Mahabare v. SunTrust Bank
| Decision Date | 30 November 2021 |
| Docket Number | Civil Action No. 20-cv-02849-LKG |
| Citation | 573 F.Supp.3d 1006 |
| Parties | Monika MAHABARE, Plaintiff, v. SUNTRUST BANK, et al., Defendants. |
| Court | U.S. District Court — District of Maryland |
Matthew Carl Nelson, William W. Carrier, III, Cori Schreider, Tydings and Rosenberg LLP, Baltimore, MD, for Plaintiff.
Mary Catherine Zinsner, Troutman Pepper Hamilton Sanders LLP, Washington, DC, for Defendants.
Plaintiff, Monika Mahabare, brings this civil action against defendants SunTrust Bank ("SunTrust"), Truist Bank ("Truist")1 and Bank of America ("Bank of America"), alleging conversion, improper payment, breach of contract and negligence claims pursuant to the Maryland Commercial Code ("Maryland UCC") and common law. See generally Am. Compl., ECF No. 20. Defendants have moved to dismiss Count I (conversion), Count III (breach of contract), Count IV (negligence) and Count V (negligence) of the amended complaint, pursuant to Fed. R. Civ. P. 12(b)(6). Def. Mot., ECF No. 25; see also Def. Mem., ECF No. 25-1. No hearing is necessary to resolve the motion. L.R. 105.6 (D. Md. 2021). For the reasons that follow, the Court GRANTS-IN-PART and DENIES-IN-PART defendants’ partial motion to dismiss.
In this action, plaintiff, Monika Mahabare, alleges that the defendants improperly paid and/or accepted a cashier's check intended to pay off her mortgage after the cashier's check was stolen, in violation of the Maryland UCC and common law. See generally Am. Compl. As relief, plaintiff seeks to recover monetary damages and costs from the defendants. Id. at 7-10.
As background, plaintiff is a Maryland resident and the borrower under a mortgage loan serviced by Cenlar Central Loan Administration & Reporting ("Cenlar"). Id. at ¶¶ 2, 10. Defendants SunTrust, Truist and Bank of America are banks with principal places of business in North Carolina. Id. at ¶¶ 3-5.
Plaintiff alleges that on August 23, 2018, she purchased two cashier's checks, totaling $164,000, to satisfy the remaining balance on her Cenlar mortgage loan. Id. at ¶ 12. Plaintiff purchased one of the cashier's checks in the amount of $140,000 from Bank of America, and this check was made payable to "CENLAR ACC# 0057503252" (the "Bank of America Cashier's Check"). Id. at ¶ 13.
On August 25, 2018, plaintiff placed an envelope containing the Bank of America Cashier's Check and a Cenlar payment coupon into a United States Postal Service ("USPS") mailbox.2 Id. at ¶ 14. Plaintiff alleges that, sometime thereafter, two unidentified individuals broke into the USPS mailbox and stole the envelope containing the Bank of America Cashier's Check. Id. at ¶ 15.
These individuals subsequently opened a bank account at SunTrust under the name "Cenlar Construction, LLC" and they deposited the Bank of America Cashier's Check into that account. Id. at ¶ 16. Thereafter, Bank of America honored the Bank of America Cashier's Check and SunTrust credited the "Cenlar Construction LLC" account with these proceeds. Id. at ¶ 18.
Plaintiff commenced this action on October 1, 2020. Compl., ECF No. 1. On June 2, 2021, plaintiff filed an amended complaint. Am. Compl.
On June 30, 2021, defendants filed a partial motion to dismiss the amended complaint, and a memorandum in support thereof. Def. Mot; Def. Mem. On July 13, 2021, plaintiff filed a response in opposition to defendants’ motion. Pl. Resp., ECF No. 26. On July 27, 2021, defendants filed a reply in support of their motion. Def. Reply, ECF No. 27.
Defendants’ partial motion to dismiss the amended complaint having been fully briefed, the Court resolves the pending motion.
To survive a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), a complaint must allege enough facts to state a plausible claim for relief. Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) ). A claim is plausible when "the plaintiff pleads factual content that allows the [C]ourt to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly , 550 U.S. at 556, 127 S.Ct. 1955 ). When evaluating the sufficiency of a plaintiff's claims under Fed. R. Civ. P. 12(b)(6), the Court accepts the factual allegations in the complaint as true and construes them in the light most favorable to the plaintiff. Nemet Chevrolet, Ltd. v. Consumeraffairs.com, Inc. , 591 F.3d 250, 253 (4th Cir. 2009) ; Lambeth v. Bd. of Comm'rs of Davidson Cty. , 407 F.3d 266, 268 (4th Cir. 2005) (citations omitted). But, the complaint must contain more than "legal conclusions, elements of a cause of action, and bare assertions devoid of further factual enhancement ...." Nemet Chevrolet , 591 F.3d at 255. And so, the Court should grant a motion to dismiss for failure to state a claim if "it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." GE Inv. Private Placement Partners II, L.P. v. Parker, 247 F.3d 543, 548 (4th Cir. 2001) (quoting H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 249-50, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989) ).
