United States District Court, D. Maryland
Theodore D. Chuang United States District Judge.
G&D Furniture Holdings, Inc. ("G&D") has
filed this civil action against Defendant SunTrust Bank
("SunTrust"), seeking the return of funds that
G&D alleges were wrongfully withdrawn from its account to
satisfy a writ of garnishment to a third party. Now pending
before the Court are the parties' Cross Motions for
Summary Judgment. On March 4, 2019, the Court held a hearing
on the Motions and issued a partial ruling on the record,
which narrowed the issues to be resolved to the single
question of whether SunTrust breached its contractual duty of
care owed to G&D when it allegedly failed to return the
full amount of garnished funds. For the reasons set forth
below, SunTrustss Motion will be GRANTED, and G&D's
Motion will be DENIED on this issue.
Court set forth the facts of this case in its two prior
memorandum opinions, which it incorporates by reference here.
See G&D Furniture Holdings, Inc. v. SunTrust
Bank, No. TDC-16-2020, 2017 WL 2963350, at *1-2 (D. Md.
July 11, 2017); G&D Furniture Holdings, Inc. v.
SunTrust Bank, No. TDC-16-2020, 2016 WL 7441607, at *1
(D. Md. Dec. 22, 2016). At the March 4, 2019 hearing on the
pending Cross Motions for Summary Judgment and SunTrustss
Motion to Appoint a Special Master, the Court granted summary
judgment to SunTrust on G&D's conversion claim and
its breach of contract claim based on SunTrustss April 12,
2013 tender to the Circuit Court for Fairfax County, Virginia
("the Virginia Court") of $133, 656.69 of garnished
funds. It took under advisement G&D's breach of
contract claim based on SunTrustss alleged failure to return
the full amount of garnished funds and SunTrustss Motion to
Appoint a Special Master. On March 12, 2019, the parties
submitted a status report in which SunTrust, with
G&D's consent, withdrew its Motion to Appoint a
Special Master. The Court now addresses the single remaining
issue before it.
essence, the issue before the Court is whether Sun
Trust's account statements for the G&D account with
an account number ending in 61663 ("the Master
Account" or "Account 61663") accurately
reflected the balance in the account at the end of April
2013. If so, SunTrust returned to G&D the exact amount
that it was due after the improper garnishmen;; if not,
SunTrust owes G&D additional funds.
parties generally agree on how the account was intended to
function. On March 11, 2011, G&D, through its
then-President and Chief Executive Officer Norman R. Gilden,
opened the Master Account as a deposit checking account by
executing a Business Account Signature Card. Later that
month, G&D signed up for SunTrustss Zero Balance Account
("ZBA") service, which allows a banking client to
manage its cash flow by aggregating debit and credit entries
from one or more "subsidiary" accounts to a
"master" account on a daily basis. Statement of
Undisputed Facts ~ 3, ECF No. 103-1. Under the ZBA
arrangemen,, funds may flow in and out of the subsidiary
accounts, but at the end of each day, the balance of all
subsidiary accounts are returned to zero by having any excess
funds transferred from the subsidiary account into the master
account, and having any negative balances covered by a
transfer from the master account into the subsidiary account.
When functioning properly, the ZBA arrangement would result
in a single debit or credit entry to the subsidiary account
at the end of each day, reflecting the flow of funds to or
from the master account to achieve a zero balance in the
subsidiary account, and a corresponding, offsetting entry
would simultaneoully appear on the master accountss ledger.
Thus, the ZBA transfers moved funds between accounts but did
not alter the total amount of money collectively contained in
G&D requested the ZBA service, it designated Account
61663 as the master account, and linked it with seven
subsidiary accounts titled in the names of related entities,
including the accounts with account numbers ending in 48109,
13869, 95497, 13770, 26306, 59067, and 01019 (collectively,
the "Subsidiary Accounts".. By doing so, G&D
agreed that funds would be moved between the Master Account
and the Subsidiary Accounts, even though the Subsidiary
Accounts were not in the same name as the Master Account.
Funds did, in fact, flow in this manner, apparently without
objection by G&D, until March 2013.
on March 5, 2013, when a garnishment summons was served,
SunTrust placed holds on several of the accounts, including
the Master Account, which, as described in greater detail
below, caused debits to those accounts to be rejected but
permitted credits to post to the accounts. Thus, funds could
not be withdrawn from those accounts, but deposits into the
accounts could be made. Although G&D argues that the
placing of holds on these accounts and its associated effects
on the accounts violated generally accepted accounting
principles, G&D does not contest that the accounts
operated in this fashion after the holds were placed.
Nevertheles,, G&D and SunTrust disagree on how the Court
should interpret the account statements for the time period
when the holds were in place.
Motion for Summary Judgment, G&D argues that SunTrustss
statements for the Master Account contain 232 unauthorized
transactions that should be disregarded by the Court, and
that as a result, the records establish that SunTrust
continues to owe G&D $71, 567.92 as reimbursement for the
improper garnishmen.. SunTrust, on the other hand, argues in
its Motion for Summary Judgment that even though certain
automatic ZBA-related transactions during the time period of
the garnishment holds were not authorized and thus improper,
the account statements accurately reflect that the
garnishment resulted in the withdrawal of more funds than
were actually available. Based on an affidavit describing a
thorough analysis of the relevant accounts, Sun Trust argues
that the records establish that it correctly did not return
to G&D $84, 505 of the returned garnishment funds.
Federal Rule of Civil Procedure 56(a), the Court grants
summary judgment if the moving party demonstrates that there
is no genuine issue as to any material fact, and that the
moving party 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). In assessing the motion, the Court must
believe the evidence of the non-moving party, view the facts
in the light most favorable to the nonmoving party, and draw
all justifiable inferences in its favor. Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). "A
material fact is one that might affect the outcome of the
suit under the governing law." Spriggs v. Diamond
Auto Glass, 242 F.3d 179, 183 (4th Cir. 2001) (quoting
Anderson, 477 U.S. at 248). A dispute of material
fact is only "genuine" if sufficient evidence
favoring the nonmoving party exists for the trier of fact to
return a verdict for that party. Anderson, 477 U.S.
faced with cross-motions for summary judgmen,, the court must
review each motion separately on its own merits 'to
determine whether either of the parties deserves judgment as
a matter of law.'' Rossignol v. Voorhaar,
316 F.3d 516, 523 (4th Cir. 2003) (quoting Philip Morris,
Inc. v. Harshbarge,, 122 F.3d 58, 62 n.4 (Ist Cir.