Opinion
606312/15
03-28-2016
Progressive Management of NY and SEA PARK WEST LP, Plaintiffs, v. Galaxy Energy LLC, Defendant.
The Law Office of Kristopher M. Dennis Attorney for Plaintiffs 17 State Street, Suite 4000 New York, NY 10004 (212) 739-0732 Law Office of Elliot J. Blumenthal, PLLC Attorneys for Defendant 483 Chestnut Street Cedarhurst, NY 11516 (516) 295-0903
The Law Office of Kristopher M. Dennis Attorney for Plaintiffs 17 State Street, Suite 4000 New York, NY 10004 (212) 739-0732 Law Office of Elliot J. Blumenthal, PLLC Attorneys for Defendant 483 Chestnut Street Cedarhurst, NY 11516 (516) 295-0903 Randy Sue Marber, J.
Upon the foregoing papers, the motion by the Defendants, GALAXY ENERGY LLC (hereinafter, "Galaxy"), seeking an order, pursuant to CPLR § 3211 (a) (5), (7), CPLR § 3013 and CPLR § 3016 (b), dismissing the Plaintiffs' Complaint, is determined as hereinafter provided.
This action stems from claim that the Defendant, Galaxy, improperly enrolled them as customers for the supply of electricity without their consent.
Insofar as a motion made pursuant to CPLR § 3211 requires this Court to accept as true the allegations of the complaint (Guggenheimer v. Ginzburg, 43 NY2d 268, 275 [1977]), the underlying facts are as follows:
The Plaintiff, Progressive Management of NY (hereafter "Progressive"), a domestic limited liability company with a principal place of business in Floral Park, New York, serves as a property manager for several properties, including the property operated by the Plaintiff, Sea Park West LP (hereafter "Sea Park"), a domestic limited partnership registered with the New York Secretary of State. (See Complaint attached to the Affirmation in Opposition as Exhibit 1 at ¶¶16 - 17) The Defendant, Galaxy, is a New York limited liability company based in Cedarhurst, New York. (Id. at ¶ 18)
The Plaintiffs' Complaint misidentifies Progressive and Galaxy as limited liability corporations. As there is no such entity as a limited liability corporation, the Court assumes the Plaintiffs' counsel intended to identify the LLC's correctly as Limited Liability Companies.
Background
Historically, in New York, customers received electricity from a local distribution utility, such as Consolidated Edison of New York ("Con Edison"), which both supplied the power and delivered it, with the customer receiving a single bill. ((Id. at ¶ 2) Under this scheme, because the local distribution utility had a monopoly, the New York State Public Service Commission ("PSC") regulated the rates charged to customers. (Id. at ¶ 3)
However, in the late 1990s, many states, including New York, deregulated the electric commodity market by "unbundling" electric supply and delivery services. (Id. at ¶ 4) Accordingly, upon deregulation, the PSC no longer regulated electric commodity rates charged to customers. (Id. at ¶ 5) Instead, customers had the option of purchasing their electricity from any supplier licensed to sell it in New York, with the electric supply rates set by private contract and market forces. (Id. at ¶ 6) In theory, the deregulated market would operate more efficiently, potentially offering a better supply price to customers through shrewd buying or fixed rate contracts. (Id. at ¶ 7) Customers generally continued to receive a single bill from the local distribution utility, but the supply charge and the name of the supplier, would be separately stated. (Id. at ¶ 8)
Upon deregulation, a class of energy saving companies ("ESCOs") came into existence. ESCOs, such as the Defendant herein, Galaxy, promote themselves as electric suppliers offering cost-savings, particularly to residential customers and small-to-medium businesses. (Id. at ¶ 9)
To protect customers, however, the PSC promulgated detailed rules and procedures for obtaining and confirming customer authorization before the customer's electric supply services were permanently switched from its existing local distribution utility to the new ESCO. (Id. at ¶ 10) These rules are set forth in the PSC's Uniform Business Practices ("UBP") which govern the business practices and operations of ESCOs, such as the Defendant. (Id. at ¶ 11) Among other things, the UBP requires the ESCO to obtain a customer's agreement to initiate service by one of the following methods:
(A) telephone agreement, preceded or followed within three business days by the provision of a sales agreement meeting specified requirements;
(B) electronic agreement and authorization, attached to an electronic version of the sales agreement; or,
(C) a written agreement bearing a customer's signature on the sales agreement. (Id. at ¶ 12)
After complying with these procedures, the UBP permitted the ESCO to then notify the distribution utility of the switch. (Id. at ¶ 13) The UBP provided that enrollment of a customer without the customer's authorization is commonly known as "slamming," which is not permitted. (Id. at ¶ 14) Further, an ESCO that engaged in slamming or certain other misconduct would, among other things, refund to a customer the difference between charges imposed by the slamming ESCO that exceeded the amount the customer would have paid its incumbent provider. (Id. at ¶ 15)
This Action
In bringing this Complaint, the Plaintiffs submit that, originally, they were in the service territory of Con Edison which delivered electricity to the Plaintiffs and billed them for that service along with the electricity supplied. (Id. at ¶ 24) Subsequently, from January 1, 2013 until August 3, 2013, the Plaintiffs were being served by Utility Expense Reduction, LLC ("UER"), an energy savings company. (Id. at ¶ 27) The Plaintiffs claim that, on or about August 3, 2013, unbeknownst to them, Sea Park was purportedly enrolled electronically with Galaxy through a telemarketing campaign. (Id. at ¶ 25)
The Plaintiffs claim that the Defendant, which was engaged in the business of supplying electricity to customers within the State of New York since 2012 and was subject to the PSC promulgated UBP governing ESCOs within the State, inappropriately designated itself as the Marketer and failed to produce any proof of authorization for the transfer of the Plaintiffs from Con Edison to itself as required under Section 5 of the Uniform Business Practices Case 98-M-1343 despite repeated requests for the same. (Id. at ¶¶ 21-23, 26) They submit that from approximately August 4, 2013 to April 4, 2014, it was their intention to be served at a fixed rate of 0.796 per kWh with UER, another ESCO, at a rate lower than what Galaxy was charging. (Id. at ¶ 27)
This action is based upon the Plaintiffs' claim that Galaxy violated the UBP when, without their authorization, it switched them from their choice of service. (Id. at ¶¶ 28-29) The Plaintiffs claim that instead, Galaxy caused Con Edison, acting as a local distribution utility to switch electricity providers to Galaxy by falsely warranting to Con Edison that they (the Plaintiffs) had approved this switch. (Id. at ¶ 30) The Plaintiffs add that Galaxy never provided either of the Plaintiffs with a sales agreement as required by the PSC (Id. at ¶ 31) and that in causing the Plaintiffs to switch their electricity supplier to Galaxy without authorization, or without due authorization, Galaxy "slammed" the Plaintiffs. (Id. at ¶ 32)
The Plaintiffs claim that, as a result, they have suffered damages no less than the difference between the electricity charges they paid Galaxy and the electricity charges they would have paid its chosen UER, a fixed rate of 0.796 per k, had they not been switched to Galaxy. (Id. at ¶ 33)
In an attempt to have their electricity usage reviewed and to determine why they were improperly switched to Galaxy in the first place, the Plaintiffs retained non-party herein, UtiliSave, LLC ("UtiliSave") as their utility management consultant. (Id. at ¶ 34)
On August 5, 2014, in a letter to Galaxy, UtiliSave, on behalf of the Plaintiffs herein, formally requested the proof of authorization of change of service. ( Id. at ¶ 35) Thereafter, during the week of August 18, 2014, UtiliSave made contact with a representative from Galaxy who stated that the sale was made over the phone and that they no longer had the recording of the telephonic agreement, despite the 2-year minimum prescribed by the UBPs in Section 4:B3. ( Id. at ¶ 36)
Subsequently, on August 25, 2014, the Plaintiffs (through UtiliSave) filed a formal complaint with the New York State Public Service Commission concerning Galaxy's slamming of the Plaintiffs. (Id. at ¶ 37) Specifically, the Complaint alleged that the Plaintiffs were slammed through an unauthorized transfer of the account which resulted in significant excess costs, estimated at approximately $50,000.00, as compared to the original contract price with UER. (Id. at ¶ 37)
