Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—E.D. Mo.: MoneyGram not liable for failed money transfer, (Jul 14, 2016)

By Jody Coultas, J.D.

Consumer protection and fraud claims filed against MoneyGram Payment Systems, Inc., based on a money transfer that did not go through, were dismissed by the federal district court in St. Louis for lack of standing and failure to show fraudulent conduct (Black v. MoneyGram Payment Systems, Inc., July 12, 2016, Fleissig, A.).

After consumer Gary Black paid a transfer fee in order to make a money transfer through a MoneyGram money transfer service located inside a Walmart store, he received a phone call from the intended recipient of the transfer who informed him there was a problem with the transfer.

Black alleged that MoneyGram falsely advertised and represented that their services could be relied on and were convenient. As a direct and proximate result of MoneyGram’s false, misleading and deceptive conduct, Black alleged that he "lost the business asset" and "lost thousands." However, Black admitted that he was able to hand deliver the money for his business purchase to the intended recipient, and that the recipient was merely unhappy.

MoneyGram was granted summary judgment on the breach of contract claim by the court. The MoneyGram contract expressly stated that the exclusive and maximum remedy for non-performance is a refund of the transfer money and any transfer fees. Black received a refund of both the transfer money and fees. Even if MoneyGram had breached the agreement, Black would not be entitled to additional remedies. Whether the damages limitation clause applied to the remainder of the claims was irrelevant because the court granted MoneyGram summary judgment on the claims on other grounds.

Black lacked standing to assert a Missouri Merchandising Practices Act (MMPA) claim, according to the court. To state a claim under the MMPA, a plaintiff must show a purchase from the defendants for personal, family, or household purposes that resulted in an ascertainable loss due to unlawful conduct by the defendant. Because the money transfer services were for business purposes, Black lacked standing.

The court granted summary judgment of Black’s independent tort claim for fraudulent inducement. Black alleged that MoneyGram intentionally misled him into purchasing their services through false statements and advertising. There was no evidence that MoneyGram made a false statement, improper omission, or other false guarantee that the transfer would be completed. Rather, Black was informed that the transfer services could be refused entirely.

There was no duty on the part of MoneyGram to disclose the reason it denied Black’s transfer, according to the court. A party may be liable for fraud by concealing or not disclosing material facts under certain circumstances. Black has not alleged that a fiduciary relationship existed, or that MoneyGram needed to say more to dispel a misleading statement. Although MoneyGram may have "special knowledge" of the reason the transfer was declined, it could not have been material to Black’s decision to enter the agreement. Also, MoneyGram could not have a duty to disclose a fact it did not yet know.

The court also granted MoneyGram summary judgment on the Minnesota Unfair Trade Practices Act (MUTPA) claim. Black is a resident of Missouri and did not suffer any injury in Minnesota.

The case is No. 4:15-cv-01767-AGF.

Attorneys: Gary Black, pro se. Merry Margaret Tucker (Coronado Katz LLC) for MoneyGram Payment Systems, Inc. and Wal-Mart Stores, Inc.

Companies: MoneyGram Payment Systems, Inc.; Wal-Mart Stores, Inc.

Cases: StateUnfairTradePractices MissouriNews