United States District Court, D. Maryland
Xinis, United States District Judge
in this interpleader action is a motion to dismiss Defendant
Jericho DC's amended counterclaim filed by Plaintiff Bank
of America, N.A. ECF No. 56. The issues are fully briefed and
the Court now rules pursuant to Local Rule 105.6 because no
hearing is necessary. For the following reasons, Bank of
America's motion to dismiss is granted in part and denied
this action is a longstanding dispute over the control and
governance of Jericho Baptist Church Ministries, Inc.
(“the Church”), located in Landover, Prince
George's County, Maryland. The Church was incorporated in
the District of Columbia in 1962 by Reverend James R.
Peebles, Sr.; his wife, Betty Peebles; and Alice Harvey.
Amended Counterclaim, ECF No. 48 at 2. The dispute spawned
much litigation during which the parties and the courts refer
to the surviving members of the original board as
“Jericho DC” to distinguish it from a
later-formed Board that incorporated in Maryland, also under
the name “Jericho Baptist Church Ministries,
Inc.” (“Jericho MD”). Jericho MD's
board members, comprised of current and former Church
employees, are referred to by Jericho DC as “the
the Church's inception, it has been governed by a Board
of Trustees. The Amended Complaint alleges that as of March
2009, the Board members were Betty Peebles, Joel Peebles,
William Meadows, Anne Wesley, and Dorothy Williams.
Id. at 3. On March 15, 2009, unbeknownst to Joel
Peebles, William Meadows, and Anne Wesley, the Employees,
including Denise Killen, Clifford Boswell, Gloria
McClam-Magruder, Clarence Jackson, and Dorothy Williams,
created a document they called “Resolution 1-09 of the
Board of Trustees, ” which purported to reflect an
election of a new Board of Trustees. Id. The
Employees claimed that Resolution 1-09 effected the
resignation of William Meadows and Anne Wesley from the
Church Board and the election of the Employees to the Board.
DC board member Betty Peebles died on October 12, 2010.
Within days of her passing, the Employees announced that they
were members of the board, and that Joel Peebles, William
Meadows, and Anne Wesley were not on the board. The Employees
also seized control of the Church, its assets, and corporate
records, and then formed a Maryland religious corporation
under the name “Jericho Baptist Church Ministries,
Inc.” (“Jericho MD”).
Peebles' passing and Jericho MD's takeover generated
a vigorous legal feud over control of the Church. Since 2010,
the parties in this action, along with several individual
Church members, have participated in no fewer than six
separate lawsuits in federal and state court attempting to
determine fully and finally which entity rightfully governs
the Church and its assets. See Jericho Baptist Church
Ministries, Inc. v. Peebles, No. CAL10-33647 (P.G. Cnty.
Cir. Ct. Oct. 25, 2011), rev'd, No. 2023 (Md.
Ct. Spec. App. Sept. 19, 2012); Jericho Baptist
Church Ministries, Inc. v. Gloria McClam-Magruder,
No. CAL11-00873 (P.G. Cnty. Cir. Ct. Oct. 25, 2011),
rev'd, No. 1953 (Md. Ct. Spec. App. Sept. 19,
2012); Chavez v. Jericho Baptist Church Ministries,
Inc., No. CAL12-13537 (P.G. Cnty. Cir. Ct. Feb. 18,
2014); George v. Jackson, No. 2013 CA 007115 B (Sup.
Ct. D.C. July 7, 2015), aff'd, 146 A.3d 405
(D.C. 2016); Franklin v. Jackson, No. DKC 14-0497,
2015 WL 1186599 (D. Md. Mar. 3, 2015); Jericho Baptist
Church Ministries, Inc. v. Jericho Baptist Church Ministries,
Inc., No. APM 16-647 (D.D.C. filed Apr. 6, 2016);
Bank of America, N.A. v. Jericho Baptist Church
Ministries, Inc., No. PX 15-02953 (D. Md. filed Sept.
29, 2015); Citibank, N.A. v. Jericho Baptist Church
Ministries, Inc., No. PX 15-02953 (D. Md. filed May 27,
Church holds four corporate accounts at Bank of America, N.A.
(“BOA”) that it opened between 1999 and 2002.
Amended Counterclaim, ECF No. 48 at 6. Jericho DC alleges
that both BOA and the Church understood that Betty and Joel
Peebles were the primary and sole individuals authorized to
act on behalf of the Church and control the Church's
accounts with BOA. Id. at 7. It alleges that Joel
Peebles had the power to establish deposit accounts on behalf
of the Church and designate persons to operate such accounts.
Joel Peebles also participated in many of the parties'
borrowing agreements over the course of their relationship.
October 7, 2010, Jericho MD member Denise Killen signed the
name of Betty Peebles to a signature card giving Killen
signature authority on the BOA accounts. Id. at 8.
