| Shaw v Club Mgrs. Assn. of Am., Inc. |
| 2011 NY Slip Op 04034 [84 AD3d 928] |
| May 10, 2011 |
| Appellate Division, Second Department |
| David Shaw et al., Appellants, v Club ManagersAssociation of America, Inc., et al., Respondents. |
—[*1] Reed Smith, LLP, New York, N.Y. (James M. Andriola, Efrat Menachemi, and Alexander Y.Thomas of counsel), for respondents Club Managers Association of America, Inc., and JamesSingerling. Nixon Peabody, LLP, Jericho, N.Y. (Joseph J. Ortego, James W. Weller, and Aaron S.Halpern of counsel), for respondents Metropolitan Club Managers Association, Inc., Todd Zorn,Barry Chandler, Randall Ruder, Burton Ward, Michael Galluzo, Robert Kasara, Joseph Meluso,and Meg O'Connor.
In an action, inter alia, to recover damages for a violation of the Donnelly Act (GeneralBusiness Law § 340), the plaintiffs appeal from an order of the Supreme Court, NassauCounty (Bucaria, J.), entered March 8, 2010, which granted the separate motions of thedefendants Club Managers Association of America, Inc., and James Singerling, and thedefendants Metropolitan Club Managers Association, Inc., Todd Zorn, Barry Chandler, RandallRuder, Burton Ward, Michael Galluzo, Robert Kasara, Joseph Meluso, and Meg O'Connor todismiss the complaint pursuant to CPLR 3211 (a) (7) insofar as asserted against each of them.
Ordered that the order is modified, on the law, by deleting the provisions thereof grantingthose branches of the defendants' separate motions which were pursuant to CPLR 3211 (a) (7) todismiss the causes of action to recover damages for tortious interference with prospectiveeconomic advantage, defamation, and conspiracy insofar as asserted against each of them andsubstituting therefor a provision denying those branches of the motions; as so modified, the orderis affirmed, without costs or disbursements.
On a motion to dismiss pursuant to CPLR 3211 (a) (7), the pleading must be afforded aliberal construction (see CPLR 3026; Leon v Martinez, 84 NY2d 83, 87 [1994]).The facts as alleged in the complaint are accepted as true, with the plaintiff accorded the benefitof every favorable inference (see Leon v Martinez, 84 NY2d at 87-88). Applying thisstandard, the Supreme Court properly granted those branches of the defendants' separate motionswhich were pursuant to CPLR 3211 (a) (7) to dismiss the first, second, fourth, sixth, seventh,eighth, ninth, and tenth causes of action insofar as asserted against each of them. However, theSupreme Court erred in granting those branches of the defendants' separate motions [*2]which were pursuant to CPLR 3211 (a) (7) to dismiss the third,fifth, and eleventh causes of action insofar as asserted against each of them.
The Supreme Court properly dismissed the first cause of action alleging a violation ofGeneral Business Law § 340, also known as the Donnelly Act. "[T]o sufficiently state aviolation of General Business Law § 340, a party must allege a conspiracy or a reciprocalrelationship between two or more legal or economic entities, identify the relevant marketaffected, describe the nature and effect of the alleged conspiracy and the manner in which theeconomic impact of that conspiracy restrains trade in the market" (Capitaland United SoccerClub v Capital Dist. Sports & Entertainment, 238 AD2d 777, 779 [1997]; see Neri's Land Improvement, LLC v J.J.Cassone Bakery, Inc., 65 AD3d 1312, 1315 [2009]; Benjamin of Forest Hills Realty, Inc. v Austin Sheppard Realty, Inc., 34AD3d 91, 94 [2006]; Watts v Clark Assoc. Funeral Home, 234 AD2d 538 [1996]).Here, the complaint fails to allege the nature and effect of the claimed conspiracy and the mannerin which the economic impact of that conspiracy restrains trade in the market (see Benjaminof Forest Hills Realty, Inc. v Austin Sheppard Realty, Inc., 34 AD3d at 97; Newsday, Inc.v Fantastic Mind, 237 AD2d 497 [1997]; Watts v Clark Assoc. Funeral Home, 234AD2d 538 [1996]; Constant v Hallmark Cards, 172 AD2d 641, 642 [1991]; cf. Anandv Soni, 215 AD2d 420 [1995]).
