## Facts

- Francis H. Azur employed Michele Vanek as his personal assistant with responsibility for receiving and opening his bills and statements, preparing checks for his signature, mailing payments, and reconciling his accounts.
- Azur delegated to Vanek sole responsibility to review his credit-card and bank statements and to contact the issuer about questionable charges; he also provided her access to his credit-card information for purchases at his request.
- For approximately seven years, Vanek controlled Azur’s incoming financial mail and concealed account activity from him.
- From about 1999 to 2006, Vanek repeatedly obtained cash advances on a credit-card account in Azur’s name and misappropriated more than $1 million.
- Vanek paid the resulting balances using checks drawn on Azur’s checking account, which she also administered.
- Chase’s fraud-detection system flagged certain activity and placed automated calls; twice, a woman returned the calls and verified the activity.
- After discovering the fraud in 2006, Azur terminated Vanek and sought to recover from Chase the amounts paid on the account.

## Issues

1. Whether TILA § 1643 creates an affirmative cause of action allowing a cardholder to obtain reimbursement from a card issuer.
2. Whether claims under TILA §§ 1643 and 1666 fail because the card use was “authorized” due to the assistant’s apparent authority.
3. Whether a negligence claim against the issuer is barred by Pennsylvania’s economic-loss doctrine when the plaintiff seeks only monetary loss arising from a credit-card relationship.
4. Whether the cardholder satisfied TILA § 1666’s requirement of timely written notice identifying the disputed billing errors.

## Decision

- The Third Circuit affirmed summary judgment for Chase.
- TILA § 1643 was held to be a limitation on a cardholder’s liability for “unauthorized use,” not an independent reimbursement remedy.
- Even assuming a reimbursement theory, Vanek’s transactions were not “unauthorized use” under TILA because Azur’s conduct created apparent authority for her to act on the account.
- The § 1666 billing-error claim failed because Azur did not provide timely written notice that adequately identified the specific disputed charges and amounts.
- The negligence claim was barred by Pennsylvania’s economic-loss doctrine because Azur sought purely economic damages within a relationship governed by contract and identified no independent tort duty.

## Legal Principles

- TILA § 1643 operates as a liability cap for “unauthorized use” and does not, by itself, create an affirmative right to reimbursement from a card issuer.
- For TILA purposes, “unauthorized use” excludes transactions made with actual, implied, or apparent authority; traditional agency principles govern apparent authority.
- Apparent authority exists when a third party reasonably believes an actor is authorized, and that belief is traceable to the principal’s manifestations; the principal bears the loss when the principal’s conduct created the appearance of authority.
- TILA § 1666 requires the consumer to send timely written notice containing the consumer’s identifying information, the amount of the alleged error, and reasons for believing an error exists; failure to comply prevents invocation of the statute’s billing-error procedures.
- Under Pennsylvania law, the economic-loss doctrine generally bars negligence claims seeking purely economic loss in a contractual setting absent a duty independent of the contract.

## Conclusion

The Third Circuit allocated the loss to the cardholder who empowered an assistant with broad control over financial affairs, holding that TILA did not supply a reimbursement action, that apparent authority defeated any claim of “unauthorized use,” that § 1666 relief required compliant written notice, and that Pennsylvania’s economic-loss doctrine foreclosed negligence recovery for purely financial harm.


Azur v. Chase Bank USA, Nat’l Ass’n, 601 F.3d 212 (3d Cir. 2010)