Estate of Baker

Estate of Baker 2024 NY Slip Op 33966(U) October 18, 2024 Surrogate's Court, Bronx County Docket Number: File No. 2020-1091/B Judge: Nelida Malave-Gonzalez Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

SURROGATE'S COURT, BRONX COUNTY

October 18 , 2024

ESTATE OF PATRICK BAKER, Deceased File No.: 2020-1091/B

Trudy Ann Baker ("Petitioner"), as administrator of the estate of her father,

Patrick Baker (the "Decedent"), commenced this turnover proceeding against Santander

Bank, N.A. ("Santander") to recover funds that the Decedent's sister, Eileen Trott

("Trott") allegedly misappropriated due to Santander's negligence. Petitioner now moves

for summary judgment directing Santander to pay the estate the full amount of those

funds, plus interest. In opposition, Santander cross-moves for summary judgment,

asking the court to dismiss this proceeding, with prejudice.

The court considered the following papers in connection with the motion and

cross-motion: Petitioner's "Notice of Motion for Summary Judgment," dated January 9,

2024; the Affirmation of Oshrie Zak, Esq., bearing no date, and its attached exhibits;

Santander's "Notice of Cross Motion for Summary Judgment" dated February 26, 2024;

the Affirmation of Trevor Fobbs dated February 10, 2024; the Affirmation of Russell

Finestein, dated February 26, 2024, and its attached exhibits; Santander's

Memorandum of Law dated February 26, 2024; the Affirmation of Oshrie Zak, Esq.,

dated April 8, 2024; and Santander's Reply Memorandum of Law dated May 22, 2024.

BACKGROUND

The decedent died intestate on April 24, 2020 at the age of 61, survived by

Petitioner as his sole distributee. Prior to his death, the Decedent commenced a

negligence action in the Bronx Supreme Court. The action settled for $750,000.00, and [* 1]

after the deduction of attorneys' fees, costs and disbursements, the Decedent's law firm

in the action issued him a settlement check, dated October 25, 2018 and solely payable

to the Decedent, in the amount of $481,661.90 (the "Settlement Check").

At the heart of this proceeding are the circumstances of the Settlement Check's

deposit into a Santander account on December 4, 2018. On that date (i) the Decedent

and Trott opened a joint account at Santander (the "Joint Account"); (ii) Trott opened an

account titled solely in her own name (the "Trott Account"); and (iii) the Settlement

Check was deposited into the Trott Account.

According to Petitioner, the Decedent wanted Santander to deposit the

Settlement Check into the Joint Account. Santander counters that the Decedent

directed it to put the funds into the Trott Account. Neither side has produced any

witnesses with specific knowledge of what occurred when the Settlement Check was

deposited. Instead, as discussed below, each side relies on Santander's "Confirmation

of Endorsement Form" (the "COE Form") which was apparently executed by the

Decedent contemporaneously with the deposit of the Settlement Check, as proof of their

respective positions.

It is not disputed that after the Decedent died, Trott withdrew all of the funds in

the Trott Account, wiring them to England, where she resides. On October 19, 2020,

Petitioner commenced a turnover proceeding in this court to recover the Settlement

Funds (File Number 2020-1091/A). Neither Trott nor Santander appeared in that

proceeding and their respective defaults resulted in a decree directing Santander to

deliver to the Decedent's estate the sum of $481,660.91, or such lesser amount that

remained in the Trott Account. The decree further ordered that if there is less than

2 [* 2]

$481,660.91 in the Trott Account, Trott was personally liable to pay any deficiency to

the Decedent's estate, together with statutory interest at 9% from the Decedent's date

of death. As all of the monies in the Trott Account had been withdrawn prior to the

issuance of the decree, Santander had no financial liability to the estate under the

decree. To date, Trott has not turned over any portion of the funds she withdrew from

the Trott Account.

