Bank of America, N.A. v. Jericho Baptist Church Ministries, Inc. et al

Filing 253

MEMORANDUM OPINION. Signed by Judge Paula Xinis on 1/10/2020. (jf3s, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
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BANK OF AMERICA, N.A.,

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Plaintiff,

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v.

Case No. PX 15-02953

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JERICHO BAPTIST CHURCH MINISTRIES,
INC. et al.,
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Defendants.

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MEMORANDUM OPINION

Currently pending and ripe for resolution is Bank of America (“BOA”)’s renewed motion
for summary judgment on all claims asserted by Jericho Baptist Church Ministries, Inc. (“Jericho
D.C.”). ECF No. 244. Also pending is Jericho D.C.’s Motion for Reconsideration. ECF No.
249. For the following reasons, the Court grants BOA’s motion and denies Jericho D.C.’s
motion.
I.

Background
The Court has previously set out the relevant facts, procedural posture, and appropriate

standard of review in its earlier memorandum opinion addressing the propriety of summary
judgment. ECF No. 201. The Court incorporates its previous opinion and will not repeat itself
here. The Court’s initial denal of summary judgment rested on the assumption that Jericho D.C.
could offer at trial a qualified expert in commercial banking procedures to establish the standard
of ordinary care in the banking industry by which the jury could measure BOA’s course of
conduct. ECF Nos. 201, 202. Since that ruling, BOA successfully moved to exclude Jericho

D.C.’s only proffered expert on this topic, Susan Riley. ECF Nos. 243, 251-1 at 98. In light of
the Court having excluded Riley, BOA now renews its summary judgment motion.
Jericho D.C. also moves for the Court to reconsider its ruling as to Riley. Because this
reconsideration motion potentially affects the outcome of BOA’s summary judgment motion, the
Court first addresses the propriety of reconsideration and then turns to the merits of BOA’s
summary judgment motion.
II.

Jericho D.C.’s Motion for Reconsideration
Jericho D.C. urges this Court to either reconsider its ruling or allow an out-of-time

designation of a new expert. ECF No. 249. Both requests are unfounded.
Regarding re-designation of a new expert, Jericho D.C. has established no good cause for
reopening discovery, which closed August 6, 2018. ECF. No 181. During discovery, the Court
had granted multiple extensions of time and had given both parties ample opportunity to prepare
their respective cases. See, e.g., ECF Nos. 148, 167, 181. Jericho D.C. chose to designate Susan
Riley as its sole standard-of-care expert and vigorously persisted in her bona fides. Now that
BOA succeeded in excluding Riley, the Court will not allow Jericho D.C. a “do-over.”
As for urging the Court to reconsider exclusion, Jericho D.C. cites not one scintilla of
procedural law in support of its position. The Court begins with the Federal Rules of Civil
Procedure. Rule 54(b) provides that “any order or other decision, however designated, that
adjudicates fewer than all the claims or the rights and liabilities . . . may be revised at any time
before the entry of a judgment adjudicating all the claims and the parties’ rights and liabilities.”
Fed. R. Civ. P. 54(b). When assessing whether revision is proper, the Court looks to the standard
for reconsideration articulated in Rules 59(e) and 60(b).

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A motion for reconsideration brought under Rule 59(e) need not be granted unless the
Court finds “an intervening change of controlling law, that new evidence has become available,
or that there is a need to correct a clear error or prevent manifest injustice.” Robinson v. Wix
Filtration Corp., LLC, 599 F.3d 403, 411 (4th Cir. 2010). “Rule 59(e) motions may not be used,
however, to raise arguments which could have been raised prior to the issuance of the judgment.
. . .” Pacific Ins. Co. v. American Nat. Fire Ins. Co., 148 F.3d 396, 403 (4th Cir. 1998). “[I]f a
party relies on newly discovered evidence in its Rule 59(e) motion, the party must produce a
legitimate justification for not presenting the evidence during the earlier proceeding. In general,
reconsideration of a judgment after its entry is an extraordinary remedy which should be used
sparingly.” Id. (internal citations and quotation marks omitted).
Rule 60(b) sets forth broader but overlapping bases for reconsideration, none of which
apply here. As with Rule 59(e), “Rule 60(b) does not authorize a motion merely for
reconsideration of a legal issue.” United States v. Williams, 674 F.2d 310, 312 (4th Cir. 1982);
see also Bank v. M/V “Mothership”, No. ELH-18-3378, 2019 WL 2192488, at *4 (D. Md. May
20, 2019) (“Rule 60(b) was not intended as a substitute for a direct appeal from an erroneous
judgment.”) (citation omitted).1
Jericho D.C.’s motion makes no attempt to comply with the rules. Rather, the motion
rests largely, if not exclusively, on the notion that this Court erred in considering “inadmissible
hearsay” related to the circumstances of Riley’s prior employment. ECF No. 249. However, the
Court’s exclusion of Riley did not depend on this challenged evidence. The Court agrees with
BOA that, at best, the documents in question are relevant as to only Riley’s lack of relevant

