Banco Multiple Santa Cruz, S.A. v. Moreno

• Citation: 888 F.Supp.2d 356
• Decision Date: 31 August 2012
• Docket Number: No. 08–CV–1271 (JG)(ALC).,08–CV–1271 (JG)(ALC).
• Parties: BANCO MULTIPLE SANTA CRUZ, S.A. d/b/a Banco Santa Cruz, Plaintiff, v. Miguel D. MORENO and Lucy I. Moreno, Defendants. Miguel D. Moreno, Third–Party Plaintiff, v. MetLife Insurance Company of Connecticut, Winston Chung and Citigroup, Inc., Third–Party Defendants.
• Court: U.S. District Court — Eastern District of New York

888 F.Supp.2d 356

BANCO MULTIPLE SANTA CRUZ, S.A. d/b/a Banco Santa Cruz,^* Plaintiff,

v.Miguel D. MORENO and Lucy I. Moreno, Defendants.

Miguel D. Moreno, Third–Party Plaintiff,

v.MetLife Insurance Company of Connecticut, Winston Chung and Citigroup, Inc., Third–Party Defendants.

No. 08–CV–1271 (JG)(ALC).

United States District Court, E.D. New York.

Aug. 31, 2012.

Law Offices of Heriberto A. Cabrera, by Joseph M. Dash, Brooklyn, NY, for Third–Party Plaintiff Miguel D. Moreno.

Schoeman, Updike & Kaufman, LLP, by Beth L. Kaufman, New York, NY, for Third–Party Defendant MetLife Insurance Company of Connecticut.

MEMORANDUM AND ORDER

JOHN GLEESON, District Judge:

Miguel Moreno (“Miguel”) alleges that his ex-wife, Lucy Moreno (“Lucy”), forged his signature on withdrawal slips which she then used to withdraw money from their joint variable annuity account without his knowledge or authorization. In his third-party complaint, Miguel has sued MetLife Insurance Company of Connecticut (“MetLife”), the issuer of the annuity, for negligence in honoring these forged withdrawal slips. MetLife now brings this motion for summary judgment, arguing that Miguel has failed to submit any evidence that MetLife is liable for negligence and that MetLife is entitled to judgment as a matter of law. For the reasons explained below, the motion is denied.

BACKGROUND

A. The Facts

On August 8, 2003, Miguel and Lucy, then husband and wife, purchased a variable annuity contract,¹ Contract Number 936572–0363459 (the “Account”), from Travelers Life & Annuity Co., for an initial purchase payment of $700,000.²See MetLife Contract (Kaufman Dec., Ex. L, ECF No. 56) at ML0016. The contract listed Miguel as the certificate owner and Lucy as the joint owner, with Lucy as the primary beneficiary. Id. at ML0016, ML0058. The Data Collection Form completed by Miguel and Lucy on August 4, 2003, in conjunction with purchasing the Account, listed their shared address as 1302 Redfern Ave., Far Rockaway, N.Y. 11691. See Data Collection Form (ECF No. 70) at ML0001.

The contract agreement for the Account specifically provided that for all jointly-owned accounts, aside from transfers between sub-accounts, “[a]ll ... rights of ownership must be exercised by joint action.” MetLife Contract at ML0021. In addition, “[j]oint certificate owners own equal shares of any benefits accruing or payments made to them.” Id.

The contract's provision relating to withdrawals prior to annuitization provided as follows:

Cash Surrender

You may elect by Written Request to receive the Cash Surrender Value of this certificate before the due date of the first Annuity or Income payment and without the consent of any Beneficiary unless irrevocably named. You may elect either a full or partial surrender of the Certificate Cash Surrender Value. In the case of a full surrender, this certificate will be canceled. A partial surrender will result in a reduction in your Certificate Value....

The Certificate Cash Surrender Value will be determined as of the next valuation following receipt of your Written Request.

Id. at ML0025. The contract defines “Written Request” as “written information including requests for certificate changes sent to us in a form and content satisfactory to us and received at Our Office.” Id. at ML0020. MetLife is the successor to Travelers Life & Annuity Co. with respect to the Account. Id. at ML0056.

Lucy and Miguel have married and divorced two times. They first married in 1987, and divorced in 1996. They remarried in 2001, and divorced again on November 30, 2005. Miguel Dep. at 11–12, 21 (Dash Dec., Ex. D, ECF No. 61). After they purchased the Account in August 2003, Lucy made three withdrawals from the Account that effectively depleted its remaining value.

On April 11, 2005, Lucy requested a withdrawal of $319,000, to be paid as a direct deposit to a CitiBank checking account. See April 2005 Withdrawal Slip (Dash Dec., Ex. F, ECF No. 61).³ Miguel is not pursuing any claims against MetLife with respect to this April 2005 withdrawal. See Stipulation and Order dated Nov. 21, 2011 (ECF No. 52). Therefore, this withdrawal is not at issue for purposes of this motion.

On November 11, 2005, just before their second divorce, Lucy faxed a letter to MetLife, addressed to the attention of “THE DEPARTMENT OF WITHDRAWALS” of “Travelifeaunity” [sic]. ML0081 (Lucy's 11/11/05 Letter, ECF No. 73–9). The letter read in full:

My SSN [is] XXX–XX–XXXX and my address is 65 14 Parson Blvd. Apt 1 b Flushing, N.Y. 11365.I want to notify that I don't want any withdrawal from the account. That I have with Mr. Miguel Moreno unless I agree that 150,000 will go into my account and the rest will go in any account that he decide to put on. I remember the first time that Mr. Moreno withdrawal 200,000 dollars without my consent. And the time of April 11th the 200,000 and 319,000 was done by both of us. I want to have a report of the statement every month in my house in flushing. If you need any information you can contact me at XXX–XX–XXXX.

