Bank of America v. Zirogiannis , 939 N.Y.S.2d 427 ( 2012 )

Order, Supreme Court, New York County (Richard F. Braun, J.), entered August 1, 2011, which, to the extent appealed from, granted Sterling Mortgage Company, Inc.’s motion and Wells Fargo Bank, N.A.’s cross motion for summary judgment for a pro rata distribution of funds from the Mark A. Zirogiannis IOLA account held at Bank of America, and denied SunTrust Mortgage, Inc.’s cross motion for a return of the funds it deposited into the IOLA account, unanimously reversed, on the law, without costs, Sterling’s motion and Wells Fargo’s cross motion denied, SunTrust’s motion granted, and the matter remanded for distribution of the funds consistent with the decision herein.

The court improperly found that the appropriate remedy in this interpleader action was to order a pro rata distribution to all of the claimants of the funds held in the IOLA account. SunTrust is entitled to the funds since it was able to identify and trace its specific funds to the money in the account at the time that Bank of America commenced the interpleader action (Matter of Reece, 122 Misc 2d 517, 518 [1983], citing Matter of Cavin v Gleason, 105 NY 256, 262 [1887]). Consistent with the relief requested by Wells Fargo, the balance of the funds should be distributed pro rata among the interpleader defendants who can establish the validity of their claim. Concur — Tom, J.P., Friedman, Acosta, DeGrasse and Roman, JJ.