Stephen S. Patterson, II v. Suntrust Bank, East Tennessee ( 2013 )


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  •                 IN THE COURT OF APPEALS OF TENNESSEE
    AT KNOXVILLE
    December 10, 2012 Session
    STEPHEN S. PATTERSON, II. V. SUNTRUST BANK, EAST TENNESSEE
    Appeal from the Circuit Court for Blount County
    No. L15908 Hon. David Reed Duggan, Judge
    No. E2012-01371-COA-R3-CV-FILED-JANUARY 11, 2013
    This case was filed pursuant to the Electronic Funds Transfer Act. Customer sought
    reimbursement from Bank for unauthorized transactions made using a debit card linked to
    his account. Bank limited reimbursement to the transactions that occurred prior to and within
    60 days of the transmittal of the bank statement that revealed the first unauthorized
    transaction. Customer filed suit. The trial court upheld Bank’s denial of recovery, finding
    that Customer’s failure to review his bank statements resulted in losses beyond the 60-day
    time period. Customer appeals. We affirm the decision of the trial court.
    Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed;
    Case Remanded
    J OHN W. M CC LARTY, J., delivered the opinion of the court, in which C HARLES D. S USANO,
    J R., P.J., and D. M ICHAEL S WINEY, J., joined.
    Gerald C. Russell, Rockford, Tennessee, for the appellant, Stephen S. Patterson, II.
    Christopher W. Martin, Knoxville, Tennessee, for the appellee, Suntrust Bank, East
    Tennessee.
    OPINION
    I. BACKGROUND
    Stephen S. Patterson, II (“Customer”) opened a combination personal and business
    checking account with Suntrust Bank, East Tennessee (“Bank”) in Alcoa, Tennessee on
    December 20, 1999. On that day, Customer was told that he would receive a debit card in
    the mail. When Customer received his debit card, he validated it and then used it to make
    purchases.
    In July 2005, Customer and Juanita Wehrman entered into a romantic relationship.
    At some point during Customer’s relationship with Ms. Wehrman, Bank mailed Customer
    another debit card. Ms. Wehrman stole the debit card and made her first unauthorized
    purchase with the card on August 22, 2005. While Customer continued to use his card, Ms.
    Wehrman used the replacement card for approximately 16 months, well beyond the longevity
    of their intermittent romantic relationship.
    On December 4, 2006, Customer was depositing money into his account at Bank when
    an employee jokingly chided him for his extravagant shopping trip in Indiana that weekend.
    Knowing that he had not visited Indiana, Customer entered the bank to speak with an
    employee. While speaking with the employee, Customer’s card was used to make another
    purchase in Indiana. The employee closed Customer’s account to prevent any further
    unauthorized transactions. Customer discovered that Ms. Wehrman had used his replacement
    debit card to make unauthorized purchases in excess of $30,000.
    Customer sought reimbursement from Bank. Relying on 15 United States Code
    Annotated section 1693g, Bank limited its reimbursement to $677.46. Bank insisted that it
    was only required to reimburse Customer for the amount of unauthorized transactions that
    occurred prior to and within 60 days of the transmittal of the bank statement that revealed the
    first unauthorized transaction. Customer also received $500 in restitution from Ms.
    Wehrman. Customer filed suit against Bank in an effort to recoup the remainder of his loss
    from Ms. Wehrman’s fraudulent use of his account.
    A bench trial was held at which Customer and Stephanie Hardiman, a bank employee
    testified. Customer testified that the employee who opened his checking account told him
    that he would not be held “liable or responsible” for unauthorized transactions. He admitted
    that other than the employee’s assurance regarding his liability, he could not recall exactly
    what the employee told him when he opened the account. He related that the employee
    instructed him to sign certain documents, including a signature card. The signature card
    provided, in pertinent part,
    It is agreed that all transactions between the Bank and the entity listed in the
    above Account Title (“Depositor”) shall be governed by the rules and
    regulations for this account and the above signed as the authorized agent(s) of
    the Depositor hereby acknowledge(s) receipt of such rules and regulations and
    the funds availability policy. The Depositor also acknowledges the funds
    availability policy has been explained.