In this proceeding, Petitioner essentially seeks to impose joint and several liability

upon Santander for the funds misappropriated by Trott, on the basis that this conversion

only occurred because Santander negligently allowed Trott to deposit the Settlement

Check into the Trott Account. A Note of Issue having been filed, Petitioner and

Santander now separately seek summary judgment granting dispositive relief.

PETITIONER'S ARGUMENTS

Petitioner puts forth essentially five arguments through attorney affirmations

which incorporate, by reference, her deposition testimony.

First, Petitioner argues that if Santander had not failed to exercise the due

diligence required under the Bank Secrecy Act's "Know Your Customer'' protocols, it

would have realized that Trott was in a confidential relationship with the Decedent,

acting not only as his caretaker but maintaining complete custody and control over him

due to his being afflicted with prostate cancer. Because Santander failed to reasonably

exercise proper due diligence to ascertain the Decedent's circumstances, it negligently

allowed the Settlement Check to be deposited into the Trott Account.

Second, Petitioner claims that the Decedent's endorsement on the Settlement

Check is forged, as evidenced by: (i) the name "Patrick Baker'' is printed on the back of

3 [* 3]

the check, not written in cursive as it is on his Driver's License, which Santander has on

record and (ii) the Decedent could not have been present at the Santander Bank's

Parkchester branch (the "Branch") when the Settlement Check was deposited, as

alleged by Santander, because the COE Form was utilized, and according to

Santander's internal policy a COE Form would only have been necessary if the

Decedent had not been physically present in the Branch to deposit the instrument.

Third, Petitioner alleges that subpoenaed personnel records of Kenyatta Miller, a

former Santander employee who signed the COE Form as a witness, indicate she was

fired for negligent acts that included her role in the deposit of the Settlement Check.

According to Petitioner, Miller's termination is an admission of Santander's liability

regarding its handling of the Settlement Check. Petitioner further suggests that

Santander refused to produce Miller for a deposition because it knew her testimony

would harm its case.

Fourth, Petitioner asserts that Santander's conduct constituted negligence per se

as the Decedent's blank endorsement of the Settlement Check is not permitted under

New York Uniform Commercial Code § 3-419 ("UCC 3-419"). Petitioner claims

Santander violated reasonable banking practices by negotiating the Settlement Check

without an endorsement directing where it should be deposited.

Lastly, Petitioner maintains that the COE Form clearly directs Santander to

deposit the Settlement Check Proceeds into the Joint Account rather than the Trott

Account. Petitioner focuses on the COE Form's checkbox section which reads and

appears as follows (the "Check Box Language"):

"I represent and warrant that I endorsed the foregoing check and transferred it to Eileen Trott

Patrick Baker [name of depositor customer].

4 [* 4]

SANTANDER'S ARGUMENTS

According to Santander, Petitioner's various allegations are contained in an

affirmation of counsel with no personal knowledge, submitted in improper form and

without any supporting documentation other than Petitioner's deposition testimony,

which actually contradicts the statements in the attorney's affirmation.

Referring to Petitioner's deposition, Santander highlights that she testified: (i)

Trott was not the Decedent's caretaker, did not live with him or visit him often; (ii) Trott

had a normal sibling relationship with the Decedent; (iii) the Decedent never asked her

to help him handle his finances; (iv) the Decedent kept his own financial records, which

he locked in his bedroom; (v) the Decedent never disclosed to Petitioner that he was

involved in a lawsuit or that he had received the Settlement Check; and (vi) Petitioner

did not find out that the Decedent had prostate cancer until six days before he died.

Moreover, Santander avers that the banking records it produced show that (i) the

Decedent did his own banking (the records include checks deposited at the Branch that

were endorsed by the Decedent) and (ii) Decedent went to the Branch on an almost

monthly basis to make withdrawals from one of his accounts, each time verifying his

identity by presenting his driver's license.

