[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUITU.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
April 9, 2004
No. 03-10218 THOMAS K. KAHN
CLERK
________________________
D. C. Docket No. 00-01703-CV-ORL-31-KRS
NOVA INFORMATION SYSTEMS, INC.,
Plaintiff-Appellant,
versus
GREENW ICH INSURANCE COM PANY,
NAC REINSURANCE COM PANY,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Middle District of Florida
_________________________
(April 9, 2004)
Before EDMONDSON, Chief Judge, BIRCH and FARRIS *, Circuit Judges.
BIRCH, Circuit Judge:
*
Honorable Jerome Farris, United States Circuit Judge for the Ninth Circuit, sitting by
designation.
This appeal stems from the financial woes of Premier Operations, Ltd. d/b/a
Premier Cruise Lines (“Premier”), a pleasure cruise company, and involves a cast
of four main characters: (1) Premier; (2) the passengers whose vacation plans were
thwarted by the cruise line's financial troubles and who pre-paid for their cruise
with their Visa or MasterCard; (3) the plaintiff-appellant credit card processing
company, NOVA Information Systems, Inc. (“NOVA”), which ultimately
reimbursed disappointed passengers who paid with their Visa or MasterCard; and
(4) the defendant-appellee surety company, Greenwich Insurance Company
(“Greenwich”), which was ultimately responsible for reimbursing disappointed
passengers who paid with either credit card, cash, or check. NOVA argues, in two
claims based on contract and four claims based on equity, that it should not bear
the financial loss of credit-card-paying customers as a result of Premier's
bankruptcy and that, instead, Greenwich should be the financial “fall guy.” The
district court disagreed with NOVA and granted summary judgment to Greenwich
on all six claims. After review, we AFFIRM.
I. BACKGROUND
When an individual purchased a berth on one of Premier's cruise ships with
his Visa or MasterCard, a series of financial transactions took place. First, Premier
accepted the passenger's reservation and generated a transaction receipt for the
2
cruise. Second, Premier forwarded the receipt to its merchant bank,1 which would
then credit Premier's account for the amount charged. In this case, First Union
Bank (“First Union”) was Premier's merchant bank, but First Union subcontracted
all of its credit card processing to NOVA. Accordingly, First Union would credit
Premier's account with the charged amount, and then NOVA would reimburse First
Union. Third, NOVA forwarded the charges to the appropriate card-issuing bank.2
Finally, the card-issuing bank would pay NOVA, and then the passenger, upon
receipt of his credit card bill, would pay his card-issuing bank directly. Thus,
Premier was paid by First Union, First Union by NOVA, NOVA by the card-
issuing bank, and the card-issuing bank by the passenger.
In the event that a purchased cruise did not take place, the parties to the
series of financial transactions would be reimbursed in essentially the opposite
order in which they were paid. The passenger would be reimbursed first by his
card-issuing bank, pursuant to the Fair Credit Billing Act and the Visa and
MasterCard regulations. 15 U.S.C. § 1666(a) and (b); 12 C.F.R. § 226.13(a)(3).
The card-issuing bank would then seek a “chargeback,” or reimbursement, from
1
A merchant bank is a member of the Visa/MasterCard system that agrees to process
payments made to the merchant––Premier––with those cards.
2
The card-issuing bank is the bank that issued the Visa or MasterCard to the passenger
purchasing the cruise.
3
First Union. 15 U.S.C. § 1666(a); 12 C.F.R. § 226.13(e)(1). Under their
contractual agreement, NOVA would then reimburse First Union and NOVA, in
turn, would normally seek reimbursement from Premier. In re Thomas B.
Hamilton Co., Inc., 969 F.2d 1013, 1017 (11th Cir. 1992).
Because passengers ordinarily paid for their cruises substantially in advance
of the departure date, the risk existed that Premier would become insolvent in the
interval between receiving full or partial payment from a passenger and providing
the pre-paid cruise. Accordingly, Premier, operating its cruise ships out of a U.S.
port, was required by federal law and the Federal Maritime Commission to provide
evidence that it could refund any unearned passenger deposits. 46 U.S.C. §
817e(a); 46 C.F.R. §§ 540.3, 540.22. To fulfill this requirement, Premier
contracted with Amwest to post a “Passenger Vessel Surety Bond” (“Amwest
bond”) to protect any Premier “passengers” 3 whose pre-paid cruise did not set sail.
