Board of Managers of Continental Towers Condominium, Respondent, v. Crestmont Management Corporation et al., Defendants, and Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Appellant

Board of Managers of Continental Towers Condominium, Respondent, v Crestmont Management Corporation et al., Defendants, and Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Appellant. [MAJORITY] Order, Supreme Court, New York County (Irma Vidal Santaella, J.), entered July 16, 1991, which denied defendant-appellant’s motion to dismiss the complaint as against it for failure to state a cause of action, unanimously affirmed, with costs. In this action by plaintiff condominium to recover reserve funds allegedly misappropriated by its managing agent, defendant-appellant, a depositary of the funds, is alleged to have had knowledge of unauthorized transfers made by the managing agent from accounts it kept with defendant, or with a failure to make proper inquiry with respect thereto. We reject defendant’s contention that the complaint lacks sufficient factual allegations to support a claim against it. The transactions in question are specified, and whether defendant knew or should have known of the defalcations properly states causes of action under various theories (see, Matter of Knox, 64 NY2d 434, 438). Nor does plaintiff seek recovery directly under Administrative Code of the City of New York § 26-703. Reference to that section is made only for the purpose of establishing that the funds were to be used for a specific purpose. Concur — Rosenberger, J. P., Asch, Kassal and Rubin, JJ.