On July 31, 2015, David R. LaBombard of the Office of Consumer Services/New York State Public Service Commission issued a decision in Case No.437289, finding in pertinent part as follows:
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This is a case where the customer, Sea Park, was enrolled for electric supply charges with Galaxy Energy. Sea Park's intentions were to be served a fixed rate of 0.796 per kWh with another energy supply company Utility Expense Reduction, LLC (UER). Galaxy Energy has reported that on or about August 3, 2013, Sea Park enrolled electronically through a telemarketing campaign with Galaxy. Upon being requested to provide the third party verification or electronic order taken at enrollment, Galaxy was unable to provide these items. To date, these item [sic] have still not been produced by Galaxy.
Galaxy has provided information that during the time Sea Park was being provided service by Galaxy, the customer saved money. However, without the proper verification of the enrollment of Sea Park with Galaxy, we deem that the enrollment is not valid and Sea Park is entitled to the protections offered by the New York State Uniform Business Practices Act (UBP). Galaxy must rebill the customer at the rates charged by the Local Distribution Utility (Con Edison of New York) during the time Sea Park was with Galaxy.
Con Edison of New York (Con Edison) has provided a cost comparison (enclosed) for the period that Galaxy provided service to Sea Park. As a result of the information provided by Con Edison, it has been determined that Sea Park was overcharged by $5,009.02 for the period of August 2, 2013 to April 4, 2014. This must be refunded to Sea Park with 1.5% interest applied to the overpayment, with interest calculated from April 4, 2014 to present.
While Galaxy has provided its own cost comparisons (both enclosed) the numbers provided on the two spreadsheets are not consistent. As this is case, we used the information from Con Edison as the most reliable source of accurate information. Galaxy is directed to provide this refund with interest to Sea Park within fifteen (15) days for the date of this letter and provide documentation fo the provision of the refund to this office.
UtiliSave has raised a second issue, that it [sic] the consultant's primary concern.
UtiliSave believes that Sea Park needs to be made whole by Galaxy for the erroneous enrollment. The consultant states that it is irrelevant whether Sea Park saved any money with Galaxy, as Sea Park should not have been with Galaxy in the first place, instead remaining with UER where the customer wished to be. I have delayed in issuing a determination for this case to allow Galaxy an attempt to contact the consultant to discuss making the customer whole. Galaxy has not made any attempts to address the issue. The consultant has provided a cost comparison based on the fixed rate guaranteed by UER and the rates charged by Galaxy (enclosed). Based on this comparison, Galaxy over charged Sea Park by $49,629.05 compared to the rates the customer would have paid to UER.
As stated above, I have determined that the enrollment of Sea Park with Galaxy has not been properly supported by documentation by Galaxy and this is deemed invalid by UBP regulations. This office has suggested that Galaxy and the consultant discuss ways to resolve this issue with the erroneous enrollment and the charges over and above what would have been charged by UER. However, as this issue is a contractual issue outside the jurisdiction of this office, resolution must be reached between the parties through negotiations or, by legal means, in a court of law.
In summary, Galaxy must provide a refund to Sea Park for the invalid enrollment of the Sea Park electric account. The terms of the refund calculation are stated above and must be provided in the form of a refund check to the customer. However, while this office has attempted to assist in the issues of overbilling of Sea Park when comparing Galaxy charges versus UER charges, a directive to make the customer whole or determination of that specific issue is beyond the jurisdiction of this office and must be resolved by negotiations between the parties or through legal means in a court of law.
