SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK: IAS PART 27
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NORMAN J. LIBERMAN, AS TEMPORARY
ADMINISTRATOR OF THE ESTATE OF
THEODORE WICHTER

Plaintiff

-against- Index No. 601357/97

WAYNE WORDEN, MERRILL LYNCH, PIERCE
FENNER SMITH, INC. also known as
MERRILL LYNCH, MICHAEL A. PETRUZILLO
JR., THE CHASE MANHATTAN BANK,
formerly known as CHEMICAL BANK,
GREATER NEW YORK SAVINGS BANK,
DEWITT NURSING HOME, RIVERSIDE
MEMORIAL CHAPEL, a/k/a RIVERSIDE
MEMORIAL CHAPELS, a/k/a NEW YORK
FUNERAL CHAPELS, INC., a/k/a SCI
FUNERAL SERVICES OF NEW YORK, INC.,
GARDEN STATE CREMATORY, INC., d/b/a
GARDEN STATE CREMATORY, IRENE
SHAPIRO, LASCELLE SENIOR, a/k/a
LESTER SENIOR, a/k/a KESTER SENIOR
JOSE CIRILO, APPLE BANK FOR SAVINGS,
also known as APPLE BANK, SANDRA
WORDEN, DEBRALYN REEVES, OSCAR
WILLIAMS, URIS A. MCKAY, FLEET BANK,
N.A., formerly known as NATWEST BANK,
N.A., formerly known as NATIONAL
WESTMINISTER BANK USA, CITIBANK, N.A.,
JACOBY & MEYERS LAW OFFICES LLP,
d/b/a JACOBY & MEYERS LAW OFFICES,
DON B. PANUSH, RICHARD ALAN EISMAN,
411 WEST END AVENUE OWNERS CORP.,
GOODSTEIN MANAGEMENT INC., DAVID DAY
REALTY INC., d/b/a/ DAVID DAY REALTY,
WENDY WALTERS & ASSOCIATES, LTD.,
TRACY ANNE ZACCONE, AND "JOHN DOE #1"
THROUGH JOHN DOE #50,

Defendants.

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IRA GAMMERMAN, J.:

Defendant Apple Bank for Savings a/k/a Apple Bank ("Apple") moves, pursuant to CPLR 3212, for summary judgment dismissing the complaint in its entirety on the grounds that 1) plaintiff's claims are barred by the applicable Statute of Limitations,
2) plaintiff's claims are barred by the applicable jurisdictional time limitations, and 3) plaintiff's claims do not state a viable
cause of action. Defendant Fleet Bank N.A, ("Fleet"), formerly known as National Westminster Bank, N.A., moves for partial summary judgment dismissing the thirty-fifth cause of action on the same grounds. Defendant Citibank, N.A. ("Citi") moves for summary judgment dismissing the thirty-sixth cause of action on the grounds that the claim lacks merit as a matter of law, or in the alternative, for partial summary judgment on its first cross- claim against defendant Apple. Defendant Lascelle Senior, a/k/a Laccelle Senior, a/k/a Lester Senior, a/k/a Kester Senior ("Senior") moves to dismiss the complaint for failure to state a cause of action and as time barred.
Norman J. Liberman, as Temporary Administrator of the Estate of Theodore Wichter, has brought several actions to recover property of the Estate that had been taken by defendant Wayne Worden. The four actions brought by Liberman were consolidated by order, dated January 31, 2000. The instant motions seek dismissal of plaintiff's claims originally filed under Index No. 122910/97. The claims involve Worden's looting of Wichter's safety deposit box and money market accounts at Apple, as well as unauthorized transactions regarding certain treasury notes and checks drawn payable to Wichter.
The plaintiff's decedent, Theodore Wichter, employed defendant Wayne Worden as a practical nurse, beginning in 1990 until his death on December 7, 1991. Wichter, a widower with no children, was 91 when he died. During his lifetime, he had accumulated substantial assets, including various bank accounts, treasury notes, a cooperative apartment and a small amount of stock.
