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Versus Evil LLC Survives Motions to Transfer and Dismiss
Versus Evil, LLC is an indie game publisher currently litigating against its bank, PNC Bank, for failing to exercise ordinary care when an “unknown person” started forging and cashing fake checks. PNC tried to transfer and dismiss the case and failed on both fronts. Versus Evil gets to continue fighting (alleged) evil.
THE ALLEGED EVIL
Versus Evil LLC, a company based in Maryland, is an indie game publisher best known for publishing The Banner Saga franchise, Guild of Dungeoneering, and Armikrog.
Versus Evil banks with PNC Bank, which was founded in 1804 and has 2,310 branches in 22 states with most of its branches located in Pennsylvania, Ohio, New Jersey, Maryland and Florida.
On February 25, 2019, Versus Evil alleges that “an unknown person or persons” created a fake check drawn on its checking account at PNC bank in the amount of $4,770.97 with a forged signature. Versus Evil alleges that someone obtained a real check with a “dog ear” wrinkle, photographed and scanned it, and deposited it using the mobile phone deposit system. After that check cleared, more checks were deposited from March 6 to March 12, 2019, totaling $188,569.58. Versus Evil then claims it promptly contacted PNC to let the bank know the checks were unauthorized forgeries and that the bank must dishonor the checks and reimburse Versus Evil for the full amounts. When PNC declined to reimburse or dishonor the checks, Versus Evil sued.
Versus Evil sued PNC Bank for failure to exercise ordinary care under Maryland’s version of the UCC and common law negligence. Versus Evil sued in state court, but PNC removed on a diversity of citizenship basis.
MOTIONS AND THE COURT’S MAY 5, 2020 ORDER
PNC filed a motion to transfer venue to the W.D. of Pennsylvania and a motion to dismiss both claims.
On the transfer motion, PNC argued it had a “Treasury Management Services Comprehensive Agreement” with Versus Evil that contained a valid forum selection clause. However, PNC failed to establish a valid clause because the agreement attached to its motion was “undated, unsigned, and incomplete.”
The court went on to say, though, that even if PNC did have a valid agreement with a forum selection clause, the court still wouldn’t grant the motion because it would be “inappropriate” under 28 U.S.C. § 1404(a). Other than the forum selection clause, nothing else supported a transfer to Pennsylvania. The court observed that Versus Evil is headquartered in Baltimore, PNC has branches in Baltimore, and PNC didn’t submit any affidavits or other evidence to show that proposed transfer would “better and more conveniently serve the interests of the parties and witnesses and better promote the interests of justice.” A good reminder that you can’t just rely on a forum selection clause, alone.
On the motion to dismiss, the court agreed with Versus Evil that Maryland’s UCC provides for a cause of action against a party who fails to exercise ordinary care in paying or taking a check. The court did dismiss the negligence cause of action because it only applies “in the absence of an adequate remedy under the UCC” (which, again, the court found existed here).