May 12, 2011
JOANNE CASALE, KAREN HUTCHINSON, PLAINTIFFS-RESPONDENTS,
SEGAL & MOREL AT LOPATCONG, LLC; SEGAL & MOREL, INC.; OVERLOOK AT LOPATCONG CONDOMINIUM OWNERS ASSOCIATION, INC.; RADATA, INC., DEFENDANTS-APPELLANTS.
On appeal from the Superior Court of New Jersey, Law Division, Warren County, Docket No. L-170-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued March 30, 2011
Before Judges Fuentes, Nugent and Newman.
On leave granted, defendants appeal from those parts of the October 29, 2010 Law Division order granting in part plaintiffs' motion for class certification. We affirm.
This action involves the radon mitigation systems installed in the residential condominium units at the Overlook at Lopatcong (the development) located in Lopatcong Township, New Jersey.
Radon is a colorless, odorless, tasteless, radioactive gas that occurs naturally in soil gas, underground water, and outdoor air. Prolonged exposure to elevated concentrations of radon and its progeny (that is, substances formed as a result of the radioactive decay of radon) has been associated with increases in the risk of lung cancer. An elevated concentration is defined as being at or above the guideline of 4 [picocuries per liter] pCi/L .... [N.J.A.C. 5:23-10.1(c)2.]
There are 384 residential units in the development consisting of 142 villas, constructed so that every two units share a common basement and a radon mitigation system; and 132 garden homes and 110 townhouses, each with its own radon mitigation system. The development is located in a municipality classified by the New Jersey Department of Environmental Protection as a "Tier 1 Area." N.J.A.C. 5:23-10, App. 10-A. A "Tier 1 Area" designation requires construction of new residences to include fully functional radon resistant techniques to prevent dangerous contamination by maintaining radon levels in a residence below designated concentrations. See N.J.A.C. 5:23-10.4.
Plaintiffs Casale and Hutchinson own adjacent villas that share a common basement and a radon mitigation system that failed radon detection tests. Defendants Segal & Morel at Lopatcong, L.L.C. and Segal & Morel, Inc. (collectively "Segal") built the homes in the development and sold them to the original owners. Defendant RAdata, Inc. installed the radon mitigation systems in the homes in the development; and defendant Overlook at Lopatcong Condominium Association (the Association) is the development's condominium association that is responsible for maintaining the radon mitigation systems in the villas.
On March 21, 2009, plaintiffs filed an eight-count complaint alleging defendants improperly designed, installed, maintained and tested the radon mitigation systems. Plaintiffs pled theories of negligence, gross negligence, trespass, nuisance, fraud, consumer fraud, and assault and battery; and sought injunctive relief, which included medical monitoring and periodic testing of radon levels in the residences. Plaintiffs subsequently moved for class certification.
To support their motion, plaintiffs submitted the certification of a former Segal employee assigned to the development, and three reports from their expert. The former Segal employee averred that when many of the units were tested for radon before a certificate of occupancy was issued, the units were tested with doors and windows open as directed by a RAdata employee. He also averred that Segal used one radon pump for multiple dwellings to save money, and many units had cracks in basement slabs because Segal would not pay for expansion joints.
Plaintiffs' expert, who inspected or partially inspected 104 units, reported many problems with the radon mitigation systems. Some of the systems use the drainage pipe to the sump pit to transfer negative pressure to the neighboring unit, thereby reducing radon in both basements, but if the sub-drainage pipe fills with water, negative pressure to one unit is cut off allowing radon levels to rise in the basement. In many homes the sump covers were unsealed, which keeps radon from being eliminated from the basement. In other systems, exterior exhaust pipes terminated before reaching the roof and were thus too close to upper story windows, which can result in the re-entry of radon through an open window. All of the outside mounted fans that were inspected had holes drilled into the pipe under the fan, which causes a loss of efficiency and premature fan failure. In all the homes with unfinished basements that were inspected, no floor to wall joints or cracks were sealed. In the expert's opinion, these and other deficiencies were sufficient to require that all units have radon tests performed.
In a written opinion dated October 7, 2010, followed by an order dated October 29, 2010, Judge Amy O'Connor certified a class of all current owners of units at the development against the Segal and RAdata defendants for negligence, gross negligence, nuisance and assault and battery claims; certified a sub-class against the Association of all current owners of villas for nuisance and trespass claims; ordered that the certification of the class and sub-class were without prejudice to the parties' right to file an application to alter, amend, or decertify the class based upon information obtained through discovery; and denied plaintiffs' motion to certify a class for fraud, consumer fraud, and the remedy of medical monitoring. We granted defendants leave to appeal.
Defendants contend that the trial judge abused her discretion by finding that plaintiffs had established the criteria for certification required by Rule 4:32-1(a) and (b). Specifically, defendants argue that plaintiffs failed to satisfy the numerosity and typicality requirements of Rule 4:32-1(a)(1) and (3), and failed to satisfy the requirements of Rule 4:32-1(b)(3) that common questions of law and fact predominate over individual claims, and that a class action is superior to other methods of adjudication.
We review a trial court's decision to grant or deny class certification under an abuse of discretion standard. Iliadis v. Wal-Mart Stores, Inc., 387 N.J. Super. 405, 422 (App. Div. 2006), overruled on other grounds, 191 N.J. 88 (2007). "Class certification decisions rest in the sound discretion of the trial court." Muise v. GPU, Inc., 371 N.J. Super. 13, 31 (App. Div. 2004).
We affirm substantially for the reasons explained by Judge O'Connor in her written decision of October 7, 2010. Judge O'Connor analyzed the theories of liability, the remedies sought by plaintiffs, the defenses, relevant facts, and applicable substantive law in determining where class certification was warranted and where it was not. See Lee v. Carter-Reed Co., 203 N.J. 496, 505-06 (2010). The judge also ordered that the parties could move to amend or decertify the class based on information obtained through discovery. We find no abuse of discretion in the judge's decision to certify the class and subclass identified in her order.
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