First Am. Intl. v Koon Young Chong

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First Am. Intl. v Koon Young Chong 2017 NY Slip Op 31447(U) July 10, 2017 Supreme Court, New York County Docket Number: 154577/2012 Judge: Gerald Lebovits Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. INDEX NO. 154577/2012 [*FILED: NEW YORK COUNTY CLERK 07/10/2017 04:10 PM 1] NYSCEF DOC. NO. 32 RECEIVED NYSCEF: 07/10/2017 NEW YORK STATE SUPREME COURT NEW YORK COUNTY: PART 7 FIRST AMERICAN INTERNATIONAL, Plaintiff, Index No.: 154577/2012 DECISION/ORDER Motion Seq. No. 001 -againstKOON YOUNG CHONG, Defendant. Recitation, as required by CPLR 2219 (a), of the papers considered in reviewing plaintiffs motion for summary judgment. · Papers Numbered Plaintiffs Notice ofMotion .....................................'. ....................................................................... l Plaintiffs Memorandum of Law in Support .................................................................................... 2 Plaintiffs Affirmation in Support ..................................................................... :............................. .3 Defendant's Affirmation in Opposition .......................................................................................... .4 Plaintiffs Reply Affirmation ........................................................................................................... 5 Joan Nerlino Caddell & Associates, PLLC, Staten Island (Ganine Gambale of counsel), for plaintiff. Lmv Offices a/Stephen K. Seung, New York City (Stephen H. Marcus of counsel), for defendant. Gerald Lebovits, J. Plaintiff moves for summary judgment. Defendant opposes the motion and argues that the presence of disputed material issues of fact preclude summary judgment. On July 8, 2012, plaintiff commenced this action seeking a money judgment against defendant arising from defendant's alleged misappropriation of deposited funds. Plaintiff seeks a judgment for $109,600.60 plus interest at the statutory rate from February 3, 2012, until the judgment entry date. Plaintiffs complaint contains five causes of action: (I) breach of contract; (2) conversion; (3) unjust enrichment; (4) money had and received; and (5) prima facie tort. On December 13, 2010, Surrogate's Court, New York County, issued a letter of guardianship to defendant. Defendant was appointed guardian of the property belonging to his son, Eugene Chong. On December 23, 2010, Surrogate's Court issued a Certificate of Appointment of Guardian to defendant. The certificate provides that all funds and property belonging to Eugene Chong, the ward, shall be deposited with plaintiff bank, in the name of the guardian and that no withdrawal or transfer could be made without an order from Surrogate's Court. INDEX NO. 154577/2012 [*FILED: NEW YORK COUNTY CLERK 07/10/2017 04:10 PM 2] NYSCEF DOC. NO. 32 RECEIVED NYSCEF: 07/10/2017 Defendant's late wife's insurer, New York Life Insurance Company, issued a check for life insurance benefits to Eugene Chong. According to plaintiff, when defendant deposited the life-insurance check in the amount of $134, 698.52, defendant also delivered a copy of the Certificate of Appointment of Guardian to a bank representative at plaintiffs Bowery branch. (Plaintiffs Notice of Motion, Affidavit of Jacqueline O'Bryant, Aug. 31, 2016, at 'l] 9, Exhibit C.) Plaintiff asserts that neither defendant nor defendant's attorney advised plaintiff of any restrictions on depositing the check or withdrawing the proceeds. (Plaintiffs Notice of Motion, Affidavit of Jacqueline O'Bryant, Aug. 31, 2016, at 'l] 10.) After defendant deposited the check, he withdrew money out of the bank account without first obtaining an order from Surrogate's Court; he transferred some of the money to another account he had with plaintiff bank. (Plaintiffs Notice of Motion, Exhibit E.) Plaintiff replenished the balance of funds that defendant withdrew. Plaintiff now wants the funds back. (Plaintiffs Notice of Motion, Affidavit of Jacqueline O'Bryant, Aug. 31, 2016, at 'l] 16.) Summary judgment "shall be granted if, upon all papers and proof submitted, the cause of action ... shall be established sufficiently to warrant the court, as a matter of law, in directing judgment in favor of any party." (CPLR 3212 [b].) The movant on summary judgment must make a prima facie showing of entitlement to judgment as a matter of law and show sufficient evidence to demonstrate the absence of any material issue of fact. ( Winegrad v New York Univ. Med: Center, 64 NY2d 851, 853 [1985].) Plaintiff has proven its conversion claim. Conversion occurs "when someone, intentionally and without authority, assumes or exercises control over personal property belonging to someone else, interfering with that person's right of possession." (Colavito v New York Organ Donor Network. Inc., 8 NY3d 43, 49-50 (2006].) One who deposits money with a bank relinquishes title, and the deposited funds become part of the bank's general funds. (Kings Premium Serv. Corp. v Mfr. Hanover Trust Co., 115 AD2d 707, 709 (2d Dept 1985].) When defendant deposited the life-insurance check, title transferred to the plaintiff, and the funds became plaintiffs property. Defendant intentionally withdrew and transferred the funds without first obtaining a court order. (Defendant's Affirmation in Opposition, Affidavit of Koon