BOA allegedly accepted the October 7th signature
card via facsimile and without appropriate documentation in
violation of BOA's policies and procedures. Jericho DC
also alleges that on April 29, 2011, BOA permitted Killen to
add herself and Employees Clarence Jackson and Dorothy
Williams as signatories on all Jericho accounts. Id.
DC alleges that it repeatedly notified BOA that the Employees
should not be permitted to access the corporate accounts but
the bank ignored these notices. Within weeks of the
Employee's takeover of the Church, Joel Peebles informed
a BOA executive of the dispute and the pending litigation and
instructed her that the Employees should not be permitted to
access the Church's corporate accounts. BOA allegedly
ignored Joel Peebles' request. On April 1, 2011 Jericho
DC again informed BOA by letter that the Employees had no
lawful right to access the corporate accounts and gave BOA
notice of the pending litigation. Again, BOA ignored this
information. Jericho DC sent several more letters to BOA
ordering them to prevent the Employees access to the accounts
on or about April 16, 2011, September 24, 2012, April 16,
2014, and October 6, 2014. Despite Jericho DC's repeated
protests, BOA continued to allow the Employees to access the
Church's accounts. During this time, BOA also prevented
Jericho DC from accessing the accounts. Thus, as Jericho DC
puts it, BOA “took sides” in the ongoing Church
governance dispute and decided to recognize the Employees as
the lawful governing body of the Church. ECF No. 48 at 11.
DC further alleges that during the five years that BOA
allowed the Employees to access and control Jericho's
accounts, the Employees misappropriated and wasted
substantial corporate assets. At the time the Employees
assumed control over the Church, the BOA accounts held
collectively over $10, 000, 000. According to BOA, these same
accounts now hold $7, 755, 199.00. Jericho DC alleges that
the contract required BOA to allow only the Church's
lawful board, Jericho DC, access to the Church's
accounts. BOA breached this agreement by granting the
Employees access to the Church's accounts and preventing
Jericho DC's access to the same.
September 29, 2015, BOA filed the instant Interpleader action
against Jericho MD, Jericho DC, and their respective board
members. ECF No. 1. The Complaint, brought pursuant to 28
U.S.C. § 1335, sought an order determining which
entity-Jericho DC or Jericho MD-owns and controls the assets
held in four BOA corporate deposit accounts that had been
established before the execution of Resolution 1-09.
December 10, 2015 Jericho DC filed its counterclaim against
BOA (ECF No. 19) and then an amended counterclaim (ECF No.
48) on February 16, 2016, asserting various causes of action
related to BOA's handling of the deposit accounts in
question, including breach of contract, negligence, gross
negligence, and a preliminary and permanent injunction. Bank
of America moved to dismiss the counterclaims under Rule
12(b)(6) of the Federal Rules of Civil Procedure. ECF No. 56.
12, 2016, Jericho DC filed a motion for summary judgment on
the question of which Board possesses current control and
ownership of the assets in accounts deposited with BOA. ECF
No. 68. On September 9, 2016, the Court granted Jericho
DC's motion for summary judgment, see Bank of Am.,
N.A. v. Jericho Baptist Church Ministries, Inc., No. PX
15-02953, 2016 WL 4721257 (D. Md. Sept. 9, 2016), allowing it
to proceed to BOA's motion to dismiss Jericho DC's
amended counterclaim. For the following reasons, BOA's
motion is granted in part and denied in part.
STANDARD OF REVIEW
ruling on a motion under Rule 12(b)(6), the court must
“accept the well-pled allegations of the complaint as
true” and “construe the facts and reasonable
inferences derived therefrom in the light most favorable to
the plaintiff.” Ibarra v. United States, 120
F.3d 472, 474 (4th Cir. 1997). “Even though the
requirements for pleading a proper complaint are
substantially aimed at assuring that the defendant be given
adequate notice of the nature of a claim being made against
him, they also provide criteria for defining issues for trial
and for early disposition of inappropriate complaints.”
Francis v. Giacomelli, 588 F.3d 186, 192 (4th Cir.
2009). “The mere recital of elements of a cause of
action, supported only by conclusory statements, is not
sufficient to survive a motion made pursuant to Rule
12(b)(6).” Walters v. McMahen, 684 F.3d 435,
439 (4th Cir. 2012) (citing Ashcroft v. Iqbal, 556
U.S. 662, 678 (2009)). To survive a motion to dismiss, the
factual allegations of a complaint “must be enough to
raise a right to relief above the speculative level on the
assumption that all the allegations in the complaint are true
(even if doubtful in fact).” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 555 (2007) (internal citations
omitted). “To satisfy this standard, a plaintiff need
not ‘forecast' evidence sufficient to prove the
elements of the claim. However, the complaint must allege
sufficient facts to establish those elements.”
Walters, 684 F.3d at 439 (citation omitted).
“Thus, while a plaintiff does not need to demonstrate
in a complaint that the right to relief is ‘probable,
' the complaint must advance the plaintiff's claim
‘across the line from conceivable to
plausible.'” Id. (quoting
Twombly, 550 U.S. at 570).