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Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A.

Court of Appeals of New York

 January 5, 1995, Argued ; February 14, 1995, Decided

No. 17


 [*22]  [**743]  [***531]    Chief Judge Kaye.

This appeal by two union funds from dismissal of their action against a bank focuses on the meaning of the phrase "[d]eceptive acts and practices" as used in General Business  [*23]  Law § 349. We conclude that there are questions of fact as to whether the bank's acts constituted conduct prohibited by the statute.

According to the undisputed facts, plaintiffs Pension Fund and Welfare Fund are not-for-profit associations that administer pension benefits and health insurance for union members and their beneficiaries. Both Funds had dealt with defendant Marine Midland Bank since the 1960's, when the Bank became their corporate trustee, and since at least 1973 the Bank had been investment advisor for the Welfare Fund.

On May 19, 1976, Robert Bradshaw, administrator of both Funds, met with Bruce Whitney, Marine's vice-president and branch manager of the East Side Oswego office. Whitney had attended meetings of the Funds' trustees and was known to Bradshaw. Bradshaw told Whitney that he wanted to open an interest-bearing [****4]  savings account for the Pension Fund, which at the time had moneys in non-interest-bearing checking accounts at Marine.

Marine offered two types of savings accounts--one for individuals, another for commercial entities. For commercial entities, Federal Regulation Q (12 CFR 217 et seq.) capped the principal upon which interest could be paid--a maximum of $ 100,000 through 1979, and a maximum of $ 150,000 thereafter. Not-for-profit entities were exempt from this regulation. To effectuate its own compliance with Regulation Q, Marine used blue signature cards for for-profit commercial customers and green cards for nonprofit commercial entities. In opening the savings account for the Pension Fund with an initial deposit of $ 10,000, Whitney without explanation gave Bradshaw a blue signature card. Although the card was designated "Commercial Savings," it did not indicate that it was for profit-oriented entities, nor did it reveal that interest would not be paid on deposits in excess of $ 100,000.

The signature card stated that the account was subject to the Bank Rules Governing Commercial Savings Deposits with Marine Midland Bank. These rules, which were not printed on the [****5]  signature card itself, governed "every savings deposit … by a corporation, partnership or other association operated for profit … or by the United States, any State or any county, municipality or political subdivision thereof." The Bank rules continued:

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85 N.Y.2d 20 *; 647 N.E.2d 741 **; 623 N.Y.S.2d 529 ***; 1995 N.Y. LEXIS 145 ****

Oswego Laborers' Local 214 Pension Fund et al., Appellants, v. Marine Midland Bank, N. A., Respondent.

Prior History:  [****1]  Appeal, by permission of the Court of Appeals, from an order of the Appellate Division of the Supreme Court in the Fourth Judicial Department, entered December 29, 1993, which affirmed an order of the Supreme Court (Robert J. Nicholson, J.), entered in Oswego County, granting a motion by defendant for summary judgment dismissing the complaint and denying a cross motion by plaintiffs for summary judgment.

Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, 199 AD2d 1096, modified.

Disposition: Affirmed.


consumer, savings, deceptive, deposit, practices, entities, signature card, opening, Funds

Antitrust & Trade Law, Consumer Protection, Deceptive & Unfair Trade Practices, General Overview, Torts, Business Torts