Opinion
1536/13
10-14-2016
Mt. Hope Universal Baptist Church, Inc., Plaintiff, v. Gertrude Bowen (aka GERTRUDE MASSOP, JENNIFER MASSOP, ANN RICHARDSON, CRYSTAL RICHARDSON, ALLISON BOWEN, MOUNT HOPE UNIVERSAL BAPTIST CHURCH, TOKS SOFOLA, ESQ., PRUDENTIAL FINANCIAL INC., CITIGROUP INC. d/b/a CITIBANK, NA, JP MORGAN CHASE BANK NA., Defendants.
Attorney for Plaintiff Christopher S. Sowers, P.C. Timothy R. Cutler, Esq. 907 Fulton Street, 2nd Floor Brooklyn, NY 11238 (718) 636-6100 Attorney for Defendant Citibank, N.A. Zeichner Ellman & Krause LLP 1211 Avenue of the Americas New York, NY 10036 (212) 223-0400 Attorney for Defendant Pruco Life Insurance Diedre A. Connolly Esq. D"Arcambal Ousley & Cuyler Burk LLP 40 Fulton Street, Suite 105 New York, NY 10038 Attorney for Defendants Bowen, Richardson & Massop Rosenbaum & Rosenbaum, P.C. 100 Wall Street, 15th Floor New York, NY 10005 Attorney for Defendant Sofola Litchfield Cavo LLP 420 Lexington Avenue, Suite 2104 New York, NY 10170 Attorney for Defendant JP Morgan Chase Bank Emmet, Marvin & Marti, LLP 120 Broadway — 32nd Floor New York, NY 10271
Attorney for Plaintiff Christopher S. Sowers, P.C. Timothy R. Cutler, Esq. 907 Fulton Street, 2nd Floor Brooklyn, NY 11238 (718) 636-6100 Attorney for Defendant Citibank, N.A. Zeichner Ellman & Krause LLP 1211 Avenue of the Americas New York, NY 10036 (212) 223-0400 Attorney for Defendant Pruco Life Insurance Diedre A. Connolly Esq. D"Arcambal Ousley & Cuyler Burk LLP 40 Fulton Street, Suite 105 New York, NY 10038 Attorney for Defendants Bowen, Richardson & Massop Rosenbaum & Rosenbaum, P.C. 100 Wall Street, 15th Floor New York, NY 10005 Attorney for Defendant Sofola Litchfield Cavo LLP 420 Lexington Avenue, Suite 2104 New York, NY 10170 Attorney for Defendant JP Morgan Chase Bank Emmet, Marvin & Marti, LLP 120 Broadway — 32nd Floor New York, NY 10271 Francois A. Rivera, J.
Recitation in accordance with CPLR 2219 (a) of the papers considered on the notice of motion of the defendant Citibank, N.A. incorrectly sued as Citigroup Inc. d/b/a Citibank, NA (hereinafter Citibank), filed on June 7, 2016, under motion sequence number four, for an order pursuant to CPLR 3211 (a) (1) and (7): dismissing the complaint of plaintiff Mt. Hope Universal Baptist Church, Inc (hereinafter plaintiff or Mt. Hope); and dismissing the cross-claim of defendant Pruco Life Insurance Company of New Jersey incorrectly sued herein as Prudential Financial Inc. (hereinafter Pruco). -Notice of Motion -Affirmation in Support Affidavit in Support -Exhibits A-U Memorandum of Law in Support -Affirmation in Opposition -Exhibits A-C -Memorandum of Law in Opposition of Pruco Reply Memorandum of Law
BACKGROUND
On January 25, 2013, Mt. Hope commenced the instant action for damages based on, among other things, fraud and conversion by filing a summons and verified complaint with the Kings County Clerk's office. On or about June 1, 2015, Mt. Hope served an amended summons and verified complaint (hereinafter the amended complaint).
The amended complaint contains seventy-one allegations of fact in support of seven causes of action. The sole cause of action asserted against Citibank is a claim for conversion. The amended complaint and bill of particulars alleges the following salient facts. Mt. Hope is a religious corporation formed in 1976. Rosetta Goodridge (hereinafter Goodridge) was the founding member of Mt. Hope. On June 9, 2009, Goodrich died testate. In her will she left certain assets to Mt. Hope. Goodrich also had a life insurance policy with Pruco which named Mt. Hope as the beneficiary. Defendants Gertrude Bowen a/k/a/ Gertrude Massop and Ann Richardson are the daughters of Goodridge and defendants Jennifer Massop, Crystal Richardson, and Allison Bowen are granddaughters of Goodridge (hereinafter collectively referred to as the "individual family defendants").
