Bank of Am., N.A. v Zirogiannis

Bank of Am., N.A. v Zirogiannis 2012 NY Slip Op 01626 Decided on March 6, 2012 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on March 6, 2012
Tom, J.P., Friedman, Acosta, DeGrasse, Román, JJ.
6941 602717/09

[*1]Bank of America, N.A., Plaintiff-Respondent,

v

Marc A. Zirogiannis, et al., Defendants, Sterling National Mortgage Company, Inc., et al., Defendants-Respondents, SunTrust Mortgage, Inc., Defendant-Appellant.




Ellenoff Grossman & Schole LLP, New York (Eric Weinstein
of counsel), for appellant.
Zeichner Ellman & Krause LLP, New York (Anthony I.
Giacobbe, Jr., of counsel), for Bank of America, N.A., respondent.
Meyer, Suozzi, English & Klein, P.C., Garden City (Robert N.
Zausmer of counsel), for Sterling National Mortgage Company,
Inc., respondent.
Hogan Lovells US LLP, New York (Renee Garcia of counsel),
for Wells Fargo Bank, N.A., respondent.
Eric T. Schneiderman, Attorney General, New York (Robert C.
Weisz of counsel), for Lawyers' Fund for Client Protection,
respondent.

Order, Supreme Court, New York County (Richard F. Braun, J.), entered August 1, 2011, which, to the extent appealed from, granted Sterling Mortgage Company, Inc.'s motion and Wells Fargo Bank, N.A.'s cross motion for summary judgment for a pro rata distribution of funds from the Mark A. Zirogiannis IOLA account held at Bank of America, and denied SunTrust Mortgage, Inc.'s cross motion for a return of the funds it deposited into the IOLA account, unanimously reversed, on the law, without costs, Sterling's motion and Wells Fargo's cross motion denied, SunTrust's motion granted, and the matter remanded for distribution of the funds consistent with the decision herein.

The court improperly found that the appropriate remedy in this interpleader action was to order a pro rata distribution to all of the claimants of the funds held in the IOLA account. SunTrust is entitled to the funds since it was able to identify and trace its specific funds to the [*2]money in the account at the time that Bank of America commenced the interpleader action (Matter of Reece, 122 Misc 2d 517, 518 [1983], citing Matter of Cavin v Gleason, 105 NY 256, 262 [1887]). Consistent with the relief requested by Wells Fargo, the balance of the funds should be distributed pro rata among the interpleader defendants who can establish the validity of their claim.

THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: MARCH 6, 2012

CLERK