Santander argues that the foregoing proof disproves all of the Petitioner's bare

claims that Trott was in a confidential relationship with the Decedent; that she exercised

undue influence over him; or that the Decedent could not manage his own financial

affairs at and/or after the time the Settlement Check was deposited. Furthermore,

Santander counters that the Petitioner's deposition testimony belies her argument that

the bank violated the "Know Your Customer'' provisions of the Bank Secrecy Act, as she

5 [* 5]

not only testified that the Decedent was competent to deposit the Settlement Check, but

that she was unaware that the Decedent had prostate cancer until after he died-

notwithstanding that she resided with him.

Santander asserts Petitioner's forgery theory is similarly unsupported by the

proofs presented. As an initial matter, Santander posits that an endorsement can be

cursive or printed, and it directs the court's attention to (i) several Social Security checks

that Decedent deposited into a joint account as bearing his printed endorsement and (ii)

exemplars of his printed signature appearing on several bank documents, including the

COE Form, a notarized document, which are virtually identical to the Decedent's

signature on the back of the Settlement Check.

Santander continues that Petitioner's claim that the Decedent did not appear at

the Branch to endorse the Settlement Check is refuted by the COE Form, which was

executed simultaneously with the endorsement of the Settlement Check. The COE

Form is notarized on December 4, 2016 by Trevor Fobbs, the Branch's former manager,

who provided an affirmation that it was his usual practice, from which he has never

deviated, to require the physical presence of a person whose signature he is notarizing

and to request identification confirming that person's identity.

With respect to Kenyatta Miller, Santander notes that according to her personnel

file, which was produced in discovery, she was terminated well before Trott emptied the

Trott Account, and there is nothing in the file suggesting her firing had anything to do

with the Settlement Check's deposit. Therefore, Santander insists, Kenyatta Miller's job

performance issues with Santander bear no relevance to the issues in this proceeding.

6 [* 6]

As for the suggestion that it refused to produce Ms. Miller as a witness,

Santander notes that Petitioner's counsel was notified during the discovery process that

she was no longer a bank employee. Moreover, Santander provided Petitioner with her

last known address. Petitioner, however, never subpoenaed Ms. Miller.

Regarding Petitioner's claim of negligence per se, Santander disputes that the

decedent's endorsement of the Settlement Check violates UCC 3-419. Santander

argues that under the Uniform Commercial Code the Decedent's blank endorsement,

without designating a specific payee, made it a negotiable instrument which could be,

and was, properly deposited into the Trott Account.

Santander maintains that it did not violate its internal policies in connection with

utilizing the COE Form, as its policy manual permits the form's completion where, as

here, there is a deposit for more than $15,000.00 being made into an account held by

someone other than the original payee. As for the Check Box Language, Santander

asserts that it only constitutes a representation and warranty by the Decedent that he

endorsed the Settlement Check and transferred it to Trott.

Santander states that, as a matter of law, the COE Form cannot constitute a

binding direction to deposit the check into any specific account, nor can it transmogrify

the Settlement Check from being a bearer instrument into one that has been specially

endorsed. Santander contends, however, that the COE Form confirms the Decedent's

intention to have the deposit made into the Trott Account because immediately above

where the Decedent signed the COE Form appears the following language: "In

consideration of the acceptance of the check by Santander Bank, N.A. for deposit into

an account and/or negotiation in which I hold no interest or signing authority, I hereby

7 [* 7]

agree to be subject to the remedies provided in UCC § 3-416(b)". Had the intention

been to put it into a Joint Account, Santander suggests, then a double endorsement

would not have been required, a COE Form would not have been prepared and the

Decedent would not have acknowledged, in writing, that he was depositing the

Settlement Check into an account that he had no interest or signing authority.

Finally, Santander points out that the monthly statements for the Trott Account

and the Joint Account had been delivered to the Decedent's address for many months

after they were opened and the Settlement Check deposited. Apparently, the

statements were found in the decedent's bedroom after he died. Santander avers that

at least 15 monthly statements for the Trott Account were sent to the Decedent before

he died, never showing a balance less than $480,000. Similarly, twelve monthly

statements for the Joint Account were sent to the Decedent prior to his death, and none

of those statements ever showed a balance greater than $12,000. As Decedent was

given notice that the Settlement Check was deposited into the Trott Account, Santander

concludes, his failure to object evidences his consent to this deposit.