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BOA points out that this motion must be stricken as untimely. Local Rule 105.10 requires that motions for
reconsideration be filed within 14 days of the entry of any applicable order. Here, Jericho D.C. waited almost three
months to move for reconsideration. Clearly, the motion is untimely and thus can be stricken on this basis alone.

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experience, not the substance of her opinions. To be sure, the Court excluded Riley based on her
lack of qualifications and stands by that decision. But independently, the Court determined that
Riley’s opinions were unreliable and lacking in foundation and methodology. ECF No. 251-1 at
103. (“Next, and in the alternative, even if I were to find that Ms. Riley was sufficiently trained,
educated and experienced, the opinions that she laid out . . . simply are not reliable”). Thus, even
if somehow the Court erred in admitting the challenged documents, the decision to exclude Riley
remains on solid footing. Jericho D.C. has failed to justify that reconsideration is warranted.
The motion is denied.
III.

BOA’s Renewed Motion for Summary Judgment
BOA contends that summary judgment on all claims is warranted because without an

expert to opine on the relevant industry standard of care and BOA’s breach of the same, no
reasonable juror could find in favor of Jericho D.C. The Court agrees.
To prevail on either its implied contractual duty or negligence claims2 at trial, Jericho
D.C. bears the burden of demonstrating that BOA breached its duty of ordinary care owed to
Jericho D.C. by continuing to disburse bank account funds as directed by Jericho M.D. and its
representative Denise Killen. ECF No. 192 at 18; see also Gillen v. Md. Nat’l Bank, 274 Md. 96,
102–03 (1975). The duty of ordinary care in this context means the “reasonable commercial
standards which prevail in the area in which the Bank is located, with respect to banking.”
Schultz v. Bank of Am., N.A., 413 Md. 15, 40 (2010) (citing Md. Code, Com. Law § 3-103(a)(7)).
BOA maintains that Jericho D.C. must submit expert testimony to establish the relevant industry

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As to Jericho D.C.’s negligence claim, the question for the trier of fact is the same as for the implied contractual
duty claim. Schultz, 413 Md. at 28 (“A bank customer may bring a negligence suit against a bank for a violation of
this duty of ordinary care.”); see also Taylor v. Equitable Tr. Co., 269 Md. 149, 155–56 (1973).

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standards as well as how BOA breached those standards, which it cannot do now that Riley’s
opinions have been stricken.
In response, Jericho D.C. advances two arguments for why summary judgment is
unwarranted. First, Jericho D.C. argues that because the 2009 BOA account records that reflect
Denise Killen as an authorized account signatory are “unauthenticated” business records, the
Court must not consider them. Without such documents, says Jericho D.C., no evidence
supports that BOA maintained any authority to disburse funds at Killen’s direction. Second, and
alternatively, Jericho D.C. contends that because BOA’s standard-of-care violations were so
patent, this case is not one in which expert testimony is necessary. The Court addresses each
argument in turn.
A.

