UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MICHIGAN

SOUTHERN DIVISION

CONTINENTAL TITLE AGENCY, LLC,

Plaintiff/Counter-Defendant, 

v.

FIFTH THIRD BANCORP,

Defendant/Counter-Plaintiff.

_______________________ __________/

CASE NO. 2:15-cv-11595

HON. MARIANNE O. BATTANI

OPINION AND ORDER GRANTING DEFENDANT’S MOTION FOR JUDGMENT ON

THE PLEADINGS 

I. INTRODUCTION

Before the Court is Defendant/Counter-Plaintiff Fifth Third Bank’s Rule 12(c)

Motion for Judgment on the Pleadings. The instant action arises from a dispute in a

check collection process between the Plaintiff/Counter-Defendant Continental Title

Agency and Defendant/Counter-Plaintiff Fifth Third Bank. Continental Title Agency

deposited a check for $395,500.00 in association with a real estate transaction into its

account with Fifth Third Bank, and the check was later revealed to be a counterfeit. 

Before Fifth Third Bank received the notice of dishonor from the paying bank,

Continental Title Agency instructed Fifth Third Bank to wire out the funds to Continental

Title’s client. Fifth Third Bank eventually notified Continental Title of the returned check

and charged back the funds from the account. Continental Title brought the instant

action against Fifth Third Bank alleging two counts: (1) violation of 12 C.F.R. § 229.33

for failing to timely notify Continental Title of the returned check; and (2) tortious

interference with business relationships by charging back $395,500.00. In its answer,

Case 2:15-cv-11595-MOB-MJH ECF No. 13, PageID.425 Filed 01/11/16 Page 1 of 20
Fifth Third Bank brought three counterclaims against Continental Title Agency: (1)

breach of contract; (2) the right to chargeback under the U.C.C.; and (3) breach of

transfer warranty. On August 17, 2015, Fifth Third Bank filed the instant Rule 12(c)

motion for judgment on the pleadings with respect to the two counts of the Continental

Title Agency’s Complaint and the breach of contract claim of Fifth Third Bank’s

Counterclaim. For the reasons that follow, the Court GRANTS Defendant’s motion. 

II. STATEMENT OF FACTS

Plaintiff/Counter-Defendant Continental Title Agency, LLC (“Continental Title”) is

a title insurance agency conducting escrow business in association with real estate

transactions. Defendant/Counter-Plaintiff Fifth Third Bank is an Ohio banking

corporation. Prior to this suit, Continental Title maintained several business accounts

with Fifth Third Bank, including the account at issue (the “2124 Account”). The parties

dispute whether the 2124 Account is a trust account, as well as the extent of Fifth Third

Bank’s knowledge of Continental Title’s business activities as an escrow agent.

On July 16, 2014, Continental Title deposited a check (the “Check”) for

$395,500.00 into the 2124 Account as a buyer’s (the “Buyer”) earnest money deposit for

a real estate transaction. The face of the check identifies the “JP Morgan Chase Bank,

N.A., Toronto Branch” as the issuing bank. (Doc. 4, Ex. A). Continental Title contends

that it was advised on July 18, 2014, that the funds from the Check were “good,” or the

check had “cleared,” and the 2124 Account’s online statement confirmed that the funds

were available for withdrawal. However, Fifth Third Bank denies the allegations that

the check had cleared.

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On July 24, 2014, Continental Title requested Fifth Third Bank to wire transfer

$395,500.00 from the 2124 Account. Continental Title contends that the wire transfer

request was initiated by the Buyer, who advised Continental that he was not going

through with the real estate transaction and requested that the funds be wired to

another account. On the same day, Fifth Third Bank processed the wire transfer as

requested. 

On July 28, 2014, Fifth Third Bank received notice from J.P. Morgan Chase (the

paying bank) that the Check was being returned as an unpaid counterfeit item. On

August 1, 2014, four days after the date that Fifth Third Bank received notice from the

paying bank, Fifth Third Bank’s representative advised Continental Title via e-mail that

the Check was a counterfeit item. (Doc. 11, Ex. D). The Fifth Third Bank immediately

charged back the amount of the dishonored Check together with return fees for a total

of $395,544.00 from the 2124 Account. 