Five days prior to Wichter's death, Worden with the assistance of defendant Senior, another practical nurse employed by Wichter, placed Wichter in DeWitt Nursing Home and told
Wichter's family that he no longer wished to see them. When Wichter died, Worden had him cremated and did not advise the family of the death. They did not discover that Wichter had died until 1995. Earlier computer inquiries by the family proved unsuccessful in providing any information regarding their aged relative. In the interim, Worden conducted transactions in plaintiff's accounts, sold his cooperative apartment and certain treasury notes without authorization and diverted Wichter's property.
In 1995, the family discovered that Wichter had died years earlier. They made inquiries into Wichter's financial affairs and found that Worden had been drawing on Wichter's accounts and liquidating his assets. Upon discovery of Worden's thefts, criminal charges of grand larceny and forgery were brought against him. The criminal action was unresolved, because Worden died.
Liberman was appointed temporary administrator by the Surrogate's Court in March 1997 and this action was commenced by filing on December 5, 1997.
Wichter opened a safe deposit box at Apple in February 1953. He was assigned box no. 20-314 and over the years, kept valuable and sentimental possessions in that safety deposit box, as reflected by the inventory made by his sister-in-law in July 1990.
Wichter also maintained a money market account bearing number 521-017984 at Apple. Plaintiff alleges that in December 1990, Worden diverted $21,000 from the account by means of double forged checks. Plaintiff further alleges that in January 1991, Worden closed the account by forging the withdrawal slip for the remaining funds. The withdrawal slip bears the marking "sip", which the bank alleges means signed in the presence of a bank officer. No affidavit of the individual, who witnessed the signature specifically attesting to the event, as opposed to the the bank's general procedures in this area, is provided.
It is also alleged that Worden opened a new account, bearing account number 521-0200662, which account was also in Wichter's name by forging his signature on the new signature card. While the account card for the old account indicates that the balance was transferred to the new account, there was no notation that the card opening the new account was signed in the presence of a bank officer and none of the bank personnel have stated that to be the case. Further, the new account card contains information different from the old account card. On the old card Wichter's mother's maiden name is Herman and on the new account card the name is Waldman.
Plaintiff asserts that by changing the signature on file and setting up this second "bogus account" Worden was then able to embezzle funds from Wichter with even greater ease and less fear of detection, because now the signature on the account card on file with the bank matched Worden's forgeries. The number of checks drawn against the account increased, along with the size of the checks. It is alleged that Worden forged the signatures as both the drawer and the endorser when the checks were made out to him or to cash, thereby diverting considerable sums.
Wichter owned two $100,000 United States Treasury Notes
bearing interest at 7 3/8% that were to mature on April 15, 1993. The Treasury Notes were identified as certificate numbers 35 and 36. The certificates were held by Wichter in the safety deposit box at Apple, at least as of the date of the inventory in 1990. In February 1991, Apple Bank Assistant Manager Michael G. Keady certified the signature of Wichter on assignment forms for the certificates, that plaintiff claims were forged by Worden. Keady alleges that it was his practice to verify signatures against those on file if the document was previously signed and to demand identification. Keady did not state whether the document had been signed in his presence or at an earlier time and then verified against the signature on file, which signature plaintiff contends was forged by Worden. The certificates were subsequently transferred to Merrill Lynch and sold by Worden, who then diverted the proceeds to his own benefit.
Worden also provided the bank with a power of attorney, dated November 21, 1991. The power of attorney was notarized by defendant Uris McKay. Defendant McKay alleges that he notarized the signature of Theodore Wichter at his apartment after obtaining identification and observing that Wichter was of sound mind. The notary's acknowledgment was originally dated November 21, 1992 and then changed to November 21, 1991 to reflect its execution just 17 days prior to Wichter's death. Plaintiff claims that the power of attorney was forged after Wichter's death and then back dated. No explanation is given by McKay for the suspicious alteration of the date in the notary's jurat.
