Oriska Insurance Company v. Israel Discount Bank of New York et al

Filing 89

MEMORANDUM-DECISION AND ORDER granting in part and denying in part 65 Motion for Summary Judgment; denying 66 Motion to Deposit Funds: The Court hereby ORDERS that Capital One's Motion for Summary Judgment is GRANTED as to Hershel Weber, Naftoli Weber, Dina Singer, and Evy Weber and DENIED as to Oriska Insurance Company; and the Court hereby ORDERS that Capital One's Motion to Deposit Funds with the Court is DENIED; and the Court hereby ORDERS that Hershel Weber, Naftoli Webe r, Dina Singer, and Evy Weber's request for change of venue is DENIED; and the Court hereby ORDERS that the Clerk of the Court serve a copy of this Memorandum-Decision and Order on all parties in accordance with the Local Rules. Signed by U.S. District Judge Mae A. D'Agostino on 10/22/2018. (ban)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
____________________________________________
ORISKA INSURANCE COMPANY,
Plaintiff,
vs.

6:17-cv-00910
(MAD/TWD)

ISRAEL DISCOUNT BANK OF NEW YORK and
CAPITAL ONE, N.A.,
Defendants,
vs.
NAFTOLY WEBER, HERSHEL WEBER, a.k.a.
Harold Weber, DINA SINGER, GUARANTEE
INSURANCE COMPANY, EVY WEBER,
Intervenor Defendants.
____________________________________________
ISRAEL DISCOUNT BANK OF NEW YORK,
Third-Party Plaintiff,
vs.
UNITED STATES OF AMERICA,
Third-Party Defendant.
____________________________________________
APPEARANCES:

OF COUNSEL:

KERNAN, KERNAN LAW FIRM
185 Genesee Street, Suite 1401
Utica, New York 13501
Attorneys for Oriska Insurance Company

LEIGHTON R. BURNS, ESQ.

KERNAN PROFESSIONAL GROUP, LLP
1310 Utica Street
P.O. Box 750
Oriskany, New York 13424
Attorneys for Oriska Insurance Company

JAMES KERNAN, ESQ.

GRABER LAW FIRM
360 Lexington Avenue, Suite 1502

DANIEL GRABER, ESQ.

New York, New York 10017
Attorneys for Israel Discount Bank of New York
TARTER KRINSKY & DROGIN LLP
1350 Broadway
New York, New York 10018
Attorneys for Capital One, N.A.

DEBRA E. BERNSTEIN, ESQ.

BARCLAY DAMON LLP
Barclay Damon Tower
125 East Jefferson Street
Syracuse, New York 13202
Attorneys for Capital One, N.A.

MITCHELL J. KATZ, ESQ.

AVROM R. VANN, P.C.
1211 Avenue of the Americas, 40th Floor
New York, New York 10036
Attorneys for Naftoly Weber, Hershel
Weber, Dina Singer, and Evy Weber

AVROM R. VANN, ESQ.

WARNER & SCHEUERMAN
6 West 18th Street, 10th Floor
New York, New York 10011
Attorneys for Guarantee Insurance Company

JONATHON D. WARNER, ESQ.

U.S. DEPARTMENT OF JUSTICE TAX DIVISION
P.O. Box 55
Ben Franklin Station
Washington, D.C. 20044
Attorneys for United States of America

STEPHANIE CHERNOFF, ESQ.

