Opinion
300367 TSN 2006.
Decided November 29, 2006.
Plaintiff represented by: Anthony J. Siano, Esq., White Plains, NY.
Defendants JP Morgan Chase Bank and Fazilat Mohamed represented by:
Barry, McTiernan MOORE, New York, NY, by Roger P. McTiernan, Esq.
Defendants JP Morgan Chase Bank ("Chase" or "Bank") and Fazilat Mohamed ("Mohamed") move for an order pursuant to CPLR §§ 3211 and 3212 granting them summary judgment dismissing the complaint. Plaintiff John Kwawukume ("plaintiff" or "Kwawukume") opposes the motion.
Procedural History
In November 2003, plaintiff commenced this action against defendants in Supreme Court, New York County by summons and verified complaint alleging three causes of action false arrest, defamation and negligent supervision and training. (Exhibit "C" to the Motion). In January 2004, defendants interposed a verified answer denying the allegations of the verified complaint. (Exhibit "D" to the Motion). In the early part of 2006, defendants made a similar motion for summary judgment which the Supreme Court denied without prejudice and then transferred this action to the Civil Court pursuant to CPLR § 325(d). (Exhibits "A" and "B" to the Motion).
Factual Background
This action arises out of an incident that occurred on March 25, 2003, at about 11:30 a.m., at a Chase bank branch, 919 Third Avenue, New York, New York ("Bank Branch") (Exhibit "B" to the Motion, Response to Bill of Particulars at ¶ ¶ 2 3). At the time of the incident, Mohamed was the assistant branch manager at the Bank Branch. ("Exhibit "H" to the Motion, Examination Before Trial ["EBT"] of Mohamed on April 21, 2004, at p. 8, line 14). Chase employed Kris Krajewski ("Krajewski") as a teller and Mohamed was his immediate supervisor. (Exhibit "I" to the Motion, EBT of Krajewski of April 21, 2004, at p. 5, line 21; p. 21, lines 11-12).
Ghana Airways, Ltd. ("Ghana Airways") employed Kwawukume as an accounting manager. (Exhibit "C" to the Motion, Verified Complaint at ¶ 2). Since 2000, Kwawukume regularly made cash and check deposits for Ghana Airways at Chase's Bank Branch. (Exhibit "F" to the Motion, EBT of Kwawukume on March 15, 2004, at p. 5). Krajewski was very familiar with Kwawukume as he frequently deposited Ghana Airways' funds at the Bank Branch. (EBT of Krajewski at p. 11, line 4).
On March 25, 2003, Kwawukume entered the Bank Branch with three cash deposits and proceeded to Krajewski's teller window. Krajewski processed two out of three deposits. (EBT of Krajewski at p. 18, lines 9-11). However, Krajewski questioned the third deposit as "the bills were stained with dye." (EBT of Krajewski at p. 37, line 14). The color of the stains appeared blue or violet blue. (EBT of Kwawukume at p. 22, line 10). Krajewski took the third deposit over to Mohamed to show her the bills because he "received training at Chase that any questionable transactions should be referred to [his] supervisor." (EBT of Krajewski at pgs. 21 and 37). When he returned, Krajewski asked Kwawukume from where he got the money and Kwawukme responded that the "old, dirt currencies" came from Ghana. (EBT of Kwawukme at p. 32, lines 10-13). Krajewski then had a conversation and showed the questionable bills to other tellers, Althea Drummond and Maria Alemany. (EBT of Kwawukume at p. 29, line 18).
Kwawukume noticed that Mohamed was on the phone. Krajewski told Kwawukume that "they are going to call the Federal Reserve Bank . . . if they should accept the money or not accept the money." (EBT of Kwawukume at p. 33, lines 14-16). Krajewski told Mohamed that the money seems to have dye pack ink on it. Mohamed told Krajewski that since the bills were so "badly dyed," she had to follow normal procedure and call Chase Security to ascertain whether the money could be deposited. Mohamed called Wayne P. White, Jr. ("White"), an investigator, at Chase's Global Security department. (EBT of Mohamed at pgs. 40-41). White told Mohamed he needed to speak to his superior, Thomas Delaney ("Delaney"). Delaney responded that he needed to call the New York City Police Department's Joint Bank Robbery Task Force. (EBT of White at pgs. 11-13). Delaney telephoned Lt. Marty Sweeney and told him that "there's a customer trying to deposit . . . some dye-stained money." Lt. Sweeney asked for the location of the branch because "I've got a team up there . . . I will send them right away." (Exhibit "J" to the Motion, EBT of Delaney at pgs. 9-10). When Kwawukume tried to leave the Bank Branch, Krajewski blocked the entrance door and asked him to wait three to five minutes. Kwawukume went away from the door and agreed to wait. (EBT of Kwawukume at pgs. 34-35).