    -2-
    Customer could not recall reading the signature card and insisted that he never received the
    rules and regulations or the funds availability policy mentioned in the document.
    Customer testified that he was not given any documentation when he opened his
    account. He also never received any disclosures in the mail regarding his potential liability
    for unauthorized transactions. He said that after opening the account, he received a box of
    checks and a debit card in the mail. He stated that the debit card was attached to a document
    similar to one he offered into evidence, which provided, in pertinent part,
    You are protected if your card is ever lost or stolen. You are not responsible
    for unauthorized purchases.
    The document also provided,
    Use of this card is subject to the terms and conditions of your current
    Customer Agreement.
    He related that the debit card also provided that he was not liable or responsible for any
    unauthorized purchases. He introduced two additional documents, bearing the same
    limitation of liability. The first document also advised that use of the card was subject to his
    user agreement, while the second document did not mention the terms and conditions
    governing the debit card. However, a debit card, which was left attached to the second
    document, provided, in pertinent part,
    The cardholder and any other authorized users by signing this agrees to all
    [Bank] terms and conditions agreement(s) governing this card.
    Relative to the theft of his replacement card, Customer testified that he dated Ms.
    Wehrman “on and off,” starting in July 2005. He admitted that she “occasionally” stayed
    overnight in his home and had access to his mail and home office. He insisted that Ms.
    Wehrman did not take the debit card that he regularly used. He surmised that she must have
    stolen a replacement card from the mailbox while he was not home. He asserted that he
    never consented to Ms. Wehrman’s use of his replacement card.
    Customer used his checking account for personal and business purposes. He admitted
    that he received monthly statements documenting his account activity. He stated that he
    opened the statements, glanced at them, and then filed them for later use. He never used the
    statements to balance his account. He related that he gave the statements to his accountant,
    who filed his income tax return each year. He acknowledged that the number of Ms.
    Wehrman’s transactions steadily increased throughout her unauthorized use of the
    -3-
    replacement card and that as a result of her increased purchases, his monthly bank statements
    spanned several pages. He admitted that the statements reflected the location of each
    purchase and that some of the unauthorized transactions occurred in North Carolina and
    Indiana. He conceded that he would have noticed that someone else was using his account
    if he had simply reviewed his statements.
    Ms. Hardiman, a vice president of corporate security at Bank, testified that she had
    been employed at Bank for 17 years. She related that she investigated claims of fraud,
    forgery, and external or internal misappropriation of funds. She was responsible for
    monitoring a large geographic area, including Blount County. As a result of her training and
    position, she was familiar with the basic way in which Bank opened and maintained checking
    accounts. She was also familiar with the way in which Bank maintained its records.
    Following voir dire, she was qualified as a custodian of records for purposes of this case.
    Ms. Hardiman testified that generally, customers are required to provide a social
    security number and sign a signature card in order to open a checking account. She stated
    that customers are either given a copy of Bank’s rules and regulations at the time the account
    is opened or they receive the pertinent documents in the mail after the account is opened.
    She asserted that if a customer elects to receive a debit card, a card is sent in the mail, along
    with the rules and regulations relating to the use of the actual card. She stated that each time
    a replacement or renewal card is sent, the customer receives another copy of the rules and
    regulations relating to the card. She related that debit cards are replaced every three years.
    She admitted that the department that oversees the creation of the rules and regulations is
    located in Atlanta, Georgia and that the company that mails the debit cards is located in a
    different state. She asserted that the Atlanta Department is responsible for ensuring that the
    pertinent documents are included with the debit cards when the cards are mailed. The 2002,
    2004, 2005, and 2006 rules and regulations were introduced into evidence as a collective
    exhibit. The documents provided, in pertinent part,
    If you do NOT tell us within two (2) business days after learning of the loss or
    theft of the electronic terminal access card or code, or preauthorized Telephone
    Funds Transfer code, and we can prove that we could have prevented someone
    from using the card or code without your permission had we been notified, you
    could lose as much as $500.
    If your statement shows transfers you did not make, tell us at once. If you do
    not tell us within sixty (60) days after the statement was mailed, you may lose
    all of the money transferred after the sixty (60) days if we can prove that we
    could have prevented the loss had you told us in time.
