Freefall Express, Inc. v Hudson Riv. Park Trust |
2007 NY Slip Op 51702(U) [16 Misc 3d 1135(A)] |
Decided on September 7, 2007 |
Supreme Court, New York County |
Ling-Cohan, 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This opinion is uncorrected and will not be published in the printed Official Reports. |
Freefall Express, Inc., Plaintiff,
against Hudson River Park Trust, Air Pegasus Heliport, Inc., Air Pegasus of New York, Inc., and Liberty Helicopters, Inc. (NY), Defendants. |
Before this Court is defendant Liberty Helicopters, Inc.'s (NY) (Liberty) motion for an order, pursuant to CPLR § 3211 (a) (7), dismissing the complaint against it. Liberty is a helicopter sightseeing and charter service which pays for its use of West 30th Street Heliport (30th St. Heliport), which is located between West 29th and 30th Streets in the Borough of Manhattan. Defendant Hudson River Park Trust (Hudson Trust) is a public corporation created by the Hudson River Park Act for the purpose of operating the Hudson River Park which runs along the west side of Manhattan, and includes the area in which the 30th St. Heliport is situated. Plaintiff Freefall Express, Inc. (Freefall), like Liberty, is in the aviation industry and Freefall pays for its use of the 30th St. Heliport.
By summons and complaint dated August 15, 2006, Freefall commenced this action for declaratory, injunctive and monetary relief, based upon allegations involving deceptive practices associated with defendants' operation and use of the 30th St. Heliport. Prior motion practice resulted in a denial of a motion by plaintiff for a preliminary injunction, as well as a summary [*2]dismissal of the complaint against Hudson Trust [FN1].
The underlying facts as they pertain to this motion are that, by written agreement, dated March 25, 1996, the New York State Department of Transportation (DOT) granted to defendant Air Pegasus Heliport, Inc. (Air Pegasus), the right to use, occupy, and operate the 30th St. Heliport. According to the complaint, Hudson Trust is DOT's successor-in-interest to the March 25, 1996 Agreement, and is responsible for oversight of the heliport. Part of Hudson Trust's responsibilities is the collection of monthly payments from Air Pegusus, which are calculated in part on a percentage of Air Pegusus's monthly gross receipts. The complaint also alleges that non-party Alvin S. Trenk (Trenk) is the chairman and CEO of both defendants Air Pegasus and Air Pegasus of New York Inc. (APNY)[FN2], and that Trenk used his professional positions to ensure that Liberty obtain and maintain the exclusive right to conduct its sightseeing operations from the 30th St. Heliport at preferential rates and discounts.
The complaint in essence states only one claim against Liberty, which is set forth in the second cause of action; that Liberty, Air Pegasus, and APNY, have violated General Business Law (GBL) § 349, through their participation in certain agreements (identified by plaintiff as the Heliport Agreement, the 5 Percent Agreement, the Sightseeing Agreement, and the Modification Agreement), which were intended to, and effectively did, reduce the revenue/gross receipts of AP. Specifically, Freefall alleges that these defendants acted together to: (1) reduce the monthly permit fee payable to the Hudson Trust; (2) deceive the Hudson Trust, the users of the heliport and the general public of New York State; and (3) as a result of Liberty, Air Pegusus, and APNY's machinations, the other users of the 30th St. Heliport, including plaintiff, have been caused to pay excessive fees for their use of the heliport to cover for the improperly reduced gross receipts of Air Pegusus. Plaintiff contends that, although Hudson Trust was deceived in this manner, it has, inexplicably, failed to take steps to remedy the situation.
Liberty seeks an order dismissing the complaint as against it on the ground that it fails to state a cause of action under GBL § 349. It is well settled that, on a motion to dismiss pursuant to CPLR 3211 (a) (7) for the failure to state a cause of action, the court must accept the allegations contained in the complaint as true and accord the plaintiff the benefit of every favorable inference (Leon v Martinez, 84 NY2d 83, 87-88 [1994]).
"New York's Consumer Protection Act - - General Business Law article 22-Awas enacted to provide consumers with a means of redress for injuries caused by unlawfully deceptive acts and practices" (Goshen v Mutual Life Ins. Co. of NY, 98 NY2d 314, 323 [2002][citations omitted]). GBL § 349 provides, at subsection (a): "[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." When the Legislature enacted the statute, it granted broad powers to the State Attorney General to enforce the statutes' consumer protection measures (see Mem of Governor Rockefeller, 1970 NY Legis Ann). Thereafter, in 1980, the Legislature sought to [*3]broaden the effectiveness of the statute by enacting subsection (h), which grants private citizens a right of action for deceptive trade practices. GBL § 349 (h) states:[i]n addition to the right of action granted to the attorney general pursuant to this section, any person who has been injured by reason of any violation of this section may bring an action in his own name to enjoin such unlawful act or practice, an action to recover his actual damages or fifty dollars, whichever is greater, or both such actions.
To be successful under GBL § 349, a plaintiff must allege and "prove three elements: first, that the challenged act or practice was consumer-oriented; second, that it was misleading in a material way; and third, that the plaintiff suffered injury as a result of the deceptive act" (Stutman v Chemical Bank, N.A., 95 NY2d 24, 29 [2000] [citations omitted]; see also Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, N.A., 85 NY2d 20, 25 [1995]).