Defendants have moved to dismiss Counts I, III, IV and V of the amended complaint, pursuant to Fed. R. Civ. P. 12(b)(6). Def. Mot.; Def. Mem. Specifically, defendants argue that the Court should dismiss plaintiff's conversion claim in Count I, because plaintiff does not have standing to pursue this claim under Section 3-420(a) of the Maryland UCC. See Def. Mem. at 5-6; see also Def. Reply at 2-4. Defendants also argue that the Court must dismiss plaintiff's common law negligence and breach of contract claims in Counts III, IV and V, because these claims have been displaced by the provisions of the Maryland UCC. See Def. Mem. at 7-11; see also Def. Reply at 4-8. And so, defendants request that the Court dismiss Counts I, III, IV and V of the amended complaint. Def. Mem. at 11.
Plaintiff counters in her response in opposition to defendants’ motion that she may pursue her conversion claim against Truist, because she is the remitter of the Bank of America Cashier's Check. See Pl. Resp. at 4-7. In addition, plaintiff argues that she has asserted plausible common law claims for negligence and breach of contract against defendants and that the Maryland UCC does not displace these claims. Id. at 7-11. And so, she requests that the Court deny defendants’ motion. Id. at 11.
For the reasons that follow, plaintiff has standing to bring her conversion claim against Truist. Plaintiff may not, however, pursue her common law negligence and breach of contract claims against the defendants, because these claims have been displaced by the Maryland UCC. And so, the Court GRANTS-IN-PART and DENIES-IN-PART defendants’ partial motion to dismiss and DISMISSES Counts III, IV and V of the amended complaint.
As an initial matter, the Court is satisfied that plaintiff has standing to bring a conversion claim against defendant Truist. It is undisputed that the Bank of America check upon which plaintiff bases her conversion claim is a cashier's check that plaintiff purchased from Bank of America in August 2018, and that Cenlar is the payee for that check. See Def. Mot. at 2; Pl. Resp. at 3 (). The Maryland UCC defines a "remitter" of an instrument as "a person who purchases an instrument from its issuer if the instrument is payable to an identified person other than the purchaser." Md. Code Ann., Com. Law § 3-103(11). In this case, it is undisputed that plaintiff purchased the Bank of America Cashier's Check from the issuer of that check, Bank of America, and that the Bank of America Check is made payable to someone other than plaintiff—namely, Cenlar. Def. Mot. at 2; Pl. Resp. at 2. Given this, plaintiff is the remitter of the Bank of America Cashier's Check, rather than the issuer of the Bank of America Cashier's Check as defendants argue in their partial motion to dismiss. Md. Code Ann., Com. Law § 2-103(11) ; Def. Mot. at 4.
Plaintiff may bring a conversion claim against defendant Truist as the remitter of the Bank of America Cashier's Check. As defendants correctly observe, Section 3-420(a) of the Maryland UCC provides, in pertinent part, that "[a]n action for conversion of an instrument may not be brought by ... the issuer or acceptor of the instrument or ... a payee or indorsee who did not receive delivery of the instrument ...." Md. Code Ann., Com. Law § 3-420(a) (emphasis added). And so, Section 3-420(a) prohibits a conversion claim brought by the issuer of a check. Id.
This provision does not, however, prohibit a remitter from pursuing a conversion claim. In fact, the Official Comments to the Maryland UCC are instructive in understanding why a remitter may pursue a conversion claim regarding a cashier's check that he or she purchased under certain circumstances. In this regard, Comment Two to Section 3-201 explains that the remitter of a cashier's check "is the owner of the check until ownership is transferred to [the payee] by delivery." Md. Code Ann., Com. Law § 3-201 cmt. 2. Comment One to Section 3-420 further clarifies that the "payee receives delivery when the check comes into the payee's possession, as for example when it is put into the payee's mailbox." Md. Code Ann., Com. Law § 3-420 cmt. 1. And so, these comments make clear that the remitter of a cashier's check retains an ownership interest in the check until the check is delivered to the payee, thereby permitting a claim of conversion related to that check when the check has not been delivered the payee.
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