Plaintiff, Defendants. documentary evidence and failure to state a claim for which relief may be granted.

Transcription

1 MOTION/CASE 1s R ES PEC TFUL LY REFERRED JUSTICE ~0

2 SUPREME COURT OF THE STATE OF NEW YORK NEWYORKCOLJNTY PART 3 DECISION AND ORDER MICHAEL ZURAKOV, individually and on behalf of all others similarly situated, Plaintiff, against REGISTER.COM, a Delaware Corporation, and FORMAN INTERACTIVE CORP., a New York Corporation Defendants. Index No /01 Defendants Register.com, Inc. and Forman Interactive Carp, ( collectively Register ) move, pursuant to CPLR 321 l(a)(l) and 321 l(a)(7), to dismiss the complaint based on, documentary evidence and failure to state a claim for which relief may be granted. The complaint alleges that Plaintiff Michael Zurakov ( Zurakov ) and Register entered into a service contract. Pursuant to the contract, Register granted Zurakov the exclusive right to use the internet domain name Laborzionist.org. Zurakov claims that Register mislead him in that Register failed to disclose that, prior to Zurakov s construction of the Laborzionist website, Register would link the Laborzionist domain name to Register s Coming Soon Page that announced that the website Laborzionist was under construction and would be Coming Soon. The Coming Soon Page also contains banner advertisements for Register s services, as Forman Intera ctive Corp. merged into Register.com on June 23,

3 ] well as advertisements for some of Register s corporate sponsors. Zurakov contends that Register s failure to advise him that Register would link Laborzionist.org to Register s Coming Soon Page violated both the implied covenant of good faith and fair dealing and General Business Law ( GBL ) Sections 39 and 350 ( Deceptive Acts and Practices ). Moreover, Zurakov claims that the Laborzionist.org. Coming Soon Page allowed Register to profit unjustly from In support of the motion to dismiss the complaint, Register argues that the documentary evidence- - the service contract - - demonstrates that Register disclosed to Zurakov that it would link the Coming Soon Page to the Laborzionist domain name. Register also argues that Zurakov s breach of contract claim is unavailing because Register did not deprive him of any of the services for which he contracted. In opposition, Zurakov argues that his registration of the domain name Laborzion.ist.org : gave Zurakov an exclusive property right in that name that gave him exclusive control over the domain name Laborzionist.org. It is Zurakov s claim that the Coming Soon Page interfered with his exclusive property right and, thus, deprived him of the benefits of the contract. Zurakov also claims that Register did not fully disclose Register s practice of linking registered domain names to the Coming Soon Page. On a motion to dismiss a complaint for legal insufficiency, the court accepts the facts alleged in the complaint as true and determines simply whether the facts alleged fit within any cognizable legal theory. Morone v. Morone, 50 N.Y.2d 81 (1980). The court liberally construes the pleading, accepting all the facts alleged as true and accords the allegations the benefit of every possible favorable inference. Leon v. Martinez, 8 2 N.Y.2d 83,87 (199). The

4 credibility of the parties is not under consideration. S.J. CapeIin Assocs. Y: Globe Mfg. Corp., 3 N.Y.2d 338 (197). However, the court may grant a CPLR 321 l(a)(l) dismissal if the documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law. Leon v. Martinez, supra. The question of whether a domain name is a property right has not been considered by the courts of this state. Accordingly, this court looks to courts in other jurisdictions that have opined on this issue. In Network Solutions, Inc. v. Umbra International, Inc., 529 S.E.2d 80 (2000), the Supreme Court of Virginia stated that, a domain name registrant acquires the contractual right to use a unique domain name for a specified period of time. The Network Court relied on Dorer v. Arel, 60 F. Supp.2d 558,561 (E.D. Va. 1999). In that case, the court stated that [A] domain name that is not a trademark arguably entails only contract, not property rights. Thus, a domain name registration is the product of a contract for services between the, registrar and registrant. In Dorer, the court distinguished domain names from patents and trademarks, noting that a patent has value and gives the patent owner the ability to exclude others from the patented product. 60 F. Supp.2d at 561 n.9. In contrast, a domain name is a valueless address with potential to become valuable depending on its use. Id. This court finds the courts reasoning in persuasive and holds that, in this case, the domain name Do rer, supra. and Network, supra., Laborzionist.org is a product of Zurakov s service contract with Register. Laborzionist.org is not a registered patent or registered trademark. Accordingly, Zurakov has a contract right, not a property right, in the domain name Laborzionist.org and his service agreement with Register exclusively governs his rights regarding his use of that domain name.

