The court consolidates motion sequence numbers 004, 005 and 006 for disposition.

In this action, plaintiff, People of the State of New York by Eliot Spitzer, Attorney General (the "Attorney General"), claims that H&R Block, Inc. ("Block, Inc."), H&R Block Services, Inc.^[FN1], H&R Block Tax Services, Inc., ("Tax Services"), H&R Block Enterprises, Inc. ("Enterprises"), H&R Block Eastern Enterprises, Inc. ("Eastern Enterprises"), H&R Block Texas Enterprises, L.P. ("Texas Enterprises") and H&R Block Financial Advisors ("HRBFA") breached Section 349(d) of the General Business Law ("GBL") and Section 63(12) of the Executive Law by engaging in fraudulent and deceptive practices in connection with marketing an Express IRA ("XIRA").

In motion 004, defendants Block, Inc., H&R Block Services, Inc., Tax Services, Enterprises and Texas Enterprises move pursuant to CPLR Section 3211 to dismiss the second amended complaint ("the complaint") in its entirety on the grounds, inter alia, that the court lacks personal jurisdiction over them and that the complaint fails to allege any wrongdoing by Tax Services, Enterprises and Texas Enterprises. In motions 005 and 006, Eastern and HRBFA move pursuant to CPLR 3211 to dismiss the complaint for failure to state a cause of action as against them.

BACKGROUND [*2]

Briefly stated, the complaint alleges that in 2001 defendant Block, Inc., a Missouri holding company and the nation's largest tax preparation company, began cross-selling an individual retirement account, the XIRA, through its wholly owned subsidiary H&R Block, Services, Inc. and that company's seventeen subsidiaries (collectively "Services"), to customers seeking tax preparation services. The complaint states that Services markets and distributes the XIRA as agent for HRBFA, a Michigan corporation, and that Block, Inc. has opened more than 600,000 XIRA accounts in the last five years. The XIRA has only one investment option a New York money market account provided by Reserve Fund, a New York Company.^[FN2] The XIRA typically pays interest at less than the rate of inflation.

The complaint alleges that Services gives consumers an introductory brochure describing the XIRA, and this brochure states that it is "a better way to save" and "you earn great rates on the money you deposit." But, the complaint alleges that neither Services nor HRBFA disclose that the fees they charge in connection with the typical XIRA account exceed the earned interest and result in account losses for the consumer who invests in this product. These fees include: (1) A $15 set-up fee; (2) a $10 annual maintenance fee; (3) a $15 re-contribution fee; and (4) a $25 account termination fee. The complaint alleges that the median XIRA account with a balance of $323 earns about $3.00 of interest per year.

The complaint states that the XIRA fees have exceeded interest earned for 85% of XIRA customers and that, in addition, neither Services nor HRBFA inform the consumer of the potential tax liabilities he or she will incur for early withdrawal of the XIRA funds. Moreover, the complaint alleges that a XIRA calculator, that Services's tax professionals use when discussing the product with consumers, affirmatively misleads clients into believing that a $300 one-time investment, earning interest at 2% per year, will grow to $366 in 10 years. In reality, however, considering just the $10 annual account maintenance fee, that $300 investment in the XIRA will shrink to $256 in 10 years. The complaint also alleges that neither Services nor HRBFA tells the consumer that, if he or she opens a XIRA, the tax return that Block prepares for that consumer will be more complex (typically a change from form 1040EZ to 1040A) and that Block will charge the consumer a higher fee for the more complex return.

The complaint states causes of action against all the defendants for violation of GBL Section 349(d), violation of Executive Law Section 63(12), common law fraud and breach of fiduciary duty.

PROCEDURAL HISTORY

By motion dated May 31, 2006, Block, Inc. and HRBFA, at that time the only two defendants in this matter, filed motions to dismiss the first amended complaint on the grounds, inter alia, that this court did not have personal jurisdiction over Block, Inc. and that the complaint failed to allege HRBFA's wrongdoing. By decision dated November 19, 2006 (Neumeier Aff., Ex. B), the court granted the motions with leave to replead, "if plaintiff can show: (1) that Block, Inc. is present in New York through a subsidiary and (2) conduct specifically attributable to HRBFA." Defendants' argument that plaintiff has violated CPLR [*3]1003 by naming additional defendants without permission of the court is without merit because in the November 19, 2006 decision the court implicitly gave plaintiff permission to name additional parties, if necessary.

