Wright v Bank of Am.

[*1] Wright v Bank of Am. 2009 NY Slip Op 52655(U) [26 Misc 3d 1203(A)] Decided on December 9, 2009 Supreme Court, Nassau County Palmieri, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on December 9, 2009
Supreme Court, Nassau County

Walter C. Wright, Plaintiff,

against

Bank of America, Myles Mortgage Services, Inc., LAC Enterprises, Inc., Mitchell Levy and James Boone a/k/a Michael Harris, Defendants.



019935/09



Nathaniel M. Swergold, Esq.

Attorney for Plaintiff

124 Cedarhurst Avenue

Cedarhurst, NY 11516

Wilson, Elser, Moskowitz, Edelman & Dicker, LLP

Attorneys for Defendant

3 Gannett Drive

White Plains, NY 10604

Myles Mortgage Services, Inc.

Defendant Pro Se

59 No. Main Street

Florida, NY 10921

LAC Enterprises, Inc.

Defendant Pro Se

982 Church Street Baldwin, NY 11510

Mitchell Levy

Defendant Pro Se

982 Church Street

Baldwin, NY 11510

James Boone a/k/a Michael Harris

Defendant Pro Se

20 Evelyn Drive

Bethpage, NY 11714

Daniel R. Palmieri, J.

The motion of defendant Bank of America (BoA), dismissing the complaint, pursuant to CPLR §3212 based on CPLR §214 and UCC §3-419 is granted and the action is dismissed as to defendant BoA.

The claim against BoA is that a check payable to plaintiff was presented for payment to BoA as collecting bank, on a forged signature, the funds were deposited into the account of another and that by honoring the check, BoA converted its proceeds. BoA now moves for judgment on the basis that an action for conversion is barred by the three year statute of limitations applicable to an action for conversion CPLR §214 and that the plaintiff lacks standing to sue since, by his own admission, he was never in actual or constructive possession of the check. UCC §§3-419 and 4-105(a).

According to the complaint, verified only by plaintiff's attorney, plaintiff sold his real property in Ozone Park to another, who obtained financing from a lender. At the closing, on March 29, 2006, a deed from plaintiff was delivered to the buyer and a check, payable to plaintiff, was issued by the lender's attorneys on their trust account with Commerce Bank, in the amount of $41,841.78 (the Check), that being the net amount due to him from the sale. Plaintiff did not attend the closing and except for his mother, who he sent to pick up his payment for the purchase, was not represented by any attorney or any other person acting on his behalf. Also attending the closing were co-defendants Levy and Boone, who were employed by or representing both Myles Mortgage Services Inc., and LAC Enterprises, Inc., (LAC).

On April 3, 2006, the Check, endorsed with plaintiff's name, was presented for collection to BoA with a deposit slip for LAC's account at BoA. The Check cleared and the proceeds thereof were credited to LAC's account. Plaintiff claims that his signature on the Check was forged and in July 2008, submitted an affidavit to that effect to BoA. This action was commenced on September 30, 2009, BoA answered and this motion ensued. That the Check was not endorsed by plaintiff is not in dispute and thus, it is not necessary for the determination of this motion to make such a finding because this decision assumes a forgery in that plaintiff did not endorse the Check. [*2]

Defendant's motion is supported by an affirmation of counsel and an affidavit of an employee of BoA, together with documentary evidence. The motion is opposed solely by way of an affirmation of plaintiff's attorney. There are no other submissions from any other defendant or person attending or having any connection to the closing or the deposit of the Check. According to the complaint, defendant Boone "secured the Check without the consent of plaintiff and thereafter delivered it to either defendant Levy and/or defendant [LAC]."

There is no claim that either plaintiff, his mother or anyone acting on their behalf ever obtained possession, be it actual or constructive of the Check or any control thereof.

It is well settled that summary judgment is a drastic remedy which should not be granted where there is any doubt about the existence of a triable issue of fact. Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395 (1957); Bhatti v. Roche, 140 AD2d 660 (2d Dept. 1988). It is nevertheless an appropriate tool to weed out meritless claims. Lewis v. Desmond, 187 AD2d 797 (3d Dept. 1992); Gray v. Bankers Trust Co. of Albany, N. A., 82 AD2d 168 (3d Dept. 1981). Even where there are some issues in dispute in the case which have not been resolved, the existence of such issues will not defeat a summary judgment motion if, when the facts are construed in the nonmoving party's favor, the moving party would still be entitled to relief Brooks v. Blue Cross of Northeastern New York, Inc., 190 AD2d 894 (3d Dept.1993).