If anything will be done with [sic] my pre-permission traveler will be responsible. Thank you for your time.

Sincerely, Lucy I Moreno

Id. (punctuation and spacing preserved; private information redacted). The letter was signed by Lucy on November 11, 2005, and apparently faxed to MetLife the same day. See id.

On September 15, 2006, after the divorce and allegedly without Miguel's knowledge, Lucy filled out and faxed a withdrawal request to MetLife for $220,000. ML0074–75 (9/15/06 Withdrawal Req., Kaufman Dec., Ex. D, ECF No. 56). The request bore the apparent signatures of both Lucy and Miguel, ML0075, although Miguel asserts that his signature was forged, Miguel Dep. at 26–27 (Dash Dec., Ex. D, ECF No. 61). The withdrawal form provided by MetLife allowed the requestor to specify an “[a]lternate [p]ayee or [a]ddress” if the “withdrawals are to be paid to other than Owner and/or mailed to an address other than address of record.” ML0075. Lucy completed that section to request that the check be mailed to 6514 Parson Blvd. Apt. 1B, Flushing, N.Y. 11365. Id. This address differed from the address of record on the Account at the time, which was apparently an address in Santo Domingo in the Dominican Republic. See ML0074; ML0141 (MetLife Quarterly Stmt. 6/30/06–9/30/06, ECF No. 73–7). MetLife processed the withdrawal request and, on September 18, 2006, issued a check to Miguel and Lucy as joint payees for $211,627.09, ⁴ payable from funds in the Account. BSC0011 (9/18/06 Check, Kaufman Dec., Ex. F, ECF No. 56). The check was mailed to the address in Flushing, New York, that Lucy had supplied on the withdrawal request. Id.; ML0104 (9/15/06 Partial Surrender Transaction Data, ECF No. 73–6).

On January 31, 2007, again allegedly without Miguel's knowledge, Lucy filled out another withdrawal request, this one for $151,000, and faxed it to MetLife. ML0082 (1/31/07 Withdrawal Req., Kaufman Dec., Ex. G, ECF No. 56). This request also bore the apparent signatures of both Lucy and Miguel. Id. MetLife processed the withdrawal request and, on February 1, 2007, issued a check to Miguel and Lucy as joint payees for $144, 609.37,⁵ payable from funds in the Account. BSC0029 (2/1/07 Check, Kaufman Dec., Ex. H, ECF No. 56). The check was mailed per Lucy's withdrawal request to Barcelona 57, Puerta Hierro, Santa Domingo, Dominican Republic, which was the same address as the address of record for the Account at the time. See BSC0029 (2/1/07 Check); ML0082 (1/31/07 Withdrawal Req.); ML0163 (1/31/07 Partial Surrender Transaction Data, ECF No. 72–1); ML0148 (MetLife Quarterly Stmt. 12/31/06–3/31/07, ECF No. 72–2).

Lucy negotiated both of the checks at a branch of Banco Multiple Santa Cruz (“BSC”) located in the city of Santiago in the Dominican Republic, which deposited the funds into her savings account there. Ortega Dep. at 35–37 (Kaufman Dec., Ex. I, ECF No. 56).⁶ The back side of the checks bore the apparent endorsement signaturesof both Lucy and Miguel. BSC0012 (Kaufman Dec., Ex. F, ECF No. 56); BSC0030 (Kaufman Dec., Ex. H, ECF No. 56).

On July 19, 2007, nearly seven months after the last withdrawal, Miguel complained to MetLife for the first time that the last three withdrawals from his account had been made without his knowledge and that his signature had been forged on these withdrawal slips. See Service Issue Log, ML0201–02 (Kaufman Dec., Ex. J, ECF No. 56); see also Petroff Dep. at 166 (Kaufman Dec., Ex. J, ECF No. 56). In or around November 2007, Miguel submitted an affidavit of fraud to MetLife asserting that his endorsement signature on the September 2006 check for $211,672.09 had been forged. BSC Am. Compl. ¶ 11.⁷ Accordingly, in December 2007, the clearing bank requisitioned the funds back from BSC based on “[f]raudulent endorsement.” Ortega Dep. at 39; see also BSC Am. Compl. ¶ 13.⁸ However, by the time the funds were recalled, Lucy had already emptied her BSC bank account. Ortega Dep. at 40.⁹ In August 2009—more than two years after his initial complaint about the unauthorized withdrawals—Miguel completed a second affidavit of fraud asserting he had never endorsed the February 2007 check for $144,609.37 and requesting that MetLife issue a new check to him.¹⁰ Moreno Fraud Aff. (Dash Dec., Ex. E, ECF No. 61). Miguel testified at his deposition that although he received quarterly statements on the Account and knew Lucy was a joint owner, he “never checked” the statements because he “didn't see any reason to check” them. Miguel Dep. at 187–88 (Kaufman Dec., Ex. K, ECF No. 56).

According to MetLife's operating procedures, when it receives a withdrawal request, it ensures the withdrawal form is signed by the owner of the contract, and by the joint owner if applicable. Petroff Dep. at 78–79 (Kaufman Dec., Ex. E, ECF No. 56). Checks are made payable to both owners if the account is jointly owned. Id. at 79. For withdrawals over $250,000, MetLife verifies the signature(s...