Thereafter, additional diversions were made using the power of attorney, including checks issued to defendant Senior after Wichter's death, when the power of attorney would no longer have been operative as a matter of law.
In February 1992, Worden provided the bank with a perjured affidavit purportedly attesting that Wichter was alive and continuing the power of attorney. The bogus affidavit is invalid on its face. It states that Worden was acting as the principal and gave himself the power, not that it was derived from Wichter. This invalid affidavit further indicates that the appointment was made on March 3, 1992, although it was notarized by an Apple Bank officer Kevin Spillane one month earlier on February 3, 1992.
In early 1992, Worden placed Wichter's cooperative apartment, located at 411 West End Avenue, New York, NY with a broker for sale. Then in April 1992, four months after Wichter's death Worden, using the power of attorney, entered into a contract of sale for the apartment with Richard Alan Eisman. The closing occurred on June 15, 1992, at which time Worden presented the invalid power of attorney and the bogus affidavit attesting to its continuing authority. At the closing, Worden received a check drawn on Citibank issued by Jacoby & Meyers for $12,829, He also received two checks drawn on NatWest, Fleet's predecessor in interest, payable to Wichter for $99,000 and $25,000 endorsed by Arthur Eisman and Alan Richard Eisman respectively. Worden deposited the checks in the Apple account for collection. When the funds were received from Citibank and Natwest, he proceeded to divert these monies as well.
Wichter also owned a $140,000 United States Treasury Note in Treasury Direct book entry form. The note matured on February 29, 1992, three months subsequent to Wichter's death. The Treasury wired the principal and interest in the amount of $145,950 to Apple for credit in Wichter's account 521-0179874, which account had been closed. Instead of advising the Treasury of the closure of the account and returning the funds, as is required by the Treasury regulations, Apple credited the other account in Wichter's name. The funds were then removed from account number 521-0200662 by Worden.
Worden also applied for and obtained an ATM card for Wichter's account after Wichter had died. Worden designated a PIN number and started using the card in February 1992, to make many cash withdrawals. The ATM withdrawals continued until November 30, 1992. Apple does not provide any documentation as to the issuance of the ATM card and the designation of a PIN number.
As of June 1, 1992, Worden apparently directed Apple to send the statements for the second account to him at his home address of 80 Riverside Drive New York, New York. Thereafter the statements for account number 521-0200662 were sent to Worden's residence, not Wichter's apartment, which was to be sold later that month.
In July 1992, Apple permitted Worden access to Wichter's safe deposit box, based upon the power of attorney. The access card for the box indicates that Worden was cleared for access by the banking floor that had the power of attorney on file. Plaintiff alleges that Worden used the opportunity to remove the contents of the safe deposit box, including treasury note certificates numbers 35 and 36. The papers submitted, however, indicate that those treasury certificates were sold prior to Worden's access to the safe deposit box and so could not have been removed in July 1992.
The pre-consolidation complaint alleged a total of 36 causes of action. The first ten causes of action are asserted against defendant Apple. The twentieth and twenty-first causes of action and the twenty-fifth through twenty-seventh causes of action are asserted against defendant Senior. The thirty-fifth cause of action is alleged against defendant Fleet, and the thirty-sixth cause of action is alleged against defendant Citi.
The first cause of action is to recover for the $145,950 wired from the Treasury Department upon the maturation of Wichter's Treasury Note in February 1992 that Apple credited to the wrong account. Plaintiff advances two theories for this claim: 1) Apple violated federal regulations when it credited the wire transfer to an account that was not designated by Wichter instead of returning the monies to the Treasury Department; and 2) Apple breached a contract with Wichter when it credited the funds to an account that had not been designated for that purpose. Apple contends that there is no right of action under the federal regulations cited by plaintiff and that there is no private remedy based upon either 31 CFR 357.26(b)(5) or 51 FR 18265. Apple further argues that the proximate cause of the loss was not its crediting of the wrong account, but Worden's subsequent embezzlement of the funds credited to Wichter's new account; and that I should treat this situation, as I did the transfer of the other treasury note to Merrill Lynch.