Mae A. D'Agostino, U.S. District Judge:
MEMORANDUM-DECISION AND ORDER
I. INTRODUCTION
In 2015, Oriska Insurance Company ("Oriska") commenced this lengthy dispute over the
assets in six trust accounts that are subject to several creditors' claims. Defendants Capital One,
N.A. ("Capital One") and Israel Discount Bank of New York ("IDB") are custodians of the
accounts. See Dkt. No. 65-4 at ¶ 4. Hershel Weber, a.k.a. Harold Weber, is the grantor and
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Naftoly Weber, Dina Singer, and Evy Weber (together with Hershel, the "Webers") are trustees to
the accounts. See Dkt. No. 65-8 at § I(B); Dkt. No. 65-9 at § I(B). Guarantee Insurance
Company ("Guarantee") and the International Revenue Service ("IRS") are creditors with liens on
the accounts. See Dkt. No. 21-21; Dkt. No. 21-38 at 5-10.
Presently before the Court is Capital One's Motion for Summary Judgment against
Plaintiff and the Webers, pursuant to Fed. R. Civ. P. 56, and Motion to Deposit Funds with the
Court, pursuant to Fed. R. Civ. P. 67. See Dkt. Nos. 65, 66. For the reasons set forth below, the
Motion for Summary Judgment is granted in part and denied in part. The Motion to Deposit
Funds with the Court is denied.
II. BACKGROUND
A.

Facts
This case involves six trust accounts that contain assets from the settlement of a case

brought before this District in 2004.1 See Dkt. No. 79-1 at ¶ 7. In 2010, Capital One became
custodian of the accounts pursuant to two contracts (the "Account Control Agreements"). See id.
at ¶ 9; Dkt. No. 65-8 (May 6, 2010 agreement with Hershel Weber and Oriska); Dkt. No. 65-9
(April 11, 2011 agreement with Naftoli Weber, Dina Singer, and Oriska).
The Account Control Agreements contain two indemnity clauses. The first clause
provides that the Webers2 "shall indemnify . . . [Capital One] . . . against all claims, liabilities and

The original case involved a Lanham Act violation by one of Hershel Weber's
companies. See Oriska Insurance Company v. The Power P.E.O., Inc., et. al, No. 5:03-CV-1481
(N.D.N.Y. filed Dec. 12, 2003).
1

Hershel Weber was a party to the May 6, 2010 agreement; Naftoli Weber and Dina
Singer were parties to the April 11, 2011 agreement. Evy Weber was not an original party to the
agreement, but was appointed Successor Co-Trustee after Naftoly Weber resigned as Co-Trustee
over the trusts. See Dkt. No. 58 at 1-2. Thus, Evy Weber has become a party to the April 11,
2011 Account Control Agreement.
2

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expenses arising out of or relating to this Agreement, including losses, costs, damages, reasonable
attorneys' fees and disbursements (collectively 'Liabilities') . . . , except to the extent such
Liabilities are occasioned by gross negligence or willful misconduct on the part of [Capital One] .
. . ." See Dkt. No. 65-1 at ¶ 4; Dkt. No. 65-8 at § I(1); Dkt. No. 65-9 at § I(1). The second clause
provided that Plaintiff "shall indemnify . . . [Capital One] . . . for any Liabilities arising out of or
relating to this Agreement by reason of any wrongful or unlawful act or failure to act on the part
of [Oriska] . . . ." See Dkt. No. 65-1 at ¶ 5; Dkt. No. 65-8 at § I(2); Dkt. No. 65-9 at § I(2).
In August 2014, Capital One notified Oriska that it was resigning as custodian of the
accounts, so Oriska made arrangements for IDB to take over their custody. See Dkt. No. 79-1 at
¶¶ 10-11. The parties executed agreements to facilitate this transfer on August 27, 2014. See
Dkt. No. 80-1 at 7. Assets from three of the six accounts were successfully transferred to IDB.
See Dkt. No. 79-1 at ¶ 13; Dkt. No. 80-1 at 6. However, the remaining assets could not be
transferred because on July 1, 2015, Capital One was served with a Restraining Order regarding
Hershel Weber's funds, on behalf of creditor Guarantee. Dkt. No. 79-1 at ¶ 14; Dkt. No. 21-21 at
29-31. Unable to complete the transfer, Capital One remains the custodian of three of the trust
accounts. Dkt. No. 65-1 at ¶ 1.
B.

