Opinion
Index No. 601952/22
08-15-2022
Elliot Sussman, Plaintiff, v. Carfax, Inc., Defendants.
Joseph I. Sussman, PC, for Plaintiff, Elliott Sussman. Sarah Sigurdson, Esq., of Sugurdson, Sarah Warlick, for Defendant, Carfax, Inc. Matthew Ross, Esq. of Meltzer, Lippe, Goldstein & Breitstone, LLP for Defendant, Carfax, Inc.
Unpublished Opinion
Joseph I. Sussman, PC, for Plaintiff, Elliott Sussman.
Sarah Sigurdson, Esq., of Sugurdson, Sarah Warlick, for Defendant, Carfax, Inc.
Matthew Ross, Esq. of Meltzer, Lippe, Goldstein & Breitstone, LLP for Defendant, Carfax, Inc.
HON. CONRAD D. SINGER, J.S.C.
The following papers read on this motion:
Defendant Carfax, Inc.'s Notice of Motion and Supporting Papers 1
Plaintiff Elliot Sussman's Affirmation in Opposition to Motion to Dismiss 2
Defendant Carfax's Reply Affirmation in Further Support of Motion 3
The defendant, Carfax Inc., ["defendant" or "Carfax"], moves for an Order dismissing plaintiff Elliot Sussman's ["plaintiff"] Verified Complaint pursuant to CPLR § 3211(a)(7) for failure to state a cause of action. Plaintiff filed opposition papers in response to the defendant's motion, and the defendant filed a reply affirmation in further support thereof. The defendant's motion to dismiss is determined as follows:
The plaintiff commenced this action by filing a Summons and Verified Complaint on February 15, 2022. By Notice of Motion dated April 14, 2022, the defendant brought this motion to dismiss in lieu of an Answer.
It is alleged in the Verified Complaint that, inter alia, in December of 2021 when the plaintiff decided to sell his 2019 Honda Odyssey, he obtained multiple estimates as to the vehicle's value using internet-based services such as Kelley Blue Book and RODO. The plaintiff allegedly received initial estimates valued between $35,000.00 and $40,000.00. It is further alleged that one of the potential buyers was from Rodo.com, and that a Rodo representative advised the plaintiff that due to a vehicle history report ["VHR"] that Rodo obtained from Carfax, which alleged "minor damage" to the vehicle, the value of the vehicle was lowered significantly from the amount first quoted. The plaintiff further alleges that no damage occurred on or about that time to the vehicle. The plaintiff allegedly filed a claim via the Carfax website regarding the erroneous report, and received communication from Carfax in which a Carfax representative stated that the damage to the vehicle was verified through Carfax's source, that the VHR would not be changed, and that Carfax does not release the names of their data sources.
The plaintiff alleges that he advised Carfax that he was unable to provide proof or documentation to dispute the erroneous report because he does not have any record whatsoever of any damage ever occurring. Carfax has allegedly refused the plaintiff's requests to provide details from their data sources other than what appeared on the subject VHR.
The plaintiff asserts two causes of action against Carfax: The first cause of action is for deceptive trade practices and false advertising in violation of GBL §§ 349 and 350. The second cause of action is for negligence.
"In the context of a motion to dismiss pursuant to CPLR § 3211[(a)(7)], the court must afford the pleadings a liberal construction, take the allegations of the complaint as true and provide plaintiff [with] the benefit of every possible inference Whether a plaintiff can ultimately establish its allegations is not part of the calculus in determining a motion to dismiss." (EBC I, Inc. v. Goldman, Sachs & Co, 5 N.Y.3d 11, 19 [2005]). Rather, the only question for the Court is "whether the facts as alleged fit within any cognizable legal theory." (Delbene v. Estes, 52 A.D.3d 647, 647 [2d Dept. 2008]).
The plaintiff's claims for deceptive trade practices and false advertising in violation of GBL §§ 349 and 350 are deemed abandoned, as the plaintiff failed to address those claims when opposing the defendant's motion to dismiss. (Blackman v. Metropolitan Transit Auth., 206 A.D.3d 602, 605 [2d Dept 2022]; Louie's Seafood Restaurant, LLC v. Brown, 199 A.D.3d 790, 793 [2d Dept 2021]). Accordingly, that portion of the defendant's motion is GRANTED and the first cause of action is dismissed.
Plaintiff's second cause of action against the defendant is for negligence. The defendant argues first that the plaintiff's cause of action for negligence should be dismissed pursuant to the "economic loss doctrine". "The economic loss doctrine provides that tort recovery in strict products liability and negligence against a manufacturer is not available to a downstream purchaser where the claimed losses flow from damage to the property that is the subject of the contract, and personal injury is not alleged or at issue". (New York Methodist Hosp. v. Carrier Corp., 68 A.D.3d 830, 831 [2d Dept. 2009]). The Court finds that the defendant has failed to establish that the "economic loss doctrine" applies to the facts of this case. It is not alleged in the plaintiff's Verified Complaint that he ever purchased the "product", i.e., the Carfax VHR, or that he was otherwise a "downstream purchaser", and there is no contract between the plaintiff and the defendant that could arguably cover this dispute. Accordingly, the Court finds that the economic loss doctrine does not bar the plaintiff from recovering against the defendant under a negligence theory. (Compare, New York Methodist Hosp., 68 A.D.3d at 831).