While the regulations are intended to protect the purchasers of Treasury Notes and to reduce the risks involved in such investments, they do not specifically provide for a private remedy. In 31 CFR Part 357 Appendix A, the regulations provide that "[i]n a case where a receiving institution fails to act in accordance with the instructions given it, the Bureau intends to use its best efforts to assist investors in rectifying the error.". This is not sufficient to suggest that a private right of action may be implied. It constitutes an alternative dispute resolution mechanism for obtaining the relief sought herein. No cases have been found that support the existence of such a private remedy.
There is, however, a basis in contract for the cause of action. The instructions given by Wichter to Apple and the Treasury designated a specific account to which the wire transfer was to be credited. It did not authorize Apple to credit any account in Wichter's name. From the affidavits and documents presented it appears that Apple took it upon itself to change the account once it had received the funds. The regulations do permit the bank to change the account, but whether or not this was proper and appropriate in this instance depends in large part on whether the second account in Wichter's name was opened by the decedent or was a bogus account that Worden set-up for his own purposes and whether reliance on the power of attorney was reasonable. These are questions of fact that preclude dismissal. The second cause of action against Apple is for permitting Worden access to the safe deposit box after Wichter's death, which permitted him to take property from the box. Here too, there are two possible theories set forth by plaintiff. The first theory is that the bank acted negligently in accepting the power of attorney and permitting access. The second theory is that the safe deposit box constitutes a bailment contract and that the contract was breached by allowing Worden, who was not authorized to have access to the box to have such access. The first theory is time-barred. The defendant contends that the plaintiff has not presented sufficient facts to support a contract claim that Worden was unauthorized and that anything was taken from the box in July 1992, when he admittedly had access. No copies of the bailment contract on the safe deposit box are provided, so that its specific terms are not known. This alone precludes dismissal at this time. The issue of whether Apple should have relied upon the power of attorney as authority for granting Worden access is another question of fact that I previously found precluded dismissal in Liberman v Jacoby & Meyers, Sup Ct NY County, September 29, 1999, Gammerman, J., Index No. 122912/97. Plaintiff has presented an inventory of the items kept in the box that was made by the decedent's sister-in- law, who had accompanied Wichter on a visit to the bank in 1990. While plaintiff alleges that treasury note certificates 35 and 36 were removed in July 1992 by Worden, the facts previously alleged indicate that these instruments were removed at an earlier time.
Plaintiff is entitled to discovery regarding the terms of the safe deposit agreement, and who had access to the box and when was it accessed. It is unclear whether Worden's access was limited to one occasion.
The third cause of action is for breach of contract. The complaint alleges that Apple collected over unauthorized endorsements on the three checks issued in Wichter's name at the closing on the cooperative apartment. The viability of this claim will depend upon resolution of the factual issue of whether the second account at Apple was authorized by Wichter. If Wichter is found to have authorized the account, then the deposit of the checks into his account without his signature would not be a breach of contract, Liberman v Worden, AD2d , 701 NYS2d 419 (1st Dept 2000). However, if the account proves to be bogus, then Wichter never received the monies deposited; and as the collecting bank, Apple might have liability on the diversion.
