Fallis v. Gate City Bank

The lawsuit that was settled is titled Mary Lou Fallis, et al. v. Gate City Bank. It is no longer pending in the East Central District Court, Cass County, State of North Dakota, Case No. 09-2019-CV-04007. The case was a “class action.” That means that the “Class Representatives,” Mary Lou Fallis and Kyla Delorme, are individuals who are acting on behalf of current and former Gate City Account Holders who were assessed certain Overdraft Fees and Non-Sufficient Funds Fees November 20, 2013, and November 30, 2021. The Class Representatives have asserted claims for breach of the account agreement and violations of the North Dakota Consumer Protection Law.

The Complaint in this lawsuit is posted on the Settlement Website and contains all of the allegations and claims asserted against Gate City. Gate City maintains that it did nothing wrong, but has agreed to settle the lawsuit to avoid the cost, delay, and uncertainty of litigation. The Court gave Final Approval to the Settlement on September 9, 2022.

To view a copy of the notice, click here.

You received a Notice because Gate City’s records indicate that you were charged one or more Overdraft Fees or Non-Sufficient Funds Fees that are the subject of this Action. You may be a member of the APPSN Fee Class or Multiple Fees Class, or both. The Court directed that notice be sent to all APPSN Fee Class and Multiple Fees Class members because each such member had a right to know about the Settlement and the options available to him or her before the Court decided to approve the Settlement.

In any lawsuit, there are risks and potential benefits that come with a trial versus settling at an earlier stage. It is the Class Representatives’ and their lawyers’ job to identify when a proposed settlement offer is good enough that it justifies recommending settling the case instead of continuing to trial. In a class action, the Class Representatives’ lawyers, known as Class Counsel, make this recommendation to the Class Representatives. The Class Representatives have the duty to act in the best interests of the classes as a whole and, in this case, it is their belief, as well as Class Counsel’s opinion, that this Settlement is in the best interest of all APPSN Fee Class and Multiple Fees Class members.

There is legal uncertainty about whether a judge or a jury will find that Gate City was contractually and otherwise legally obligated not to assess the fees at issue. Even if it was contractually wrong to assess these fees, there is uncertainty about whether the Class Representatives’ claims are subject to other defenses that might result in no or less recovery to APPSN Fee Class and Multiple Fees Class members. Even if the Class Representatives were to win at trial, there is no assurance that the APPSN Fee Class and Multiple Fees Class members would be awarded more than the current Settlement amount and it may take years of litigation before any payments would be made. By settling, the APPSN Fee Class and Multiple Fees Class members will avoid these and other risks and the delays associated with continued litigation.

Gate City disputes the allegations in the lawsuit and denies any liability or wrongdoing, and it enters into the Settlement solely to avoid the cost, delay, and uncertainty of further proceedings in the litigation.

If you received a Notice, then Gate City’s records indicate that you may have been a member of the APPSN Fee Class and/or the Multiple Fees Class and were entitled to receive a payment or credit to your Account. You may have been a member of each class.

You are were a member of the APPSN Fee Class if you were a current or former Gate City Account Holder from North Dakota who was assessed an Overdraft Fee(s) on a Debit Card transaction that was authorized into a positive available balance, but settled against a negative available balance during the Class Period.

You are were a member of the Multiple Fee Class if you were a current or former Gate City Account Holder from North Dakota who was assessed a Non-Sufficient Funds Fee(s) and/or Overdraft Fee(s) on an Automated Clearing House (ACH) and/or check transaction that was resubmitted for payment by a merchant after being returned by Gate City for insufficient funds during the Class Period.

You had three options:

1. do nothing and receive a payment or account credit according to the terms of this Settlement;
2. opt-out of the Settlement; or
3. participate in the Settlement, but object to it.

Each of these options is described in a separate FAQ below.

There was no deadline to receive a payment or credit. If you did nothing, then you will received a payment or credit.

The deadline for sending a letter to opt-out of the settlement was August 10, 2022.

The deadline to file an objection with the Court was also August 10, 2022.

The Court had to decide that the Settlement was fair, reasonable, and adequate before providing approval. The Court held a “Final Approval Hearing” on September 9, 2022, at 10:00 a.m. and approved the Settlement.

Gate City has agreed to create a Settlement Fund of $5,500,000.00, which consists of $4,840,000.00 for the APPSN Fee Class and $660,000.00 for the Multiple Fee Class.

As discussed in response to FAQs 9, 10, and 11, attorneys’ fees, litigation costs, the costs paid to a third-party Settlement Administrator to administer the Settlement (including mailing and emailing Notice), and Service Awards to the Class Representatives will be allocated between and paid out of the Settlement Fund for both the APPSN Fee Class and Multiple Fees Class. Thereafter, the APPSN Fee Net Settlement Fund and Multiple Fees Net Settlement Fund was divided among all members of each of those classes entitled to Settlement Class Member Payments based on formulas described in the Settlement and stated in response to FAQ 12.

The Court awarded attorneys’ fees totaling $1,833,333.33 and litigation costs totaling $98,350.00, incurred in filing and litigating the Action.

The Court approved Service Awards in the amount of $5,000.00 for each Class Representatives for their filing and pursuit of the Action.

The Settlement Administrator estimates its expenses will be $100,000.00.