Two uniformed and two plain-clothed New York City police officers then arrived. (EBT of Kwawukume at p. 36). Kwawukume testified that one of the uniformed police officers stated that he was under arrest, but did not handcuff him. (EBT of Kwawukume at pgs. 37-39). The detectives asked Kwawukume about the money. Kwawukume left with the detectives to go to his office to retrieve documentation about the currency. Id. The detectives also spoke to Kwawukume's supervisor, Obed Owusu-Kiggi. Kwawukume was at his office with the detectives for about ten minutes. (EBT of Kwawukume at p. 41).
However, a "Criminal History Record Search" dated September 27, 2004, revealed neither any arrest nor criminal charges filed against plaintiff. (Exhibit "L" to the Motion).
After Kwawukume left his office, he accompanied the detectives to the precinct in their vehicle. (EBT of Kwawukume at pgs. 43-44). Kwawukume was introduced to two Federal Bureau of Investigation ("FBI") agents. (EBT of Kwawukume at pgs. 46-47). The FBI agents never stated that he was under arrest. The FBI agents asked Kwawukume about the money and his identification. (EBT of Kwawukume at p. 48). After questioning, the FBI agents then told Kwawukume he was free to go. (EBT of Kwawukume at p. 50). Kwawukume was at the precinct for about two hours. (EBT of Kwawukume at p. 46).
Summary Judgment
The movant has the initial burden of proving entitlement to summary judgment. Winegrad v N.Y.U. Medical Center, 64 NY2d 851, 487 NYS2d 316 (1985). Once the movant has provided such proof, in order to defend the summary judgment motion the opposing party must "show facts sufficient to require a trial of any issue of fact." CPLR § 3212(b); Zuckerman v City of New York, 49 NY2d 557, 427 NYS2d 595 (1980); Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065, 416 NYS2d 790 (1979); Freedman v Chemical Construction Corp., 43 NY2d 260, 401 NYS2d 176 (1977); Spearmon v Times Square Stores Corp., 46 AD2d 552, 465 NYS2d 230 (2nd Dept 1983). "It is incumbent upon a [litigant] who opposes a motion for summary judgment to assemble, lay bare and reveal [his, her, or its] proof, in order to show that the matters set up in [the complaint] are real and are capable of being established upon a trial." Spearmon, 96 AD2d at 553, 465 NYS2d at 232 (quoting DiSabato v Soffes, 9 AD2d 297, 301, 193 NYS2d 184, 189 [1st Dept 1959]). If the opposing party fails to submit evidentiary facts to controvert the facts set forth in the movant's papers, the movant's facts may be deemed admitted and summary judgment granted since no triable issue of fact exists. Kuehne Nagel, Inc. v F.W. Baiden, 36 NY2d 539, 543-544, 369 NYS2d 667, 671 (1975).
Federal "Safe Harbor" Provision Under The Annunzio-Wylie Act
In 1992, the Congress enacted The Annunzio-Wylie Act ("the Act"), codified as amended in different sections of the United States Code, to enlist financial institutions to report suspicious transactions in the international effort to combat money laundering and the global movement of drug money. While anti-money laundering was the primary focus of the Act, its language is broad enough to encompass the financial institution's obligation to report any known or suspected violation of federal law related to the flow of currency and other financial transactions. In order to encourage the bank's compliance with the Act, the drafters included a "safe harbor" provision to protect financial institutions, its employees and agents from any liability. 31 USC § 5318(g). The three safe harbors set forth in 31 USC § 5318(g)(3) release financial institutions of liability from, inter alia, the following types of disclosures:
1) "disclosure of any possible violation of law or regulation to a government agency"
2) "disclosure pursuant to this subsection [§ 5318(g)] or any other authority
3) "any director, officer, employee, or agent of such institution who makes, or requires another to make any such disclosure."
See Lopez v. First Union National Bank of Florida, 129 F3d 1186 (11th Cir 1997); Lee v. Bankers Trust Co., 166 F3d 540 (2d Cir 1999).
There is a split between the Second and Eleventh Circuits in interpreting the first safe harbor provision. The Eleventh Circuit requires "a good faith suspicion that a law or regulation may have been violated." Lopez, 129 F3d at 1192-93. However, the Second Circuit in Lee v. Bankers Trust Co., supra, rejected the "good faith suspicion" standard. The Second Circuit explained as follows:
. . . although the safe harbor provision is unambiguous, and does not require resort to legislative history, the history of the Act demonstrates that Congress did not intend to limit protection to statements made in good faith. An earlier draft of the safe harbor provision included an explicit good faith requirements for statements made in an SAR. See 137 Cong. Rec. S16, 642 (1991). However, the requirement was dropped in later versions of the bill, and was not included in the bill that was eventually enacted by Congress. See 137 Cong. Rec. S17,910, S17,969 (1991); 31 U.S.C. § 5318(g)(3).
