Jacobs v. Citibank, N.A.
| Court | New York Supreme Court Appellate Division |
| Writing for the Court | Before KUPFERMAN; All concur except KUPFERMAN |
| Citation | 92 A.D.2d 786,459 N.Y.S.2d 781 |
| Decision Date | 08 March 1983 |
| Parties | Howard L. JACOBS, P.C., et al., Plaintiffs-Respondents, v. CITIBANK, N.A., Defendant-Appellant. |
Page 781
v.
CITIBANK, N.A., Defendant-Appellant.
First Department.
Page 782
L.L. Levy, New York City, for plaintiffs-respondents.
D.L. Cuneo, New York City, for defendant-appellant.
Before KUPFERMAN, J.P., and SULLIVAN, CARRO, SILVERMAN and BLOOM, JJ.
MEMORANDUM DECISION.
Order of the Supreme Court, New York County, entered September 8, 1982, denying defendant's motion to dismiss plaintiffs' complaint pursuant toCPLR 3211 and for summary judgment pursuant to CPLR 3212, reversed, on the law, with costs and the motion for summary judgment granted.
Plaintiffs bring this uncertified class action on the theory that the charges imposed by the defendant bank for returning checks issued by them on their accounts for insufficient funds, and for returning third party checks deposited to their accounts which were dishonored by the drawee bank because of insufficient funds of the drawer are "grossly excessive" and hence, a penalty, in violation of § 1-106 of the UCC and are impermissible.
When the plaintiffs opened their accounts, each of them signed agreements authorizing the charges then prevailing for the specified and other services. The agreements further provided that the rates specified therein were subject to change upon notice. No claim is made that they were not notified of 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 the same theory as that here presented. However, that case came before us on a motion to dismiss the complaint. While both the majority and the dissenter agreed in the conclusion "that these charges were not in violation of section 1-106 and article 4 of the Uniform Commercial Code" (p. 846, 413 N.Y.S.2d 9) the majority noted "that plaintiffs allege violations of 'other applicable laws and regulations' " (p. 846, 413 N.Y.S.2d 9). Since, on a motion to dismiss we deal only with the facial allegations without inquiring into their substance, the majority concluded that the complaint stated a cause of action. Here, however, we are confronted with a motion for summary judgment. On such an application we look to the uncontroverted proof. Inasmuch as plaintiffs' proof does no more than try to establish a penalty, a conclusion rejected by us in Clark, plaintiffs can find no comfort in that case.
Moreover, in the classical sense, the fees charged cannot be a penalty for a penalty presupposes the breach of a contract with the payment of a fixed sum consequent upon the breach (Hamid Fair Booking, Inc. v. Wirth, 265 N.Y. 214, 192 N.E. 297). To constitute a penalty the stipulated sum must be disproportionate to the injury...
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Wyeth v. King Pharmaceuticals, Inc., No. 04CV4068 (SLT/RML).
...charge, stipulated to by the plaintiffs for specified services to be rendered." (Wyeth Opp. at 14) (quoting Jacobs v. Citibank, N.A., 92 A.D.2d 786, 787, 459 N.Y.S.2d 781, 782 (N.Y.App.Div.1st Dep't 1983), aff'd, 61 N.Y.2d 869, 872, 474 N.Y.S.2d 464, 462 N.E.2d 1182, 1183-84 (N.Y.1984)). It......
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People v. Calandra
...to conclude that Federally chartered banks are "not subject to the strictures of the New York Banking Law" (Jacobs v. Citibank, N.A., 92 A.D.2d 786, 787, 459 N.Y.S.2d 781, aff'd 61 N.Y.2d 869, 474 N.Y.S.2d 464, 462 N.E.2d 1182). The somewhat inartful wording of Section 673 of the statute wh......
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Jacobs v. Citibank, N.A.
...and Cole R. Capener, New York City, for respondent. [61 N.Y.2d 871] OPINION OF THE COURT MEMORANDUM. The order of the Appellate Division, 92 A.D.2d 786, 459 N.Y.S.2d 781, should be affirmed, with Plaintiffs issued checks on their own accounts which were returned for insufficient funds and a......
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Wavertree Corp. v. Bellet Constr. Co., 5474
...appeal dismissed in part, denied in part 74 N.Y.2d 758, 545 N.Y.S.2d 98, 543 N.E.2d 741 [1989] ; Howard L. Jacobs, P.C. v. Citibank , 92 A.D.2d 786, 459 N.Y.S.2d 781 [1st Dept. 1983], affd 61 N.Y.2d 869, 474 N.Y.S.2d 464, 462 N.E.2d 1182 [1984] ).A rational jury could also have found, based......
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Wyeth v. King Pharmaceuticals, Inc., No. 04CV4068 (SLT/RML).
...charge, stipulated to by the plaintiffs for specified services to be rendered." (Wyeth Opp. at 14) (quoting Jacobs v. Citibank, N.A., 92 A.D.2d 786, 787, 459 N.Y.S.2d 781, 782 (N.Y.App.Div.1st Dep't 1983), aff'd, 61 N.Y.2d 869, 872, 474 N.Y.S.2d 464, 462 N.E.2d 1182, 1183-84 (N.Y.1984)). It......
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People v. Calandra
...to conclude that Federally chartered banks are "not subject to the strictures of the New York Banking Law" (Jacobs v. Citibank, N.A., 92 A.D.2d 786, 787, 459 N.Y.S.2d 781, aff'd 61 N.Y.2d 869, 474 N.Y.S.2d 464, 462 N.E.2d 1182). The somewhat inartful wording of Section 673 of the statute wh......
-
Jacobs v. Citibank, N.A.
...and Cole R. Capener, New York City, for respondent. [61 N.Y.2d 871] OPINION OF THE COURT MEMORANDUM. The order of the Appellate Division, 92 A.D.2d 786, 459 N.Y.S.2d 781, should be affirmed, with Plaintiffs issued checks on their own accounts which were returned for insufficient funds and a......
-
Wavertree Corp. v. Bellet Constr. Co., 5474
...appeal dismissed in part, denied in part 74 N.Y.2d 758, 545 N.Y.S.2d 98, 543 N.E.2d 741 [1989] ; Howard L. Jacobs, P.C. v. Citibank , 92 A.D.2d 786, 459 N.Y.S.2d 781 [1st Dept. 1983], affd 61 N.Y.2d 869, 474 N.Y.S.2d 464, 462 N.E.2d 1182 [1984] ).A rational jury could also have found, based......