With respect to the first element, a party
claiming the benefit of the section must, at the threshold, charge conduct that is consumer oriented. The conduct need not be repetitive or recurring but defendants' acts or practices must have a broad impact on consumers at large; [p]rivate contract disputes unique to the parties would not fall within the ambit of the statute.
As has been observed:The typical violation contemplated by the statute involves an individual consumer who falls victim to misrepresentations made by a seller of consumer goods usually by way of false and misleading advertising. The consumer oriented nature of the statute is evidenced by the remedies it provides. Section 349 (h) provides parties with the opportunity to receive the greater of actual damages or $50. The New York cases where plaintiffs have recovered under section 349 (h) further reflect its consumer orientation since they uniformly involve transactions where the amount in controversy is small.
(Genesco Entertainment v Koch, 593 F Supp 743, 751-752 [US Dist Ct, SD NY 1984]). While the "consumer-oriented" prong of the statute does not preclude the application of such statute to disputes between businesses per se, it does severely limit it (Cruz v NYNEX Information Resources, 263 AD2d 285, 290 [1st Dept 2000]). Where the alleged deceptive practices occur between relatively sophisticated entities with equal bargaining power, such does not give rise to liability under GBL § 349 (Exxonmobil Inter-America, Inc. v Advanced Information Engineering Services, Inc., 328 F Supp 2d 443, 449 [SDNY 2004]). Further, large businesses are not the small-time individual consumers GBL § 349 was intended to protect (Genesco Entertainment v [*4]Koch, 593 F Supp 743).Thus, the mere fact that Freefall is a business is insufficient to defeat a GBL § 349 claim but, as a threshold matter, for Freefall to claim the benefit of section 349, it must charge conduct of the defendant that is consumer oriented (Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, N.A., 85 NY2d at 25).
A review of the complaint reveals a series of general legal conclusions and speculation, rather than concrete facts from which this court could infer an injury to consumers at large. Freefall's attempt to recite the elements of a consumer-oriented claim by merely asserting that other users of the heliport and the "general public of New York State" are deceived and that users of the heliport are charged excessive fees is both amorphous and conclusory. [Complaint, ¶61-64].Freefall has failed to demonstrate that defendant's acts or practices have a broader impact on consumers at large. Freefall's claimed losses, or any claimed losses of other heliport users, are not of the type GBL §349 seeks to remedy and do not fall under the definition of "those who purchase goods and services for personal, family or household use". (Sheth v New York Life Ins. Co., 273 AD2d 72, 73 [1st Dept 2000]; see also Cruz v NYNEX Information Resources, 263 AD2d 285, 289-90 [1st Dept 2000]). In fact, the Court of Appeals has made clear that "[p]rivate contract disputes, unique to the parties [such as the one involved here], would not fall within the ambit of the statute" (Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, 85 NY2d at 25). Although this Court accepts Freefall's allegations as true and accords them every favorable inference (Leon v Martinez, 84 NY2d at 87-88), the complaint does not contain factual allegations which support a contention/conclusion that the offensive acts or omissions are consumer-oriented within the meaning of the statute. Further, in addition to the complaint, Freefall's arguments focus on Freefall's business losses which it claims to be more than $25,000, rather than on any loss to the consumer at large. As Freefall seeks to cover damages in excess of $25,000, "this [is] not the modest type of transaction the statute was primarily intended to reach...[i]t is essentially a private contract dispute...which is unique to these parties, not conduct which affects the consuming public at large" (NYU v. Continental Ins. Co., 87 NY2d at 321 [internal quotations and citations omitted]).
As the first element is a threshold element, which Freefall has not made, this Court need not deal with the other elements in detail. With regard to the other two elements under the GBL
§ 349, "[a] prima facie case requires as well a showing that defendant is engaging in an act or practice that is deceptive or misleading in a material way and that plaintiff has been injured by reason thereof". (Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, N.A., 85 NY2d at 25-26 [citations omitted]). "Whether a representation or an omission, the deceptive practice must be likely to mislead a reasonable consumer acting reasonably under the circumstances" (Stutman v. Chemical Bank, 95 NY2d 24, 29 [2000][internal quotations and citations omitted]).
Similarly, Freefall's allegations do not adequately plead the second and third elements of a claim under GBL § 349. Absent from the complaint against Liberty is any reference to statements, acts, or omissions that purportedly deceived, or caused Freefall to be misled in a material way. As a result of plaintiff's failure to elucidate the nature of the offending statements, acts, or omissions, there can be no charge that plaintiff suffered injury as a result thereof; they are both a prerequisite for, and an integral part of, the third element.
Moreover, in opposition to the within motion to dismiss, plaintiff only submits an [*5]attorney affirmation, rather than an affidavit by someone with personal knowledge to remedy the pleading defects (see Rovello v Orofino Rlty. Co., Inc., 40 NY2d 633 [1976]). Thus, Freefall's failure to properly allege a violation of GBL § 349 mandates a dismissal of the claim.
Accordingly, it is
ORDERED that the motion to dismiss is granted and the complaint as against defendant Liberty Helicopters, Inc. (NY) is severed and dismissed; and it is further
ORDERED that the action in all other respects continues; and it is further
ORDERED that within 30 days of entry of this order, movant shall serve a copy upon all parties with notice of entry.
Dated:
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Hon. Doris Ling-Cohan, J.S.C. C:\htformat\f5170270.txt