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Dammers v. Wells Fargo Bank, N.A.

United States District Court, S.D. New York

January 2, 2018




         Plaintiffs Steven W. Dammers ("S. Dammers") and Judith I. Dammeis ("J. Dammeis") (collectively "Plaintiffs") commenced this action in the New York State Supreme Court, Westchester County, by filing a Motion for Summary Judgment in lieu of a complaint, pursuant to C.P.L.R. § 3213, seeking recovery of monies alleged owed on two Certificates of Deposit ("CD"). Defendant Wells Fargo Bank, N.A. ("Defendant" or "Wells Fargo"), removed the action from state court pursuant to 28 U.S.C. §§ 1332, 1441, and 1446. Defendant also filed its opposition to Plaintiffs Motion for Summary Judgment. For the following reasons, Plaintiffs' motion is DENIED.


         C.P.L.R. § 3213 provides, in relevant part, that a Plaintiff may commence an action based upon an instrument for the payment of money only or upon any judgment by serving with the summons a notice of Motion for Summary Judgment and the supporting papers in lieu of a complaint. C.P.L.R. § 3213 is intended to be a streamlined procedure, combining pleading and motion practice in one step, prior to joinder of issue, under limited circumstances. See Weissmam v. Slnorm Deli, Inc., 88 N.Y.2d 437, 443, 646 N.Y.S.2d 308, 669 N.E.2d 242 (1996); see also Interman Indus. Prod., Ltd. v. R.S.M. Electron Power, Inc., 37 N.Y.2d 151, 154, 371 N.Y.S.2d 675, 332 N.E.2d 859 (1975) ("[§] 3213 is intended to provide a speedy and effective means of seeming a judgment on claims presumptively meritorious")- For a document to come within the confines of C.P.L.R, § 3213 it must be clear from the instrument that there exists an unconditional obligation to make payment of the nature that "a prima facie case would be made out by the instrument and a failure to make the payments called for by its terms." Merman Industrial Products, 37 N.Y.2d at 155 (citing Seaman-Andwall Corp. v. Wright Mach. Corp., 295 N.Y.S.2d 752, 31 A.D.2d 136 (1st Dept. 1968), affd29 N.Y.2d 617, 324N.Y.S.2d 410, 273 N, E.2d 138 (1968)); see also Nordea Bank Finland, PLC, v Molten, 923 N.Y.S.2d 464, 84 A.D, 3d 589 (1st Dept. 2011). A document or instrument does not qualify under C.P.L.R. § 3213 "if outside proof is needed, other than simple proof of nonpayment or a similar de minimis deviation from the face of the document." Weissman, 88 N.Y.2d at 444.

         Motions for summary judgment are governed by Rule 56 of the Federal Rules of Civil Procedure. The rule states in pertinent part:

A party may move for summary judgment, identifying each claim or defense-or the part of each claim or defense-on which summary judgment is sought. The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.

Fed. R. Civ. P. 56(a). The moving parly bears the initial burden of demonstrating the absence of any genuine dispute or issue of material fact by pointing to evidence in the record, "including depositions, documents . .. [and] affidavits or declarations, " Fed.R.Civ.P. 56(c)(1)(A), "which it believes demonstrate[s] the absence of a genuine issue of material fact." Celolex Corp. v. Catrett 411 U.S. 317, 323 (1986). Once the moving party has fulfilled its preliminary burden, the onus shifts to the nonmoving party to raise the existence of a genuine dispute of material fact. Fed.R.Civ.P. 56(c)(1)(A); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). Courts must "constru[e] the evidence in the light most favorable to the non-moving party and dvaw[] all reasonable inferences in its favor." Fincher v. Depository Trust & Clearing Corp., 604 F.3d 712, 720 (2d Civ. 2010) (quoting Atlianz Ins. Co. v. Lertier, 416 F.3d 109, 113 (2d Cir. 2005)). In reviewing the record, "the judge's function is not himself to weigh the evidence and determine the truth of the matter." Anderson, 477 U.S. at 249. Rather, "the inquiry performed is the threshold inquiry of determining whether there is the need for a trial." Id. at 250.

         Under New York law, a written negotiable instrument is created where: (1) the instrument is signed by the maker; (2) it contains an unconditional promise or order to pay a sum certain; (3) it is payable on demand or at a definite lime; and (4) it is payable to order or to bearer. N.Y.U.C.C. § 3-104(1) (a)-(d). "The computation [of payment] must be one which can be made from the instrument itself without reference to any outside source." U.C.C. § 3-106, Comment 1. The use of parol evidence is impermissible to contradict the unambiguous terms of the instrument. Shron v. Troulman Sanders LLP, 20 N.Y.3d 430, 436, 963 N.Y.S.2d 613, 986 N.E.2d 430 (2013); Hogan & Co. v. Saturn Mgmt., Inc., 433 N.Y.S.2d 168, 78 A.D.2d 837 (1st Dept. 1980).