The balance of the Settlement Fund after attorneys’ fees and costs, the Service Awards, and the Settlement Administration Costs, was divided among all Settlement Class Members entitled to Settlement Class Member Payments following the division for the two classes and thereafter in accordance with the formulas outlined in the Settlement and summarized below:

1. The APPSN Fee Net Settlement Fund shall be paid pro rata to the members of the APPSN Fee Class using the following calculation:
   • The dollar amount of the APPSN Fee Net Settlement Fund divided by the total number of APPSN Fees paid by all members of the APPSN Fee Class, which yields a per-fee amount;
   • Multiply the per-fee amount by the total number of APPSN Fees charged to and paid by each member of the APPSN Fee Class.
   • This results in a APPSN Fee Class Settlement Class Member Payment.
2. The Multiple Fees Net Settlement Fund shall be paid pro rata to the members of the Multiple Fees Class using the following calculation:
   • The dollar amount of the Multiple Fees Net Settlement Fund divided by the total number of Multiple Fees paid by all members of the Multiple Fees Class, which yields a per-fee amount;
   • Multiply the per-fee amount by the total number of Multiple Fees charged to and paid by each member of the Multiple Fees Class.
   • This results in a Multiple Fees Class Settlement Class Member Payment.
3. The total of the APPSN Fee Settlement Class Member Payment and/or the Multiple Fees Class Settlement Class Member Payment due to each Settlement Class Member is the total Settlement Class Member Payment.

Current Account Holders received a credit to their Accounts for the amount they were entitled to receive. Former Account Holders received a check from the Settlement Administrator.

Payments to eligible Class Members were issued in March 2023.

If you stayed in the Settlement Class, all of the decisions made by the Court bind you, and you gave Gate City a “release.” A “release” means you cannot sue, continue to sue, or be part of any other lawsuit against Gate City about the legal issues in this case. Section XII of the Settlement Agreement contains the release and describes the precise legal claims that you gave up if you remained in the Settlement. The Settlement Agreement is available here.

No. If you are a Settlement Class member, then you may be entitled to receive a payment or credit for APPSN Fees and/or Multiple Fees without making a claim, unless you chose to opt-out of the Settlement.

Payments to eligible Class Members were issued in March 2023.

If you did not want to receive a payment or credit, or if you wanted to keep any right you may have had to sue Gate City for the claims alleged in this lawsuit, then you must have opted out of the Settlement.

The deadline to exclude yourself from the Settlement was August 10, 2022.

If you opted out of the Settlement, you preserved and did not give up any of your rights to sue Gate City for the claims alleged in this case. However, you were not entitled to receive a payment or credit from the Settlement.

In the event an account has multiple Account Holders and one such individual opted out of the Settlement, all of the Account Holders are deemed to have opted out of the Settlement.

You could have objected to the Settlement or any part of it that you did not like if you did not exclude yourself, or opt-out, from the Settlement. The deadline to object to the Settlement was August 10, 2022.

Objecting was telling the Court that you did not believe the Settlement was fair, reasonable, and adequate for the APPSN Fee Class and/or the Multiple Fees Class, and asking the Court to reject it. You could have objected only if you did not opt-out of the Settlement. If you objected to the Settlement and did not opt-out, then you are entitled to a payment or credit from the APPSN Fee Net Settlement Fund and/or Multiple Fees Net Settlement Fund, or both, but you released claims you might have had against Gate City. Opting-out was telling the Court that you did not want to be part of the Settlement, and did not want to receive a payment or credit for APPSN Fees and/or Multiple Fees, or both, or release claims you might have had against Gate City for the claims alleged in this lawsuit.

The Court approved the Settlement on September 9, 2022. If you objected, the Court overruled your objection and any other objection(s), and you remain part of the Settlement.

The Court held a “Final Approval Hearing” on September 9, 2022, at 10:00 a.m. and has approved the Settlement.

No. Class Counsel answered any questions the Court had. You may have attended if you desired to do so.

If you objected, you may have asked the Court for permission to speak at the Final Approval Hearing.

The Court ordered that the lawyers and their law firms referred to in the notice as “Class Counsel” represent you and the other members of the APPSN Fee Class and/or Multiple Fees Class.

No. Class Counsel will be paid directly from the Settlement Fund.

The Court was asked to approve the amount of attorneys’ fees at the Fairness Hearing. Class Counsel filed an application for attorneys’ fees and costs, at the time they filed the motion for Final Approval. You may review a copy of the fee application here, or by requesting the court record from the Clerk of the District Court for the East Central Judicial District at https://www.ndcourts.gov/public-access.

This website only summarizes the Settlement. More details are contained in the Settlement Agreement, which can be viewed/obtained here; in person at the Office of the Clerk of the District Court for the East Central Judicial District, which is located at 211 9th Street South, Fargo, North Dakota 58103; by contacting the Settlement Administrator (details below) and requesting a copy; or by requesting the court record from the Clerk of the District Court for the East Central Judicial District at https://www.ndcourts.gov/public-access.

For additional information about the Settlement and/or to obtain a copy of the Settlement Agreement, or to change your address for purposes of receiving a payment, you should contact the Settlement Administrator as follows:

Mary Lou Fallis et al. v. Gate City Bank Settlement Administrator
P.O. Box 5820
Portland, OR 97228-5820

For more information, you also can contact the Class Counsel as follows:

Class Counsel
Jeffrey Ostrow Jonathan M. Streisfeld KOPELOWITZ OSTROW P.A. One West Las Olas Boulevard Suite 500 Fort Lauderdale, Florida 33301  1-954-525-4100  1-954-525-4300  ostrow@kolawyers.com  streisfeld@kolawyers.com	Jeffrey Kaliel KALIEL GOLD PLLC 1100 15th St. NW 4th Floor Washington, DC 20005  1-202-350-4783  jkaliel@kalielpllc.com

PLEASE DO NOT CONTACT THE COURT OR ANY REPRESENTATIVE OF GATE CITY CONCERNING THE SETTLEMENT.