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

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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.•

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  1. A Tilted Kilt at a water park themed hotel? Who planned that one? I guess the Dad's need something to do while the kids are on the water slides.

  2. Don't come down on the fair for offering drinks. This is a craft and certainly one that belongs in agriculture due to ingredients. And for those worrying about how much you can drink. I'm sure it's more to do with liability than anything else. They don't want people suing for being over served. If you want a buzz, do a little pre-drinking before you go.

  3. I don't drink but go into this "controlled area" so my friend can drink. They have their 3 drink limit and then I give my friend my 3 drink limit. How is the fair going to control this very likely situation????

  4. I feel the conditions of the alcohol sales are a bit heavy handed, but you need to realize this is the first year in quite some time that beer & wine will be sold at the fair. They're starting off slowly to get a gauge on how it will perform this year - I would assume if everything goes fine that they relax some of the limits in the next year or couple of years. That said, I think requiring the consumption of alcohol to only occur in the beer tent is a bit much. That is going to be an awkward situation for those with minors - "Honey, I'm getting a beer... Ok, sure go ahead... Alright see you in just a min- half an hour."

  5. This might be an effort on the part of the State Fair Board to manage the risk until they get a better feel for it. However, the blanket notion that alcohol should not be served at "family oriented" events is perhaps an oversimplification. and not too realistic. For 15 years, I was a volunteer at the Indianapolis Air Show, which was as family oriented an event as it gets. We sold beer donated by Monarch Beverage Company and served by licensed and trained employees of United Package Liquors who were unpaid volunteers. And where did that money go? To central Indiana children's charities, including Riley Hospital for Children! It's all about managing the risk.

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