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B.S.L. One Owners Corp. v. Key International Manufacturing, Inc.

Appellate Division of the Supreme Court of New York, Second Department
Mar 18, 1996
640 N.Y.S.2d 135 (N.Y. App. Div. 1996)

Summary

declining to dismiss GBL § 349 claim alleging misrepresentation in connection with sale of securities in cooperative condominium

Summary of this case from Prickett v. N.Y. Life Ins. Co.

Opinion

March 18, 1996

Appeal from the Supreme Court, Richmond County (Sangiorgio, J.).


Ordered that the order is modified, on the law, by (1) deleting the provision thereof which granted the defendants' application for leave to serve a motion to dismiss the amended complaint and substituting therefor a provision granting that branch of the defendants' application which was for leave to serve a motion to dismiss the third cause of action in the amended complaint and denying the remaining branches of the application, and (2) deleting the provision thereof which granted the defendants' motion to dismiss the amended complaint and substituting therefor a provision denying the motion; as so modified, the order is affirmed insofar as appealed from, with costs to the plaintiff.

The Supreme Court erred when it granted in full the defendants' application for leave to file a motion pursuant to CPLR 3211 to dismiss the amended complaint. The original complaint asserted causes of action to recover damages for fraud, breach of fiduciary duty, and Martin Act (General Business Law art 23-A) violations. The defendants moved to dismiss the complaint in its entirety pursuant to CPLR 3211 (a). The Supreme Court's order, entered October 20, 1993, granted the defendants' motion "as to the cause of action asserted under the Martin Act". Thereafter, the plaintiff served an amended complaint which was essentially the same as the original complaint except that it substituted a cause of action to recover damages for deceptive practices in place of the Martin Act cause of action. Because the defendants' previous challenge to the fraud and breach of fiduciary duty causes of action was denied, the defendants were barred by the "single motion rule" from challenging these causes of action in a second motion pursuant to CPLR 3211 (a) (see, Teller v Bill Hayes, Ltd., 213 A.D.2d 141, 144; Schwartzman v Weintraub, 56 A.D.2d 517; Ross v Epstein, 26 A.D.2d 658). Therefore, the Supreme Court improperly granted those branches of the defendants' application which were for leave to serve a motion to dismiss the first two causes of action. Accordingly, the fraud and breach of fiduciary duty causes of action are reinstated.

The amended complaint stated a valid cause of action for deceptive practices pursuant to General Business Law §§ 349 and 350. General Business Law § 349 (h) provides that "any person who has been injured [by deceptive acts or practices in the conduct of any business] may bring an action in his [or her] own name to enjoin such unlawful act or practice". False advertising in the conduct of any business is also actionable (see, General Business Law § 350) and permits a private right of action (see, General Business Law § 350-d). Moreover, the deception must relate to a consumer-oriented transaction (see, Teller v Bill Hayes, Ltd., supra, at 145). Contrary to the defendants' contention, the instant sale of securities in a cooperative corporation to the residential shareholders is a consumer-oriented transaction within the meaning of the statute and the plaintiff is a proper party to bring such an action (see, Breakwaters Townhomes Assn. v Breakwaters of Buffalo, 207 A.D.2d 963; Board of Mgrs. v Bayberry Greens Assocs., 174 A.D.2d 595). Further, the amended complaint alleged that the defendants engaged in deceptive practices in the advertisement and sale of the cooperative shares and that the shareholders were injured thereby (see, Board of Mgrs. v Bayberry Greens Assocs., supra, at 596; see also, Oswego Laborers' Local 214 Pension Fund v Marine Midland Bank, 85 N.Y.2d 20, 25). Accordingly, the third cause of action is also reinstated. Bracken, J.P., Sullivan, Santucci and Krausman, JJ., concur.


Summaries of

B.S.L. One Owners Corp. v. Key International Manufacturing, Inc.

Appellate Division of the Supreme Court of New York, Second Department
Mar 18, 1996
640 N.Y.S.2d 135 (N.Y. App. Div. 1996)

declining to dismiss GBL § 349 claim alleging misrepresentation in connection with sale of securities in cooperative condominium

Summary of this case from Prickett v. N.Y. Life Ins. Co.
Case details for

B.S.L. One Owners Corp. v. Key International Manufacturing, Inc.

Case Details

Full title:B.S.L. ONE OWNERS CORP., Appellant, v. KEY INTERNATIONAL MANUFACTURING,…

Court:Appellate Division of the Supreme Court of New York, Second Department

Date published: Mar 18, 1996

Citations

640 N.Y.S.2d 135 (N.Y. App. Div. 1996)
640 N.Y.S.2d 135

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