The third cause of action also claims that Apple is liable for breach of contract when it paid out over forged checks issued on Wichter's original account and on the purportedly bogus account. Defendant Apple contends that these check claims must be dismissed in light of my decision in Liberman v Worden, Sup Ct NY County, July 16, 1998, Index No. 601357/97, NYLJ August 6, 1998, p 22, c 6, which decision has been recently affirmed in part and modified in part by the Appellate Division, Liberman v Worden, AD2d , 701 NYS2d (1st Dept 2000). In that decision, I dismissed all claims against Chase Manhattan Bank ("Chase") and Merrill Lynch and sustained some of the claims against Greater New York Savings Bank ("GNY"). The Appellate Division affirmed the dismissal as to Chase and Merrill Lynch and dismissed additional claims as to GNY. In particular, the Appellate Division limited the contract claims for unauthorized withdrawals against GNY to those accruing during the 6 years preceding the commencement of the lawsuit.
Apple contends that it provided checking and ATM services as did Chase and that so much of the complaint that is premised upon forged checks and ATM withdrawals should be dismissed under UCC 4-406(4) and 15 USC 1693 respectively, in accordance with the earlier decision. Plaintiff argues that Apple is a savings bank, like GNY, and that the causes of action constitute unauthorized withdrawals under Banking Law Section 239 (7), which provides a 20 year statute of limitations for unauthorized transfers from funds on deposit with a state chartered savings bank, and that such provision specifically states that it takes precedence over other statutes of limitation, that might otherwise apply. Plaintiff maintains that Banking Law 239(7) precludes reliance on UCC Section 4-406(4) and 15 USC 1693.
While it is true that both Apple and GNY are both state chartered savings institutions, this distinction is not controlling. The Appellate Division in reviewing the earlier decision declined by implication to apply Banking Law Section 239(7) when it limited the contract claims against GNY for unauthorized withdrawals to one unauthorized withdrawal accruing within the six years preceding the lawsuit. Since these cases have been consolidated, the earlier decision is now law of the case. I am bound by the Appellate determination and must look to the gravamen of the action and apply the normally appropriate statute of limitations.
Moreover, UCC 4-406(4) and 15 USC 1693 are not statutes of limitations as such. They provide that an account holder must notify the bank of claims of check forgeries or unauthorized ATM transactions within a year of issuance of a statement thereon, Woods v MONY Legacy Life Insurance Co., 84 NY2d 280 (1994); Bisbey v D.C. National Bank, 793 F2d 315 (DC Cir 1986). These provisions set up a jurisdictional requirement of notice to the bank prior to the commencement of any lawsuit to recover for items improperly charged against the account. These statutes are not statutes of limitations, rather they create a condition precedent to suit, Billings v East River Savings Bank, 33 AD2d 997 (1st Dept 1970); Bisbey v D.C. National Bank, supra. Banking Law 239(7) has no effect on conditions precedent to suit, that are entirely distinct and separate from statutes of limitation, cf Weiner v Sprint Mortgage Bankers Corp., 235 AD2d 472 (2d Dept 1997).
The Court of Appeals in Woods v MONY Legacy Life Insurance Co., supra at 285 (1994) noted that "the goal of the UCC-'to simplify, clarify and modernize the law governing commercial transactions'(UCC 1-102[2][a])-is best served by application of a uniform standard for detecting forgeries on returned drafts." Thus, UCC 4-406(4) and its electronic funds counterpart, 15 USC 1693, should be read to standardize the methods by which forgeries on returned drafts and unauthorized ATM transfers are detected and handled. These methods apply to all entities offering checking and ATM accounts, whether they are commercial banks, insurance companies or state chartered savings banks, id.
The plaintiff argues that this court should follow the California case, Mac v Bank of America, 76 Cal App 4th 582 (Ct of App 1st dist, div 3 1999), which held that UCC 406(4) would not apply to statements issued after the death of the depositor. Defendant argues that the earlier decisions in this matter are controlling. In the earlier decision of Liberman v Worden, NYLJ August 6, 1998, p 22, c 6, I found that no cause of action was stated against Chase for checks issued after Wichter's death where statements were sent to the address he had designated. The Appellate Division has recently affirmed that determination,
Liberman v Worden, AD2d , 701 NYS2d 419 (1st Dept 2000). As previously noted, the earlier decisions are the law of the case and provide controlling authority. I must, therefore, decline to follow the California case cited by plaintiff.
