Somewhere in New York, a coverage dispute over a racing yacht insurance policy just reminded litigators of a lesson that applies to approximately none of their yachts and all of their commercial contracts: not every dollar lost in a business relationship gone wrong is a consumer harm, no matter how sympathetic the plaintiff.
In USMMA Sailing Foundation, Inc. v. Hilb Group of N.Y., LLC, decided October 7, 2026, the Appellate Division, Second Department, reversed a ruling from Supreme Court and held that New York General Business Law Section 349, the broad deceptive acts and practices statute of the state, did not apply to a dispute between a sailing foundation and its insurance broker over coverage for a racing yacht. The reasoning of the court tracks decades of New York case law that gets re-litigated every few years because plaintiffs keep hoping this time will be different: GBL Section 349 exists to police conduct with a broad impact on consumers at large, not a one-off dispute between sophisticated commercial parties over the terms of their own private agreement. As the court put it, private contract disputes, unique to the parties, fall outside the reach of the statute, however aggrieved one party feels about how the deal turned out.
If this sounds like an unglamorous, almost administrative holding, that is because it is, and that is exactly why it matters. GBL Section 349 is a favorite tool on the plaintiff side precisely because it offers remedies, including attorney fees in some cases, that ordinary breach of contract claims do not. Every year, litigants on the losing end of a straightforward commercial dispute try to dress it up as deceptive practices to get access to those remedies, and every year the Appellate Division has to remind everyone that a contract fight between two businesses, however one-sided, however frustrating, however nautical, is still just a contract fight. The decision from the Second Department here is useful precedent for exactly the kind of case Seidman Law Group handles routinely: a commercial counterparty such as a broker, vendor, lender, or landlord, sued under a consumer protection theory because the actual breach of contract claim, standing alone, looked a little thin.
The takeaway for clients: when defending a commercial dispute in New York and the complaint reaches for GBL Section 349, or the analogous Consumer Fraud and Deceptive Business Practices Act in Illinois, which has its own public impact requirement that courts apply with similar skepticism to purely private disputes, that claim is often the weakest part of the pleading, not the strongest, and it is worth moving to dismiss it early rather than litigating it alongside the merits all the way to trial.
David Seidman is the principal and founder of Seidman Law Group, LLC. He serves as outside general counsel for companies, which requires him to consider a diverse range of corporate, dispute resolution and avoidance, contract drafting and negotiation, real estate, and other issues. He can be reached at david@seidmanlawgroup.com or 312-399-7390.
This blog post is not legal advice. Please consult an experienced attorney to assist with your legal issues.
Image created by Claude
