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AMTRUST…cont

Monalisa Bradford, Ms. Grant’s supervisor, reviewed Ms. Grant’s searches of the Restraining Notice, Sheriff’s Levies and Executions. Ms. Bradford also searched for, and did not find, any accounts in the name of Manhattan and Bronx Surface Transit Operating Authority. Ms. Bradford entered the name “Manhattan and Bronx Surface Transit Operating Authority” and also entered a shortened version of this name into both the “System One and AMTRUST computer systems” used by researchers in Chase’s Holds and Levies Department. Like Ms. Grant, Ms. Bradford did not search for accounts in the name of “MABSTOA” because she neither knew nor had reason to know, based upon the information provided, that the acronym was used on any of the judgment debtor’s accounts. As part of her verification of Ms. Grant’s research, Ms. Bradford also contacted several other departments at Chase to determine if there were any accounts in the name of Manhattan and Bronx Surface Transit Operating Authority. However, she did not find any accounts.

The following day, on New Year’s Eve, December 31, 1998, the attorney-plaintiffs served Chase with an Amended Restraining Notice and Information Subpoena. This time, the amended notice included the judgment debtor’s acronym name “MABSTOA.”The very next business day, January 4, 1999 (January 1st was a legal holiday and January 2nd and 3rd fell on the weekend), Ms. Grant faxed the amended restraining notice to Richard Garcia in Chase’s New York City Municipal Group. By January 6, 1999, Chase’s Holds and Levies Department had placed a hold on six MABSTOA accounts, each hold in the amount of $1.92 million.

On the morning of January 6, 1999, Gloria Dennery, Assistant Treasurer of Chase’s New York City Municipal Group, discovered that the MABSTOA accounts were overdrawn due to holds placed by the Holds and Levies Department on six of MABSTOA’s accounts. Chase’s New York City Municipal Group handles all municipal accounts, including MABSTOA’s. Ms. Dennery contacted the Holds and Levies Department to learn more information about the holds. Ms. Dennery learned that Chase restrained the accounts pursuant to the attorney-plaintiffs’ Second Restraining Notice and immediately contacted MABSTOA’s controller, Pat Agard, to identify an account from which she could hold sufficient funds to cover the judgment. After identifying an account, Ms. Dennery withdrew $2, 883,044.30 of MABSTOA’s funds and transferred that amount into an attached account to ensure the availability of funds to pay the personal injury judgment.

Later in the day on January 6, 1999, the attorney-plaintiffs served Chase with a Substituted Amended Restraining Notice and Information Subpoena. The substituted notice identified thirteen account numbers and included a tax identification number for the judgment debtor. On January 7, 1999, Ms. Dennery notified Doreene Sullivan, a customer service representative in the Holds and Levies Department, that sufficient funds to cover plaintiffs’ judgment had already been debited from a MABSTOA account. Ms. Dennery asked that the holds on the six overdrawn MABSTOA accounts be removed.

Meanwhile, from January 4th through January 6th, the attorney-plaintiffs spoke with Ms. Bradford and Ms. Dennery regarding Chase’s restraint of MABSTOA’s accounts. The attorney-plaintiffs also spoke with Lynne Federman, Esq., Vice President and Assistant General Counsel within Chase’s Legal Department, to make certain that the appropriate restraints on MABSTOA’s accounts would be in place. On January 11, 1999, Ms. Dennery notified the attorney-plaintiffs that sufficient funds were transferred from MABSTOA’s account and frozen to cover the judgment. That same day, Chase was served by the attorney-plaintiffs with two additional Sheriff’s Levies. Upon becoming aware that multiple holds had resulted in overdrawn accounts and that funds had been restrained to cover the judgment, MABSTOA paid plaintiffs directly on January 14, 1999, in full satisfaction of the judgment, including attorneys’ fees and interest through the date of payment.

The aforementioned testimonial and documentary evidence establish that plaintiffs’ fraud claim, which is based upon allegations that, in response to the sheriff’s levies and executions and plaintiffs’ restraining notices, Chase knowingly, intentionally and falsely represented that it held no MABSTOA accounts or assets, when, in fact, it had at least 15 accounts in the name and/or for the benefit of MABSTOA, containing more than a sufficient amount to satisfy the judgment in question, is devoid of merits. In an action to recover damages for fraud, the plaintiff must show that (1) the defendant made a material false representation, (2) the defendant intended to defraud the plaintiff thereby, (3) the plaintiff reasonably relied upon the representation, and (4) the plaintiff suffered damage as a result of such reliance.

