When I first ran across Tennille v. Western Union Co., 2010 WL 4609732 (D. Colo. Nov. 8, 2010), I worried that Toni Tennille -- or worse yet, her husband/accompanist, the perpetually mute Captain -- had fallen on hard times and needed each of their remaining fans to wire them 20 bucks. Then, I read the caption more closely and saw that the plaintiff was James P. Tennille. A son, perhaps? Toni Tennille is now 70, lives in Prescott, Arizona, and just celebrated her 35th anniversary of being married to The Captain. (35 years?! Talk about "Love Will Keep Us Together.")
Tennille v. Western Union is, in fact, about wire transfers. Mr. Tennille apparently seeks to represent a class of people who wired money that was never claimed at the other end of the transaction. Tennille claimed that the defendant had a duty to notify the senders that their funds had failed to go through or went unclaimed. Instead, the defendant allegedly held on to unclaimed funds, accruing interest on them in interest-bearing accounts "until individual state unclaimed property laws trigger a notification obligation." Id. at *1. The defendant allegedly then attempted to return the principal, but retained the accumulated interest for itself. Id.
Plaintiff seeks to represent a nationwide class of wire transferors, asserting claims for conversion, fraud, and unjust enrichment. The defendant moved to dismiss, and the trial court denied the motion.
The court first determined that it would not matter what state's law governed the claim, since the laws that possibly applied (Colorado, Missouri, Illinois and Alabama) did not differ materially. Then, in analyzing the unjust enrichment cause of action, the court reasoned that, regardless of which state's law applies, "[t]he essence of the claim is the retention of a benefit under circumstances where it would be unjust to return it." Id. at *2. The court rejected the defendant's argument that unjust enrichment could not apply because the underlying transaction was governed by a written contract. Its reasoning, however, seems to articulate an exception that would swallow the rule:
While it is true that neither equity nor tort law provides a means for shifting risk one has assumed under contract, that maxim does not prevent recovery where the wrong alleged falls outside or exists independently of that contract. . . . Here, where the terms and import of any express contract between the parties is in dispute, Plaintiffs' claims for unjust enrichment are not barred under any of the applicable states' common law.
Id. at *3 (citations omitted). But how "in dispute" could the terms of this written contract really be? Western Union is full of sharp employees. It has to anticipate that customers may attempt to hold the company liable for funds that are not claimed, and you can bet that the form written agreement a customer signs addresses the issue of how that money will be handled, including interest. If all that a plaintiff must do is merely plead that an agreement does not exist in order to get around the contractual bar to the equitable remedy of unjust enrichment, then the contractual bar is essentially worthless.
The court also adopted a novel approach to the defendant's statute of limitations challenge. Although plaintiffs' claims were premised -- at least in part -- on the failure to notify the sender that the transfer did not go through, the court did not measure the three-year statute of limitations from the date of the transfer. Rather, it chose to measure the accrual of the claim from the date years later when the defendant notified class members that the transfers did not go through. Why? "Because Western Union continued to generate and retain interest on Plaintiffs' unclaimed funds until such time as they notified Plaintiffs that their deposits had not been redeemed, Plaintiffs' claims did not accrue for statute of limitations purposes until then." Id.
In addition, the court denied defendant's motion to dismiss the conversion claim, reasoning that it was essentially identical to the unjust enrichment claim, even though it had different elements. The defendant had argued that the plaintiffs had failed to plead a demand and refusal for the interest, as required for conversion. The court held -- with little analysis -- that "[i]f a technical 'demand and refusal' is necessary to state a claim for conversion of that interest, then the filing of these lawsuits clearly satisfies this requirement." Id. at *4.
The court held the fraud claim in abeyance, and encouraged the parties to settle: "Specific consideration should be given to resolving this case short of protracted litigation based on the rulings issued to date." Id.
Ultimately, the decision in Tennille leaves me with same incomplete feeling I had when I first listened to Muskrat Ramble in the Seventies. There's more to the defenses than is articulated in this opinion.