Subsequently, Continental Title complained to Fifth Third Bank regarding the

chargeback. On August 18, 2014, Continental Title and Fifth Third Bank entered into an

agreement (the “August 18 Agreement”) to address the dispute and “cooperate in

pursuing any and all remedies to recover the $395,500.00 from third parties.” (Doc. 11,

Ex. E). In the agreement, Fifth Third Bank agreed to reverse the $395,500.00

chargeback to the 2124 Account immediately in exchange for Continental Title’s

agreement to deposit $100,000.00 into a segregated account (the “Segregated

Account”) on August 18, 2014, to deposit another $50,000.00 by September 18, 2014,

and a final $50,000.00 by October 20, 2014. The agreement provides: 

The Segregated Account may provide a source of repayment to Bank

should the parties agree, or should a court of competent jurisdiction

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determine, that Continental is liable for all or a portion of the liability

resulting from the return of the Customer Check. Bank and Continental

agree that neither Party can withdraw or debit any funds from the

Segregated Account without mutual agreement of the Parties or an order

of a Court of competent jurisdiction.” 

(Doc. 11, Ex. E, at 39).

Continental Title made the first deposit of $100,000.00 due on August 18, 2014,

but failed to make the second or third deposits of $50,000.00 each due on September

18, 2014, and October 20, 2014. On October 16, 2014, Fifth Third Bank debited

$100,000.00 from the Segregated Account. Continental Title demanded a return of the

$100,000.00, and Fifth Third Bank refused. 

On April 1, 2015, Continental Title filed a complaint in the Circuit Court for the

County of Oakland. In the Complaint, Continental Title alleges two counts against

Defendant Fifth Third Bank: (1) violation of Regulation CC for failure to timely notify

Continental Title of the returned Check; and (2) tortious inference with business

relationships by seizing funds from the 2124 Account. Continental Title requests the

Court (1) to declare that Fifth Third Banks does not have a valid chargeback claim

against Continental Title for the $395,000.00 relating to the Check; (2) to order Fifth

Third Bank to refund the $100,000.00 on deposit in the Segregated Account, and award

statutory interest, costs, attorney fees and such further legal and equitable relief; and (3)

to enter a monetary judgment against Fifth Third Bank for damages caused by the

tortious inference with its business relationship, and related costs, interest and attorney

fees. 

On May 4, 2015, Defendant Fifth Third Bank removed the case to this Court. On

May 11, 2015, Defendant Fifth Third Bank filed its answer to the Complaint, and

asserted three counterclaims against Continental Title: (1) breach of the Commercial

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Account Rules controlling the 2124 Account; (2) a declaration of its right to chargeback

from the 2124 Account pursuant to U.C.C. § 4-214 (Mich. Comp. Laws § 400.4214); and

(3) breach of transfer warranty under U.C.C. § 4-207 (Mich. Comp. Laws § 440.4207). 

Defendant requests the Court to enter a judgment against Continental Title for

$395,500.00 along with its costs and reasonable attorney fees. 

On August 17, 2015, Defendant/Counter-Plaintiff Fifth Third Bank filed the instant

Rule 12(c) motion for judgment on the pleadings with respect to the two counts of the

Continental Title’s Complaint and Count I of Fifth Third Bank’s Counterclaim. 

III. STANDARD OF REVIEW

A motion for judgment on the pleadings under Federal Rule of Civil Procedure

12(c) applies the same standards that govern motions to dismiss under Rule 12(b). See

Fed. R. Civ. P. 12(c); Vickers v. Fairfield Med. Ctr., 453 F.3d 757, 761 (6th Cir. 2006). 

“For purposes of a motion for judgment on the pleadings, all well-pleaded material

allegations of the pleadings of the opposing party must be taken as true, and the motion

may be granted only if the moving party is nevertheless clearly entitled to judgment.” JP

Morgan Chase Bank, N.A. v. Winget, 510 F.3d 577, 581 (6th Cir. 2007). 

Federal Rule of Civil Procedure 12(d) provides that if matters outside the

pleadings are presented in a Rule 12(c) motion and such matters are not excluded by

the court, the motion must be treated as one for summary judgment. Fed. R. Civ. P.

