Hamilton Group
Federal Home Loan Bank

Not overruled or negatively treated on appealinfoCoverage
Appellate Division of the Supreme Court of New York, Fourth DepartmentNov 21, 2003
1 A.D.3d 973 (N.Y. App. Div. 2003)
1 A.D.3d 973767 N.Y.S.2d 332

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CA 03-00975.

November 21, 2003.

Appeal from an order of Supreme Court, Onondaga County (Centra, J.), entered January 23, 2003, which granted the motion of defendant Federal Home Loan Bank of New York to dismiss the complaint against it.

Sonneborn, Spring, O'Sullivan Zenzel, P.C., Syracuse (John J. Coughlin of Counsel), for Plaintiff-Appellant.

Hiscock Barclay, LLP, Syracuse (John P. Langan of Counsel), and Winston Strawn, New York, for Defendant-Respondent.

Before: Present: Green, J.P., Wisner, Hurlbutt, Kehoe, and Hayes, JJ.


It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously reversed on the law without costs, the motion is denied and the complaint against defendant Federal Home Loan Bank of New York is reinstated.

Memorandum: Plaintiff, a purchaser of accounts receivable, commenced this action against defendant Federal Home Loan Bank of New York (Federal), alleging that Federal had failed to pay three invoices that plaintiff had purchased from nonparty National Staffing, Inc. (National). Prior to the alleged default, plaintiff and National jointly executed and sent to Federal a "Blanket Notice of Payment Redirection" letter. The redirection letter concerned "payment of all current and future amounts owed by you to National," and informed Federal that plaintiff "has or may acquire" all rights in National's invoices payable by Federal. The redirection letter further notified Federal to direct all future payments to National to plaintiff's post office box address. That post office box was listed as plaintiff's address in the footer of the redirection letter, and the letter was signed by officers of both plaintiff and National and appeared on plaintiff's letterhead. Supreme Court granted the motion of Federal to dismiss the complaint against it based on documentary evidence ( see CPLR 3211 [a] [1]), on the ground that the redirection letter was insufficient to give notice of National's assignment of the invoices to plaintiff. We reverse. The redirection letter was sufficient to place Federal on inquiry notice that the invoices at issue had been assigned from National to plaintiff because it reasonably identifies the rights to be assigned and notifies Federal to direct payment to plaintiff's address ( see UCC 9-406; General Motors Acceptance Corp. v. Albany Water Bd., 187 A.D.2d 894, 896; Continental Purch. Co. v. Van Raalte Co., 251 App. Div. 151, 152; see also Capital Factors v. Caldor, Inc., 182 A.D.2d 532). If Federal had any doubt whether the payment had been assigned or concerning the proper payee ( see 9-406, Comments 2, 4), it should have contacted plaintiff for proof of the assignment (see 9-406 [c]) with "reasonable promptness" (9-406, Comment 3). Because we conclude that the documentary evidence submitted by Federal does not conclusively establish a defense to the asserted claims as a matter of law ( see generally Leon v. Martinez, 84 N.Y.2d 83, 88; Technology for Measurement v. Briggs, 291 A.D.2d 902, 903), we reverse the order, deny the motion of Federal, and reinstate the complaint against it.