Canestaro v Raymour & Flanigan Furniture Co. (2013 NY Slip Op 52270(U))

Canestaro v Raymour & Flanigan Furniture Co.

2013 NY Slip Op 52270(U) [42 Misc 3d 1210(A)]

Decided on May 20, 2013

Supreme Court, Erie County

Walker, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

Plaintiffs, in their individual capacities, and on behalf of all those similarly situated, filed this action against defendants, Raymour & Flanigan Furniture Company and its predecessor or parent company, Raymours Furniture Company Inc. (collectively "Raymour"), alleging three causes of action stemming from Raymour's alleged violations of New York General Business Law ("GBL") §§ 349 and 350, et seq. Raymour operates over 80 retail showrooms, 8 clearance centers, 17 customer care centers, and 2 distribution centers serving customers in New York, New Jersey, Connecticut, Delaware, Massachusetts, Pennsylvania and Rhode Island. Raymour maintains 46 such locations in New York State alone.

Raymour advertises and otherwise offers to the general public a financing arrangement whereby a customer can obtain "0% financing" for a period of time (the "0% Promotion") by purchasing furniture using a Raymour credit card, typically issued by Wells Fargo Financial National Bank ("Wells Fargo"). Plaintiffs allege that, without disclosure and contrary to the impression created by the 0% Promotion, Raymour maintains a company-wide policy of charging customers availing themselves of the 0% Promotion (the "0% Interest Customers") higher prices than it charges customers who utilize all other payment methods (e.g., cash, VISA, MasterCard, etc.).

In support of its motion, Raymour characterizes Plaintiffs' claims as tantamount to the imposition of "an unprecedented duty of disclosure", that would "effectively outlaw retail price negotiation and fix prices at a retailer's bottom line" (Raymour's Reply Memorandum of Law, dated April 15, 2013, at p. 2).

Pursuant to CPLR § 3211(a)(7), a party may move for judgment dismissing the claims against it where the pleading fails to state a cause of action. When considering such a motion, the facts alleged in the complaint must be accepted as true [Leon v. Martinez, 84 NY2d 83, 87 (1994)]. "The strict pleading requirements for causes of action sounding in common-law [*2]fraud (see CPLR 3016) do not apply to causes of action sounding in violation of General Business Law §349" [Joannou v. Blue Ridge Insurance Co., 289 AD2d 531, 532 (2d Dep't. 2001)]. Thus, plaintiffs meet their pleading burden if the "[s]tatements in [their] pleading [are] sufficiently particular to give the court and parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved and the material elements of each cause of action or defense" [CPLR §3013].

"In determining a CPLR 3211(a)(7) motion, the court must accord the complaint a liberal construction, assume its factual allegations to be true, draw every possible favorable inference therefrom and determine only whether any cognizable cause of action has been alleged" [Bergler v. Bergler, 288 AD2d 880 (4th Dep't 2001)]. This is true even where defendants submit evidence on a motion to dismiss [see, e.g., Enzinna v. D'Youville College, 84 AD3d 1744, 1745 (4th Dep't 2011); Board of Managers of Marke Gardens Condominium v. 240/242 Franklin Avenue., LLC, 71 AD3d 935 (2d Dep't 2010)]. In short, "CPLR 3211 allows plaintiff to submit affidavits, but it does not oblige him to do so on penalty of dismissal" [Rovello v. Orofino Realty Co., Inc., 40 NY2d 633, 635 (1976)].

Plaintiff Canestaro admits that he negotiated the price he paid for his home furnishings with Raymour representatives (Affidavit of Christopher Canestaro, sworn to on September 8, 2012, at ¶5). Plaintiffs allege that "[Raymour] mischaracterizes plaintiffs' claim as being based on price." (Plaintiff's Memorandum of Law, dated March 27, 2013, at p. 9). However, the amended complaint and Plaintiffs' opposition papers are replete with allegations that Raymour charges "higher prices" to 0% Interest Customers. The amended complaint contains at least six (6) references to "higher prices;" Plaintiffs' opposition submissions contain at least nine (9) such references; and their own attorney states that this case is about Raymour's "company-wide policy of charging [0% Interest Customers] higher prices than they charge customers who utilize all other payment methods (Affirmation of Thomas S. Lane, Esq., dated

March 27, 2013, at ¶3) (emphasis added).