Lee, 166 F3d at 544.
There are several regulations or laws that Chase may rely upon to come within the ambit of the Act's safe harbor provisions including 12 CFR § 208.61, 12 CFR § 208.62 and 18 USC § 2113. 12 CFR § 208-61 was promulgated by the Board of Governors of the Federal Reserve System "to assist in the identification and prosecution of persons who commit such acts [as robberies, burglaries and larcenies]." 12 CFR § 208.61(a). 12 CFR § 208.62 requires a financial institution to file a "Suspicious Activity Report" ("SAR"), inter alia, when it detects a known or suspected violation of federal law involving any amount of money. When "immediate attention" is required, the "financial institution shall immediately notify, by telephone, an appropriate law enforcement authority." (Emphasis added) 12 CFR § 208.62(d). 18 USC § 2133(b) and (c) prohibit bank robbery and third-party possession of money which has been taken or stolen from a financial institution.
Chase's employees suspected that Kwawukume's third cash deposit which was stained purple or blue was dye-packed currency. A dye-pack is "a package that resembles cash that [is] given to a bank robber in lieu of good money." It contains "an activation pack . . . that would emit smoke and dye." The dye stains the bills and marks them as stolen. "Color-wise it [the dye pack stain] is a very dark reddish almost to a point of reddish purple is some cases." (EBT of Delaney at pgs. 25-27).
Possession of dye-pack money would be a violation of federal law which Chase would be obligated to report to the proper authorities such as the New York City Police Department and/or the Federal Bureau of Investigation. Under the analysis of the Second Circuit, such a report would trigger the safe harbor provision and the resultant disclosure would necessarily be protected. However, under the Eleventh Circuit's higher "good faith suspicion" standard, a further inquiry is required. Implicit in this standard is the recognition that the financial institution need not demonstrate that a federal law had been actually violated, but it maintained a good faith suspicion of such violation, "even if it turns out in hindsight that none was." Lopez, 129 F3d at 1193. Even under this heightened standard, a federal court has found that money that bore the telltale stains caused by exploding dye packs was legally sufficient "probable cause" to seize it without a search warrant pursuant to the plain view doctrine and to gain its admission into evidence. U.S. v Levasseur, 704 F Supp 1158 (D. Mass, 1989). Thus, if dye pack stained money may be sufficient to demonstrate probable cause, a fortiori, it would satisfy the lesser "good faith suspicion" standard. As such, Chase's disclosure is protected from liability under the safe harbor provisions pursuant to 31 USC § 5318(g)(3).
State Law Claims
False Arrest
In order to establish a claim for false arrest, plaintiff must establish that "(1) the defendant intended to confine plaintiff, (2) the plaintiff was conscious of the confinement, (3) the plaintiff did not consent to the confinement, and (4) the confinement was not otherwise privileged." Broughton v State of New York, 37 NY2d 451, 456, 373 NYS2d 87, 93 (1975). See also Martinez v City of Schenectady, 97 NY2d 78, 85, 735 NYS2d 868, 872 (2001).
In Du Chateau v Metro-North Commuter R.R. Co., 253 AD2d 128, 131, 688 NYS2d 12, 15 (1st Dept 1999), the First Department explained that merely reporting an alleged crime to the proper authorities who subsequently make an arrest based on that information does not constitute a false arrest as follows:
It is well settled in this State's jurisprudence that a civilian complainant, by merely seeking police assistance or furnishing information to law enforcement authorities who are then free to exercise their own judgment as to whether an arrest should be made and criminal charges filed, will not be held liable for false arrest or malicious prosecution. ( See, Celnick v. Freitag, 242 AD2d 436, 437, 662 NYS2d 37; Schiffren v. Kramer, 225 AD2d 757, 758-759, 640 NYS2d 175).
The First Department further explained that it is insufficient for the plaintiff to merely show that the defendant's words or actions caused law enforcement officers to confine the plaintiff, "plaintiff must show that the defendant directed an officer to take [him] into custody." 253 AD2d at 132, 688 NYS2d at 16, quoting Vernes v Phillips, 266 NY 298 (internal quotations omitted, emphasis added). In other words, a plaintiff must show that the defendant did more than merely provide information and/or identify plaintiff to the police to give rise to liability. See also De Filippo v County of Nassau, 183 AD2d 695, 583 NYS2d 283 (2nd Dept 1992) (where two bank employees provided information and identified plaintiff as the bank robber, bank was not liable for false imprisonment claims); King v Crossland Savings Bank, 111 F3d 251 (2nd Cir 1997) (bank's erroneous report to police that plaintiff's traveler's checks were either lost or stolen was not actionable against bank for false imprisonment).