12(d). The court may consider matters outside the pleadings without converting the

motion to one for summary judgment if those matters “are referred to in the plaintiff’s

complaint and are central to [the plaintiff’s claim.]” Weiner v. Klais & Co., Inc., 108 F.3d

86, 89 (6th Cir. 1997). The court may also consider matters of which it may take judicial

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notice, such as public records, judicial proceedings, and other materials “capable of

accurate and ready determination by resort to sources whose accuracy cannot

reasonably be questioned.” Bowers v. Wynne, 615 F.3d 445, 470 (6th Cir. 2010). Both

parties attached evidentiary materials in their briefs, but all materials attached are

matters that were referred to in the pleadings and central to the claims or matters that

the Court did not rely upon in rendering its judgment. Therefore, the Court declines to

convert the instant Rule 12(c) motion into one for summary judgment. 

IV. ANALYSIS

A. Regulation CC Violation

Continental Title alleges that Fifth Third Bank violated the Federal Reserve’s

Regulation CC by failing to timely notify Continental Title of the returned Check. 

Specifically, Regulation CC requires a depository bank to inform its customer of a

returned check by “midnight of the banking day following the banking day on which it

received the returned check.” 12 C.F.R. § 229.33. It is undisputed that Fifth Third Bank

did not inform Continental Title of the returned Check until four banking days later. 

However, the parties dispute whether Regulation CC applies to the Check at issue,

which was drawn on J.P. Morgan Chase Bank N.A.’s Toronto office. (Doc. 4, Ex. A).

The Board of Governors of the Federal Reserve System issued Regulation CC to

regulate, among other things, banks’ duties to make deposited funds available for

withdrawal and to expedite the collection and return of checks. 12 C.F.R. § 229.1. 

Regulation CC does not apply to all “checks” or all “banks.” Regulation CC defines the

term “check” primarily as “[a] negotiable demand draft drawn on or payable through or

at an office of a bank.” 12 C.F.R. § 229.2(k). Regulation CC specifically eliminates its

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applicability to any bank’s foreign offices. “Unless otherwise specified, the term bank

includes all of a bank’s offices in the United States, but not offices located outside the

United States.” 12 C.F.R. § 229.2(e). Therefore, Regulation CC does not apply to a

check issued by a bank’s office located outside of the United States. 

The official commentary further confirms this geographical limitation on

Regulation CC’s applicability. “Check is defined in section 602(7) of the EFA Act as a

negotiable demand draft drawn on or payable through an office of a depository

institution located in the United States.” 12 C.F.R. § 229 app. E (II)(K)(1) (emphasis

added). “Unless otherwise specified, the term bank includes all of a bank’s offices in

the United States. The regulation does not cover foreign offices of U.S. banks.” 12

C.F.R. § 229 app. E (II)(F)(3). The Consumer Compliance Handbook, published by the

Federal Reserve, further clarifies that, in the context of Regulation CC, “[t]he term

‘check’ does not include checks drawn in a foreign currency or checks drawn on a bank

located outside the United States.” Consumer Compliance Handbook: Regulation CC

Availability of Funds and Collection Checks 1, n.1 (Fed. Reserve Sys. Bd. of Governors

Div. of Consumer and Cmty. Affairs 2015).

In the present case, Regulation CC is inapplicable because the Check at issue is

drawn on a bank’s foreign office, specifically, the J.P. Morgan Chase Bank’s Toronto

office. In its Response, Plaintiff argues that Regulation CC applies to the Check at

issue because the paying bank, J.P. Morgan Chase Bank, N.A., is a U.S. bank, not a

foreign bank. In support this argument, Plaintiff supplies FDIC certification indicating

J.P. Morgan Chase Bank, N.A., is a federally insured bank in the United States. (Doc.

11, Ex. F). Plaintiff further supplies the screenshot of J.P. Morgan Chase Bank’s

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website stating that “[d]eposits with JPMorgan Chase Bank, N.A., Toronto Branch, are

not insured by the Canada Deposit Insurance Corporation.” (Doc. 11, Ex. H).

