Singh v. City of N.Y.

• Decision Date: 30 December 2020
• Docket Number: 2017–12988,Index No. 701402/17
• Citation: Singh v. City of N.Y., 189 A.D.3d 1697, 139 N.Y.S.3d 307 (N.Y. App. Div. 2020)
• Parties: Daler SINGH, etc., et al., appellants-respondents, v. CITY OF NEW YORK, et al., respondents-Appellants.
• Court: New York Supreme Court — Appellate Division

189 A.D.3d 1697

139 N.Y.S.3d 307

Daler SINGH, etc., et al., appellants-respondents,

v.CITY OF NEW YORK, et al., respondents-Appellants.

2017–12988

Index No. 701402/17

Supreme Court, Appellate Division, Second Department, New York.

Argued—September 17, 2020

December 30, 2020

Wolf Haldenstein Adler Freeman & Herz, LLP, New York, N.Y. (Benjamin Y. Kaufman, Gregory M. Nespole, Correy A. Kamin, and Law Offices of Daniel L. Ackman of counsel), for appellants-respondents.

Zachary W. Carter, Corporation Counsel, New York, N.Y. (Richard Dearing and Eric Lee of counsel), for respondents-appellants.

ALAN D. SCHEINKMAN, P.J., HECTOR D. LASALLE, VALERIE BRATHWAITE NELSON, ANGELA G. IANNACCI, JJ.

DECISION & ORDER

In a purported class action, inter alia, to recover damages for violations of General Business Law § 349 and breach of the implied covenant of good faith and fair dealing, and/or to rescind certain contracts, the plaintiffs appeal, and the defendants cross-appeal, from an order of the Supreme Court, Queens County (Kevin J. Kerrigan, J.), dated September 21, 2017. The order, insofar as appealed from, granted that branch of the defendants' motion which was pursuant to CPLR 3211(a) to dismiss the first cause of action on the grounds that the plaintiffs failed to comply with the requirements of General Municipal Law § 50–e and failed to state a cause of action. The order, insofar as cross-appealed from, denied those branches of the defendants' motion which were pursuant to CPLR 3211(a) to dismiss the third cause of action and so much of the fifth cause of action as sought rescission of the subject contracts based upon breach of the implied covenant of good faith and fair dealing.

ORDERED that the order is affirmed insofar as appealed from; and it is further, ORDERED that the order is reversed insofar as cross-appealed from, and those branches of the defendants' motion which were pursuant to CPLR 3211(a) to dismiss the third cause of action and so much of the fifth cause of action as sought rescission of the subject contracts based upon breach of the implied covenant of good faith and fair dealing are granted; and it is further,

ORDERED that one bill of costs is awarded to the defendants.

The plaintiffs in this putative class action seek to recover monetary damages, and/or to rescind their contracts to purchase New York City taxi cab medallions, due to the alleged actions of the defendants, the City of New York and the New York City Taxi and Limousine Commission (hereinafter the TLC), which purportedly caused a dramatic loss in value of the medallions after the medallions had been purchased at auction. The plaintiffs allege, inter alia, that prior to holding three taxi cab medallion auctions in late 2013 and early 2014, the TLC "intentionally overstated the value of taxi medallions and concealed the fact that the value of those medallions had already begun to decline due to factors known to the TLC but not disclosed to [the] plaintiffs," and that after the auctions, the TLC "through its actions and inaction, significantly undermined the value of the medallions it had just sold to [the] plaintiffs." The TLC's alleged wrongful action and inaction after the auctions included permitting affiliates of Uber Technologies, Inc. (hereinafter Uber), to acquire licenses to operate black car services despite the affiliates' failure to satisfy the black car licensing requirements, and permitting affiliates of Uber to "accept street hails in direct and illegal competition with medallion taxis."

The defendants moved pursuant to CPLR 3211(a)(1) and (7) to dismiss the complaint, and the plaintiffs opposed the motion. In an order dated September 21, 2017, the Supreme Court, inter alia, granted that branch of the defendants' motion which was to dismiss the first cause of action, which sought to recover damages for violations of General Business Law § 349. The plaintiffs appeal from this portion of the order. The court denied those branches of the defendants' motion which were to dismiss the third cause of action, which sought to recover damages for breach of the implied covenant of good faith and fair dealing, and so much of the fifth cause of action as sought rescission of the contracts based upon breach of the implied covenant of good faith and fair dealing, on the ground that the plaintiffs failed to state a cause of action. The defendants appeal from these portions of the order.

Administrative Code of the City of New York § 7–201 and General Municipal Law § 50–e together require a plaintiff, in order to bring an action sounding in tort against the City of New York, to serve a notice of claim within ninety days after the date the claim arises (see Bovich v. East Meadow Pub. Lib., 16 A.D.3d 11, 16, 789 N.Y.S.2d 511 ; Raven El. Corp. v. City of New York, 291 A.D.2d 355, 356, 739 N.Y.S.2d 28 ). Failure to comply with a statutory notice of claim requirement is a ground for dismissal pursuant to CPLR 3211(a)(7) for failure to state a cause of action (see Mosheyev v. New York City Dept. of Educ., 144 A.D.3d 645, 646, 39 N.Y.S.3d 832 ; Bertolotti v. Town of Islip, 140 A.D.3d 907, 908–909, 33 N.Y.S.3d 456 ).

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" (see North State Autobahn, Inc. v. Progressive Ins. Group Co., 102 A.D.3d 5, 11, 953 N.Y.S.2d 96 ). We agree with the Supreme Court's determination that the plaintiffs' first cause of action, which sought to recover damages for violations of General Business Law § 349, was a claim sounding in tort, and therefore was subject to the requirements of General Municipal Law § 50–e, as a cause of action sounding in fraud (see Clarke–St. John v. City of New York, 164 A.D.3d 743, 744, 83 N.Y.S.3d 549 ). Accordingly, we agree with the court's determination granting that branch of the defendants' motion which was to dismiss the first cause of action due to the plaintiffs' failure to serve a notice of claim within 90 days after the claim arose (see Mosheyev v. New York City Dept. of Educ., 144 A.D.3d at 646, 39 N.Y.S.3d 832 ; Bertolotti v. Town of Islip, 140 A.D.3d at 908–909, 33 N.Y.S.3d 456 ).

We disagree, however, with the Supreme Court's determination to deny those branches of the defendants' motion which were to dismiss the third cause of action, which sought to recover damages for breach of the implied covenant of good faith and fair dealing, and so much of the fifth cause of action as sought rescission of the contracts based upon breach...