United States District Court, D. Massachusetts
MEHMET KAHVECI, P.C., d/b/a FANEUIL HALL DENTAL ASSOCIATES, Plaintiff,
CITIZENS BANK, N.A., Defendant.
MEMORANDUM AND ORDER ON DEFENDANT'S MOTION FOR
SUMMARY JUDGMENT AND PLAINTIFF'S MOTION TO AMEND
DENNIS SAYLOR IV UNITED STATES DISTRICT JUDGE
an action by a customer against a bank arising from an
employee's unauthorized depositing of company checks into
her personal checking account. Plaintiff Mehmet Kahveci,
doing business as Faneuil Hall Dental Associates, operates a
dental practice in Boston, Massachusetts. His office manager,
a trusted employee and friend, embezzled funds by depositing
checks addressed to his practice into her own checking
account at defendant Citizens Bank. The complaint contends
that the bank was negligent in letting the employee deposit
the checks by means of forged endorsements.
has moved for summary judgment, contending that
plaintiff's claims are barred by the statute of
limitations. Plaintiff has opposed the motion and moved to
amend the complaint, primarily to add a claim under Mass.
Gen. Laws ch. 93A. For the reasons stated below, the motion
for summary judgment will be granted, and the motion to amend
will be denied.
where otherwise noted, the following facts are set forth in
the record and are undisputed.
Kahveci is a dentist who operates his practice through a
professional corporation, Mehmet Kahveci, P.C., doing
business as Faneuil Hall Dental Associates
(“FHDA”). The dental practice is located at 177
State Street, Boston, Massachusetts. Kahveci is the
practice's primary dentist, and the only officer,
director, and shareholder of the professional corporation.
(MK Aff. ¶¶ 1-2; VC Aff. ¶¶ 2-3).
Bank, N.A., is a national banking association, with a
principal office located at 28 State Street, Boston,
Massachusetts. (Compl. ¶ 2).
of Kahveci's practice, he accepts payments from patients
directly and from health insurance companies. (Compl. ¶
5; MK Aff. ¶¶ 10, 22; VC Aff. ¶ 12). Any
checks received were supposed to be deposited in the bank
account used exclusively with the operation of the business:
an account at Citizens Bank titled “Faneuil Hall Dental
Associates.” (Compl ¶ 7; MK Aff. ¶ 3; RN Aff.
¶ 10(a), Ex. A; Kahveci Dep. at 31-32). The practice has
maintained that account since at least April 2008.
(Def.'s SMF ¶ 2).
2003, Kahveci hired Julia Vaysglus as an office assistant.
(Kahveci Dep. at 24-26; MK Aff. ¶¶ 8-9; VC Aff.
¶¶ 10-11). She was recommended to him by her
cousin, Kahveci's domestic partner, who works as a dental
hygienist at the practice. (Id.). Kahveci came to
consider Vaysglus both a friend and a trusted employee, and
also had a friendship with her husband. (Kahveci Dep. at
34-35, 80-81). As an office assistant, she was responsible
for a variety of administrative tasks, including new patient
intake and onboarding, preparing and submitting insurance
claims, placing orders for dental supplies and materials,
sorting the daily mail and dental supply deliveries,
preparing payments due for various monthly expenses,
processing and depositing payments received from patients and
their insurers, and assisting with bookkeeping. (MK Aff.
¶ 10; VC Aff. ¶ 12).
in 2007, Kahveci promoted Vaysglus to the position of office
manager. (Kahveci Dep. at 26-27; MK Aff. ¶ 11; VC Aff.
¶¶ 13-14). As office manager, she acquired
additional responsibilities; she became the primary
bookkeeper, which entailed entering and categorizing all
outgoing expense payments and incoming check and credit card
payments into a bookkeeping software program, and processing
biweekly payroll and making the associated payroll tax
payments. (Kahveci Dep. at 27, 69-70; MK Aff. ¶ 12; VC
Aff. ¶ 15). She also became the employee primarily
tasked with entering and monitoring all insurance claims
within the software program used by the practice as its
patient-file and insurance-tracking system. (MF Aff. ¶
16; VC Aff. ¶ 16). In her new position as office
manager, Vaysglus reported directly to Kahveci. (Kahveci Dep.
between December 15 and 30, 2014, 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 $96, 633.10. (Kahveci Dep. at 37-39, 43, Ex. 3 at
No. 3.3). Shortly thereafter, he contacted the practice's
outside accountants to determine the cause of the
discrepancy. (Kahveci Dep. at 38-41; MK Aff. ¶¶
38-39, Exs. A-B; KS Aff. ¶ 15).
