Bell v Gateway Energy Servs. Corp.

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Bell v Gateway Energy Servs. Corp. 2021 NY Slip Op 32405(U) February 26, 2021 Supreme Court, Rockland County Docket Number: 31168/2018 Judge: Sherri L. Eisenpress Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: 1] ROCKLAND COUNTY CLERK 02/26/2021 03:53 PM NYSCEF DOC. NO. 156 INDEX NO. 031168/2018 RECEIVED NYSCEF: 02/26/2021 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF ROCKLAND ----------------------------------------------------x DANIELLE BELL, individually and on behalf of others similarly situated, SECOND AMENDED DECISION & ORDER (Motion #12) Plaintiffs, -against- Index No.: 31168/2018 GATEWAY ENERGY SERVICES CORP., Defendant. ----------------------------------------------------X EISENPRESS, J. The following papers numbered 1-7 were read on this motion by Plaintiff Danielle Bell, for an Order granting Class Certification and appointing Plaintiff and her counsel as Class Representative and Class Counsel: NUMBERED PAPERS NOTICE OF MOTION/MEMORANDUM OF LAW IN SUPPORT/AFFIRMATION IN SUPPORT/EXHIBITS 1-19 MEMORANDUM OF LAW IN OPPOSITION/AFFIRMATION IN OPPOSITION/ EXHIBITS A-P MEMORANDUM OF LAW IN REPLY/AFFIRMATION IN REPLY/EXHIBITS 1-6 1-3 4-5 6-7 Upon the foregoing papers, these motions are determined as follows : Plaintiff Danielle Bell, a resident of New City, New York, commenced this putative class action by Summons and Verified Complaint dated March 1, 2018, alleging that defendant Gateway Energy Services Corporation ("Gateway"), of Montebello, New York, overcharged her and thousands of New York consumers for natural gas and/or electricity, in violation of General Business Law ("GBL") Section 349. Plaintiff seeks to certify the following class: All Gateway customers who were charged on a fixed rate plan at any time and were converted to a variable rate plan for natural gas and/or electricity services in New York from May of 2014 to 1 1 of 8 [*FILED: 2] ROCKLAND COUNTY CLERK 02/26/2021 03:53 PM NYSCEF DOC. NO. 156 INDEX NO. 031168/2018 RECEIVED NYSCEF: 02/26/2021 the present. 1 Plaintiff's claims, and those of the proposed class, arise from an alleged unlawful and deceptive misrepresentation made by Gateway Energy Services Corporation (''Gateway") regarding the competitiveness of its variable rate energy pricing plans made in the "Welcome Letter" and/or "Renewal Letter" provided by Gateway to its customers before they entered into a contract with Gateway. "CPLR article 9, which authorizes class action suits in New York, and sets forth the criteria to be considered in granting class action certification, is to be liberally construed. The determination to grant class action certification rests in the sound discretion of the Supreme Court, 'and any error should be resolved in favor of allowing the class action. [internal citations omitted]'" Kidd v Delta Funding Corp., 289 AD2d 203, 734 N.Y.S.2d 848 (2d Dept 2001) "The primary issue on a motion for class certification is whether the claims as set forth in the complaint can be efficiently and economically managed by the court on a classwide basis. The class representative has the burden of establishing the prerequisites of certification. [internal citations omitted]" Globe Surgical Supply v GEICO Ins. Co., 59 AD3d 129, 136-37, 871 N.Y.S.2d 263 (2d Dept 2008). CPLR Section 901(a) states: "One or more members of a class may sue or be sued as representative parties on behalf of all if: ( 1) t he class is so umer,ous thatjoinder of all members, whether otherwi1se required or perm itted, is impracticable; (2) t here are questions of law or fact commo n to the class which predominate over any questions affecting only indlvidual members~ (3) the cla ims or defenses of t he representat ive parties are typ i,cal of the claims or defenses of the class; ( 4) the representative pa1rties will fairly and adequately protect the inter,e sts oft ne dass; and (5) a class action is sup•e rior to ,o ther avai 'lab le methods for t he fair and efficient adjudication of the controversy." 1 Excluded from the Class are Defendant; any parent, subsidiary, or affiliate of Defendant; any entity in which any Defendant has or had a controlling interest, or which Defendant otherwise controls or controlled; and any officer, director, legal representative, predecessor, successor, or assignee of a Defendant. 