Law Offices of Lawrence Katz, Cedarhurst (Lawrence Katz of counsel), for appellants.
Schiff Hardin LLP, New York City (David Jacoby of counsel), and Schiff Hardin LLP, Chicago, Illinois (Paula J. Morency, Aphrodite Kokolis and Jeannice D. Williams of counsel), for respondent.
The United States Court of Appeals for the Second Circuit has asked us to resolve two questions regarding General Business Law § 395-a, which (with certain exceptions) forbids the
termination before expiration of any " maintenance agreement covering parts and/or service" (general business law § 395-A  ). we hold that general business law § 395-a does not make contract clauses that contradict its terms null and void; and that violation of section 395-a alone does not give rise to a [991 N.E.2d 191] [969 N.Y.S.2d 417] cause of action under General Business Law § 349.
Plaintiffs Lori Schlessinger and Brenda Pianko purchased furniture from the Fortunoff Department Store. Each of them also bought from Fortunoff, along with the furniture, the " Guardsman Elite 5 Year Furniture Protection Plan" (the Plan). The Plan is a contract in which defendant Valspar Corporation, through its Guardsman business unit, agreed that, if the furniture became stained or damaged during the contract period, it would " perform one or more" of a number of services— ranging from advice on stain removal to replacement of the furniture— or would arrange a store credit or offer a financial settlement. The Plan contains what plaintiffs call the " store closure provision," which stipulates that
" [i]f the particular store location where you originally purchased your furniture ... has closed, no longer carries Guardsman as a supplier, changed ownership, or has stopped selling new furniture since your purchase, Guardsman will give you a refund of the original purchase price of this Protection Plan."
General Business Law § 395-a (2) says that, with exceptions not applicable here, " [n]o maintenance agreement covering parts and/or service shall be terminated at the election of the party providing such parts and/or service during the term of the agreement." Plaintiffs claim, and we assume for present purposes (as did the Second Circuit), that the store closure provision violates section 395-a (2).
Fortunoff went into bankruptcy, and the store where plaintiffs bought their furniture closed. Pianko made a claim under the Plan for unspecified damage to her furniture (a table). Based on the store closure provision, Valspar tendered Pianko a full refund of the payment she made for the Plan ($100 in her case). Schlessinger does not allege that her furniture has been stained or damaged, or that she has made any claim under the Plan.
Plaintiffs brought a diversity action against Valspar in the United States District Court for ...