MOUNT HOPE UNIVERSAL BAPTIST CHURCH INC v. NA (2019)

DECISION & ORDER

ORDERED that the order is affirmed insofar as appealed from, with costs.

The plaintiff, Mount Hope Universal Baptist Church, Inc. (hereinafter Mt. Hope), alleges that the defendants Gertrude Bowen (also known as Gertrude Massop), Ann Richardson, Jennifer Massop, Crystal Richardson, and Allison Bowen (hereinafter collectively the individual defendants) induced the defendant Pruco Life Insurance Company of New Jersey, incorrectly sued herein as Prudential Financial, Inc. (hereinafter Pruco), to issue a check to them for the proceeds of a life insurance policy that had been purchased by a relative of the individual defendants and named Mt. Hope as the beneficiary.  The check was made payable to Mount Hope Universal Baptist Church, and the individual defendants are alleged to have opened a bank account in Mt. Hope's name with the defendant Citigroup, Inc., doing business as Citibank, NA (hereinafter Citibank), into which the check from Pruco, endorsed by one of the individual defendants, was deposited.

Citibank moved, inter alia, pursuant to CPLR 3211(a)(7) to dismiss the cross claim asserted against it by Pruco for contribution.  The Supreme Court granted that branch of the motion, and Pruco appeals.

Citibank established the applicability of the general rule that a drawer, such as Pruco, does not have a direct cause of action against a depository bank, such as Citibank, for collecting an improperly endorsed check (see Horovitz v. Roadworks of Great Neck, Inc., 76 N.Y.2d 975, 976, 563 N.Y.S.2d 735, 565 N.E.2d 484;  Prudential–Bache Sec. v. Citibank, 73 N.Y.2d 263, 272, 539 N.Y.S.2d 699, 536 N.E.2d 1118;  Citigroup Global Mkts. v. Infante, 134 A.D.3d 758, 23 N.Y.S.3d 246;  Parker v. Flores, 202 A.D.2d 561, 562, 609 N.Y.S.2d 93).  Contrary to Pruco's contention, the narrow exception to that rule set forth in Underpinning & Found. Constructors, Inc. v. Chase Manhattan Bank, N.A., 46 N.Y.2d 459, 414 N.Y.S.2d 298, 386 N.E.2d 1319) is inapplicable here (see UCC 3–405[1][a];  Pellicio v. Hartford Life Ins. Co., 262 A.D.2d 293, 691 N.Y.S.2d 554).  Accordingly, we agree with the Supreme Court's determination to grant that branch of Citibank's motion which was pursuant to CPLR 3211(a)(7) to dismiss Pruco's cross claim for contribution.

MASTRO, J.P., CHAMBERS, MILLER and CHRISTOPHER, JJ., concur.