DISCUSSION

Motion 004

Block, Inc., Services, Tax Services, Enterprises, and Texas Enterprises argue that dismissal is warranted because plaintiff does not have personal jurisdiction over them. Tax Services, Enterprises and Texas Enterprises also contend that the complaint does not allege any misconduct on their part, and they also claim that the Attorney General cannot bring claims on behalf of non-New York consumers.

A. THE COURT LACKS PERSONAL JURISDICTION OVER BLOCK, INC.

CPLR Sections 301 and 302(a), New York's long arm statute, govern a New York court's jurisdiction over non-resident defendants. Under these rules, the plaintiff must demonstrate that the non-resident defendant has minimum contacts with New York and that the court's assertion of jurisdiction over the defendant comports with the notions of fair play and substantial justice. (International Shoe Co. v Washington, 326 U.S. 310, 316 [1945]; Southern Indus. of Clover, Ltd. v Tex-Cellence, Inc., 2005 WL 818400, at 2-3, 5 [Sup. Ct. NY County 2005]).

CPLR Section 301 permits a court to assert personal jurisdiction over a defendant who is present in New York on a continuous and systematic basis. (Landoil Res. Corp. v Alexander & Alexander Serv. Inc., 77 NY2d 28 [1990]). Jurisdiction pursuant to CPLR Section 302(a) exists when the causes of action a plaintiff alleges arise out of or relate to the nonresident defendant's contacts with the forum state. (Lancaster v Colonial Freight Line, Inc., 177 AD2d 152 [1st Dept 1992]).

It is undisputed that Block, Inc. is a Missouri holding company that does not directly conduct business in New York and that Block, Inc. has no physical presence in New York and has no employees or registered agent for service of process in this state. Block, Inc. provides no goods or services in the state of New York and does not derive any direct revenue from goods consumed or services rendered in New York. Accordingly, Block, Inc. is not present in this state for the purposes of jurisdiction under CPLR 301.

However, the complaint alleges that Block, Inc. does business in New York through its subsidiaries Services and HRBFA. While it is true that Block, Inc. is the parent of direct and indirect subsidiaries providing tax and investment services in New York, "the mere ownership by a parent company of a subsidiary that is subject to personal jurisdiction is insufficient to establish jurisdiction over the parent." (Moreau v. RPM, Inc., 20 AD3d 456, 457 [2d Dept 2005]; Porter v LBS Indus., Inc., 192 AD2d 205 [4th Dept 1993]). Thus, in order to establish jurisdiction under the parent-subsidiary theory, the Attorney General must plead facts to demonstrate: (1) that H&R Block Services, Inc. and/or its subsidiaries and/or HRBFA is subject to personal jurisdiction in New York and (2) that Block, Inc. exerts such pervasive control over those entities that they are "mere" departments of Block, Inc. (Delagi v Volkswagenwork AG of Wolfsburg, 29 NY2d 426 [1972]). A subsidiary will be considered a "mere department" if the parent company's control is so pervasive that the separation between the two entities is more formal than real. When making that determination, a court will consider the subsidiary's financial dependence on the parent, the parent's interference in the assignment of executive personnel, failure to observe corporate formalities and control by the parent of the subsidiary's [*4]day-to-day operations. (Volkswagon A.G. v Beech Aircraft Corp., 751 F.2d 117,120 [2d Cir. 1984]).

1. Services

Services is a compilation of eighteen corporate entities. It is undisputed that one of those entities, Eastern Enterprises, is subject to the jurisdiction of the courts of New York. Moreover, Tax Services, another of H&R Block Services Inc.'s subsidiaries, is registered to do business in New York and is therefore subject to this court's jurisdiction as it is well settled that a foreign corporation that registers under the New York Business Corporation Law ("BCL") and establishes the Secretary of State as its agent for service of process under BCL Section 304 has consented to personal jurisdiction in the State of New York. (Augsbury Corporation v Petrokey Corporation, 97 AD2d 173, 176 [3rd Dept 1983] ["the privilege of doing business in New York is accompanied by an automatic basis for personal jurisdiction"]; Speed v. Pelican Resort, N.V., 1992 WL 147646 [S.D.NY] [applying New York law]; Polansky v Gelrod, 20 AD3d 663, 665 [3d Dept 2005]; Advance Realty Assoc. v Krupp, 636 F.Supp. 316 [S.D.NY 1986] [registration pursuant to BCL 304 confers jurisdiction, regardless of the actual volume of business done there]; Siegel, New York Practice, Section 2:44). Both of these entities are wholly owned subsidiaries of H&R Block Services, Inc. that in turn is a wholly owned subsidiary of Block, Inc. However, plaintiff has failed to plead facts to demonstrate that Tax Services and/or Eastern are mere departments or agents of H&R Block Services, Inc. so as to make H&R Block Services, Inc. amenable to this court's jurisdiction. (Porter supra, at 212, ["[A] finding of agency for jurisdictional purposes will not be inferred from the mere existence of a parent-subsidiary relationship."]).

