Green v. H & R Block, Inc.

Tax-return preparer H & R Block (Block) (defendant) advertised the highest and fastest refunds for customers. In Maryland, Block offered rapid refunds to customers via a loan program with Beneficial National Bank (BNB). If a customer met screening criteria, Block facilitated a loan with BNB for the anticipated return amount, secured by the return itself. The loan application Block completed and submitted stated that Block was authorized to share the customer’s tax return for loan purposes. If BNB approved a loan, the customer would pick up the loan check from Block, and the refund, when received, was paid directly into the customer’s BNB account. Customers paid a financing charge of $29 to $89. Block benefited from the loan program in three ways, none of which it disclosed to customers: Block received a license fee for referred loans, a Block affiliate purchased many of the loans, and Block received 15 percent of the check-cashing fee for checks cashed at Sears, a retail chain where manv Block stores were located. A group of Maryland customers who used Block’s loan program (plaintiffs), including Joyce Green, filed a class-action suit against Block. They argued, among other things, that there was an agency relationship between Block and its customers and that Block breached its fiduciary duties by failing to disclose the ways it benefited from the loans. The trial court granted a motion to dismiss in Block’s favor, finding that there was no principal-agent relationship. The customers appealed.