This Court has already determined that the confinement was privileged pursuant to the safe harbor provisions of 31 USC § 5318(g)(3). In addition, plaintiff cannot demonstrate the other elements of false arrest. At best, plaintiff has shown that Krajewski persuaded Kwawukume to remain in the Bank Branch until the police arrived and identified him to police who subsequently detained and questioned him. Other than the defendants' alleged initial erroneous report and identification to police, plaintiff failed to demonstrate that defendants either directed, instigated or persuaded the police to later allegedly arrest him.
Defamation
To establish a cause of action for defamation, plaintiff must demonstrate the following elements:
1) a false statement on the part of the defendants concerning the plaintiff;
2) published without privilege or authorization to a third party;
3) fault amounting to at least negligence on the part of the defendants; and
4) causing damage to plaintiff's reputation by special harm or defamation per se.
See Restatement (Second) of Torts § 558; Dillon v City of New York, 261 AD2d 34, 38, 704 NYS2d 1, 5 (1st Dept 1999).
CPLR § 3016(a) requires that the alleged false and defamatory words be specified with particularity in the complaint. The complaint must also allege the "time, place and manner of the false statement and to specify to whom it was made. (Citations omitted)." Dillon v City of New York, 251 AD2d at 38, 704 NYS2d at 5.
The Court of Appeals held in Foster v Churchill, 87 NY2d 744, 642 NYS2d 583, (1996) that a "qualified privilege" exists where the communication is made to persons who have some common interests in the subject matter. 87 NY2d at 751-752, 642 NYS2d at 587. Moreover, this shield is effective unless the defendants acted with malice in their accusations against plaintiff. A showing of malice is required "in order to defeat the qualified privilege that arises when a person makes a good-faith bona fide communication upon a subject in which he or she has an interest, or a legal, moral or societal interest to speak and the communication is made to a person with a corresponding interest." Russ v State Employees Federal Credit Union, 298 AD2d 791, 793, 750 NYS2d 658, 660 (3rd Dept 2002) (citations omitted) (credit union which reported suspected theft to police was shielded from liability due to its qualified privilege).
In this case, defendants enjoyed a qualified privilege to communicate among its employees and report to police a good-faith bona fide communication that plaintiff presented suspicious currency resembling dye-pack ink for deposit. Plaintiff has not presented any evidence that defendants acted with malice to overcome this qualified privilege.
Negligent Supervision and Training
Plaintiff apparently concedes that his third cause of action for negligent supervision and training sounds in ordinary negligence. (Memorandum of Law in Opposition to Defendants' Motion for Summary Judgment, at pgs. 12-14). In any event, both causes of action for ordinary negligence and negligent supervision and training are not supported by the evidence presented in this case.
The Second, Third and Fourth Departments have held that a claim for negligent investigation or prosecution is not actionable in New York even against non-governmental entities. See, e.g., Coleman v Corporate Loss Prevention Associates, Inc., 282 AD2d 703, 724 NYS2d 321 (2nd Dept 2001); Russ v State Employees Federal Credit Union, 298 AD2d 791, 793, 750 NYS2d 658, 660 (3rd Dept 2002); Pandolfo v U.A. Cables Systems of Watertown, 171 AD2d 1013, 568 NYS2d 981 {171 AD2d 1013} (4th Dept 1991).
Plaintiff's negligence cause of action must be dismissed as a "party seeking damages for an injury resulting from a wrongful arrest and detention is relegated to the traditional remedies of false arrest and imprisonment." Higgins v City of Oneonta, 208 AD2d 1067, 1069, 617 NYS2d 566, 569 (3rd Dept 1994). See also Secard v Dept. of Social Services of County of Nassau, 204 AD2d 425, 612 NYS2d 167 (2nd Dept 1994); Heath v State of New York, 229 AD2d 912, 645 NYS2d 366 (4th Dept 1996).
Furthermore, plaintiff has failed to make any showing of deficient training or supervision of defendant's employees. Richardson v New York University, 202 AD2d 295, 609 NYS2d 180 (1st Dept 1994). See also Moore v First Federal Savings and Loan Association of Rochester, 237 AD2d 956, 654 NYS2d 900 (4th Dept 1997) (bank had no duty to customer for its failure to supervise and train bank employees concerning incident in which employee called police reporting mistaken suspicion that customer was in possession of a gun).
Conclusion
Accordingly, this Court grants defendants' motion for summary judgment dismissing the complaint. The clerk shall enter a judgment dismissing the complaint.
The foregoing constitutes the decision and order of this Court. Courtesy copies of this decision and order have been sent to counsel for the parties.