Margot J. Garant, Inc., and MARGOT J. GARANT, Plaintiffs ...

1 2/18/2015 MARGOT J. garant , Inc. v Suffolk County Natl. Bank (2015 NY Slip Op 50119(U)) [*1] MARGOT J. garant , Inc. v Suffolk County Natl. Bank2015 NY Slip Op 50119(U)Decided on February 11, 2015 Supreme Court, Suffolk CountyEmerson, by New York State Law Reporting Bureau pursuant to Judiciary Law opinion is uncorrected and will not be published in the printed Official on February 11, 2015 Supreme Court, Suffolk CountyMargot J. garant , Inc., and MARGOT J. garant , Plaintiffs ,againstSuffolk County National Bank, EGAN & GOLDEN, LLPA ttorneys for Plaintiffs2/18/2015 MARGOT J.

2 garant , Inc. v Suffolk County Natl. Bank (2015 NY Slip Op 50119(U)) South Ocean AvenuePatchogue, New York 11772 SMITH, FINKELSTEIN, LUNDBERG, ISLER and YAKABOSKI, LLPA ttorneys for Defendant456 Griffing AvenueRiverhead, New York 11901 Elizabeth H. Emerson, the following papers numbered 1-42 read on this motionfor preliminaryinjunction and cross-motion to dismiss ; Order to Show Cause and supporting papers 1-8; Notice of Cross Motion and supporting papers 9-37 ; Answering Affidavits andsupporting papers39 ; Replying Affidavits and supporting papers40-42 ; Other 38 ; it is,ORDERED that the motion by the Plaintiffs for a preliminary injunction was resolvedpursuant to a so-ordered stipulation dated September 23, 2014; and it is further2/18/2015 MARGOT J.

3 garant , Inc. v Suffolk County Natl. Bank (2015 NY Slip Op 50119(U)) that the cross motion by the defendant for an order dismissing the complaintis plaintiff MARGOT garant , an attorney with an office in the Village of Port Jefferson,New York, represents clients in real estate transactions. On July 9, 2014, a client namedYang Jun was referred to her in connection with the purchase of a home in Port record reflects that garant never met Yang, who claimed to be from China, and thatthey communicated with each other via email. On July 17, 2014, garant received a checkfor the purchase in the amount of $399, from John Owen of CI Investments, withwhom Yang purportedly had investments.

4 The check was drawn on the account of EuroVinyl Windows & Doors, Inc., at the Bank of Nova Scotia in Ontario, Canada. On July24, 2014, garant brought the check to the Port Jefferson branch of the defendant, SuffolkCounty National Bank ("SCNB"), and deposited it into her attorney escrow account. Thedeposit was rejected because the check was drawn on a foreign bank and had to be sentout for collection. On July 25, 2014, garant was given the option of having the funds wiredinto her escrow account or sending the check out for collection. She chose the latter.

5 Thecheck was sent to SCNB's Operations Department, which mailed it to the Federal ReserveBank of Atlanta on July 31, 2014. After the Federal Reserve processed the check andmailed it to the Bank of Nova Scotia, SCNB received a provisional credit therefor in theamount of $399, On August 8, 2014, SCNB provisionally credited that amount toGarant's escrow account. However, unbeknownst to SCNB, the Bank of Nova Scotia hadrejected the check as forged/counterfeit on August 7, 2014, and mailed it back to theFederal Reserve Bank of Atlanta. August 12 and 13, 2014, Yang sent garant three emailswith instructions for wiring some of the funds to his wife or ex-wife.

6 Each email containeddifferent instructions. The third and final email directed garant to wire $265,000 to anaccount entitled Overseas Consultants at Ameriserve Financial Bank in Pennsylvania,which she did on August 13, 2014. On August 18, 2014, SCNB received an envelopepostmarked August 14, 2014, from the Federal Reserve Bank of Atlanta. Enclosed thereinwas a Cash Letter Summary dated August 13, 2014, returning the check. Also enclosedwere the check itself and the Bank of Nova Scotia's return slip indicating that the checkwas being returned as forged/counterfeit.

7 SCNB telephoned garant on August 18, 2014, to2/18/2015 MARGOT J. garant , Inc. v Suffolk County Natl. Bank (2015 NY Slip Op 50119(U)) her that the check had been "recalled." On August 19, 2014, SCNB revoked theprovisional credit and charged back garant 's escrow account $399, and her corporation, MARGOT J. garant , Inc. (the " Plaintiffs "), commenced thisaction against SCNB for a judgment declaring that it is not entitled to exercise the right ofsetoff against garant 's attorney escrow account and directing it to return $399,585,60 tothat account, for breach of warranty and breach of the duty of care under the UCC, fornegligent misrepresentation, for fraudulent misrepresentation, for promissory estoppel, forbreach of fiduciary duty, and for attorney's fees under the UCC.

8 SCNB moves to dismissthe complaint pursuant to CPLR 3211 (a) (1) and (7).The Court of Appeals recently decided a case that is remarkably similar to the one atbar. In Greenberg, Trager & Herbst, LLP v HSBC Bank USA (17 NY3d 565), the plaintiff,a law firm, received an email from Northlink Industrial Limited ("Northlink"), a Hong Kongcompany, looking for legal representation to collect debts owed by its North Americancustomers. The plaintiff agreed to represent Northlink and requested a $10,000 sent [*2]Greenberg, Trager & Herbst ("GTH") a Citibank check from aNorthlink customer in the amount of $197,750 with instructions to take its $10,000 retainerout of the check and wire the balance to Citibank in Hong Kong.

9 GTH deposited the checkinto its attorney trust account at HSBC on Friday, September 21, 2007. HSBC provisionally credited GTH's account in the amount of $197,750 on the next business day,Monday, September 24, 2007. HSBC sent the check to the Federal Reserve Bank ofPhiladelphia for presentment to Citibank. Citibank rejected the check because the routingnumber was not recognized by its automated sorting system and sent the check back toHSBC the next day, September 25, 2007.[FN1] HSBC repaired the routing number;determined that the check belonged to Citbank, Las Vegas; and sent it to the FederalReserve Bank of San Francisco.

10 On September 27, 2007, in response to an inquiry byGTH regarding whether the check had "cleared," HSBC advised GTH that the funds were"available." Later that day, GTH wired $187,750 from its account to Hong Kong pursuantto Northlink's instructions. On September 28, 2007, HSBC confirmed to GTH that thewire transfer had been consummated. On October 2, 2007, HSBC received a notice fromCitibank that the check had been dishonored as "suspect counterfeit" and so advised2/18/2015 MARGOT J. garant , Inc. v Suffolk County Natl. Bank (2015 NY Slip Op 50119(U)) HSBC then revoked its provisional settlement [FN2] and charged back GTH' commenced an action against HSBC and Citibank sounding in negligence andnegligent misrepresentation.