X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Decision and order The plaintiff has moved pursuant to CPLR §2221 seeking to reargue a decision and order dated December 20, 2020 which dismissed the lawsuit. The defendants have opposed the motion. Papers were submitted by the parties and arguments held. After reviewing all the arguments this court now makes the following determination. As recorded in the prior order between 2013 and 2014 the defendants sold airline miles to the plaintiffs for payments exceeding $500,000. The complaint alleged the defendant sold these miles to plaintiff knowing the miles were fraudulently obtained. United Airlines refused to honor a portion of the miles used and cancelled airline tickets purchased with those miles. The plaintiffs business suffered as a result and instituted this lawsuit and alleged causes of action for breach of contract, breach of implied contract, unjust enrichment, fraud, loss of value and prima facie tort. In the prior order the court dismissed the entire complaint and now the plaintiff seeks to reargue that determination. Conclusions of Law A motion to reargue must be based upon the fact the court overlooked or misapprehended fact or law or for some other reason mistakenly arrived at in its earlier decision (Deutsche Bank National Trust Co., v. Russo, 170 AD3d 952, 96 NYS2d 617 [2d Dept., 2019]). In the previous decision the court concluded there could be no breach of contract because the defendants delivered miles to the plaintiff and the plaintiff paid for such miles, thus satisfying all contractual obligations. Upon reargument the plaintiff asserts the defendants were obligated to reimburse the plaintiff in the event the miles were dishonored. Consequently, the defendants owe the plaintiffs such refunds and therefore the breach of contract claim is valid. The Amended Complaint does assert the plaintiff requested a refund which the defendant’s refused (see, Amended Complaint, §15) however, the plaintiff has not pointed to any contractual provision that requires such refund. The terms and conditions contained within plaintiff’s website states that the plaintiff “IS PURCHASING YOUR MILES AND POINTS FOR THE PURPOSE OF USING THE MILES AND POINTS AS CONSIDERATION FOR PURCHASING TRAVEL. MONEY PAID TO YOU NOW IS A DEPOSIT THAT WILL BE EARNED AND BECOME NON-REFUNDABLE AT THE TIME A TICKET IS PURCHASED USING THE MILES OR POINTS. IF THE MILES AND POINTS ARE CANCELLED FOR ANY REASON BY YOU, AN AIRLINE OR THE CREDIT CARD ISSUER, THEN YOU WILL REFUND THE DEPOSIT TO FLYERMILES” (see, website of plaintiff submitted as Exhibit ‘N’ to motion for reargument). Thus, the only instance where a refund is necessary is where the miles or points are cancelled for any reason. In this case the tickets that were purchased with those miles were cancelled. There is nothing in the website which governs that eventuality and surely nothing that states if the ticket is cancelled by the airline then the seller of the miles, the defendants in this case, must refund the money received from the transaction. Thus, there is no requirement any such refund was due and consequently there is no basis to conclude there are any questions about a breach of contract claim. Since there are no breach of contract likewise there can be no independent claims of unjust enrichment. Concerning the fraud claim the court held the complaint failed to state any cause of action since the defendants could not control whether the airline would dishonor any tickets purchased with such miles. The plaintiff asserts that since the defendants improperly pooled miles into one account they knew the airline would dishonor them and thus committed fraud. Further, even if, as the court held in the prior order, the plaintiff was not permitted to sell secondary miles, still the defendant’s fraud contributed to this loss. Essentially, the plaintiff argues that since the defendants sold pooled miles accounts which are inherently tainted then such sales constituted fraud. However, there is no basis upon which to assert the miles were inherently tainted. Indeed, the airline approved many of the tickets purchased with those miles without objection. Thus, as already held in the prior decision, no misrepresentation was made by the defendants because they could not control whether or not the tickets would be honored. Further, contrary to the plaintiff’s arguments, the defendants did not and could not know with certainty the actions a third party would take, particularly where the third party, the airline, acted inconsistently, approving some tickets and dishonoring others. By those very terms the defendants could not have provided any basis upon which any misrepresentation was in their control and thus could not have committed any fraud. The plaintiff has not presented any argument not already presented compelling the court to reconsider its prior determination. Lastly, even if the Amended Complaint alleged special damages surely the complaint does not allege the defendants acted with the specific intent to harm the plaintiff, a necessary element of prima facie tort (Freihofer v. Hearst Corp., 65 NY2d 135, 490 NYS2d 735 [1985]). Therefore, based on the foregoing the motion seeking to reargue the earlier decision is consequently denied. So ordered. Dated: March 15, 2021

 
Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.

More From ALM

Premium Subscription

With this subscription you will receive unlimited access to high quality, online, on-demand premium content from well-respected faculty in the legal industry. This is perfect for attorneys licensed in multiple jurisdictions or for attorneys that have fulfilled their CLE requirement but need to access resourceful information for their practice areas.
View Now

Team Accounts

Our Team Account subscription service is for legal teams of four or more attorneys. Each attorney is granted unlimited access to high quality, on-demand premium content from well-respected faculty in the legal industry along with administrative access to easily manage CLE for the entire team.
View Now

Bundle Subscriptions

Gain access to some of the most knowledgeable and experienced attorneys with our 2 bundle options! Our Compliance bundles are curated by CLE Counselors and include current legal topics and challenges within the industry. Our second option allows you to build your bundle and strategically select the content that pertains to your needs. Both options are priced the same.
View Now

New York Legal Awards 2021

October 13, 2021
New York, NY

The New York Law Journal honors attorneys and judges who have made a remarkable difference in the legal profession in New York.


Register

General Counsel Conference East 2021

September 22, 2021 - September 23, 2021
New York, NY

GCC East addresses General Counsel trends in regulatory, data protection, tech management, legal operations, and leadership.


Register

New Jersey Legal Awards 2021

September 23, 2021
Virtual, NJ

New Jersey Law Journal honors lawyers leaving a mark on the legal community in New Jersey with their dedication to the profession.


Register

Senior Corporate Counsel

Any City, Illinois, United States

We are a nationwide firm that specializes in structuring, financing and executing ESOP buyout transactions.  We are seeking an attorney...


Apply Now ›

(EXCLUSIVE) COMMERCIAL AGREEMENTS/CORPORATE COUNSEL WANTED FOR GLOBAL COMMUNICATION SOFTWARE COMPANY (Atlanta, GA)

Atlanta, Georgia, United States

Our client, a publicly-traded, communication software company, has engaged us to identify a Corporate Counsel for their North American legal...


Apply Now ›

LITIGATION ATTORNEY

Cheshire, Connecticut, United States

Mid-size law firm focused on Insurance Defense is seeking a highly personable, highly motivated litigation attorney to join the general liti...


Apply Now ›

JAVERBAUM WURGAFT HICKS

09/20/2021
NJLJ Web

JAVERBAUM WURGAFT HICKS mourn the passing of our Co-Founding Partner, collegue, and friend.


View Announcement ›

BARTON GILMAN LLP

09/14/2021
CLT Web

Barton Gilman Expands Into Connecticut


View Announcement ›

BARTON GILMAN LLP

09/14/2021
TLI Web

Barton Gilman LLP is excited to announce that its expansion into Philadelphia


View Announcement ›