Jackson v. Bank of Am., N.A.

• Decision Date: 21 May 2013
• Citation: 40 Misc.3d 949,971 N.Y.S.2d 800,2013 N.Y. Slip Op. 23192
• Parties: Delores JACKSON, Shawn Jackson and Odmis Villa, Individually and on Behalf of all Others Similarly Situated, Plaintiff, v. BANK OF AMERICA, N.A., Defendants.
• Court: New York Supreme Court

40 Misc.3d 949

971 N.Y.S.2d 800

2013 N.Y. Slip Op. 23192

Delores JACKSON, Shawn Jackson and Odmis Villa, Individually and on Behalf of all Others Similarly Situated, Plaintiff,

v.BANK OF AMERICA, N.A., Defendants.

Supreme Court, Kings County, New York.

May 21, 2013.

G. Oliver Koppell, New York City, for plaintiffs.

Zeichner, Ellman & Krouse, New York City, for defendant.

RICHARD VELASQUEZ, J.

After oral argument and a review of the submissions herein, the Court finds as follows:

Defendant Bank of America moves the court for dismissal of plaintiffs' complaint pursuant to CPLR § 3211(1) and (7) by virtue of a defense founded upon documentary evidence, and for failure to state a claim upon which relief can be granted. Specifically, defendant alleges that CPLR § 5222 of the Exempt Income Protection Act does not provide a private cause of action for a plaintiff/debtor.¹

Plaintiffs oppose defendant's motion to dismiss on the grounds that a plaintiff/account holder may enforce her/his rights under CPLR § 5222–a, the Exempt Income Protection Act (EIPA), by implied/private right of action against a bank for violations of EIPA.

Facts

Plaintiffs Dolores Jackson and Shawn Jackson

Plaintiffs Dolores Jackson and her daughter, Shawn Jackson, jointly maintained a savings and a checking account at one of defendant Bank of America's branches in New York City. On December 2, 2010, plaintiffs received notice from defendant Bank of America that their accounts were frozen due to the service of a restraining notice and/or levy by third-party creditors on Shawn Jackson's funds. At the time of the restraint, the Jacksons had approximately $1707.79 in their savings account, and $2309.36 in their checking account which the Jackson plaintiffs contend was from Dolores Jackson's pension. At the time of the restraint, defendant Bank of America charged the Jacksons administrative fees associated with placing the restraint on the accounts in the amount of $100.00. Defendant then issued a check to plaintiff Shawn Jackson in the amount of $1740.00. All of these actions took place on December 2, 2010—giving plaintiffs no advanced notice or opportunity to contest the restraining order on the grounds that the funds in both accounts were exempt from restraint pursuant to CPLR § 5222–a.

Defendant Bank of America provided an Affidavit in support of its motion by Kathleen A. Arcuri, Vice President/Operations Manager in the Northeast Legal Order processing Department for the Bank of America. Ms. Arcuri's affidavit was provided in support of Defendant's motion to dismiss. Ms. Arcuri affirms in her affidavit that she is “responsible for the supervision of the part of the Legal Order processing Center which processes notices of restraint, attachments and/or levies by third-party creditors served under the laws of New York and certain other states in the Northeast Region.” She further avers that she is

“fully familiar with BANA's procedures concerning restraining notices served on it by judgment creditors seeking to restrain the accounts of bank customers pursuant to the laws of New York, including CPLR § 5222, which were in place at the time the restraints effected upon the accounts of Plaintiffs Shawn and Delores Jackson and Odamis Villa.”

Ms. Acuri, however, never mentions in her affidavit the mandates of CPLR § 5222–a, the Exempt Income Protection Act, which details procedures for the protection of account holders who have funds that are exempt from restraint by Federal and/or State law that must be followed by a bank before funds can be restrained.

As exhibits to her affidavit, Ms. Acruri provides the following: Exhibit A consists of a letter which Ms. Acruri avers was sent to Shawn and Delores Jackson on December 2, 2010 by “BANA”—the same day on which the defendant took action to restrain the accounts, close one account and send a check for $1740.00 to Shawn Jackson. The letter reads:

Utica, N.Y. 13502

December 02, 2010

Delores Jackson Shawn M. Jackson–Dasilva

(Address redacted)

Brooklyn, N.Y. 11201–50515

Reference No. (redacted) 0359

Case: SHAWN JACKSON

Case No. (Redacted) 286/10

Customer Name: SHAWN JACKSON

Dear Valued Customer,

We received a(n) Garnishment–NY Restraining Notice for $2,006.12 which required us by law to debit your:

ACCOUNT # AMOUNT ATTACHEDNON–REFUNDABLE PROCESSING FEEBOX#

(REDACTED) 0887$1,697.60$0.00

(REDACTED) 3619$469.36$100.00

We are holding the above funds to satisfy this legal order pending further instructions from the court or attaching party.