Procedural History
Plaintiff commenced this action on August 26, 2015 by filing a Complaint against IDB

and Capital One in state court seeking to enjoin the banks from "delivering the assets in the
Collateral Accounts to anyone other than the plaintiff . . . ." See Dkt. No. 65-4 at 8. A
Temporary Restraining Order was granted on August 28, 2015 and modified on October 27, 2015
to allow the banks to collect their regular business fees from the accounts. See Dkt. No. 21-10 at
4. IDB and Capital One each filed Answers to the Complaint, and Guarantee intervened in the
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action as a judgment-creditor. See Dkt. Nos. 21-9, 21-21, 21-24. On August 18, 2017, the action
was removed to the Northern District of New York after the IRS levied a tax lien against Hershel
Weber. See Dkt. No. 1; Dkt. No. 21-38 at 5-10.
On May 2, 2018, Capital One filed a Motion for Summary Judgment against Plaintiff and
the Webers, pursuant to Fed. R. Civ. P. 56, and Motion to Deposit Funds with the Court, pursuant
to Fed. R. Civ. P. 67. See Dkt. Nos. 65, 66. The Webers and Plaintiff each filed opposition
papers on July 9, 2018. See Dkt. Nos. 79, 80. On July 13, 2018, Capital One filed its Reply. See
Dkt. No. 82.
C.

Local Civil Rule 7.1 Statement of Undisputed Material Facts
In support of its Motion for Summary Judgment, Capital One submitted a Statement of

Undisputed Material Facts, which broadly stated that (1) Capital One currently holds three of the
trust accounts at issue in this case, (2) Capital One entered into Account Control Agreements with
respect to these accounts, and (3) those agreements contain indemnity provisions as described
above. See Dkt. No. 65-1 at ¶¶ 1-5. In response, the Webers submitted a Counter Statement of
Undisputed Material Facts, in which they stated that (1) the Account Control Agreements were no
longer valid, by "order" of the New York State Supreme Court, and (2) the Webers would be
subject to over $800,000 of capital gains taxes if Capital One were to liquidate the securities in
the Accounts. See Dkt. No. 80-5 at ¶¶ 1-2. The Webers did not admit or deny any of the facts in
Capital One's Statement of Undisputed Material Facts.
Unlike the Webers, Plaintiff did not submit an Opposing Statement of Material Facts.
However, in an Affidavit by Najam Adnan, an accounting analyst for the Oriska, Plaintiff
provided: (1) details about the purpose and history of the funds, (2) that on August 4, 2014
Capital One notified Oriska that it was resigning as custodian of the funds, (3) that Oriska made
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arrangements with IDB to take over custody of the assets, (4) that "Account Control Agreements
continue the assets in custody from Capital One to IDB Bank," (5) that assets from three of the
accounts remain with Capital One after the restraining order from Guarantee, and (6) that Oriska
recently asked IDB to complete the transfer of the remaining assets from Capital One to IDB. See
Dkt. No. 79-1 at ¶¶ 1, 4-15.
III. DISCUSSION
A.

Summary Judgment Motion
1. Legal Standard
A court may grant a motion for summary judgment only if it determines that there is no

