IBJNews

Nick’s English Hut's ATM miscue spawns legal nightmare

Back to TopCommentsE-mailPrintBookmark and Share

Jon Pike withdrew cash from the ATM at Nick’s English Hut on Sept. 27, 2010, paying a $1.50 transaction fee in the process.

That seemingly humdrum moment touched off a legal odyssey for the iconic Bloomington watering hole that nearly three years later might finally be reaching a conclusion.

Pike ended up filing a class action federal lawsuit charging Nick’s ATM lacked a fee-disclosure sticker, putting it in violation of the federal Electronic Funds Transfer Act. The suit argues that Nick’s “frequent and persistent” non-compliance with the law entitles Pike and hundreds or thousands of other users of the machine to damages far greater than what they paid in fees.

After the taking of depositions and dozens of filings by the parties, the case is now set for a three-day jury trial beginning Oct. 22 in Indianapolis.

If that weren’t bad enough, Nick’s also is fending off a lawsuit filed by its insurer, Wisconsin-based Society Insurance, which wants a federal court to declare the issues at play in the Pike suit are outside those covered under its policies providing millions of dollars in coverage.

If there is any consolation for the owners of Nick’s, it’s that scores of business owners across the country feel their pain. American Banker estimates that attorneys filed as many as 2,000 ATM-sticker lawsuits before Congress in December 2012 eliminated the requirement, concluding it was unnecessary given that modern ATMs give users the right to opt out of transactions if they deem fees are too high.

Many of the suits were brought by the same handful of attorneys. For instance, the counsel for Pike—Eric Calhoun of the Dallas law firm Travis & Calhoun—also represented Zachary Couch, who sued the Indianapolis Indians and its ATM vendor in July 2011, citing the absence of stickers disclosing a $2 fee.

The parties settled that case last October, with the defendants setting up a $35,000 settlement fund that provided users of the ATMs $14.50 for each transaction. Attorneys for the class received the biggest payday, $50,000, which covered fees as well as expenses.

It’s not clear how much Nick’s has racked up in legal fees or whether the restaurant is trying to settle in advance of the trial. Messages left with Nick’s co-owner Susan Bright and the restaurant’s attorney, Thomas Rosta of Metzger Rosta LLP in Noblesville, were not returned. Calhoun and Pike, who in the spring wrapped up his second year as a student at Indiana University’s medical school, did not respond to inquiries.

Earlier this year, Magistrate Judge Mark Dinsmore granted partial summary judgment to Pike, narrowing the field of issues to be decided at trial to Nick’s net worth and its legal liability. Nick’s wasn’t able to refute Pike’s central claim—that there was no fee sticker on the ATM the day of his transaction—but there is uncertainty whether a sticker was missing the entire one-year period for which ATM users would be eligible for a recovery.

During a deposition, Bright said she had known there was a law called the Electronic Funds Transfer Act and knew it required disclosure of ATM fees “in some way,” but thought disclosure during the transaction was sufficient.

She said she eventually put a sticker on the machine. Asked if that occurred before Pike sued in September 2011, she said, “Maybe. Maybe not.”

Tim Durham delays appeal

Convicted Ponzi scheme operator Tim Durham is not going to get quick relief from the U.S. Court of Appeals—in part because he has decided to slow down the legal process.
 

Durham Durham

U.S. District Court Judge Jane Magnus-Stinson in November sentenced Durham to 50 years in prison after a federal jury found him guilty of all 12 felony counts stemming from the collapse of Akron, Ohio-based Fair Finance Corp.

He is appealing his convictions, as are Fair co-owner Jim Cochran, who received a 25-year sentence, and Fair’s chief financial officer, Rick Snow, who received 10 years.

Attorneys for all three men were to have submitted their appellate briefs by July 25. But on July 2, Durham sought an extension until Sept. 25.

Attorneys for Cochran and Snow consented, and the court blessed the new timetable on July 3. Durham’s motion didn’t give a reason for the extension but noted he isn’t going anywhere. Durham, 51, is housed at the U.S. Penitentiary in McCreary, Ky., with a potential release date of Jan. 25, 2056.•

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

  3. I don't know about the rest of you but I only stop at these places for one reason, and it's not to picnic. I move trucks for dealers and have been to rest areas in most all 48 lower states. Some of ours need upgrading no doubt. Many states rest areas are much worse than ours. In the rest area on I-70 just past Richmond truckers have to hike about a quarter of a mile. When I stop I;m generally in a bit of a hurry. Convenience,not beauty, is a primary concern.

  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

ADVERTISEMENT