The opinion of the court was delivered by: GERARD E. LYNCH, District Judge
This action concerns an annuity that plaintiff Rosa Dina
Macaluso ("Rosa Dina") purchased from defendant United States
Life Insurance Company ("U.S. Life") in 1992. In 2000, plaintiff
requested a distribution of the accrued amount of the annuity,
and, following instructions conveyed by plaintiff's estranged
husband, defendant Gaetano Macaluso ("Gaetano"), and his
daughter, third-party defendant Rosalinda Macaluso ("Rosalinda"),
U.S. Life deposited the distribution into a bank account held
jointly by Rosa Dina and Gaetano. Gaetano then withdrew the
entirety of the distribution and placed the funds into an account
held in his name only. Rosa Dina brought this action against U.S.
Life for breach of contract and negligence, and against Gaetano for conversion and breach of fiduciary duty. U.S. Life
cross-claimed against Gaetano for conversion and unjust
enrichment, and Gaetano counterclaimed against Rosa Dina for the
recoupment of monies allegedly withdrawn by Rosa Dina from joint
accounts. Rosa Dina now moves for summary judgment on her breach
of contract claim against U.S. Life and on Gaetano's
counterclaims, and U.S. Life moves for summary judgment or, in
the alternative, injunctive relief, on its cross-claims against
Gaetano. For the reasons discussed below, plaintiff's motions
will be granted as against both U.S. Life and Gaetano. U.S Life's
motion on its cross-claims against Gaetano will also be granted.
Rosa Dina and Gaetano Macaluso married in 1979 and resided
together at 150-26 Eighth Avenue, Whitestone, New York, until
1995, when the couple became estranged and Rosa Dina moved to
Italy. Gaetano continues to reside at the Whitestone address. In
October 1992, Rosa Dina purchased a group single premium deferred
annuity (the "Annuity") from U.S. Life for $81,000, listing her
address as 150-32 Eighth Avenue, Whitestone, New York.*fn1
In exchange for this premium, U.S. Life issued an annuity
contract bearing certificate number BA0374353V (Affidavit of
Bruno Cilio, Ex. A). The contract provides for withdrawals only
upon written request, and similarly requires that any assignment
or other instructions are valid only if delivered in writing.
Rosa Dina moved to Italy in 1995 and currently resides in
Vicari, Italy. Since at least 1998, U.S. Life has been aware of
Rosa Dina's residence in Italy and has regularly sent communications regarding the Annuity to her Italian address.
(Cilio Aff., Ex. D.) In December 1999, Rosa Dina requested a
partial withdrawal of $16,000 from the Annuity by sending an
Annuity Service Request form to U.S. Life, listing her address in
Italy and directing that payment be made to a bank account there.
(Affidavit of Rhonda Spence, Ex. B.) U.S. Life sent the $16,000
payment to the designated Italian account and Rosa Dina duly
received it. (Spence Aff. ¶¶ 3-4.)
In March 2000, Rosa Dina requested a withdrawal of the total
remaining balance on the Annuity by sending a second Annuity
Service Request to U.S. Life, again listing the Italy address and
the Italian bank account to which U.S. Life had sent the previous
withdrawal. (Cilio Aff., Ex. B.) However, U.S. Life neither
followed Rosa Dina's written instructions, as required by the
Annuity contract, nor sought written clarification of any
ambiguities from Rosa Dina. Instead, on April 7, 2000, a
representative of U.S. Life, Lauren Nguyen, called the Whitestone
phone number listed on the 1992 Annuity application. When Gaetano
answered the phone, Nguyen told him that she was having trouble
reading Rosa Dina's instructions on the Annuity Service Request
and needed to know where to send the requested withdrawal of
approximately $96,000. Gaetano told Nguyen that Rosa Dina was in
Italy, but that he would call Rosa Dina the next day, Saturday,
and ask her what to do, and Nguyen agreed to call Gaetano back to
receive instructions regarding the method of distribution.
(Gaetano's Rule 56.1 Statement ¶¶ 3-9 and Ex. B.) Telephone
records indicate that Gaetano did place a call to Rosa Dina's
phone number in Italy on the following day, although the nature
of any conversation is disputed. (Id.)