A review of the aforementioned testimonial and documentary evidence reveals that plaintiff cannot satisfy the element of misrepresentation. As noted above, plaintiff claims that Chase knowingly, intentionally and falsely represented that it held no MABSTOA accounts or assets, when, in fact, it had at least 15 accounts in the name and/or for the benefit of MABSTOA. However, that is not what Chase represented. The judgment debtor identified by the attorney-plaintiffs in the initial restraining notice and levies was Manhattan and Bronx Surface Transit Operating Authority. There is no reference to the acronym MABSTOA, as the proper name of the judgment debtor. An examination of the Questions and Answers in Connection with Information Subpoena and the Sheriff’s Levies show that Chase stamped those documents with the statement: A search of the records indicates that there is no account in the name of the judgment debtor Manhattan and Bronx Surface Transit Operating Authority. As fully described above, Chase’s holds and Levies Department did conduct a search for Manhattan and Bronx Surface Transit Operating Authority but found none. Therefore, it was entirely accurate for Chase to stamp the Questionnaire and Sheriff’s Levies with the statement that a search revealed no account in the name of the Manhattan and Bronx Surface Transit Operating Authority, which was the only judgment debtor identified at that time by the attorney-plaintiffs The aforementioned testimonial and documentary evidence also demonstrates that plaintiffs cannot satisfy the element of intend to defraud. In his pleading, plaintiff avers that Chase’s alleged misrepresentation was intended to impede or delay the collection of the Schneider judgment. The claims is belied by the record. The initial Restraining Notice and Information Subpoena, under the name Manhattan and Bronx Surface Transit Operating Authority, were served on December 29,1998. The next day, Chase was served with the Sheriff’s Levy and Execution under the name Manhattan and Bronx Surface Transit Operating Authority. Immediately, an employee from Chase’s Holds and Levies Department conducted a search which revealed no account under that name. Then, a supervisor from Chase’s Holds and Levies department also did a search with the same negative result. The Amended Restraining Notice and Information with the correct name was served on December 31, 1998, which was processed the next business day on January 4,1999. Two days later, Chase Hold and Levies Department placed a hold on six accounts of MABSTOA. The holds were released when Chase transferred sufficient money to one of MABSTOA’s accounts to satisfy the Schneider Judgment. A few days later, on January 11, 1999, plaintiffs were informed that an account has been created to satisfy the Schneider judgment. Such account, however, was never used to satisfy the Schneider Judgment since a few days later, on January 14, 1999, MABSTOA directly paid plaintiff.

Thus, despite the apparent mixup with the name of the personal injury judgment debtor, plaintiffs received full payment only ten business days after serving the initial Restraining Notice and Information Subpoena, under the name Manhattan and Bronx Surface Transit Operating Authority. This period of time cannot be construed in any manner to be an inordinate amount of time in light of the fact that the time period incorporated an extensive holiday period. Significantly, Chase employee Gloria Dennery testified that Chase typically pays monies subject to a Sheriff’s Levy within ten to fourteen business days. Under the circumstances, Chase has refuted any claim that it was deleterious in its duties with regard to the restraining notices, subpoenas and levies it received, let alone that it acted in concert with MABSTOA to frustrate and delay the satisfaction of the Schneider Judgment.

The foregoing proof provides defendant Chase with prima facie entitlement to summary judgment by negating any claim of misrepresentation and intent to commit fraud. This Court, therefore, is required to direct judgment in favor of defendant Chase as a matter of law, unless plaintiffs in opposing the motion, set forth sufficient proof to establish, at the very least, an existence of a material issue of fact requiring a trial of the action.

This Court finds that attorney-plaintiffs have failed to meet their burden. For instance, plaintiffs do not attempt to refute the fact that Chase’s employees promptly responded to plaintiff’s restraining notices, information subpoenas and Sheriff’s levies naming Manhattan and Bronx Surface Transit Operating Authority as the judgment debtor. Nor can plaintiff deny the fact that once the proper name of the judgment debtor (i.e., “MABSTOA”) was provided, Chase employees located the pertinent accounts and placed a hold on several accounts owned by the judgment debtor. Significantly, plaintiffs have never contended that the judgment debtor did not intend to pay the Schneider judgment. Under the circumstances, any claim that Chase misrepresented the unavailability of any account to satisfy the Schneider judgment so as to impede or delay the collection of the Schneider judgment is implausible, conclusory and unsupported.

For the foregoing reasons, it is hereby ordered that the motion by defendant Chase, seeking summary judgment dismissing the action, is granted and the complaint is hereby dismissed, and the Clerk is directed to enter a judgment in favor of said defendant.

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