Bank of Am., N.A. v. Jericho Baptist Church Ministries, Inc.
| Decision Date | 09 September 2016 |
| Docket Number | Case No. PX 15-02953 |
| Parties | BANK OF AMERICA, N.A., Plaintiff, v. JERICHO BAPTIST CHURCH MINISTRIES, INC. et al., Defendants. |
| Court | U.S. District Court — District of Maryland |
Pending in this interpleader action is a motion for summary judgment filed by Defendant Jericho DC against Defendant Jericho MD. ECF No. 68. The issues have been fully briefed and a hearing was held on Wednesday, August 3, 2016, with supplemental briefing to follow. See ECF No. 83 & 84. For the following reasons, Jericho DC's motion for summary judgment is granted.
Underlying this action is a longstanding dispute over the control and governance of Jericho Baptist Church Ministries, Inc. ("the Church"), located in Landover, Prince George's County, Maryland. The Church was incorporated in the District of Columbia in 1962 by Reverend James R. Peebles, Sr.; his wife, Betty Peebles; and Alice Harvey. ECF No. 68-1 at 6, 61. The dispute spawned much litigation, during which the parties and the courts refer to the surviving members of the original board as "Jericho DC" to distinguish it from a later-formed Board that incorporated in Maryland, also under the name "Jericho Baptist Church Ministries, Inc." ("Jericho MD").1
From the Church's inception, the Church has been governed by a Board of Trustees. As of March 2009, the Board members were Betty Peebles, William Meadows, Anne Wesley, and Dorothy Williams. ECF No. 68-1 at 7. Additionally, although Jericho DC has steadfastly maintained that Joel Peebles was and is a member of the Board, Jericho MD has vigorously disagreed.
On March 15, 2009, the Jericho DC Board members were summoned to Betty Peebles' office to sign "Resolution 1-09 of Board of Trustees" ("Resolution 1-09"). Resolution 1-09 established the new slate of Jericho MD Board members. At least some of the Jericho DC Board members signed Resolution 1-09, assuming it was routine paperwork and unaware that the purpose of 1-09 was to oust the Jericho DC Board. ECF No. 68-1 at 14-15. The new Board consisted of former trustees Betty Peebles and Dorothy Williams, as well as new trustees Gloria McClam-Magruder, Denise Killen, Clarence Jackson, Jennie Jackson, Bruce Landsdowne, Norma Lewis, and Lashonda Terrell. ECF No. 68-1 at 24-25. Joel Peebles received no notice of Resolution 1-09 prior to its passage, and did not know of its existence until September 2010. ECF No. 68-1 at 7. By implication, Resolution 1-09 removed William Meadows, Anne Wesley, and Joel Peebles from the Board of Trustees. ECF No. 68-1 at 7.
On October 12, 2010, Betty Peebles, the Church's leader, passed away. On November 1, 2010, six individuals, including four of the new purported Board members identified in Resolution 1-09 (Gloria McClam-Magruder, Denise Killen, Clarence Jackson, and Dorothy Williams) incorporated in Maryland as "Jericho Baptist Church Ministries, Inc." The articles of incorporation identified the Jericho MD Board as operators of the Church. ECF No. 68-1 at 40-44. That same day, Jericho MD filed Articles of Merger with the D.C. Department of Consumer and Regulatory Affairs indicating that, pursuant to a vote by the Board of Trustees of JerichoDC, Jericho DC was merged into Jericho MD. ECF No. 68-1 at 30-31. Jericho MD Board members Gloria McClam-Magruder, Denise Killen, Clarence Jackson, Clifford Boswell, Dorothy Williams, and Lynda Pyles signed on the corporation's behalf. Id.2 Denise Killen and Gloria McClam-Magruder executed the merger on Jericho DC's behalf. See ECF No 68-1 at 31, 34. The merger effectively eliminated Jericho DC and made Jericho MD the new governing body of the Church.
Betty Peebles' passing and Jericho MD's takeover generated a vigorous legal feud over control of the Church. Since 2010, the parties in this action, along with several individual Church members, have participated in no fewer than six separate lawsuits in federal and state court attempting to determine fully and finally which entity rightfully governs the Church. See Jericho Baptist Church Ministries, Inc. v. Peebles, No. CAL10-33647 (P.G. Cnty. Cir. Ct. Oct. 25, 2011), rev'd, No. 2023 (Md. Ct. Spec. App. Sept. 19, 2012); Jericho Baptist Church Ministries, Inc. v. Gloria McClam-Magruder, No. CAL11-00873 (P.G. Cnty. Cir. Ct. Oct. 25, 2011), rev'd, No. 1953 (Md. Ct. Spec. App. Sept. 19, 2012); Chavez v. Jericho Baptist Church Ministries, Inc., No. CAL12-13537 (P.G. Cnty. Cir. Ct. Feb. 18, 2014); George v. Jackson, No. 2013 CA 007115 B (Sup. Ct. D.C. July 7, 2015) [hereinafter George v. Jackson]; Franklin v. Jackson, No. DKC 14-0497, 2015 WL 1186599 (D. Md. Mar. 3, 2015); Jericho Baptist Church Ministries, Inc. v. Jericho Baptist Church Ministries, Inc., No. APM 16-647 (D.D.C. filed Apr. 6, 2016); Bank of America, N.A. v. Jericho Baptist Church Ministries, Inc., No. PX 15-02953 (D. Md. filed Sept. 29, 2015); Citibank, N.A. v. Jericho Baptist Church Ministries, Inc., No. PX 15-02953 (D. Md. filed May 27, 2016).