The Supreme Court also properly dismissed so much of the second cause of action as allegeda violation of General Business Law § 349, since the complaint did not allege an act orpractice that was "consumer oriented" (Gaidon v Guardian Life Ins. Co. of Am., 94NY2d 330, 344 [1999] [internal quotations omitted]; see Oswego Laborers' Local 214Pension Fund v Marine Midland Bank, 85 NY2d 20, 24-25 [1995]; see also Maple House, Inc. v Alfred F.Cypes & Co., Inc., 80 AD3d 672, 673 [2011]). Similarly, the Supreme Court properlydismissed so much of the second cause of action as alleged a violation of General Business Law§ 350, since the complaint did not allege an advertisement that "had an impact onconsumers at large" (Andre Strishak & Assoc. v Hewlett Packard Co., 300 AD2d 608,609 [2002]).
Additionally, the Supreme Court properly dismissed the ninth and tenth causes of actionalleging injurious falsehood and prima facie tort, since the complaint failed to allege specialdamages with sufficient particularity (see Drug Research Corp. v Curtis Publ. Co., 7NY2d 435, 440-441 [1960]; Stanton vCarrara, 28 AD3d 642 [2006]; see also Nyack Hosp. v Empire Blue Cross & BlueShield, 253 AD2d 743 [1998]). Moreover, to make out a claim sounding in prima facie tort,"the plaintiff[ ] [must] allege that disinterested malevolence was the sole motivation for theconduct of which [he or she] complain[s]" (R.I. Is. House, LLC v North Town Phase II Houses, Inc., 51 AD3d890, 896 [2008]). However, the complaint does not contain such an allegation.
Further, the Supreme Court properly dismissed the fourth, sixth, seventh, and eighth causesof action alleging negligence (see generally Pulka v Edelman, 40 NY2d 781, 782 [1976]),breach of the implied duty of good faith and fair dealing (see Aventine Inv. Mgt. v CanadianImperial Bank of Commerce, 265 AD2d 513, 514 [1999]), negligent misrepresentation (see Ideal Steel Supply Corp. v Anza,63 AD3d 884, 885 [2009]), and unjust enrichment (see generally Whitman Realty Group, Inc. v Galano, 41 AD3d 590,592-593 [2007]), respectively.
However, the Supreme Court erred in dismissing the fifth cause of action allegingdefamation. The Supreme Court correctly determined that the alleged statements tend to injurethe plaintiffs in their trade, business, or profession (see Wasserman v Haller, 216 AD2d289, 289-290 [1995]). Thus, the statements are slander per se and damages are presumed (seeLiberman v Gelstein, 80 NY2d 429, 435 [1992]). The Supreme Court then held that thealleged statements were protected by a qualified privilege. However, the shield provided by aqualified privilege may be dissolved if a plaintiff can demonstrate that a defendant spoke withspite or ill will (common-law malice) or with a high degree of awareness of the statements'probable falsity (constitutional malice) (see Liberman v Gelstein, 80 NY2d at 437-438;Kotowski v Hadley, 38 AD3d499, 500 [2007]). Here, the complaint alleged, inter alia, that certain of the individualdefendants spoke with knowledge that such statements were false or spoke with recklessdisregard for the statements' truth or falsity. "Since . . . the burden does not shift tothe nonmoving party on a motion made pursuant to CPLR 3211 (a) (7), a plaintiff has 'noobligation to show evidentiary facts to support [his or her] allegations of malice on a motion todismiss pursuant to CPLR 3211 (a) (7)' " (Sokol v Leader, 74 AD3d 1180, 1182 [2010], quoting Kotowskiv Hadley, 38 AD3d at 500-501; seeArts4All, Ltd. v Hancock, 5 AD3d 106, 109 [2004]). Thus, dismissal of the fifth causeof action alleging defamation pursuant to CPLR 3211 (a) (7) was not warranted.[*3]
Additionally, since the complaint alleged that thedefendants interfered with the plaintiffs' prospective economic advantage through wrongfulmeans (see Carvel Corp. v Noonan,3 NY3d 182, 190-191 [2004]; Anesthesia Assoc. of Mount Kisco, LLP v Northern Westchester Hosp.Ctr., 59 AD3d 473, 477 [2009]; Caprer v Nussbaum, 36 AD3d 176, 204 [2006]), the SupremeCourt erred in dismissing the third cause of action alleging tortious interference with prospectiveeconomic advantage.
Finally, since the plaintiffs stated causes of action to recover damages for independentlyactionable torts, the Supreme Court erred in dismissing the eleventh cause of action allegingconspiracy (see Alexander & Alexander of N.Y. v Fritzen, 68 NY2d 968, 969 [1986]; Chung v Wang, 79 AD3d 693, 695[2010]; Shepis v 3 Cottage Place Assoc., 265 AD2d 317 [1999]). Mastro, J.P., Florio,Belen and Chambers, JJ., concur. [Prior Case History: 2010 NY Slip Op 30511(U).]