Gray•Duffy Settles Business Dispute Involving Credit Card Merchant Accounts

September 2012


Michael Eisenbaum of Gray•Duffy’s Encino office successfully resolved a lawsuit filed against the firm’s client for alleged breach of contract involving a credit card merchant service provider.


US Merchant Services v. Incom International, et al. The firm’s client, Incom International, is an Agent who develops merchant account portfolios which are then sold to merchant service providers including US Merchant Services (USMS). The plaintiff, USMS filed a lawsuit for breach of contract against Incom International, after Incom International transferred several accounts out of the USMS portfolio without consent which led USMS to apply for a TRO and preliminary injunction. USMS also immediately began withholding all residual payments due to Incom International pursuant to the Agency contract due to the alleged breach of contract, and also sought several thousand dollars in damages for the transfer of a few dozen merchant accounts. On behalf of Incom International, Michael Eisenbaum of Gray•Duffy had the case transferred to binding arbitration pursuant to the contract terms. Incom International also presented a counter-claim in arbitration for breach of USMS’ obligation to make the residual payments on all remaining merchant accounts in the portfolio. Prior to the arbitration, a settlement was reached where both sides agreed to forego seeking any damages for past breaches and resume the relationship. No money was exchanged other than USMS resumption of the residual payments, which was retroactively set to May 2012. Thereupon, the case and arbitration were dismissed.

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.