It is apparent that the approach to this problem taken by the courts in New York does not provide for the California exception. In Woods v MONY Legacy Life Insurance Co., supra the court held that where the statements were sent to an authorized person at an authorized address, no claims against the bank could be sustained. In reviewing the transactions disputed herein, the court's first consideration is whether the statements were sent to the customer pursuant to request or instruction of the customer or otherwise in a reasonable manner (UCC 4-406(1)).
Plaintiff urges that an equitable estoppel should bar the defendant from relying on these defenses. However, as I noted earlier, in Liberman v Worden, supra equitable estoppel is not applicable to toll UCC-4-406 or 15 USC 1693.
With respect to the checks drawn on Wichter's first account no claim may be maintained. Wichter received statements on that account at the address he designated, and he did not notify the bank that any of the checks had been forged within one year of receipt of his statements. This is precisely the situation that was before the court in Liberman v Worden, AD2d , 701 NYS2d 419 (1st Dept 2000) and that resulted in dismissal of the claims against Chase.
Whether the forged checks drawn on the so called "bogus account" are recoverable will depend upon the resolution of various factual issues: 1) whether Wichter set up the account or Worden created the account as a vehicle to perpetrate his fraud;
2) if the account was set up by Wichter, did the bank have a right to rely upon the power of attorney to permit Worden to change the mailing address on the account to divert the statements to his own home. These questions go to the authority of the person designating the mailing address for the account and must await a trial.
The third cause of action also cites numerous actions of Apple as examples of alleged bad faith, that plaintiff maintains constitute breaches of the implied covenant of good faith. The actions cited do not rise to the level of bad faith. As with the allegations against Chase on the earlier motion, they are only conclusory claims of knowledgeable participation by bank employees in the fraudulent embezzlement scheme of Worden that will not support a cause of action against the bank, see Prudential-Bache Securities, Inc. v Citibank, N.A., 73 NY2d 263 (1989).
Similarly, the fourth cause of action for breach of the UCC 3-419 requirement of the duty to act in good faith and in accordance with reasonable commercial standards and its common law counterpart, the eighth cause of action, cannot stand scrutiny. Taking into consideration plaintiff's laundry list of the bank's failures to catch Worden's embezzlement, all that is alleged here, is at best a "failure to perceive a fraud was in progress" and that the bank "was negligent in not being sufficiently vigilant," Calisch Associates, Inc. v Manufacturers Hanover Trust Co., 151 AD2d 446, 448 (1st Dept 1989), Retail Shoe Commission v Manufacturers Hanover Trust, Co., 160 AD2d 47 (1st Dept 1990). This does not constitute a breach of the duty of good faith, nor a failure to observe reasonable commercial standards either under the UCC or the common law.
The fifth cause of action seeks to recover for unauthorized transfers and withdrawals from the two accounts at Apple. All claims with respect to the first account are time-barred, Liberman v Worden, AD2d , 701 NYS2d 419 (1st Dept 2000).
As to the second account, those claims based upon forged checks or endorsements are subject to the same factual issues enumerated in the third cause of action and will not be dismissed at this juncture. There also was a transfer made by a withdrawal slip signed by Worden on March 3, 1992 in his own name, after Wichter's death. This particular withdrawal is not time-barred and would support this cause of action.
The sixth cause of action is to recover for the funds diverted by means of ATM transfers. Apple argues that these claims are precluded under 15 USC 1693. Plaintiff alleges that the ATM card was not issued to Wichter during his lifetime, and that Worden sought this service from the bank after Wichter had died, so that it was never properly authorized. Whether the bank had the right to rely upon the power of attorney and perhaps the invalid affidavit of continuing authority to grant ATM privileges to Worden on Wichter's behalf presents a factual issue. This is another area where plaintiff would be entitled to take discovery, particularly since the bank has not come forward on this motion with any information regarding the establishment of ATM privileges.