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(See Exhibit "C" attached to the Affirmation in Opposition)
Notably, Mr. LaBombard held that the remaining issue, i.e., that the Plaintiffs should be compensated for Galaxy improperly removing it from the UER it wished to be with, and that, based upon that rate, would have saved at least another $49,629.05 compared to the rates the customer would have paid to UER, needed to be litigated in Court since this was "a contractual issue outside the jurisdiction" of the Commission. (Id. at ¶ 41) As such, and due to Galaxy's failure to fully compensate the Plaintiffs for the slamming of its account, the Plaintiffs submit that their only remedy is to bring this suit. (Id. at ¶ 42)
To that end, in bringing this Complaint, the Plaintiffs advance four causes of action; to wit, (1) Slamming — Deceptive Business Practices under the General Business Law ("GBL") §§ 349 and 349-d; (2) Tortious Interference with Contract; (3) Fraud; and (4) Unjust Enrichment.
Upon the instant motion, the Defendant, Galaxy, seeks to dismiss the complaint. Specifically, Galaxy asserts six principal bases for its application. First, the Plaintiffs repeatedly consented to the provision of services from Galaxy. Second, the issues raised in the Complaint have already been decided and, therefore, the Complaint must be dismissed. Third, the Complaint fails to allege any misrepresentations that were deceptive to a consumer and therefore the GBL §§ 349 and 349-d claims fail to state a cause of action. Fourth, the Plaintiffs fail to plead any facts indicating how Galaxy purportedly knew or should have known about the Plaintiffs' alleged contract with a third party and therefore the Complaint fails to state a claim for tortious interference with contract. Fifth, the Complaint fails to specify any factual allegations of fraud and therefore the fraud claim also fails to state a cause of action. Lastly, the Plaintiffs' impermissibly vague and conclusory allegations fail to state a cause of action for unjust enrichment.
Initially, this Court notes that the Defendant's argument that this action should be dismissed on the grounds that the issues raised herein have already been decided by the PSC and need not be relitigated in this Court, is entirely meritless.
Pursuant to CPLR § 3211 (a) (5):
Rule 3211. Motion to dismiss
(a) Motion to dismiss cause of action. A party may move for judgment dismissing one or more causes of action asserted against him on the ground that:
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5. the cause of action may not be maintained because of ... collateral estoppel...
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The law is clear. "Collateral estoppel, or issue preclusion, prevents a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party". (Pinnacle Consultants v. Leucadia Natl. Corp., 94 NY2d 426, 431—432 [2000] [internal quotation marks and citations omitted]) "It is a doctrine intended to reduce litigation and conserve the resources of the court and litigants and it is based upon the general notion that it is not fair to permit a party to relitigate an issue that has already been decided against it". (Kaufman v. Eli Lilly & Co., 65 NY2d 449, 455 [1985])
Thus, on a motion to dismiss a complaint pursuant to CPLR § 3211 (a) (5) on the grounds that the action is barred by the doctrine of collateral estoppel, "[t]he party seeking to invoke collateral estoppel has the burden to show the identity of the issues, while the party trying to avoid application of the doctrine must establish the lack of a full and fair opportunity to litigate". (Matter of Dunn, 24 NY3d 699, 704 [2015]) Ultimately, "[c]ollateral estoppel effect will only be given to matters actually litigated and determined in a prior action. If the issue has not been litigated, there is no identity of issues between the present action and the prior determination". (Kaufman v. Eli Lilly & Co., supra at 456—457 [internal quotation marks and citations omitted])
Here, it is plain that there has not been any "adjudication" of any issue in this case. Indeed, there was no "prior action" wherein any issue, much less this specific issue, was "litigated." That the Plaintiffs filed a complaint (via their utility management consultant) with the PSC and the PSC, in response, issued its determination and resolution of the grievance, does not amount to an adjudication of the issues, much less one that can now bind either or both of the parties in this action. (cf., Matter of Chatham Towers, Inc. v. Bloomberg, 39 AD3d 308 [1st Dept. 2007]; see also, City of New York v. Welsbach Elec. Corp., 9 NY3d 124 [2007]; Kret v. Brookdale Hosp. Med. Ctr., 61 NY2d 861 [1984])
In any event, a plain and simple reading of the PSC's response to the Plaintiffs' complaint also makes it clear that "...while [the PSC]...attempted to assist in the issues of overbilling of Sea Park when comparing Galaxy charges versus UER charges..." it clearly held that "...a directive to make the customer whole or determination of that specific issue [was] beyond the jurisdiction of [that] office and [would have to] be resolved by negotiations between the parties or through legal means in a court of law". (See Exhibit "C" attached to the Affirmation in Opposition). Accordingly, the Defendant's claim that this action should be dismissed on the grounds that the issues raised in the Complaint have already been decided, is meritless.
