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Monday, May 27, 2024 | Back issues
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No Damages for Frozen & Fined Citibank Accounts

MANHATTAN (CN) - Two New Yorkers cannot get money damages from Citibank for freezing their bank accounts and charging them approximately $100 in fees for putting the restraint on their accounts, a federal judged ruled in a class action suit.

Plaintiffs Celinda Acevado and Jacqueline Lopez each received a notice from Citibank stating that their bank account had been frozen because of a restraining notice and/or levy served on Citibank by judgment creditors. Acevado had approximately $2,000 in her account and Lopez approximately $3,000.

Both claim that they could not access any of the funds in their account and did not receive a disclosure that a portion of their money is exempt from restraint, as required by Exempt Income Protection Act. The plaintiffs sought to bring the action on behalf of all Citibank account owners who had their accounts restrained and/or were charged a restraining fee since January 1, 2009.

The purpose of the EIPA, enacted in New York in 2008, is to "create a procedure for the execution of money judgments on bank accounts containing exempt funds to ensure that debtors can continue to access those funds." It stipulates that any restraining order placed on an account not apply to the first $1740 in the account.

U.S. District Judge Paul G. Gardephe wrote that while EIPA gives debtors the right to sue creditors and recover costs, there is "no express or implied private right of action under the EIPA permitting an account holder to sue his or her bank for money damages related to alleged EIPA violations." However, he denied Citibank's request for dismissal on non-monetary grounds and writes that the plaintiffs and all account holders can seek injunctive relief for EIPA violations against their banks.

While Citibank argued that the damages alleged by Acevado and Lopez, do not add up to $5 million minimum required by the Class Action Fairness Act for a class action suit, Gardephe found that "the Court cannot say to a 'legal certainty' that the amount in controversy is less than $5,000,000," and denied Citibank's motion to dismiss. He granted the dismissal on all other counts brought by the plaintiffs, including conversion, breach of fiduciary duty, unjust enrichment, negligence, and breach of contract.

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