Clark v. Marine Midland Bank, Inc.

Citation67 A.D.2d 846,413 N.Y.S.2d 9
PartiesLeonard CLARK et al., etc., Plaintiffs-Respondents, v. MARINE MIDLAND BANK, INC., Defendant, and Chase Manhattan Bank, N. A., Inc., Defendant-Appellant.
Decision Date06 February 1979
CourtNew York Supreme Court Appellate Division

A. S. Julien, New York City, for plaintiffs-respondents.

D. A. Doherty, New York City, for defendant-appellant.

Before BIRNS, J. P., and SILVERMAN, EVANS, FEIN and MARKEWICH, JJ.

MEMORANDUM DECISION.

Order of the Supreme Court, New York County, entered July 21, 1978, insofar as said order denied motion of defendant Chase Manhattan Bank, N. A., Inc. to dismiss the first and fourth causes of action, affirmed, with $75 costs and disbursements of this appeal to respondents.

In this class action against various banks for damages, plaintiffs assert that defendant-appellant Chase Manhattan Bank, N. A., Inc. and defendant Marine Midland Bank, Inc., with each of whom plaintiffs claim they maintain checking accounts, improperly imposed a service charge of $4.00 to $5.00 each time a customer's check was not honored by the bank because of insufficient or uncollected funds. The first cause of action alleges that such charge is "grossly disproportionate to the actual costs, if any, incurred by the defendant banks in connection with returned items" and thus is a penalty in violation of section 1-106 of the Uniform Commercial Code, Article 4 of the Uniform Commercial Code, and "other applicable laws and regulations". The fourth cause alleges that the checking account agreements signed by plaintiffs do not contain a provision authorizing a "service charge" or "penalty" when there are insufficient or uncollected funds and that therefore defendants in imposing these charges, breached the agreements.

On a motion to dismiss for failure to state a cause of action, the allegations of the complaint must be viewed most favorably to the pleader (Barr v. Wackman, 36 N.Y.2d 371, 375, 368 N.Y.S.2d 497, 502, 329 N.E.2d 180, 183). Applying that rule, the first and fourth causes of action are sufficient (Foley v. D'Agostino, 21 A.D.2d 60, 63, 248 N.Y.S.2d 121, 125).

First cause: It cannot be said as a matter of law that no violations of the statutes, laws and regulations alluded to have occurred. Accepting the argument of defendants and the conclusion of the dissent that these charges are not in violation of section 1-106 and Article 4 of the Uniform Commercial Code, we note nevertheless that plaintiffs allege violations of "other applicable laws and regulations". Defendants are not without remedy if they find the allegations of this cause vague or ambiguous. They may move to correct this pleading (CPLR 3024(a)) and upon such motion service of an amended complaint may be ordered. Dismissal of the cause as presently pleaded is improper (see Bradford v. 27 East 38th Street Realty Corp., 4 A.D.2d 830, 166 N.Y.S.2d 432).

Fourth cause: For purposes of this motion, it must be assumed that the agreement between each plaintiff and defendant was intended to express the whole contract between the parties (Eighmie v. Taylor, 98 N.Y. 288, 294-295; see Wood v. Lucy, Lady Duff-Gordon, 222 N.Y. 88, 91, 118 N.E. 214, see also 10 N.Y.Jur., Contracts § 202). This is the common-sense, everyday understanding of a checking account agreement between customer and bank. Implicit in such agreement is the promise by the bank that there would be no penalty or charge imposed upon the customer with reference to his or her checking account or checking activity other than as specified in the agreement. Accordingly, in reading paragraphs "38" and "39" of the complaint, we find, in effect, an allegation of the breach of the contractual promise not to impose the penalty or charge of which plaintiffs complain.

In the circumstances, it...

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3 cases
  • McCormick & Co., Inc. v. Empire Ins. Group, 1332
    • United States
    • United States Courts of Appeals. United States Court of Appeals (2nd Circuit)
    • June 6, 1989
  • Jacobs v. Citibank, N.A.
    • United States
    • New York Supreme Court Appellate Division
    • March 8, 1983
    ...changes in the schedule of fees. To support their position plaintiffs rely, in large part, on our decision in Clark v. Marine Midland Bank, Inc., 67 A.D.2d 846, 413 N.Y.S.2d 9 and § 108 subd. 8 of the Banking Law. We think that this reliance is misplaced. Clark was a case predicated upon th......
  • Dietrich v. Chemical Bank
    • United States
    • United States State Supreme Court (New York)
    • September 21, 1981
    ...dishonored. N.Y. Banking Law Section 108(8)(c). This Court agrees with Chemical that the case of Clark v. Marine Midland Bank, Inc., 67 A.D.2d 846, 413 N.Y.S.2d 9 (1st Dept. 1979), does not call for a different result than is reached here. In Clark, Plaintiff alleged that the charges were v......

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