In the complaint, the plaintiff does not allege, or even suggest, that H&R Block Services, Inc. exercises such pervasive control over its New York subsidiaries that they are mere departments of the parent. The only "fact" that plaintiff asserts to make this connection appears in plaintiff's Memorandum in Opposition at p. 17 where it alleges that Eastern Enterprises is financially dependent on H&R Block Services, Inc. because Eastern Enterprises is limited to an issue of $30,000 in stock. This allegation, that does not appear in the complaint, is insufficient to establish H&R Block Services, Inc.'s pervasive dominance of Eastern Enterprises.

Accordingly, plaintiff cannot base jurisdiction over H&R Block Services, Inc. on its parent-subsidiary relationship with Tax Services and Eastern Enterprises. Moreover, plaintiff cannot base jurisdiction over Block, Inc. on its parent-subsidiary relationship with H&R Block Services, Inc. because H&R Block Services, Inc. is not itself subject to this court's jurisdiction. In addition, jurisdiction over Block, Inc. cannot be based on Block, Inc.'s indirect relationship with the New York subsidiaries because plaintiff does not present facts to demonstrate that Block, Inc. directly exerts pervasive control over Eastern Enterprises and Tax Services.

2. HRBFA

It is undisputed that HRBFA is subject to the jurisdiction of the courts of this state. However, the complaint does not allege that HRBFA is a "mere department" of Block, Inc. or that HRBFA is acting as Block, Inc.'s agent in this state. The complaint does not allege facts to demonstrate that Block, Inc. exerted pervasive control over HRBFA.

3. Conspiracy

Moreover, allegations in the complaint do not support plaintiff's argument that Block, [*5]Inc. is engaged in a purported conspiracy with its subsidiaries. The assertion of conspiracy, without more, is insufficient to establish jurisdiction under New York's long arm statute. (Lehigh Valley Indus., Inc. v Birenbaum, 527 F.2d 87 [2d Cir. 1975]). To support the exercise of long arm jurisdiction, plaintiff must make a prima facie factual showing of a conspiracy to commit a tort in New York and allege sufficient facts that would allow the court to conclude that Block, Inc. was a member of that conspiracy. (Cleft of the Rock Found. v Wilson, 992 F. Supp. 574 [E.D.NY 1998]). As discussed below, the complaint fails to allege fraud against each of the defendants with the required particularity. (CPLR 3016[b]). Accordingly, because plaintiff has failed to adequately plead fraud against each of the defendants, it cannot base jurisdiction on conspiracy to commit fraud. (See, e.g. DeRaffele v. 210-220-230 Owners Corp., 33 AD3d 752 [2d Dept 2006]).

Motions 004 and 006

B. THE COMPLAINT FAILS TO ALLEGE SPECIFIC MISCONDUCT BY H&R BLOCK SERVICES, INC., TAX SERVICES, ENTERPRISES, EASTERN ENTERPRISES OR TEXAS ENTERPRISES

CPLR Section 3016(b) states that "[w]here a cause of action or defense is based upon fraud, misrepresentation, mistake, willful default, breach of trust or undue influence, the circumstances constituting the wrong shall be stated in detail." Because the underlying facts of the complaint here are based on fraud, CPLR 3016(b) applies to each of the asserted causes of action. (People v Katz, 84 AD2d 381 [1st Dept 1982]; Browning Ave. Realty Corp. v Rubin, 207 AD2d 263 [1st Dept. 1994]). Moreover, where the complaint alleges fraud and misrepresentation against each of several defendants, plaintiff must allege facts that identify each defendant's alleged connection to the alleged fraud. (See, e.g., New York Transp., Inc. v Naples Transp., Inc., 116 F. Supp 2d 382, 386 [E.D.NY 2000]; Drexel Burnham Lambert Group v Vigilant Ins. Co., 157 Misc 2d 198 [Sup. Ct. NY County 1993], citing Aetna Ins. Co. v Merchants Mut. Ins. Co., 84 AD2d 736 [1st Dept 1981]).

