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D & I Fashions Inc. v. JP Morgan Chase Bank

January 28, 2008


The opinion of the court was delivered by: Philip S. Straniere, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the printed Official Reports.

"I believe...that banking establishments are more dangerous than standing armies,..."*fn1

"A power has risen up in the government greater than the people themselves, consisting of many and various interests, combined into one mass, and held together by the cohesive power of the vast surplus in the banks."*fn2

"Finance is the art of passing money from hand to hand until it finally disappears."*fn3

Claimant, D & I Fashions, Inc., commenced this small claims action against the defendant, JP Morgan Chase Bank, alleging that the defendant had failed to return monies claimant received as a security deposit and placed in a savings account with defendant's predecessor in interest. A trial was held on November 25, 2008. Claimant appeared without an attorney. Defendant was represented by counsel.

Claimant, by its principal, testified that on July 1, 1996 it received $2,200.00 from its tenant, Entertainment Technologies Pegasus Productions, as a security deposit in regard to a commercial lease of the premises, 8140 New Utrecht Avenue, Brooklyn, New York, which is owned by the claimant. On July 5, 1996, claimant deposited the $2,200.00 in a savings account at Chemical Bank (No.183608698201) opened at defendant's branch at 8523 20th Avenue, Brooklyn, New York. On August 4, 1996, the tenant delivered to claimant a second check in the amount of $2,200.00 as an additional security deposit. Claimant deposited the second check in the same account at Chemical Bank on August 12, 1996. It is conceded that the current named defendant is the successor to Chemical Bank after several mergers and acquisitions. Although Chemical Bank acquired Chase Bank in July 1996, the month this account was opened, it elected to do business under the name Chase. In 2008 the tenant, who has remained a tenant the entire time, inquired as to the status of the account. Claimant went to the defendant's branch at 8523 20th Avenue, Brooklyn, New York to close the account only to learn that the defendant no longer had any record of such an account.

Counsel for the defendant suggested that because the bank no longer had any record of the account, and since claimant insisted that it never closed the account, that perhaps the monies had been turned over to New York State as "abandoned property" as required by the New York Abandoned Property Law. Defendant asserted that because there was no activity on the account for several years, such as further deposits or withdrawals, the account would be deemed "abandoned" after five years. Claimant asserts that it never abandoned the account nor had it ever received any notification either from the defendant or the State of New York that the account has been deemed abandoned. Claimant alleges that when it contacted New York State Comptroller Division of Abandoned Property, it was informed that no such account had ever been surrendered to it. Claimant also stated that the defendant refused to cooperate and file the necessary papers with New York State to trace the account. Defendant asserts that it did not fill out the forms because its records do not show that the account was turned over to the State of New York. Defendant contends that the only logical conclusion is that the claimant must have closed the account. Either that, or the account was transferred to defendant's branch in "Brigadoon" and it will reappear in 2096.

Claimant admitted that over the years it has no record of receiving any 1099-INT Form from the defendant in regard to the interest being earned on the account. Defendant asserted that after seven years it purges all of its accounts so that it has no record of any 1099-INT being issued to the claimant. Defendant also stated that the type of savings account opened by the claimant could be closed by the claimant without presenting the savings account register simply by the use of a withdrawal slip and an independent form of identification from the claimant. Under this procedure, there would be no record of the closing of the account on the savings register maintained by the claimant unless the claimant made such a notation.


New York State Finance Law §95 provides:

Abandoned property fund. 1. The state comptroller shall maintain a special fund to be known as the abandoned property fund. Such fund shall consist of all moneys paid to him pursuant to the provisions of the abandoned property law and all moneys which by law shall be paid into such fund.

Abandoned Property Law §300 provides:

Unclaimed property held or owing by banking organizations. 1. The following unclaimed property held or owing by banking organizations shall be deemed abandoned property: (a) Any amounts due on deposits...held or owing by a banking organization, which shall have remained unclaimed for five years by the person or persons appearing to be entitled thereto, including any interest or dividends thereon, excepting (i) any such amount which has been reduced or increased, exclusive of dividend or interest payment, within five years, or (ii) any such amount which is represented by a passbook not in the possession of the banking organization, which has been presented for entry of dividend or interest credit within five years, or (iii)any such amount with respect to which the banking organization has on file written evidence received within five years that the person or persons appearing to be entitled to such amounts had knowledge thereof,...

Abandoned Property Law §301 provides:

Annual report of abandoned property. 1. On or before the first day of August in each year every banking organization shall make a verified written report to the state comptroller which shall contain a true and accurate statement, as of the thirtieth day of June next preceding of all abandoned property specified in section three hundred, held or owing by it.

Abandoned Property Law §1412-a provides:

1....every person,...or corporation required to file a report of abandoned property pursuant to this chapter, shall retain for a period of five years following the thirty-first day of December of the year for which the report has been filed, all books, records and ...

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