SCAN SHORT FORM ORDER SUPREME COURT: ST ATE OF NEW YORK COUNTY OF NASSAU. PRESENT: HON. IRA B. WARSHAWSKY, Justice.
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1 SCAN SHORT FORM ORDER SUPREME COURT: ST ATE OF NEW YORK COUNTY OF NASSAU PRESENT: HON. IRA B. WARSHAWSKY, Justice. JOHN ST AMA TOPULOS, MEHMET ARIS, ALl ARIS NESET ZAIM, MEHMET KIRCA, MUST AF A KAHVECI, KADIR DURGUT, NAEEM ANJUM ORHAN AKSIT, SEZAI TIY ALOGLU, KEMAL KARABULUT, TANERINAL, SELAHATTIN CANBAKIS, MEHMET OCAL, ISA CITLAK SERDAR CA YLl, KENAN IPEK, OKY A Y ILNEM SEBAHA TTIN AKKA Y A, T ARUN KUMAR, SALlH KESEN, IBRAHIM KURAL TRIAL/IAS PART 9 INDEX NO. : /2008 MOTION DATE: 04/23/2009 MOTION SEQUENCE: 001 and against - Plaintiffs PRIME TIME TRANSPORTATION, INC., MICHAEL KANDOV and YURI KANDOV Defendants. The following papers read on this motion: Notice of Motion, Affrmation, Affidavit & Exhibits Anexed... 1 Memorandum of Law in Support of Defendants' Motion to Dismiss... 2 Attorney s Affirmation of Gerald V. Dandeneau & Exhibit Anexed... 3 Notice of Cross-Motion, Affidavit, Affirmation & Exhibit Annexed... Reply Affirmation of Roberta C. Pike Reply Memorandum of Law in Partial Opposition to Plaintiffs ' Cross- Motion to Amend and in Furher Support of Defendants' Motion to Dismiss... 6 Memorandum of Law in Opposition to Defendants' Motion and in Support of Plaintiffs' Motion... 7
2 PRELIMINARY STATEMENT The Defendants move for dismissal of the complaint pursuant to Civil Practice Law and Rules 3211 (a)(4) in nine respects as follows: a. Plaintiffs Kesen and Kural have prior actions pending against Prime Time Transportation (Prime Time) in Supreme Cour, Queens County; b. Plaintiff Kirca s claims are barred by a general release; c. All claims of fraudulent inducement in the First Cause of Action and elsewhere on behalf of Akkaya asserted prior to April 3, 2003 are bared by the statute of limitations; d. Dismissing causes on behalf of Canbakis on the ground that there is no contractual relationship between this Plaintiff and the Defendants; e. Dismissing the First Cause of Action alleging fraudulent inducement on the ground that such claims are bared by the existence of a contract between the Plaintiffs and Prime Time; f. Dismissing the First Cause of Action on behalf of Stamatopulos, Mehmet Aris, Ali Aris, Zaim, Kirca, Kahveci, Anjum, Aksit, Karabulut, Inal, Canbakis, Ocal, Citlak, Cayli, Ipek Akkaya, Kumar, Kesen and Kural on the basis of the applicable statute of limitations; g. Dismissing claim of unjust enrichment on behalf of all plaintiffs in that this claim is bared by the existence of a contract between the Plaintiffs and the Defendant Prime Time; h. Dismissing the Third Cause of Action against the individual Defendants in that they are not paries to the contract with the Plaintiffs; i. Dismissing the Fourth Cause of Action on behalf of Stamatopulos, Mehmet Aris, Ali Aris, Zaim, Kirca, Kahveci, Anjum, Aksit, Karabulut, Inal, Canbakis, Ocal, Citlak, Cayli, Ipek Akkaya, Kumar, Kesen and Kural pursuant to Civil Practice Law and Rules General Business Law 691 (4); 3211 (A)(7) and The Plaintiffs cross-move for leave to serve an amended and supplemental Summons and Complaint, and requests that the Defendants' motion be in all respects denied. Among the more salient aspects of the cross-motion are: 1. It deletes the names of Kesen and Kural in response to (a) above; 2. The name of Serkan Limo, Inc. is sought to be substituted for Plaintiff Kesen; 3. The causes of action alleging unjust enrichment and violation of General Business