R3-75, Ex. C.
Despite the existence of the Amwest bond, NOVA would face substantial
financial risk in the event that Premier was unable to cover its chargebacks.
Accordingly, NOVA sought reassurance from Premier regarding its financial
3
“Passenger” is defined in FMC regulations as “any person who is to embark on a vessel
at any U.S. port and who has paid any amount for a ticket contract entitling him to water
transportation.” 46 C.F.R. § 540.2(g).
4
condition. To ameliorate NOVA's concerns, Premier “urged Nova to remember
that it was protected from any 'chargeback losses'” under the Amwest bond. R3-75
at 3. Unsatisfied with Premier's representation alone, NOVA asked Premier to
obtain more specific assurances of third-party beneficiary coverage under the
Amwest bond. Premier, in turn, asked the General Counsel of the Federal
Maritime Commission (“FMC”) for a legal interpretation of whether a credit card
company could seek subrogation for the passenger reimbursements protected by a
surety bond. Although the response was tempered, the FMC General Counsel
replied in the affirmative.4 Still not satisfied, NOVA sought assurance from
Amwest directly that its chargeback claims would be covered under the Amwest
bond. Amwest, however, would not provide NOVA with the assurance it sought.
In its ongoing effort to provide NOVA with adequate financial protection,
Premier then contracted with the fourth main character, Greenwich Insurance
Company (“Greenwich”),5 to post a new surety bond, which “inure[d] to the
4
The FMC General Counsel wrote that “the credit card company should be permitted to
enjoy subrogation to the benefits the surety bond provides to passengers.” R2-59, Ex. C. The
General Counsel made clear, however, that “there is no case law addressing this issue . . . [and
thus] a conclusive determination of this issue would have to be made by a court of competent
jurisdiction. . . . [T]he opinion expressed herein is my own, rendered in my capacity as General
Counsel for the Commission.” Id.
Contrary to this position, the FMC's Proposed Rule now makes clear that credit card
processors like NOVA are not intended to be protected by surety bonds required by the FMC.
67 Fed. Reg. 66,352 at 66,354 n.8 (Oct. 31, 2002) (to be codified at 46 C.F.R. pt. 540).
5
NAC Reinsurance Corporation, also a named defendant-appellee, is the parent of
Greenwich.
5
benefit of any and all passengers to whom the Principal [Premier] may be held
legally liable for any of the damages herein described.” R1-1, Ex. B. Greenwich's
agent prepared a proposed letter of assurance, addressed to NOVA, expressing that
NOVA would be covered under Premier's new surety bond.6 In exchange for this
proposal and the financial protection it purported to offer, Premier requested a
reduction in the fees it paid to NOVA, but NOVA never agreed to the reduction.
As a result, the proposal reflected in the draft letter was never finalized.
Nevertheless, because of its contractual arrangement with First Union, NOVA
continued to process Premier's credit card transactions.
In September of 2000, Premier ceased operating. To alert pre-paid Premier
passengers that future cruises would not take place, both the FMC and Greenwich
issued press releases encouraging passengers to contact their card-issuing banks for
a refund.7 And then the refund process began: passengers were reimbursed by
6
This draft letter stated Greenwich's position that
so long as NOVA was able to provide reasonable evidence that it had honored
credits to passengers who would have, according to all the terms of the FMC
bond, been considered valid claimants to Greenwich for the non-performance by
Premier, then NOVA would be considered a valid claimant as well under our
bond.
R2-59, Ex. A.
7
The FMC issued two press releases. The first stated that “for passengers who purchased
their cruise by credit card, we suggest contacting the credit card company and providing them
with this information.” R2-59, Ex. K. The second press release stated that “Prior experience has
shown that . . . credit card issuers may often provide speedier reimbursement to passengers than
the claims process established to handle claims under bonds issued pursuant to [FMC]
requirements.” R3-93, Ex. F.
