SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NASSAU. Plaintiff, Defendant.

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1 MEMORANDUM SUPREME COURT OF THE STATE OF NEW YORK, COUNTY OF NASSAU PRESENT : Hon. Burton S. Joseph, Justice. JAMES T. EDGE, on Behalf of Himself and All Others Similarly Situated, SLOMlN S, INC., - against Plaintiff, Trial/KS Part 18 Index No / Motion No. 002 Motion Date Aug. 7,2002 Defendant. Papers Numbered Notice of Motion, Affirmation & Exhibits Annexed Memorandum of Law in Opposition Reply Affirmation... 3 Memorandum of Law Upon the foregoing papers and for the following reasons, the motion by Defendant Slomin s Inc., for summary judgment dismissing the complaint, is granted. On March 23, 1993, Plaintiff James T. Edge signed a Five-Year Monitoring Agreement for a home alarm monitoring system provided by Defendant Slomin s Inc. and its affiliates. In exchange for committing to five years of alarm monitoring, Edge received his security system hardware at no charge. Relevantly, Edge initialed the relevant portion of the Agreement, Paragraph 2A, which states: Subscriber agrees to pay [the] monthly charge * * * plus tax to be billed quarterly payable

2 in advance for the monitoring * * * during the first year of this Agreement. Thereafter, the charge each year will be Slomin s then prevailing rate at the beginning of each. anniversary of this Agreement. The first payment is due upon signing of this Agreement, and the following payments are due commencing the first day of the next period * * * Pursuant to these express terms, on the first anniversary of the Agreement, Edge s monthly rate -2- changed to Slomin s then-prevailing rate - which amounted to a 45 cent increase from $19.50 to $ Each year thereafter his monthly rate increased slightly reflecting Slomin thenprevailing rate. No objection was voiced by Edge at those times. s When this Agreement expired, Edge signed a new Five-Year Monitoring Agreement on March 14, 1998, in exchange for an upgraded security system at no additional charge. The 1998 Agreement was substantially the same tow pages as the 1993 Agreement and contained the same provision at issue herein as to the yearly increases to the alarm monitoring rate to Slomin s prevailing rate on each yearly anniversary. It is undisputed that Edge had made his payments regularly, and knew about the yearly increases in his monthly charges since at least 1995 or In September, more than seven years after he began doing business with Slomin s- Edge filed this putative class action complaint, on behalf of himself and other persons similarly situated, alleging that Slomin initial contractual rate and that Slomin s breached its 1998 Agreement by charging more than his s billing practices contained in the Agreement violate the prohibition against deceptive and misleading practices under New York s General Business Law Specifically, Edge argues that Slomin s failed to clearly disclose that it would increase the monthly monitoring charges beginning with the second year of the contract. Issue was joined shortly after commencement of the action, and discovery proceedings have almost been completed. The case is to be certified as ready for trial in November, 2002.

3 By Notice of Motion returnable August 7,2002, Slomin s moves for summary judgment dismissing the complaint pursuant to CPLR 3212, on the grounds that, inter alia, the 1998 Agreement is not deceptive or misleading to the reasonable consumer as a matter of law pursuant to General Business Law $ 349, and that, in any event, Edge s Section 349 and breach of contract claims are barred by their respective statutes of limitations. In opposition to the motion, Edge s counsel argues that Slomin s Agreement was deceptively misleading as proscribed by Section 349 and that Edge was personally misled and suffered quantifiable damages by it. This Court disagrees with Edge s characterizations. Enacted as a broad consumer protection measure in the furnishing of any service within the State, General Business Law $ 349 provides private citizens with a right of action to enjoin unlawful and deceptive business practices and recover actual damages, attorney s fees and, in certain instances, treble damages (General Business Law 5 349[h]; see Goshen v Mu tual Life Ins. Co. ofn7y, 98 NY2d 3 14). In interpreting this statute, the New York Court of Appeals has enunciated three elements a plaintiff must show in order to establish a valid claim: first, that the challenged act or practice was consumer-oriented; second, that it was misleading in a material way; and third, that the plaintiff suffered injury as a result of the deceptive act (Stutman v Chemical Bank, 95 NY2d 24,29; see Gaidon v Guardian Life Ins. Co. ofam., 94 NY2d 330, 344; Oswego Laborers Local 214 Pension Fund v Marine Midland Bank, 85 NY2d 20,25). While the consumer oriented prong simply requires a litigant to show that the allegedly deceptive behavior has a broad impact on consumers at large (id.; see Teller v BiZZ Hayes, Ltd., 2 13 AD2d 14 1, 145), the deceptive practice, whether a representation or omission, must be likely to mislead a reasonable consumer acting reasonably under the circumstances (Oswego, -3-

