On June 20, 2025, the U.S. Court of Appeals for the Sixth Circuit resurrected a lawsuit against a bank involving “Authorized Positive, Settled Negative” (“APSN”) overdraft fees and nonsufficient funds (“NSF”) fees. Gardner v. Flagstar Bank, No. 24-1436, 2025 WL 1721191 (6th Cir. June 20, 2025). The plaintiff argued that these fees violated the operative Terms & Conditions. The district court had granted summary judgment to the defendant because the plaintiff’s deposition testimony indicated that she did not read the T&Cs and thus could not advance her own interpretation of the contract.

The Sixth Circuit disagreed. The court held that when a written contract is ambiguous, Michigan law “requir[es] a factual determination as to the intent of the parties in entering the contract.” Id. at *3. The court also rejected the defendant’s attempt to rely on extrinsic evidence to support its interpretation of the contract because the contract was admittedly ambiguous and the plaintiff’s signature on the contract thus “indicate[d] very little about her subjective understanding of the contract.” Id. at *5. In this case, the defendant had updated its Terms & Conditions to attempt to better explain its policies, but the court did not address the amended contract because the plaintiff and her expert were able to point to APSN fees that pre-dated the defendant’s updates.

The defendant also attempted to argue that the plaintiff failed to allege APSN transactions in her complaint and only included them in a belated expert declaration. However, the Sixth Circuit faulted the defendant for failing to move to strike the expert’s declaration on timeliness grounds, and held that the defendant could not belatedly challenge the declaration on appeal. Id. at *4.