    -4-
    We will extend the time periods for a good reason, such as a long trip or
    hospital stay, which might keep you from notifying us.
    In accordance with Visa guidelines, SunTrust Check Card holders are not
    liable for unauthorized Visa merchant transactions performed with their
    SunTrust Check Cards if the card is reported lost or stolen within two days (48
    hours) of discovery. After two days, there is a maximum liability of $50.
    She admitted that she did not know whether the rules and regulations were sent with
    Customer’s debit card or with any of his replacement or renewal cards. She also
    acknowledged that she was not present when Customer opened his account and could not
    state whether he received a copy of the rules and regulations at that time.
    Ms. Hardiman explained that customers who elect to receive a debit card also receive
    a personal identification number (“PIN”) that is to be used with the card. She related that a
    card can be used in one of two ways, either the customer enters the PIN each time he or she
    makes a purchase or the customer simply signs his or her name at the time of the purchase.
    She stated that the PIN remains the same even when customers receive replacement or
    renewal cards. She admitted that a customer could request a new PIN.
    Ms. Hardiman testified that if a customer were to report unauthorized transactions
    within 60 days of the first transaction reflected in the monthly statement, Bank would have
    closed the checking account, blocked the cards associated with the account from future use,
    and reimbursed the customer in full. She acknowledged that she would not have been
    involved with Customer’s case if he had notified Bank of the unauthorized transactions in
    a timely manner. She explained that she learned of Customer’s case because of the time
    frame of the unauthorized activity and the amount of money that was stolen.
    Following the presentation of the above evidence, the trial court dismissed Customer’s
    complaint. The court found Ms. Hardiman’s testimony credible and noted that the
    disclosures provided by Bank were compliant with federal regulations. The court also found
    that Customer was negligent for failing to review his monthly statements, that he “put [Ms.
    Wehrman] in the position of having access to his debit card, or at least to intercept a
    replacement card,” and that he offered “no proof” regarding the claim that the card used by
    Ms. Wehrman was not validated. The court acknowledged the general limitation of a
    customer’s liability found in the applicable law, the disclosure statements, and on the
    documents provided by Bank. However, the court stated that the applicable law and
    disclosures provided “an exception to that limitation of liability where an account holder is
    not diligent in monitoring his periodic bank statements, and where the account holder fails
    to report to the bank what are very clearly unauthorized charges.” The court concluded,
    -5-
    [Customer] was negligent in failing to review his monthly account statements,
    and it was as a result of that negligence that he has suffered this loss. [Bank]
    simply cannot be held liable for unauthorized transactions which were clearly
    disclosed on the face of his bank statements. It may be true that [Customer]
    did not become aware of these unauthorized transactions until [December 4,
    2006], when he went through the drive-through window at [Bank]. He should
    have known of these charges to his account, however, as soon as these charges,
    being made in locations where [Customer] had never been, showed up on his
    bank account statements. The [c]ourt will charge him with knowledge of what
    a reasonable, diligent person should have known.
    The [c]ourt also concludes, based upon all of the facts it has found and the law
    cited herein, that [Bank] established that these unauthorized transactions would
    not have occurred had [Customer] notified [Bank] within the applicable 60-day
    period; [Bank] has established that it could have prevented the loss had
    [Customer] told [Bank] in time.
    Finally, to the extent, if at all, [Customer] intends to argue that the 60-day
    period should have been extended due to extenuating circumstances, he has
    offered no proof of any such circumstances.
    This timely appeal followed.
    II. ISSUES
    We consolidate and restate the issues raised on appeal as follows:
    A. Whether Customer may be held liable for Ms. Wehrman’s unauthorized
    transactions.
    B. Whether the trial court erred in upholding Bank’s limitation of Customer’s
    recovery because he failed to notify Bank of the unauthorized activity within
    the applicable time period.
    -6-
    III. STANDARD OF REVIEW
    On appeal, the factual findings of the trial court are accorded a presumption of
    correctness and will not be overturned unless the evidence preponderates against them. See
    Tenn. R. App. P. 13(d). The trial court’s conclusions of law are subject to a de novo review
    with no presumption of correctness. Blackburn v. Blackburn, 
    270 S.W.3d 42
    , 47 (Tenn.
