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Lane's Floor Coverings & Interiors Inc. v. DiLalla

Plaintiff Alleging 'Commercial Bad Faith' Fails to Plead Fraud by Bank

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The following e-filed documents, listed by NYSCEF document number (Motion 003) 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 117, 118, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137 were read on this motion to/for DISMISSAL. DECISION + ORDER ON MOTION Upon the foregoing documents, the motion and cross motion are determined as follows: Defendants Anthony DiLalla (DiLalla) and Valley National Bank (Bank) (together defendants), move, pursuant to CPLR 3211 (a) (1) and (a) (7) for dismissal of the amended complaint. Plaintiff Lane’s Floor Coverings & Interiors, Inc. (plaintiff) opposes and cross moves to compel discovery and for sanctions. For the reasons set forth below, the motion is granted, and the cross motion is denied. Procedural History Plaintiff is a privately owned company that sells and installs floor coverings. It commenced this action in September 2016, seeking to recover company funds it discovered had been fraudulently taken as early as February 2011 by its former controller, Howard Smith (Smith) allegedly with the assistance of Bank’s branch manager, DiLalla, and the acquiescence of Bank (see New York Supreme Court Electronic File [NYSCEF] Doc No. 97, complaint, 12; Doc No. 103, amended complaint, 12).1 “On or after December 21, 2013,” plaintiff discovered a “staggering amount of inconsistencies in [its] financial records” (NYSCEF Doc No. 103, 12). The amount at issue was $60,066.67, drawn by Smith from one of plaintiff s corporate bank accounts at Bank, made out to American Express, and either not indorsed, or bearing an indorsement “unrelated to or unaffiliated with American Express” (see NYSCEF Doc No. 103,

14-16). American Express never received these payments and the monies have remained unaccounted for (see NYSCEF Doc No. 103,

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