4 supra, at 26; see Negrin v Norwest Mortgage, Inc., 263 AD2d 39, 50). Applying these principles to the matter at bar, Slomin s has established its entitlement to summary judgment by providing admissible evidence of its practices as well as its past dealings with Edge. On the other hand, Edge has failed to plead sufficient facts tending to show deceptive business practices by Slomin s in violation of General Business Law Although the allegations against Slomin s appear to meet the consumer-oriented prong since the same Agreement is unquestionedly used with consumers at large and its provisions have a broad impact on consumers of its home alarm monitoring services, Edge has failed to clearly establish that the Agreement s provisions were misleading to him or others in a material way, the second prong of the Stutman, Gaidon and Oswego trilogy. The record reveals, initially, that Edge himself knew, or should have known, of Slomin s billing policies and annual increases of his monthly fee to the then prevailing rate. Indeed, he explicitly demonstrated his understanding - which appears to be constant since before Edge became a customer in March on at least two different occasions, including: when he signed the 1993 Agreement, and when he testified that he understood the plain meaning of Paragraph 2A at his deposition. It is undisputed, additionally, that Edge received and paid quarterly bills from Slomin s since 1993, which reflected annual adjustments and increases to his monthly charge. Edge in fact knew, and certainly should have know, that his monthly rate had increased for years prior to signing the 1998 Agreement; he understood the terms to carry over to the 1998 Agreement. Given Edge s actual knowledge of Slomin s billing policy as described in Edge testified that: when I paid the bill, I noticed they were a little bit more each month. It was probably a couple years after I got the system * * * Yeah, 95,

5 the Agreements, he does not appear to have been misled by either the 1993 or 1998 Agreements. Moreover, under New York law, to establish that an act or business practice is deceptive within the meaning of the statute, a plaintiff must show that it was misleading to the reasonable consumer. Even if Edge was somehow misled by the Agreement, he has not demonstrated that a reasonable consumer would have misunderstood Slomin s billing practices as explicitly stated in the Agreement. A reasonable consumer would have read, and indeed is required to read, the entire agreement to which he is contractually bound. Here, after reading the entire Agreement, a reasonable consumer could draw no other conclusion than what the agreement expressly states, that the charge each year will be Slomin s then prevailing rate at the beginning of each anniversary of this Agreement. It appears unlikely that a reasonable consumer would believe that the initial monthly charge stated in the Agreement is locked in for the five-year duration of the Agreement, without taking into consideration the prevailing rate, inflation or other forces generally increasing prices. Further, because the conduct complained of is specifically provided for by in the parties Agreement and thus was fully disclosed, such conduct is not a deceptive practice within the meaning of General Business Law (Citipostal, Inc. v Unistar Leasing, 283 AD2d 916, 918; see Sands v Ticketmaster-New York, 207 Corp., 18 1 AD2d 493,494, Iv dismissed 80 AD2d 687, Iv denied 85 NY2d 893). NY2d 904; Lewis v Hertz Nor has Edge made a showing of the third element of Stutman, Gaidon and Oswego, which requires a party to show that he suffered injury as a result of a business deceptive practice (see Stutman, supra, at 29; Gaidon, supra, at 344; Oswego, supra, at 25; General Business Law 0 349[h]). In other words, Edge must establish that the actual harm -5-

6 alleged - unwarranted increases to his initial monthly rate - was caused by the deception. The allegations of Edge s counsel in a hearsay memorandum of law are insufficient to raise any triable issue of fact as to that prong (see CPLR 3212). Edge has failed to establish with admissible evidence that he suffered any harm - pecuniary or otherwise - flowing from the alleged deceptive practice. Consequently, Edge s claim under the General Business Law must be dismissed. In addition to asserting a Section 349 claim, Edge attempts to bootstrap a breach of contract claim into this case; however, no set of facts alleged in the complaint or established in Edge s deposition support such a claim, because the 1998 Agreement expressly provides for annual adjustments to the initial rate charged. Despite these express terms in the 1993 and 1998 Agreements, Edge argues that by Slomin s actually adjusting the monthly rate after the first year, Slomin s has breached the 1998 Agreement. It is black letter law that a breach of contract claim cannot stand, however, simply because a plaintiff misunderstood or failed to read the contractual terms (see Kavoukian v Kaletta, W2d_, 742 NYS2d 157, 159; Morby v Di Siena Assocs. LPA, 291 AD2d 604,605). Indeed, even if a Slomin s salesperson misrepresented the terms prior to execution, a breach of contract claim would fail (id.). Put simply, Edge is bound by the plain meaning of the terms of the 1998 Agreement and has no claim for a breach of contract. In accordance with the foregoing, Slomin s motion is granted and the complaint is hereby dismissed in its entirety. This constitute the decision, order and judgment of the Court. ENTER: Dated: Mineola, New York September lo, SEP