In Duane Reade, Inc. v. Cardtronics, LP , Duane Reade sued Cardtronics for breach of an ATM-placement agreement.
In 1999, American Express Travel Related Services Company (Amexco) entered into a contract to place Amexco ATMs in Duane Reade stores. In 2003, Amexco assigned its rights under the agreement to Cardtronics , and the parties amended the contract shortly thereafter to expand the number of Duane Reade locations that would be equipped with ATMs.
The amendment provided the ATMs could be branded with a bank's name and trademark, but would continue to be operated by Cardtronics . The bank's customers would be able to use the ATM without any surcharge whereas, previously, all cardholders paid a transaction fee.
To compensate for the lost revenue, the agreement provided Cardtronics would look at "the number of surcharged transactions conducted by said bank's customers during the immediately preceding month at all of the ATMs covered by such arrangement ... and thereafter through the term of this Agreement on a monthly basis [would] credit [ Duane Reade ] with the full amount of the Branding Surcharge Transactions."
In 2005, Cardtronics and Chase entered into a branding agreement, and later that year, Duane Reade claimed the payments it received were incorrect, because the agreement required a monthly transaction-based calculation credit. Cardtronics alleged the credit was limited to the number of Chase transactions that occurred the month prior to the branding agreement's effective date.
When the New York County Supreme Court agreed with Cardtronics 's interpretation of the contract and dismissed Duane Reade 's breach of contract claim, an appeal to the Appellate Division, First Department, followed.
Because it viewed the document as "ambiguous," and questioned the "logic" of Cardtronics ' position, the AD1 reversed the lower court's determination and sent the matter back for a formal hearing or trial.
The AD1 branded that one real good.
To download a copy of the Appellate Division's decision, please use this link: Duane Reade, Inc. v. Cardtronics, LP