DISCUSSION

Summary judgment allows a party to demonstrate that no material issue of fact

requires a trial and that judgment may be directed in its favor as a matter of law. (Brill v

City of New York, 2 NY3d 648, 651 [2004].) To obtain summary judgment, the movant

must "establish his cause of action or defense sufficiently to warrant the court as a

matter of law in directing judgment in his favor" by "evidentiary proof in admissible form"

(Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065, 1066 [1979]) (internal

citations and quotation marks omitted).

8 [* 8]

"One opposing a motion for summary judgment must produce evidentiary proof in

admissible form sufficient to require a trial of material questions of fact" (Zuckerman v

City of New York, 49 NY2d 557, 562 [1980].) Where, however, "the moving party has

not met the initial burden of setting forth evidentiary facts sufficient to establish

entitlement to judgment as a matter of law, the motion must be denied. There is no

necessity for the opposing party to respond with evidentiary proof' (Roman v Hudson

Telegraph Associates, 15 AD3d 227,228 [1st Dept 2005]).

Petitioner's Forgery Claim

As an initial matter, the court is satisfied that the Decedent endorsed the

Settlement Check. Contrary to Petitioner's contentions, she has not raised anything

other than a "bald assertion of forgery" regarding the Decedent's endorsement (Sterling

National Bank v Alan B. Brill, P.C., 186 AD3d 515, 518 [2d Dept 2020]). Her

unsupported forgery allegation fails to raise a material issue of fact requiring a trial.

Decedent's printed signatures on other Santander documents submitted in

support of the cross-motion, including several Social Security checks deposited into the

Joint Account and the COE Form, are similar to the Decedent's printed signature on the

back of the Settlement Check. The court finds Decedent's signature on the COE Form

to be a particularly reliable exemplar because the Decedent's signature on the COE

Form was notarized and duly acknowledged by a notary public, creating a presumption

of its authenticity (Albany County Sav. Bank v McCarty, 149 NY 71, 80 [1896]; Clark v

Mortgage Servs. Unlimited, 78 AD3d 1104 [2d Dept 201 O]; CPLR 4538). This

presumption is bolstered by the notary's unimpeached affirmation testimony indicating

that the Decedent signed the COE Form at the Branch, in his presence.

9 [* 9]

Petitioner's Claims of Negligence Per Se

Petitioner has not established negligence per se based on Santander's alleged

violations of federal and New York State laws governing a bank's responsibility to its

customers. The court does not agree with Petitioner's contention that UCC 3-419 bars

Santander from negotiating the Settlement Check without a special endorsement.

Petitioner's reliance on the holdings in Tonelli v Chase Manhattan Bank, N.A., 41 NY2d

667 ( 1997) and Lynch v First National Bank of Jersey City, 107 NY 179 ( 1887) as

support for this premise is misplaced. In those cases, drawee banks were held liable for

negotiating unendorsed checks. Here, however, the Settlement Check was properly

endorsed and converted into a bearer instrument that could be negotiated and

deposited into the Trott Account (see UCC 3-205[b]).

Similarly unavailing is Petitioner's argument of negligence per se based on

Santander's alleged violation of the Bank Secrecy Act's "Know Your Customer" ("KYC")

regulations. KYC regulations require banks to use reasonable diligence to identify

customers and those acting on their behalf. It does not create a private cause of action.

There is no evidence supporting Petitioner's claim that Santander would have

ascertained that the Decedent lacked the capacity to deposit the Settlement Check if it

had exercised reasonable diligence. In fact, Petitioner's own deposition testimony

contradicts this claim, portraying the Decedent as being of sound mind and under no

disability which would have prevented him from willingly and knowingly depositing the

Settlement Check into the Trott Account.