genuine issue of material fact to be tried and that the facts as to which there is no such issue
warrant judgment for the movant as a matter of law. See Chambers v. TRM Copy Ctrs. Corp., 43
F.3d 29, 36 (2d Cir. 1994) (citations omitted). When analyzing a summary judgment motion, the
court "cannot try issues of fact; it can only determine whether there are issues to be tried." Id. at
36-37 (quotation and other citation omitted). Moreover, it is well-settled that a party opposing a
motion for summary judgment may not simply rely on the assertions in its pleading. See Celotex
Corp. v. Catrett, 477 U.S. 317, 324 (1986) (quoting Fed. R. Civ. P. 56(c), (e)).
In assessing the record to determine whether any such issues of material fact exist, the
court is required to resolve all ambiguities and draw all reasonable inferences in favor of the nonmoving party. See Chambers, 43 F.3d at 36 (citing Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 255 (1986)) (other citations omitted). Where the non-movant either does not respond to the
motion or fails to dispute the movant's statement of material facts, the court must be satisfied that
the citations to evidence in the record support the movant's assertions. See Giannullo v. City of
New York, 322 F.3d 139, 143 n.5 (2d Cir. 2003) (holding that not verifying in the record the
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assertions in the motion for summary judgment "would derogate the truth-finding functions of the
judicial process by substituting convenience for facts").
2. Local Rule 7.1(a)(3)
Pursuant to Local Rule 7.1(a)(3), a party moving for summary judgment must submit a
Statement of Material Facts, which "shall set forth, in numbered paragraphs, each material fact
about which the moving party contends there exists no genuine issue. Each fact listed shall set
forth a specific citation to the record where the fact is established." See N.D.N.Y. L.R. 7.1(a)(3).
The record includes "the pleadings, depositions, answers to interrogatories, admissions and
affidavits" and excludes "attorney's affidavits." Id. A party opposing a motion for summary
judgment must file a response to the movant's Statement of Material Facts, and this "response
shall mirror the movant's Statement of Material Facts by admitting and/or denying each of the
movant's assertions in matching numbered paragraphs. Each denial shall set forth a specific
citation to the record where the factual issue arises." Id. The Local Rule further provides that
"[t]he Court shall deem admitted any properly supported facts set forth in the Statement of
Material Facts that the opposing party does not specifically controvert." Id. (emphasis in
original).
The Second Circuit has recognized "that district courts have the authority to institute local
rules governing summary judgment submissions . . . and ha[s] affirmed summary judgment
rulings that enforce such rules." N.Y. Teamsters Conference Pension & Ret. Fund v. Express
Servs., Inc., 426 F.3d 640, 648-49 (2d Cir. 2005) (internal and other citations omitted). "Rules
governing summary judgment practice are essential tools for district courts, permitting them to
efficiently decide summary judgment motions by relieving them of the onerous task of 'hunt[ing]

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through voluminous records without guidance from the parties.'" Id. at 649 (quotation and other
citations omitted).
Capital One's Statement of Undisputed Material Facts fully complies with Local Rule
7.1(a)(3), and the facts within are clearly supported by the record. Capital One has shown that it
currently holds three of the trust accounts at issue in this case, that it entered into Account Control
Agreements with respect to these accounts, and that those Agreements contain indemnity
provisions as described above. See Dkt. Nos. 65-7, 65-8, 65-9. These facts are properly
supported by an affidavit by a Vice President and Senior Trust Officer at Capital One, the May 6,
2010 Account Control Agreement, and the April 11, 2011 Account Control Agreement. Id.
On the other hand, neither Plaintiff nor the Webers properly adhered to Local Rule
7.1(a)(3). The Webers submitted a Counter Statement of Undisputed Material Facts that did not
mirror Capital One's Statement with admissions or denials of each assertion, but instead contained
only two additional facts to support their Opposition. See Dkt. No. 80-5; N.D.N.Y. L.R.
7.1(a)(3). Plaintiff did not even bother to submit a Statement of Material Facts, instead opposing
Capital One's motion with an accounting analyst's affidavit and attorney's affirmation. See Dkt.
Nos. 79, 79-1. As such, in accordance with Rule 7.1(a)(3), the Court deems the properly
supported facts in Capital One's Statement of Material Facts admitted by all parties. See
N.D.N.Y. L.R. 7.1(a)(3).
3. Indemnification Clauses
Even if the Court disregards these procedural deficiencies, the Court finds that the
Webers' opposition papers have not actually raised any genuine issues of material facts.
"Reliance on a party's statement of undisputed facts may not be warranted where those facts are
unsupported by the record." N.Y. Teamsters Conference Pension & Ret. Fund, 426 F.3d at 649
8

