Where a plaintiff has filed a complaint against a defendant bank, the plaintiff’s claim for statutory conversion accrued in April 2015, so the plaintiff’s tort claims are time-barred.
“This matter comes before the Court on Defendant Nicolet National Bank’s (Nicolet) Motion for Summary Disposition pursuant to MCR 2.116(C)(7) and MCR 2.116(C)(10). This Court, being fully apprised of the premises, GRANTS Nicolet’s Motion. …
“In April of 2015, Plaintiff entered into a business loan agreement with Nicolet’s predecessor, mBank, designed to pay off an existing line of credit at another banking institution, Superior National Bank & Trust. Nicolet agreed to pay Superior $3,145,088.96 and in return, Plaintiff established an account with Nicolet under a Deposit Account Security and Control Agreement (DACA) and transferred certificates of deposit valued at $3.15 million from Superior into that account to be held as collateral. Plaintiff alleges that this $3.15 million in certificates of deposit were actually permanently restricted donor gifts (Restricted Gifts) under the Uniform Prudent Management of Institutional Funds Acts (UPMIFA), MCL 451.921 et seq.
“The DACA provided that Nicolet had a security interest in that account, that Plaintiff could not withdraw or otherwise control funds in that account below the minimum balance of $3.15 million, and that Nicolet would pay Plaintiff interest at a rate of 2.75% per annum. The initial maturity date on the loan was set in March of 2021, however, at that time, Plaintiff was unable to pay off the loan. Plaintiff and Nicolet therefore entered into an agreement to extend the maturity date to March of 2027.
“In March of 2023, Plaintiff became insolvent and defaulted on its loan with Nicolet. As a result, and acting in accordance with the business loan agreement and the DACA, Nicolet seized the funds remaining in Plaintiff’s account—at that time, $2,933,653.22—and applied those funds to the outstanding balance due on the loan secured by that account. Following an investigation into Plaintiff’s operations and insolvency by the Attorney General and appointment of a Receiver, Plaintiff filed the present action on March 4, 2024. …
“Plaintiff has alleged that because the $3.15 million held as collateral by Nicolet under the DACA were Restricted Gifts, the Defendant Trustees and Officers had no legal right to pledge the funds and Nicolet had no legal right to seize the funds upon Plaintiff’s default. Plaintiff argues that Nicolet thus unlawfully converted those funds and the claim for conversion accrued when Nicolet did seize the remaining balance of Plaintiff’s accounts in March of 2023. Nicolet now argues that, assuming arguendo that Plaintiff does have a valid claim for statutory conversion, such a claim accrued when it initially accepted the funds as collateral in violation of the UPMIFA, and thus the claim is time barred under the three-year statute of limitations applicable to tort actions. MCL 600.5805(2). …
“The question before the Court is therefore at what time was the Plaintiff harmed by Nicolet’s acceptance of the funds. …
“The Court has considered the facts and arguments and now finds that Plaintiff’s claim for statutory conversion accrued in April of 2015, and thus Plaintiff’s tort claims are time-barred. …
“As to the civil conspiracy claim, it necessarily fails because without an actionable statutory conversion claim, there is no underlying tort to sustain the claim. Green v Pontiac Public Library, 350 Mich App 478, 498 (2024); Admiral Ins Co v Columbia Casualty Ins Co, 194 Mich App 300, 313 (1992). Nicolet is therefore entitled to summary disposition as a matter of law under MCR 2.116(C)(10).”
Finlandia Univ. v. Nicolet Nat’l Bank; MiLW No. 10-111297, 7 pages; Ingham County Court; Jamo, J.