1 No. 155
Jules Polonetsky, &c., et al.,
Appellants,
v.
Better Homes Depot, Inc. et al.,
Respondents.
_________________________________________________________________
2001 NY Int. 125
November 19, 2001
This opinion is uncorrected and subject to revision before publication
in the New York Reports.
Jane L. Gordon, for appellants.
Jeffrey A. Mitchell, for respondents.
New York State Attorney General; Better Business Bureau Serving
Metropolitan New York; Association of the Bar of the City of New York;
AARP, amici curić.
_________________________________________________________________
ROSENBLATT, J.:
New York City's Consumer Protection Law prohibits "any deceptive or
unconscionable trade practice in the sale, lease, rental or loan of
any consumer goods or services" (Consumer Protection Law
(Administrative Code) § 20-700). Defendants, Better Homes Depot and
its president, Eric Fessler, are in the business of purchasing,
repairing and then reselling homes in New York City. In its
enforcement capacity, the City's Department of Consumer Affairs (DCA)
sued defendants seeking fines and an injunction against defendants'
allegedly deceptive practices in connection with their business.
This case involves two issues. First, defendants claim that their
activities do not involve "consumer goods or services" within the
DCA's jurisdiction. Second, defendant Fessler claims that he cannot be
subjected to personal liability because none of the allegedly
fraudulent acts were committed for his individual benefit. We disagree
with defendants as to both contentions, and therefore reverse the
order of the Appellate Division which dismissed the complaint. I.
Using newspaper advertisements and flyers handed out at subway
stations, Better Homes marketed its activities to prospective New York
City home buyers. In response to grievances of dissatisfied Better
Homes customers, DCA filed a suit in Supreme Court, alleging that
SNIPPETS:
This opinion is uncorrected and subject to revision before publication in the New York
New York City's Consumer Protection Law prohibits "any deceptive or unconscionable trade
Defendants, Better Homes Depot and its president, Eric Fessler, are in the business of
the City's Department of Consumer Affairs (DCA) sued defendants seeking fines and an
We disagree with defendants as to both contentions, and therefore reverse the order of the
Using newspaper advertisements and flyers handed out at subway stations, Better Homes
If buyers observed that the structures were in disrepair, Better Homes would promise to
The complaint also alleges that Better Homes falsely convinced prospective buyers that their
Better Homes discouraged buyers from employing their own attorneys, steering them instead to
In addition, Better Homes told buyers that it was recommending Federal Housing Authority
Fessler and Better Homes moved to dismiss, contending that § 20-700 has no application to
The Appellate Division modified and dismissed the complaint as against both, holding that the
43 NY2d 268, 272-273; cf., Gaidon v Guardian Life Ins.
In arguing that a house is not a consumer good or service, defendants claim that sustaining
While the City's Code refers to "consumer goods or services," GBL § 349 is far broader in its
The Commissioner counters by asserting that the conduct alleged in the complaint did not
Defendants have not only sold property, but also have allegedly orchestrated a system of
Under these circumstances, we are unable to say that a jury could not infer his knowledge of
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