Opinion
3672/04.
Decided July 5, 2005.
Upon the foregoing papers it is ordered that the defendant's motion for summary judgment is granted and the plaintiff's claims to recover (1)the moneys distributed to Jeffrey Berke, (2)damages for emotional distress and bad faith and (3)punitive damages are dismissed. The plaintiff's cross-motion is denied.
The following facts are undisputed. Plaintiff is the beneficiary of two Totten Trust accounts created by John Trzasko. An action for the appointment of a guardian for John Trzasko pursuant to Article 81 of the Mental Hygiene Law was commenced in 1998 and resulted in Jeffrey Berke being appointed as the guardian of Trzasko's person and property, by Order dated December 1, 1998. As the guardian, Berke was granted, inter alia, the authority to place Trzasko in a nursing home upon being released from Long Island Jewish-Hillside Hospital, and, upon Trzasko's death, to pay for reasonable funeral expenses and Trzasko's bills for expenses incurred prior to his death.
On September 1, 1999 Trzasko died. On or about October 18, 1999 Berke paid for Trzasko's funeral expenses by a Jamaica Savings Bank (now known as NFB) check in the amount of $2,965.00 payable to R. Stutzman Sons, the funeral home, drawn against the funds in one of Trust accounts. Pursuant to an Order dated June 6, 2002 and entered on June 13, 2002 directing Berke to pay for the care of Trzasko at the Cliffside Nursing Home, Berke obtained a bank check in the amount of $47,224.12 payable to the Cliffside Nursing Home drawn on one of the Totten Trust accounts at NFB.
On January 10, 2003, the Surrogate of Queens County issued Letters of Administration appointing Janet Fellows, Trzasko's daughter, the Administratrix of the Estate of Trzasko. On or about July 15, 2003, Janet Fellows appeared at NFB, presented the Letters of Administration, a death certificate for Trzasco and a death certificate for the plaintiff, Anna Yanoscik and withdrew the balance of the money, i.e. $54,559.10, in the two Totten Trust Accounts. In November of 2003the plaintiff went to NFB to withdraw the money in the accounts and learned that the money distributed to others and the accounts were closed.
Plaintiff commenced this action for conversion, negligence, fraud, bad faith and breach of fiduciary duty against the defendant, NFB based on the theory that NFB, the trustee of two Totten Trust Accounts for the benefit of plaintiff, breached its fiduciary duty when it distributed the funds to third-persons after Trzasco's death; that the bank's extreme and outrageous conduct and bad faith resulted in the conversion of the funds and caused plaintiff to sustain severe emotional distress and pain and suffering. Plaintiff seeks to recover the contents of the two Totten Trust accounts plus interest from September 1, 1999, as well as, damages for emotional distress, bad faith and punitive damages.
NFB also commenced a third-party action against Berke and Fellows. The action as against Berke was discontinued. NFB now moves for summary judgment dismissing the portions of the complaint asserting claims for (1)recovery of the moneys distributed to Jeffrey Berke, (2)damages for emotional distress and bad faith and (3)punitive damages. The plaintiff opposes and cross-moves for summary judgment in her favor on all of her causes of action.
A party moving for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, offering sufficient evidence to demonstrate the absence of any material issues of fact. ( Alvarez v. Prospect Hosp., 68 NY2d 320, 324; Winegrad v. New York Univ. Med. Ctr., 64 NY2d 851, 853; Zukerman v. City of New York, 49 NY2d 55.)The defendant has submitted competent evidence including the affidavit of Nancy Angela Elia, Vice President of NFB, copies of Trzasco's death certificate, Fellow's letters of Administration and copies of the checks issued to pay for Trzasco's expenses which establish, prima facie, its entitlement to partial summary judgment, requiring the plaintiff to demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action. (Winegrad v. New York Univ. Med. Ctr., supra; Zukerman v. City of New York, supra.)
The plaintiff cannot recover the amounts released to Berke pursuant to the Orders of the court. A Totten Trust account is subordinate to the creditors of the decedent for debts incurred prior and subsequent to his death where the decedent's estate has been exhausted. (See, In re LaPine, 18 AD3d 552.) In addition, NFB was required to release the funds to Berke in accordance with the court orders. (See, ( Beakes Dairy Co. v. Berns, 128 AD2d 137; Application of New York Foundation for Senior Citizens Guardian Services, Inc., 154 Misc2d 880.) Plaintiff has failed to submit any evidence to raise a question of fact as to whether there were sufficient funds in Trzasko' Estate to cover the estate debts so that the Trust would not have to be invaded to satisfy those debts. ( In re LaPine, supra; see also Beakes Dairy Co. v. Berns, supra, citing Matter of Totten, 179 NY 112.) In addition, Berke's withdrawals were made pursuant to two Orders of the Court issued in the context of a Guardianship matter. The plaintiff's presumption that the Court was not aware of and did not consider the nature of the accounts, and did not authorize Berke to satisfy the debts from the Totten Trust Accounts is without merit since the Totten Trust Accounts were part of the inventory of Trzasko's property.