The individual family defendants allegedly took certain actions to deprive Mt. Hope of Goodrich's assets. Specifically, the individual family defendants conspired to fraudulently obtain the death benefit by impersonating Mt. Hope in dealing with Pruco and Citibank. The individual family defendants filed a death benefit with Pruco in order to claim the death benefits under the life insurance policy. Pruco issued a payout check in the amount of $133,529.40 (hereinafter the subject check) to the individual family defendants. The individual family defendants also opened an account at Citibank in the name of the entity that they had created in order to perpetrate the fraud. Jennifer Massop then endorsed the subject check and deposited it into the account held by Citibank.
Mt. Hope essentially alleges that Citibank improperly permitted the individual family defendants to open a bank account in the name of Mt. Hope Baptist Church Inc. and thereafter improperly released the life insurance funds proceeds to them.
On July 31, 2015, Ann Richardson and Gertrude Bowen a/k/a Gertrude Massop filed an amended answer to the amended complaint. On September 9, 2015, Pruco filed an amended answer to the amended complaint containing affirmative defenses and cross claims. Pruco's sole cross claim against Citibank was for contribution. By answer dated October 27, 2015, Jennifer Massop answered the amended complaint. On November 2, 2015, Toks Sofola, Esq. filed an answer to the amended complaint. On November 13, 2015, JP Morgan Chase Bank filed an answer to the amended complaint with cross claims. On November 23, 2015, Citibank filed a verified amended answer with cross claims. On December 4, 2015, Pruco filed a reply to Citibank's answer with crossclaims
LAW AND APPLICATION
In the first branch of its motion Citibank seeks dismissal of Mt. Hope's complaint pursuant to CPLR3211 (a) (1) and (7). In the interest of judicial economy the CPLR 3211 (a) (7) ground will be analyzed first. In the event that the complaint fails to state a cause of action then the Court need not determine the CPLR 3211 (a) (1) basis for dismissal.
On a motion to dismiss the complaint pursuant to CPLR 3211(a) (7) for failure to state a cause of action, the court must afford the pleading a liberal construction, accept all facts as alleged in the pleading to be true, accord the plaintiff the benefit of every possible inference, and determine only whether the facts as alleged fit within any cognizable legal theory (Sinagra v City of New York, 127 AD3d 729, 730 [2nd Dept 2015] citing Breytman v Olinville Realty, LLC, 54 AD3d 703, 703—704 [2nd Dept 2008]). A motion to dismiss pursuant to CPLR 3211 (a) (7) will fail if, taking all facts alleged as true and according them every possible inference favorable to the plaintiff, the complaint states in some recognizable form any cause of action known to our law (Ader v Guzman, 135 AD3d 668, 669 [2nd Dept 2016] citing Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34, 38 [2nd Dept 2006]). Conversion
Conversion is the unauthorized exercise of the right of ownership over property belonging to another to the exclusion of the owner's rights (State v Seventh Regiment Fund, 98 NY2d 249 [2002] citing Vigilante Ins. Co. of America v Housing Auth. Of the City of El Paso, 87 NY2d 36 [1995]). Money can be the subject of conversion when it can be described, identified, or segregated in the manner that a specific chattel can be and when it is subject to an obligation to be returned (see generally, Republic of Haiti v Duvalier, 211 AD2d 379 [1st Dept 1995]; see also Hebrew Institute for the Deaf and Exceptional Children v Kahana, 17 Misc. 1110(A) [NY Sup 2007]). Furthermore, a person may be liable for conversion by conniving with another in an act of conversion (Id.) (citing Ahles v Aztec Enterprises, 120 AD2d 903 [3rd Dept 1986]). The two essential elements of conversion are that the plaintiff has a possessory right or interest in the property in dispute and that the defendant's dominion over the property in dispute or interference with it, is in derogation of plaintiff's rights. The mere right to payment cannot be basis of a cause of action for conversion (see Barker v Amorini, 121 AD3d 823 [2nd Dept 2014] see also Zendler Const. Co., Inc. v First Adjustment Group, Inc., 59 AD3d 439 [2nd Dept 2009]).
It is well settled that the UCC applies to negotiable instruments such as the check which is the basis of the instant action. The UCC provides that a depository bank is defined as "the first bank to which an item is transferred for collection even though it is also the payor bank" (U.C.C. Law § 4-105). A payor bank is defined as "a bank by which an item is payable as drawn or accepted" (Id.). By the allegations of fact set forth in the amended complaint and by the plaintiff's concession in its opposition papers, there is no dispute that Citibank was the depository bank. Furthermore, the allegations of fact set forth in the amended complaint and Pruco's answer with cross claims, as well as, the concession in Pruco's opposition papers establishes that Pruco was the drawer of the subject check.
