Case ID: ad2d_280/html/0334-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Interlink Financing Co., Ltd., et al., Appellants, v Korea First Bank of New York, Respondent.
    [720 NYS2d 474]
   —Order, Supreme Court, New York County (Harold Tompkins, J.), entered December 8, 1999, which granted defendant’s motion for summary judgment dismissing the complaint, unanimously affirmed, with costs.

The subject account of plaintiff Maeng at defendant bank, a time deposit account when initially opened, became a demand deposit by operation of law when it became subject to immediate seizure upon the Government’s demand as a result of the seizure warrant obtained by the Internal Revenue Service. As a Federal Deposit Insurance Corporation member and in accordance with 12 CFR 217.2 (Regulation Q), defendant bank is therefore prohibited from paying interest on demand deposits. Thus, plaintiff’s claim that he was entitled to an award of interest for the period of the seizure is manifestly without merit (United States v Philadelphia Natl. Bank, 374 US 321 [stating that member banks of the Federal Reserve System may not pay interest on demand deposits]; Van de Kamp v Bank of Am. Natl. Trust & Sav. Assn., 204 Cal App 3d 819, 251 Cal Rptr 530 [interpreting 12 CFR 217.2]). Even if, as plaintiff claims, defendant issued statements for the period in question indicating that interest had accrued upon the funds in the account, plaintiff could not have reasonably relied upon such statements given the existence of the seizure order. Concur — Sullivan, P. J., Andrias, Wallach, Lerner and Buckley, JJ.