Of the lawsuits mentioned above, George v. Jackson is the only case that has been tried to final verdict in which the Court squarely decided which Board controls the Church. In that case, individual Jericho DC church members, whose membership had been terminated by the new Jericho MD Board, filed suit in the Superior Court for the District of Columbia against Jericho MD and its board members. George v. Jackson at 3, ECF No. 68-1 at 8. The plaintiffs sought a declaration that Jericho MD was not the valid Church Board as well as injunctive relief designed to strip Jericho MD of its power to govern the Church.
After a three-day bench trial, Judge Stuart G. Nash ruled in favor of Jericho DC. Judge Nash pronounced Joel Peebles as a valid member of the Jericho DC Board of Trustees at the time Resolution 1-09 was executed. Consequently the Court found that removal of the Jericho DC Board members was illegal under the District of Columbia Nonprofit Corporation Act ("DCNCA"). ECF No. 68-1 at 12.3 This was because Joel Peebles' inclusion as a Board member meant that Resolution 1-09 was passed without notice to one of the Board members, in violation of the DCNCA. Additionally, because Joel Peebles received no notice of the meeting to vote on Resolution 1-09, all actions taken by the Board at that meeting must be deemed invalid under the DCNCA. In re Se. Neighborhood House, 93 B.R. 303, 305 (Bankr. D.D.C. 1988). Consequently, because Resolution 1-09 was invalid, Jericho MD had no legal authority to act as the governing Board. The Superior Court thus declared that the surviving members of the Jericho DC Board—William Meadows, Dorothy Williams, and Joel Peebles—was and is the valid Board of Trustees, and ordered Jericho MD to cease exercising any ownership or control over any Church corporate assets. ECF No. 68-1 at 18. The case is currently on appeal.
On September 29, 2015, Plaintiff Bank of America, N.A. ("BOA") filed a Complaint for Interpleader against Jericho MD, Jericho DC, and their respective board members. ECF No. 1. The Complaint, brought pursuant to 28 U.S.C. § 1335, seeks an order determining which entity— Jericho DC or Jericho MD—owns and controls the assets held in four BOA corporate deposit accounts that had been established before the execution of Resolution 1-09. The frozen accounts collectively are worth $7,755,199. ECF No. 1 at 2.
On December 10, 2015 Jericho DC filed a counterclaim against Bank of America (ECF No. 19) and on February 19, 2016 it filed an amended counterclaim (ECF No. 48) asserting various causes of action related to Bank of America's handling of the deposit accounts in question, including breach of contract, negligence, and gross negligence. Bank of America moved to dismiss the counterclaims under Rule 12(b)(6) of the Federal Rules of Civil Procedure. ECF No. 56. On May 12, 2016, Jericho DC filed a motion for summary judgment on the question of which Board possesses current control and ownership of the assets in accounts deposited with the Bank of America. ECF No. 68. This Memorandum Opinion and Order addresses solely Jericho DC's motion for summary judgment and for the following reasons, Jericho DC's motion for summary judgment is granted.
A court may enter summary judgment only if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008). However, summary judgment is inappropriate if any material fact at issue "may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242,250 (1986); JKC Holding Co. LLC v. Washington Sports Ventures, Inc., 264 F.3d 459, 465 (4th Cir. 2001).
"A party opposing a properly supported motion for summary judgment 'may not rest upon the mere allegations or denials of [his] pleadings,' but rather must 'set forth specific facts showing that there is a genuine issue for trial.'" Bouchat v. Baltimore Ravens Football Club, Inc., 346 F.3d 514, 522 (4th Cir. 2003) (quoting former Fed. R. Civ. P. 56(e)). "A mere scintilla of proof . . . will not suffice to prevent summary judgment." Peters v. Jenney, 327 F.3d 307, 314 (4th Cir. 2003). "If the evidence is merely colorable, or is not significantly probative, summary judgment may be granted." Liberty Lobby, 477 U.S. at 249-50 (citations omitted). At the same time, the court must construe the facts presented in the light most favorable to the party opposing the motion. See Scott v. Harris, 550 U.S. 372, 378 (2007); Emmett, 532 F.3d at 297.
Interpleader actions involve a two-step process. Rapid Settlements, Ltd. v. U.S. Fid. & Guar. Co., 672 F. Supp. 2d 714, 717 (D. Md. 2009). First, the court decides whether the interpleader plaintiff is entitled to bring the action. CMFG Life Ins. Co. v. Sche...
To continue reading
Request your trial