5 The first cause of action states a claim for breach of the implied covenant of good faith and fair dealing. To sustain this cause of action, the plaintiff must plead that the defendant withheld the benefits of the contract from the plaintiff or the defendant sought to prevent performance of the contract. Aventine Investmenr Management, Inc. v. Canadian Imperial Bank of Commerce, 265 A.D.2d 5 13 (2nd Dept 1999). Initially, Zurakov has adequately stated a cause of action for breach of an implied covenant of good faith and fair dealing. The complaint alleges that Zurakov was deprived of the benefits of the service contract because he bargained for the exclusive right to control the domain name Laborzionist.org and Register interfered with his control by linking the domain name to the Coming Soon Page. However, a review of the service contract between Zurakov and Register reveals that Zurakov paid Register $35.00 to register the domain name Laborzionist.org. Because the word register is not defined in the service contract, the court ascribes to that word its usual and, ordinary meaning. See, Rosner v. Metropolitan Proper@ and Liability Insurance Company, 2001 WL (NY); hbnez v. Dinkins, 168 Misc. 2d 68 (Sup. Ct. NY Co. 1996). According to Webster s Dictionary, to register means, (t)o enter in a register, official record, list, enroll or to make a record of. Webster s New Collegiate Dictionary, 2d Edition, It is undisputed that Register made a record of Zurakov s domain name Laborzionist.org and registered Laborzionist.org exclusively to Zurakov. Zurakov s argument that he bargained for the right to control the domain name Laborzionist.org is without merit. The word control never appears in the language of the contract. Moreover, the contract explicitly provides that, register.com may suspend, cancel, transfer or modify lhis] use of the services at any time, for any reason, in register.com s sole discretion. (Complaint, Ex. A, para. 15). Thus,

6 Zurakov received everything he bargained for under the service contract with Register.com and the court dismisses the first cause of action for breach of the covenant of good faith and fair dealing. The second cause of action is for deceptive acts and business practices in violation of GBL $39, The court also dismisses this cause of action. To state a cause of action for unfair and deceptive business practices, a plaintiff must show that the alleged conduct was consumer-oriented, had a broad impact on many consumers and was materially misleading or deceptive. Oswego Laborers Local 21 Pension Fund et al. v. Marine Midland Bank, NA., 85 N.Y.2d 20 (1995). However, evidence of full disclosure of the alleged deceptive practices leads to dismissal of the GBL $39 and 350 claim. See Sands v. Ticketmaster-New York, Inc., 207 A.D.2d 687 ( Ia Dept. 199)(holding that because Ticketmaster disclosed its fees to consumers, Ticketmaster had not e:gaged in deceptive business practices); See also Lewis v. Hertz C&p., 18 1 A.D.2d 93,9 ( 1 Dept. 1992)( dismissing the deceptive business practices claim because Hertz Corp. had fully disclosed its practices prior to renting vehicles to individuals). Here, Register fully disclosed its practice of displaying a Coming Soon Page in both the Frequently Asked Questions Section and the Help Section of Register s website. Moreover, the Coming Soon Page was not materially deceptive because it did not interfere with Zurakov s use of the domain name Laborzionist.org. Rather, the Coming Soon Page provided an announcement of the domain name Laborzionist.org for Zurakov during the period 2GBL Section 39 (a) states, (d)eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state is hereby declared unlawful. GBL Section 350 states, (f)alse advertising in the conduct of any business, trade or commerce or in the furnishing of any service in this state is hereby declared uniawfu1. 5

7 between his registration of the domain name and his construction of the website. Finally, it is undisputed that Zurakov had the ability to delete the Coming Soon Page by following the instructions set forth in both the FAQ and Help sections. Zurakov s third claim for unjust enrichment is based on quasi-contract. It is well settled that a quasi-contract claim is not a valid cause of action when a valid and enforceable contract exists between the parties. See, e.g., Fyrdman & Co. v. Credit Suisse First Boston Corp., 272 A.D.2d 236,238 (1 Dep t 2000); Curtis Props. Corp. v. GreifCos., 236 A.D.2d 237,239 (lst Dep t 1997); Clark-Fitzpatrick; Inc. v. Long Island Rail Road Complany, 70 N.Y.2d 382 (1987). Here, a valid and enforceable contract exists between Zurakov and Register.com. Therefore, the court dismisses plaintiffs unjust enrichment claim as well. Accordingly, it is ORDERED that defendants motion to dismiss the complaint is granted and the Th comp&t is dismissed. e clerk is directed to enter judgment dismissing the complaint with prejudice without I costs or disbursements. DATE