The Defendant also bases its motion to dismiss this action, pursuant to CPLR § 3211 (a) (7), CPLR § 3013 and CPLR § 3016 (b), for failure to state a cause of action.
The law is clear. On a motion to dismiss pursuant to CPLR § 3211 (a) (7), the Court must accept as true, the facts "alleged in the complaint and submissions in opposition to the motion, and accord plaintiffs the benefit of every possible favorable inference," determining only "whether the facts as alleged fit within any cognizable legal theory". (Simkin v. Blank, 19 NY3d 46, 52 [2012]; Sokoloff v. Harriman Estates Dev. Corp., 96 NY2d 409, 414 [2001]). "Whether a plaintiff can ultimately establish [his or her] allegations is not part of the calculus in determining a motion to dismiss". (EBC I, Inc. v. Goldman, Sachs & Co., 5 NY3d 11, 19 [2005]). Indeed, the plaintiff has no obligation on a motion to dismiss to demonstrate evidentiary facts to support the allegations contained in the complaint. (Stuart Realty Co. v. Rye Country Store, 296 AD2d 455 [2nd Dept. 2002]; Paulsen v. Paulsen, 148 AD2d 685, 686 [2nd Dept. 1989])
Notably, CPLR § 3013 requires a pleading to sufficiently particularize the material elements of each cause of action. (see generally, Moore v. Johnson, 147 AD2d 621 [2nd Dept. 1989]; Pace v. Perk, 81 AD2d 444, 449 [2nd Dept. 1981]) Ultimately, however, conclusory averments of wrongdoing are insufficient to sustain a complaint. (DiMauro v. Metropolitan Suburban Bus Auth., 105 AD2d 236 [2nd Dept. 1984]) Thus, bare legal conclusions and factual allegations "flatly contradicted by documentary evidence in the record are not presumed to be true, and [i]f the documentary proof disproves an essential allegation of the complaint, dismissal pursuant to CPLR 3211(a)(7) is warranted even if the allegations, standing alone, could withstand a motion to dismiss for failure to state a cause of action". (Deutsche Bank Natl. Trust Co. v. Sinclair, 68 AD3d 914, 915 [2nd Dept. 2009] quoting Peter F. Gaito Architecture, LLC v. Simone Dev. Corp., 46 AD3d 530, 530 [2nd Dept. 2007])
Slamming — Deceptive Business Practices under the GBL §§349 and 349-dGeneral Business Law § 349 prohibits deceptive business practices. The statute makes actionable conduct which does not rise to the level of common law fraud. (Karlin v. IVF Am., 93 NY2d 282, 287 [1999]; Gaidon v. Guardian Life Ins. Co. Of Am., 94 NY2d 330 [1999])
The statute provides a remedy to those who have been subject to deceptive or misleading acts or business practices that are consumer oriented. (Oswego Laborers Local 214 Pension Fund v. Marine Midland Bank, 85 NY2d 20 [1995]) A deceptive act or practice for the purposes of the statute is one which is likely to mislead a reasonably prudent consumer (Karlin v. IVF, America, Inc., supra)
Thus, to state a claim for deceptive business practices under GBL § 349, a plaintiff must allege: (1) a deceptive consumer-oriented act or practice which is misleading in a material respect, and (2) injury resulting from such act (Oswego Laborers Local 214 Pension Fund v. Marine Midland Bank supra at 25; City of New York v. Smokes-Spirits.com, Inc., 12 NY3d 616, 621 [2009]; Stutman v. Chemical Bank, 95 NY2d 24, 29 [2000]) Section 349 "contemplates actionable conduct that does not necessarily rise to the level of fraud". (Gaidon v. Guardian Life Ins. Co. of Am., 94 NY2d 330, 343 [1999]) A plaintiff need not prove scienter to state a claim pursuant to GBL § 349. (Gaidon v. Guardian Life Ins. Co. of Am., 96 NY2d 201, 210 [2001]; Karlin v. IVF Am., supra at 290) "In determining whether a representation or omission is a deceptive act, the test is whether such act is likely to mislead a reasonable consumer acting reasonably under the circumstances". ( Andre Strishak & Assoc. v. Hewlett Packard Co., 300 AD2d 608, 609 [2nd Dept. 2002] quoting Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, supra at 26)