(citing Holtz v. Rockefeller & Co., Inc., 258 F.3d 62, 73-74 (2d Cir. 2001)). Here, the record does
not support the Webers' assertions about the indemnification clauses.
First, the Webers claim that Justice Samuel Hester of the New York State Supreme Court
"expressly ruled that the Account Control Agreements no longer remain in effect." See Dkt. No.
80-5 at ¶ 1; see also Dkt. No. 80-4 at 4-5. This is plainly false. The Webers point to a December
18, 2015 Order denying a motion for change of venue based on a venue selection clause in the
Account Control Agreements, in which Justice Hester stated, "[t]he parties interested in the
accounts have executed the agreements of August 27, 2014, thereby superceding and vitiating the
previous agreements involving Capital One. The actual transfer of the accounts from Capital One
to IDB is merely a ministerial act. For these reasons, neither the 'control agreements' involving
Capital One, nor any provisions therein, remain in effect."3 See Dkt. No. 80-1 at 6. The record
clearly indicates that Capital One was not able to transfer all of the assets to IDB, so Capital One
maintained custody over three of the trust accounts subject to the Account Control Agreements.
See Dkt. No. 65-1 at ¶ 1; Dkt. No. 66-6 at ¶ 5; Dkt. No. 79-1 at ¶ 14; Dkt. No. 21-21 at 29-31.
Justice Hester's statement was not an order to the contrary. Thus, the record does not support the
Webers' claim that the Account Control Agreements no longer remain in effect as to the accounts
still with Capital One.
Second, both Plaintiff and the Webers argue that there are questions of material fact as to
whether Capital One is entitled to indemnification. For the reasons set forth below, the Court
finds that Capital One is entitled to indemnification from the Webers, but there are questions of
material fact as to whether Capital One is entitled to indemnification from Plaintiff.

Rather than citing to the Order directly, the Webers impermissibly cite to their attorney's
affirmation to support this statement. See Dkt. No. 80-5 at ¶ 1; N.D.N.Y. L.R. 7.1(a)(3)
(excluding attorney's affidavits from permissible record citations).
3

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It is well-established in New York that "parties may obtain contractual indemnity from
liability - even where such liability is incurred in whole or in part through their own fault through express, 'unequivocal' agreements to that effect." Gibbs-Alfano v. Burton, 281 F.3d 12,
20 (2d Cir. 2002) (citing Margolin v. New York Life Ins. Co., 32 N.Y.2d 149, 153 (1973)). Still,
"[p]romises by one party to indemnify the other for attorneys' fees run against the grain of the
accepted policy that parties are responsible for their own attorneys' fees." Oscar Gruss & Son,
Inc. v. Hollander, 337 F.3d 186, 199 (2d Cir. 2003) (citing Hooper Assocs., Ltd. v. AGS
Computers, Inc., 74 N.Y.2d 487, 492 (1989)). Thus, under New York law, "[w]hen a party is
under no legal duty to indemnify, a contract assuming that obligation must be strictly construed to
avoid reading into it a duty which the parties did not intend to be assumed." Hooper, 74 N.Y.2d
at 491 (citations omitted). That is, "[t]he promise should not be found unless it can be clearly
implied from the language and purpose of the entire agreement and the surrounding facts and
circumstances." Id. at 491-92 (citations omitted).
Courts in the Second Circuit have employed the following principles of construction to
determine whether indemnification provisions are intended to include attorneys' fees in suits
between the parties to the contract: (1) the analysis begins with the presumption that the
agreement does not cover attorneys' fees in an action between the parties; (2) a provision
containing only broad language that does not unequivocally indicate that the parties intended to
indemnify attorneys' fees will not support such a claim; (3) if it is apparent that no third-party
claims were contemplated by the parties, the agreement should be construed to provide indemnity
for claims between the parties; (4) likewise, if future third-party claims were possible at the time
of the contract, there should be no indemnification for suits between the parties; and (5)
indemnification provisions that specifically distinguish third-party claims from interparty claims
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indicate an intent to cover claims between the parties. In re Refco Securities Litig., 890 F. Supp.
2d 332, 343-44 (S.D.N.Y. 2012) (citations omitted).
a. The Webers' Liability
The Webers argue that Capital One is not entitled to indemnification because it has
engaged in willful misconduct by "actively litigating and not, as a mere stakeholder, remaining
neutral and awaiting the outcome of this lawsuit. . . ." See Dkt. No. 80-4 at 5, 8-10. In their
opinion, Capital One's decision to "actively participat[e] in every aspect of the case and itself
mak[e] motions . . ." was a calculated attempt to generate extensive litigation fees. See id. at 6.
Instead, the Webers argue, Capital One should have simply answered the Complaint to advise the
Court that it would continue to hold the accounts and would abide by a court order. See id. at 8-9.
That argument is absurd. Capital One has every right to protect its interests in this
lawsuit, and its decision to defend itself is not willful misconduct. See Chesapeake Energy Corp.
v. Bank of New York Mellon Tr. Co., No. 13-CV-1582, 2013 WL 5432331, *5-7 (S.D.N.Y. Sept.
30, 2013) (finding that although a bank's decision to defend against claims on the merits was not
required, doing so was not the equivalent of acting "'in bad faith, vexatiously, wantonly, or for
oppressive reasons'") (quoting Alyeska Pipeline Serv. Co. v. Wilderness Soc'y, 421 U.S. 240, 25859 (1975)); see also Gardner v. Owasco River Ry., 142 A.D.2d 61, 64 (3d Dep't 1988) (holding
that, to prove willful or malicious conduct, the plaintiff is required to show "an intentional act of
unreasonable character performed in disregard of a known or obvious risk so great as to make it
highly probable that harm would result").
The language and purpose of the Account Control Agreements, a strict reading of the
indemnity clause, and the analysis of the surrounding facts and circumstances clearly indicate that
the parties intended that the Webers would indemnify Capital One "against all claims, liabilities
11

