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Citibank, N.A. v. Jericho Baptist Church Ministries, Inc.

United States District Court, D. Maryland

July 13, 2018

CITIBANK, N.A., Interpleader Plaintiff,
v.
JERICHO BAPTIST CHURCH, MINISTRIES, INC. Jericho DC, et al., Interpleader Defendants.

          MEMORANDUM OPINION AND ORDER

          PAULA XINIS UNITED STATES DISTRICT JUDGE

         Pending before the Court in this interpleader action is a Motion for Summary Judgment filed by Interpleader Defendant Jericho Baptist Church Ministries, Inc. (DC) (“Jericho DC”) against its co-Interpleader Defendant Jericho Baptist Church Ministries, Inc. (Maryland) (“Jericho MD”). ECF No. 45. The matter has been fully briefed. For the following reasons, the Court GRANTS IN PART and DENIES IN PART Jerhico DC's Motion for Summary Judgment, and will hold a hearing to determine outstanding matters as laid out in this Memorandum Opinion and Order.

         I. BACKGROUND

         Jericho DC and Jericho MD share a contentious history of litigation regarding the administrative control of Jericho Baptist Church Ministries, Inc. The facts and circumstances of those previous cases, relevant here, are laid out in the Court's opinion in Bank of America, N.A. v. Jericho Baptist Church Ministries, Inc., No. 15-02953, 2016 WL 4721257, at *1 (D. Md. September 9, 2016) (hereinafter the “Bank of America matter”). In this interpleader action filed by Citibank on May 27, 2016, Citibank seeks Court determination of whether Jericho DC or Jericho MD is the rightful owner of the funds held in nine Citibank accounts totaling $2, 177, 637.09. See generally ECF No. 1.

         On October 14, 2011, Jericho MD opened the first of the Citibank accounts at issue and with $1, 700, 000 transferred by check from Jericho DC's Bank of America account. ECF No. 1 ¶ 23; ECF No. 45-1 at 58. While Jericho MD opened the Citibank account in its own name, it used Jericho DC's tax identification number (“EIN”). See ECF No. 1 ¶ 27; ECF No. 50-1 at 4-6. Jericho MD thereafter transferred to the Citibank account an additional $2.5 million from a bank account held at PNC Bank. See ECF No. 50-3 at 4; ECF No. 57; ECF No. 57-1.

         On November 1, 2016, after years of Jericho MD transacting business using the Citibank accounts, Citibank deposited the balance of the account funds in the Court's registry in connection with this interpleader action. See ECF Nos. 22, 26. Jericho DC moved for summary judgment in its favor, arguing that the outcome in George v. Jackson, No. 2013 CA 007115 B (Sup. Ct. D.C. July 7, 2015) (hereinafter “George v. Jackson”), and this Court's opinion in the Bank of America matter, demand that the Court rule in Jericho DC's favor here. ECF No. 45 at 7-8. Jericho MD opposed the motion, arguing that genuine disputes of material fact as to which entity controls the accounts, and commingling of account funds, preclude summary judgment. See generally ECF No. 50-1. For the following reasons, the Court grants in part and denies in part Jericho DC's motion for summary judgment.

         II. STANDARD OF REVIEW

         “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986) (citing predecessor to current Rule 56(a)). The burden is on the moving party to demonstrate the absence of any genuine dispute of material fact. Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970).

         The “mere existence of a scintilla of evidence in support” of the party opposing summary judgment is insufficient to defeat a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). The nonmoving party may not rest upon mere allegations or denials but instead must, by affidavit or other evidence, set out specific facts in the record showing a genuine dispute for trial. See Fed. R. Civ. P. 56(c)(1). The facts themselves, and the inferences to be drawn from the underlying facts, must be viewed in the light most favorable to the nonmoving party. Scott v. Harris, 550 U.S. 372, 378 (2007); Iko v. Shreve, 535 F.3d 225, 230 (4th Cir. 2008). The party opposing summary judgment “cannot create a genuine issue of material fact through mere speculation or the building of one inference upon another.” Othentec Ltd. v. Phelan, 526 F.3d 135, 140 (4th Cir. 2008) (quoting Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985)). Where a party's statement of a fact is “blatantly contradicted by the record, so that no reasonable jury could believe it, ” the Court will credit the record over the averred fact. See Scott v. Harris, 550 U.S. 372, 380 (2007).

         III. DISCUSSION

         A. Collateral Estoppel and Funds Transferred from Jericho DC's Bank of America Account

         The doctrine of collateral estoppel “is concerned with the issue implications of the earlier litigation of a different case.” Colandrea v. Wilde Lake Community Ass'n, Inc., 361 Md. 371, 390 (2000). Where an issue has been fully and finally litigated in a prior matter involving the identical parties or their privies, the parties are estopped from relitigating the same matter. Id. at 387 (collecting cases). In determining whether collateral estoppel, or issue preclusion, applies, the Court must ascertain whether: 1) the issue in question is identical to the one previously decided, 2) there was a final judgment on the merits, 3) the parties are the same or in privity to the parties of the prior adjudication, and 4) the parties had a fair opportunity to be heard on the issue. Id. at 391; see Davis v. Davis, 663 A.2d 499, 501 (D.C. 1995) (under D.C. law, collateral estoppel requires an issue be actually litigated, determined by a valid, final judgment on the merits, after a full and fair opportunity for litigation by the parties or their privies, and the determination must have been essential to the judgment).

         It is undisputed that on October 14, 2011, Denise Killen, a purported Jericho MD board member, transferred $1.7 million from Jericho DC's Bank of America account to the Citibank account. See ECF No. 45-1 at 58. That transaction occurred after March 15, 2009. This Court, relying on the findings of George v. Jackson, which had determined that “actions taken by [Jericho MD] after March 15, 2009, acting as the purported Board of Trustees of Jericho DC . . . are invalid, ” ECF No. 45-1 at 20; see Jericho Baptist Church Ministries, Inc., 2016 WL 4721257 at *4-5, *10, has already determined that Jericho DC had lawful control over the Bank of America funds as of March 15, 2009, and all subsequent Jericho MD transactions on that account were invalid. By extension, therefore, the Court already has determined that the funds transferred from the Bank of America account to the Citibank account were and are properly controlled by Jericho DC. Because this question of control has been determined, the first prong of the collateral estoppel test is satisfied. See Jericho Baptist Church Ministries, Inc., 2016 WL 4721257, at *10.

         Similarly, the remaining three elements of collateral estoppel cut in Jericho DC's favor as to the $1.7 million transferred from the Bank of America Account. Both George v. Jackson and this Court's prior opinion were final judgments on the merits. Both matters involved Jericho DC and Jericho MD or their privies. Finally, the parties certainly had a fair chance to be heard on the issue central to this case-to wit, which entity lawfully controlled the Church. In the Bank of America matter, the Court discussed at length why both Jericho MD and Jericho DC's interests were represented in the George v. Jackson case. Jericho Baptist Church Ministries, Inc., 2016 ...


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