153 Misc.2d 347, 581 N.Y.S.2d 569
Michael A. NIEMIEC and Judith L.
Polek, Plaintiffs,
v.
KELLMARK CORP., doing business as
United Consumers Club of Buffalo,
Defendant.
KELLMARK CORP., doing business as
United Consumers Club of Buffalo,
Plaintiff,
v.
Michael A. NIEMIEC and Judith L.
Polek, Defendants.
City Court of Tonawanda, Erie County.
Feb. 6, 1992.
DAVID GERALD JAY, Acting City Judge.
" 'Will you walk into my parlor?' " said
the spider to the fly;
" 'Tis the prettiest little parlor that ever
you did spy.' " Howitt, The Spider and
the Fly.
*348 The facts elicited at trial are
basically uncontested. KELLMARK
attracts the attention of members of the
public to its business mainly by telephone
solicitation. Once a prospect has been
identified, a solicitor maintains contact
until the prospect either shows no interest
or an appointment is made to visit the
Club premises. Detailed records of all
calls are made by the solicitor, fueled by
the knowledge that an $80 commission
hangs in the balance. Once the prospect
has been "invited" to the Club premises,
he or she is oriented to the Club's
purpose, which is to make available to the
"member", many and varied catalogs from
which the member can select items for
future purchase. The Club offers these
items at specially discounted member's
prices, with claims of savings from
ordinary **570 retail prices. Only
members can make such purchases and
participate in such savings.
The prospect is then advised as to the
manner in which he or she can attain Club
membership: a two year membership is
offered for $1160; an option to renew for
eight more years at $95/year is offered for
$30. The hesitant prospect is advised
that this is a once in a lifetime offer. The
prospect cannot take the proffered
contract home to think it over. The
decision must be made then and there.
Once the member has been signed up,
the catalogues of the Club are then made
available for the member's selections.
There are, however, a few obstacles to
member satisfaction: (1) no dues are
refundable, even upon the member's
death; (2) the membership cannot be
assigned to another person for any
reason, even in the event the member is
transferred to another locality; (3)
merchandise cannot be returned, once
accepted; and (4) orders cannot be
cancelled, even if the merchandise has
not been shipped.
In bold type the member is advised:
MEMBERS ARE WARNED NOT TO
ACCEPT MERCHANDISE AND SIGN
FOR IT UNTIL AFTER THEY HAVE
CAREFULLY EXAMINED SAME TO
MAKE SURE THE MERCHANDISE
CONFORMS TO THE ORDER, AND
THAT THE CONDITION OF THE ITEM
IS ACCEPTABLE TO THEM, SINCE
THE CLUB WILL NOT BE
RESPONSIBLE FOR MERCHANDISE
ONCE ACCEPTED BY MEMBERS,
AND MERCHANDISE MAY NOT BE
RETURNED.
One wonders how a member can inspect
the contents of a parcel before its
delivery. The Court cannot imagine a
commercially reasonable way that a
delivery service would allow such pre-delivery inspection.
The member must abide by the
warranties of the supplier *349 and has no
recourse to the Club whatsoever. On the
other hand, the member is also advised
that contact with the suppliers of
merchandise is forbidden. Further, "the
Club's low price [will not] be disclosed to
retailers," on pain of ejection from the
Club.
In this case, it was established that the
buyers were contacted by the Club and
made an appointment to visit on a
Saturday. After the usual tour of the Club
premises, representatives of the Club sold
them a membership for two years at a
cost of $1,100.00. On Monday, after
suffering buyers' remorse, they attempted
to cancel the membership only to be
advised that they could not.
[1] At trial buyers attempted to rely upon
the Door-To-Door Sales Protection Act
(Personal Property Law 425-431),
which gives a buyer three business days
to cancel the types of sales covered under
the act. They can find no safe harbor
there as the sale in question was made at
the business premises of the seller.
Personal Property Law 426(1).
[2] Buyers may recover, however, since
this Club membership is nothing more
than a cleverly disguised method of selling
nothing but hopes and dreams. How
much merchandise must be purchased at
the Club's "low prices" before the member
gets his money's worth for the two year
membership fee? The Court suggests
that the answer to that question is: too
much. And with that answer, the
inescapable legal conclusion is that the
contract is grossly unconscionable.
The law is beginning to fight back
against those who once took advantage
of the poor and illiterate without risk of
either exposure or interference. From
the common-law doctrine of intrinsic
fraud we have, over the years,
developed common and statutory law
which tells not only the buyer but also
the seller to beware. This body of laws
recognizes the importance of a free
enterprise system but at the same time
will provide the legal armor to protect
and safeguard the prospective victim
from the harshness of an
unconscionable contract. Jones v. Star
Credit Corp., 59 Misc.2d 189, 191, 298
N.Y.S.2d 264 (Sup.Ct.1969) (Wachtler,
J.).
The obvious argument made here by the
Club is that since the members are neither
**571 poor nor illiterate, they should not
be able to avoid the contract. The
evidence clearly reflects that the members
own their own home and earn upwards of
$50,000 per annum. They are hardly
illiterate. However, the fact that masterful
salesmanship caused the bargain to be
*350 struck in the first place and the fact
that the bargain is so one-sided, leads the
Court to the inescapable conclusion of
unconscionability. UCC 2-302. See,
e.g., Bogatz v. Case Catering Corp., 86
Misc.2d 1052, 383 N.Y.S.2d 535
(N.Y.C.Civil Ct.1976); Nu Dimensions
Figure Salons v. Becerra, 73 Misc.2d 140,
340 N.Y.S.2d 268 (N.Y.C.Civil Ct.1973).
The counterclaim of KELLMARK CORP.
for the balance of the purchase price is
dismissed and the claim for return of the
deposit is granted. Judgment for
NIEMIEC and POLEK against
KELLMARK CORP. in the sum of $90.00.
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