Continental Title’s argument that J.P. Morgan Chase Bank is a U.S. incorporated

bank has no bearing on the determination of Regulation CC’s applicability. The plain

language of Regulation CC and its official commentary clearly establish that the

regulation’s applicability is predicated on the physical location of a bank’s office, not on

the bank’s place of incorporation. See 12 C.F.R. § 229 app. E(II)(F) (noting that

Regulation CC applies to a foreign bank’s U.S. offices, but does not apply to a U.S.

bank’s foreign offices). The regulation and the commentary further establish that this

geographical limitation extends to Regulation CC’s applicability to checks. See 12

C.F.R. § 229 app. E(II)(K)(1). Consequently, Regulation CC does not apply to the

Check at issue, and Continental Title cannot sustain its claim against Fifth Third Bank

under 12 C.F.R. §§ 229.33 and 229.38. 

Even if Regulation CC applies, Continental Title cannot establish that Fifth Third

Bank is liable for any damages due to Regulation CC’s “no harm no foul” rule.” Under

Regulation CC, “[t]he measure of damages for failure to exercise ordinary care is the

amount of loss incurred, up to the amount of the check, reduced by the amount of the

loss that party would have incurred even if the bank had exercised ordinary care.” 12

C.F.R. § 229.38(a). In the present case, Continental Title instructed Fifth Third Bank to

wire out the funds back to the Buyer on July 24, 2014, but Fifth Third Bank did not

receive notice of dishonor from J.P. Morgan Chase Bank until July 28, 2014. The loss

would have been incurred even if the Fifth Third Bank had timely notified Continental

Title of the dishonored Check. Plaintiff argues that the delay “deprived Continental of

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the chance to catch the perpetrators [of the scam].” This statement is mere speculation

insufficient to establish that the alleged delay caused actual damages. Therefore, even

if Regulation CC applies, Continental Title cannot sustain its claim for any damages. 

See Denkewalter & Assocs., Ltd. v. Cole Taylor Bank, No. 10-CV-4899, 2011 WL

3164460, at *4 (N.D. Ill. July 27, 2011) (rejecting plaintiff’s Regulation CC claim against

the collecting bank because plaintiff failed to establish actual damages caused by the

alleged delay where the funds at issue was already wired out of the account two days

before the collecting bank received notice of dishonor).

In its Response to the instant motion, Continental Title further alleges that

Defendant Fifth Third Bank failed to exercise ordinary care under the U.C.C. because it

failed to provide a notice of dishonor by the “midnight deadline or within a longer

reasonable time.” Mich. Comp. Laws. § 440.4214. Continental Title does not allege

this U.C.C. violation in its Complaint, or even mention the U.C.C. in its Complaint. Its

attempt to assert this new claim in the Response to the present Rule 12(c) motion

without first seeking leave to amend is inappropriate. Therefore, the Court declines to

adjudicate this improperly asserted claim. For the reasons above, the Court dismisses

Count I of Continental Title’s Complaint regarding the alleged Regulation CC violation.

B. Tortious Interference with Business Relationships

To establish a claim for tortious interference with a business relationship, a

plaintiff must prove four elements: (1) the existence of a valid business relationship; (2)

knowledge of the relationship on the part of the defendant; (3) an intentional

interference by the defendant inducing or causing a breach or termination of the

relationship; and (4) resultant damage to the plaintiff. Cedroni Assocs., Inc. v.

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Tomblinson, Harburn Assocs., Architects & Planners, Inc., 821 N.W.2d 1, 3 (Mich.

2012). “To fulfill the third element, intentional interference inducing or causing a breach

of a business relationship, a plaintiff must demonstrate that the defendant acted both

intentionally and either improperly or without justification.” Dalley v. Dykema Gossett

PLLC, 788 N.W.2d 679, 696 (Mich. Ct. App. 2010). A plaintiff may do so by either

“proving (1) the intentional doing of an act wrongful per se, or (2) the intentional doing of

an act with malice and unjustified in law for the purpose of invading plaintiff’s contractual

rights or business relationship.” Advocacy Org. for Patients & Providers v. Auto Club

Ins. Ass’n, 670 N.W.2d 569, 580 (Mich. Ct. App. 2003). 

