Schlessinger v. Valspar Corp.
2012 U.S. App. LEXIS 14089
| 2d Cir. | 2012Background
- Plaintiffs Schlessinger and Pianko purchased furniture and Guardsman maintenance plans via Fortunoff; plans include a store-closure refund provision.
- Fortunoff later filed for bankruptcy; store closed and Fortunoff stopped selling Guardsman plans.
- Pianko's furniture claimed damaged; Valspar denied the claim citing the store-closure provision.
- Schlessinger did not pursue a claim; Pianko asserted breach of contract and §349 claims; no private §395-a action was contemplated.
- Plaintiffs allege the store-closure provision violates New York General Business Law § 395-a and seek relief; district court dismissed.
- Appellants appeal; court certifies NY Court of Appeals questions due to novel state-law issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the store-closure provision can be voided as against public policy under §395-a | Schlessinger/ Pianko seek excision of provision to allow remainder of contract to be enforceable. | Valpar argues no private right of action and public policy does not justify severing provision. | Court certifies NY Court of Appeals; no ruling on severability here. |
| Whether §349 claims may proceed based on alleged deception related to §395-a | Plaintiffs contend deceptive practice by including and enforcing the cursed provision. | Conboy/Broder preclude §349 claims that merely recast regulatory violations; stay requires certification. | Court certifies NY Court of Appeals; no ruling on §349 viability here. |
Key Cases Cited
- Benjamin v. Koeppel, 650 N.E.2d 829 (N.Y. 1995) (illegality under regulation may be severed if not voiding entire contract)
- Sheehy v. Big Flats Cmty. Day, Inc., 541 N.E.2d 18 (N.Y. 1989) (implied private right of action factors for regulatory statutes)
- Conboy v. AT&T Corp., 241 F.3d 242 (2d Cir. 2001) (private §349 actions cannot cloak a regulatory violation as deceptive practice)
- Llanos v. Shell Oil Co., 866 N.Y.S.2d 309 (N.Y. App. Div. 2d Dep’t 2008) (statutory remedies presumptively cumulative with §349; private actions may lie)
- Rhodes v. Herz, 920 N.Y.S.2d 11 (N.Y. App. Div. 1st Dep’t 2011) (an implied private right of action analysis considered in licensing context)