    2008); Union Carbide Corp. v. Huddleston, 
    854 S.W.2d 87
    , 91 (Tenn. 1993). Mixed
    questions of law and fact are reviewed de novo with no presumption of correctness; however,
    appellate courts have “great latitude to determine whether findings as to mixed questions of
    fact and law made by the trial court are sustained by probative evidence on appeal.” Aaron
    v. Aaron, 
    909 S.W.2d 408
    , 410 (Tenn. 1995).
    IV. DISCUSSION
    A.
    The Electronic Funds Transfer Act (“the EFTA”), as represented in the United States
    Code (“the USC”) and the Code of Federal Regulations (“the CFR”), delineates the rights,
    responsibilities, and liabilities of participants in the banking industry. 15 U.S.C. § 1693(b);
    15 C.F.R. § 205.1(b). Pursuant to the EFTA, a consumer may only be held liable for
    unauthorized transactions involving his or her account if the financial institution provided
    the pertinent disclosures of liability, if the account was accessed using an accepted device,
    and if the issuer of the accepted device provided a means whereby the user can be identified
    as the person authorized to use the device. 15 U.S.C. § 1693g(a); 12 CFR § 205.6(a).
    I.
    Customer asserts that he never received the disclosures of liability. He contends that
    the disclosure documents and Ms. Hardiman’s testimony regarding Bank’s policies and
    procedures for providing the documents were inadmissible. Bank responds that the
    documents and the testimony were admissible.
    When Customer opened his account, he signed a document in which he acknowledged
    receipt of Bank’s rules and regulations, namely the disclosure documents. Additionally, any
    issues relating to the admission of the disclosure documents are waived because he did not
    object when the documents were admitted into evidence. Tenn. R. App. P. 36(a) (providing
    that failure to contemporaneously object to the admission of inadmissible hearsay testimony
    results in waiver of the issue on appeal). Lastly, his arguments relating to Ms. Hardiman’s
    testimony are misplaced.
    -7-
    Customer contends that Ms. Hardiman was not properly qualified as a custodian of
    records, thereby invalidating her testimony relating to Bank’s policies and procedures
    because her statements were inadmissible hearsay. Hearsay is defined as “a statement, other
    than one made by the declarant while testifying at the trial or hearing, offered in evidence to
    prove the truth of the matter asserted.” Tenn. R. Evid. 801(c). Hearsay is inadmissible in
    trial court proceedings unless it falls within one of the recognized exceptions to the hearsay
    rule. Tenn. R. Evid. 802; Mitchell v. Archibald, 
    971 S.W.2d 25
    , 28 (Tenn. Ct. App. 1998).
    Generally, a custodian of records must be presented to introduce
    [a] memorandum, report, record, or data compilation, in any form, of acts,
    events, conditions, opinions, or diagnoses made at or near the time by or from
    information transmitted by a person with knowledge and a business duty to
    record or transmit if kept in the course of a regularly conducted business
    activity and if it was the regular practice of that business activity to make the
    memorandum, report, record or data compilation[.]
    Tenn. R. Evid. 803(6) (emphasis added). Documents are admissible pursuant to this rule
    when the following criteria are met:
    1. The document must be made at or near the time of the event recorded;
    2. The person providing the information in the document must have firsthand
    knowledge of the recorded events or facts;
    3. The person providing the information in the document must be under a
    business duty to record or transmit the information;
    4. The business involved must have a regular practice of making such
    documents; and
    5. The manner in which the information was provided or the document was
    prepared must not indicate that the document lacks trustworthiness.
    Alexander v. Inman, 
    903 S.W.2d 686
    , 700 (Tenn. Ct. App. 1995).
    In this case, the documents were not records of events that had occurred in the course
    of regularly conducted business activity. The documents were prepared to inform customers
    of Bank’s policies and procedures in accordance with policy changes and applicable laws.
    The documents were offered to establish Customer’s knowledge and understanding of
    -8-
    Bank’s operating procedures, namely Bank’s limitation of liability for unauthorized
    transactions if Customer failed to review his bank statements. The documents were also
    offered to establish Bank’s compliance with federal regulations. Accordingly, Ms.
