Schlessinger v. Valspar Corp.
817 F. Supp. 2d 100
E.D.N.Y2011Background
- Plaintiffs allege breach of contract and GBL § 349 claims stemming from Guardsman maintenance agreements sold with furniture from Fortunoff; Fortunoff later went bankrupt.
- The store closure provision promised refunds of the original purchase price if the Fortunoff location closed or stopped selling Guardsman or changed ownership after purchase.
- Plaintiffs submitted claims (e.g., Panko) after Fortunoff’s bankruptcy; claims were denied.
- Plaintiffs contend § 395-a bars the store closure provision as unenforceable and seeks reprocessing of denied claims and statutory damages.
- Defendant argues § 395-a creates no private right of action and that § 349 cannot be used to enforce § 395-a.
- Court grants motion to dismiss both breach of contract and § 349 claims as to § 395-a being non-private and as an improper end run around the statute.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 395-a creates a private right of action. | Plaintiffs rely on § 349 and contract to enforce provisions. | § 395-a has no private right of action and enforcement is via AG. | No private right of action under § 395-a. |
| Whether breach of contract claim survives without the store closure provision. | Store closure provision voided by § 395-a should invalidate the contract term. | Without a private right of action, § 395-a cannot void contract terms. | Breaches dismissed; § 395-a cannot be incorporated into contract via private action. |
| Whether § 349 claims can be maintained by alleging violation of a statute with no private right of action. | § 349 permits private action for deceptive practices. | Cannot use § 349 to enforce § 395-a lacking private action. | § 349 claim dismissed as impermissible end run around § 395-a. |
Key Cases Cited
- Ahmad v. Nassau Health Care Corp., 8 A.D.3d 512 (2d Dep’t 2004) (implied private right of action factors for statutory enforcement)
- City of New York v. Smokes-Spirits.Com, Inc., 12 N.Y.S.3d 616 (N.Y. App. Div. 1st Dept. 2009) (enforcement scheme considerations under private rights analysis)
- Goldman v. Simon Property Group, Inc., 58 A.D.3d 208 (2d Dep’t 2008) (private-right-of-action analysis for statute with no private remedy)
- Kerusa Co. LLC v. W10Z/515 Real Estate Ltd. Partnership, 12 N.Y.3d 236 (2009) (artful pleading and Martin Act-like context—no private right of action preempts common-law claims)
- Conboy v. AT&T Corp., 241 F.3d 242 (2d Cir. 2001) (private right to enforce state statute via § 349 not allowed when statute lacks private action)
- Broder v. Cablevision Systems Corp., 418 F.3d 187 (2d Cir. 2005) (§ 349 cannot compensate for lack of private action in related statutes)
- Llanos v. Shell Oil Co., 55 A.D.3d 796 (2d Dep’t 2008) (statutes without private right cannot be read to create common-law remedies)