6
their card-issuing banks, the card-issuing banks by First Union, and First Union by
NOVA under their contractual arrangement. Because Premier, now bankrupt,
could not reimburse NOVA, NOVA was left without apparent recourse.
After receiving and paying the chargebacks, NOVA sent assignment forms
to those passengers who had initiated chargebacks through their card-issuing
banks. These assignment forms asked the recipients to assign their rights to
receive refunds under the surety bond to NOVA, but also said that making the
assignment did not affect the passenger's right to reimbursement from his card-
issuing bank. R2-59, Ex. J. NOVA also contacted Greenwich to confirm that it
was covered under the bond, but Greenwich contended that only individual
“passengers” were covered. The FMC has since confirmed Greenwich's position
that NOVA was not protected under the bond. Notice of Proposed Rulemaking, 67
Greenwich, through its law firm processing claims filed under the bond, also issued a
press release encouraging passengers to contact their card-issuing banks for a refund. This press
release stated:
based on our experience . . . we believe that any passenger who paid for their
transportation by means of a credit card would be well advised to immediately
request the card issuer to cancel any charges relating to any of the cancelled
cruises. . . . By filing a claim with the credit card company, . . . the passenger will
avoid the delays that will inevitably occur in the investigation and claims settling
process.
All passengers who made payment for cruises that have been cancelled by
cash or check may obtain a Claim Form [to submit to the Coordinating Center].
R3-93, Ex. E. (emphasis in original).
7
Fed. Reg. 66,352 at 66,353-54 (Oct. 31, 2002) (to be codified at 46 C.F.R. pt.
540).8
Unhappy to be left empty-handed, NOVA filed a complaint against
Greenwich alleging six claims, based on its position that Greenwich, instead,
should bear the financial burden: (1) breach of contract, (2) contractual
subrogation, (3) promissory and equitable estoppel, (4) equitable subrogation, (5)
contribution, and (6) unjust enrichment. The district court granted summary
judgment to Greenwich on all six claims, and NOVA now appeals.
II. DISCUSSION
In this section, we will (a) state the proper standard of review, (b) discuss
and reject NOVA's two legal claims, and (c) discuss and reject NOVA's four
equitable claims.
A. Standard of Review
“We review the trial court's grant or denial of a motion for summary
judgment de novo, viewing the record and drawing all reasonable inferences in the
light most favorable to the non-moving party.” Patton v. Triad Guar. Ins. Corp.,
277 F.3d 1294, 1296 (11th Cir. 2002). Summary judgment is appropriate when
8
This Proposed Rule was issued issued after the parties filed their dispositive motions in
the district court.
8
“there is no genuine issue as to any material fact and . . . the moving party is
entitled to a judgment as a matter of law.” Fed. R. Civ. P. 56(c).
B. NOVA's Legal Claims
NOVA asserted two legal claims against Greenwich based on its position
that Greenwich should bear the financial loss resulting from Premier's bankruptcy:
(1) breach of contract and (2) contractual subrogation. We discuss and reject each
claim in turn.
1. Breach of Contract
NOVA incorrectly argues that it is a third-party beneficiary to the surety
bond contract between Premier and Greenwich. To maintain an action on a
contract as a third-party beneficiary, NOVA must clearly show that either (a) the
contract itself or (b) both contracting parties primarily and directly intended to
provide a benefit to NOVA. Vencor Hosps. v. Blue Cross Blue Shield of R.I., 169
F.3d 677, 680 (11th Cir. 1999); Blu-J, Inc. v. Kemper C.P.A. Group, 916 F.2d 637,
640 (11th Cir. 1990); Caretta Trucking, Inc. v. Cheoy Lee Shipyards, Ltd., 647
So.2d 1028, 1031 (Fla. Dist. Ct. App. 1994). We hold that the district court
correctly concluded that “neither the contract itself nor the contracting parties
expressed any intent to directly benefit [NOVA] as a third party.” R4-111 at 13.