    Hardiman’s qualification as a custodian of records was unnecessary for the purpose of
    admitting the disclosure documents and allowing her to testify about the documents.
    The testimony complained of, Ms. Hardiman’s assertion that Bank employees are
    instructed to provide the disclosure documents when the account is opened and that updated
    disclosure documents were sent with each new card, was derived from the manuals Ms.
    Hardiman studied during her employment training and her experience as an officer in the
    security division. Additionally, the testimony was not offered to prove the truth of the matter
    asserted in the manuals, namely that Bank followed the appropriate procedure on the day that
    Customer opened his account.1 Instead, Ms. Hardiman merely testified that Bank provided
    policies and procedures that should have been followed on the day Customer opened his
    account and each time Bank mailed Customer a replacement or renewal debit card. Such
    testimony was not hearsay, was relevant, and was properly admitted. With all of the above
    considerations in mind, we conclude that the preponderance of the evidence supports the trial
    court’s conclusion that Customer received the applicable disclosures.
    II.
    Customer argues that he cannot be held liable for the unauthorized transactions
    because the debit card was not an accepted card or access device. An accepted card is
    defined as
    a card, code, or other means of access to a consumer’s account for the purpose
    of initiating electronic fund transfers when the person to whom such card or
    other means of access was issued has requested and received or has signed or
    has used, or authorized another to use, such card or other means of access for
    the purpose of transferring money between accounts or obtaining money,
    property, labor, or services[.]
    15 U.S.C. § 1693a(1). Likewise, the CFR provides, in pertinent part,
    (a)(1) Access device means a card, code, or other means of access to a
    consumer’s account, or any combination thereof, that may be used by the
    consumer to initiate electronic fund transfers.
    1
    The manuals were also not entered into evidence.
    -9-
    (2) An access device becomes an accepted access device when the consumer:
    ***
    (iii) Receives an access device in renewal of, or in substitution
    for, an accepted access device from either the financial
    institution that initially issued the device or a successor.
    12 C.F.R. § 205.2(a).
    Customer admits that the debit card was a renewal or substitution card but asserts that
    the card was not an accepted device because Ms. Wehrman intercepted the card from his
    mailbox, thereby preventing him from actually receiving the card. The testimony presented
    concerning the place and time in which the card was stolen was speculative, at best.
    However, Customer admitted that he invited Ms. Wehrman into his home for overnight visits
    and provided her with unlimited access to his home office and mailbox while he was not
    present. Ms. Wehrman was not a random passerby that stole Customer’s card. She was
    provided with unrestricted access to Customer’s home office and mailbox while Customer
    was not present. With these considerations in mind, we conclude that Ms. Wehrman’s
    receipt of the debit card, whether obtained from the home office or the mailbox, was
    sufficient to establish Customer’s receipt of the debit card. Accordingly, the preponderance
    of the evidence supports the trial court’s conclusion that the transactions were made with an
    accepted access device or other means of access.
    III.
    Customer has seemed to limit his focus on the language that was on a document that
    the debit card he received in the mail was attached to, this language as noted earlier provided:
    You are protected if your card is ever lost or stolen. You are not responsible
    for unauthorized purchases.
    He seems to overlook the additional language which provides:
    Use of this card is subject to the terms and conditions of your current
    Customer Agreement.
    However, even if our focus in this case was limited to that of Customer and the
    language he has advanced, Customer still cannot recover because he has violated the implied
    -10-
    condition of good faith and fair dealing in his contract with Bank. When Customer opened
    his account with Bank, he entered into a contract. As previously explained by this court,
    Every contract imposes upon the parties a duty of good faith and fair dealing
    in the performance and interpretation of the contract. Wallace v. National
    Bank of Commerce, 
    938 S.W.2d 684
    , 686 (Tenn 1996); R ESTATEMENT
    S ECOND OF C ONTRACTS § 205 (1979); 2 J OSEPH M. P ERILLO & H ELEN
    H ADJIYAUUAKIS B ENDER, C ORBIN ON C ONTRACTS § 5.27, at 139 (rev. ed
    1995). This duty requires a contracting party to do nothing that will have the
    effect of impairing or destroying the rights of the other party to receive the
    benefits of the contract. Winfree v. Educators Credit Union, 
    900 S.W.2d 285
    ,
    289 (Tenn. Ct. App. 1995).
