Elpidio Badillo et al., Respondents, v. Tower Insurance Company of New York, Appellant

Elpidio Badillo et al., Respondents, v Tower Insurance Company of New York, Appellant. [643 NYS2d 565] [MAJORITY] The IAS Court properly declined to dismiss the amended complaint for failure to state a cause of action, where plaintiffs, as secured creditors, sought to recover monetary damages for the alleged wrongful payment by defendant insurer of certain fire loss insurance proceeds to the named insured. The amended complaint, liberally construed (Morone v Morone, 50 NY2d 481, 484), states a viable cause of action for conversion, premised upon the receipt by defendant insurer of either actual notice (Rosario-Paolo, Inc. v C & M Pizza Rest., 84 NY2d 379) or constructive notice of plaintiffs’ perfected security interest in the insurance proceeds (UCC 9-306; First Natl. Bank v Merchant’s Mut. Ins. Co., 49 NY2d 725, revg on dissenting opn below 65 AD2d 59, 61-62; Sanchez v United States, 696 F2d 213; McGraw-Edison Credit Corp. v Allstate Ins. Co., 62 AD2d 872, 878). We have considered defendant’s remaining arguments and find them to be without merit. Concur—Milonas, J. P., Rosenberger, Wallach, Ross and Tom, JJ.