Greenberg, Trager & Herbst, LLP v. HSBC Bank USA, 17 N.Y.3d 565

GTH, a New York construction-litigation law firm, deposited a Citibank check for $197,750 into its HSBC trust account on Sept 21, 2007, with retainer and wiring instructions to Northlink; funds were to be held as a retainer.
HSBC provisionally credited $197,750 under the funds-availability rule and forwarded the check to FRBP for presentment, routing via MICR routing number that indicated Citibank, Las Vegas; an IRD was generated by Item Processing North.
Item Processing North rejected the IRD as unrecognized routing number; the IRD was marked 'sent wrong,' and HSBC repaired the routing number by applying a partial routing number and re-presented the check to FRBS.
Citibank returned the check as 'sent wrong' within its midnight deadline; HSBC later learned the check was dishonored as counterfeit on Oct 2, 2007 and charged back GTH's account after notifying them.
GTH sued HSBC and Citibank for conversion, negligence, and negligent misrepresentation; the trial and appellate courts granted summary judgments for banks, holding no breach of duty owed to GTH.
The Court of Appeals affirmed, holding that under UCC 4-301 to 4-212 and the Expedited Funds Availability Act, the banks owed no duties to GTH beyond those codified in UCC provisions, and that no fiduciary or estoppel-based claims could prevail.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Payor bank to noncustomer depositor duties	GTH asserts Citibank owed a duty under UCC 4-301/4-302 to detect counterfeit and inform the depositor.	Citibank owed only UCC-defined duties; no general duty to noncustomers; duties limited to paying, returning, or dishonoring by midnight deadline.	Citibank owed no duty beyond UCC timelines; summary judgment affirmed.
Depositary/collecting bank ordinary-care standard	HSBC failed to exercise ordinary care by treating 'sent wrong' as nondishonor and not informing GTH or charging back timely.	HSBC acted in ordinary care by treating 'administrative return' and repairing routing number as industry practice; no breach.	HSBC acted with ordinary care; summary judgment affirmed.
Negligent misrepresentation by HSBC	HSBC’s representation that funds had 'cleared' created a special relationship justifying reliance.	Bank-depositor relationship is arm's-length; no fiduciary duty; waiver clause precludes claims; misrepresentation insufficiently tied to special relationship.	No viable negligent misrepresentation claim; lien on fiduciary duty rejected.
Equitable estoppel against banks	Banks’ actions led GTH to rely and wire funds; estoppel should allocate loss to banks or the responsible party.	UCC risk allocation to the depositor; no breach or misrepresentation warrants estoppel.	Equitable estoppel rejected; UCC allocation controls.

Putnam Rolling Ladder Co. v Manufacturers Hanover Trust Co., 74 N.Y.2d 340 (1989) (duty of ordinary care under UCC context; relied on in addressing bank duties)
Monreal v Fleet Bank, 95 N.Y.2d 204 (2000) (customer-focused duties under UCC; distinguished in payor-bank noncustomer context)
Hanna v First Natl. Bank of Rochester, 87 N.Y.2d 107 (1995) (risk of loss generally remains with depositor until final settlement)
Call v Ellenville Natl. Bank, 5 A.D.3d 521 (2004) (usage of trade and ambiguous terms like 'cleared' in banking context)
Manufacturers Hanover Trust Co. v Yanakas, 7 F.3d 310 (2d Cir. 1993) (factors for ordinary-care duty in bank-related negligence; industry context)
River Glen Assoc. v Merrill Lynch Credit Corp., 295 A.D.2d 274 (1st Dept 2002) (negligent misrepresentation and fiduciary considerations in banking context)
FAB Indus. v BNY Fin. Corp., 252 A.D.2d 367 (1st Dept 1998) (industry practices and banker conduct standards)
Kirschner v KPMG LLP, 15 N.Y.3d 446 (2010) (agent/principal duties and disclosure obligations in fiduciary-like relationships)