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GENERAL BUSINESS LAW 349 CAUSE OF ACTION AGAINST A WORKERS’ COMPENSATION LAW TRUST SHOULD NOT HAVE BEEN DISMISSED (THIRD DEPT).

The Third Department determined that a General Business Law 349 cause of action against a Workers’ Compensation Law trust should not have been dismissed. The trust was taken over by the Workers’ Compensation Board and was found to have a deficit of $220 million. Several lawsuits were brought by members of the trust alleging breach of contract, fraud, breach of a fiduciary duty, etc.:

… [W]ith respect to the General Business Law § 349 cause of action [we] disagree with Supreme Court’s reasoning that the alleged misconduct was not consumer oriented.

“The threshold requirement of consumer-oriented conduct is met by a showing that the acts or practices have a broader impact on consumers at large in that they are directed to consumers or potentially affect similarly situated consumers” … . The amended complaint alleged that “[d]efendants aggressively marketed and advised the [t]rust and self-insurance trusts to the public at large in general as a safe and less expensive alternative to traditional insurance” and that “the information disseminated by [d]efendants was likely to mislead reasonable employers.” The amended complaint further alleged that defendants’ actions “injured and harmed [p]laintiffs, other members of self-insured trusts and the general public” and have “jeopardized the workers’ compensation benefits of New York employers and their employees.” Construing these allegations liberally, as we must, we find that plaintiffs sufficiently alleged that the misconduct at issue was consumer oriented … . Belair Care Ctr., Inc. v Cool Insuring Agency, Inc., 2019 NY Slip Op 00015, Third Dept 1-3-19

 

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