BPD Intl. Bank v Petitto
Annotate this CaseDecided on May 29, 2007
Civil Court of the City of New York, Richmond County
BPD International Bank, Plaintiff,
against
Charles A. Petitto, Defendant.
37009/03
A P P E A R A N C E S
Counsel for Plaintiff:
Avery J. Gross, Esq.
30 Bay Street
Staten Island, NY 10301
718-447-8006
Counsel for Defendant:
Law Offices of Nichole E. Lee, PC
291 Jewett Ave.
Staten Island, NY 10302
718-447-6054
Philip S. Straniere, J.
The plaintiff, BPD International Bank, moves pursuant to CPLR §3212 for an order granting summary judgment against the defendant, Charles Petitto, for a judgment in the amount of $9,092.55. Defendant cross moves for an order dismissing plaintiff's complaint as being time barred or, in the alternative, dismissing plaintiff's complaint for failure to comply with outstanding discovery requests. Both sides are represented by counsel and have submitted opposition and reply affirmations. The defendant is an attorney at law who had previously represented plaintiff in commercial collection litigation.
The action was brought by plaintiff to recover monies from the defendant, its former attorney, received in his fiduciary capacity in the matter of BPD International Bank v. Briones (Civil Court, Richmond County, Index Number 960/1997). The undisputed facts are that the plaintiff retained defendant to collect a consumer debt owed to plaintiff bank. The defendant brought suit, recovered a judgment in the amount of $8,493.27, issued an income execution to the New York City Marshal and collected the entire amount of the judgment, plus marshal fees and interest totaling $9,571.11. Plaintiff alleges the funds collected were never remitted by defendant. Defendant alleges that he paid plaintiff, however, he is unable to provide proof of the alleged payment.
Defendant argues that plaintiff's action is one for conversion and therefore governed by a three- year statute of limitations (CPLR §214(3)). Plaintiff claims the cause of action is based on contract in that plaintiff entered into a contractual agreement with the defendant whereby defendant would attempt to recover money from a debtor and repay plaintiff the money collected. Plaintiff contends defendant breached that contract and therefore the six-year statute of limitations applies (CPLR §213(2)).
Conversion is defined as "an unauthorized assumption and exercise of the right of [*2]ownership over goods or personal chattels belong to another, to the alteration of their condition or the exclusion of owner's rights" (Black's Law Dictionary, 5th Edition). In support of his position defendant relies on Adams v. Hickey, 35 AD2d 328 (2006) and Disabled American Veterans v. Phillips, 13 Misc 3rd 1210(A)(2006) which found the cause of action for conversion includes the misappropriation of funds, i.e. money, as in the case at bar. Therefore, defendant concludes plaintiff's claim is barred by the three year statute of limitations.
Plaintiff's opposition is that its cause of action is for the recovery of money had, received and retained by the defendant. A conversion claim cannot be based solely on an allegation that a defendant received money and failed to pay the plaintiff (See Interstate Adjusters v. First Fid. Bank, N.J., 251 AD2d 232(1998)). In Interstate the Court held that an action for money received is an equitable quasi-contract claim. Looking to the statutes, CPLR §214(3) specifically refers to chattel, while CPLR §213(2) specifically refers to a contractual obligation. Regardless of whether plaintiff's claim is one in tort or contract, plaintiff has the right to select the longer statute.
When a plaintiff has more than one cause of action available, he or she may elect the remedy to pursue; the fact that one remedy may be time barred does not affect a plaintiff's right to pursue others (See King v. King, 13 AD2d 437 (1961)). Therefore, the defendant's argument that the cause of action is for the conversion of money, even if correct, does not bar plaintiff's claim. Additionally, the cases defendant cites in support of his position are distinguished from the one at bar in that in those cases each plaintiff's claim was for conversion. In applying the statute of limitations, if two remedies are available, the plaintiff may proceed on either theory and the action will be governed by the longer statute. In this case, the gravamen of plaintiff's complaint is one of contract and therefore the six-year statute of limitations under CPLR §213 governs.
