275 Clinton Ave. Hous. Corp. v Approved Oil Co. of Brooklyn, Inc.

[*1] 275 Clinton Ave. Hous. Corp. v Approved Oil Co. of Brooklyn, Inc. 2017 NY Slip Op 50398(U) Decided on February 23, 2017 Civil Court Of The City Of New York, Kings County Montelione, 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 This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on February 23, 2017
Civil Court of the City of New York, Kings County

275 Clinton Avenue Housing Corp., Plaintiff,

against

Approved Oil Co. of Brooklyn, Inc., d/b/a Approved Oil Co., Defendant.



11951/16



For Plaintiff:

Silverstein & Saperstein

by Adam Silverstein, Esq.

185 Wythe Avenue, Suite A

Brooklyn, NY 11249

(212-233-4995)

For Defendant:

Dealy, Silberstein & Braverman, LLP

by Marc D. Braverman, Esq.

225 Broadway, Suite 1405

New York, NY 10007

(212-385-0066)
Richard J. Montelione, J.

Defendant's motion to dismiss plaintiff's complaint pursuant to CPLR 3211 (a)(7) came before the court on December 22, 2016. In addition to the oral arguments of counsel, the court has considered the following listed submissions of the parties, pursuant to CPLR 2219(a):

Title Number

Defendant's Notice of Motion dated December 5, 2016; Attorney Affirmation of Marc Braverman, Esq., affirmed on December 5, 2016; Exhibits A-C; and Memorandum of Law in Support of Motion dated December 5, 2016 1

Plaintiff's Attorney Affirmation in Opposition of Adam Silverstein, Esq., affirmed on November 10, 2016; and Exhibit A 2

Defendant's Memorandum of Law in Reply dated December 21, 2016 3

Plaintiff, a cooperative corporation, by its counsel, alleges and seeks in three causes of action: that defendant, a heating oil supplier, was unjustly enriched by overcharging plaintiff by approximately $9,820.00 for heating oil; that defendant committed fraud by "taking advantage of lax oversight by management" and thus plaintiff was damaged by way of the overcharge; and that defendant engaged in deceptive practices in violation of General Business Law § 349.[FN1]

In determining a motion to dismiss pursuant to CPLR 3211(a)(7), "the sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion for dismissal will fail" (Guggenheimer v. Ginzburg, 43 NY2d 268, 275, 401 N.Y.S.2d 182, 372 N.E.2d 17 [1997]; see Pacific Carlton Dev. Corp. v. 752 Pac., LLC, 62 AD3d 677, 679, 878 N.Y.S.2d 421 [App. Div. 2nd Dept 2009]). "[T]he complaint must be liberally construed in the light most favorable to the plaintiff and all allegations must be accepted as true" (Pacific Carlton Dev. Corp. v. 752 Pac., LLC, 62 AD3d at 679, 878 N.Y.S.2d 421 [App. Div. 2nd Dept 2009]; see Leon v. Martinez, 84 NY2d 83, 87, 614 N.Y.S.2d 972, 638 N.E.2d 511 [1994]). Affidavits may be received, and the court may freely consider them for the limited purpose of remedying any defects in the complaint (see Leon v. Martinez, 84 NY2d at 88, 614 N.Y.S.2d 972, 638 N.E.2d 511 [1994]; Fitzgerald v. Federal Signal Corp., 63 AD3d 994, 995, 883 N.Y.S.2d 67 [App Div 2nd Dept 2009]).

Defendant moves to dismiss plaintiff's first cause of action for unjust enrichment and advances two arguments in support of dismissal. Defendant argues, inter alia, that plaintiff fails to establish such a claim because an allegation that "simply because its prices were higher than that of its competitors," does not give rise to a claim for unjust enrichment. Further, defendant argues that the substance of plaintiff's complaint for unjust enrichment implies a claim under General Business Law § 396-r, which concerns alleged price gouging, is likewise without a basis in law or in fact.

