Galasso, Langione, & Botter, LLP v. Galasso
| Decision Date | 19 September 2016 |
| Docket Number | No. 010038–07.,010038–07. |
| Citation | 43 N.Y.S.3d 767 (Table) |
| Parties | GALASSO, LANGIONE, & BOTTER, LLP, (formerly known as Galasso, Langione, LLP), Plaintiffs, v. Anthony P. GALASSO and Signature Bank, Defendants. Galasso, Langione & Botter, LLP, Peter J. Galasso, Individually, James R. Langione, Individually, Galasso, Langione & Botter, LLP As Escrow Agents on Signature Bank Account Number 1500451064 and Account Number 1500351639, and M & T Bank Account Number 9835989485, on behalf of Stephen Baron, Adele Fabrizio, Theresa Halloran and The Estate of George Caroll, Plaintiffs, v. Signature Bank, M & T Bank, Anthony Galasso, Daniel Samela, CPA, Christine Galasso, Matthew Mandela, Jeanne Mandela, Robert Fresella, Donna Fresella, and "John & Jane Does 1–10," Defendants. Signature Bank, Plaintiff, v. Galasso, Langione & Botter, Galasso and Langione, LLP, Peter J. Galasso & James Langione, LLP, Peter Galasso, and James Langione, Defendants. Wendy Baron and Stephen Baron, Plaintiffs, v. Anthony Galasso, Galasso, Langione, LLP, Galasso, Langione & Botter, LLP, Galasso, Langione, Catterson & Lofumento, LLP, Peter Galasso, individually, James Langione, individually, Alan Botter, individually, Signature Bank, M & T Bank, and GC Lawcondo, LLC, Defendants. |
| Court | New York Supreme Court |
Jeffrey Catterson, Esq., Langione, Catterson & LoFrumento, LLP, Garden City, for Plaintiff/Defendant (Galasso).
William Vita, Esq., Westerman Ball Ederer Miller & Sharfstein, LLP, Uniondale, for Plaintiff/Defendant (Signature).
Kevin P. Fitzpatrick, Esq., Marschhausen & Fitxpatrick, P.C., Westbury, for Defendant (Fresella).
Anthony A. Capetola, Esq., The Law Offices of Anthony A. Capetola, Williston Park, for Plaintiff (Baron).
The within actions, which have been joined for discovery and trial, arise from, inter alia, the theft, transfer and disposition of funds from the escrow and IOLA accounts of, or maintained by and for, the parties, and concern the disputes between the parties to allocate responsibility for the losses occasioned in connection therewith.1
In December 1988, Peter Galasso ("Peter") and James Langione ("Langione") established the law firm, Galasso, Langione & Goidell. In 2000, Goidell left the law firm, at which time it became Galasso Langione, LLP. In 2003, Alan Botter, Esq. joined the law firm, the name of which again changed to Galasso, Langione & Botter, LLP. In 2008, Alan Botter withdrew as a partner and the law firm changed again to Galasso, Langione, Catterson & LoFrumento, LLP. In 2013, following Peter Galasso's suspension from the practice of law due to circumstances which will be discussed herein, the law firm changed to Langione, Catterson & LoFrumento, LLP (the various firm partnerships shall be hereinafter be referred to as the "Firm") (Affirmation in Support at ¶¶ 4–6 [Motion Seq. No. 6]; Ex. "36" at pp 18–20 [Motion Seq. No. 21] ).
In 1993, the Firm hired Peter's brother, Anthony Galasso ("Anthony"), as a "gofer". Within a few years, Anthony became the Firm's office manager and bookkeeper, "responsible for all accounting and financial aspects" therefor (Affidavit in Support at ¶ 4 [Motion Seq. No. 20] ).
In or around 1990, the Firm started banking at EAB Bank. In 2001, EAB Bank "became" Citibank (Ex "17" at pp 32, 96 [Motion Seq. No. 21] ). As office manager and bookkeeper, Anthony undertook certain banking duties for the Firm. He would go to the bank to make deposits, sign checks on the Firm's operating accounts and attend to other banking matters.3 As such, Anthony "got to know" Steve Reinhardt ("Reinhardt"), a bank Vice President, and his assistant, Annie Jeter ("Jeter"), and became the "face" of the Firm at the bank (Affidavit in Opposition at ¶ 6 [Motion Seq. No. 21] ).
In February 2002, Reinhardt left Citibank and became a Senior Vice President and Group Director at Signature Bank ("Signature").4 He thereafter met with Peter and Anthony and asked the Firm to transfer its accounts from Citibank to Signature (Affidavit in Opposition at ¶ 8 [Motion Seq. No. 21] ). In 2002, the Firm transferred its banking business from Citibank to Signature. Anthony was in favor of moving the Firm's accounts because he thought Reinhardt was a "nice guy" and that it was "[m]ore of the loyalty that comes with just being friendly with somebody for 10 years" (Ex. "36" at p. 67 [Motion Seq. No. 21] ).