2 2 of 8 [*FILED: 3] ROCKLAND COUNTY CLERK 02/26/2021 03:53 PM NYSCEF DOC. NO. 156 INDEX NO. 031168/2018 RECEIVED NYSCEF: 02/26/2021 These CPLR Sec. 901(a) criteria, which are commonly referred to a numerosity , commonal ity, typicality, adequacy of representa tion, and superiority , are to be "liberally construed" by the reviewing Court. Wilder v. May Dept. Stores Co., 23 A.D.3d 646, 649, 804 N.Y.S.2d 423 (2d Dept. 2005). Numerosi ty. Plaintiff contends that the class is so numerous that joinder of all members is impracticab le. According to Plaintiff, Gateway's records indicate that the proposed Class encompasses more than 8,000 gas and electricity accounts with service addresses in New York. Defendant Gateway disputes numerosity and argues that Ms. Bell has produced no evidence that the same letters were sent to anyone else in the putative class. Gateway argues that even if on reply Plaintiff shows evidence that others received the letters, she cannot show that all persons who received the letter were influenced by it. Upon reply, Plaintiff points out that defense counsel on August 6, 2019, produced spreadshee ts affixed with Bate stamps, which contained the entire charge history of all accounts meeting the putative class definition in the Verified Class Action Complaint dated March 1, 2018, and more specifically , those New York customers who enrolled with Gateway on a fixed rate and were later charged a variable rate because they failed to cancel or renew on or after May 23, 2014. Additionall y, Defendant produced a multitude of documents which al contain the same "competiti ve" representa tion. In the instant case, the Court finds that the numerosity requireme nt has been met with some 8,223 proposed class members. See Pruitt v. Rockefeller Center Properties, Inc., 167 A.D.2d 14, 21, 574 N.Y.S.2d 672 (1 st Dept. 1991)(acti on involving thousands of class members clearly meets the statute's numerosity requireme nt.) Commona lity. Plaintiff argues that the requireme nt of commonal ity is met here since there are at least two common questions that are determinat ive of every class member's claim. First, common to every class member's claim is whether Gateway represente d that its variable rate would be competitiv e and second is a determinat ion of the proper amount of damages, i.e. the difference between what Gateway charged or what customers would have 3 3 of 8 [*FILED: 4] ROCKLAND COUNTY CLERK 02/26/2021 03:53 PM NYSCEF DOC. NO. 156 INDEX NO. 031168/2018 RECEIVED NYSCEF: 02/26/2021 can paid had they been utility customer s. Plaintiff argues that the entire proposed class' claims be adjudicat ed using a common set of proof, including the Welcome and Renewal Letters based wit, upon the documen ts themselv es. Damages can be adjudicat ed using common proof, to Gateway 's business records as compared to publicly available date regarding utility rates. Defendan t contends that there is no common ality because Ms. Bell offers no method of determin ing the "net impressio n" of Gateway 's statemen ts on a class-wide basis. to all Gateway contends that Plaintiff must prove that the challenge d statemen ts were made 8,000 plus putative class members and she fails to show there is some common thread running the through the communi cations sent to all class members that would enable the jury to assess "net effect" of the statemen ts. Gateway further argues that there is no workable damages model, as comparis on to utility rates is not proper. To meet the standard of common ality, class members ' claims need only be substant ially similar, not identical in every aspect. Freeman v. Great Lakes Energy Partners, ality] LLC, 12 A.D.3d 1170, 1171, 785 N.Y.S.2d 640 (4 th Dept. 2004). "[I]ndeed , [the common , rule requires predomin ance, not identity or unanimit y, among class members ." Id. Moreover the mere presence of a question of individua l reliance does not preclude class action 517 certificat ion. Super Glue Corp v. Avis Rent A Car System, Inc., 132 A.D.2d 604, 607, N.Y.S.2d 764 (2d Dept. 1987) In the instant matter, the Court finds that Plaintiff has met the common ality each standard . Although some of the letters and terms and condition s may vary somewha t, contains the represen tation that Gateway 's rates would be competit ive, thus posing a common te question. Additiona lly, the Court finds that comparis on to the local utility rates is appropria t's given the fact that Orange and Rockland had approxim ately 80% of the market and Defendan that own employee , Sam Gifford, compared Gateway 's rates to the local utility, finding Gateway 's rates were 190% above the local utility. 