From Casetext: Smarter Legal Research

Century Business Credit Corp. v. North Fork Bank

Appellate Division of the Supreme Court of New York, First Department
Jan 15, 1998
246 A.D.2d 395 (N.Y. App. Div. 1998)

Summary

holding that bank is not liable for negligence to customer's creditors, and stating that requiring a bank to monitor its customer's account would "unreasonably expand banks' orbit of duty."

Summary of this case from DALE v. ALA ACQUISITIONS I., INC.

Opinion

January 15, 1998

Appeal from the Supreme Court, New York County (Charles Ramos, J.).


Plaintiff factor's cause of action for conversion against defendant bank was properly dismissed, it being clear that under the terms of both the Loan Security Agreement between plaintiff and its borrower and the Blocked Account Agreement between plaintiff, defendant and the borrower, the borrower, not defendant, was left with dominion and control over its other deposits with defendant. Plaintiff's cause of action for negligence against defendant was properly dismissed since to hold that banks owe a duty to their depositors' creditors to monitor the depositors' financial activities so as to assure the creditors' collection of the depositors' debts would be to unreasonably expand banks' orbit of duty. We have considered plaintiff's other contentions, including that there is a need for further disclosure, and find them to be without merit.

Concur — Rosenberger, J.P., Williams, Andrias and Colabella, JJ.


Summaries of

Century Business Credit Corp. v. North Fork Bank

Appellate Division of the Supreme Court of New York, First Department
Jan 15, 1998
246 A.D.2d 395 (N.Y. App. Div. 1998)

holding that bank is not liable for negligence to customer's creditors, and stating that requiring a bank to monitor its customer's account would "unreasonably expand banks' orbit of duty."

Summary of this case from DALE v. ALA ACQUISITIONS I., INC.

stating that requiring a bank to monitor its customers' accounts for the benefit of its customers' creditors would "unreasonably expand banks' orbit of duty"

Summary of this case from Chaney v. Dreyfus Service Corp.

dismissing negligence claim asserting that bank had a duty to monitor depositor's activities on behalf of creditors on the basis that such liability would "unreasonably expand banks' orbit of duty."

Summary of this case from Abehrstock v. JPMorgan Chase
Case details for

Century Business Credit Corp. v. North Fork Bank

Case Details

Full title:CENTURY BUSINESS CREDIT CORPORATION, Appellant, v. NORTH FORK BANK…

Court:Appellate Division of the Supreme Court of New York, First Department

Date published: Jan 15, 1998

Citations

246 A.D.2d 395 (N.Y. App. Div. 1998)
668 N.Y.S.2d 18

Citing Cases

Chaney v. Dreyfus Service Corp.

Although not explicit, it is clearly the fear of imposing on banks endless, unpredictable liability that…

Elmaliach v. Bank of China Ltd.

It also rejected BOC's arguments that New York was an inconvenient forum because, among other reasons, BOC is…