and expenses" arising out of the Account Control Agreements. See Hooper, 74 N.Y.2d at 491.
The parties executed the Account Control Agreements when Capital One became custodian of the
trust accounts; it is logical that they would indemnify the custodian for costs associated with
managing those accounts. See Dkt. No. at 65-1 at ¶¶ 1-2; Dkt. No. 65-8; Dkt. No. 65-9. Nothing
in the record suggests otherwise.
Furthermore, the Court finds that Capital One is entitled to reasonable attorneys' fees for
actions between the parties because the indemnity clause unequivocally includes "reasonable
attorneys' fees and disbursements." See Dkt. No. 65-8 at §§ I(1)-(2); Dkt. No. 65-9 at §§ I(1)-(2);
In re Refco Securities Litig., 890 F. Supp. 2d at 343-44. The Webers urge the Court not to find
liability at this point, vaguely alleging that Capital One will seek unreasonably high fees. See
Dkt. No. 80-4 at 11-12. The Court is only deciding the issue of liability today, and will rule on
the reasonableness of the fees after it has reviewed submissions on that issue. Therefore, Capital
One's Motion for Summary Judgment against the Webers is granted.
b. Oriska's Liability
The indemnification clause that applies to Plaintiff contains notably different language.
That clause provides that Capital One is entitled to indemnification only if Plaintiff engaged in
"any wrongful or unlawful act or failure to act." See Dkt. No. 65-1 at ¶ 5; Dkt. No. 65-8 at § I(2);
Dkt. No. 65-9 at § I(2). Capital One argues that "Oriska's failure to prosecute this litigation in a
timely and straightforward manner has contributed to the expense incurred by Capital One,"
suggesting that Plaintiff's delayed prosecution tactics satisfy the failure to act requirement in the
indemnification clause. See Dkt. No. 65-2 at 7. Plaintiff responds that this statement is
conclusory, and that Capital One fails to provide "the factual background which establishes any
basis for damages or expenses caused by Oriska's actions." See Dkt. No. 79 at ¶ 13.
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Examining the record, the Court does not find that Plaintiff failed to diligently prosecute
this litigation, or that Plaintiff has engaged in any conduct covered by the indemnification clause.
Since the case was removed to this Court in August 2017, Plaintiff has participated in telephonic
conferences, submitted motions and pleadings, and complied with the Court's deadlines. See Dkt.
Nos. 32, 33, 46. Although Plaintiff did seek a thirty day extension to respond to document
requests, that brief extension does not suggest Plaintiff has not diligently prosecuted this action.
See Dkt. Nos. 67, 68. Without evidence of any wrongful or unlawful act, or failure to act on
Plaintiff's part, the Court cannot say that a genuine issue of material facts does not exist. As such,
Capital One's Motion for Summary Judgment against Oriska is denied.
B.

