EverBank Class Action Reaches Settlement over CD Closures

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A federal judge in California issued preliminary approval of a $750,000 class action settlement reached between EverBank and a Class of plaintiffs who allege that EverBank illegally closed CD accounts without members’ consent.

Plaintiff Ek Vathana filed the initial lawsuit in 2009 and represents a Class of consumers who held EverBank WorldCurrency CDs (certificates of deposit) denominated in Icelandic króna. Vathana alleged that EverBank breached its contract when it closed CD accounts without consumer consent and also used a low conversion rate from Icelandic króna to U.S. dollars.

According to Vathana, Everbank’s terms that governed the CDs required the financial institution to renew the accounts annually, and when EverBank failed to do so, it violated the Truth in Savings act by neglecting to notify account holders of the change in status. Vathana also alleges that there was no conversion rate established when EverBank closed the CDs.

In 2012, a federal judge in Northern California granted EverBank’s request for summary judgment and dismissed Vathana’s case. In 2014, Vathana appealed to the Ninth Circuit and the court ruled that EverBank did not breach the contract by closing the CDs, but did find that there was an issue of material fact that existed regarding the conversion rate that EverBank used when it closed the CD accounts.

Circuit Judge Mary Murguia remanded the case, but in the meantime, both parties participated in negotiations and reached the $750,000 settlement.

“The court preliminarily finds that the proposed settlement should be approved as: (i) the result of serious, extensive arm’s-length and non-collusive negotiations; (ii) falling within the range of reasonableness warranting final approval; (iii) having no obvious deficiencies; (iv) not improperly granting preferential treatment to the lead plaintiff or segments of the class; and (v) warranting notice of the proposed settlement to class members and further consideration of the settlement at the fairness hearing,” U.S. District Judge Richard Seeborg wrote in the preliminary motion for approval of the settlement.

Under the terms of the proposed settlement, the attorneys representing the Class are asking for up to $250,000 in fees and an additional $40,000 in expenses. As Class representative, the settlement also looks to grant Vathana an incentive award in the amount of $12,500.

The remaining $441,500 of the settlement will be divided among Class Members based on their proportional loss upon conversion to U.S. dollars, according to the proposed settlement.

“Pursuant to lead plaintiff’s calculations, the class as a whole had approximately $3,206,185.45 in losses in the form of ‘conversion losses,'” the proposed settlement states. “This figure is the sum of all conversion losses … for every CD that matured during the 13 week period between Oct. 8 and Dec. 31, 2008. The dollar amount of the settlement fund given to a class member for a particular CD will be the conversion loss, divided by $3,206,185.45, multiplied by the net settlement fund.”

As an example, Vathana was paid $2,958.03 when his EverBank WorldCurrency Icelandic króna CD matured. By using the formula propsed in the settlement, he would receive $471.96 under the terms of the settlement.

A final fairness hearing for the EverBank settlement will be held on July 7, 2016 in San Francisco.

More information about the EverBank class action settlement was not immediately available. Keep checking TopClassActions.com or sign up for our free newsletter for the latest updates. You can also mark this article as a “Favorite” using your free Top Class Actions account to receive notifications when this article is updated.

Vathana is represented by Michael Millen, of the Law Offices of Michael Millen.

The EverBank Class Action Lawsuit Settlement is Ek Vathana v. EverBank, et al., Case No. 09-cv-02338-RS in the U.S. District Court for the Northern District of California.