Young Chong, at 4.) Plaintiff proved with admissible evidence that because defendant was not authorized to withdraw proceeds of the check without a court order, plaintiff had a superior right of interest on which it may recover defendant's wrongfully obtained funds. (Plaintiffs Notice of Motion, Exhibit C.) In any event, plaintiff is entitled to summary judgment on its breach-of-contract claim. An action for breach of contract requires proof of (I) a contract; (2) performance of the contract by one party; (3) breach by the other party; and (4) damages. (WorldCom, Inc. v Sandoval, 182 Misc 2d 1021, I 024 (Sup Ct, NY County 1999].) By defendant's use of the bank accounts, defendant assented to the terms and conditions of plaintiffs account agreement, a valid contract. When defendant withdrew or transferred money without a court order, defendant breached the account agreement. (Plaintiffs Notice of Motion, Exhibit C.) Plaintiff then replenished into a separate, special account, from its own funds, defendant's wrongfully withdrawn funds. (Plaintiffs Notice of Motion, Affidavit of Jacqueline O'Bryant, Aug. 31, 2016, 'l] 16.) 2 INDEX NO. 154577/2012 [*FILED: NEW YORK COUNTY CLERK 07/10/2017 04:10 PM 3] NYSCEF DOC. NO. 32 RECEIVED NYSCEF: 07/10/2017 · Defendant alleges that he asked various bank personnel whether a court order was needed to withdraw the funds, and the bank personnel said that an order was unnecessary. (Defendant's Affirmation in Opposition, Affidavit of Koon Young Chong, at 4.) But a bank has no duty to inform a customer or depositor of the monetary consequences of a transaction. (Bennice v Lakeshore S&L Ass 'n, 254 AD2d 731, 732 [4th Dept 1998].) Defendant states that he used the money to pay for rent, food, and pay back relatives. But these reasons do not create material issues of fact for trial. Defendant's remaining arguments are likewise unavailing. Defendant's defenses are dismissed. Defendant's answer raises the following affirmative defenses, numbered 1 through 10: (I) plaintiffs recovery would result in unjust enrichment to the plaintiff; (2) defendant withdrew money according to plaintiffs instructions, consent, and approval; (3) defendant, who is foreign born, and who neither speaks, reads nor understands English, relied on plaintiffs statements that the withdrawals were proper; (4) plaintiffs damage resulted solely from plaintiffs culpable conduct or negligent acts; (5) plaintiffs complaint fails to state a cause of action; (6) action against defendant is barred by plaintiffs ]aches; (7) action against defendant is barred by plaintiffs waiver; (8) plaintiff failed to take steps to mitigate its alleged damage; (9) the court has no personal jurisdiction over defendant; and (10) defendant did not understand the alleged agreements and plaintiff did not accurately explain to defendant the meaning of any documents he allegedly signed. Defendant's first and fifth affirmative defenses are stricken. According to defendant, he withdrew money to pay for rent, food, and other necessities. (Defendant's Affirmation in Opposition, Affidavit of Koon Young Chong, at 4.) Also, he used some of the withdrawn funds to repay relatives who had helped defendant and his son, the ward, during a period of financial hardship. (Id.) Defendant states that his annual earnings for the years of2007-2012 ranged from $4272 to $6944. (Defendant's Affirmation in Opposition, Affidavit of Koon Young Chong, at 2.) Defendant's defenses have no merit. Defendant's second, fourth, sixth, and seventh affirmative defenses are stricken. Absent a a special relationship of trust and confidence, a bank has no duty to inform a customer or depositor of the monetary consequences ofa transaction. (Bennice, 254 AD2d at 732.) In any event, plaintiffs evidence shows that as soon as it discovered defendant's unauthorized withdrawals and transfers, it sought the money back from defendant. (Plaintiffs Notice of Motion, Affidavit of Jacqueline O'Bryant, Aug. 31, 2016, ii 16.) When defendant refused, plaintiff replenished the funds into a special account, to be held pending further order of the Surrogate's Court. (Id.) Defendant's third and tenth affirmative defenses are stricken. A bank is generally permitted to "assume that a person acting as a fiduciary will apply entrusted funds to the proper purposes and will adhere to the conditions of the appointment." (Matter of Knox, 64 NY2d 434, 438 [1985].) Although defendant states that he does not understand English, he was represented 3 INDEX NO. 154577/2012 [*FILED: NEW YORK COUNTY CLERK 07/10/2017 04:10 PM 4] NYSCEF DOC. NO. 32 RECEIVED NYSCEF: 07/10/2017 by counsel throughout the guardianship proceedings; therefore, plaintiff was not obligated to inform or explain to defendant his fiduciary responsibilities. Defendant's eighth affirmative defense is also stricken. In its opposition papers, defendant does not say how plaintiff failed to mitigate its damages. Defendant's ninth affirmative defense is stricken as well. Defendant does not address this defense in his opposition papers. Accordingly, it is ORDERED that plaintiffs summary-judgment motion is granted, and plaintiff shall settle order; and it is further ORDERED that plaintiff serve a copy of this decision and order on defendant. Dated: July 10, 2017 I? J.~ON. GERALD LEBOVITS J.s.c. 4

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