Rule 67 Transfer of Funds
Capital One has moved to deposit the funds in the accounts with the Court, pursuant to

Fed. R. Civ. P. 67. For the following reasons, that motion is denied.
A court may grant leave to deposit funds into the court "where there are competing claims
to the funds that may subject the party holding the funds to liability." Harvey v. Fresquez, No.
10-CV-5291, 2011 WL 855875, *3 (S.D.N.Y. Mar. 8, 2011), aff'd, 479 Fed. Appx. 360 (2d Cir.
2012) (internal citations omitted). Rule 67 is a "'procedural device . . . intended to provide a place
of safekeeping for disputed funds pending resolution of a legal dispute and not to provide a means
of altering the contractual relationships and legal duties of each party.'" Ray Legal Consulting
Grp. v. DiJoseph, 37 F. Supp. 3d 704, 729 (S.D.N.Y. 2014) (quoting Prudential Ins. Co. of Am. v.
BMC Indus., Inc., 630 F. Supp. 1298, 1300 (S.D.N.Y. 1986)). It is within the court's discretion to
permit or deny such a deposit. United States v. New York State Supreme Court, Erie Cnty., No.
07-CV-27S, 2008 WL 305011, *3 (W.D.N.Y. Feb. 1, 2008).

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Capital One asks the Court to enforce at least one portion of the Account Control
Agreements, the indemnification clauses, while simultaneously attempting abrogate its custodial
obligations under those same contracts. To allow Capital One to deposit the funds would alter the
parties' "contractual relationships and legal duties," because Capital One has a contractual
obligation to act as custodian to the trust accounts. See Ray Legal Consulting Grp., 37 F. Supp.
3d at 729 (denying request to deposit funds where the parties had contracted that the law firm
would act as the escrow agent for the funds). The Court is not a vehicle for contract modification.
As such, the Motion to Deposit Funds with the Court is denied.
C.

Venue
The Webers argue that venue is improper in the Northern District of New York, relying on

the Account Control Agreements' venue selection clauses which provide that "any dispute arising
out of or related to the Agreement shall be litigated solely in the Supreme Court of New York,
County of New York, or the United States District Court for the Southern District of New York."
See Dkt. No. 80-4 at 5. The Webers have not moved for a transfer of venue since their motion for
change of venue was denied in state court in 2015, though they have been litigating in this forum
since August 18, 2017. See Dkt. No. 1; Dkt. No. 80-1 at 8. At this point, the forum selection
clause has been waived. As such, the Webers' request for change of venue is denied.
D.

Breach of Contract
Finally, the Webers mistakenly argue that Capital One's claim for indemnification is a

"garden variety breach of contract claim." See Dkt. No. 80-4 at 12-14. This is completely
inaccurate. Capital One seeks to enforce the indemnity clauses in the Account Control
Agreements; it is not alleging a breach of those agreements.
IV. CONCLUSION
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After careful review of the record, the parties' submissions, and the applicable law, the
Court hereby,
ORDERS that Capital One's Motion for Summary Judgment is GRANTED as to Hershel
Weber, Naftoli Weber, Dina Singer, and Evy Weber and DENIED as to Oriska Insurance
Company; and the Court hereby
ORDERS that Capital One's Motion to Deposit Funds with the Court is DENIED; and the
Court hereby
ORDERS that Hershel Weber, Naftoli Weber, Dina Singer, and Evy Weber's request for
change of venue is DENIED; and the Court hereby
ORDERS that the Clerk of the Court serve a copy of this Memorandum-Decision and
Order on all parties in accordance with the Local Rules.
IT IS SO ORDERED.
Dated: October 22, 2018
Albany, New York

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