National Union Fire Insurance Company of Pittsburgh, PA v. Advanced Employment Concepts, Inc – Case Brief Summary (New York)

In National Union Fire Insurance Company of Pittsburgh, PA v. Advanced Employment Concepts, Inc. (269 AD2d 101, 703 N.Y.S.2d 3 [1st Dept 2000]), the account holder of bank accounts located in Florida obtained an order vacating a restraining order and an order of attachment issued against the garnishee bank, which had a branch located in New York.

The account holder argued that the New York court was without authority to attach and restrain bank accounts located outside of New York.

The Appellate Division, First Department affirmed the order vacating the restraining order, stating "it is clear that the accounts which the petitioner seeks to attach are not in the same jurisdiction as the New York office that petitioner served." Id. at 102.

The Appellate Division reasoned that the separate entity rule for separate bank branches did not permit the bank account located in Florida to be considered within the State of New York based on the bank's New York office, and that exceptions developed in case law did not apply:

"To the extent that the petitioner requests that we extend the holdings of Digitrex and Limonium Maritime, S.A. to encompass all of a bank's branches, notwithstanding their physical location outside of this jurisdiction, we decline to do so and note that such an extension would require, in our view, a pronouncement from the Court of Appeals or an act of the Legislature." Id.

The Appellate Division's application of the bank-branch separate entity rule was not new, but the Appellate Division's application of the rule in the context of whether it had jurisdiction over an account in a Florida bank branch is noteworthy.

That is, the Appellate Division could have vacated the restraining notice simply because it was not served on the correct entity, irrespective of where that entity was located.

Nevertheless, the Appellate Division went further. In light of the separate entity rule, the restraining notice was ineffective because the bank branch served was out of the jurisdiction, i.e., not subject to New York's in personam jurisdiction.