The opinion of the court was delivered by: CONNER
On August 3, 1995, plaintiffs Infostar, Inc. ("Infostar"), Dina Bedi and Chhaya Bedi filed this action against defendants Continental Casualty Company ("Continental") and The Hartford Steam Boiler Inspection and Insurance Company ("Hartford").
Plaintiffs have asserted, inter alia, claims against both defendants under N.Y. Gen. Bus. L. § 349, which prohibits deceptive acts or practices in the conduct of business. Defendant Hartford has made a motion under Rule 12(b)(6) and defendant Continental has made a motion under Rule 12(c) to dismiss those claims. All of the parties have submitted affidavits and documentary evidence that go beyond the pleadings. Therefore, we treat these motions as motions for summary judgment. See Fed. R. Civ. P. 12(b), 12(c). For the reasons set forth below, defendants' motions are granted.
This action arises out of a fire that occurred on September 3, 1994, on the premises of a computer store operated by plaintiffs. Continental insured Infostar against the loss of the contents of the store, up to a value of $ 2,000,000, and against the loss of income from the business for up to twelve months. Plaintiffs allege that Infostar lost $ 1,067,570.00 from damage to the contents of the store and $ 422,008.00 from loss of income. Hartford insured Infostar against the loss of contents and expenses, up to $ 51,000, and for loss of income up to $ 10,000.
Plaintiffs allege that Infostar's losses under this policy exceed the policy amount. Plaintiffs assert that although Infostar filed timely proofs of loss following the fire, Continental and Hartford have not paid Infostar the sums due. Hartford contends that it did not pay Infostar's claim because Infostar never filed a proper proof of loss. Continental asserts that it did not pay Infostar's claim because it was investigating the possibility that the fire was caused by arson committed by plaintiffs. Infostar has asserted claims seeking payment under the policies.
Plaintiffs have also brought claims under § 349 based on allegations that Continental and Hartford have acted in bad faith and have engaged in unfair settlement practices in violation of N.Y. Ins. L. § 2601 and the regulations promulgated thereunder. Specifically, plaintiffs assert that defendants have claimed that the fire was caused by arson, although they have no reason to believe that arson occurred, and that defendants have intentionally delayed settlement.
Summary judgment should be granted when "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The Supreme Court has held that the entry of summary judgment is appropriate "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). The party seeking summary judgment "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those [materials] which it believes demonstrate the absence of a genuine issue of material fact." Id at 323. It may discharge that burden merely by "pointing out to the district court  that there is an absence of evidence to support the nonmoving party's case." Id., at 325; Gallo v. Prudential Residential Servs., Ltd., 22 F.3d 1219, 1223-24 (2d Cir. 1994). In order to defeat summary judgment, the nonmoving party must "go beyond the pleadings and . . . designate 'specific facts showing that there is a genuine issue for trial.'" Celotex, 477 U.S. at 324. Moreover, "[t]he evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). No genuine issue for trial exists unless there is sufficient evidence favoring the nonmoving party for a reasonable jury to return a verdict for that party. See id., at 248-49.
N.Y. Gen. Bus. L. § 349, which is part of New York's consumer protection statutes, provides that:
(a) Deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful.
(h) Any person who has been injured by reason of any violation of this section may bring an action . . . to recover his actual damages or fifty dollars, whichever is greater. . . . The court may, in its discretion, increase the award of damages to an amount not to exceed three times the actual damages up to one thousand dollars, if the court finds the defendant willfully or knowingly violated this section. The court may award reasonable attorney's fees to a prevailing plaintiff.
In Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20, 623 N.Y.S.2d 529, 532, 647 N.E.2d 741 (N.Y. 1995), the New York Court of Appeals stated that "section 349 is directed at wrongs against the consuming public. . . . Thus, as a threshold matter, plaintiffs claiming the benefit of section 349 . . . must charge conduct of the defendant that is consumer-oriented." A plaintiff is not required to prove that the complained-of conduct is recurring, but instead "must demonstrate that the acts or practices have a broader impact on consumers at large." Id. Thus, "the deceptive act or practice may not be limited to just the parties." Teller v. Bill Hayes, Ltd., 213 A.D.2d 141, 630 N.Y.S.2d 769, 772 (App. Div. 1995). For example, § 349 does not apply to private contract disputes that are unique to the parties. See Oswego, 623 N.Y.S.2d at 532.
Defendants contend that there is no evidence that Continental and Hartford's actions had, or could have, an impact on anyone other than plaintiffs. Hence, they argue that this case is simply a private coverage dispute between the parties and that we should grant summary judgment dismissing plaintiffs' § 349 claims. Plaintiffs counter that in order to satisfy the "consumer-oriented" requirement, they must only demonstrate that the transaction in question is not a "one-shot deal." They contend that insurance policies are contracts of adhesion created for a class of consumers and that insurers have large claims departments to handle their relationships with many consumers. Therefore, they argue, the acts of insurance companies in servicing their ...