G&D Furniture Holdings, Inc. v. Suntrust Bank, Civil Action No. TDC-16-2020
| Decision Date | 22 December 2016 |
| Docket Number | Civil Action No. TDC-16-2020 |
| Parties | G&D FURNITURE HOLDINGS, INC., Plaintiff, v. SUNTRUST BANK, Defendant. |
| Court | U.S. District Court — District of Maryland |
Plaintiff G&D Furniture Holdings, Inc. ("G&D") has filed this civil action against Defendant SunTrust Bank ("SunTrust"), alleging that SunTrust improperly removed funds from its bank account and never returned the full amount taken. Pending before the Court is Defendant SunTrust Bank's ("SunTrust") Motion to Dismiss the First Amended Complaint. The Motion is fully briefed and ripe for disposition, and no hearing is necessary to resolve the issues. See D. Md. Local R. 105.6. For the reasons that follow, the Motion is GRANTED IN PART and DENIED IN PART.
G&D, a Maryland corporation, entered into a commercial banking relationship with SunTrust, a Georgia-based bank doing business in Virginia. At some point in April 2013, SunTrust withdrew $133,656.69 from G&D's account. Later, SunTrust returned $49,151.54 to the account, but failed to return the remaining amount. G&D claims that it is owed $84,505.00 as a result of SunTrust's improper withdrawal of funds from its account.
G&D filed this lawsuit on April 26, 2016, in the Circuit Court for Prince George's County, Maryland. SunTrust removed the action to this Court on June 10, 2016. G&D filed an Amended Complaint on July 12, 2016. The Amended Complaint alleges that SunTrust is liable for breach of the Rules and Regulations governing SunTrust deposit accounts (Count I), breach of the debtor-creditor relationship formed when G&D opened its SunTrust account (Count II), a violation of public banking laws and regulations (Count III), breach of a bailment relationship (Count IV), breach of fiduciary duty (Count V), and conversion (Count VI). G&D seeks judgment in the amount of $85,000 in compensatory damages, $500,000 in punitive damages, interest, and costs.
SunTrust filed its Motion to Dismiss on August 26, 2016, seeking the dismissal of all claims against it. On September 12, 2016, G&D filed an Opposition to the Motion in which it agreed voluntarily to dismiss the claim that SunTrust had violated public banking laws and regulations (Count III) and the claim for breach of fiduciary duty (Count V). SunTrust filed a Reply Memorandum on September 27, 2016. On October 10, 2016, G&D filed a Response to SunTrust's Reply Memorandum. On October 25, 2016, G&D filed a Supplemental Response to SunTrust's Reply Memorandum. The Court construes both the Response to the Reply and the Supplemental Response to be sur-reply briefs filed without leave of the Court and therefore strikes them on that basis. See D. Md. Local R. 105.2(a).
In its Motion, SunTrust asserts that G&D's claims should be dismissed because they are time-barred. SunTrust further argues that G&D's breach of contract claims in Counts I and II are insufficiently pleaded, the common law bailment claim fails because a depository account does not create a bailment, and the conversion claim fails because under Maryland law money cannot be converted. G&D contends that it has adequately pleaded the breach of contract claims and that SunTrust's legal arguments concerning the law of bailment and conversion are incorrect.
To defeat a motion to dismiss under Federal Rule of Civil Procedure 12(b)(6), the complaint must allege enough facts to state a plausible claim for relief. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A claim is plausible when the facts pleaded allow "the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Legal conclusions or conclusory statements do not suffice. Id. The Court must examine the complaint as a whole, consider the factual allegations in the complaint as true, and construe the factual allegations in the light most favorable to the plaintiff. Albright v. Oliver, 510 U.S. 266, 268 (1994); Lambeth v. Bd. of Comm'rs of Davidson Cty., 407 F.3d 266, 268 (4th Cir. 2005).