If required by state law we may have to attach future deposits if the amount attached is not sufficient to satisfy the amount of the legal order.

If you have questions about the legal order, believe it should not apply to your amounts, or think the order contains an error, please contact the attaching party; FORSTER & GARBUS at 631–393–9400. We are unable to return the funds to you unless we receive a release.

Should you have questions concerning your account, please contact our Customer Service Center at one of the numbers listed below. Should you need to forward any additional correspondence to us regarding this matter, please direct it to the address noted above. When contacting the Bank regarding this Garnishment–NY Restraining Notice, please use the reference # (redacted) 0359. ²

Defendant's letter makes no reference to exempt funds or any of the mandated procedures required by CPLR § 5222–a, and, in fact, requires the recipients (“Delores Jackson Shawn M. Jackson–Disalva”) to contact the “attaching party”, Foster and Garbus, if the Jacksons believe the Order is in error. The letter also states “We are holding the above funds to satisfy this legal order pending further instructions from the court or attaching party”. The letter suggests that Customer Service can be contacted regarding the Garnishment, but again, there is no reference whatsoever to the law regarding funds that are “exempt” from garnishment, and how a customer with exempt funds should proceed. In fact, the funds were not “held” by defendant Bank of America, they were sent on December 2, 2010 to Shawn M. Jackson–Disalva only by certified check on the same day the letter referenced above was sent.

The next document submitted for in support of defendant's motion is Exhibit B. Ms. Arcuri avers that Exhibit B is a copy of a computer screen printed from the “BANA” Tracking System, and is generated from the “BANA” Legal Order processing database. The database is maintained by the bank in the ordinary course of its business. The information in this database is input by the bank's employee at or about the time that the employee processes a restraining notice. This notice states in relevant part the following: The accounts belongs to “Dolores Jackson Shawn H. Jackson–Dasilva”; the account numbers are (redacted) 0887 and (redacted) 3619; the available balance in 0887 was $!,697.50 on December 2, 2010; the available balance in 3619 was $2,309.36 on December 2, 2012; under the column entitled “Exemption Code”, no exemption is shown for either account.

Attached to Exhibit B is a copy of a subpoena and restraining notice addressed to the Bank of America for the accounts of Shawn Jackson only, regarding a judgment in the amount of $2,006.12. The subpoena is dated 11/24/10. The “Information Subpoena with Restraining Notice to Garnishee” addressed to defendant Bank of America contains none of documents required by CPLR § 5222–a before a bank can lawfully restrain a bank account.

At Exhibit E, plaintiff attaches a document which shows “Attachment Type” as “Garnishment–NY Restraining Notice.” Near the top of this document is a Notice in bold type which states: “ATTACHMENT TYPE MAY REQUIRE ACCOUNT REVIEW FOR FEDERAL...”. The notice stops at this point, apparently because the entire document was not copied. Again, this document indicates that the accounts belong to: “DOLORES JACKSON SHAWN M JACKSON–DASILVA” and that on 12/02/2010 account (redacted) 0887 contains $1697.60 and account (redacted) 3619 contains $2,309.36. The last column is entitled “EXEMPTION CODE” and no exemption code is shown for either account.

Exhibit C is a photocopy of a cashier's check payable to SHAWN JACKSON in the amount of $1740.00. This check is also dated 12/02/2010. No explanation is provided as to why this certified check was sent through the mail to Shawn Jackson, and why her account was then closed. This action by defendant Bank of America was again a violation of CPLR § CPLR 5222–a which requires that exempt funds in an account remain available for the recipient of the exempt funds use.

Exhibit G is a photocopy of a cashier's check payable to Dolores Jackson & Shawn m. Jackson–Dasilva in the amount of $76.04. No explanation is provided as to what these funds represent.

Defendant has not refuted plaintiffs' claims that their funds were aggregated to satisfy the judgment amount in the restraining order, and that no attempt was made by the defendant Bank to determine whether any funds in these accounts were “exempt” funds belonging to Delores Jackson. Further, Bank of American has not disputed the fact that the third-party creditor did not attached any of the mandated documents to the restraining order, and that CPLR § 5222–a(b) requires that a bank receiving a restraining order without these documents may not, under any circumstances, restrain a bank account, and that any such restraint is void pursuant to this statute. CPLR § 5222–a(b) states explicitly that the person or entity issuing the restraining notice

“ shall provide the banking institution with the restraining notice, a copy of the restraining notice, an exemption notice, and two exemption claim forms ... [which] shall be the claim forms set forth in [the statute] .... Failure to serve the notice and forms together with the restraining notice renders the restraining notice void, and the banking institution shall not restrain the account.”

Plaintiff Odamis Villa

Plaintiff ...