The seventh cause of action is a claim for the breach of the duty of due care. As such, the claim sounds in negligence. Plaintiff has not indicated any duty separate and apart from the bank's contractual obligations to its customer that would give rise to an action in negligence. The claim is merely duplicative of the third cause of action for breach of contract. Even if it were sufficient to state a claim in negligence, that claim would, in any event, have to be dismissed as time-barred. The ninth and tenth causes of action are for aiding and abetting Worden's fraud and conversion respectively. These two causes of action cannot be sustained. To state a claim for aiding and abetting plaintiff must allege 1) the existence of wrongful conduct by the primary wrongdoer, in this case Worden; 2) knowledge of the wrongful conduct on the part of Apple: and
3) substantial assistance of Apple in achieving the wrongdoing,
DePinto v Ashley Scott, Inc., 222 AD2d 288 (1st Dept 1995). Plaintiff must show that the alleged aider and abettor had actual knowledge of the underlying tort, either fraud or conversion,
H2O Swimwear, Ltd. v Lomas, 164 AD2d 804 (1st Dept 1990).
Allegations of constructive knowledge or that defendant was on notice as to Worden's embezzlement will not be sufficient, Williams v Bank Leumi Trust Company of New York, 1997 WL 289865
(SDNY 1997). Plaintiff's conclusory allegations of constructive knowledge or notice are inadequate to withstand the motion, National Westminster Bank USA v Weskel, 124 AD2d 144 (1st Dept), app denied 70 NY2d 604 (1987).
Since the eighth, ninth and tenth causes of action are dismissed, there are no claims remaining against defendant Apple upon which to predicate plaintiff's demand for punitive damages. The plaintiff has not set forth the elements required to support a request for punitive damages under the other causes of action. The surviving claims are all contractual in nature and do not give rise to punitive damages, NY University v Continental Insurance Co., 87 NY2d 315 (1995). Moreover, the alleged wrongful conduct is not so egregious as to evidence a "high degree of moral turpitude" or "wanton dishonesty" that warrants the imposition of punitive damages, Walker v Sheldon, 10 NY2d 401, 4 (1961). Nor is it a part of a pattern directed at the public generally, Rocanova v Equitable Life Assurance Society, 83 NY2d 603 (1994).
Apple also seeks to dismiss plaintiff's request for attorneys' fees. Under New York law, attorneys' fees will not be awarded absent an agreement, statute or rule permitting them. Here there is no contract providing for attorneys' fees. However, 15 USC 1693m(a)(3) permits attorneys' fees with regard to claims of unauthorized ATM transactions. The award of any attorneys' fees will only be permitted if plaintiff is successful on his claim under 15 USC 1693 and limited to that claim. Plaintiff has not set forth any fees incurred in prior litigation that would warrant applying the exception recognized in Shindler v Lamb, 25 Misc2d 810(Sup Ct NY County 1959), affd 10 AD2d 826(1st Dept 1960), affd 9 NY2d 621 (1962) to permit attorneys' fees as to the entire action.
Plaintiff alleges that the applications of defendants Senior, Citibank and Fleet are procedurally improper under CPLR 2215, as they were interposed against a non-moving party and should have been brought as new motions. Defendants argue that the court should overlook this technical defect since no prejudice resulted and plaintiff had an ample opportunity to submit papers in response to the defective cross motions.
As noted in Mango v Long Island Jewish Hillside Medical Center, 123 AD2d 843, (2nd Dept 1986) CPLR 2215 provides that a cross motion is not the proper vehicle for seeking relief from a non-moving party. However, this technical defect may be disregarded when there is no prejudice and the opposing party has had ample time to be heard on the merits, Volpe v Canfield, 237 AD2d 282 (2d Dept 1997). Plaintiff has not alleged any prejudice and has had ample opportunity to be heard and has submitted extensive papers in opposition to the motions. I will, therefore, consider the cross motions.