Peter (in his affidavit) does not remember whether he "did anything physically to make [the transfer] happen", or whether he "signed documents to make it happen", but, rather, "it just happened" (Ex. "36" at p. 68 [Motion Seq. No. 21] ). Nevertheless, Peter testified as follows:
I specifically remember signing account applications only because I knew that you can't open up the account absent that, so I recall that we did that because there was a process, but again, I don't have a specific picture in my head as to signing documents. I just know that we prob-at the time we got the corresponding accounts opened....
Peter further testified that he assumed Anthony brought the bank documents to Reinhardt at Signature because "that would be the type of task that we would ask [Anthony] to do rather than us as attorneys do" (Ex. "36" at pp 71–72 [Motion Seq. No. 21] ).
Peter asserts that given that our practices were distinct (Affidavit in Support at ¶ 29 [Motion Seq. No. 21] ).
When the Firm transferred its bank accounts from Citibank to Signature, Anthony submitted a supposedly forged Limited Liability Partnership Banking Agreement dated August 27, 2002, indicating that "Anthony was authorized to deposit checks, make withdrawals on [the Firm's] operating accounts, transfer money between the operating accounts and "contract for any services offered by the Bank" (Affidavit in Opposition at ¶¶ 12–13 [Motion Seq. No. 21] ).
Reinhardt, when questioned about Anthony's authority, testified that Peter never explicitly stated that Anthony had authority to sign account applications on his behalf (Ex. "17" at p. 159 [Motion Seq. No. 21] ). However, following the transfer of accounts to Signature, "Peter had virtually no dealings with Signature representatives Steve Reinhardt or Annie Jeter during the entire time that his law firm banked at Signature" (Signature's Statement of Material Facts at ¶ 92 [Motion Seq. No. 20] ). In this regard, Peter acknowledged that he delegated to Anthony (and the Firm's accountant) the duty of maintaining all physical bank accounts, and that Anthony was "at the bank more ... being friendly" with Bank personnel, and thus, Signature contends that it was Anthony who was the "face of the firm" (Ex. "36" at pp 32–33 [Motion Seq. No. 21]; Affidavit in Opposition at ¶ 6 [Motion Seq. No. 21] ).
In 2002, the Firm initially opened and maintained three accounts at Signature. Two accounts were the Firms's operating accounts (account numbers xxxxxx1604 and xxxxxx2636), and the third account was the Firm's IOLA account (account number xxxxxx1639). The next year, Alan Botter joined the firm and because "he ran a practice that was largely independent of [Langione and Peter's] practices, Alan opened his own IOLA and operating accounts" (Firm's Statement of Material Facts at ¶ 4 [Motion Seq. No. 21] ).
The account applications submitted by Anthony to Signature (not including the Botter accounts), designated Anthony as an authorized signatory on the Firm's operating accounts but not on the IOLA account. Anthony was also designated as the "primary contact" for the Firm on the operating accounts but not the IOLA account (Exs. "18", "19", "22" [Motion Seq. No. 21] ). Each of the account applications designated a post office box as the address in which Signature was to mail its monthly statements and, further, each application required the Firm to confirm that it had received a copy of, and agreed to certain terms and conditions of, the Signature Business Account Agreement and Disclosures with respect to the IOLA and operating accounts (Affirmation in Opposition to Motion at ¶ 14 [Motion Seq. No. 21] ). This was indicated by a checkmark in the appropriate box on the accounts' applications. In addition to the three authorized accounts, Anthony opened and maintained "sham" accounts at Signature Bank without the Firm's authorization or knowledge.5 Peter and Langione contend that they never signed any of the bank documents that were submitted to Signature for the authorized accounts and that they were forged by Anthony along with the sham account applications6 (Affirmation in Opposition at ¶ 20 [Motion Seq. No. 20] ).
In this regard, Jeter testified that she and Anthony completed the account applications together; at her deposition, Jeter identified her handwriting on the 2002 account applications, with the exception of the social security numbers (Galasso Statement of Material Facts at ¶ 20 [Motion Seq. No. 21] ). Jeter acknowledged that despite the fact the applications were completed by her, including designating a post office box as the mailing address for the Firm's bank mail, she never had a conversation with or met either Peter or Langione (Galasso Statement of Facts at ¶ 21 [Motion Seq. No. 21] )
Although the account applications designated a post office box as the mailing address for all accounts statements, initially, the Firm's monthly bank statements were sent to the Firm at its office address. Anthony thereafter...
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