Court Opinion

ID: 9773581
Source: CourtListenerOpinion
Date Created: 2023-08-29 17:50:25.57528+00
Date Added: 2024-06-11T07:31:55.316624
License: Public Domain

Pigott, J. (dissenting in part).
Because, in my view, plaintiff has alleged sufficient facts to sustain his declaratory judgment action, I dissent from that part of the majority opinion affirming the Appellate Division’s dismissal of that cause of action. Since this case is before us on a motion to dismiss, the facts are drawn without contradiction from plaintiffs complaint.
On June 15, 2000, plaintiff entered into an agreement with Bloomberg L.P. and Bloomberg Finance L.P. (collectively, Bloomberg) to (1) lease certain equipment (a Bloomberg terminal) and services; and (2) subscribe to additional services (news and financial information). Paragraph 2 (b) of the Agreement contains an “automatic renewal provision” that states that said Agreement will be automatically renewed for successive two-year periods unless Bloomberg or plaintiff elected not to renew by giving not less than 60 days notice to the other. The provision states as follows:
“2. Term.
“(a) This agreement shall be effective from the date it is accepted by Lessor [Bloomberg] and shall remain in full force and effect thereafter until the date that is two years after the date that the Services are first provided (the ‘Term’), unless earlier terminated during the Term or any renewal thereof, as follows: (i) Lessee [Plaintiff] shall have the right to terminate this Agreement at any time upon not less than 60 days’ prior written notice to Lessor and *761upon payment of the charges set forth in paragraph 3 of this Agreement; and (ii) Lessor shall [sic] the right to terminate this Agreement at any time immediately upon written notice to Lessee in the event of a breach by Lessee of any of the provisions of this Agreement.
“(b) The Term shall be automatically renewed for successive two-year periods unless Lessee or Lessor elects not to renew by giving not less than 60 days’ prior written notice to the other. If this Agreement is so renewed for any additional period beyond the initial Term, the charges payable pursuant to paragraph 3(a) hereof for such renewal period shall be calculated at the prevailing rates then offered by Lessor, and the Schedule shall be considered to be amended accordingly.”
Although the Agreement expired on June 15, 2002, Bloomberg never sent a notice to plaintiff giving him advance notice of the automatic renewal as required by statute (see General Obligations Law §§ 5-901, 5-903), nor did plaintiff expressly renew the Agreement. Plaintiff thereafter continued making payments, and Bloomberg continued providing the equipment and services.
In September 2008, plaintiff contacted a Bloomberg representative and advised him that he no longer wished to subscribe to Bloomberg’s services, and that he wished to terminate the Agreement as of the end of September 2008. The representative directed plaintiff to the automatic renewal provision and told him that the Agreement was “operative and enforceable” and that he was obligated to fulfill its terms until June 15, 2010, admitting that it was Bloomberg’s “standard policy” not to give advance notice of the automatic renewal deadline, a policy having been in effect for the previous 10½ years. The representative also stated that Bloomberg would terminate the Agreement in exchange for nearly $20,000, approximately one year’s worth of payments under the Agreement.
In October 2008, plaintiff sent Bloomberg written notice stating that he wanted his subscription cancelled as of October 1, 2008. Notwithstanding this, on October 23, Bloomberg sent plaintiff a notice stating that his payment for the last quarter of 2008 was due, prompting plaintiff to e-mail Bloomberg that he had cancelled his subscription. Upon receiving a similar notice in November 2008, plaintiff demanded in writing that Bloomberg retrieve its equipment.
*762On December 9, 2008, Bloomberg sent plaintiff a letter that included all outstanding invoices on plaintiffs account, including $5,400 on an outstanding invoice for charges subsequent to plaintiffs termination of the Agreement. The letter stated that plaintiff was in breach of the Agreement and that, per the Agreement, Bloomberg would repossess the Bloomberg equipment and that plaintiff would be liable for a 50% termination charge covering the balance of the Agreement.
Plaintiff commenced this action seeking declaratory and injunctive relief on the ground that the Agreement is unenforceable. The action also alleged an as-of-yet uncertified “class action” against Bloomberg asserting, as relevant here, causes of action premised on alleged violations of General Obligations Law §§ 5-901 and 5-903 (the “automatic renewal” statutes) and General Business Law § 349 (“unfair and deceptive acts and practices” statute). Bloomberg moved to dismiss the complaint for failure to state a cause of action.