The plaintiff brought two separate actions against Senior, Liberman v DeWitt Nursing Home, Index No. 122525/97 and Liberman v Apple Bank, Index No. 122910/97. The claims in both proceedings involved the same transactions and sought identical relief. In a decision and order dated July 12, 1999, I reviewed the claims in Liberman v DeWitt Nursing Home, and dismissed the aiding and abetting conversion cause of action as time-barred, and permitted the other causes of action to proceed. In light of the consolidation, the claims asserted originally in Liberman v Apple Bank are duplicative of the claims already considered on the earlier motion. Thus, I will not go into the merits of such claims, but will dismiss the twentieth and twenty-fifth through twenty-seventh causes of action as duplicative, Squire Records, Inc. v Vanguard Recording Society, Inc., 25 AD2d 190 (1st Dept 1966), affd 19 NY2d 797 (1967). The twenty-first cause of action is dismissed, as time-barred in accordance with the decision and order dated July 12, 1999.
The thirty-fifth and thirty-sixth causes of action state parallel claims against Fleet and Citi respectively. They arise out of the deposit of checks drawn on said banks made out to Wichter at the closing on the sale of the cooperative apartment that were turned over to Worden, who then endorsed the checks in Wichter's name and deposited them in the second account at Apple, from whence Worden absconded with the funds. Since Wichter had been dead for several months, the endorsement clearly was a forgery.
Both Citi and Fleet rely upon Apple's argument that the proximate cause of the loss was not the forged endorsement, because the funds were deposited in Wichter's account and then later removed by the thief. However, I have already indicated that the second account, while in Wichter's name, may not have ever been within his control, unlike the account at Chase or the first account at Apple. If at trial the account is found to have been bogus, then Wichter's property was converted upon the deposit in the bogus account and not when the funds were withdrawn.
Fleet, in turn, contends that the Estate has no standing to bring suit against the payor banks. Fleet asserts that in order to bring suit for conversion under UCC 3-419, the payee at one time must have had actual or constructive possession, and that, since Wichter was dead, there was no actual possession of the checks, nor was there constructive possession of the checks, since Worden was without authority to act on behalf of Wichter or the Estate. Plaintiff argues that Worden held the checks in constructive trust for the Estate, and that all parties to the transaction assumed he was acting as Wichter's agent, and that the Estate has the right to elect to ratify Worden's receipt of and possession of the checks, without ratifying the endorsement. Plaintiff has set forth sufficient facts to permit the imposition of a constructive trust. Also should the Estate elect to ratify Worden's receipt of the checks, J.M. Heinike Associates, Inc. v Chili Lumber Co., 83 AD2d 751 (4th Dept 1981), then there would be no question about possession. At present, summary judgment is not available inasmuch as the factual issue cited above precludes such relief.
Citi has requested judgment over on its cross-claim should it be found liable based upon UCC 3-417(2). Since I have made no such finding at this time, judgment on the cross-claims should also await the trial.
Accordingly, it is
ORDERED that the motion of Apple for summary judgment dismissing the complaint is granted to the extent of severing and dismissing the fourth, seventh, eighth, ninth and tenth causes of action, and all demands for punitive damages; and it is further
ORDERED that the motion of Apple for summary judgment dismissing the complaint is granted to the extent of severing and dismissing those portions of the third and fifth causes of action which seek to recover for transactions in account no. 521-017894 and for breach of the covenant of good faith; and it is further
ORDERED that the motion of defendant to dismiss Senior is granted and the twentieth, twenty-first, twenty-fifth through twenty-sixth and twenty-seventh causes of action are severed and dismissed; and it is further
ORDERED that the motion of defendant Citi for summary judgment is denied; and it is further
ORDERED that the motion of defendant Fleet for summary judgment is denied.

Dated: February 24, 2000
ENTER:

_____________________
J.S.C.