January 2, 2015, Kahveci and his accountants began their
investigation (originally, with Vaysglus's assistance).
As she was either unable (due to the recent birth of her
child) or, more likely, unwilling (due to her embezzlement)
to assist, Kahveci assigned one of his other front-desk
employees to help. (Kahveci Dep. at 47-49; MK Aff
¶¶ 40-47, 55, Exs. B-C; VC Aff ¶¶ 8,
19-27, and Exs. A-2-C). It then took several weeks to obtain
the necessary Form 1099s and detailed payment information
from some 55 insurance companies that had made payments to
the practice in 2013. (MK Aff. ¶¶ 46-57, Exs. B-G;
VC Aff. ¶¶ 24-38, Exs. A-1-I; KS Aff. ¶¶
February 11 and 12, 2015, Kahveci and Vaysglus exchanged a
series of texts messages about the discrepancy. (MK Aff.
¶ 62, Ex. F). During that conversation, he voiced his
suspicions that the discrepancy was due to “either
insurance error or embezzlement.” (Id.).
February 13, 2015, Kahveci received a telephone call from
Vaysglus's husband. He told Kahveci that his wife had
asked him to call and confess that she “had stolen
money.” (Kahveci Dep. at 58-59; MF Aff. ¶¶
66-68, Exs. B-G; VC Aff. ¶¶ 39-40). He terminated
Vaysglus soon thereafter. (Kahveci Dep. at 61-62; VC Aff.
¶¶ 41-44, Exs. J-K).
the course of the next several weeks, Kahveci, with the help
of his accountants, learned the details of the embezzlement.
(Compl. ¶¶ 12, 15; MK Aff. ¶¶ 69-74; VC
Aff. ¶¶ 17, 39-43, 46-49, Exs. K, M-P; KS Aff.
¶ 31). The investigation was completed in March 2015.
(Kahveci Dep. at 69; MK Aff. ¶¶ 72-74).
learned that Vaysglus had taken insurance checks payable to
his practice and, instead of depositing them in the
practice's account, deposited them into one of her two
personal accounts, also at Citizens Bank. (Compl. ¶ 15;
MK Aff. ¶ 5; RN Aff. ¶ 5). He discovered that
between January 2009 and December 2014, she deposited at
least 281 insurance checks into her personal
accounts-bringing the total amount embezzled to $352, 913.28.
(Compl. ¶¶ 11, 15-18; MK Aff. ¶¶ 4, 7; RN
Aff. ¶¶ 4, 7). She was not, of course, authorized
to deposit those checks into her own accounts. (Compl. ¶
16; MK Aff. ¶ 6; RN Aff. ¶ 6).
misappropriated the checks by endorsing checks payable to
“Faneuil Hall Dental Associates” or “Mehmet
Kahveci DMD” with the handwritten words “pay to
the order of Julia Vaysglus, ” and then forging his
signature underneath. (MK Aff. ¶ 6; RN Aff. ¶ 6).
There were also at least two checks that she deposited
directly into her account without any endorsement. (RN Aff.
¶ 6). Citizens Bank credited Vaysglus's accounts in
the full amount of each check. (Compl. ¶ 18; MK Aff.
¶ 7; RN Aff. ¶ 7). In addition, it did not inquire
as to whether Vaysglus was authorized to endorse the checks
or deposit them into her own accounts. (Compl. ¶ 19).
filed suit against Vaysglus on September 23, 2015. (Kahveci
Dep. at 76). More than two years later, on February 2, 2018,
he filed this complaint against Citizens Bank. (Compl.)
complaint was filed in the Suffolk County Superior Court on
February 1, 2018, asserting claims for conversion and
negligence. Citizens Bank 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.
March 21, 2018, Citizens Bank moved to dismiss the complaint,
contending that all claims are time-barred. The Court denied
that motion on April 23, 2018.
31, 2018, the Court held a scheduling conference pursuant to
Fed.R.Civ.P. 16(b). Two weeks prior to the conference, on May
17, 2018, the parties submitted a joint statement pursuant to
Local Rule 16.1 proposing a pretrial schedule. The joint
statement of the parties proposed a ...