Furthermore, the challenged act or practice must be "consumer oriented, that is, it must have a broad impact on the consumers at large". (Gray v. Seabord Sec., Inc., 14 AD3d 852, 853 [3rd Dept. 2005] citing U.W. Marx, Inc. v. Bonded Concrete, Inc., 7 AD3d 856, 858 [3rd Dept. 2004]) "The conduct need not be repetitive or recurring but defendant's acts or practices must have a broad impact on consumers at large; [p]rivate contract disputes unique to the parties ... would not fall within the ambit of [GBL 349]". (New York Univ. v. Continental Ins. Co., 87 NY2d 308, 320 [1995], quoting Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, supra at 25) "If a plaintiff meets this threshold [of consumer oriented conduct], its prima facie case may then be established by proving that defendant is engaging in an act or practice that is deceptive in a material way and that plaintiff has been injured by it". (Id) Whether a representation or omission is a "deceptive act or practice" depends on the likelihood that it will "mislead a reasonable consumer acting reasonably under the circumstances". (Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, supra at 26) "In the case of omissions in particular ... [GBL 349] surely does not require businesses to ascertain consumers' individual needs and guarantee that each consumer has all relevant information specific to its situation" (Id) However, "[o]mission-based claims under Section 349 are appropriate where the business alone possesses material information that is relevant to the consumer and fails to provide this information' ". (Bildstein v. MasterCard International, Inc., 2005 WL 1324972, *4 [SDNY 2005] quoting Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, supra at 26)
Here, accepting as true the facts alleged in the plaintiffs' amended complaint, and affording them the benefit of every possible favorable inference (Sokoloff v. Harriman Estates Dev. Corp., supra at 414; see also, 511 West 232nd Owners Corp. v. Jennifer Realty Co., 98 NY2d 144, 152 [2002]), this Court concludes that the Plaintiffs' cause of action founded upon violation of General Business Law § 349 must be dismissed. Indeed, it is plain to this Court that the Plaintiffs have failed to allege any conduct that was deceptive to consumers at large. At best, the Complaint only baldly asserts that the Defendant allegedly warranted to Con Edison that the Plaintiff approved a switch to Galaxy. The purported misconduct attributed to the Defendant arises out of its alleged "slamming" of the Plaintiffs. While the Plaintiffs assert that Galaxy's "violations of the UBP were materially misleading and deceptive to the consumer public at large" (Complaint, ¶ 44), such an allegation is entirely conclusory and wholly bare of any factual support. Ultimately, these alleged wrongs, even if assumed to be true, do not establish that Galaxy "engaged in acts or practices which were deceptive or misleading and which had an impact on consumers at large". (Drepaul v. Allstate Ins. Co., 299 AD2d 391, 393 [2nd Dept. 2002]; Korn v. First UNUM Life Ins. Co., 277 AD2d 355, 356 [2nd Dept. 2000]) Rather, at best, the Plaintiffs' claims concern a private commercial dispute involving the two businesses involved in the transaction negating the applicability of General Business Law § 349. (see e.g., Drepaul v. Allstate Ins. Co., supra; Security Mut. Life Ins. Co. of NY v. Dipasquale, 283 AD2d 182 [1st Dept. 2001]; Sheth v. New York Life Ins. Co., 273 AD2d 72, 73-74 [1st Dept. 2000])
Therefore, the cause of action for deceptive business practices should be dismissed. (Gale v. International Bus. Machines Corp., 9 AD3d 446 [2nd Dept. 2004]) Notably, a claim based upon a violation of the General Business Law § 349-d also fails.