The amended complaint contains general allegations concerning an alleged "company-wide policy and practice." Such generalized allegations fail to state a cause of action under the GBL [Ashkenazi as Trustee of the Zablidowsky Life Ins. Trust v. AXA Equitable Life Ins. Co., No. 115034/2007, 2008 NY Misc. LEXIS 7810, at **3, 12-13 (Sup. Ct., NY Cty., Feb. 8, 2008)]. Indeed, New York courts routinely dismiss GBL claims where the allegations are insufficiently specific to establish a deceptive practice [see, e.g., Golub v. Tanenbaum-Harbor Co., 88 AD3d 622, 623 (1st Dep't 2011) (finding plaintiff's "conclusory allegations [in the complaint] insufficient to save the claim" under GBL §349); Kamhi v. Tay, 244 AD2d 266, 266-67 (1st Dep't 1997) (dismissing, inter alia, deceptive advertising claim under GBL §349); Ho Jo Contracting Co. v. Schultz Ford, Inc., 148 AD2d 582, 584 (2d Dep't 1989) ("we agree with the defendant that the vague allegations in the complaint with regard to [GBL] §349 fail to state a claim upon which relief can be granted")].

Plaintiffs cannot avoid their threshold obligation to plead a viable claim for themselves, by purporting to represent a putative "class" of unnamed individuals [see, e.g., Estruch v. Volkswagenwerk, 97 AD2d 978, 978 (4th Dep't 1983) ("[i]nasmuch as the individual [*3]claims for damages under subdivision (h) of section 349 and subdivision 3 of Section 350-d of the General Business Law have been found to be without merit plaintiffs may not, as representatives, maintain a class action based on those sections"); Abramovitz v. Paragon Sporting Goods Co., 202 AD2d 206, 208 (1st Dep't 1994) ("the dismissal of the plaintiff's individual causes of action under General Business Law §§349 and 350 . . . as devoid of merit also mandated dismissal of the class action claims herein as moot"); see also, Ovitz v. Bloomberg L.P., 18 NY3d 753, 759 (2012) (putative class action alleging violation of GBL§349 properly dismissed on a pre-answer motion to dismiss under CPLR 3211 ... where individual plaintiff failed to state a viable cause of action on his own behalf)].

Fundamentally, Plaintiffs fail to identify any false advertisement. While challenging the price they paid for their furniture, Plaintiffs do not allege that they paid more for their furniture than any advertised price. The advertisement quoted in the amended complaint does not promise a specific price [Amended Complaint, at ¶8]. In fact, it is silent as to price [Id.].

It is axiomatic that "[w]ithout advertisements related to the issue at hand . . . Plaintiffs have failed to state a claim for false advertising under Gen. Bus. L. §350" [Anunziatta v. Orkin Exterminating Co., 180 F. Supp. 2d 353, 362-63 (N.D.NY 2001)].

In Andrew Strishak & Assocs., P.C. v. Hewlett Packard Co., 300 AD2d 608 (2d Dep't 2002), the court dismissed a false advertising claim under GBL §350 on similar grounds. In that case, the plaintiffs alleged that Hewlett Packard "represented to consumers that ink cartridges were included with the purchase of printers, and concealed the fact that the cartridges were only one-half filled with ink" [Id. At 609]. The Second Department affirmed dismissal of this claim under CPLR 3211(a)(7) for failure to state a cause of action, because "[t]he boxes containing the printers indicated only that ink cartridges were included with the purchase . . . . [T]he defendant did not provide any description with respect to the amount of ink contained in the cartridge" [Id. at 609]. "Accordingly, the causes of action for violations of General Business Law sections 349 and 350 were properly dismissed since (sic) the complaint failed to allege an act or practice that was misleading in a material respect" [Id. at 610].

The billing statement that Plaintiff Canestaro submitted in opposition to the motion establishes that he received the interest-free financing which Raymour advertised (Canestaro Aff., at Ex. C). Again, Plaintiffs' claims pertain to price, not interest paid, and the advertisement which is the subject of the amended complaint is simply not related to price. The GBL does not prohibit negotiations pertaining to the price of goods. Price negotiation "is part of a time-honored haggling or bargaining process, and is not in itself unlawful" [Goldberg v. Manhattan Ford Lincoln-Mercury, Inc., 129 Misc 2d 123, 126 (Sup. Ct., NY Cty., 1985)].