Generally speaking, to obtain summary judgment it is necessary that the movant establish its claim or defense by the tender of evidentiary proof in admissible form sufficient to warrant the court, as a matter of law, in directing judgment in its favor (CPLR 3212 [b]), which may include deposition transcripts and other proof annexed to an attorney's affirmation. Olan v Farrell Lines, 64 NY2d 1092 (1985). Absent a sufficient showing, the court should deny the motion, irrespective of the strength of the opposing papers. Winegrad v New York Univ. Med. Ctr., 64 NY2d 851 (1985).

If a sufficient prima facie showing is made, however, the burden then shifts to the non-moving party. To defeat the motion for summary judgment the opposing party must come forward with evidence to demonstrate the existence of a material issue of fact requiring a trial. CPLR 3212 (b); see also GTF Marketing, Inc. v. Colonial Aluminum Sales, Inc., 66 NY2d 965 (1985); Zuckerman v. City of New York, 49 NY2d 557 (1980). The non-moving party must lay bare all of the facts at its disposal regarding the issues raised in the motion. Mgrditchian v. Donato, 141 AD2d 513 (2d Dept. 1988). Conclusory allegations are insufficient (Zuckerman v. City of New York, supra), and the defending party must do more than merely parrot the language of the complaint or bill of particulars. There must be evidentiary proof in support of the allegations. Fleet Credit Corp. v. Harvey Hutter & Co., Inc., 207 AD2d 380 (2d Dept. 1994); Toth v. Carver Street Associates, 191 AD2d 631 (2d Dept. 1993). If a party defends a motion by resort to CPLR 3212(f), that is, the party has a defense sufficient to defeat the motion but that the facts cannot yet be stated, that party must be able to make some showing that such facts do in fact exist; mere hope that discovery may [*3]reveal those facts is insufficient. Companion Life Ins. Co. v All State Abstract Co., 35 AD3d 519 (2d Dept. 2006). Nor can mere speculation serve to defeat the motion. Pluhar v Town of Southhampton, 29 AD3d 975 (2d Dept. 2006); Ciccone v Bedford Cent. School Dist., 21 AD3d 437 (2d Dept. 2005).

However, the court must draw all reasonable inferences in favor of the nonmoving party. Nicklas v Tedlen Realty Corp., 305 AD2d 385 (2d Dept. 2003); Rizzo v. Lincoln Diner Corp., 215 AD2d 546 (2d Dept. 1995). The role of the court in deciding a motion for summary judgment is not to resolve issues of fact or to determine matters of credibility, but simply to determine whether such issues of fact requiring a trial exist. Dyckman v. Barrett, 187 AD2d 553 (2d Dept. 1992); Barr v County of Albany, 50 NY2d 247, 254 (1980); James v. Albank, 307 AD2d 1024 (2d Dept. 2003); Heller v. Hicks Nurseries, Inc., 198 AD2d 330 (2d Dept. 1993).

The Court need not, however, ignore the fact that an allegation is patently false or that an issue sought to be raised is merely feigned. See Village Bank v Wild Oaks Holding, Inc., 196 AD2d 812 (2d Dept. 1993); Barclays Bank of NY v Sokol, 128 AD2d 492 (2d Dept. 1987), such as when the affidavit in opposition clearly contradicts earlier deposition testimony. Central Irrigation Supply v Putnam Country Club Assocs., LLC, 27 AD3d 684 (2d Dept. 2006).

It is well settled that an attorney's affirmation that is not based on personal knowledge or supported by documentary evidence is of no probative value. Warrington v. Ryder Truck Rental, Inc., 35 AD3d 152 (2d Dept. 2006); Sampson v. Delaney, 34 AD3d 349 (1st Dept. 2006); cf Davey v. Dolan, 46 AD3d 854 (2d Dept. 2007). Here, plaintiff's attorney does not profess to possess personal knowledge of any facts asserted and has not employed his affirmation as a vehicle to refer to other competent evidence, hence on factual issues, the affirmation lacks probative usefulness.

