Summary
dismissing third-party beneficiary claim for plaintiff's failure to establish that contract was made with the intent to benefit plaintiff
Summary of this case from Crossland Savings FSB v. Rockwood InsuranceOpinion
May 27, 1986
Appeal from the Supreme Court, Westchester County (Buell, J.).
Judgment dated September 14, 1984, modified, on the law, by reducing the principal amount of compensatory damages awarded in the second decretal paragraph thereof from the principal amount of $40,873.01 to the principal amount of $33,613.69, and by adding a provision dismissing the first and seventh causes of action of the plaintiff's complaint. As so modified, judgment dated September 14, 1984, affirmed, without costs or disbursements, and the matter is remitted to the Supreme Court, Westchester County, for the entry of an appropriate amended judgment.
The jury rendered a verdict in favor of the plaintiff on its claim for compensatory damages in the principal amount of $40,873.01, based upon causes of action seeking damages, inter alia, for false representation resulting in a fraudulent conveyance, violation of a restraining notice, and on the basis that the plaintiff was the third-party beneficiary of the bank's promise to the defendant Triangle Meat Provisions Corp. (hereinafter Triangle) to use its best efforts to compromise the claims of Triangle's creditors.
The restraining notice that the plaintiff caused to be served upon the bank after the plaintiff was granted summary judgment against Triangle in the principal amount of $34,238.97 for goods sold and delivered, was ineffective, where the bank, at the time of service, was not in possession of any property in which Triangle had an interest and did not owe a debt to Triangle (see, CPLR 5222 [b]). Therefore, the trial court erred in denying that branch of the bank's motion to dismiss the first cause of action, which sought damages based on an alleged violation of that restraining notice.
In addition, the plaintiff failed to meet its burden of establishing that the bank's promise to Triangle was made with the intent to benefit the plaintiff (see, Braten v Bankers Trust Co., 60 N.Y.2d 155; Airco Alloys Div. v Niagara Mohawk Power Corp., 76 A.D.2d 68). Therefore, the trial court erred in denying that branch of the bank's motion which was to dismiss the seventh cause of action which sought damages based on the bank's alleged breach of this promise (see, Braten v Bankers Trust Co., supra).
The plaintiff did sustain its burden of establishing a cause of action against the bank for fraudulent representation. However, of the award of $40,873.01 in compensatory damages, $7,259.32 was already outstanding and due to the plaintiff prior to the commission of the tortious acts. Therefore, only the remaining portion of the compensatory damages award by the jury, i.e., $33,613.69, should be left undisturbed.
The trial court did not err in dismissing the plaintiff's cause of action for attorney's fees based on Debtor and Creditor Law § 276-a, since this is not an action to set aside a conveyance by a debtor (see, Debtor and Creditor Law § 276-a; Rentz v Brodsky, 174 Misc. 554). Finally, the record at bar does not contain sufficient evidence to support the conclusion that the conduct of the bank evinced such a high degree of moral turpitude and wanton dishonesty which would warrant an award of punitive damages (see, Borkowski v Borkowski, 39 N.Y.2d 982; Walker v Sheldon, 10 N.Y.2d 401; Luxonomy Cars v Citibank, 65 A.D.2d 549). Mangano, J.P., Brown, Weinstein and Spatt, JJ., concur.