United States District Court, D. Maryland
XINIS UNITED STATES DISTRICT JUDGE
pending and ripe for resolution are the parties'
cross-motions for summary judgment. ECF Nos. 188, 189. The
issues have been fully briefed, and the Court held a hearing
on February 5, 2019. For the reasons articulated below, the
Court GRANTS in part and DENIES in part Counter-Defendant
Bank of America's (“BOA”) motion and DENIES
Counter-Plaintiff Jericho Baptist Church Ministries'
(“Jericho D.C.”) motion.
case originated as an interpleader action filed by BOA
seeking Court determination of who rightfully owns the funds
held in various BOA accounts. At the center of this case is
the longstanding dispute over the control and governance of
Jericho Baptist Church Ministries, Inc. (“the
Church”), located in Landover, Prince George's
County, Maryland. BOA asked this Court to determine which of
two warring Church factions, Jericho D.C. or Jericho M.D.,
rightfully owned account funds held in the name of the
Church. In the same action, Jericho D.C. filed three
counterclaims against BOA for breach of contract, negligence
and gross negligence. ECF Nos. 19, 48.
the initial interpleader action, the Court determined that
Jericho D.C. was the rightful owner of the BOA account funds.
Applying principles of collateral estoppel, the Court held
that the decision reached in George v. Jackson, No.
2013 CA 007115 B (D.C. Super. Ct. July 7, 2015), declaring
Jericho D.C. the controlling Board as of 2009, compelled the
same result with regard to the BOA bank accounts. As a
result, Jericho D.C.'s counterclaims alleging BOA
mishandling of the accounts necessitated resolution.
to the Counterclaims, the Court denied BOA's motion to
dismiss and set a discovery schedule. ECF No. 108. While
discovery has been protracted and fraught with difficulty, it
has concluded. The parties' cross-motions for summary
judgment have been briefed comprehensively and the Court held
a hearing. Based on the record evidence, the following facts
are undisputed unless otherwise noted.
Peebles and her husband, Reverend James R. Peebles,
incorporated the Church in 1962. ECF No. 188-3. After James
Peebles' death in 1996, Betty Peebles assumed control
over the Board governing the Church, referred to in this
opinion as Jericho D.C. Peebles maintained such control
uninterrupted until her death in 2010. ECF No. 188-4.
September and October of 2002, the Church opened two deposit
accounts with BOA. In connection with those accounts, the
Church granted Betty Peebles authority to enter into
agreements with BOA, to “appoint and delegate”
others to enter into agreements with the Bank, and to
“take any other actions pursuant to such agreements in
connection with said accounts that the officer or employee
deems necessary.” ECF Nos. 188-7, 188-9. Betty Peebles,
therefore, retained broad powers to transact business with
BOA on behalf of Jericho D.C.
March 15, 2009, Trustees from Jericho D.C. executed
Resolution I-09, which purportedly recognized the Church
Board of Trustees to be Betty Peebles, Dorothy Williams,
Gloria McClam-MacGruder, Denise Killen, Clarence Jackson,
Jennie Jackson, Bruce Landsdowne, Norma Lewis, and Lashonda
Terrell. ECF No. 188-23. This Resolution completely changed
the composition of the controlling Board, most notably
removing Joel Peebles as a Trustee. BOA, however, was unaware
of Resolution I-09 until Denise Killen produced it to BOA in
October 27, 2010, nearly 18 months after the resolution
purported to take effect. ECF No. 189-8. Joel Peebles was
equally in the dark. ECF No. 189-22.
October 19, 2009, Betty Peebles executed several documents
which collectively overhauled the Church accounts with BOA.
The first, entitled “Deposit Account Documentation
Banking Resolution and Certificate of Incumbency, ”
permitted Betty Peebles or Denise Killen (identified as
Trustee/Secretary) “acting alone (a) to establish
accounts” as well as to “operate and close such
accounts” and to “designate persons to operate
each such account.” ECF No. 188-10. The Certificate
plainly states that it “will apply to all accounts you
maintain with us.” Id. The second was an
updated signature card that added Killen as a signatory. ECF
No. 188-10 at 2. The signature card granted K illen
“authority to operate an account, ” which
included “authority to sign checks, and other items and
to give us other instructions to withdraw funds; to endorse
and deposit checks and other items payable to or belonging to
you to the account; and to transact other administrative
business related to the account, including closing the
account.” Id. Betty Peebles also authorized
Killen to be the “designated account signer” on
all BO A accounts associated with the Church. ECF No. 188-20.