To recover against NFB for "commercial bad faith", the plaintiff must establish that NFB has itself acted dishonestly and become a participant in a fraudulent scheme. (See, Prudential-Bache Sec. v. Citibank, 73 NY2d 263, 275-277.) The plaintiff's conclusory claim, without any competent evidence in support, that NFB should have known that she, "Anna Yanoscik" the beneficiary, could not have died in 1981 because she had her own account in the same branch is insufficient to raise a question of fact as to NFB's "commercial bad faith". Plaintiff did not notify the bank of her claim to the funds until four years after Trzasco's death. The possible existence of "suspicious circumstances which may have induced a prudent banker to investigate", ( Prudential-Bache Sec. v. Citibank, supra;) is not "knowing and intentional participation" in a fraudulent scheme. (See, Chemical Bank v. Haskell, 51 NY2d 85, 92.)
Recovery of damages for emotional distress may be had only where the alleged conduct is "`so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community'" ( Sheila C. v. Povich, 11 AD3d 120, 130-131, quoting Murphy v. American Home Prods. Corp., 58 NY2d 293, 303; see also, Call v. Ellenville Nat. Bank, 5 AD3d 521.) NFB's conduct does not rise to the level of such extreme and outrageous conduct so as to sustain a cause of action for emotional distress. (See, Howell v. New York Post Co., 81 NY2d 115, 121; Mahl v. Citibank, N.A., 234 AD2d 348, app denied 90 NY2d 804.)
Ordinarily, punitive damages are not recoverable as their purpose is to vindicate public rights and not to remedy private wrongs. (See, Rocanova v. Equitable Life Assur. Soc., 83 NY2d 603,613 [1993]; Garrity v. Lyle Stuart, Inc., 40 NY2d 354, 358.) Such damages, however, may be recovered in addition to compensatory damages upon a showing that conduct complained of was part of a pattern of similar conduct directed at the public generally, aggravated by evil or a wrongful motive or that there was wilful and intentional misdoing, or a reckless indifference equivalent intentional wrongdoing. ( Walker v. Sheldon, 10 NY2d 401, 404-405; see, also Rocanova v. Equitable Life Assur. Soc., supra.) In this case, plaintiff cannot recover punitive damages where since there is no allegation of harm directed at the public generally, or that NFB's acts or omissions were intentional, wilful or malicious and merely seeks damages for an alleged personal wrong. (See, Walker v. Sheldon, supra.)
With respect to the plaintiff's motion for summary judgment, the plaintiff failed to make a prima facie showing of entitlement to judgment as a matter of law, offering sufficient evidence to demonstrate the absence of any material issues of fact. ( Alvarez v. Prospect Hosp., supra; Winegrad v. New York Univ. Med. Ctr., supra; Zukerman v. City of New York, supra.) The relationship between a bank and its depositor is that of debtor-creditor and imposes upon the bank the duty to exercise ordinary care in the handling of its accounts. (See, Uniform Commercial Code (UCC) § 4-103; Call v. Ellenville Nat. Bank, 5 AD3d 521; Matter of Guardianship of Leftridge, 449 NYS2d 892.) The duty of ordinary care does not require a bank to conduct an investigation to protect funds from the possible wrongful conduct of a fiduciary where the bank lacks knowledge of such facts and circumstances which should have aroused suspicion and, in the exercise of ordinary care, required an investigation. (See, Matter of Knox, 64 NY2d 434, 442.)
Plaintiff does not claim that Fellows was not the Administratrix of the Estate. Plaintiff contends that NFB failed to exercise "ordinary care" when it released the money to Fellows without investigating the validity or authenticity of the Yanoscik death certificate produced by Fellows especially in view of the fact that she had other accounts in her name in the same branch of NFB. The existence of these accounts should have caused NFB to investigate the validity of the purported Yanoscik death certificate. The plaintiff's arguments, however, are insufficient to establish, as a matter of law, that NFB failed to act reasonably and with ordinary care under the circumstances then existing. Moreover, the fact that four years had passed before Fellows or plaintiff made any attempt to access the accounts is also sufficient to raise a question of fact as to whether NFB acted reasonably and with ordinary care.