    Elliott v. Elliott, 
    149 S.W.3d 77
    , 84-85 (Tenn. Ct. App. 2004). Customer admitted that he
    failed to review his monthly bank statements for an extended period of time. He also
    admitted that had he reviewed his monthly bank statements, he would have noticed the
    unauthorized transactions. By failing to consistently review his bank statements, he impaired
    Bank’s ability to ensure that only authorized transactions were honored and exposed Bank
    to liability for fraudulent transactions. Accordingly, we conclude that Customer violated the
    duty of good faith and fair dealing that was implicit in his contract with Bank.
    IV.
    Lastly, Customer contends that he may not be held liable for the unauthorized
    transactions because Bank failed to provide a means whereby the user of the debit card could
    have been identified as the person authorized to use the device. Ms. Hardiman testified that
    the user of any debit card would have had to enter a PIN or provide a signature when using
    the card to make a purchase. Accordingly, we reject Customer’s contention and conclude
    that Bank provided the appropriate means to identify the authorized user of the card at issue.
    Having concluded that Bank provided the pertinent disclosures of liability, that the account
    was accessed using an accepted device, that Customer violated his implicit duty of good faith
    and fair dealing, and that Bank provided a means whereby the user could have been
    identified as the person authorized to use the device, we also conclude that the trial court did
    not err by holding Customer liable for Ms. Wehrman’s unauthorized transactions.
    B.
    Having determined that Customer may be held liable for the unauthorized
    transactions, we must review the court’s decision regarding the amount of Customer’s
    liability for the unauthorized transactions. Several documents were introduced regarding
    -11-
    Bank’s policy of limiting consumer liability for unauthorized transactions. Two of the three
    documents also provided that use of the debit card was subject to the terms and conditions
    of Bank’s rules and regulations in the customer agreement, which essentially followed the
    provisions contained in the USC and CFR. The debit card attached to the third document
    contained the same caveat. Customer argues that despite the pertinent rules and regulations
    governing his account, Bank verbally advised him that he was not liable for unauthorized
    purchases. However, Customer signed a signature card in which he acknowledged that he
    was governed by Bank’s rules and regulations for his account.
    Relative to the EFTA, the CFR provides, in pertinent part,
    (b) Limitations on amount of liability. A consumer’s liability for an
    unauthorized electronic fund transfer or a series of related unauthorized
    transfers shall be determined as follows:
    (1) Timely notice given. If the consumer notifies the financial
    institution within two business days after learning of the loss or
    theft of the access device, the consumer’s liability shall not
    exceed the lesser of $50 or the amount of unauthorized transfers
    that occur before notice to the financial institution.
    (2) Timely notice not given. If the consumer fails to notify the
    financial institution within two business days after learning of
    the loss or theft of the access device, the consumer’s liability
    shall not exceed the lesser of $500 or the sum of:
    (i) $50 or the amount of unauthorized transfers
    that occur within the two business days,
    whichever is less; and
    (ii) The amount of unauthorized transfers that
    occur after the close of two business days and
    before notice to the institution, provided the
    institution establishes that these transfers would
    not have occurred had the consumer notified the
    institution within that two-day period.
    (3) Periodic statement; timely notice not given. A consumer
    must report an unauthorized electronic fund transfer that
    appears on a periodic statement within 60 days of the financial
    -12-
    institution’s transmittal of the statement to avoid liability for
    subsequent transfers. If the consumer fails to do so, the
    consumer’s liability shall not exceed the amount of the
    unauthorized transfers that occur after the close of the 60 days
    and before notice to the institution, and that the institution
    establishes would not have occurred had the consumer notified
    the institution within the 60-day period. When an access device
    is involved in the unauthorized transfer, the consumer may be
    liable for other amounts set forth in paragraphs (b)(1) or (b)(2)
    of this section, as applicable.