The defendant further argues that the plaintiff has failed to allege the traditional common-law elements of a negligence cause of action, i.e., "the existence of a duty that the defendant owed to the plaintiff, a breach of that duty, and that the breach of that duty was a proximate cause of the plaintiff's injuries". (RD Legal Funding Partners, LP v. Worby Groner Edelman & Napoli Bern, LLP, 195 A.D.3d 968, 971 [2d Dept 2021]).
Contrary to the defendant's assertions, the Court finds that the element of duty is sufficiently pled in the Verified Complaint. "The existence and extent of a duty is a question of law". (Maher v. White, 184 A.D.3d 630, 632 [2d Dept 2020]). "Courts traditionally 'fix the duty point by balancing factors, including the reasonable expectations of parties and society generally, the proliferation of claims, the likelihood of unlimited or insurer-like liability, disproportionate risk and reparation allocation, and public policies affecting the expansion or limitation of new channels of liability". (Hamilton v. Beretta USA Corp., 96 N.Y.2d 222, 232, opinion after certified question answered, 264 F.3d 21 [2d Cir. 2002] [citations omitted]). "The injured party must show that a defendant owed not merely a general duty to society but a specific duty to him or her, for 'without a duty running directly to the injured person there can be no liability in damages, however careless the conduct or foreseeable the harm." (Hamilton, 96 N.Y.2d at 232] [citation omitted]).
In this case, the plaintiff does not allege that the defendant owed a general duty to society, but instead alleges that the defendant, in issuing the VHR pertaining to his specific vehicle, identified by a specific VIN Number, i.e. "5FNRL6H7XKB009165", owed the plaintiff a duty of care in publishing that VHR to ensure that it contained true and accurate information. (Verified Complaint, NYSCEF Doc. 1]).
The Court finds that, under the circumstances presented in the plaintiff's Verified Complaint, and affording the pleadings a liberal construction, taking the allegations set forth therein as true, and providing the plaintiff with the benefit of every possible inference, that the plaintiff has sufficiently alleged the existence of a duty between the plaintiff and the defendant. The court finds that an individual who has no control over a report, which is prepared specifically to value his vehicle, is reasonably entitled to believe that the company which makes money by preparing such report will do so by taking reasonable care under the circumstances to ensure that the information contained in such report is correct. (Lindor v. Palisades Collection, LLC, 30 Misc.3d 754, 762 [Sup. Ct Kings County 2010]). Whether the defendant breached such duty is a question to be resolved by the fact-finder in this matter. (Lindor, 30 Misc.3d at 762).
The Court is not persuaded by the defendant's arguments concerning the use of a disclaimer printed on its VHRs, which states: "CARFAX depends on its sources for the accuracy and reliability of its information. Therefore, no responsibility is assumed by Carfax or its agents for errors or omissions in this report". (Affirmation of Sarah Sigurdson, Esq., dated April 14, 2022 ["Sigurdson Aff."], ¶ 21]). The defendant argues that the conspicuous disclaimer put the plaintiff on notice and that neither Rodo.com nor plaintiff could have "reasonably believed" that the VHR at issue was represented as being error-free or accurate. The case relied upon by the defendant, Colnaghi USA v. Jewelers Protection Servs., 81 N.Y.2d 821, 824 [1993]), is materially different from this case, because in that case the Court of Appeals upheld a contractual provision pursuant to which the plaintiff agreed to absolve the defendant from liability for negligence claims. (81 N.Y.2d at 824). The Court of Appeals noted that New York law generally enforces "contractual provisions absolving a party from its own negligence". (Colnaghi, 81 N.Y.2d at 823) (citations omitted). In this case, as discussed above, the plaintiff and the defendant were not parties to any contract, and it can't be said that the plaintiff "agreed" to absolve the defendant from liability for negligence claims.
In light of the forgoing, and in consideration of the liberality with which the pleadings are to be viewed at this extremely early stage of the litigation, and affording the plaintiff the benefit of every favorable inference, the Court finds that the plaintiff's Verified Complaint makes out a cause of action for negligence against the defendant, and the portion of the defendant's motion which seeks dismissal of the second cause of action is DENIED.
Accordingly, it is hereby
ORDERED, that the defendant Carfax's motion to dismiss pursuant to CPLR § 3211(a)(7) is GRANTED, to the extent that the first cause of action for deceptive trade practices and false advertising in violation of GBL §§ 349 and 350 is DISMISSED; and it is further, ORDERED, that the defendant Carfax's motion to dismiss pursuant to CPLR § 3211(a)(7) is otherwise DENIED, and the litigation will proceed with respect to the plaintiff's second cause of action for negligence against the defendant; and it is further, ORDERED, that the defendant shall interpose an Answer within twenty days of the date this Order is signed; and it is further, ORDERED, that the parties shall appear in the Preliminary Conference Part for a Preliminary Conference at 9:30 AM on September 15, 2022.
This constitutes the Decision and Order of this Court.