| Kevin Kerveng Tung, P.C. v JP Morgan Chase & Co. |
| 2013 NY Slip Op 02223 [105 AD3d 709] |
| April 3, 2013 |
| Appellate Division, Second Department |
| Kevin Kerveng Tung, P.C., Appellant, v JPMorgan Chase & Co. et al., Respondents. |
—[*1] Stagg, Terenzi, Confusione & Wabnik, LLP, Garden City, N.Y. (Thomas E. Staggand Jessica M. Prunell of counsel), for respondents.
In an action to recover damages for negligence and fraudulent concealment, theplaintiff appeals (1) from an order of the Supreme Court, Queens County (Grays, J.),entered November 10, 2011, which granted the defendants' motion to dismiss thecomplaint pursuant to CPLR 3211 (a) (7), and (2), as limited by its brief, from so muchof an order of the same court entered April 17, 2012, as denied that branch of its motionwhich was for leave to renew its opposition to the defendants' motion to dismiss thecomplaint pursuant to CPLR 3211 (a) (7).
Ordered that the order entered November 10, 2011, is affirmed; and it is further,
Ordered that the order entered April 17, 2012, is affirmed insofar as appealed from;and it is further,
Ordered that one bill of costs is awarded to the defendants.
On January 6, 2011, the plaintiff allegedly received a cashier's check from a thirdparty in the amount of $295,500, and deposited that check into its Interest On LawyerAccount Fund (hereinafter IOLA) bank account at Citibank. The cashier's checkpurportedly was drawn on the defendant JP Morgan Chase Bank, N.A., a subsidiary ofthe defendant JP Morgan Chase & Co. Relying on the validity of the cashier's check, theplaintiff transferred the sum of $272,250 from its IOLA account to another third party onJanuary 7, 2011. On January 12, 2011, the defendants allegedly dishonored payment onthe cashier's check. The plaintiff commenced this action against the defendants to recoverdamages for negligence and fraudulent concealment, alleging, among other things, thatthe defendants were negligent in failing to safeguard their cashier's checks, in failing toinform the public that forged or counterfeit checks bearing the defendants' names werebeing circulated throughout the banking system, and in failing to investigate the matterafter receiving the subject cashier's check for deposit.
The Supreme Court granted the defendants' motion to dismiss the complaint pursuantto CPLR 3211 (a) (7) for failure to state a cause of action. Thereafter, as relevant to thisappeal, the Supreme Court denied the plaintiff's motion for leave to renew its oppositionto the defendants' [*2]motion.
On a motion pursuant to CPLR 3211 (a) (7), a court must "accept the facts as allegedin the complaint as true, accord plaintiffs the benefit of every possible favorableinference, and determine only whether the facts as alleged fit within any cognizable legaltheory" (Leon v Martinez, 84 NY2d 83, 87-88 [1994]; see AG Capital Funding Partners,L.P. v State St. Bank & Trust Co., 5 NY3d 582, 591 [2005]; Paramount Transp. Sys., Inc. vLasertone Corp., 76 AD3d 519, 520 [2010]; JP Morgan Chase v J.H. Elec. of N.Y., Inc., 69 AD3d 802,803 [2010]).
Although a court may "consider evidentiary material submitted by a defendant insupport of a motion to dismiss pursuant to CPLR 3211 (a) (7)" (Sokol v Leader, 74 AD3d1180, 1181 [2010]), the plaintiff correctly contends that the Supreme Court shouldnot have considered an affidavit which was submitted to establish that the subjectcashier's check was counterfeit, rather than stolen, since that evidence was improperlysubmitted by defendants for the first time in their reply papers (see Cotter v Brookhaven Mem.Hosp. Med. Ctr., Inc., 97 AD3d 524, 525 [2012]; David v Bryon, 56 AD3d413, 414 [2008]; Barrera vMTA Long Is. Bus, 52 AD3d 446 [2008]; Hoyte v Epstein, 12 AD3d 487 [2004]; Voytek Tech. vRapid Access Consulting, 279 AD2d 470, 471 [2001]). Nonetheless, even withoutconsidering this affidavit, the defendants were entitled to dismissal of the complaint forfailure to state a cause of action.