Plaintiff contends that it is entitled to summary judgment as the defendant never remitted the money collected to it. Plaintiff has submitted proof of the transmittal of account to the defendant; a copy of the summons and the judgment in the underlying claim; copy of the
marshal's collection ledger; and a letter from the defendant himself to the judgment debtors acknowledging that the judgment had been fully paid. Plaintiff further submits an affidavit from Vincent P. Crocitto, the senior vice president of the bank, confirming that no money was ever received by the plaintiff. Plaintiff has met its burden and demonstrated that no triable issue of fact exists. Once the moving party has met its burden, the burden shifts to the party opposing the motion to produce evidence in admissible form to establish the existence of material issues of fact which require a trial. (Garnham & Han Real Estate Brokers, Inc. v. Oppenheimer, 148 AD2d 493 (2d Dept. 1989)).
Defendant claims he paid the money to a former employee of plaintiff bank, Paul Perez. Defendant has not submitted proof of payment because he alleges he no longer has his file. The final payment on the judgment was in March of 1998. Plaintiff commenced this action in July of 2003. Defendant, as an attorney, is under a duty to maintain his records for a minium of seven [*3]years. Since the money collected in the underlying action was not a fee, defendant was required to place the money in his trust account prior to disbursement to plaintiff.
Professional Disciplinary Rule §1200.46 (DR 9-102) Preserving Identity of Funds and Property of Others;... Maintenance of Bank Accounts;... is applicable to this situation and provides:
(d) Required Bookkeeping Records. A lawyer shall maintain for seven years after the events which they record:
(1) The records of all deposits in and withdrawals from the accounts specified in section 1200.46(b) of this part and of any other bank account which concerns or affects the lawyer's practice of law. These records shall specifically identify the date, source and description of each item deposited, as well as the date, payee and purpose of each withdrawal of disbursement...
(8) All checkbooks and check stubs, bank statements, prenumbered canceled checks and duplicate deposit slips with respect to the special accounts specified in DR 9-102(B) (subdivision (b) of this section) and other bank account which records the operation of the lawyer's practice of law.
Defendant's flippant assertion in his affidavit that the underlying file relating to this cause of action is one he "either lost or threw out" is unacceptable and may be a violation of the disciplinary rules. Payment is an affirmative defense and as an affirmative defense defendant has the burden of proof (CPLR §3018(b); CIT Group/Factoring Mfrs. Hanover v. Supermarkets Gen. Corp. 183 AD2d 454 (1992)). Defendant had an obligation to retain his books and records for a period of seven years. This litigation was commenced within that time period, so even if he could have disposed of these records after seven years if there was no suit pending, the fact that litigation was commenced effecting his accounts triggered an obligation to retain these records. Defendant cannot benefit from his own wrongful act. The defendant cannot provide proof of payment and therefore his affirmative defense of payment fails and must be stricken. Defendant has failed to come forward with any evidence in opposition to the motion and as such plaintiff is entitled to summary judgment.
Defendant's cross-motion seeking discovery has been previously decided by this Court on December 21, 2004. The Court has already ruled that "the plaintiff has responded to the defendant's discovery demands as to those documents that the plaintiff has in its possession or are available. The plaintiff, however, will be precluded from offering any evidence at trial which it claims it does not have available to provide to the defendant in response to defendant's discovery demands."
Accordingly, plaintiff's motion for summary judgment is granted. The defendant's cross-motion to dismiss is denied. The marshal has collected $9,571.11. Ninety-five percent of the sum collected belongs to the plaintiff and 5% is marshal's fees. The clerk is directed to enter judgment in favor of the plaintiff in the amount of $9,092.55, plus interest from February 23, 1998. [*4]
The foregoing constitutes the decision and order of the Court.
Dated:May 29, 2007_____________________________
Staten Island, NYHON. PHILIP S. STRANIERE
Judge, Civil Court
ASN by _______ on ____________.
A P P E A R A N C E S
Counsel for Plaintiff:
Avery J. Gross, Esq.
30 Bay Street
Staten Island, NY 10301
718-447-8006
Counsel for Defendant:
Law Offices of Nichole E. Lee, PC
291 Jewett Ave.
Staten Island, NY 10302
718-447-6054
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