         A promissory note is a type of instrument containing an unequivocal and unconditional obligation to repay the lender, executed by the Defendant. Lugli v. Johnston, 912 N.Y.S.2d 108, 78 A.D.3d 1133, 1135 (2d Dept. 2010); see also Gullery v. Imburgio, 905 N.Y.S.2d 221, 74 A.D.3d 1022 (2d Dept. 1996). "'To establish prima facie entitlement to judgment as a matter of law on the issue of liability with respect to a promissory note, a plaintiff must show the existence of a promissory note executed by the defendant and the failure of the defendant to pay in accordance with the note's terms'" Hansraj v. Stfkhu, 43 N.Y, S.3d 127, 145 A.D.3d 755, 755-56 (2d Dept. 2016) (citing Nunez v. Channel Grocery & Deli Corp., 998 N.Y.S.2d 663, 124 A.D.3d 734, 734-735 (2d Dept. 2015)). Once plaintiff submits evidence establishing these elements, the burden then shifts to the defendant to submit evidence establishing the existence of a triable issue with respect to a bona fide defense. See Jin Sheng He v. SingHuei Chang, 921 N.Y.S.2d 128, 83 A.D.3d 788, 789 (2d Dept. 2011), DISCUSSION

         Plaintiffs assert they are entitled to summary judgment as a matter of law. Plaintiffs aver they are the holders in due course of two $100, 000.00 CDs which are payable upon presentment. (Memorandum of Law in Support of Plaintiff s Motion for Summary Judgment in Lieu of Complaint ¶ 1 ("PI. Mot. Summ. J.”), ECF Doc. No. 1.) The CD ending in number 0929 is held jointly by Plaintiffs (Aff. of Steven W, Dammcrs in Supp. of Mot. for Summ. J. in Lieu of Compl. ¶ 9 ("Aff. of S. Dammers"), ECF Doc. No. 1) and the CD ending in number 0921 is held solely by S. Dammers. (Id. ¶ 10.) Plaintiffs opened the CD accounts with First Union National Bank ("First Union") on December 6, 1999. (Id. ¶ 11.) Wells Fargo is First Union's successor. (Def. Mem. of Law in Opp. to Pi. Mot. for Summ. J. 2 ("Def. Opp."), ECF Doc. No. 12; PI. Mot. Summ. J. ¶ 1.) Plaintiffs aver that soon after opening the accounts, they placed the CDs in a safe deposit box where they remained until December 11, 2015. (PI. Mot. Summ. J.. ¶¶ 1-2.) On December 11, 2015, Plaintiffs presented the CDs to Defendant for payment in full, inclusive of interest. (Id. ¶ 2, ) Despite presentment to the Bank, Defendant refused to redeem them. Lastly, Plaintiffs aver the accounts were never closed nor did they previously attempt to redeem the CDs. (Id. ¶ 7; Aff. of S. Dammers ¶ 23.)

         In further support of their motion, Plaintiffs submits two documents showing the CDs which issued by First Union. The documents contain, in relevant part, an acknowledgment of a deposited amount ($100, 000.00 each)[1], an opening date for each (December 6, 1999), an account number, the depositor's names (Both S: and J. Dammers), the signature of a First Union representative, an interest rate per annum, an interest payment frequency period (monthly), a maturity rate (January 6, 2001) and an indication that each certificate was subject to automatic renewal. Conspicuously missing from the documents is any language even remotely evincing an unconditional obligation to pay. Thus, Plaintiff has failed to make a prima facie showing of entitlement to the relief sought.

         Though no further discussion is required, the Court notes that had Plaintiffs met their burden, Defendant's submission in opposition to the Motion for Summary Judgment would have raised a material issue of fact. Defendant asserts that the CDs do not, as suggested by Plaintiffs, bear instruments payable upon presentment, but are merely receipts for Time Deposit accounts. (Def. Opp., at 1.) In support for their contention, Defendant relies on the clear and unequivocal language contained on the face of the CD which refers to the document as a "Receipt."

         Defendant also submits the declaration of Benita Sheffield ("Sheffield"), a litigation support specialist for Wells Fargo, who was formerly employed by First Union as a Client Operations Manager and who continued her employment with Wells Fargo thereafter. (See id, ) Sheffield avers she is familial- with the policies and procedures for opening First Union Time Deposit accounts and the record keeping system for managing such accounts. (Def. Opp., Ex. 2. (Decl. of Benita Sheffield ¶ 3 ("Sheffield Deck")).) She further avers that a holder of a Time Deposit account is paid the amount due on the initial or any subsequent maturity date upon signing a receipt form (for accounts with no certificate issued) at any branch office. (Id. ¶ 7.) After reviewing the CDs presented by Plaintiffs, Sheffield avers that the documents, which were generated in the Chappaqua, NY branch, are "customer receipts." (Id. ¶ 8.)

         In further support, Defendant submits the declaration of Katheiine Salazar ("Salazar"), an assistant Vice President for Wells Fargo. (Def. Opp., Ex. 1. (Decl. of Katheiine Salazar ¶ 1 ("Salazar Decl."))-) Salazar avers that she is familiar with the records and record keeping methods and polices of First Union and Wells Fargo. (Id. ¶¶ 2, 4.) As a general rule, Wells Fargo retains copies of account records for seven years from the date those records are generated. (Id. ¶ 5.) Salazar avers that two years after an account is closed, electronic records of transactions may be purged from the bank's system, but the purging may take up to three years. (Id. ΒΆ 6.) She further avers the bank has policies and procedures in place to ...

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