In Henry v City of New York (2007 WL 1062519 at *5 [E.D.NY 2007]), the court stated:

A complaint sounding in fraud may not rely on sweeping

references to acts by all or some of the defendants because

each named defendant is entitled to be apprised of the facts

surrounding the alleged fraud. A plaintiff must demonstrate

that each defendant had a specific intent to defraud either by

devising, participating in, or aiding and abetting the scheme.

(Internal citations and quotations omitted)

The complaint does not allege any specific action or omission attributable to H&R Block Services, Inc., Tax Services, Enterprises, Eastern Enterprises or Texas Enterprises that would support a finding of liability against any of those entities on any of the four causes of action. The complaint merely states that Enterprises, Eastern Enterprises and Tax Services are subsidiaries of H&R Block Services, Inc., that are incorporated under Missouri law, and that those entities conduct extensive business in New York and distribute New York products, including the XIRA. As to Texas Enterprises, the complaint states that it is also a subsidiary of Services and is a limited partnership organized in Texas and that Services marketed and sold the XIRA in New York either directly or through its subsidiaries. [*6]

All of the allegations in the complaint that relate to the four causes of action name H&R Block, Services and HRBFA as the actors. Paragraph one of the complaint defines services as H&R Block Services, Inc. and its subsidiaries. Plaintiff does not dispute that H&R Block Services, Inc. consists of seventeen (17) separate subsidiaries, and, thus, the allegations in the complaint that allege Services engaged in fraud and misrepresentation appear to implicate H&R Block Services, Inc. and all seventeen subsidiaries without identifying the allegedly wrongful conduct of each of the eighteen actors. Plaintiff's failure to set forth specific factual allegations regarding the purportedly wrongful conduct by H&R Block Services, Inc., Tax Services, Enterprises, Eastern Enterprises and Texas Enterprises is fatal to plaintiff's claims against those entities. (See, e.g., Davantzis v Painewebber, Inc., 2001 WL 1423519 [Sup. Ct., Nassau County 2001] [Generally, on a motion to dismiss, the facts pleaded are presumed true in order to determine whether the allegations fit within any cognizable legal claim. However, when the complaint is devoid of any factual allegation of the underlying conduct for which plaintiff seeks to hold defendant liable, plaintiff is not entitled to the benefit of favorable inferences usually accorded.]; see also New York Trans, Inc., 116 F. Supp. 2d 382, 386 [E.D.NY 2000]).

In addition, as to the fiduciary duty claim against Eastern Enterprises (Motion 006), plaintiff must plead: (1) existence of a fiduciary duty; (2) breach of the duty; (3) that the breach was a substantial factor in causing plaintiff's injury; and (4) damages as a result of the breach. (New York Pattern Jury Instructions, Civil, Breach of Fiduciary Duty, [2002]). Here, the complaint is devoid of any allegations that Eastern Enterprises provided advice to consumers in a fiduciary capacity or held or insured consumers' funds. The failure to plead breach of trust against Eastern Enterprises with particularity is fatal to plaintiff's claim against that entity. (See CPLR 3016[b]; Black Car and Livery Ins. Inc. v H&W Brokerage, Inc., 28 AD3d 595 [2d Dept 2006]).

Motion 005

The complaint alleges that HRBFA, a Michigan corporation, is a wholly owned subsidiary of Block, Inc. that does extensive business in New York. The complaint further alleges that HRBFA contracted with Reserve Funds to distribute and market the XIRA and to act in a fiduciary capacity with respect to the XIRA client-investors and that, in turn, HRBFA delegated the responsibility for marketing the XIRA and determining the suitability of the product to Services. Plaintiff contends that HRBFA acted in concert with Block, Inc. and Services to develop the XIRA and that HRBFA abused the relationship of trust it has with its customers by steering customers into an unsuitable retirement vehicle, misrepresenting the XIRA and failing to disclose fees. Plaintiff also contends that HRBFA failed to monitor Services by allowing Services to market the XIRA in a fraudulent way and that HRBFA failed to make disclosures of its own to XIRA customers. Plaintiff further contends that HRBFA (1) does not give XIRA customers a written document describing all of the fees before the customer decides to open the XIRA account; (2) fails to inform clients that opening the XIRA increases the complexity of their tax returns; and (3) fails to inform customers that, because of the fees, their accounts will erode over time unless they make substantial continuing contributions.