9
a. The Contract
The contract on which NOVA maintains its claim is the surety bond issued
by Greenwich to protect Premier's passengers. 9 The surety bond provides
protection for Premier “passengers” whose cruises did not take place. R3-75, Ex.
C. “Passengers” are defined in FMC regulations––that have remained
unchanged––as “any person who is to embark on a vessel at any U.S. port and who
has paid any amount for a ticket contract entitling him to water transportation.” 46
C.F.R. § 540.2(g). “Person” is defined as “individuals, corporations, partnerships,
associations, and other legal entities.” Id. § 540.2(a).
NOVA argues that including “corporations” in the definition of “person”
indicates the FMC's intent to include credit card companies in the bond's protection
for “passengers.” The “corporations” protected by surety bonds, however, are
those that purchase tickets on cruise vessels: “[i]f a corporation purchases all of
the available berths for a particular voyage, that corporation or its designated
beneficiaries/assignees are entitled to the benefits afforded by the ticket contract.”
57 Fed. Reg. 41,887 at 41,889 (Sept. 14, 1992) (to be codified at 46 C.F.R. pt.
540). In this case, NOVA has not purchased any tickets––it only reimbursed First
9
We note that the FMC's Proposed Rulemaking makes clear that credit card processors
like NOVA are not intended to be protected by surety bonds required by the FMC. 67 Fed. Reg.
at 66,354 n.8. Even prior to this new Rule, however, NOVA was not protected by FMC surety
bonds as a bond claimant.
10
Union for chargebacks according to its contractual obligation. Although, in
essence, NOVA has “paid” for a cruise because, in the chain of reimbursements,
the money it paid First Union was eventually used to compensate disappointed
passengers, we hold that the district court correctly concluded that “the legislature
intended to cover purchasers of passenger fares in advance of the cruise, not third-
party processors who honored chargebacks after the fact of non-performance.” R4-
111 at 14 (emphasis in original). Thus, NOVA is not a “passenger” entitled to
protection under the surety bond issued by Greenwich.
b. The Contracting Parties
Despite NOVA's contention, there is no evidence in the record––much less
clear evidence––showing that either Premier or Greenwich intended for NOVA to
be protected under the bond. NOVA argues that both the draft letter, written by
Greenwich's agent and intended to placate NOVA's fears about Premier's financial
condition, and the negotiations conducted between Premier and Greenwich,
provide evidence that NOVA was an intended third party beneficiary to the bond.
The draft letter, however, is just that––a proposal in draft form that was never
finalized. And the negotiations between Greenwich and Premier show only that
they negotiated over expanding the bond's coverage, not that the parties ever
agreed to such an expansion. Even if Premier made representations to NOVA that
11
NOVA would be covered under its surety bond, there is no evidence in the record
showing that Greenwich possessed a similar, finalized intent. Thus, because there
is no clear evidence that both parties intended to benefit NOVA, NOVA may not
maintain an action on the contract as a third-party beneficiary.
2. Contractual, or Conventional, Subrogation
NOVA wrongly argues that Greenwhich should reimburse NOVA for the
chargebacks it has paid to First Union under the doctrine of contractual, or
conventional, subrogation. Conventional subrogation “depends upon a lawful
contract, and occurs where one having no interest in or relation to the matter pays
the debt of another, and by agreement is entitled to the securities and rights of the
creditor so paid.” Dade County Sch. Bd. v. Radio Station WQBA, 731 So.2d 638,
647 (Fla. 1999). NOVA argues that it should step into the shoes of the Premier
passengers who assigned their rights to reimbursement under the surety bond to
NOVA.
NOVA's argument is misplaced because “an assignee can acquire no greater
rights than those possessed by the assignor himself.” Pulte Home Corp., Inc. v. Ply
Gem Indus., Inc., 804 F. Supp. 1471, 1481 (M.D. Fla. 1992). The evidence in this
case shows that NOVA received the assignments from Premier passengers after
NOVA had already reimbursed First Union for those chargebacks––which means
12
that the passengers who assigned their rights to NOVA had already been
reimbursed by their card-issuing banks, thereby extinguishing their claims.
Because double recovery would be prohibited, those passengers had no right to
reimbursement under the Greenwich bond and, thus, no rights to assign to NOVA.