“A wrongful act per se is an act that is inherently wrongful or an act that can

never be justified under any circumstances.” Badiee v. Brighton Area Sch., 695 N.W.2d

521, 539 (Mich. Ct. App. 2005). On the other hand, “[t]o establish that a lawful act was

done with malice and without justification, the plaintiff must demonstrate with specificity,

affirmative acts by the defendant that corroborate the improper motive of the

interference. Where the defendant’s actions were motivated by legitimate business

reasons, its actions would not constitute improper motive or interference.” BPS Clinical

Labs v. Blue Cross & Blue Shield of Mich., 552 N.W.2d 919, 925 (Mich. Ct. App. 1996). 

Essentially, plaintiff must show that the interferer did something “illegal, unethical or

fraudulent.” El-Sayed v. Bank of Am., N.A., No. 13-12458, 2014 WL 3870785, at *6

(E.D. Mich. Aug. 7, 2014) (quoting Dalley, 788 N.W.2d at 696).

Plaintiff Continental Title alleges that Defendant Fifth Third Bank tortiously

interfered with its business relationships with its customers by charging back funds from

the 2124 Account on August 1, 2014, resulting in Continental Title’s eventual business

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shutdown. Continental Title sets out two alternative theories on the impropriety of the

August 1 chargeback. 

Continental Title first alleges that Fifth Third Bank’s August 1 chargeback was an

act wrongful per se because Fifth Third Bank had waived its right to chargeback

Continental because of the late notice of dishonor, presumably in violation of Regulation

CC’s timely notice requirement under 12 C.F.R. § 229.33 or the U.C.C.’s similar

“midnight deadline rule.” This argument is meritless. As Defendant correctly points out,

Plaintiff cannot claim that Fifth Third Bank waived its right to chargeback due to the

alleged Regulation CC violation because Regulation CC does not apply to the Check at

issue as discussed above. Nor can Plaintiff claim that Fifth Third Bank waived right to

chargeback for violating the U.C.C. “midnight deadline rule” when the U.C.C. specifically

authorizes charging back even if notice is untimely, providing that “[i]f the return or

notice is delayed beyond the bank's midnight deadline or a longer reasonable time after

it learns the facts, the bank may revoke the settlement, charge back the credit, or obtain

return from its customer . . .” Mich. Comp. Laws. § 440.4214(1). 

Alternatively, Continental Title alleges that Fifth Third Bank’s August 1

chargeback was a lawful act done with malice and unjustified in law where the Fifth

Third Bank improperly seized funds and threatened to seize funds from the 2124

Account, even though Fifth Third Bank knew that the Escrow Account contained no

Continental Title funds. Continental Title specifically alleges that the 2124 account was

an escrow account created solely for Continental Title to deposit customers’ funds in

connection with its role as an escrow agent. Continental Title further contends that Fifth

Third Bank was aware of the nature of Continental Title’s escrow business but

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nonetheless applied the chargeback to the 2124 Account with the intention to drive

Continental Title out of business. Continental Title relies on four exhibits to support

these contentions: 

 A screen shot from Fifth Third Bank’s website marketing its “Escrow Manager

Online” service. (Doc. 11, Ex. A).

 Materials prepared by Fifth Third Bank for Continental Title acknowledging

that Continental Title maintained “escrow/trust” accounts at the bank. (Doc.

11, Ex. B).

 Account statements of the 2124 Account that titled the account as “ESCROW

ACCOUNT.” (Doc. 11, Ex. C). 

 The August 1, 2014 email from Fifth Third Bank representative Brian Downs

to Continental Title notifying it of the dishonored Check where Mr. Downs

referred the 2124 Account as “the escrow account.’ (Doc. 11, Ex. D). 

Plaintiff cannot establish that the chargeback was a lawful act done with malice

and without justification. Plaintiff’s theory that Fifth Third Bank intended to drive it out of

business is implausible on its face given that there remained $4,328,906.39 in the 2124

Account as of July 31, 2014. (Doc. 11, Ex. C., at 7). This high balance could hardly

lead Fifth Third Bank to believe Continental Title’s business would fold with the August 1

chargeback of $395,544.00. 