Section 349—d, which was enacted in 2011, contains language similar to GBL § 349 (a), and "target[s] abuses in the energy services market" (Simmons v. Ambit Energy Holdings, LLC, 2014 WL 5026252 at *2 [SDNY 2014]) It states, in pertinent part: "No person who sells or offers for sale any energy services for, or on behalf of, an ESCO shall engage in any deceptive acts or practices in the marketing of energy services". (Gen. Bus. Law § 349—d[3])
It has been held that section 349—d (3) has the same elements as section 349 (a). (see generally, Yang Chen v. Hiko Energy, LLC, 2014 WL 7389011 at *6 [SDNY 2014]); Claridge v. North American Power & Gas, LLC, 2015 WL 5155934 [SDNY 2015])
Accordingly, this Court finds that the plaintiffs' claim also falls outside the protection of the GBL § 349-d, supra.
Tortious Interference with Contract
In order to state a cause of action for tortious interference with contractual relations, it must be alleged that (1) a contract existed between the plaintiff and a third party; (2) that the defendant knew of the contract; (3) that the defendant intentionally induced the third party to breach or otherwise made performance impossible; and (4) that the plaintiff suffered damages as a result. (Bayside Carting v. Chic Cleaners, 240 AD2d 687, 688 [2nd Dept. 1997]; Lama Holding Co. v. Smith Barney, 88 NY2d 413 [1996]; Kronos, Inc. v. AVX Corp., 81 NY2d 90 [1993])
Here, the Plaintiffs have sufficiently pled a tortious inference with contractual relations cause of action including their assertion that Galaxy knew or should have known about the Plaintiffs' alleged contract with another ESCO, namely, UER. Specifically, the Plaintiffs' contentions that "Sea Park was purportedly enrolled electronically with Galaxy through a telemarketing campaign" (Complaint, ¶ 25) and that "Galaxy inappropriately designated themselves as the Marketer...and failed to produce any proof of authorization as required under Section 5 of the [UBP] despite repeated requests for the same" (Complaint, ¶ 26), help establish, for the purposes of a motion made pursuant to CPLR § 3211 (a) (7), a claim for tortious interference with contract.
Therefore, the branch of the Defendant's motion seeking to dismiss the Plaintiffs' second cause of action should be denied.
