Pelt v. BankCard USA Merchant Services, Inc.

Citations: 898 So. 2d 701; 2004 Ala. LEXIS 251Docket: 1031235

Court: Supreme Court of Alabama; October 1, 2004; Alabama; State Supreme Court

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First Western Bank seeks a writ of mandamus to compel the Greene Circuit Court to vacate its order denying the bank's motion to dismiss a complaint filed by Mary Louise Pelt, which alleges lack of in personam jurisdiction. The original complaint, filed on April 15, 2002, is a class-action suit against First Western, BankCard USA Merchant Services, and other unnamed parties for violating the Telephone Consumer Protection Act (TCPA). Pelt claims she received unsolicited facsimile advertisements from the defendants, specifically on March 25, 2002, without prior consent. The complaint alleges that the defendants knowingly and willfully violated the TCPA by sending these advertisements without obtaining express permission. 

On October 4, 2002, Pelt submitted a first amended complaint, adding Fax.com, Inc. as a defendant while reiterating previous allegations. First Western's motion to dismiss, filed on August 26, 2002, included an affidavit from its president, Richard A. Palmer, explaining that First Western was the sponsoring institution for BankCard under a processing agreement. Palmer detailed the operational relationship wherein BankCard, as an Independent Sales Organization (ISO), must be sponsored by a financial institution to provide merchant services. The complaint seeks a judicial declaration of the TCPA violations and damages resulting from those violations.

BankCard has a contractual agreement with First Data Resources (FDR), obligating FDR to process debit transactions through MasterCard or Visa to the card-issuing bank, which subsequently posts to the customer's credit card. MasterCard and Visa settle the transaction by transferring payment to FDR, which then deposits those funds into a BankCard account at First Western, from where payments are disbursed to the respective merchant's bank. First Western denied involvement in sending a facsimile advertisement and included its agreement in its motion to dismiss the case. Over a year later, during a hearing on First Western's motion, Pelt filed an opposition, admitting that BankCard sent the advertisement but claiming it acted as First Western's "soliciting agent." Pelt asserted that the court had specific jurisdiction over BankCard and, by extension, First Western under the doctrine of respondeat superior. In support, Pelt relied solely on the agreement's provisions. The court allowed First Western ten days to respond, and on November 13, 2003, it filed a reply brief and a second affidavit from Richard Palmer, which rejected the agency theory by stating that First Western did not supervise or control BankCard’s operations. Pelt sought to strike this affidavit as untimely, citing procedural rules. On February 2, 2004, First Western renewed its motion to dismiss for lack of personal jurisdiction, referencing its previous arguments and Palmer’s affidavits, and requested permission for the second affidavit's consideration. On April 1, 2004, the trial court denied First Western's motions without addressing Pelt's strike motion, indicating it likely considered Palmer's second affidavit. On May 11, 2004, First Western petitioned for a writ of mandamus to overturn the trial court's order and dismiss it from the action due to lack of personal jurisdiction, noting that such a petition is appropriate for challenging a denial of a motion to dismiss for in personam jurisdiction.

A petitioner can obtain a writ of mandamus if they demonstrate a clear legal right to have an action dismissed against them. Jurisdiction over a defendant can be general or specific, with specific jurisdiction arising when a defendant's limited contacts with the forum state relate directly to the lawsuit. First Western is not subject to general jurisdiction in Alabama, and while BankCard sent a facsimile to Pelt, Pelt claims BankCard acted as First Western's agent, thus subjecting First Western to specific jurisdiction via respondeat superior. However, First Western argues that Pelt did not adequately allege an agency relationship in her complaints, asserting that vague references to "agents" are insufficient for establishing personal jurisdiction. The court agrees, stating that without explicit allegations of agency, jurisdiction over First Western cannot be established based on BankCard's actions. Pelt's complaint only vaguely mentions agency, failing to clarify that BankCard was acting on behalf of First Western, and this vagueness led to confusion during proceedings. Consequently, Pelt's lack of clear agency averments prevents the exercise of personal jurisdiction over First Western, which is entitled to a writ of mandamus to vacate the trial court's denial of its motion to dismiss. The petition is granted, and the writ is issued. The court notes that the facsimile involved is a one-page document mentioning BankCard's registration as a service provider for First Western. No issues regarding Fax.com, Inc. are addressed, as the court's decision makes them unnecessary.