    12 C.F.R. § 205.6(b) (emphasis added). Likewise, the USC provides, in pertinent part,
    In no event, however, shall a consumer’s liability for an unauthorized transfer
    exceed the lesser of--
    (1) $50; or
    (2) the amount of money or value of property or services
    obtained in such unauthorized electronic fund transfer prior to
    the time the financial institution is notified of, or otherwise
    becomes aware of, circumstances which lead to the reasonable
    belief that an unauthorized electronic fund transfer involving the
    consumer’s account has been or may be effected. Notice under
    this paragraph is sufficient when such steps have been taken as
    may be reasonably required in the ordinary course of business to
    provide the financial institution with the pertinent information,
    whether or not any particular officer, employee, or agent of the
    financial institution does in fact receive such information.
    Notwithstanding the foregoing, reimbursement need not be made to the
    consumer for losses the financial institution establishes would not have
    occurred but for the failure of the consumer to report within sixty days of
    transmittal of the statement (or in extenuating circumstances such as extended
    travel or hospitalization, within a reasonable time under the circumstances) any
    unauthorized electronic fund transfer or account error which appears on the
    periodic statement provided to the consumer under section 1693d of this title.
    In addition, reimbursement need not be made to the consumer for losses which
    the financial institution establishes would not have occurred but for the failure
    of the consumer to report any loss or theft of a card or other means of access
    -13-
    within two business days after the consumer learns of the loss or theft (or in
    extenuating circumstances such as extended travel or hospitalization, within
    a longer period which is reasonable under the circumstances), but the
    consumer’s liability under this subsection in any such case may not exceed a
    total of $500, or the amount of unauthorized electronic fund transfers which
    occur following the close of two business days (or such longer period) after the
    consumer learns of the loss or theft but prior to notice to the financial
    institution under this subsection, whichever is less.
    15 U.S.C. § 1693(b) (emphasis added).
    Having reviewed the applicable code sections, we note that the USC and the CFR
    provide three separate tiers of liability. Depending on the circumstances, a consumer may
    be held liable for $50, $500, or an unlimited amount of the unauthorized transactions if he
    or she failed to review the pertinent bank statements and timely notify the financial
    institution. Additionally, more than one tier of liability may apply to the consumer because
    a tier may be read in conjunction with other tiers. Indeed, the official staff interpretation of
    the CFR provides, in pertinent part,
    The standard of unlimited liability applies if unauthorized transfers appear on
    a periodic statement, and may apply in conjunction with the first two tiers of
    liability. If a periodic statement shows an unauthorized transfer made with a
    lost or stolen debit card, the consumer must notify the financial institution
    within 60 calendar days after the periodic statement was sent; otherwise, the
    consumer faces unlimited liability for all unauthorized transfers made after the
    60-day period. The consumer’s liability for unauthorized transfers before the
    statement is sent, and up to 60 days following, is determined based on the first
    two tiers of liability: up to $50 if the consumer notifies the financial institution
    within two business days of learning of the loss or theft of the card and up to
    $500 if the consumer notifies the institution after two business days of learning
    of the loss or theft.
    12 C.F.R. Pt. 205, Supp. I. (emphasis added).
    Ms. Hardiman testified that Bank would have closed the account when Customer
    reported the unauthorized transactions. Customer acknowledged that he would have
    recognized the unauthorized transactions if he had reviewed his bank statements. The first
    periodic statement evidencing an unauthorized transaction was sent on August 31, 2005.
    Customer did not notify Bank of the unauthorized activity within 60 days of August 31, 2005.
    Instead, he notified Bank within two days of learning of the theft. Thus, he was liable for
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    $50 of the transactions that occurred prior to the expiration of the 60-day time period and for
    the entirety of the transactions that occurred after the expiration of the 60-day time period.
    Having reviewed the record, we conclude that Bank should have credited Customer’s account
    in the amount of $659.07, taking into account the $50 fee for the transactions that occurred
    before the statement was sent and within the 60-day time period. Customer acknowledged
    receipt of $677.46 from Bank. Accordingly, we affirm the trial court’s dismissal of the
    complaint because he received a credit in excess of what he was entitled to receive.
    V. CONCLUSION
    The judgment of the trial court is affirmed, and the case is remanded for such further
    proceedings as may be necessary. Costs of the appeal are taxed to the appellant, Stephen S.
    Patterson, II.
    ______________________________________
    JOHN W. McCLARTY, JUDGE
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