3 Law ~ 349 are deleted in response to (g) and (I); 4. Addition of new causes of action alleging breach of a Fiduciar Obligation to the Plaintiffs and breach of an implied covenant of good faith and fair dealing; 5. Addition of a cause of action for tortious interference with the Plaintiffs' franchise agreements by virtue of the Defendants' manipulation of the " Sunshine Board", as described in the affidavit of Mehmet Aris; 6. The remaining causes of action for breach of the fiduciar agreement are limited to the six years preceding the commencement of the action; 7. Urging the Defendants be held to a higher standard because of the lack of business sophistication of the Plaintiffs; 8. Challenges the release of Kirca as not knowingly intended to release the Defendants from all of the claims set forth in the release; 8. Limits the claims of Akkaya for the period subsequent to April 2, The Defendants reply sets forth the following, based upon the Cross-motion, and the concessions contained in the supporting affidavit and affirmation: withdrawn. a. Plaintiffs Kesen and Kurals claims are dismissed based upon a prior pending action; b. Serkan Limo is in privity with the Defendants, not Canbakis; c. Claims by Akkay preceding his release of April 2, 2003 are barred; d. Unjust enrichment claims are withdrawn; e. Deceptive trade practices asserted by Tiyaloglu and Ilnem are withdrawn; f. Fraudulent inducement claims by Plaintiffs other than Durgut, Tiyaloglu and Ilnem are BACKGROUND These actions arise from franchise agreements between the Plaintiffs and Prime Time. The Plaintiffs are owners oflimousines who paid to Prime Time a franchise fee of $ in return for services by Prime Time to provide driving assignments for their customers. The Defendant developed corporate customers, and arranged for a franchisee to pick up passengers, in return for which they were provided a voucher, which they turned in to Prime Time, which did biling and made payment to the franchisees upon submission of the voucher.
4 The Plaintiffs allege that the Defendants made unauthorized deductions from the forwarded payments in violation of the terms of the agreement. A furher allegation involves the creation of a "Sunshine Board" by the Defendants, which was intended to regulate the activities of the franchisees. Instead, it was used to penalize drivers who questioned the compensation, or the imposition of infractions and leveling of fines against the drivers ' payments. DISCUSSION The Defendants' motion to dismiss the claims of Kesen and Kural is granted on consent. The Plaintiffs' motion to substitute Serkan Limo in place of Plaintiff Canbakis is granted. The Plaintiff Akkaya s claims are limited to those subsequent to April 2, The Defendants motion to dismiss the unjust enrichment claims is denied as moot, in that the Plaintiffs have withdrawn them. The motions to dismiss the Fourth Cause of Action based upon violation of General Business Law ~ 349 is denied as moot since such claims are now withdrawn. Dealing first with the Plaintiffs' cross-motion to amend the complaint, the motion to add a new cause of action alleging breach of fiduciar duty is denied. The relationship between franchisor and a franchisee does not constitute a fiduciary one. (Akkaya v. Prime Time Transp. Inc. 45 A.D.3d 616 (2d Dept. 2007)). To the extent that the Plaintiffs seek to add claims of violation of the breaches of an implied covenant of good faith and fair dealing, the motion is granted, with the proviso that such claims are implicit in all contracts, and no obligation can be implied which is inconsistent with the express terms of the contract. Testing Service, 87 N.Y.2d 384 (1995)). (Dalton v. Educational The motion to add a cause of action for tortious interference with the franchise agreements is denied. Such a cause of action is maintainable only against a third pary, not between paries to the agreement. (Lyon v. Menoudakis Menoudakis, 2009 WL (2d Dept. 2009)). To the extent that the Plaintiffs request that the Cour impose a higher standard than that imposed by law because of the alleged lack of business sophistication of the Plaintiffs is denied. Turning to the Defendants' motion, to the extent not acceded to by the response of the Plaintiffs, the motion to dismiss the claims of Kirca Mehmet as barred by a general release is granted. When a document is clear on its face, courts wil not accept parole evidence
