Goshen v. Mut. Life Ins. Co.

CourtNew York Court of Appeals
Writing for the CourtChief KAYE and s WESLEY, ROSENBLATT, GRAFFEO, GREEN and RITTER concur; s SMITH and LEVINE taking no part.
Citation774 N.E.2d 1190,746 N.Y.S.2d 858,98 N.Y.2d 314
Decision Date02 July 2002
PartiesPAUL A. GOSHEN, on Behalf of Himself and All Others Similarly Situated, Appellant, v. MUTUAL LIFE INSURANCE COMPANY OF NEW YORK et al., Respondents. WALTER SCOTT et al., on Behalf of Themselves and All Others Similarly Situated, Appellants, v. BELL ATLANTIC CORPORATION et al., Respondents.

98 N.Y.2d 314
774 N.E.2d 1190
746 N.Y.S.2d 858

PAUL A. GOSHEN, on Behalf of Himself and All Others Similarly Situated, Appellant,
v.
MUTUAL LIFE INSURANCE COMPANY OF NEW YORK et al., Respondents.
WALTER SCOTT et al., on Behalf of Themselves and All Others Similarly Situated, Appellants,
v.
BELL ATLANTIC CORPORATION et al., Respondents

Court of Appeals of the State of New York.

Argued June 4, 2002.

Decided July 2, 2002.


98 N.Y.2d 315
Milberg Weiss Bershad Hynes & Lerach LLP, New York City (Barry A. Weprin, Melvyn I. Weiss and Mark T. Millkey of counsel), James, Hoyer, Newcomer, Forizs & Smiljanich, P.A., Tampa, Florida, Bonnett, Fairbourn, Freidman & Balint, P.C.,
98 N.Y.2d 316
Phoenix, Arizona, Parry, Deering, Futscher & Sparks P.S.C., Covington, Kentucky, and Hubbard & Biederman, L.L.P., Dallas, Texas, for appellant in the first above-entitled action

Dewey Ballantine LLP, New York City (Karvey Kurzweil, Richard W. Reinthaler, James P. Smith III and John E. Schreiber of counsel), and Michael C. Dorf for respondents in the first above-entitled action.

98 N.Y.2d 317
Cleary, Gottlieb, Steen & Hamilton, New York City (Mitchell A. Lowenthal, Evan A. Davis and J.J. Gass of counsel), and Victoria E. Fimea, Washington D.C., for American Council of Life Insurers, amicus curiae in the first above-entitled action

Stamell & Schager, LLP, New York City (Jason L. Solotaroff of counsel), Abbey Gardy, LLP (Joshua N. Rubin of counsel), and Law Offices of Mark S. Kaufman (Mark S. Kaufman of counsel), for appellants in the second above-entitled action.

98 N.Y.2d 318
Davis Polk & Wardwell, New York City (Guy Miller Struve, Nancy B. Ludmerer, D. Scott Tucker, Amy V. Garcia and Edmund Polubinski III of counsel), Robert Ernst and Richard H. Wagner for respondents in the second above-entitled action

98 N.Y.2d 319
Eliot Spitzer, Attorney General, New York City (Caitlin J. Halligan, Daniel Smirlock, Thomas G. Conway, Kenneth Dreifach, Jane M. Azia and Robert H. Easton of counsel), for Attorney General of the State of New York, amicus curiae in the first and second above-entitled actions.

98 N.Y.2d 320
O'Melveny & Myers LLP, Washington D.C. (Walter Dellinger, John H. Beisner and Marc E. Isserles of counsel), and National Chamber Litigation Center (Robin Conrad of counsel), for Chamber of Commerce of the United States of America, amicus curiae in the first and second above-entitled actions.

Rice & Justice, Albany (John Carter Rice, Lawrence P. Justice and Bradley F. Rice of counsel), for Business Council of New York State, Inc., amicus curiae in the first and second above-entitled actions.

Chief Judge KAYE and Judges WESLEY, ROSENBLATT, GRAFFEO, GREEN2 and RITTER2 concur; Judges SMITH and LEVINE taking no part.

98 N.Y.2d 321
OPINION OF THE COURT

CIPARICK, J.

On these appeals we are once again called upon to determine the applicability of New York's Consumer Protection Act. General Business Law § 349 (a) prohibits "[d]eceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state." An issue common to both appeals is whether an allegedly deceptive scheme that originates in New York, but injures a consumer in a transaction outside the state, constitutes an actionable deceptive act or practice under General Business Law § 349 (a). An additional issue in Scott is whether the New York plaintiffs have sufficiently stated a claim for deceptive acts and practices, or false advertising, under General Business Law § 349 (h) or § 350. In the circumstances presented, we answer the first question in the negative and the second in the affirmative.

I.

A. The Goshen Action

Plaintiffs in this action are insurance policy purchasers who claim to be the victims of a deceptive scheme contrived and implemented by defendants Mutual Life Insurance Company of New York and its wholly owned subsidiary, MONY Life Insurance Company of America (MONY). Defendants have extensive ties to New York and conduct business in the state. Plaintiffs purchased "vanishing premium" policies from defendants at various times before starting this action. A "vanishing premium" would allegedly allow consumers to make periodic premium payments at a rate that would yield investment income to permit premium payments to decline until the obligation to make payments vanished entirely without affecting coverage (see Gaidon v Guardian Life Ins. Co. of Am., 94 NY2d 330 [1999]). Plaintiffs claim that the vanishing premium is a deceptive scheme based on the artificial inflation of projected policy dividends.