As a result, NOVA's claim based on conventional subrogation must fail. 10
C. NOVA's Equitable Claims
NOVA asserted four equity-based claims against Greenwich based on its
position that Greenwich should bear the financial loss resulting from Premier's
bankruptcy: (1) promissory and equitable estoppel, (2) equitable subrogation, (3)
contribution, and (4) unjust enrichment. We consider and reject each claim in turn.
1. Promissory and Equitable Estoppel
Based on both promissory and equitable estoppel, 11 NOVA erroneously
asserts that Greenwich should reimburse it for the credit card chargebacks NOVA
has paid. Neither version of estoppel, however, may be “invoked to enlarge or
extend the coverage specified in a contract,” unless the oral representations or
10
Moreover, NOVA has not “paid the debt of another” as required for a conventional
subrogation claim. See part II.C.3. for a more complete discussion.
11
Equitable estoppel requires reliance on a representation of fact while promissory
estoppel requires reliance on a promise. Pinnacle Port Cmty. Ass'n v. Orenstein, 872 F.2d 1536,
1543 (11th Cir. 1989). This distinction is irrelevant in this case, thus we discuss estoppel
generally.
13
promises are interpretations of ambiguous contract terms. Kane v. Aetna Life Ins.,
893 F.2d 1283, 1285, 1285 n.3 (11th Cir. 1990).
That exception does not exist in this case because any representations
Greenwich may have made either to Premier or to NOVA regarding NOVA's
coverage under the bond were not interpretations of ambiguous terms. The FMC
has defined “passenger” and “person” in its regulations, and the surety bond issued
by Greenwich was intended to protect Premier “passengers.” Because credit card
processing companies do not fall within the definition of “passenger,” any intent
on the part of Greenwich (or Premier) to include NOVA as a protected “passenger”
would have enlarged or extended the coverage specified in the bond.
Furthermore, even if estoppel were applicable in this case, NOVA cannot
satisfy the elements of estoppel. Although NOVA may have detrimentally relied
on the draft letter or the negotiations between Greenwich and Premier regarding
NOVA's coverage under the bond, NOVA must show that Greenwich reasonably
expected to induce NOVA's reliance based on the promises or representations
Greenwich made. Pinnacle Port Cmty. Ass'n v. Orenstein, 872 F.2d 1536, 1543
(11th Cir. 1989). The district court correctly concluded that Greenwich “could
[not] reasonably expect that an unsigned draft letter would induce [NOVA] into
action or forebearance, especially where [Greenwich] did not . . . officially accept
14
the letter.” R4-111 at 18-19. Moreover, the negotiations between Greenwich and
Premier over whether the surety bond included NOVA as a claimant were never
concluded: Premier never accepted Greenwich's draft proposal to extend coverage
to NOVA because NOVA refused to lower Premier's fees in return. Thus, NOVA's
claims based on estoppel must fail.
2. Equitable Subrogation
NOVA wrongly claims that Greenwich should reimburse NOVA based on
the doctrine equitable subrogation. To maintain a claim based on equitable
subrogation, NOVA must prove five elements: (1) that it made the payment at
issue to protect its own interests, (2) the payment was non-voluntary, (3) it was not
primarily liable for the debt paid, (4) it paid the entire debt, and (5) subrogation
would not work any injustice to the rights of a third party. Dade County Sch. Bd.
v. Radio Station WQBA, 731 So.2d 638, 646 (Fla. 1999). Subrogation, however,
is not available to a party who pays his own debt. In re Munzenrieder Corp., 58
B.R. 228, 231 (M.D. Fla. 1986).
Essentially, NOVA argues that it qualifies for equitable subrogation because
it paid Greenwich's debt to Premier passengers. Under the doctrine, NOVA now
claims an equitable right to stand in the shoes of Premier passengers who were
entitled to reimbursement under the Greenwich bond and, hence, claim
15
compensation from Greenwich. See Dade County Sch. Bd., 731 So.2d at 646.
NOVA's claim fails, however, because NOVA paid its own debt, not a debt
obligated by Greenwich.
