In a September 15, 2011 decision by Justice Driscoll the court granted a motion to dismiss various claims brought against a bank sounding in conversion (both common law and under the UCC), fraud and breach of fiduciary duties. Plaintiff is a mortgage brokerage company. One of its employees deposited over 200 checks into a bank account in the name of another entity which the employee controlled. The mortgage company sued the bank because it accepted and deposited the checks. The banks moved to dismiss. The court reviewed the pleading requirements for causes of action sounding in fraud, conversion, and breach of fiduciary duties as well as the statute of limitations for each type of action. The court found that plaintiff failed to allege its fraud claim with sufficient particularity as required by CPLR 3016(b) and failed to demonstrate that an independent cause of action exists based on a violation of UCC 3-306. The court further found that a three year statute of limitations applied to the other claims addressed in the motion which were untimely, but that plaintiff had a remaining claim against the bank for “monies had and received.” 

Golden First Mtge. Corp. v Smith et al. Sup Ct, Nassau County, Sept. 15, 2011, Driscoll, J, Index No. 3426-11