1. Executive Law Section 63(12) Claim

Under Executive Law Section 63(12), the Attorney General may bring an action for restitution, damages and injunctive relief in response to "repeated fraudulent or illegal acts" or "persistent fraud." Section "63(12) . . . broadly constru[es] the definition of fraud so as to [*7]include acts characterized as dishonest or misleading and eliminating the necessity for proof of an intent to defraud." (State of New York v Apple Health and Sports Clubs, Ltd., 206 AD2d 266, 267 [1st Dept. 1994]).

"Under Section 63(12) the test for fraud is whether the targeted act has the capacity or tendency to deceive, or creates an atmosphere conducive to fraud." (State of New York v General Electric, Co., 302 AD2d 314 [1st Dept 2003]).

Here, the complaint adequately states a violation of Executive Law 63(12) against HRBFA by alleging that HRBFA failed to disclose excessive fees and affirmatively misrepresented that the customer could earn great rates and the XIRA was a better way to save. The only fee disclosed in writing prior to the customer's decision to open an XIRA is the $25 dollar closing fee. These statements are not mere "puffery" because, in this instance, the targeted consumer would not reasonably know that these statements were an exaggeration. (See Sutton Associates v Lexis Nexis, 196 Misc 2d 30, 33 [Sup. Ct. NY County 2003]; In re Attorney General v Bull Inv. Group, 46 AD2d 25 [3d Dept. 1974]).

2. GBL Section 349 Claim

Moreover, the complaint adequately states a GBL Section 349 claim against HRBFA. GBL Section 349 provides that "[d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful." A deceptive practice is "misleading in a material way" and must be "likely to mislead a reasonable consumer acting reasonably under the circumstances." (State of New York v General Electric Co., 302 AD2d at 315). GBL Section 349 does not require proof of scienter or "intent to defraud or mislead." (Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20, 26 [1995]). Statements are actionable under Section 349, even if literally true, if there is "evident capacity of the representations at issue to mislead even reasonable consumers acting reasonably under the circumstances." (State of New York v General Electric, Co., 302 AD2d at 315).

In this case, HRBFA's failure to disclose fees, the possible negative rate of return and the XIRA's unsuitability as a short-term savings vehicle are actionable under Section 349 that imposes liability when "the business alone possesses material information that is relevant to the consumer and fails to provide this information." (Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, 85 NY2d at 26).

3. Common Law Fraud

Under New York law, the elements of common law fraud are: (1) a false representation (2) of a material fact with (3) intent to defraud and (4) reasonable reliance on the representation (5) causing damage to the plaintiff. (Stuart Silver Associates v Baco Dev. Corp., 245 AD2d 96, 98 [1st Dept 1997]).

Because the complaint, here, fails to allege that HRBFA acted with intent to defraud XIRA customers, the court is constrained to dismiss the cause of action for common law fraud against HRBFA. (New York University v Continental Ins. Co., 87 NY2d 308 [1995]; New York Medical College v Histogenetics, 6 AD3d 410 [2d Dept. 2004]).

4. Breach of Fiduciary Duty

To state a claim for breach of fiduciary duty, plaintiff must plead: (1) the existence of a fiduciary duty between the parties; (2) breach of that duty; and (3) damages suffered as a result of the breach. [*8]

Plaintiff has adequately pled a breach of fiduciary duty claim against HRBFA by stating that, in its contract with Reserve Funds, HRBFA agreed to "act in a fiduciary capacity with respect to [XIRA] client-investors" and it agreed to be "solely responsible for determining suitability" of the investment. (Complnt. Para. 40). Plaintiff also alleges that HRBFA affirmatively misled XIRA customers by failing to disclose the true cost of the XIRA (Complnt. Para 65) and that the vast majority of XIRA investors lost money (Complnt. Para 45).