Greenwich was obligated to pay Premier passengers who made a claim for
reimbursement under the surety bond. NOVA, on the other hand, was obligated to
reimburse First Union as a result of reimbursements filed by Premier passengers
with their card-issuing banks. Although, in essence, both NOVA and Greenwich
were ultimately responsible for reimbursing Premier passengers––NOVA for those
passengers who requested reimbursement from their card-issuing banks, and
Greenwich for those passengers who requested reimbursement under the
bond––their obligations were, as the district court correctly noted, “separate and
distinct.” R4-111 at 21. NOVA was contractually obligated to reimburse First
Union regardless of whether any passengers ever made a claim for reimbursement
under Greenwich's surety bond.12 Moreover, NOVA was not responsible for
directly reimbursing any Premier passengers. As the district court noted, “[t]he
fact that passengers could make a claim under the Bond or through their credit card
12
The fact that the FMC and Greenwich issued press releases encouraging passengers to
seek reimbursement from their card-issuing banks does not bolster NOVA's position. As the
district court noted, “[i]t would be speculative to infer that the credit card passengers relied on
[Greenwich's] press release and voicemail as opposed to the FMC's press releases.” R4-111 at
22.
16
company . . . reinforces the fact that the liabilities [of NOVA and Greenwich] ran
side by side, not vertically.” R4-111 at 21 n.35 (emphasis in original). Thus,
NOVA has not paid any debt belonging to Greenwich and cannot maintain a claim
for equitable subrogation.13
3. Contribution
NOVA incorrectly argues that it is entitled to equitable contribution from
Greenwich for a portion of its financial loss stemming from Premier's bankruptcy.
The doctrine of equitable contribution “attempts to distribute equally among those
who have a common obligation, the burden of performing that obligation.”
Fletcher v. Anderson, 616 So.2d 1201, 1202 (Fla. Dist. Ct. App. 1993) (per
curiam). NOVA maintains that it and Greenwich have a “common obligation” to
reimburse Premier passengers who paid for their cruise with their Visa or
MasterCard.
NOVA's argument fails, however, because it was not responsible for
reimbursing Premier passengers––rather, it was responsible for reimbursing First
Union. Although the money paid to First Union was, considering the chain of
reimbursements, ultimately paid to Premier passengers, NOVA, unlike Greenwich,
13
We note also that the FMC's Proposed Rule makes clear that credit card companies like
NOVA are not subrogees under FMC Surety Bonds. 67 Fed. Reg. at 66,354 n.8. For this
additional reason, NOVA cannot maintain a claim for equitable subrogation.
17
did not have an obligation to reimburse those passengers directly. Similarly,
Greenwich, unlike NOVA, had no obligation to First Union or, through it, to card-
issuing banks. NOVA and Greenwich thus did not share a “common legal
liability.” Columbus-McKinnon Corp. v. Ocean Prod. Research, Inc., 792 F. Supp.
786, 789 (M.D. Fla. 1992). Accordingly, no “common obligation” existed between
the two sufficient to maintain a claim for contribution.
4. Unjust Enrichment
NOVA erroneously claims that Greenwich owes it money based on a theory
of unjust enrichment. To succeed on a claim of unjust enrichment, NOVA must
show: (1) it conferred a benefit on Greenwich of which Greenwich is aware, (2)
Greenwich voluntarily accepted and retained the benefit conferred, and (3) “the
circumstances are such that it would be inequitable for [Greenwich] to retain the
benefit without paying for it.” Shibata v. Lim, 133 F.Supp.2d 1311, 1316 (M.D.
Fla. 2000). NOVA argues that the “benefit” it conferred on Greenwich is a
reduction in the ultimate liability of Greenwich under the surety bond because the
passengers who were reimbursed by their card-issuing banks––a remedy they were
encouraged to pursue––did not seek reimbursement under the bond.