It has long been held that a check has no valid inception until delivery (State v Barclays Bank of New York, N.A., 76 NY2d 533, 536 (1990)[internal citations omitted]). Further, a payee must have actual or constructive possession of a negotiable instrument in order to attain the status of a holder (State v Barclays Bank of New York, N.A., 76 NY2d 533, 536 (1990) see also UCC 1-201 [20]) and to have an interest in it. These are established principles of negotiable instruments law (State v Barclays Bank of New York, N.A., 76 NY2d 533, 536 (1990) citing Papex Intl. Brokers v Chase Manhattan Bank, 821 F2d 883, 885 [1st Cir 1987]; UCC 3-410 , Official Comment 5 pertaining to subd [1] [ordinarily the obligation on an instrument is not effective until delivery]; Bailey, Brady on Bank Checks § 5.1, at 5-2 [6th ed 1988]; see also, Uniform Negotiable Instruments Law § 16). A payee that has not had actual or constructive possession of a check has no cause of action against the depository bank (State v Barclays Bank of New York, N.A., 76 NY2d 533, 536 [1990]). Constructive possession has been defined as being in a position to exercise control over a thing (U.S. v DiNovo, 523 F.2d 197, 201[7th Cir.1975]).
In the instant matter the allegations in the amended complaint establish that Mt. Hope never had actual or constructive possession of the subject check. The amended complaint did not allege that the subject check was delivered to Mt. Hope or to its authorized agent. Accordingly, Mt. Hope has not stated a cause of action for conversion as against Citibank. The amended complaint actually asserts the opposite, namely, that the individual family defendants fraudulently procured actual possession of the subject check without Mt. Hope's authority or permission. Citibank has established that the amended complaint fails to plead a cause of action against it. Consequently, it is unnecessary to address Citibank's motion to dismiss the complaint pursuant to CPLR 3211 (a) (1). Contribution
In the second branch of its motion Citibank seeks dismissal of Pruco's sole cross claim for contribution as asserted against it pursuant to CPLR 3211 (a) (1) and (7). Once again, the CPLR 3211 (a) (7) ground for dismissal will be analyzed first. A cause of action for contribution requires that the culpable parties must be subject to liability for damages for the same personal injury (Nassau Roofing & Sheet Metal v Facilities Development Corporation, 71 NY2d 599 [1988]). The parties need not be liable under the same theories or whether the party whom contribution is sought is allegedly responsible for the injury as a " concurrent, successive, independent, alternative or even intentional tortfeasor" (Id.). Contribution is not founded upon, nor does it necessarily arise from contract, and only a ratable or proportional reimbursement is sought (McDermott v City of New York, 50 NY2d 211[1980]; McFall v Compagnie Maritime Belge S.A., 304 NY 314 [1952]; Fox v County of Nassau, 183 AD2d 746, 583 NYS2d 482 [2nd Dept 1992]. Where a party is held liable at least partially because of its own negligence, contribution against other culpable tortfeasors is the only available remedy" (Fox v County of Nassau, 183 AD2d 746 [2nd Dept 1992]).
Conversion, the sole cause of action asserted by Mt. Hope against Citibank, is dismissed pursuant to CPLR 3211(a) (7). Consequently, Citibank has no liability for the damages allegedly sustained by Mt. Hope and Pruco has no claim against Citibank for contribution toward said damages (Nassau Roofing & Sheet Metal v Facilities Development Corporation, 71 NY2d 599 [1988]).
There is no dispute that Pruco is the drawer of the subject check. In general, the drawer of a check paid by a depository bank over a forged endorsement "has no cause of action against the depository [bank] for the obvious reason that either the forgery is effective to transfer the instrument ... or if it is not, the depository [bank] has received nothing of the drawer for which the drawer may recover" (Citigroup Global Markets v Infante,134 AD3d 758, 759 [2nd Dept 2015]). Pruco as the drawer of the check, has no direct claim against Citibank for collecting an improperly endorsed check (see Horowitz v Roadworks of Great Neck, 76 NY2d 975 [1990]).
The "critical requirement" of a valid third-party claim for contribution is that "the breach of duty by the contributing party must have had a part in causing or augmenting the injury for which contribution is sought" (Nelson v Chelsea GCA Realty, Inc., 18 AD3d 838, 840 [2nd Dept 2005]). Citibank has established that it has not breached any duty owed to Mt. Hope. Furthermore, Pruco's cross claim has plead no facts alleging that Citibank's alleged breach of a duty owed to Pruco had any part in causing or augmenting the injury for which it seeks contribution (see Marist College v Chazen Environmental Services, Inc. 84 AD3d 1181, 1183 [2nd Dept 2011]). Citibank has also established that it either has no duty or breached no duty owed to Pruco. Accordingly, Pruco does not have a cause of action for contribution as against Citibank.
CONCLUSION
Citibank, NA's motion for an order dismissing Mt. Hope Universal Baptist Church Inc's complaint pursuant to CPLR 3211 (a) (7) is granted.
Citibank, NA's motion for an order dismissing Pruco Life Insurance Company of New Jersey's cross-claim asserted against it for contribution pursuant to CPLR 3211 (a) (7) is granted.
The foregoing constitutes the decision and order of this Court. Enter: J.S.C.