Defendants' reliance on Carnegie v H.R. Block (269 AD2d 145 [1st Dept. 2000]) is unavailing. Carnegie involved Refund Anticipation Loans ("RALs"), another Block product, but in that case plaintiff did not allege that the transaction occurred in the context of any broader relationship of trust and confidence. Here, HRBFA expressly agreed, in its contract with Reserve Funds, to act in a fiduciary capacity with respect to XIRA client-investors.

Moreover, defendants' argument that the Attorney General does not have parens patriae power to bring the fiduciary duty claim is without merit. To bring a parens patriae action to sue in the public interest, the Attorney General must: (1) identify a quasi-sovereign interest in the public's well being; (2) that touches a "substantial segment" of the population; and (3) articulate "an interest apart from the interests of the particular private parties . . . ." (Snapp & Son, Inc. v Puerto Rico, 458 U.S.. 592, 607 [1982]). Here, recovery of damages for aggrieved consumers is but one aspect of the case. The Attorney General's focus is on obtaining wide-ranging injunctive relief designed to vindicate the State's quasi-sovereign interest in securing an honest marketplace for all consumers. That the Attorney General seeks recovery on behalf of an identifiable group does not require this Court to ignore the primary purpose of the fiduciary duty claim and to characterize it as one brought solely for the benefit of a few private parties. (See State of New York v General Motors Corp., 547 F. Supp. 703, 706-707 [S.D.NY 1982])

Out of State Consumers

The Attorney General has clear authority to seek to restrain illegal business practice by a local business in relation to both in-state and out-of-state residents. Neither GBL Section 349 nor Executive Law 63(12) impose geographical restrictions upon the consumer complaints that properly serve as a basis for an enforcement action by the Attorney General. As one court has already specifically noted, "the plain meaning of the language ... indicates that the Legislature intended that all consumers be protected from illegal practices regardless of their residency and that the Attorney-General of this State is mandated to take necessary action ... to protect all of these consumers." (People by Vacco v Lipshitz, 174 Misc 2d 571, 580 [Sup. Ct. NY County 1997], citing State of New York v Camera Warehouse, Inc., 130 Misc 2d 498 [Sup Ct. Dutchess County]; see also State of New York v Telehublink Corp., 301 AD2d 1006 [3d Dept 2003])

Defendants' reliance on Goshen v Mutual Life Ins. Co. (98 NY2d 314 [2002]) for the proposition that the attorney general has no authority to recover on behalf of non-New York residents is without merit. In Goshen, the Court of Appeals specifically stated that its holding did not preclude claims involving deceptions leading to New York transactions by out-of-state claimants. The court explained:

[W]e note that our General Business Law analysis does not

turn on the residency of the parties. As both the text of

the statute and the history suggest, the intent is to protect

consumers in their transactions that take place in New

York State. It was not intended . . . to function as a per [*9]

se bar to out of state plaintiffs' claims of deceptive acts

leading to transactions within the state.

Here, the complaint alleges that HRBFA's misrepresentations and omissions led both in state and out-of state customers to invest in the XIRA New York money market account. Thus, unlike Goshen, where both the deception and the transaction occurred out-of-state, in this case, the XIRA customer completed the transaction by depositing his or her funds in a New York money market account. (See also State of New York v Telehublink, 301 AD2d at 1009-10; Sterling Nat'l Bank v Kings Manor Estates, LLC, 2005 NY Misc. LEXIS 2191 [NY City Civ. Ct. 2005] [Goshen only requires that "(s)ome part of the underlying transaction" occur in New York for Section 349 to apply.])

Accordingly, it is

ORDERED that motions 004 and 006 that seek to dismiss the complaint as against H&R Block, Inc., H&R Block Services, Inc., H&R Block Tax Services, Inc., H&R Block Enterprises, Inc., H&R Block Eastern Enterprises Inc., H&R Block Texas Enterprises, L.P., are granted; and it is further

ORDERED that Motion 005 that seeks to dismiss the complaint against H&R Block Financial Advisers is granted to the extent that the third cause of action for common law fraud is dismissed and the motion is otherwise denied. Defendant is directed to serve an answer within 20 days of service of a copy of this Order with Notice of Entry.

Dated: July __, 2007

ENTER:

________________________________

J.S.C.