Early the following week, at the appointed time, Nguyen called
Gaetano again and was told, first by Gaetano and then again by
his daughter Rosalinda, that Gaetano had spoken with Rosa Dina and that she wanted the distribution sent to a Citibank
account in Whitestone, held jointly by Gaetano and Rosa Dina.
(Id.) Nguyen noted this instruction on the back of the Annuity
Service Request form (Cilio Aff., Ex. B), and a check made out to
Rosa Dina for $96,231.86 was sent to the joint account (Cilio
Aff., Ex. E). Gaetano promptly withdrew the full amount and
deposited it in an account held in his name only. (Affidavit of
Randi Knepper, Ex. B at 15-16.)
After U.S. Life sent the check to Citibank, it sent two written
confirmations of the distribution, both addressed to Rosa Dina:
one to the Whitestone address where Gaetano resides, and one to
the Whitestone address listed on the 1992 Annuity application.
(Spence Aff., Ex. F.) No notice was sent to the Italian address
provided by Rosa Dina on both of her Annuity Service Requests,
and used by U.S. Life to correspond with Rosa Dina since at least
1998. Thereafter, Rosa Dina sent another written instruction to
U.S. Life, requesting that it stop payment on the check sent to
Citibank and repeating the direction of the Annuity Service
Request that any distribution be sent to her in Italy. (Spence
Aff., Ex. G.) Following the refusal of both U.S. Life and Gaetano
to deliver the Annuity proceeds to her, Rosa Dina filed the
present action in this Court on April 1, 2003.*fn2 (Knepper
Aff., Ex. A.) DISCUSSION
I. Standard on Summary Judgment
Summary judgment must be granted where "there is no genuine
issue as to any material fact and . . . the moving party is
entitled to a judgment as a matter of law." Fed.R.Civ.P.
56(c). A fact is "material" if it "might affect the outcome of
the suit under the governing law," and an issue of fact is
"genuine" where "the evidence is such that a reasonable jury
could return a verdict for the nonmoving party." Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). On a motion for
summary judgment, the evidence must be viewed in the light most
favorable to the nonmoving party, and the Court must resolve all
ambiguities and draw all reasonable inferences in its favor.
Id. at 255; Cronin v. Aetna Life Ins. Co., 46 F.3d 196, 202
(2d Cir. 1995).
To defeat a motion for summary judgment, however, the nonmoving
party "must do more than simply show that there is some
metaphysical doubt as to the material facts." Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
"[C]onclusory allegations or unsubstantiated assertions" will not
suffice. Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir. 1998).
Rather, the nonmoving party must "set forth specific facts
showing that there is a genuine issue for trial." Fed.R.Civ.P.
56(e); Matsushita, 475 U.S. at 587 ("Where the record taken as
a whole could not lead a rational trier of fact to find for the
non-moving party, there is no `genuine issue for trial.'")
(quoting First Nat'l Bank v. Cities Service Co., 391 U.S. 253,
In her motion for summary judgment on the breach of contract
claim against U.S. Life, plaintiff argues that U.S. Life breached
the Annuity contract by failing to comply with her express
written instructions in the Annuity Service Request regarding the
method of distribution. Instead, U.S. Life distributed the withdrawal to an account held
jointly by Rosa Dina and Gaetano, where the funds could be, and
were, withdrawn by Gaetano. (P. Mem. 4.)
To establish a breach of contract claim under New York law, a
plaintiff must show: (1) a valid contract; (2) plaintiff's
performance; (3) defendant's failure to perform; and (4) damages
resulting from the breach. See, e.g., Furia v. Furia,
498 N.Y.S.2d 12, 13 (2d Dep't 1986); 22A N.Y. Jur.2d Contracts §
432. U.S. Life does not dispute that the Annuity created a valid
contract and that Rosa Dina performed her obligations under it.
However, U.S. Life contends that Rosa Dina has failed to
establish the third and fourth elements of a breach of contract.
First, U.S. Life asserts there is a material issue of fact as to
whether Gaetano was authorized to act as Rosa Dina's agent with
respect to the Annuity, and thus whether U.S. Life was in breach
when it followed his instructions regarding distribution. (U.S.
Life Mem. 5.) Second, it asserts that any mistake by U.S. Life
was a "harmless error," and Rosa Dina has suffered no ...