United States District Court, D. Maryland, Southern Division
MAR-CHEK, INC. et al., Plaintiffs,
MANUFACTURERS AND TRADERS TRUST COMPANY et al., Defendants.
J. HAZEL, UNITED STATES DISTRICT JUDGE
Mar-Chek, Inc. and Mar-Chek II, Inc. (collectively,
“Mar-Chek” or “Plaintiffs”) initiated
this case in the Circuit Court for Anne Arundel County
asserting a number of state law claims. ECF No. 1. After
Plaintiffs stipulated to the dismissal of a non-diverse
party, the remaining Defendants Manufacturers and Traders
Trust Company and M&T Bank Corporation (collectively,
“M&T”) and Branch Banking and Trust Company
(“BB&T”) filed a Notice of Removal.
Id. Pending before the Court is Plaintiffs'
Motion to Remand or for Leave to Amend Complaint, ECF No. 30,
and Defendants' Motions to Dismiss, ECF Nos. 45 & 49.
No. hearing is necessary. See Loc. R. 105.6 (D. Md.
2016). For the following reasons, Plaintiffs' Motion to
Remand or for Leave to Amend will be denied, and
Defendants' Motions to Dismiss will be granted.
operate multiple “Checkers” fast food restaurants
throughout Maryland. ECF No. 1-2 ¶ 16. Prior to 2007,
Mar-Chek hired Mitul B. Shah to perform bookkeeping services.
Id. ¶ 17. Shah was eventually promoted to be
Mar-Chek's Chief Financial Officer. Id. However,
Shah was not authorized to sign checks. Id. Rather,
Keith A. Martin, Mar-Chek's owner and President, was the
only person authorized to sign checks or transfer Mar-Chek
funds. Id. ¶¶ 16- 17.
February 2007, Shah opened bank accounts in the name of
Mar-Chek, Inc., at Provident Bank (“Provident”).
Id. ¶ 18. Provident employed Christina Stroud,
later Christina Cooper (“Stroud”), as a bank
teller and teller manager. Id. Stroud was involved
in a romantic relationship with Shah, and she processed the
opening of the Mar-Chek account for Provident. Id.
To open the account, Shah completed and executed paperwork
that falsely represented that he was authorized to open the
account and take actions on behalf of Mar-Chek with regard to
the account. Id. ¶¶ 19-24.
completed and executed a form provided by Provident that was
entitled “Resolution for Corporate Deposit
Account.” Id. ¶ 19. The Resolution
falsely stated that Mar-Chek authorized Shah to act on behalf
of Mar-Chek in all respects concerning the account.
Id. ¶ 20. The Resolution listed Martin, who was
identified under the title “President, ” and
Shah, who was identified under the title “Authorized
Signer, ” as the only individuals who were purportedly
authorized to sign checks on behalf of Mar-Chek. Id.
¶ 21. The Resolution represented that the person signing
it was the Secretary of Mar-Chek, but only Shah signed the
document, under a line marked as “Other Officer.”
Id. ¶¶ 19, 21. Shah's title was not
listed, although the form required that it be listed.
Id. ¶ 21.
never authorized Shah to be an authorized signatory or act on
behalf of Mar-Chek concerning any bank account. Id.
¶ 22. Shah also was never the Secretary or other officer
of Mar-Chek, and Provident knew that, because it had
Mar-Chek's Articles of Incorporation, which did not
identify Shah as the Secretary or other officer of Mar-Chek.
Id. ¶ 19.
also opened a Commercial Signature Card. Martin did not sign
the card, was not present at Provident while the account
paperwork was processed, and did not authorize Shah to sign
on his behalf. Id. ¶¶ 23, 25. However,
Shah signed Martin's name to obtain the card and claimed
that he was an authorized signatory for the account.
Id. The Signature Card listed “Christina
Stroud” as the “Branch Representative” who
processed the Signature Card. Id. Stroud and
Provident had the Articles of Incorporation in their
possession but made no attempt to verify the signatures on
the account opening paperwork or to contact Martin or anyone
at Mar-Chek (other than Shah) regarding the account opening
paperwork. Id. at ¶ 24. A cursory comparison of
Martin's signature on the Articles of Incorporation with
his purported signature (actually forged by Shah) on the
Signature Card would have revealed that the signature on the
Signature Card was not Martin's. Id.
the account, Stroud was required to obtain supporting
documentation and verify that she completed a Commercial
Account Opening Checklist. Id. at ¶ 26. The
Checklist required employees to secure approvals for all
authorized signers, verify the identification of all account
holders, and obtain an authorized signer verification form.
Id. Stroud falsely represented on the Checklist that
she performed these tasks, even though she did not.
Id. The “Operations” department was
required to verify the documentation, and the Checklist
includes another set of initials for the Operations employee
who purportedly performed this verification, but no such
verification was performed. Id. at ¶ 28.
Additionally, the branch manager was required to approve the
account paperwork, but the space where the branch manager is
required to be identified is blank, indicating that the
branch manager never approved the paperwork. Id.
Shah opened the account and added himself as a signatory who
could act on the account's behalf, he wrote and
personally endorsed checks from the Mar-Chek accounts to
himself and others and sent electronic/wire transfers for his
personal benefit without Mar-Chek's authorization.
Id. ¶ 30. Shah concealed the payments in
Mar-Chek's accounting software by posting them as a
reduction to accounts payable to appear as if vendor invoices
were being paid and also as a reduction to a fictitious
payroll account. Id. at ¶ 35. In addition, Shah
and his father began making loans to Mar-Chek, which Shah
recorded on the Mar-Chek accounts as a liability, but did not
record repayments as a reduction of the loan/liability.
2009, the Provident/M&T accounts were closed, and Shah
opened four bank accounts on behalf of Mar-Chek at BB&T
and then added himself as a signatory on the accounts.
Id. at ¶ 32. Martin did not execute any account
initiation or modification paperwork with BB&T to include
Shah as a signatory on the account. Id. ¶ 34.
Shah wrote and personally endorsed checks from the accounts
to himself and others and sent electronic/wire transfers for
his personal benefit, without the authorization of Mar-Chek.
Id. BB&T failed to follow its operating
procedures and/or prevailing banking standards in permitting
Shah to add himself to the accounts as a signatory with the
authority to transmit funds through electronic/wire
transfers, despite the fact that he was not an officer of the
corporation. Id. ¶ 32.
2013, Shah moved three operating and payroll accounts of
Mar-Chek from BB&T back to M&T. Id. at
¶ 40. Stroud remained employed by M&T as a Teller
Manager and remained personally involved with the Mar-Chek
accounts. Id. In the process of re-opening accounts
with M&T, Shah completed and executed forms provided by
M&T entitled “Certified Banking Resolutions of
Corporation.” Id. at ¶ 41. The
Resolutions stated, among other things, that Mar-Chek duly
approved resolutions to open the accounts at M&T and that
Shah was authorized to open the accounts and act on
Mar-Chek's behalf. Id. The Resolutions contained
Martin's purported signatures, but the signatures were
not originals; instead they were stamped replicas.
never authorized Shah to add himself as a signatory on the
Mar-Chek accounts, and he never signed the Resolutions or
authorized anyone to execute the Resolutions on his behalf or
stamp his signature on the Resolutions. Id. Martin
was never present at M&T, and no one at M&T made any
attempt to contact Martin or verify his signature or that he
authorized the Resolutions. Id. Moreover, M&T
knew that Shah was not authorized to open the accounts or
submit the Resolutions, because it had the ...