Further, to establish “malice,” Plaintiff must prove that Defendant, at minimum,

performed the chargeback with an “improper motive.” BPS Clinical Labs., 552 N.W.2d

at 925. “Where the defendant’s actions were motivated by legitimate business reasons,

its actions would not constitute improper motive or interference.” Id. In the present

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case, two pieces of evidence are dispositive. First, the Commercial Account Rules, the

contract controlling the 2124 Account, specifically provides that “[i]f any Item is returned

to [Fifth Third Bank] unpaid by any means (including electronically) or form at any time

for any reason, [Fifth Third Bank] will reverse the credit to, or otherwise debit your

Account or any other Account of [Continental Title] with [Fifth Third Bank] for the amount

of the credit . . .” (Doc. 4, Ex. D, at 4). Second, U.C.C. § 4-214 specifically provides that

a collecting bank has the right to charge back for a returned check in a provisional

settlement. Mich. Comp. Laws. § 440.4214(1). Taken together, Fifth Third Bank had a

reasonable belief that it had the right to chargeback the funds from 2124 Account under

both the U.C.C. and the controlling contract. Enforcing one’s legal and contractual

rights is a legitimate business reason. Therefore, Fifth Third Bank’s reasonable belief

that it was enforcing its legal and contractual right effectively rebuts the claim that it was

acting with malice and without justification. See Formall, Inc. v. Cmty. Nat’l Bank of

Pontiac, 421 N.W.2d 289, 293 (Mich. Ct. App. 1998) (upholding a dismissal of the

tortious interference claim and noting that defendant’s actions in securing plaintiff’s loan

payment pursuant to the provisions of the promissory notes are motivated by

legitimated business reasons). 

This District addressed essentially the same argument in Experts, LLC v.

JPMorgan Chase & Co., No. 13-cv-12550, 2013 WL 4487508 (E.D. Mich. Aug. 20,

2013). In Experts, the plaintiff, a company specializing in loan modification consulting,

brought a tortious interference with business relationships claim against J.P. Morgan

Chase Bank for closing its bank account. Id. at *1. J.P. Morgan Chase Bank contended

that, after Expert’s customers reversed large numbers of Automated Clearing House

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transactions, Chase closed Expert’s bank account under its right pursuant to the

account’s controlling agreement. Id. at *2. In that case, the court rejected the plaintiff’s

contention that Chase’s decision to close the account was unlawful or that it was done

with malice and without justification, noting that the account’s controlling agreement

specifically permits Chase to close the account “at any time with or without cause.” Id.

at *4. Similarly, in the present case, the 2124 Account’s controlling agreement and the

relevant U.C.C. provision justify Fifth Third Bank’s decision to chargeback. Therefore,

Plaintiff’s tortious interference claim cannot be sustained. 

Continental Title’s repeated contention that the 2124 Account is an escrow

account is unavailing. As Continental Title admits itself, “[a]s a title company holding

monies for clients in escrow, (similar to the way attorneys hold money in client trust

accounts for clients), Continental owed legal obligations with respect to those monies.” 

(Doc. 11, at 5-6) (emphasis added). Continental cites to multiple statutes related to an

escrow agent’s fiduciary duties. Even assuming that the 2124 Account was an escrow

account and that Fifth Third Bank knew that it was an escrow account, none of these

statutes cited indicates that the legal obligations relating to the escrow monies are owed

by anyone other than Continental Title. Nor did the parties reach a separate escrow

agreement imposing a fiduciary duty onto the Fifth Third Bank. Merely alleging that a

bank account is an escrow account does not impute any legal or contractual obligation

of an escrow agent onto the bank. 

Furthermore, nothing in the pleadings or exhibits even suggests that Fifth Third

Bank was expected to apply any extra care to the monies in an escrow account. 

Plaintiff repeatedly references the marketing materials prepared by Fifth Third Bank

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promoting its “Escrow Manager Online” service as evidence of Fifth Third Bank’s own

recognition of the 2124 Account as an escrow account. (Doc. 11, Ex. A, B). However,

the parties admit that the “Escrow Manager Online” service does not apply to the 2124

Account. Even assuming that it does, the provisions of Treasury Management Services

Terms and Conditions Book relating to the Escrow Manager Online services specifically

provide, “[Fifth Third Bank is] only acting as a depositary bank; [Fifth Third Bank] will not

be providing escrow services or otherwise acting as an escrow agent for [Continental

Title] . . . any and all responsibilities for providing escrow agent services to [Continental

Title’s] clients remain with [Continental Title].” (Doc. 4, Ex. C., at 49). Consequently,

Continental Title cannot claim that Fifth Third Bank acted with malice in charging back

from the alleged escrow account, as there is not even any reasonable expectation for

the bank to treat an escrow account differently from any other bank account. 

