Sims v. First Consumers National Bank

• Decision Date: 25 March 2003
• Citation: 303 A.D.2d 288,758 N.Y.S.2d 284
• Court: New York Supreme Court — Appellate Division
• Parties: BRENDA M. SIMS et al., Appellants,<BR>v.<BR>FIRST CONSUMERS NATIONAL BANK et al., Respondents.

303 A.D.2d 288

758 N.Y.S.2d 284

BRENDA M. SIMS et al., Appellants,

v.FIRST CONSUMERS NATIONAL BANK et al., Respondents.

Decided March 25, 2003.

Concur — Buckley, P.J., Ellerin, Lerner, Friedman and Marlow, JJ.

In this putative class action plaintiffs allege that high-pressure sales tactics lured them into accepting credit cards with hidden fees. Plaintiffs allege that defendants use advertising to market secured credit cards to people who otherwise have difficulty receiving credit, that the ads hide certain fees by not mentioning them thereby deceiving customers, and that when an applicant is approved for a secured card, defendant bank sends a document titled "FCNB Credit Card Agreement" with a disclosure statement on the reverse side in six-point type. Both plaintiffs claim that they did not learn of annual or overlimit fees until incurred and then only when a customer service representative referred them to the "minuscule" disclosure statement. Plaintiffs' causes of action are: (1) for deceptive acts and practices in violation of General Business Law § 349; (2) for breach of contract in that plaintiffs were charged fees not properly disclosed; and (3) for breach of defendants' duty of good faith and fair dealing.

Defendants moved under CPLR 3211 (a) (1) and (7) for dismissal of the complaint relying on the disclosure statements provided plaintiffs. Plaintiffs argued that since those disclosure statements were in a smaller type than allowed under CPLR 4544, they were inadmissible. The IAS court granted defendants' motion, construing plaintiffs' reliance on CPLR 4544 as an unwarranted attempt to create a private right of action. Noting that plaintiffs had voluntarily paid certain invoices, the IAS court found that as a matter of law the disclosure statements barred plaintiffs' claims. Since plaintiffs' complaint does not depend on CPLR 4544 as a private right of action and since we discern disputed issues of fact, we reverse.

Plaintiffs' pleading does not seek relief for a violation of CPLR 4544; damages are sought, instead, on three separate causes of action arising from alleged deceptive practices, contract breaches and breaches of the duty of good faith and fair dealing. The standard against which defendants' pre-answer motion should have been decided is whether or not, "accepting the material allegations as true and giving plaintiff the benefit of every reasonable inference [citation omitted], the complaint sets forth sufficient facts such that a cognizable claim * * * can be discerned" (see Kralic v Helmsley, 294 AD2d 234, 235 [2002]). The gist of plaintiffs' deceptive practices claim is that the typeface and location of the fee disclosures, combined with high-pressure advertising, amounted to consumer conduct that was deceptive or misleading in a material way, causing plaintiffs damages for purposes of General Business Law § 349. Whether defendants' conduct was deceptive or misleading is a question of fact. The applicable legal standards against which the disclosure statement must be analyzed are provided by...