MIKE D'ANDREA and TRACY D'ANDREA, on behalf of themselves and all other persons similarly situated, Plaintiffs-Respondents,
K. HOVNANIAN, HOVNANIAN ENTERPRISE, INC., K. HOVNANIAN VENTURE I, LLC, Defendants-Appellants.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued December 4, 2012.
On appeal from the Superior Court of New Jersey, Law Division, Gloucester County, Docket No. L-0734-06.
Gary A. Wilson (Post & Schell, P.C.) of the District of Columbia, Pennsylvania, and Texas Bars, admitted pro hac vice, argued the cause for appellant (Post & Schell, P.C., and Mr. Wilson, attorneys; Mr. Wilson, John W. Dornberger, and Lee H. Eckell, on the briefs).
James C. Shah argued the cause for respondents (Trimble & Armano and Shepherd, Finkelman, Miller & Shah, LLP, attorneys; Mr. Shah and John W. Trimble, Jr., on the brief).
Archer & Greiner, attorneys for amicus curiae Weyerhaeuser Company (Christopher R. Gibson and Benjamin D. Morgan, on the brief).
Before Judges Alvarez, Waugh and St. John.
By leave granted,  defendants K. Hovnanian, Hovnanian Enterprise, Inc., and K. Hovnanian Venture I, LLC, take an interlocutory appeal of the December 29, 2011 class certification to plaintiffs, who assert claims related to the heating, ventilation, and air conditioning (HVAC) systems in their homes, which were built by defendants. After our review of the record, consideration of oral argument, and the written submissions of the parties, we now affirm.
The matter was initiated in May 2006, by plaintiffs' filing of a complaint on behalf of themselves and others similarly situated. The class designation consists of
[a]ll persons or entities who from June 27, 2001 to the present purchased a home in New Jersey from Defendants with a HVAC system installed such that the cavities between studs or partitions to be used as return ducts are not isolated from unused spaces with tight-fitting stops or sheet metal or with wood not less than 2-inch nominal thickness and/or where such cavities are part of a required fire-resistance-rated assembly ("class").
At issue is defendants' manner of construction of the return cavity that is a necessary component of the HVAC system in the homes of the proposed class, as the space in which return air is contained is an area of negative pressure. Since fire tends to move from positive to negative areas of pressure, it is important for safety reasons that those spaces are isolated with fireblocking from cavities not used for air movement. The return air cavity must be properly sealed off so that no return air escapes into adjacent unused non-return air cavities.
Plaintiffs allege a number of defects, including that the webs of I-joists found in the return cavities are three-eighths of an inch thick, rather than two-inches thick, have pre-punched holes, and were never tested for fire-containing properties. Fireblocking at the end of joist-bay plenums was constructed using Thermo-Pan or Thermo-Ply Red fiberboard. Holes were drilled into the I-joists to allow wires and pipes to pass through but the holes were never sealed, thereby violating code provisions regarding penetrations of fire stops and draft stops. The bottoms of the joist-bay plenums in basements were closed off with Thermo-Pan or Thermo-Ply. The vertical cracks between two-by-four beams in double-stud cavities were not sealed off as necessary for fireblocking. Cracks were improperly sealed with either a layer of Thermo-Ply or Thermo-Pan. Electrical wires penetrate some stud cavities. Electrical outlet boxes are sometimes located in return stud cavities and are not properly isolated from the return cavity. The air stud cavities on the side of homes which abut garages violate the code, because such garage walls are required to be fire resistant, and the International Residential Code-2000 (IRC-2000) requires that stud cavities not be part of a fire resistance mechanism.
Defendants counter that the identified structures were constructed in a manner that satisfies the intent of relevant building codes, that the materials utilized meet the intent of the codes, and that the performance of the materials meets all code requirements. Furthermore, defendants question whether the IRC-2000 code is applicable, suggesting that the earlier Council of American Building Officials Code-1995 (CABO-1995) applies. The IRC-2000 was not adopted until May 2003, and New Jersey allowed a grace period of six months thereafter for the mandatory implementation of that code. Defendants' expert report, however, observed that "in the areas that are germane to this matter, the CABO and IRC codes are essentially identical." Defendants further challenge plaintiffs' claims on the basis that plaintiffs exaggerate the requirements of fireblocking, that the building codes allowed for the use of different materials, and that code officials in the areas where plaintiffs' structures are located approved the manner of construction by virtue of the issuance of certificates of occupancy.
The trial judge decided the motion for class certification after eight days of testimony from expert witnesses on behalf of both sides and consideration of substantial oral argument and written submissions. During the course of the hearing, plaintiffs' expert Marur Dev testified, as did defendants' experts Charles Spitz and E. Mitchell Swann. Swann inspected seventy-five homes in seventeen different developments, while Dev inspected eighty homes in ten developments, identifying two or more fireblocking violations in each.
Judge Hoffman set forth detailed findings in compliance with Rule 4:32-1(a):
Number 1. I find that the class is so numerous the joinder of all members is impracticable. Although, I will be approving a somewhat modified class, I find that numbers are still likely to be in the neighborhood of 1, 000 – certainly in excess – well in excess of 500. This is clearly sufficient to meet the numerosity requirement. I would note in the case of Vargas [v.] Calabrese, 634 F.Supp. 910, District Court of New Jersey, 1986, [a] class of more than 40 individuals was found to be sufficient to satisfy the numerosity requirement.
Number 2. The requirement that there are questions of law or fact common to the class. Here, the common issue pertains to the methodology employed in the HVAC construction, and gives rise to numerous common questions and facts of law, including:
1) whether the defendant[s'] conduct failed to comply with applicable building codes;
2) whether the materials utilized by the defendants in the HVAC construction are equal to or superior to the materials otherwise mandated by the code; whether the defendant[s'] alleged wrongful conduct resulted in ascertainable loss and/or economic damages to the class; whether the defendant[s'] conduct constituted unlawful, unfair, and/or deceptive practices, in violation of the Consumer ...