Finally, Continental Title contends that it has pled with the required specificity by

comparing its pleadings with the allegations in Auburn Sales, Inc. v. Cypros Trading

Shipping, Inc., No. 14-10922, 2015 U.S. Dist. LEXIS 116403 (E.D. Mich. Sept. 1, 2015). 

Plaintiff contends that, in both cases, “the plaintiff[s] alleged that defendant[s] committed

a wrongful (illegal) act which had ramifications on the plaintiff’s ability to do business,”

which is sufficient to sustain a tortious interference claim at the pleading stage. (Doc.

11, at 16-17). Continental Title’s reliance on Auburn Sales is misplaced. In Auburn

Sales, the plaintiff alleged that the defendants obtained counterfeit automotive parts,

and mixed and sold them with legitimate parts purchased from the plaintiff. 2015 U.S.

Dist. LEXIS 116403 at *2-3. The plaintiff further alleged that plaintiff’s supplier

customers refused to do business with it after they learned of defendants’ wrongful act. 

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Id. at *3. The court held that plaintiff sufficiently pled a tortious interference claim where

the alleged “intentional comingling counterfeit and mislabeled parts” is a per se wrongful

act given that said conduct violates federal law. Id. at *8-9. In contrast to Auburn Sales,

Continental Title cannot establish a per se wrongful act to sustain its tortious

interference claim. 

For the reasons above, the Court dismisses Count II of Continental Title’s

Complaint regarding the claim of tortious interference with business relationships.

A. Breach of Contract

Fifth Third Bank contends that the 2124 Account is subject to the Commercial

Account Rules, which expressly allow the bank to chargeback, or obtain a refund of, any

deposit or credit to the 2124 Account for dishonored checks. The Check at issue was

returned as counterfeit; thus Fifth Third Bank contends that it was entitled to obtain the

chargeback as it did on August 1, 2014. Fifth Third Bank continues to contend that,

since Fifth Third Bank reversed this chargeback on August 18, and now is unable to

obtain a refund from Continental Title, it is entitled to obtain this refund from Continental. 

As a preliminary issue, the parties dispute whether the Fifth Third Bank’s

Commercial Account Rules are applicable to the 2124 Account at issue. Continental

Title denies that the Commercial Account Rules are applicable and argues that it “did

not and would not agree to terms which allowed Fifth Third to simply withdraw its

customers’ money from a pooled escrow account – those funds belonged to third

parties.” This argument is unavailing. The contract controlling the 2124 Account

provides that a customer accepts and agrees to the Commercial Account Rule “[b]y

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opening an Account and either signing the signature card for the Account or using the

Account in any way.” (Doc. 4, Ex. D, at 1). Further, Continental Title does not deny that

its representative signed the signature page of the Master Treasury Management

Agreement. (Doc. 4, Ex. B, at 13). The Master Treasury Management Agreement

specifically incorporates Fifth’s Third’s Treasury Management Terms and Conditions. 

(Doc. 4, Ex. B, at 9). The Terms and Conditions, in turn, expressly state that all

transactions in the account at issue are subject to Fifth Third’s Commercial Account

Rules. (Doc. 4, Ex. C, at 1). Consequently, the 2124 Account is governed by the

Commercial Account Rules.

Unless a contract provision violates law or one of the traditional defenses to the

enforceability of a contract applies, unambiguous contracts must be enforced as written. 

Rory v. Continental Ins. Co., 703 N.W.2d 23, 26 (Mich. 2005). Absent ambiguity,

contractual interpretation begins and ends with the actual words of a written agreement. 

See Henderson v. State Farm Fire & Cas. Co., 596 N.W.2d 190, 193-94 (Mich. 1999). 

