Donnenfeld v. Petro, Inc.

333 F. Supp. 3d 208
CourtDistrict Court, E.D. New York
DecidedSeptember 12, 2018
DocketNos. 17-CV-2310 (JFB)(SIL)
StatusPublished
Cited by20 cases

This text of 333 F. Supp. 3d 208 (Donnenfeld v. Petro, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Donnenfeld v. Petro, Inc., 333 F. Supp. 3d 208 (E.D.N.Y. 2018).

Opinion

JOSEPH F. BIANCO, United States District Judge

Plaintiff M. Norman Donnenfeld ("Donnenfeld" or "plaintiff") brings this putative class action against defendant Petro, Inc. ("Petro" or "defendant"), a home heating oil provider, for breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, fraudulent inducement, and violations of New York's General Business Law and other state consumer protection laws. Presently before the Court is Petro's motion to dismiss the First Amended Class Action Complaint in its entirety. For the reasons set forth below, the Court grants the motion as to plaintiff's claims for breach of the covenant of good faith and fair dealing and fraudulent inducement, but otherwise denies it. The Court will grant plaintiff leave to re-plead the fraudulent inducement claim.

I. BACKGROUND

A. Facts

The Court takes the following facts from the First Amended Class Action Complaint. (ECF No. 20.) The Court assumes these facts to be true in deciding the motion to dismiss, and construes them in the light most favorable to plaintiff, the non-moving party.

Petro is a home heating oil provider that operates in several states, including New York. (Am. Compl. ¶¶ 3, 16, 21-23.) Petro offers three pricing plans to its home heating oil customers: variable, ceiling, and *213fixed. (Id. ¶¶ 4, 24.) These pricing plans are described on Petro's website as follows:

Variable Plan
The Variable Plan has an attractive rate that fluctuates up and down with market conditions. There are no price protective cost or termination fees associated with this plan.
Fixed Plan
Our Fixed Plan requires a 1-year commitment to Petro. The oil price remains the same for every delivery, for every gallon throughout the year, regardless of market conditions. Petro pre-purchases all of your oil and assumes all risk, so if you terminate your account prior to the expiration of your contract, an early termination fee of $599.00 will be assessed.
The Petro Ceiling Plan
Many customers feel this plan is a better option than the fixed price plan as it gives you a limit on how high your price can go and hopefully take advantage of lower prices in the future. The price will trend up or down based on market conditions at the time each delivery is made but will never exceed a set limit. A 1-year commitment to Petro is required for this plan. Similar to the fixed plan, Petro protects the cost of your oil and assumes all risk, so if you terminate your account prior to the expiration of your contract, an early termination fee of $399.00 will be assessed.

(Id. ¶ 4.)

On August 7, 2013, Donnenfeld entered into a fixed price Retail Fuel Delivery and Services Agreement with Petro ("the Fixed Price Contract"). (Id. ¶ 27, Ex. A.) Under that contract, Petro agreed to deliver home heating oil to Donnenfeld at a fixed price of $3.649 per gallon for the approximately one-year period from August 7, 2013 to August 31, 2014. (Id. Ex. A at 1.) In return, Donnenfeld agreed to obtain home heating oil exclusively from Petro during that period. (Id. ) The contract provided that, if Donnenfeld's account was "cancelled for any reason" during the one-year period, he would "be charged a $599.00 early termination fee." (Id. )

In connection with entering into the Fixed Price Contract, Donnenfeld received, among other documents, Petro's Terms and Conditions. (Id. at 3.) Those Terms and Conditions included a "Limits of Liability" provision, which provided that "[a]ny and all actions, whether based in contract or tort, whether for personal injury or property damage, and whether brought by buyer or buyer's insurance company, must be commenced within one year of the cause of action or shall be barred as a matter of law." (Id. )

On July 30, 2014, Donnenfeld continued his Fixed Price Contract for another year. (Id. ¶ 28.) That agreement was memorialized in a form letter to Donnenfeld from Mike Perna, the President and General Manager of Petro's Plainview, New York office. (Id. Ex. B.) The phrase "A note of thanks for renewing your contract with Petro" appeared at the top of the letter, and the first sentence read, "Thank you so much for renewing your heating oil agreement with Petro!" (Id. ) The letter provided that, for the approximately one-year period from September 1, 2014 to August 31, 2015, Petro would deliver home heating oil to Donnenfeld at a $3.699 per gallon fixed price. (Id. ) It further provided that Donnenfeld agreed to obtain home heating oil exclusively from Petro during that period. (Id. ) The letter also stated that, if Donnenfeld's account was "cancelled for any reason" during the one-year period, he would be charged a $599.00 early termination fee. (Id. )

*214Donnenfeld alleges that heating oil prices dropped significantly shortly after he agreed to continue his Fixed Price Contract with Petro. (Id. ¶ 29.) Based on Petro's representations that, under their ceiling plan, the price he paid for heating oil would be based on market conditions, Donnenfeld determined that he would save money by entering into a ceiling price contract. (Id. )

Accordingly, in December 2014, several months before his current contract was due to expire, Donnenfeld called Mike Perna to change to a ceiling price plan. (Id. ) To make that change, Petro charged Donnenfeld-and Donnenfeld paid-a $300 early termination fee. (Id. ¶ 29.) Donnenfeld then received a form letter from Mike Perna "confirm[ing] [the] phone conversation" and "outlin[ing] the terms of [the] ceiling price agreement." (Id. Ex. C (the "Ceiling Price Contract").) As with the previous letter, the phrase "A note of thanks for renewing your contract with Petro" appeared at the top of this letter, and the first sentence again read, "Thank you so much for renewing your heating oil agreement with Petro!" (Id. ) The letter stated that, for the approximately one-year period from December 5, 2014 to December 31, 2015, Petro would deliver home heating oil to Donnenfeld at a price that would "not exceed $2.899 per gallon," but that Donnenfeld's "actual delivered price ... w[ould] vary based on market conditions, including but not limited to, product availability, wholesale cost and other factors." (Id. ) Like the previous contracts, the letter provided that Donnenfeld agreed to obtain home heating oil exclusively from Petro during the relevant one-year period. (Id. ) Finally, the letter stated that, "with [Donnenfeld's] permission, [Petro] recorded the conversation detailing the terms of this Ceiling Price agreement, and w[ould] retain a copy of that recording for [Donnenfeld's] protection." (Id. )

Donnenfeld alleges that, despite a steady decline in oil prices throughout the term of his Ceiling Price Contract, his "price per gallon did not budge after the first two months." (Id.

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