Fraud
To establish a cause of action for common law fraud, a plaintiff must plead the following elements: (1) a false representation of material fact, (2) with intent to defraud, (3) reasonable reliance on the misrepresentation and (4) causation of damages to the plaintiff. (Lama Holding Co. v. Smith Barney, supra; Channel Master Corp. v. Aluminum Ltd. Sales, 4 NY2d 403 [1958]); Oko v. Walsh, 28 AD3d 529 [2nd Dept. 2006]) In addition, CPLR § 3016 (b) provides that an action for fraud must be pled "with particularity, including specific dates and items, if necessary and insofar as practicable." Conclusory allegations of fraud will not be sufficient. (Dumas v. Fiorito, 13 AD3d 332 [2nd Dept. 2004]; Sargiss v. Magarelli, 50 AD3d 1117 [2nd Dept. 2008]) The intention of this rule is to "deter unfounded claims". (Sergeants Benevolent Assn. Annuity Fund v. Renck, 19 AD3d 107 [1st Dept. 2005]) In light of the difficulty of pleading the specific details of fraud, however, the Court of Appeals has held that it is sufficient to plead facts that would allow a fact-finder to make a reasonable inference of fraud. (Pludeman v. Northern Leasing Sys. Inc., 10 NY3d 486, 493 [2008])
Here, however, the Plaintiffs' complaint makes only conclusory allegations regarding the claim for fraud. Indeed, there is no indication of any actual misrepresentations, who made them or when they were purportedly made. Nor are there sufficient allegations that would allow a fact finder to make a reasonable inference of fraud.
Thus, the Plaintiffs' failure to allege the necessary elements for a cause of action for fraud and to plead sufficient facts to allow a reasonable inference of fraud, requires dismissal of this cause of action. (Wint v. ABN AMRO Mtge. Group, Inc., 19 AD3d 588, 589 [2nd Dept. 2005])
Unjust Enrichment
To establish an unjust enrichment cause of action, a plaintiff must allege that (1) the other party was enriched, (2) at that party's expense, and (3) it is against equity and good conscience to permit the other party to retain what is sought to be recovered. (Paramount Film Distrib. Corp. v. State of New York, 30 NY2d 415, 421 [1972]) "[T]he essential inquiry in any action for unjust enrichment or restitution is whether it is against equity and good conscience to permit the defendant to retain what is sought to be recovered". (Id; Conlon v. Teicher, 8 AD3d 606 [2nd Dept. 2004])
Here, the Plaintiffs have sufficiently alleged that by causing the Plaintiffs to become customers on the false representation that they authorized a change to Galaxy, the Defendant was enriched at their expense and it is against equity and good conscience to permit the Defendant to retain any payments that it received that were in amounts higher than what they had agreed to pay UER. (Clifford R. Gray, Inc. v. LeChase Constr. Servs., LLC, 31 AD3d 983, 988 [3rd Dept. 2006]; cf. GFRE, Inc. v. U.S. Bank, N.A., 130 AD3d 569 [2nd Dept. 2015])
Therefore, the branch of the Defendant's motion seeking to dismiss the Plaintiffs' fourth cause of action should be denied.
The parties' remaining contentions have been considered and do not warrant discussion.
Accordingly, it is hereby
ORDERED, that the branch of the Defendant's motion seeking to dismiss the Plaintiffs' First and Third causes of action, is hereby GRANTED; and it is further
ORDERED, that the branch of the Defendant's motion seeking to dismiss the Plaintiff's Second and Fourth causes of action, is DENIED; and it is further
ORDERED, that the Defendant's counsel shall serve the Plaintiffs' counsel with an answer to the Verified Complaint within thirty (30) days of the date of this Order; and it is further
ORDERED, that a Preliminary Conference (see 22 NYCRR 202.12) in this matter shall be held at the Preliminary Conference Part, located at the Nassau County Supreme Court on May 18, 2016, at 9:30 a.m. This directive, with respect to the date of the Conference, is subject to the right of the Clerk to fix an alternate date should scheduling require; and it is further
ORDERED, that the Plaintiffs' counsel shall serve a copy of this Order upon the Defendant's counsel pursuant to CPLR § 2103 (b) 1, 2 or 3 within ten (10) days of the date of this Order. PROOF OF SERVICE MUST BE FILED WITH THE COURT . This constitutes the Decision and Order of the Court. All applications not specifically addressed herein are DENIED. DATED: Mineola, New York March 28, 2016 ________________________________ Hon. Randy Sue Marber, J.S.C.