The 2009 Bank Records are Properly Considered at Summary Judgment

As to the 2009 bank records, BOA rightly points out that Jericho D.C. relies exclusively
on authority which pre-dates the current applicable Federal Rules of Civil Procedure as amended
in 2010. ECF No. 247 at 10–11. The operative version of Rule 54(b) provides that at the
summary judgment stage, the Court may consider documents which have not yet been properly
authenticated, subject to the non-moving party’s objection. See Fed. R. Civ. P. 54(b), (c). If the
non-movant objects on authenticity grounds, the Court must determine whether the moving party
can produce authenticated documents at trial. Id. See also Sall v. Wells Fargo Bank, N.A., No.
DKC 10-2245, 2012 WL 5463027, at *1 n.1 (D. Md. Nov. 7, 2012); Ridgell v. Astrue, No. DKC
10-3280, 2012 WL 707008, at *9 (D. Md. Mar. 2, 2012) (“the 2010 amendments to Rule 56
changed the procedure for submitting materials on summary judgment. The new rule eliminated
the ‘unequivocal requirement that documents submitted in support of a summary judgment
motion must be authenticated.’”).

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Here, BOA has submitted record evidence that it can and would authenticate the
documents in question at trial. See ECF No. 248 at 6 n.2. The 2009 records bear the mark of
BOA’s electronic document management system, ImageView, which is the repository for
account documents. Jericho D.C. does not contest that BOA could call a records custodian at
trial to testify as to BOA’s document retention policy and thus authenticate the documents
without difficulty. Id. Finally, BOA’s 30(b)(6) witness testified at deposition that the
documents were kept in the ordinary course of BOA’s business. ECF No. 188-8 at 291, 319,
321. On this record, nothing before the Court suggests that BOA “cannot provide authenticated
versions of their exhibits.” Sall, at *1 n.1 (emphasis in original). Jericho D.C., therefore, has
failed to convince the Court that, pursuant to Rule 56(c), it must disregard the 2009 documents.
The Court will consider them as part of the record evidence.3
B.

Banking Industry Standard of Care Testimony is Necessary to Jericho D.C.’s
Case

This leaves the question of whether Jericho D.C. can, without expert testimony, sustain
its burden of demonstrating that BOA’s reliance on Killen’s authority to honor requested
disbursements from the church bank accounts violated the applicable industry standard of care.
As previously discussed, ECF No. 201 at 13, the Court is guided principally by Schultz, in which
the Maryland Court of Appeals analyzed whether expert testimony concerning the standard of
care is necessary to sustain a banking negligence case involving alleged unauthorized account
disbursements. 413 Md. at 19. There, the plaintiff, the personal representative of the deceased
account holder, contended that the bank breached its duty of due care when it added a signatory
to the bank account and allowed that signatory to negotiate withdrawals on her own behalf. Id.

