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Cedar v. Centex Homes

August 20, 2007

JOE CEDAR AND MARIE VESTUTOR AND ON BEHALF OF OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
CENTEX HOMES, LLC AND CENTEX CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Dennis M. Cavanaugh, U.S.D.J.

OPINION

This matter comes before the Court upon motion by Defendant Centex Homes, LLC ("Centex Homes"), to dismiss the third count of Plaintiffs', Joe Cedar and Mary Vestutor, ("Plaintiffs") Complaint for failure to plead fraud with sufficient particularity, pursuant to Federal Rule of Civil Procedure ("FRCP") 12(b)(6) and FRCP 9(b). In addition, Defendant Centex Homes moves to dismiss Plaintiffs' Complaint for lack of personal jurisdiction pursuant to FRCP 12(b)(2). No oral argument was heard pursuant to Rule 78 of the FRCP. After carefully considering the submissions of the parties, and based upon the following, it is the finding of this Court that Defendants' motions to dismiss are granted without prejudice. Plaintiffs may move to amend their fraud pleading to comply with FRCP 9(b).

BACKGROUND

Procedural

Plaintiffs commenced this action against Centex Homes and Centex Corporation (collectively "Defendants") alleging strict liability, breach of implied warranty and violation of the New Jersey Consumer Fraud Act for failure to comply with building and fire codes. Plaintiffs also petition the Court for injunctive relief to stop Centex Homes from further building and development.

Plaintiffs filed their Complaint on January 8, 2007, alleging that Centex Homes and Centex Corporation built and continued to build thousands of defective residential homes that violated New Jersey fire proofing codes. Plaintiffs further allege that Centex Homes engaged in unconscionable consumer practice, deception, fraud, false promise and/or misrepresentation in the building and sale of these homes. Plaintiffs filed this suit on behalf of themselves and "on behalf of others similarly situated" pursuant to Rule 4:32-1.

Defendants filed a motion on March 6, 2007, to dismiss the third count of Plaintiffs' Complaint for failure to plead fraud with sufficient particularity or, in the alternative, for a more definite statement as to the third count of the Complaint pursuant to FRCP 12(b)(6) and 9(b). Defendants' motion also asks the Court to compel Plaintiffs to replead the allegations in the first, second and fourth counts of the Complaint with a more definite statements pursuant to FRCP 12(e). Centex Corporation filed a motion to dismiss for lack of personal jurisdiction pursuant to FRCP 12(b)(2).

On May 18, 2007, Defendants withdrew the portion of its motion seeking a more definite statement as to the first, second and fourth counts of the Complaint.

Factual History

Centex Homes is involved in the construction and sale of one story, single family homes throughout the State of New Jersey. They have been involved in the development of at least six communities with at least nine models constructed and sold at various times. (Compl. at ¶¶ 2, 9, 22-24).

Each residential unit sold by Centex Homes was inspected and received a certificate of occupancy from a host of different state authorized building inspectors. (Defs.' Mem. Mot. Dismiss 5, 6). The units sold were governed by differing construction, housing, and fire proofing codes ranging from the Building Officials and Code Administrators ("BOCA") prior to 2000 to the current International Residential Code ("IRC"). Id. Both the BOCA and IRC were subject to substantial revisions and amendment during their period of governance. Id.

Centex Corporation is a Nevada Corporation with its principal place of business in Texas. (Snyder Aff. ¶4). Centex Corporation does not have any offices, employees, or conduct any business in New Jersey. Id. Centex Corporation functions as a holding and parent company to various homebuilding companies, financial services providers and construction companies including Centex Homes. Id. at ¶5.

Plaintiffs purchased a Raphael model home located at 9 Medici Drive, Manchester Township, Ocean County, New Jersey from Centex homes in 2001. (Compl. at ΒΆ 3). Plaintiffs allege that the house has multiple problems related to fire proofing. More specifically, that the wall between the garage and habitable areas are not made from one hour fire proof material, that the attic was made from inappropriate materials and/or should have contained a partition, and that the retractable wooden staircase was not made from the correct variety of wood necessary to prevent fire damage. (Comp. at ...


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