Again, NOVA's argument is misplaced. NOVA was contractually obligated
to reimburse First Union for any chargebacks it incurred. This obligation is
18
separate and distinct from the obligation Greenwich had to reimburse passengers
who claimed a right to compensation under the bond. Although NOVA, in effect,
ultimately paid for reimbursements that could have been claimed instead under the
Greenwich bond, this did not confer a direct benefit on Greenwich. At best,
NOVA conferred an indirect or incidental benefit on Greenwich, and the equities
in this case do not favor shifting the financial burden from NOVA to Greenwich
because both parties were compensated for the risks they took and the financial
burdens they now suffer.14
NOVA, however, argues that requiring it to sustain the financial loss in this
case would be inequitable for five reasons. All five of these arguments are flawed,
and we discuss them in turn.
First, NOVA relies on the facts that the FMC has determined that its
regulations are to be construed broadly to protect corporations, and that the FMC
General Counsel opined that credit card companies would be protected under
surety bonds. Contrary to this assertion, however, as we mentioned, the FMC
regulations protect corporations as “passengers,” and are not to be construed so
14
NOVA, for example, increased the fees it charged Premier because of NOVA's
uncertainty regarding Premier's financial condition. See, e.g., R3-79 at 176-77. Greenwich, in
turn, required Premier to post 30% of the bond's $15 million value––approximately $5
million––in collateral, which Greenwich retains today, in order to secure the bond. R3-77 at
120-21.
19
broadly as to protect corporations like NOVA that reimburse merchant banks for
chargebacks. And the FMC General Counsel's opinion was just that––an opinion,
not binding precedent. Moreover, the Proposed Rule makes clear that the General
Counsel's position was not validated and credit card processing companies are not
protected as claimants under surety bonds. See 67 Fed. Reg. at 66,354 n.8.
Second, NOVA alleges that Greenwich made representations and promises
that NOVA would be protected under the surety bond. For the same reasons why a
claim for estoppel cannot be maintained, this argument is to no avail.
Third, NOVA contends that Greenwich is a compensated risk taker because
Greenwich required Premier to post $5 million in cash collateral––which
Greenwich retained––in exchange for the $15 million bond. But NOVA was also a
compensated risk taker––NOVA raised the fees it charged Premier because of its
concern over Premier's financial condition. In fact, NOVA too has recouped
millions of dollars in fees from its relationship with Premier. R3-79 at 176. Thus,
both parties are compensated risk takers and this argument does not support
shifting the financial risk to Greenwich alone.
Fourth, NOVA contends that Greenwich “engaged in a concerted effort to
shift their Premier-related losses” to NOVA by issuing the press release
encouraging passengers to seek reimbursement from their card-issuing banks.
20
Appellant's Br. at 40. As the district court correctly noted, however, “[i]t would be
speculative to infer that the credit card passengers relied on [Premier's] press
release and voicemail as opposed to the FMC's press releases.” R4-111 at 22. And
even if some passengers were persuaded to seek reimbursement from their card-
issuing banks instead of under the bond, NOVA would still be contractually
obligated to reimburse First Union for any chargebacks it incurred. Requiring
NOVA to honor its contractual obligations is not an inequitable result.
Fifth and finally, NOVA argues that because Greenwich would have been
liable to reimburse any credit-card paying passengers who sought reimbursement
under the bond instead of from their card-issuing bank, this necessarily means that
Greenwich should be responsible for reimbursing all credit-card paying customers.
The converse of this argument, however, is that because NOVA is ultimately
responsible for reimbursing credit-card-paying passengers, Greenwich should be
able to seek reimbursement from NOVA for all the reimbursement claims of
credit-card-paying passengers that Greenwich has paid. The liabilities of NOVA
and Greenwich, as we have discussed, are separate and distinct. Because both
parties could be liable for the same reimbursements does not mean that either
NOVA or Greenwich may then seek compensation from each other.
21
Thus, each of NOVA's five reasons to support equitable shifting of the
financial risk in this case to Greenwich fails, as does NOVA's claim for
compensation under the doctrine of unjust enrichment.
III. CONCLUSION
NOVA alleged six claims against Greenwich based on its position that
Greenwich, rather than NOVA, should shoulder the financial risk from Premier's
bankruptcy. We reject NOVA's theories and affirm the district court's grant of
summary judgment in favor of Greenwich on each of the claims.
22