The purpose of interpreting a contract is to determine and enforce the intent of the

parties as expressed in the contract. Old Kent Bank v. Sobczak, 620 N.W.2d 663, 666-

67 (Mich. Ct. App. 2000). Unambiguous contract language should be enforced

according to the plain and ordinary meaning of its terms. DaimlerChrysler Corp. v.

Wesco Distrib., Inc., 760 N.W.2d 828, 833 (Mich. Ct. App. 2008). 

In this case, an examination of the contract language of the Commercial Account

Rules is sufficient. The Commercial Account Rules clearly provide: “When [Continental

Title] deposit[s] or cash[es] a check, draft or other item with [Fifth Third Bank] . . . by any

means, [Fifth Third Bank] act[s] as [Continental Title’s] agent in collecting the Item. 

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[Continental Title has] the risk of loss for each Item throughout the collection process

and [is] solely responsible for the return, rejection and collectability of each Item.” (Doc.

4, Ex. D, at 3). The Commercial Account Rules further provide: “[Fifth Third Bank] may

reverse or chargeback any deposit or other credit to [Continental Title’s] Account if it is

reversed or returned to [Fifth Third Bank] for any reason at any time, or was otherwise

the subject of an error.” (Doc.4, Ex. D, at 4). 

Continental Title sets forth three arguments against the Fifth Third’s breach of

contract claim: (1) the Rule 12(c) motion is inappropriate because Continental Title’s

Complaint against Fifth Third Bank is well pled; (2) Fifth Third Bank violated Regulation

CC for failing to provide timely notice of dishonor; and (3) Continental Title asserts a

tortious interference claim which entails larger damages than the $395,500 sought by

Fifth Third Bank. All three arguments are meritless. Regarding its first argument that its

Complaint is well pled, the inquiry here is whether Defendant Fifth Third Bank can

sustain its counterclaim. Whether Plaintiff’s Complaint is well pled or not has no bearing

on this inquiry. Regarding Continental Title’s second argument that Fifth Third Bank

violated Regulation CC, the Court has concluded that Regulation CC has no

applicability in the present case. Regarding Continental Title’s third argument based on

its tortious interference claim, the Court has concluded that Continental Title cannot

sustain such a claim. Consequently, Continental fails to bring any persuasive argument

to rebut Fifth Third Bank’s breach of contract claim.

The Court therefore concludes that, under the clear and unambiguous language

of the Commercial Account Rules, Fifth Third Bank is entitled to obtain a refund of

$395,500.00. Since the parties established the Segregated Account to provide a source

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of repayment, and Fifth Third Bank already seized $100,000.00 from this account, Fifth

Third Bank is entitled to a judgment for $295,500.00.

B. Attorney Fees

Lastly, Fifth Third Bank requests the Court to award attorney fees and costs as

provided under the contract between parties. The Commercial Account Rules provide:

“[if Fifth Third Bank is] brought into or must initiate any legal proceedings regarding

[Continental Title] or [its] Account, including for the collection of overdraft, [Continental

Title] agree[s] to reimburse [Fifth Third Bank], to the extent allowed by law, for any

reasonable attorneys’ fees and costs that [Fifth Third Bank] may incur.” (Doc. 4, Ex. D,

at 19). Continental Title does not raise any specific argument in response to this

request. Under this unambiguous contract, Fifth Third Bank is also entitled to

reasonable attorney fees and costs. 

V. CONCLUSION

For the reasons stated, the Court GRANTS Defendant’s Motion for Judgment on

the Pleadings. Both counts of Continental Title’s Complaint are DISMISSED. A

judgment for $295,500.00, along with its costs and reasonable attorney fees, is entered

in favor of Fifth Third Bank under Count I of its Counterclaim. Because Fifth Third

Bank’s remaining two counterclaims seek the same relief awarded by the Court on

Count I, Counts II and III are DISMISSED as moot. 

IT IS SO ORDERED.

Date: January 11, 2016 s/Marianne O. Battani 

MARIANNE O. BATTANI

United States District Judge

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CERTIFICATE OF SERVICE

The undersigned certifies that the foregoing Order was served upon counsel of record via the

Court's ECF System to their respective email addresses or First Class U.S. mail to the non-ECF

participants on January 11, 2016.

s/ Kay Doaks 

Case Manager

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