Overdraft program specialist John M. Floyd & Associates of Baytown, Texas, has sued Fiserv Inc. of Brookfield, Wis., for $10 million, claiming the technology company violated a promotional and non-competition agreement between the two.
The suit was filed in U.S. District Court in Sherman, Texas. It also names two former Fiserv credit union core processing subsidiaries – IntegraSys and Summit Information Systems.
MEA Financial Enterprises of Monett, Mo., another overdraft services provider, also was named in the suit but has since been removed from the case, according to a July 7 filing.
According to the filing, JMFA entered into strategic alliance agreements with IntegraSys and Summit in December 2003 and October 2004, respectively, that called for Fiserv to allow JMFA to participate in the larger company's Innovate annual customer meetings to present its products, and to not compete with JMFA by offering other overdraft products.
“Floyd has complied with each and every provision of the Fiserv agreements. Fiserv, however, has not,” the suit said. Violations of the agreement, JMFA claims in the suit, include not publishing at least two annual ads or direct mail pieces, not allowing JMFA to attend Innovate, and not making “every commercially reasonable effort to ensure” Fiserv credit union customers attend JMFA product presentations.
JMFA said it notified Fiserv in August 2010 that it would no longer be paying fees on its agreements with the larger company. Fiserv responded in writing by demanding payment, according to the smaller company, and the original suit was filed in December 2010.
A second filing then claimed that this past March, Fiserv and MEA interfered with JMFA's attempt to win the business of a Washington, D.C., credit union.
MEA was dropped from the suit in May, the current complaint said, and now JMFA is seeking a jury trial in its claims against Fiserv, seeking actual damages to be determined, exemplary damages of $10 million and court costs and fees.
Both JMFA and Fiserv declined comment on the case because it is ongoing.
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