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G&D Furniture Holdings, Inc. v. Suntrust Bank

United States District Court, D. Maryland

March 28, 2019



          Theodore D. Chuang United States District Judge.

         Plaintiff 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civil action against Defendant SunTrust Bank ("SunTrust"), seeking the return of funds that G&D alleges were wrongfully withdrawn from its account to satisfy a writ of garnishment to a third party.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.


         The 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.

         In 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.

         The 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 the accounts.

         When 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.

         Then, 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.


         In its 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.

         I. Legal Standard

         Under 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. at 248-49.

         "When 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. 1997)).

         II. ...

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