5 contradict the plain meaning. The release (Exh. "C" to Motion) is paricularly specific in that it relates to all claims for deductions made by Prime Time and Prime Time Sunshine Fund, Inc. from payments on account of vouchers, including fines, penalties, radio dues, surcharges, etc. A part is bound by the specifically mentioned items in a signed general release as well as matters reasonably related to them. (Tarantola v. Wiliams 48 AD.2d 552 (2d Dept. 1975)). The motion to dismiss claims on behalf of Kesen and Kutral is granted on consent, since those paries have prior pending actions in Queens County. The motion to dismiss the First Cause of Action for fraudulent inducement on behalf of all Defendants is granted. The action is premised on a claimed violation of a franchise agreement, thus precluding claims of a quasi-contractual nature. This renders moot the motion to dismiss the First Cause of Action on behalf of Akkaya on the ground of a general release, and the claims on behalf of the Plaintiffs named in (f) of the motion. A claim for fraudulent inducement must be specifically pleaded. The alleged intention of a part not to comply with the agreement into which he enters is not fraudulent inducement, but constitutes a breach of contract. The essential elements required to adequately plead a cause of action for fraudulent inducement are: that the defendant made a false representation of a material fact, that the defendant made such misrepresentation knowingly (i., with scienter), that the misrepresentation made was justifiably relied upon by the plaintiff, and that some injury or damage resulted to the plaintiff (Lama Holdings Co. Smith Barney, Inc. 88 N. Y.2d 413, 422 (1996)). The allegations of the Second Cause of Action for unjust enrichment are duplicative of the claims for breach of contract. The Second Cause of Action is dismissed. Herrington Sutclife, LLP, 61 AD.3d 614 (ISI Dept. 2009)). (Hoeffner v. Orrick The motion to dismiss the Third Cause of Action as to Defendants Michael and Yuri Kandov is granted. The Plaintiffs have made no claim that these individuals acted in other than on behalf of Prime Time. Leave to plead a Fifth Cause of Action is denied. The allegations are nothing more than claims for breach of contract and the implied warranties of good faith and fair dealing. Punitive damages are not recoverable in a breach of contract action. (Fulton v. Allstate Ins. Co., 14 AD.3d (1 sl Dept. 2005)), as the purose is not to remedy private rights, but to vindicate public wrongs, citing (Rocanova v. Equitable Life Assur. Socy. of us., 83 N.Y.2d
6 (1944)). The motion for leave to plead the Sixth Cause of Action, although it does not appear to add anything to the Third Cause of Action, is granted. In both the Plaintiffs claim that the Defendants failed to comply with the terms of the franchise agreements, for which damages in excess of $ are claimed. The proposed Seventh Cause of Action alleges a violation of General Business Law ~ 349. This statute is a consumer protection statute which applies solely to matters affecting the consumer public at large. (Kirk v. Heppt, 532 F. Supp.2d 586 (S. Y. 2008)). In addition, it is applicable only to consumers, and does not apply to arangements between businesses. (International Design Concepts, LLC v. Saks, Inc. 486 F.Supp.2d 299 (S. Y. 2007). The actions of the Defendant Prime Time are not a threat to the consumer population at large; and the Plaintiffs are not consumers. They are owners and operators of a limousine business, who sought to improve their business opportunities by contracting with Prime Time. For both of the foregoing reasons, the Seventh Cause of Action fails. CONCLUSION The sole remaining claims of the Plaintiffs who remain in the action are for breach of contract. In the face of a written agreement, equitable claims in the nature of quasi-contract are inappropriate. The claims against the individual Defendants are dismissed, in that there is no claim that the Plaintiffs contracted with any entity other than Prime Time. To the extent that any request for relief is not specifically granted, it is denied. The Plaintiffs are to revise its caption pursuant to the decision of the Cour. The Defendants are to serve an Answer to that which remains of the Complaint by July 20 matter is adjourned for a Preliminary Conference on July 29, 2009, at 9:30 AM. This constitutes the Decision and Order of the Cour The Dated: June 23, 2009 NTE JUN 2 6?Onq NAS ",u v-vui,1 f COUNTY CLERK'S OFFfC!
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