"The elements of a cause of action to recover for unjust enrichment are '(1) the defendant was enriched, (2) at the plaintiff's expense, and (3) that it is against equity and good conscience to permit the defendant to retain what is sought to be recovered'" (GFRE, Inc. v. U.S. Bank, N.A., 130 AD3d 569, 570, 13 N.Y.S.3d 452, quoting Mobarak v. Mowad, 117 AD3d 998, 1001, 986 N.Y.S.2d 539). "The essence of such a cause of action is that one party is in possession of money or property that rightly belongs to another" (Hogan Willig, PLLC v. Kahn, 145 AD3d 1619, 44 N.Y.S.3d 321 [App. Div. 2016], quoting Hayward Baker, Inc. v. C.O. Falter Constr. Corp., 104 AD3d 1253, 960 N.Y.S.2d 764). In the instant case, even when construing plaintiff's complaint liberally, the court finds that plaintiff did not state a cause of action against defendant for unjust enrichment. To find otherwise could mean that every paid invoice, made without an objection, for a fuel delivery provided at the request of a cooperative organization and/or management agency, who are sophisticated parties, may result in a claim for unjust enrichment because a lower price for oil exists somewhere in the market. A "showing that the plaintiff's [*2]actions [in this case, managerial oversight] have benefitted the defendant will not suffice to establish a cause of action for unjust enrichment" (see Kingston Oil Supply Corp. v. Smith, 101 AD3d 1569, 957 N.Y.S.2d 771 [App. Div. 2012]; Mandarin Trading Ltd. v. Wildenstein, 16 NY3d at 182, 919 N.Y.S.2d 465, 944 N.E.2d 1104 [2011]; Sperry v. Crompton Corp., 8 NY3d 204, 215—216, 831 N.Y.S.2d 760, 863 N.E.2d 1012 [2007]).

As to any potential claim of price gouging under General Business Law 396-r, the same can only be brought by the Attorney General. See GBL § 396-r; Americana Petroleum Corp. v. Northville Industries Corp., 200 AD2d 646, 648 (2d Dept 1994). Thus, plaintiff does not have standing to assert this cause of action. The court also notes that plaintiff referenced a series of correspondences between the parties in support of its claim and the same was annexed without an affidavit of personal knowledge. New York courts have consistently held that "a bare affirmation of . . . [an] attorney who demonstrated no personal knowledge . . . is without evidentiary value and thus unavailing." Zuckerman v City of New York, 49 NY2d 557, 563 (1980).

Regarding a cause of action in fraud, "(t)he elements of a cause of action sounding in fraud are a material misrepresentation of an existing fact, made with knowledge of the falsity, an intent to induce reliance thereon, justifiable reliance upon the misrepresentation, [4] and damages" (Introna v Huntington Learning Ctrs., Inc., 78 AD3d 896, 898, 911 NYS2d 442 [2010]; Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 910 NE2d 976, 883 NYS2d 147 [2009]). Upon review, the court finds that the complaint fails to provide the specificity needed to allege fraud and therefore no cause of action based on fraud is stated. Plaintiff's counsel states that "[a]s anyone familiar with building operations would ascertain, scrutiny of a particular bill will only occur (if ever) when the budget is shown to the cooperative Board, which is precisely how Defendants were caught" however, not only is this conclusory statement insufficient as a predicate for an action but upon reviewing the entire complaint, plaintiff fails to plead a material misrepresentation of a fact. Parenthetically, it is not alleged that the heating oil delivered was not at a price previously agreed upon. Plaintiff's counsel artfully states that "defendant intentionally failed to quote the price of its deliveries" but concedes that oil deliveries and payments are made without managerial oversight by plaintiff. Ultimately, plaintiff fails to meet the elements of a cause of action for fraud.