4 4 of 8 [*FILED: 5] ROCKLAND COUNTY CLERK 02/26/2021 03:53 PM NYSCEF DOC. NO. 156 INDEX NO. 031168/2018 RECEIVED NYSCEF: 02/26/2021 Typical ity. Plaintiff argues that typicalit y is satisfied because all class membe rs were victims its variable rate, of the same miscond uct, i.e. Gatewa y's deceptiv e represe ntations regardin g would have paid and they suffered the same injury, i.e. paying a rate that was higher than they Addition ally, the had Gatewa y not misrepr esented that its variable rate would be compet itive. losures, which she Compla int contains allegatio ns of plan-wid e misrepr esentat ions and non-disc alleges, by definitio n, were not individu alized. In oppositi on, Defenda nt Gatewa y contend s that typicalit y is not present because rates would be Ms. Bell was not influenc ed or injured by Gatewa y's stateme nt that its variable that Ms. Bell is compet itive, since she never wanted variable rates. Defenda nt further argues as a class subject to unique rebuttal s and defenses that preclude her from serving on three prior represe ntative, includin g that she had easily navigate d the renewal process Gatewa y's action occasions; was aware variable rates could go up and down each month; and means Ms. Bell in sending a "no-stri ngs attache d" un-case d check and partially used gift card, has no standing . be To be typical, "it is not necessary that the claims of the named plaintiff Inc., 132 A.D.2d identica l to those of the class." Super Glue Corp v. Avis Rent A Car System . even if the class 604, 607, 517 N.Y.S.2d 764 (2d Dept. 1987). The requirem ent is satisfied class. Pruitt, 167 represe ntative cannot persona lly assert all the claims made on behalf of the parties arise A.D.2d at 22. Typicali ty is satisfied by establis hing that the claims represe ntative as the other class "out of the same course of conduct and are based on the same theories d 179 (1 st Dept. membe rs." Ackerm an v. Price Waterho use, 252 A.D.2d 179, 201, 683 N.Y.S.2 claims and the 1998). Moreover, the typicali ty requirem ent relates to the nature of the that plaintiff 's underly ing transac tion, not the amount or measur e of damage s, and the claim basis to deny damage s may differ from those of other membe rs of the class is not a proper er, 56 A.D.2d class certifica tion. Vickers v. Home Federal Sav. And Loan Ass'n of East Rochest 5 5 of 8 [*FILED: 6] ROCKLAND COUNTY CLERK 02/26/2021 03:53 PM NYSCEF DOC. NO. 156 INDEX NO. 031168/2018 RECEIVED NYSCEF: 02/26/2021 62, 65, 390 N.Y.S.2d 747 (4 th Dept. 1977). Here, whether or not Ms. Bell may have navigate d the renewal process better to be placed on than other proposed class membe rs, or whether she did not intentio nally seek out of the same the variable rate, does not negate typicalit y where Ms. Bell's claims arise be compet itive-as course of conduct - i.e. the represe ntation that Gatewa y's energy rates would are no unique other class member s. Moreover, contrary to Gatewa y's content ions, there to the summa ry defenses related to lack of standing . The Court made a finding with respect . The Court judgme nt motions that there exists a live controv ersy sufficien t to confer standing ent Corp v. noted that defend ant's reliance on a single 78 year old case, Tractor & Equipm that her retentio n Chain Belt Co., 50 F. Supp. 1001, 1004 (S.D.N.Y. 1942), for the proposit ion offer, is simply of a check for an unreaso nable period of time constitu tes acceptance of an had accepted misplac ed. In Tractor and Equipm ent Corp., the Court did not rule that plaintiff issue of fact the offer based upon retentio n of the check, but rather, that this raised a triable of the letter to be determi ned by the jury. In the instant matter, howeve r, a plain reading ngs attache d"accomp anying the check and gift