The plaintiff's first three causes of action were premised upon the theory that itsuffered damages as a result of the defendants' negligence. "To establish a cause ofaction sounding in negligence, a plaintiff must establish the existence of a duty ondefendant's part to plaintiff, breach of the duty and damages" (Greenberg, Trager & Herbst, LLPv HSBC Bank USA, 17 NY3d 565, 576 [2011]; see Akins v Glens FallsCity School Dist., 53 NY2d 325 [1981]; Stukas v Streiter, 83 AD3d 18, 23 [2011]). As relevanthere, "[t]he duty of a payor bank . . . to a noncustomer depositor of a checkis derived solely from UCC 4-301 and 4-302" (Greenberg, Trager & Herbst, LLP vHSBC Bank USA, 17 NY3d at 577). In this case, where the defendants weretogether alleged to be the payor bank (see UCC 4-105 [b]) that was not also thedepository bank (see UCC 4-105 [a]), they were accountable for paying theamount of the cashier's check, whether properly payable or not, if they "retain[ed] theitem beyond midnight of the banking day of receipt without settling for it" (UCC 4-302[a]), or, if after authorizing a timely provisional settlement, they failed to revoke suchsettlement prior to making final payment and before the "[m]idnight deadline" (UCC4-104 [1] [h]), by either returning the check, or sending written notice of dishonor ornonpayment (see UCC 4-301, 4-302). Thus, the only duty which the defendantsowed to the plaintiff was to pay the check, return the check, or send notice of dishonor(see Greenberg, Trager & Herbst, LLP v HSBC Bank USA, 17 NY3d at577-578). As the complaint failed to allege that, upon the defendants' failure to pay thecheck, they breached their duty to either return the check or send notice of dishonor, theSupreme Court properly granted those branches of the defendants' motion which were todismiss the first three causes of action, all of which sounded in negligence.
Furthermore, the Supreme Court properly granted that branch of the defendants'motion which was to dismiss the cause of action to recover damages for fraudulentconcealment. "A cause of action to recover damages for fraudulent concealment requires,in addition to scienter, reliance, and damages, a showing that there was a fiduciary orconfidential relationship between the parties which would impose a duty upon thedefendant to disclose material information and that the defendant failed to do so" (Consolidated Bus Tr., Inc. vTreiber Group, LLC, 97 AD3d 778, 779 [2012]; see High Tides, LLC vDeMichele, 88 AD3d 954, 957 [2011]). Here, the Supreme Court properly heldthat the complaint failed to allege the existence of a fiduciary or confidential relationshipbetween the parties (see Merrill Lynch, Pierce, Fenner & Smith v ChemicalBank, 57 NY2d 439, 444 [1982]; Bennice v Lakeshore Sav. & Loan Assn.,254 AD2d 731 [1998]).
The Supreme Court properly denied that branch of the plaintiff's motion which wasfor leave to renew its opposition to the defendants' motion to dismiss the complaintpursuant to CPLR 3211 (a) (7). A motion for leave to renew "shall be based upon newfacts not offered on the prior motion that would change the prior determination or shalldemonstrate that there has been a change in the law that would change the priordetermination; and . . . shall contain reasonable justification for the failureto present such facts on the prior motion" (CPLR 2221 [e] [2], [3]). Here, [*3]even if the plaintiff's excuse for failing to provide thenewly submitted evidence in its original opposition papers constituted a reasonablejustification, the facts derived from the evidence were insufficient to remedy the defectsin the complaint (see Leon v Martinez, 84 NY2d at 88; Rovello v OrofinoRealty Co., 40 NY2d 633, 635-636 [1976]), such that there would be a change in theSupreme Court's determination upon the consideration of such evidence (see generally Kranenberg v TKRSPub, Inc., 99 AD3d 769 [2012]; see also Millan v AMF Bowling Ctrs., Inc., 38 AD3d 860,861 [2007]). Furthermore, the Supreme Court, in ruling upon that branch of theplaintiff's motion which was for leave to renew, properly considered the Court ofAppeals' determination in Greenberg, Trager & Herbst, LLP v HSBC Bank USA (17NY3d 565 [2011]), which was decided after the submission of the original motionpapers. Accordingly, leave to renew was properly denied. Skelos, J.P., Leventhal, Halland Sgroi, JJ., concur. [Prior Case History: 34 Misc 3d 1209(A), 2011 NY Slip Op52461(U).]