First Department Rules that GBL 239-c, Relating to Appraisals, Must be Narrowly Construed

On December 9, 2014, the First Department issued a decision in TOV Manufacturing, Inc. v. Jaco Import Corp., 2014 NY Slip Op. 08566, holding that appraisals of loose gemstones are not covered by GBL 239-c.

In TOV Manufacturing, the trial court refused to dismiss a third party claim for violation of 239-c based on an allegedly misleading appraisal of an emerald. The First Department reversed, dismissing the claim, explaining:

[The defendant's] General Business Law claim, alleging that [the third-party defendant's] appraisal report for an emerald was misleading, deceptive or fraudulent, fails as a matter of law. Section 239-c of the General Business Law, upon which [the third-party defendant] relies and which provides that a person or entity may bring a civil action for damages arising from a misleading, deceptive or fraudulent appraisal, does not apply to appraisals of emeralds or other loose precious stones. Indeed, section 239 defines appraiser, as used in section 239-c, as a person or entity that purports to ascertain and state the true value of property, and property is defined as, in pertinent part, jewelry, watches, and objects made from or containing precious stones, including emeralds. Accordingly, section 239-c applies to jewelry, watches or objects made from precious stones, but not to loose stones such as emeralds. Legislative enactments in derogation of common law, and especially those creating liability where none previously existed, must be strictly construed.

(Internal quotations and citations omitted).