Dillon v U-A Columbia Cablevision of Westchester
100 N.Y.2d 525, 790 N.E.2d 1155, 760 N.Y.S.2d 726 (2003)
New York Court of Appeals · May 1, 2003
What the court decided
New York’s voluntary payment doctrine "bars recovery of payments voluntarily made with full knowledge of the facts, and in the absence of fraud or mistake of material fact or law."
Who won
The party seeking its money back lost. A cable subscriber could not recover a late fee she had paid.
Why it matters for salespeople
This is the doctrine behind a practical point for salespeople: a company that deliberately pays a commission, knowing the facts, may not be able to get it back later. No New York appellate court has yet applied the doctrine to a commission, so it is an argument rather than a settled answer.
Key passage: 100 N.Y.2d 525 at 526.
Read the decision (PDF) Marked with official reporter pages for citation.
Source of the text: Caselaw Access Project, Harvard Law School Library (scan of the official New York Reports) — https://case.law/caselaw/?reporter=ny-2d&volume=100&case=0525-01. This page summarizes the decision in plain language; the court’s own words are in the opinion below.
Where this case comes up in the guide
The opinion
Red markers such as [100 NY2d 000] show where each page of the official reporter begins. Gray markers such as [*2] are the slip opinion's own page markers.
[100 NY2d 526] OPINION OF THE COURT
Memorandum.
The order of the Appellate Division should be affirmed, with costs.
Plaintiff, a customer of defendant cable television company, commenced this purported class action for compensatory and punitive damages challenging the $5 late fee she paid to defendant for her late payments. The complaint alleges that, although defendant in its promotional materials characterized the late fee as an administrative fee intended to be a reasonable estimate of its costs resulting from customers’ late payments and nonpayments, it was an unlawful penalty bearing no relation to defendant’s actual costs incurred in servicing such payments, and plaintiff would not have paid the fee had she known the true facts. Supreme Court granted defendant’s motion to dismiss the complaint, and the Appellate Division affirmed.
We agree with both lower courts that the voluntary payment doctrine bars plaintiff’s complaint. That common-law doctrine bars recovery of payments voluntarily made with full knowledge of the facts, and in the absence of fraud or mistake of material fact or law (see Gimbel Bros. v Brook Shopping Ctrs., 118 AD2d 532, 535-536 [1986]). Here, no fraud or mistake is alleged in that, according to the complaint, plaintiff knew she would be charged a $5 late fee if she did not make timely payment. Alleged mischaracterization of a $5 late fee as an administrative fee does not overcome application of the voluntary payment doctrine.
Chief Judge Kaye and Judges Smith, Ciparick, Wesley, Rosenblatt, Graffeo and Read concur.
Order affirmed, with costs, in a memorandum.