cards- which stated that there were "no-stri ent offer being make clear that no settlem ent offer was being made. If there was no settlem nce of an offer, made, Plaintiff 's failure to cash the check could not constitu te an accepta facts. renderin g the Tractor and Equipm ent Corp. case inapplic able to the instant Adequa cy and Superio rity. The Court finds that Plaintiff and her counsel will which exists fairly and adequa tely protect the class, as there does not appear to be any conflicts appears to have between class represe ntatives and class membe rs; the represe ntative trated both familiar ity with the lawsuit and financial resources; and counsel has demons the class action compete nce and experien ce as class counsel. Addition ally, the Court finds that this controv ersy, is superio r to other availabl e method s for the fair and efficien t adjudica tion of al litigatio n. particul arly given the modest value of each individu al claim and the cost of individu concern ing class Addition ally, Plaintiff represe nts that she is unaware of any other litigatio n 6 6 of 8 [*FILED: 7] ROCKLAND COUNTY CLERK 02/26/2021 03:53 PM NYSCEF DOC. NO. 156 INDEX NO. 031168/2018 RECEIVED NYSCEF: 02/26/2021 members' claims. CPLR Sec. 902. Once the Court has determined the prerequisites set forth in CPLR Sec. 901 have been met, the Court must then consider the additional factors set forth in CPLR Sec. 902 . Among the matters which the court shall consider in determining whether the action may proceed as a class action are ( 1 )The interest of members of the class in individually controlling the prosecution or defense of separate actions; (2) The impracticability or inefficiency of prosecuting or defending separate actions; (3) The extent and nature of any litigation concerning the controversy already commenced by or against members of the class; ( 4) The desirability or undesirability of concentrating the litigation of the claim in the particular forum; (5) The difficulties likely to be encountered in the management of a class action ." CPLR §902. Here, the Court finds that these additional factors, called "feasibility considerations," favor certification in this case . There is no evidence that individual class members are seeking to control their own action, as it does not appear that there is other pending litigation which seeks to raise the same claims. Additionally, New York is the most desirable and suitable forum since the claims arise under New York law, the suit arises from Gateway's conduct in New York and all of the class members and accounts are, or were, maintained in New York. Additionally, the class action will conserve judicial resources and prevent inconsistent adjudications. Accordingly, it is hereby ORDERED that Plaintiff's Motion to Certify the Class is GRANTED in its entirety; and it is further ORDERED that the certified class will consist of: "All Gateway customers who were charged on a fixed rate plan at any time and were converted to a variable rate plan for 7 7 of 8 [*FILED: 8] ROCKLAND COUNTY CLERK 02/26/2021 03:53 PM NYSCEF DOC. NO. 156 INDEX NO. 031168/2018 RECEIVED NYSCEF: 02/26/2021 natural gas and/or electricity services in New York from may of 2014 to the present. 2"; and it is further ORDERED that Danielle Bell is appointed as Class Representative and Kevin Laukaitis and Jonathan Shub from the Shub Law Firm LLC, Keith Vernon of the law firm Timoney Knox LLP, and Troy M. Frederick and Beth A. Frederick from the Federick Law Group PLLC are appointed as Class counsel; and it is further ORDERED that the parties are directed to appear for a settlement conference via Microsoft Teams on April 7, 2021 at 11 :00 a.m. The Court shall provide the link for the conference the day prior. The foregoing constitutes the Decision and Order of this Court on Motion #10 . Dated : To : New City, New York February 26, 2021 .:t All Counsel via NYSCEF 2 Excluded form the Class are Defendant; any parent, subsidiary, or affiliate of Defendant; any entity in which any Defendant has or had a controlling interest, or which Defendant otherwise controls or controlled ; and any officer, director, legal representative, predecessor, successor, or assignee of a Defendant. 8 8 of 8

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