These documents, in conjunction with the Deposit Agreement,
formed the contract between BOA and Jericho DC. ECF No.
to the execution of these documents, however, Joel Peebles
was granted similar signatory authority on the Church
operating account ending in #8458. ECF No.
188-18. The parties vigorously disagree as to
whether the documents executed in 2009 removed Joel Peebles
as an authorized signatory for this account or simply added
Denise K illen as an authorized signatory. Further, the
testimony in this respect is less than clear. BOA Regional
Executive, Patricia Brooks-Nobles, who was personally
involved in the Jericho dispute, testified that she
“did not see anything” in the BOA account
documents “that deleted Joel Peebles as an authorized
signatory for the Church operating account”; however,
she also testified that the corporate resolution documents
executed in 2009 “supersede” the prior
signature card, and so it was “unnecessary” for
the bank to do anything more to effectuate Joel Peebles'
removal as a signatory. ECF No. 189-29 at 18, 39. Further,
the 2009 signature card for the operating account, on its
face, notes that Killen was added to the account, but nowhere
does the card indicate Joel Peebles was “deleted,
” even though the form of the signature card provides
for such notation. ECF No. 188-19 (Deposit Account
Documentation Signature Card noting an “update”
and “adding” Denise Killen as signatory).
after the documents were executed, Betty Peebles died. On
November 5, 2010, Joel Peebles wrote BOA expressing thanks
for BOA's condolences for his mother's passing and
discussing the Church's relationship with BOA. ECF No.
188-24. He further instructed BOA that “as the
authorized representative of the governing body of the
Jericho Baptist Church Ministries, Inc. I am the only person
authorized to make financial transactions with your bank;
that includes drafting checks, money transfers, etc.”
Id. On November 9, 2010, Brooks-Nobles of BOA
responded to Joel Peebles in writing, stating that because
his assertions contradicted the operative account documents
executed on October 9, 2009, the Bank required further
documentation to confirm the switch of authority. ECF No.
March 4, 2011, Joel Peebles responded to Brooks Nobles, first
alerting her that he had just received her correspondence two
days prior because “sadly your communication was
intercepted.” ECF No. 188-26. Peebles also included for
BOA's records “Resolution from the board of
directors/trustees which names Joel Peebles as . . . the sole
authorized signer for the Jericho Baptist Church Ministries,
Inc.” and “the only person authorized to make
financial transactions with the Bank, ” as well as
Board meeting minutes and organizational documents confirming
the same. Id. Curiously, this Board resolution was
signed by the same individuals who signed Resolution I-09.
Compare id., with ECF No. 189-8.
concedes that at this time she clearly recognized “that
there was a conflict” regarding Church control. ECF No.
189-29 at 23 (acknowledging a draft email which documents a
“sincere hope that the church will come to a resolution
in the near future. It is not the desire of the bank to be
placed in the middle of this division.”)
(emphasis added). BOA had also received a flurry of
corroborative correspondence that the two Church factions
were embroiled in a series of legal disputes over Church
control. BOA had received a subpoena for bank records (ECF
No. 188-27); had been warned by attorneys for both the Board
of Jericho D.C. and of Jericho M.D. that each regarded its
own Board as in control of the funds held with BOA (ECF Nos.
189-12, -23); and BOA had begun internal discussions as to
the status of pending litigation that BOA expected would only
“get messier before it gets better.” ECF Nos.
189-17, 189-18. Joel Peebles also carefully laid out the
status of such litigation by separate correspondence. ECF No.
189-22; see also ECF No. 189-23 (letter from Jericho
D.C. attorney Timothy Maloney identifying two separate
pending court cases concerning Church control and warning
that BOA's continued disbursements to “Dorothy
Williams, Denise Killen or anyone working on their
behalf” may result in litigation against the Bank).
September 4, 2011, Jericho D.C. filed suit against BOA on
almost identical grounds as those asserted in the current
counterclaims pending before this Court. See Jericho
Baptist Church Ministries, Inc. v. Bank of America,
N.A., 8:11-cv-2618-AW (D. Md. 2011) (“2011
suit”). While the 2011 suit was pending, however, the
Circuit Court for Prince George's County, Maryland
declared Denise Killen and the other Jericho M.D. Board
members to be the lawful Board governing the Church. ECF No.
188-28. Jericho D.C., as a result, voluntarily
dismissed the federal suit without prejudice to refile. Then,
on September 19, 2012, the Court of Special Appeals of
Maryland reversed the Prince George's County Circuit
Court's grant of summary judgment and remanded for
further proceedings, finding that ...