Lastly, plaintiff's third cause of action alleges that defendant purportedly engages in unlawful deceptive acts or practices in the conduct of defendant's business in violation of New York General Business Law § 349. To state a viable claim under General Business Law § 349, the alleged acts, if permitted to continue, must have a "broad impact on consumers at large." Thompson v. Parkchester Apts Co., 271 AD2d 311, 311 (App. Div. 1st Dept 2000); see also Plaza Penthouse LLP v. CPS 1 Realty LP, 24 Misc 3d 1238(A), 899 N.Y.S.2d 62 (Sup. Ct. 2009). "Private contract disputes, unique to the parties ... [do] not fall within the ambit of the statute" (Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 NY2d at 25, 623 N.Y.S.2d 529, 647 N.E.2d 741 [1999]; see New York Univ. v. Continental Ins. Co., 87 NY2d at 320, 639 N.Y.S.2d 283, 662 N.E.2d 763 [1995]). "The 'single shot transaction' (Genesco Entertainment, Div. of Lymutt Indus., Inc. v. Koch, 593 F. Supp. at 752 [S.D.NY 1984]), which is 'tailored to meet the purchaser's wishes and requirements' (New York Univ. v. Continental Ins. Co., 87 NY2d at 321, 639 N.Y.S.2d 283, 662 N.E.2d 763 [1995]), does not, without more, constitute consumer-oriented conduct for the purposes of this statute (internal citations omitted)." N. State Autobahn, Inc. v. Progressive Ins. Grp. Co., 102 AD3d 5, 953 N.Y.S.2d 96 [*3](App. Div. 2nd Dept 2012). As further detailed in N. State Autobahn, Inc. v. Progressive Ins. Grp. Co., supra, conduct that involved "an extensive marketing scheme" (Gaidon v. Guardian Life Ins. Co. of Am., 94 NY2d at 344, 704 N.Y.S.2d 177, 725 N.E.2d 598 [1999]), the "multi-media dissemination of information to the public" (Karlin v. IVF Am., 93 NY2d at 293, 690 N.Y.S.2d 495, 712 N.E.2d 662 [1999]), or where it constituted a standard or routine practice that was "consumer-oriented in the sense that [it] potentially affect[ed] similarly situated consumers" (Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 NY2d at 27, 623 N.Y.S.2d 529, 647 N.E.2d 741; see Wilner v. Allstate Ins. Co., 71 AD3d 155, 164, 893 N.Y.S.2d 208 [App. Div. 2nd Dept 2010]) have been held to satisfy the statutory requirement. In other words, "[the] defendant's acts or practices must have a broad impact on consumers at large" (New York Univ. v. Continental Ins. Co., 87 NY2d at 320, 639 N.Y.S.2d 283, 662 N.E.2d 763; see Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, 85 NY2d at 25, 623 N.Y.S.2d 529, 647 N.E.2d 741 [1995]; see also N. State Autobahn, Inc. v. Progressive Ins. Grp. Co., 102 AD3d 5, 953 N.Y.S.2d 96 [App. Div. 2nd Dept 2012]).

As noted previously, plaintiff's opposition is solely the affirmation of its attorney and as such, plaintiff's attorney's statements are without any probative value. Zuckerman v. City of New York, 49 NY2d 557, 563 (1980). Notwithstanding, as a motion made pursuant to CPLR § 3211 requires this court to accept as true the allegations of the complaint (Guggenheimer v. Ginzburg, 43 NY2d 268, 275 [1977]), the court finds that General Business Law § 349 does not apply here, as in the case herein, plaintiff's allegation that defendant delivered heating oil to plaintiff's premises on multiple occasions at plaintiff's request and that due to plaintiff's lack of oversight, defendant submitted invoices with overcharges, is akin to a series of private transactions between the parties rather than a sale of goods to the general public. Furthermore, unlike the disparate bargaining power between the parties in Oswego, plaintiff employed a management company that presumably oversees the routines of heating oil delivery and payment of invoices.

The court also compares the elements of an account stated to the case herein. As articulated by the Court in Envtl. Appraisers & Builders, LLC v. Imhof, 143 AD3d 756, 40 N.Y.S.3d 132 (App. Div. 2nd Dept 2016):

'An account stated is an agreement between parties to an account based upon prior transactions between them with respect to the correctness of the account items and balance due' (American Express Centurion Bank v. Gabay, 94 AD3d 795, 795, 941 N.Y.S.2d 863, quoting Fleetwood Agency, Inc. v. Verde Elec. Corp., 85 AD3d 850, 851, 925 N.Y.S.2d 576). 'An agreement may be implied where a defendant retains bills without objecting to them within a reasonable period of time, or makes partial payment on the account' (American Express Centurion Bank v. Gabay, 94 AD3d. at 795, 941 N.Y.S.2d 863, quoting American Express Centurion Bank v. Cutler, 81 AD3d 761, 762, 916 N.Y.S.2d 622).

Here, unlike the passive situation in an account stated which creates liability where the party receives a bill and does not contest it, plaintiff actively made multiple payments. The equities may or may not favor the plaintiff, but the law provides no remedy in the dispute between the parties.

Therefore, based on the foregoing, defendant's motion to dismiss is granted and plaintiff's complaint is dismissed. This constitutes the Decision and Order of the court.

Dated: February 23, 2017

Richard J. Montelione, A.J.S.C. Footnotes

Footnote 1: Plaintiff cites "General Business Law § 347 (deceptive acts and practices)" in its complaint, however, § 347 outlines criminal prosecution by the Attorney General of a violation of the GBL. Both parties discuss this cause of action to mean § 349 of the General Business Law, which discusses deceptive acts and practices.