exhibit D-5. Again, it purported to be signed by Jason. Id. In December, 2005, an ATM card was issued for Jason Marquess on the same terms.
Crucially, in February, 2006, a form was submitted authorizing telephone and online transfers from the account in the name of Jason Marquess to an account in the name of David Marquess, Jason's brother (and William's other son). Exhibit D-7. The form was signed in the name of Jason Marquess. Id.
All of the forms described above listed Jason's address as the Howell Street address, which was actually William's residence. Jason was living in Florida at all relevant times. Transcript at 40. The signatures on the forms were all verified against each other by PSECU personnel, and found acceptable. Transcript at 76-80, Testimony of Susan Krause.
Then, on October 23, 2007, William Marquess died. Transcript at 10. PSECU employee Measie Fairfax received notice of William Marquess's death from the Department of the Treasury on October 30, 2007. Deposition Transcript of Measie Fairfax at 7-8. On November 1, 2007, Ms. Fairfax sent one letter, addressed to both Jason Marquess and David Marquess, and mailed to the Howell Street address, headed by the redacted account numbers for three accounts. Exhibit J-3. Although the accounts were not identified by owner in the letter, the account numbers were for (a) the account held individually by William Marquess; (b) the account apparently held jointly by William and Jason Marquess; and (c) a joint account held by William and David Marquess. Exhibit J-3. The letter explained certain forms, which were enclosed. Id.
John Marquess was named the administrator for the estate of his brother, William. Transcript at 10. As part of his duties, he contacted PSECU. Id. at 12. On November 9, 2007, he spoke to Ms. Fairfax. Exhibit B-1, Exhibit J-4. She told him only about the account held solely by William Marquess. Transcript at 14, and Exhibit J-4.
John Marquess continued to be in touch with Ms. Fairfax. On November 26, 2007, he wrote to her:
You may recall, in our conversation, I advised you that neither I nor any potential heir is aware of any accounts that my brother may have owned or had an ownership interest. In short, we "don't know what we don't know" and I therefore need PSECU to disclose to me the following: any and all accounts in which my brother, William A. Marquess, had any ownership interest, including, but not limited to, individual accounts, CD accounts, IRA accounts, savings or checking accounts he owned individually, accounts he owned with or without Rights of Survivorship, joint accounts, and accounts of any nature whatsoever, and any Safe Deposit Boxes.
If he had any such accounts, even accounts with Rights of Survivorship with any of his heirs, I can represent to you that neither I nor any such heir is aware of any such account. In short, we need PSECU to disclose to me the source and nature of any accounts.
Exhibit B-3 (emphasis supplied). Nevertheless, this letter did not lead to the disclosure of the apparent joint account in William's and Jason's names. Transcript at 18.
On January 22, 2008, an individual called PSECU on the telephone. Exhibit J-5. The caller identified himself as Jason Marquess, and said: "I talked to my brother recently who just found out that he had an account with PSECU through [sic] my father had set it up. He is recently deceased. He had to like go through a whole bunch of stuff to find out that he had it. And he told me that I have one too and I have no way of finding how." Id.
He later said: "I didn't know [the account] existed until maybe last week my brother let me know he had one. And I have one. He looked at his online and he told me when he was going through transferring funds, there was an account with my name on it and that he could have transferred funds into." Id.
Ultimately, it was decided that the PSECU employee, Tina Powell, would send the caller the account number and PIN number for the account, and mail it to William Marquess's former address, from which, as the caller assured her, it would be forwarded to Jason's sister's address. Id. She did this. Deposition Transcript of Tina Powell at 29.
On February 1, 2008, PSECU received a second call from a person identifying himself as Jason Marquess. Exhibit J-6 (Transcript of Telephone Call). He stated that he did not have the password needed to use the online account. Id. The PSECU employee to whom he spoke changed the password to Jason Marquess's birth date, without mentioning the specific birth date on the phone. Id.
On the same date, $25,000.00 was electronically transferred from Jason Marquess's money market account to David Marquess's account. Exhibit J-1 at Bates Stamp 0088. The address on the account was also changed from William Marquess's former address to David Marquess's address. Exhibit J-12 at ¶ 20, Transcript at 34. In two subsequent transactions, the amounts of $354.74 and $514.43 were also electronically transferred from Jason's account to David's. Exhibit J-1 at Bates Stamp 0091 and 0092.
On September 25, 2008, John Marquess received a letter from the Commonwealth of Pennsylvania, addressed to Jason Marquess, and notifying him of inheritance tax due on the joint account in the names of William and Jason Marquess. Transcript at 17; Exhibit D-14. John Marquess was not previously aware of the existence of this account. Transcript at 18. Neither was Jason Marquess. Transcript at 30.
Jason Marquess first contacted PSECU about the joint account on October 14, 2008. Transcript, Testimony of Susan Krause, at 70. Two days later, Susan Krause, the financial crimes investigator for PSECU, told Jason that the account existed but that almost all of the funds had been transferred to David Marquess's account. Id. at 70; Exhibit D-13. Jason told Ms. ...