Supreme Court denied Bloomberg’s motion to dismiss the General Obligations Law §§ 5-901 and 5-903 and General Business Law § 349 causes of action, concluding that, as to the claim for a permanent injunction, the threat to plaintiffs creditworthiness was sufficient to establish irreparable injury, and that as to the declaratory judgment claim, there was a “justiciable controversy” (2009 NY Slip Op 32397[U], *13 [2009]).
The Appellate Division, in dismissing the complaint, concluded that the automatic renewal provision in the Agreement was “inoperative” and “unenforceable” because Bloomberg failed to give the requisite notice, but nevertheless found that dismissal was warranted because plaintiff failed to allege that he paid for services that he did not receive and, to the extent that plaintiff sought damages for the alleged breach of the “automatic renewal” statutes, a private right of action was not expressly created by their language, nor could it be fairly implied (77 AD3d 515, 515 [2010]).
In my view, the Appellate Division’s dismissal went well beyond its function at this stage of the proceeding. This is a declaratory judgment action and, as such, the court’s duty was to determine, upon an assumption that the allegations were true, whether Bloomberg violated the automatic renewal statutes—and it is clear that it did. The court’s further finding—that there is no private right of action for the violation of *763such statutes—goes beyond the purpose of a declaratory judgment action. Instead, it concluded that “declaratory and injunctive relief is unwarranted . . . since no justiciable controversy remains to support the claim for declaratory relief’ (id. at 516).
Plaintiffs cause of action for declaratory and injunctive relief states that there is an “actual and justiciable controversy” between plaintiff and Bloomberg relative to their rights and obligations under the Agreement, and that Bloomberg has “engaged in and continuéis] to engage in conduct that has a great probability of causing substantial and irreparable harm.” It is alleged that Bloomberg’s failure to provide plaintiff and the proposed class with notices of automatic renewal of the Agreement rendered the successive Agreements inoperative and unenforceable. As a result, according to plaintiff, he and members of the putative class are entitled to declaratory relief that the Agreements are unenforceable, and that its members are entitled to injunctive relief necessary to ensure that Bloomberg’s “illegal, unfair and deceptive conduct will not continue into the future.”
CPLR 3001 allows a court to render a declaratory judgment as to the rights of the parties when there is a justiciable controversy (i.e., one involving a present, rather than hypothetical, contingent or remote prejudice to the plaintiff) (see American Ins. Assn. v Chu, 64 NY2d 379, 383 [1985]). Plaintiff has alleged that notwithstanding the statutory protection given to consumers by these statutes, Bloomberg’s standard practice is to automatically renew its subscribers’ contracts without giving any advance notice of the automatic renewal provisions therein or the deadlines for terminating them. In other words, Bloomberg’s standard practice is to violate the automatic renewal statutes.
Plaintiff further alleges that despite the fact that Bloomberg’s renewals are both “inoperative” and “unenforceable” due to its failure to provide the statutorily-required notice, Bloomberg treats all of its subscriber contracts as having been automatically renewed. It sends bills and collects fees under the service contracts. When subscribers, like plaintiff, attempt to terminate the services, Bloomberg, in the words of plaintiff, “brazenly tells them that they cannot do so because their contracts were automatically renewed.” Bloomberg then falsely informs its subscribers that their only choices are to continue the service and pay for the remainder of the term, or discontinue the service and pay a termination fee equal to 50% of the charges for *764the remainder of the two-year “renewed” term. Moreover, plaintiff claims, if a subscriber refuses to pay fees under a “renewed” contract, Bloomberg “unleashes its bill collectors” from its New York headquarters, and bombards subscribers with dunning letters, e-mails, collection notices, and threats, misrepresenting that the subscribers are in breach of the contract; and if they do not pay, Bloomberg threatens to report them to the credit bureaus and refer them to collection agencies. This does not appear to me to warrant the “no harm, no foul” approach the courts have taken to this case.
Whether the case merits class action status is another matter and, in my view, should be left to the sound discretion of the trial court. But this seems to me like an appropriate use of our declaratory judgment jurisprudence, and I would reinstate that cause of action.
Chief Judge Lippman and Judges Ciparick, Graffeo, Read and Smith concur with Judge Jones; Judge Pigott dissents in part in a separate opinion.
Order affirmed, with costs.