It is equally fundamental that the GBL does not empower courts to regulate the prices that businesses charge to their customers: "courts are not empowered to set policy on prices" [Super Glue Corp. v. Avis Rent A Car Sys., Inc., 159 AD2d 68, 71 (2d Dep't 1990)]. Thus, even charging "excessive prices" is not itself actionable under GBL §349 [Id. at 71]. "Ordinarily, of course, the prices charged by private business to customers generally are not subject to governmental supervision under our political and economic structure, except in the case of specifically regulated industries, or upon the enactment of a broad structure of price controls in time of emergency" [Hertz Corp. v. Attorney General of the State of New York, 136 [*4]Misc 2d 420, 424 (Sup. Ct., NY Cty. 1987)].

It follows that a merchant need not "disclose" to each potential buyer with whom it may negotiate that the buyer might be able to negotiate a deeper discount under some other payment scenario. The GBL simply does not require a merchant to disclose to a customer that he or she could pay less under a different arrangement [see, e.g., Gershon v. Hertz Corp., 215 AD2d 202 (1st Dep't 1995) ("[d]efendant's alleged practice of not disclosing to prospective customers alternative rental arrangements at lower rates than that the customer had inquired about is not a deceptive practice under General Business Law §349")].

The amended complaint fails to allege "deceptive trade practices", as recognized under the General Business Law. Apart from false advertising which, as discussed above, is not present here, the typical "deceptive trade practices" which have been held to violate the General Business Law include pyramid schemes, misrepresentations as to the origin, nature of quality of a product, false testimonials, and bait-and-switch operations [see Goldberg, 129 Misc 2d at 125-26].

This cause of action is based on the same allegations as the General Business Law claims, and thus fails for the same reasons. The Court of Appeals has made it clear that a party cannot save a nonviable claim under the General Business Law by renaming it an "unjust enrichment" claim [Corsello v. Verizon NY, Inc., 18 NY3d 777, 790-91 (2012) (dismissing unjust enrichment claim as duplicative of, inter alia, plaintiff's defective GBL §349 claim)]. Indeed, "unjust enrichment is not a catchall cause of action to be used when others fail" [Id. at 790; see also, Sperry v. Crompton Corp., 8 NY3d 204, 216 (2007) (unjust enrichment claims cannot be used to circumvent statutory limitations of General Business Law)].

Moreover, under general principles governing such claims, Plaintiffs cannot state a claim for unjust enrichment, because they received what they paid for, i.e., their home furnishings [see, e.g., Sokoloff v. Town Sports Int'l, Inc., 6 AD3d 185, 186 (1st Dep't 2004); Castillo v. Tyson, 268 AD2d 336, 337 (1st Dep't 2000); and In re United Cigar Stores Co. Of America, 70 F.2d 263, 264 (2d Cir. 1934)].

It is also a well-established principle of New York law that "[t]he existence of a valid and enforceable written contract governing a particular subject matter ordinarily precludes recovery in quasi-contract for events arising out of the same subject matter" [Clark-Fitzpatrick, Inc. v. Long Island R. Co., 70 NY2d 382, 388 (1987)]. Thus, "[r]ecovery for unjust enrichment is barred by the existence of a valid and enforceable contract" [Genesee/Wyoming YMCA v. Bovis Lend Lease LMB, Inc., 98 AD3d 1242, 1246 (4th Dep't 2012); see also, [Daley v. Erie, 71 AD3d 1398, 1400 (4th Dep't 2010)].

Plaintiffs seek a permanent injunction predicated, and wholly dependent upon the above-referenced claims. This cause of action lacks independent allegations, and instead merely seeks equitable relief. Because this claim is based on the underlying claims pertaining to alleged violations of the GBL, and unjust enrichment - which, as set forth above, are subject to dismissal - and lacks its own independent basis, this cause of action cannot stand alone and must be dismissed. "[T]he rule is well settled that there is no injunctive cause of action under New York law ... . Instead, plaintiffs must allege some wrongful conduct on the part of the defendant for [*5]which their requested injunction is an appropriate remedy" [Rochester Linoleum and Carpet Ctr., Inc. d/b/a Rochester Flooring Res. v. Springer, No. 2005/11545, slip op. At 10-11 (Sup. Ct., Monroe Cty., Jan. 30, 2006), quoting The O Zon Inc. v. Charles, 272 F. Supp. 2d 307, 312 (S.D.NY 2003); see also, Held, 2009 N.Y, Misc. LEXIS 2955, at ***13-14 n.2].

This constitutes the Decision and Order of this Court. Submission of an order by the Parties is not necessary. The mailing of a copy of this Decision and Order by this Court shall not constitute notice of entry.

Dated: May 20, 2013