YOU CAN’T FIGHT CITY HALL – OR THE BANK

A church split of “longstanding” resulted at the end in an interpleader action brought by a bank.  The bank paid the proceeds of the church accounts into the registry of the court.  For the interpleader action, the bank sought attorney fees, expenses, and a reservation of some of the proceeds (and maybe all of the remainder to be reserved) for future legal expenses.  One of the parties objected and alleged the bank was not an impartial stakeholder, and counterclaimed against the bank.  However, the court awarded legal fees and expenses to the bank.  Bank of America, NA v Jericho Baptist Church Ministries, Inc., Memorandum Opinion, (D. Maryland 2017).

A short Memorandum Opinion of this type does not usually contain detailed recitations of facts.  Thus, the actual fury of the church split was not detailed.  Resolution of the church split by the court, if the court did so, is not detailed in this opinion.

The only lesson that should starkly leap from the opinion is that a church split that results in litigation will not stay between the parties and will lead to legal expenses of substantial amounts in many instances.  Certainly, if the dispute forces a bank to choose sides, it will usually not do so and will usually ask a court to resolve its role.  If the parties resist, the bank will seek and typically obtain legal fees and expenses.  Although typically interpleader legal fee awards are modest, as such things go, but often they are not the only awards of legal fees possible.

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