Defendant has made a prima facie showing of entitlement to relief, thus shifting the burden to plaintiff to come forward with evidence in admissible form demonstrating the existence of questions of fact.

UCC §3-419 provides in substance that an instrument is converted when it is paid on a forged indorsement. The statute of limitations for an action on conversion is three years. CPLR §214(3). Jones v. Community Bank of Sullivan County, 306 AD2d 679, 680 (3rd Dept. 2003). Here, this action, which was commenced on September 30, 2009, was commenced beyond the three year limit and should be dismissed on that basis alone.

Moreover, it is well settled that a named payee must have actual or constructive possession in order to sue a depositary bank on a forged instrument and here, there is neither an allegation nor any evidence that plaintiff had either actual or constructive possession of the Check. State of New York v. Barclays Bank of NY, 76 NY2d 533 (1990); Gallery Garage Management Corp., v. Chemical Bank, 226 AD2d 305 (1st Dept. 1996).

Plaintiff's counsel invoking Hechter v. New York Life Insurance Company, 46 NY2d 34 (1978), argues that this action, although pleaded as being for conversion, should be [*4]considered an action on a contract and is thus timely as being commenced within six years of its accrual. CPLR § 213.

Plaintiff is correct that Hechter held that UCC §3-419 did not abolish the pre-UCC contract action against a collecting bank, id at 39, UCC §1-103.

Defendant notes that plaintiff has not moved to amend his complaint to assert a cause of action that would be timely under the six year period of limitations. The Court is permitted, however, to consider this action as having been brought pursuant to a contract theory. See, Schenectady Steel Co., v. Guardian Life Ins. Co. Of Am., 300 AD2d 854 (3rd Dept. 2002), where it was found to be proper to deny a cross motion to amend a complaint to assert an additional cause of action for conversion because the Court, in making its determination, read the complaint to state such a cause of action, thus, rendering an amendment as academic. An action on a contract theory under these circumstances is one for money had and received where the law creates or implies a promise to pay and is often referred to as assumpsit which will lie to find liability by enforcing what is a fictitious promise to pay. Castex Fire Proof Door Co., v. Sheftman, 163 Misc. 303 (City Court of New York, New York, Bronx County 1937); see also Holt v. Feigenbaum, 52 NY2d 291, 297 (1981).

However, even before the UCC New York barred a payee from suing the depository bank absent delivery of the check, thereby requiring the payee to sue the drawer on the underlying obligation. State v. Barclays Bank of NY, 151 AD2d 19, 22 (3rd Dept. 1989), affirmed 76 NY2d 533 (1990), which held that plaintiff's action in quasi contract like its action for conversion under the UCC must fail where the checks were never actually or constructively delivered to the plaintiff because plaintiff never acquired a property interest in them and hence, could not be said to have suffered a loss. Id at 540-541.

In sum, summary judgment is appropriate considering the action as being for conversion because it was commenced beyond the applicable three year period. See Rohmer Associates, Inc. v. Rohmer, 36 AD3d 990 (3rd Dept. 2007); New Windsor Assoc. v. Norstar Bank of Hudson Val., 114 AD2d 1017 (2d Dept. 1985) and because there is no claim or evidence of receipt by plaintiff of the Check either actually or constructively.

As an action on a contract it is timely, however, such an action also requires evidence that the plaintiff came into possession of the Check and there are no facts present here from which a trier of fact could make such a finding. Galley Garage Management Corp. v. Chemical Bank, supra; Cf Schenectady Steel Co. v. Guardian Life Ins. Co of Am, supra, (question of fact as to constructive possession via an agent).

Based on the foregoing, the motion is granted and the action against BoA is dismissed.

The remaining parties shall appear at a preliminary conference at the Supreme Courthouse, 100 Supreme Court Drive, Mineola, NY, lower level, on January 28, 2010, at 9:30 a.m. No adjournments of this conference will be permitted absent the permission of or Order of this Court. All parties are forewarned that failure to attend the conference may result in Judgment by Default, the dismissal of pleadings (see 22 NYCRR 202.27) or [*5]monetary sanctions (22 NYCRR 130-2.1 et seq.).

This shall constitute the Decision and Order of this Court.

ENTER

DATED: December 9, 2009

HON. DANIEL PALMIERI

Acting Supreme Court Justice