Opinion
February 10, 1999
Appeal from Order and Judgment of Supreme Court, Erie County, Michalek, J. — Injunction.
Present — Hayes, J. P., Wisner, Pigott, Jr., Callahan and Balio, JJ.
Order and judgment unanimously modified on the law and as modified affirmed without costs and matter remitted to Supreme Court for further proceedings in accordance with the following Memorandum: The Attorney General commenced this special proceeding pursuant to Executive Law § 63 Exec. (12) and General Business Law article 22-A for injunctive relief, restitution, penalties and costs. The petition alleges, inter alia, that William S. Appel and Denise A. Sterrs (respondents), operating as 5907 Main Hyway, Inc., doing business as Edit Ink, organized and directed a fraudulent and deceptive scheme to induce authors seeking to publish their manuscripts to submit them to Edit Ink for editing. The scheme allegedly involved a network of publishing houses and literary agents, including the other respondents.
Supreme Court properly granted that part of the petition seeking a permanent injunction, without conducting a hearing ( see, Matter of State of New York v. Daro Chartours, 72 A.D.2d 872). The Attorney General met his initial burden of establishing violations of Executive Law § 63 Exec. (12) and General Business Law §§ 349 Gen. Bus. and 350 Gen. Bus.. He established that respondents misled authors into believing that their work had been selected for referral to Edit Ink because it had commercial potential. Respondents masked the fact that such referrals were routinely made as part of a money-making venture by failing to disclose their referral arrangement. In response, respondents did not raise any triable issues of fact requiring a hearing.
The court abused its discretion, however, in ordering restitution in the full amount of the fees received by Edit Ink since January 1995. There is no proof regarding what percentage of those revenues is attributable to respondents' deception. We therefore modify the order and judgment by vacating decretal paragraphs H., I. and J., and we remit the matter to Supreme Court for a hearing to consider "unjust enrichment and the relative advantages and burdens of fashioning a restitution remedy" ( Matter of State of New York v. Ford Motor Co., 136 A.D.2d 154, 158, aff'd 74 N.Y.2d 495).