The Court finds similarly unavailing Jericho D.C.’s argument that the documents constitute “inadmissible
hearsay.”
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at 21. The plaintiff did not offer any expert testimony on the professional standards applicable to
banking officers when adding signatories to a checking account. Instead, the plaintiff relied on
evidence demonstrating that the signature card adding the signatory had been forged and other
irregularities from which the jury could infer the bank negligently disbursed the funds in
question. Id. at 34.
The court, in reversing the jury’s award in favor of plaintiff, held that expert testimony
was indeed required for the plaintiff to sustain his burden at trial. In reasoning that the standards
applicable to a bank in authorizing account signatories is beyond the ken of the average
layperson, the court explained,
[W]e cannot say with any certainty that most people have added someone’s name to their
bank accounts. Petitioner supports this contention by asserting that ‘[l]ay people are
frequently called upon in today’s society to prove their identifications.’ We disagree that
these experiences provide a sufficient basis to conclude what the trier of fact would know
because such experiences may vary widely from the reasonable standards in the banking
industry. Furthermore, the relevant activity in this case was by the bank itself, not a bank
customer. Even if most people have added a name to their bank accounts, most people
have certainly not acted as a bank officer adding a name to a customer’s bank account.
That process may occur behind closed doors, out of the sight of the customer, and may
involve numerous unknown procedures. To explain this process, a plaintiff must produce
expert testimony from someone familiar with the process from a bank’s perspective.
Petitioner also failed to provide evidence of the reasonable commercial banking standards
that prevail specifically in the relevant geographical area of the Bank, as required by the
ordinary care standard. Finally, banking practices are changing in the era of the Internet
and other electronic banking practices. Bank procedures may not be the same today as
they were just a few years ago, which also means that an expert may be necessary to
explain to the trier of fact what duty a bank owes to a customer.
Id. at 34–35.
Accordingly, the Schultz Court concluded that the trial court erred in submitting the case
to the jury absent expert testimony as to the pertinent standards of care and the bank’s violation
of the same. Id. at 35.
In this respect, Schultz is on all fours with this case. As did the plaintiff in Schultz,
Jericho D.C. contends that BOA violated its duty of due care when adding Denise Killen as a
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signatory on the church bank accounts and thereafter allowing her to authorize disbursement of
account funds. Jericho D.C. further contends that BOA breached similar duties in refusing to
honor Joel Peebles’ request to deny Killen such authority. When viewed most favorably to
Jericho D.C., the Court cannot discern how a trier of fact would be able to ascertain the proper
standards of care applicable to BOA officers and, without the benefit of expert testimony,
whether such officers fell below such standards. For this reason, as in Schultz, the case simply
cannot reach the jury.
Jericho D.C. rightly contends that the Schultz Court recognized such expert testimony is
not required where “the alleged negligence, if proven, would be so obviously shown that the trier
of fact could recognize it without expert testimony.” Schultz, 413 Md. at 29. By way of
illustration, the Schultz Court noted that expert testimony is unnecessary where the bank’s acts
and omissions are as obviously negligent as “where a dentist extracts the wrong tooth, a doctor
amputates the wrong leg or leaves a sponge in a patient’s body, or an attorney fails to inform his
client that he has terminated the representation of his client.” Id. at 30. In such rare situations,
the breach in the relevant standard of care need no further expert elaboration.
That is not this case. In trying to convince the Court otherwise, Jericho D.C. points to
two Maryland Court of Special Appeals cases, each of which were discussed in Schultz. ECF
No. 249 at 22; Schultz, 413 Md. at 29–30. As the Schultz Court emphasized, Saxon v. Harrison,
186 Md. App. 228 (2009) involved a bank’s disbursing funds on a check that had been indorsed
with only part of the payee’s name. The other case, Free State Bank & Trust v. Ellis, 45 Md.
App. 159 (1980) concerned a bank’s release of collateral without authority. Schultz was careful
to distinguish such patent transgressions from the more complex question of when a bank may

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honor the directives of additional or alternative signatories on a bank account. 413 Md. at 30–
31. Thus, as in Schultz, neither Saxon or Ellis advance this Court’s analysis.
Jericho next attempts to distinguish the facts of Schultz from this case. If anything, such
attempts highlight that perhaps expert testimony is as critical here, if not more, than in Schultz.
Jericho D.C. ably demonstrates that which neither party disputes—a war for church control had
been waging between Jericho D.C. and Jericho M.D. for years. During this time, courts of law
disagreed over which faction controlled the church and, by extension, church bank accounts.
BOA honored the most recent, operative bank records which conferred on Killen authority to
direct the disbursement of bank funds, albeit over Joel Peebles’ protestations. Thus, the ultimate
trial question for which Jericho D.C. bears the burden of proof is whether BOA’s acceptance of
and honoring Killen as an authorized signatory on the church bank accounts violated bank
industry standards of care.
But without an expert, Jericho D.C. can marshal no evidence as to the standards of care
applicable to BOA and the highly regulated industry of commercial banking, or as to how BOA
breached such standards. Accordingly, without the benefit of expert testimony and viewing the
remaining evidence most favorably to Jericho D.C., no reasonable trier of fact could conclude
that BOA’s conduct breached the relevant industry standard of care. Because such proof is
necessary to sustain either the breach of implied contractual duty or the companion negligence
claims, the Court is constrained to grant summary judgment in BOA’s favor as to all remaining
counts.
IV.

Conclusion
For the foregoing reasons, Bank of America, N.A.’s motion for summary judgment is

granted and Jericho Baptist Church Ministries, Inc.’s motion for reconsideration is denied.

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A separate Order follows.

1/10/2020_____________________
Date

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Paula Xinis
United States District Judge

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