Under Maryland law, a civil action must be filed within three years from the date it accrues. See Md. Code Ann., Cts. & Jud. Proc. § 5-101 (2011). According to SunTrust, all of G&D's claims are time-barred because they accrued as of April 12, 2013, more than three years before G&D filed its original Complaint on April 26, 2016. In support of this argument, SunTrust asks the Court to take judicial notice of the opinion of the Supreme Court of Virginia in PS Business Parks, L.P. v. Deutsch & Gilden, Inc., 758 S.E.2d 508 (Va. 2014). In that opinion, the court found the following facts relevant to the present case. PS Business Parks obtained a judgment for unpaid rent against a company called Deutsch & Gilden, Inc. ("Deutsch & Gilden"), which maintained an account at SunTrust. Id. at 509-10. The Deutsch & Gilden account was related to G&D's account through a "treasury management service" which drew money each day from the Deutsch & Gilden account into G&D's account and moved funds back from G&D's account into the Deutsch and Gilden account on an as-needed basis for operational expenses. Id. at 510. PS Business Parks filed a garnishment summons, naming SunTrust Bank as garnishee, against "some other debt due or property of the judgment debtor [Deutsch & Gilden], specifically all accounts, including account ending 61663." Id. On April 12, 2013, SunTrust filed with the Circuit Court of Fairfax County, Virginia a check in the amount of $133,656.69 drawn from an account ending in 61663 held by G&D, not Deutsch & Gilden. Id. When G&D filed a motion to quash the garnishment summons, the court granted the motion and ordered SunTrust to return the balance to G&D "as if the garnishment had not been filed." Id. at 511. The Supreme Court of Virginia affirmed that order. See id. at 511-12.
According to SunTrust, PS Business Parks establishes that the funds at issue in the present case were withdrawn from G&D's account on April 12, 2013, because the opinion states that SunTrust's check, drawn from the G&D account in response to the garnishment summons was deposited with the court on that date. G&D argues that SunTrust's analysis impermissibly relies on facts outside the pleadings, and that even if the Court takes the PS Business Parks opinion into account, SunTrust has not correctly identified the date the claim accrued. According to G&D, the cause of action accrued on October 30, 2014, when the Fairfax County Circuit Court ordered SunTrust to return the wrongfully garnished funds to G&D, but SunTrust failed to return $84,505 of the funds. In the alternative, G&D asserts that the cause of action accrued in early May 2013, when G&D received its monthly account statement, dated April 30, 2013, and actually discovered that SunTrust had taken the money.
The Court declines SunTrust's invitation to take judicial notice of the facts set forth in PS Business Parks. Only indisputable facts are susceptible to judicial notice. See Nolte v. Capital One Fin. Corp., 390 F.3d 311, 317 n.* (4th Cir. 2004). "Indisputable facts" are those that are "generally known within the trial court's territorial jurisdiction" or "can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned." Fed. R. Evid. 201(b). Facts adjudicated in an earlier case, however, "do not meet either test of indisputability contained in Rule 201(b)." United States v. Zayyad, 741 F.3d 452, 464 (4th Cir. 2014). Consequently, the Court will not, at the motion to dismiss stage, rely on the facts set forth in PS Business Parks or G&D's Opposition to the Motion. See Sec'y of State for Defence v. Trimble Nav. Ltd., 484 F.3d 700, 705 (4th Cir. 2007) (). The parties must establish the circumstances of the withdrawal and the date on which it occurred through evidence presented at a later stage of the proceeding.
Even if the Amended Complaint had alleged that the funds were withdrawn on April 12, 2013, or on a date preceding April 26, 2013, that fact would not necessarily warrant dismissal on statute of limitations grounds. Under Maryland's "discovery rule," a claim in a civil action does not accrue until the plaintiff "in fact knew or reasonably should have known of the wrong." Poffenberger v. Risser, 431 A.2d 677, 680 (Md. 1981). The discovery rule is "a recognition that the Legislature, in employing the word 'accrues' in § 5-101 never intended to close our courts to plaintiffs inculpably unaware of their injuries." Murphy v. Merzbacher, 697 A.2d 861, 865 (Md. 1997). The Maryland Court of Appeals has held that the discovery rule applies to contractual disputes. See Bragunier Masonry Contractors, Inc. v. Catholic Univ. of Am., 796 A.2d 744, 758 (Md. 2002). Thus, whether a statute of limitations defense would succeed would depend on the resolution of the factual question of when G&D discovered, or should have discovered, the unauthorized withdrawal. Here, the Amended Complaint does not answer that question, and G&D, in noting that it did not receive the account statement memorializing that transaction until May 2013, denies that it knew or should have known of the improper withdrawal before April 26, 2013. Thus, even if the Court were to accept the proffered facts, SunTrust's argument for dismissal on statute of limitations grounds would fail.
In Count II, which alleges a "Breach of the Debtor-Creditor Relationship," G&D alleges that when it entered into a commercial banking deposit relationship with SunTrust, SunTrust agreed explicitly and implicitly to "handle the bank account of G&D as a debtor-creditor relationship." Am. Compl. ¶ 10. According to G&D, SunTrust violated that agreement when it improperly withdrew funds from SunTrust's account and refused to return them. SunTrust contends that...
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