Finally, Petitioner asserts a general claim that Santander's negligence can be

assumed because it failed to follow its internal operating policies relative to the

10 [* 10]

Settlement Check. Petitioner, however, does not identify these policies with any

specificity. If this claim is based on Santander's firing of Kenyatta Miller, Petitioner has

not shown how her termination relates to the Settlement Check's deposit or to Trott's

purported misappropriation of estate funds. If the claim is based on the allegation that

the COE Form was not required by Santander's policy manual, such an additional

safety measure would not constitute negligence per se.

The COE Form and the Account Statements

As a matter of law, nothing in the COE Form changed, restricted or affected the

negotiability of the Settlement Check. The instrument's blank endorsements by the

Decedent and Trott authorized Santander to deposit it into either the Trott Account or

the Joint Account, in accordance with the Decedent's instructions. On the record

presented, the court finds that those instructions were to deposit the Settlement Check

into the Trott Account, as memorialized by the (i) COE Form and (ii) the uncontroverted

fact that the Decedent never objected to the deposit, notwithstanding that for one year

prior to his death he received monthly statements from Santander showing the funds

were not held in the Joint Account.

The COE Form confirms that the deposit of the Settlement Funds into the Trott

Account was not an error. If the intent was to deposit the Settlement Check into the

Joint Account, that could have been done with only the Decedent's endorsement, since

he had an interest in the Joint Account. However, because the funds were going into

Trott's account, the Settlement Check had to be endorsed by the Decedent and Trott,

and pursuant to Santander's policy manual, the COE Form had to be filled out, which

11 [* 11]

included information about the Decedent and Trott, the two necessary parties to the

transaction.

Trott is identified as a depositor at the top of the COE Form, and her account

number is written adjacent to her name. Notably, no other account number appears in

the COE Form. The Decedent signed the form in his capacity as a payee of the

Settlement Check, and immediately above his signature it states: "In consideration of

the acceptance of the check by Santander Bank, N.A. for deposit into an account and/or

negotiation in which I hold no interest or signing authority, I hereby agree to be subject

to the remedies provided in UCC § 3-416(b)". This statement would be unnecessary

and contradictory if the Decedent was depositing it into the Joint Account, in which he

held an interest and signing authority.

When read in the context of the entire COE Form, it is clear that the Checkbox

Language is a representation and warranty that the Decedent transferred the

Settlement Check to Trott, not to Trott and the Decedent as Petitioner suggests. While

Petitioner's motion papers insist the word "and" appears after Trott's name in the

Checkbox Language section of the COE Form, that is inaccurate. The Decedent's

name appears on a separate line in the section, adjacent to language identifying him as

the depositor/customer making the warranty and representation about transferring the

Settlement Check to Trott. Nowhere in the Checkbox Language is there a reference to

the Joint Account. The only account referenced in the COE Form is the Trott Account.

Santander included the defenses of laches and statute of limitations in its

responsive pleading but did not argue those theories in their cross-motion. As such, the

court does not pass on whether Petitioner's claims are time barred in light of the

12 [* 12]

Decedent's receipt of statements from Santander showing the deposit was not made

into the Joint Account (see, e.g., New York Uniform Commercial Code §4-406[4]).

Instead, the court sees those account statements as compelling evidence of the

Decedent's intention to have the Settlement Check deposited in the Trott Account, an

intention which is corroborated by (i) the Decedent never indicating any objection to the

Settlement Check's deposit into the Trott Account, notwithstanding he continued

transacting business with Santander during the year prior to his death, apparently even

visiting the Branch in person on an almost monthly basis, and (ii) Petitioner's deposition

testimony that Decedent disclosed his receipt of the Settlement Check to Trott, but not

to Petitioner, even though he resided with Petitioner and had opportunity to do so.

Conclusion

Based on the foregoing, Santander has established its entitlement to summary

judgment granting the relief sought in its cross-motion. Accordingly, it is hereby:

ORDERED, that Petitioner's motion for summary judgment is denied in its

entirety; and it further

ORDERED, that Santander's cross-motion is granted and Petitioner's Verified

Petition in this proceeding is dismissed, with prejudice.

This decision constitutes the order of the court.

Settle decree.

13 [* 13]