Plaintiff Paul A. Goshen, a Florida resident, used the cash surrender proceeds of his MONY life insurance policy to purchase a vanishing premium policy. Plaintiff claims that a MONY sales agent induced him to surrender his prior policy in

98 N.Y.2d 322
order to purchase the vanishing premium policy using a deceptive sales presentation to illustrate its potential economic benefits. Plaintiff, believing the sales information to be true, ultimately purchased a vanishing premium policy through a MONY representative in Florida.

Plaintiff's complaint alleged several causes of action, including "deceptive trade practices." Following commencement of the action, Supreme Court granted defendants' motion for summary judgment and dismissed the action in its entirety, and the Appellate Division affirmed. On appeal, this Court reinstated only plaintiff's General Business Law § 349 cause of action, holding that an issue of fact remained as to whether defendants' acts were misleading to a "reasonable consumer," and remitted the matter to Supreme Court (see Gaidon, 94 NY2d at 344). On remittal, defendants sought dismissal as to plaintiff Goshen. Supreme Court granted the motion and dismissed Goshen's claim because he purchased his policy in Florida. The Appellate Division affirmed, and we granted plaintiff leave to appeal (97 NY2d 609 [2002]). We now affirm.

B. The Scott Action

Plaintiffs here, as in Goshen, collectively seek relief for acts that they allege are deceptive. Plaintiffs are consumers who subscribed to defendants' Digital Subscriber Line (DSL) Internet service. Defendants are Delaware corporations with principal places of business in New York and Virginia. Plaintiffs Walter Scott, David Solomon and Eric Wu are New York residents. The remaining plaintiffs—Alvarez & Co., Inc., John F. Latuperissa, Andrew Boncek and Greg Howard—are out-of-state residents.

In 1999, defendants initiated a significant marketing campaign to promote its DSL service. Through their Web site and various forms of print media, defendants advertised the service as

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1537 practice notes
  • Goldemberg v. Johnson & Johnson Consumer Cos., No. 13–cv–3073 NSR.
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • March 27, 2014
    ...New York v. Smokes–Spirits.Com, Inc., 12 N.Y.3d 616, 621, 883 N.Y.S.2d 772, 911 N.E.2d 834 (2009) ; Goshen v. Mut. Life Ins. Co. of N.Y., 98 N.Y.2d 314, 324, 746 N.Y.S.2d 858, 774 N.E.2d 1190 (2002). Defendant argues that the Complaint fails to satisfy the second and third elements of this ......
  • Orellana v. Macy's Retail Holdings, Inc., 17 Civ. 5192 (NRB)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • July 10, 2018
    ...where the subject matter of the misrepresentation is within the defendant's control. In Goshen v. Mutual Life Insurance Co. of New York, 98 N.Y.2d 314, 323, 774Page 39 N.E.2d 1190 (2002), the defendants, DSL providers, made certain misleading representations regarding the quality of their i......
  • Style Asia, Inc. v. J Club, Index No. 160405/2019
    • United States
    • United States State Supreme Court (New York)
    • October 13, 2020
    ...all material disputes regarding those facts. Beal Sav. Bank v. Sommer, 8 N.Y.3d 318, 324 (2007); Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326 (2002); 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 152 (2002); Seaman v. Schulte Roth & Zabel LLP, 176 A.D.3d 538......
  • Partners v. Ajw Qualified Partners Llc
    • United States
    • New York Supreme Court Appellate Division
    • April 12, 2011
    ...as a matter of law” ( Leon v. Martinez, 84 N.Y.2d 83, 88, 614 N.Y.S.2d 972, 638 N.E.2d 511; see Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190). Put differently, the documentary evidence must “resolv[e] all factual issues as a matter of law and......
  • Request a trial to view additional results
1537 cases
  • Goldemberg v. Johnson & Johnson Consumer Cos., No. 13–cv–3073 NSR.
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • March 27, 2014
    ...New York v. Smokes–Spirits.Com, Inc., 12 N.Y.3d 616, 621, 883 N.Y.S.2d 772, 911 N.E.2d 834 (2009) ; Goshen v. Mut. Life Ins. Co. of N.Y., 98 N.Y.2d 314, 324, 746 N.Y.S.2d 858, 774 N.E.2d 1190 (2002). Defendant argues that the Complaint fails to satisfy the second and third elements of this ......
  • Orellana v. Macy's Retail Holdings, Inc., 17 Civ. 5192 (NRB)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • July 10, 2018
    ...where the subject matter of the misrepresentation is within the defendant's control. In Goshen v. Mutual Life Insurance Co. of New York, 98 N.Y.2d 314, 323, 774Page 39 N.E.2d 1190 (2002), the defendants, DSL providers, made certain misleading representations regarding the quality of their i......
  • Style Asia, Inc. v. J Club, Index No. 160405/2019
    • United States
    • United States State Supreme Court (New York)
    • October 13, 2020
    ...all material disputes regarding those facts. Beal Sav. Bank v. Sommer, 8 N.Y.3d 318, 324 (2007); Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326 (2002); 511 W. 232nd Owners Corp. v. Jennifer Realty Co., 98 N.Y.2d 144, 152 (2002); Seaman v. Schulte Roth & Zabel LLP, 176 A.D.3d 538......
  • Partners v. Ajw Qualified Partners Llc
    • United States
    • New York Supreme Court Appellate Division
    • April 12, 2011
    ...as a matter of law” ( Leon v. Martinez, 84 N.Y.2d 83, 88, 614 N.Y.S.2d 972, 638 N.E.2d 511; see Goshen v. Mutual Life Ins. Co. of N.Y., 98 N.Y.2d 314, 326, 746 N.Y.S.2d 858, 774 N.E.2d 1190). Put differently, the documentary evidence must “resolv[e] all factual issues as a matter of law and......
  • Request a trial to view additional results

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