The opinion of the court was delivered by: TRAGER
Plaintiff Harary filed suit in this court in 1995 alleging seven causes of action against defendant Allstate after it denied a claim under her fire insurance policy.
Allstate moved for judgment on the pleadings on the fourth, fifth, sixth, and seventh causes of action. On October 6, 1995, Allstate's motion was denied except as to the fourth cause of action. However, discovery was stayed on these claims unless plaintiff came forth with an amended complaint or until the merits of the first three causes of action were resolved. See Tr. of Conference of 10/6/95 ("Tr.") at 11.
Allstate subsequently moved for summary judgment on plaintiff's first three causes of action. By Memorandum and Order dated March 11, 1997 ("M&O"), Allstate's motion was granted on the ground that Harary's failure to cooperate breached her contract with Allstate. At that time decision was reserved as to the disposition of plaintiff's remaining claims. The Memorandum stated that summary judgment on plaintiff's remaining claims would be rendered unless plaintiff moved to amend her complaint. The basis for decision would be that in light of the finding of plaintiff's failure to cooperate, she now lacked standing with regard to the balance of the claims. See M&O at 33-34.
On May 2, 1997, plaintiff stated that she would not move to amend her complaint because she was "unable to provide more specific allegations in support of her claims without the evidence that plaintiff believes would be adduced in the course of discovery . . . ." Ltr. from Ernest O. Carrozza, Esq. counsel for plaintiff to court dated May 2, 1997. Plaintiff requested that summary judgment be considered with regard to the "criteria set forth in . . . [the] March 11, 1997 decision." Id. Plaintiff also argued that she had standing to bring a suit under 42 U.S.C. § 1982 "separate, apart, and distinct from the contract . . . ." Id. In rebuttal, defendant asserted that plaintiff's statement that she lacked any evidence to support a motion to amend the complaint demonstrated that plaintiff was merely engaged in a fishing expedition; that the complaint failed to state a cause of action; and that § 1982 does not extend to actions on an insurance contract. See Ltr. from Stuart D. Markowitz, Esq. counsel for defendant dated May 8, 1997.
Since discovery was stayed on plaintiff's remaining claims, they will be considered under a Rule 12(b)(6) standard. See Kopec v. Coughlin, 922 F.2d 152, 155 (2d Cir. 1991). Consideration of plaintiff's remaining claims is proper under this standard for several reasons. First, because discovery was stayed on these claims pending the resolution of the first three claims, no additional facts have been adduced. Second, in light of plaintiff's statement that without discovery she is unable to provide additional facts, review of the complaint's sufficiency is proper at this time. Finally, because the remaining claims have already been the subject of a motion to dismiss, both parties have had notice as well as the opportunity to submit papers in opposition.
Motions to dismiss under Fed. R. Civ. P. 12(b)(6) are governed by a liberal standard:
In deciding such a motion, a district court must construe any well-pleaded factual allegations in the complaint in favor of the plaintiff, and may dismiss the complaint only where "'it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.'"
Sykes v. James, 13 F.3d 515, 519, (2d Cir. 1993) (quoting Allen v. Westpoint-Pepperell, Inc., 945 F.2d 40, 44 (2d Cir. 1991) (quoting Conley v. Gibson, 355 U.S. 41, 45-46, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957))). Nevertheless, "while the pleading standard is a liberal one, bald assertions and conclusions of law will not suffice." Leeds v. Meltz, 85 F.3d 51, 53 (2d Cir. 1996)(citations omitted).
Plaintiff's Fifth Cause of Action
Plaintiff's fifth cause of action is a claim under New York State's consumer protection law prohibiting deceptive practices. Section § 349(a) of the General Business Law (McKinney 1980) provides that "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." To maintain an action under § 349, a plaintiff must show (1) that the defendant's acts "have a broad impact on consumers at large;" (2) that the defendant is engaged in a deceptive practice; and (3) that this practice has injured the plaintiff. New York University v. Continental Ins. Co., 87 N.Y.2d 308, 320, 639 N.Y.S.2d 283, 662 N.E.2d 763 (N.Y. 1995)(citing cases). Plaintiffs claiming a violation of § 349 must, as a threshold issue, charge consumer oriented conduct. See Oswego Laborers' Local 214 Pension Fund v. Marine Midland Bank, N.A., 85 N.Y.2d 20, 25, 623 N.Y.S.2d 529, 647 N.E.2d 741 (N.Y. 1995). Consumer oriented conduct is not necessarily repetitive, but it must be a type of conduct that would have an impact on consumers generally. See id. Private contractual disputes are usually not within the statute because they are "unique to the parties." Id. In the context of insurance contracts, the New York Court of Appeals recently held that an insurance contract that involved sophisticated parties and a large scale insurance contract did not fall within the ambit of the statute. See New York University, 87 N.Y.2d at 321. The court left open the possibility that under different circumstances a contract for insurance might give rise to a claim under § 349. See id. (citing Riordan v. Nationwide Mut. Fire Ins. Co., 756 F. Supp. 732 (S.D.N.Y. 1990)).
Several district courts have considered the adequacy of a pleading under § 349 where the conduct is related to a dispute over an insurance claim. In Riordan v. Nationwide Mut. Fire Ins. Co., 756 F. Supp. 732 (S.D.N.Y. 1990), aff'd in part, question certified, 977 F.2d 47 (2d Cir. 1992), certification withdrawn, 984 F.2d 69 (2d Cir. 1993) the court held that the plaintiffs could maintain an action under § 349 against a fire insurer who had failed to pay their claim. In Riordan plaintiffs sued their insurance carrier claiming that their insurer had adopted "a claim settlement policy and practice designed to frustrate fair and efficient claim settlement, in violation of the New York Insurance Law. . . ." Riordan, 756 F. Supp. at 736. Judge Kram found that the plaintiffs had adequately pled a claim under § 349:
Although plaintiffs allege that their primary and direct injury results from Nationwide's breach of its obligations under the Policy, plaintiffs expressly allege the existence of a claim settlement policy designed to deceive certain categories of policyholders; in other words, the public at large. Plaintiffs allege a direct causal connection between defendant's alleged illegal claim settlement practice and Nationwide's avoidance of its obligations under the Policy and therefore set forth precisely such evidentiary allegations of injury to the public at large as are required to sustain their claim under the General Business Law.
Riordan, 756 F. Supp. at 739 (citation omitted). In their amended complaint, the Riordan plaintiffs plead specific factual assertions regarding the treatment of their claim; if true, the conduct violated New York's ...