Jones, Wolf & Kapasi, LLC Defeats Motion to Dismiss Involving Maspeth Bank’s Failure to Safeguard Valuables in Safe Deposit Boxes

       Jones, Wolf & Kapasi, LLC (“JWK”) defeated a motion dismiss in the New York Supreme Court, Queens County related to allegations that Maspeth Federal Savings and Loan Association d/b/a Maspeth Federal Savings Bank (“Maspeth”) failed to safeguard our clients’ jewelry and other valuables contained in their safe deposit boxes. Accordingly, JWK’s clients commenced an action to recover damages for breach of contract, negligence, gross negligence and violation of New York’s General Business Law § 349 (“GBL”).

         As set forth by the Court in recapping our clients’ allegations:

“… a burglary occurred at Maspeth…As a result of the burglary, the contents of multiple safe deposit boxes…were stolen, and millions of dollars in currency and valuables were taken…the burglars approached the bank through a hole in a fence located in the back of the bank. They then used a ladder to reach the roof of the bank and cut through the bank’s roof with a torch to allow them entry into the vault…the roof was not fortified with concrete or steel, which allowed the burglars to cut through the roof membrane and penetrate the safe with ordinary hardware and tools…the alarm was triggered, but no one responded to the alarm. Three suspects were subsequently arrested in connection with the burglary.

            In denying Maspeth’s motion to dismiss, and keeping in all of our clients’ claims, the Court stated the following:

Breach of Contract: “The complaint alleges that ‘in consideration for Plaintiff’s payment of annual rental fees, Defendant Maspeth Bank, agreed to safeguard and store their property in their safe deposit boxes located at the Rego Park branch.’ Further, the complaint alleges that Maspeth represented to the plaintiffs that the safe deposit boxes were safe and secure. Also, the complaint states that Maspeth’s failures to safeguard plaintiffs’ personal items constitute a breach of its obligations under the lease for the safe deposit box. Furthermore, the plaintiffs relied on the representations of Maspeth that its property would be secure in the safe deposit box… Moreover, a bailee, such as Maspeth, can be held liable for breach of contract for the failure to return the goods subject to the bailment.”

Negligence: “The complaint alleges that defendant Maspeth failed to exercise reasonable care in safeguarding the contents of the safe deposit box. According to the complaint, defendant Maspeth failed to establish required security measures in the bank and failed to include required security devices. Moreover, the plaintiffs can make out a prima facie case of negligence by showing that they deposited their property with the defendant and the latter is unable to return it.”

Gross Negligence: “At bar, the complaint alleges certain facts amounting to gross negligence by the defendant, including its failure to properly respond to the alarm. According to the complaint, the alarm was initially triggered at 1:00 A.M., indicating a breach at the bank. It was reset at 1:30 A.M. and was triggered again at 2:00 A.M. Plaintiffs assert that none of defendant’s agents or employees responded to the alarm. Defendant clearly did not have proper safety protocols in place. Such failure, at an institution such as a bank, certainly constitutes gross negligence.”

GBL 349: “Defendant falsely represented to the plaintiffs, as well as other customers, that the safe deposit boxes at the bank were safe and secure. Thus, its actions were clearly consumer oriented. Further, the representation that the safe deposit box was secure was materially misleading inasmuch as the valuables of the plaintiffs were stolen from the safe deposit box. Indeed, the plaintiffs’ purpose in storing their valuables in the safe deposit box was to ensure their safety.”

           The case is Patel et al. v Maspeth Federal Savings & Loan Association et al., Index No. 708481/19 (Sup. Ct. Queens County July 21, 2020), and the Order can be read here.

            For more information about Jones, Wolf & Kapasi, LLC, you are invited to connect with us at:legaljones.com or @JonesWolfKapasi.