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Kahveci v. Citizens Bank N.A.

United States District Court, D. Massachusetts

April 23, 2018

CITIZENS BANK, N.A., Defendant.


          F. Dennis Saylor IV, United States District Judge

         This is an action arising from an employee's unauthorized depositing of company checks into her personal checking account. Plaintiff Mehmet Kahveci operates a dental practice in Boston, Massachusetts. His office manager embezzled funds by depositing checks addressed to Kahveci's business into her own checking account at defendant Citizens Bank. The complaint contends that the bank was negligent in letting the employee deposit the checks. Defendant has moved to dismiss the complaint for failure to state a claim upon which relief can be granted. For the reasons stated below, the motion will be denied.

         I. Background

         A. Factual Background

         The facts are set forth as described in the complaint.

         Mehmet Kahveci is a dentist and manages Faneuil Hall Dental Associates, a dental practice in Boston, Massachusetts. (Compl. ¶ 3). As part of his practice, he accepts payments from patients directly and from health insurance companies. (Id. ¶ 5). At all times relevant to the complaint, any checks received were endorsed by Kahveci's office with a rubber stamp, stating “For deposit only Acct # 1107889437 Faneuil Hall Dental Associates M. Kahveci D.M.D.” (Id. ¶ 7). Checks were supposed to be deposited in an account numbered 1107889437 at Citizens Bank titled “Faneuil Hall Dental Associates.” (Id.).

         Julia Vaysglus was employed by Kahveci as an office manager beginning in July 2008. (Id. ¶ 13). As office manager, her responsibilities included submitting invoices to insurers, processing and endorsing checks with the rubber stamp, and making daily bank deposits into the practice's account at Citizens Bank. (Id. ¶ 14).

         In “early 2015, ” Kahveci received a notice from the Internal Revenue Service stating that he had underreported his practice's gross income for the 2013 tax year by almost $100, 000. (Id. ¶ 8). The IRS stated that although Kahveci had reported gross income of $1, 513, 665, gross receipts for the year were $1, 610, 298. (Id.). Kahveci had calculated the $1, 513, 665 amount by totaling all deposits made into the Citizens Bank account. (Id. ¶ 9).

         Kahveci then investigated his office's gross receipts from 2009 through 2014. (Id. ¶ 10). The investigation was completed in March 2015. (Id. ¶ 12). He learned that during that five-year period, the total amount deposited into the account was $337, 737.32 less than the amount paid by patients and insurance companies to his practice. (Id. ¶ 11). He further discovered that Vaysglus had taken insurance checks payable to his practice and deposited them into one of her two personal accounts, also at Citizens Bank. (Id. ¶ 15). Vaysglus was not authorized, either orally or in writing, to deposit those checks into her own accounts. (Id. ¶ 16).

         Vaysglus misappropriated these checks in two ways: she either (1) endorsed checks payable to “Faneuil Hall Dental Associates” or “Mehmet Kahveci DMD” with the handwritten words “pay to the order of Julia Vaysglus” and signed her name, or (2) simply deposited the checks into her personal account without any further endorsement. (Id. ¶¶ 17, 20). Citizens Bank credited Vaysglus's accounts in the full amount of each check. (Id. ¶ 18). In addition, it did not inquire as to whether Vaysglus was authorized to endorse the checks or deposit them into her own accounts. (Id. ¶ 19).

         B. Procedural Background

         The complaint was originally filed in the Suffolk County Superior Court on February 1, 2018, and asserts claims for conversion and negligence. Citizens Bank first received a copy of the complaint on February 23, 2018. (Not. of Removal ¶ 5). It timely removed the action to this Court on March 9, 2018. It has now moved to dismiss the complaint, contending that all claims are time-barred.

         II. Legal Standard

         On a motion to dismiss, the court “must assume the truth of all well-plead[ed] facts and give . . . plaintiff the benefit of all reasonable inferences therefrom.” Ruiz v. Bally Total Fitness Holding Corp., 496 F.3d 1, 5 (1st Cir. 2007) (citing Rogan v. Menino, 175 F.3d 75, 77 (1st Cir. 1999)). To survive a motion to dismiss, the complaint must state a claim that is plausible on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). In other words, the “[f]actual allegations must be enough to raise a right to relief above the speculative level, . . . on the assumption that all the allegations in the complaint are true (even if doubtful in fact).” Id. at 555 (citations omitted). “The plausibility standard is not akin to a ‘probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 556). Dismissal is appropriate if the complaint fails to set forth “factual allegations, either ...

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