DBI Architects, P.C. v. American Express Travel-Related Services, Co., Inc.

DBI Architects, P.C. (DBI) (plaintiff) had a corporate credit-card account with American Express Travel-Related Services, Co., Inc. (AMEX) (defendant). DBI appointed Kathy Moore as the accounting manager for some of its offices and gave Moore both payment and approval responsibilities, including the authority to issue DBI-corporate checks to pay bills from vendors. Moore requested that AMEX list her as a cardholder on DBI’s corporate account without DBI’s knowledge. Over a 10-month span, Moore charged $133,254.79 on DBI’s corporate-AMEX card for unauthorized personal items, and then paid the amounts off with DBI checks, which she signed with DBI’s president’s name. During this span, AMEX sent DBI monthly-billing statements, which listed Moore as a cardholder and itemized Moore’s charges. Moore also used DBI checks to pay off $162,139.04 in charges on her personal-AMEX card for personal items. After months of silence, DBI requested refunds from AMEX for Moore’s fraudulent charges. AMEX refused DBI’s request. Accordingly, DBI sued AMEX for violating the Truth in Lending Act (TILA). AMEX moved for summary judgment, which the district court granted. The parties agreed that Moore had neither actual nor implied authority to use the card. However, the district court relied on a factually similar banking-law case and reasoned that although Moore did not have apparent authority to become a cardholder, DBI created an appearance of apparent authority in Moore by failing to inspect the monthly billing statements. DBI appealed.