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Mellet v. Aquasid, LLC

Superior Court of New Jersey, Appellate Division

October 16, 2017

ROBERT MELLET and BETTY EVANS, on behalf of themselves and other persons similarly situated, Plaintiffs-Appellants,

          Argued May 4, 2017

          Decided June 21, 2017

         On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-516-15.

          Andrew P. Bell argued the cause for appellants (Locks Law Firm, L.L.C. and the Law Office of Charles N. Riley, L.L.C, attorneys; Michael Galpern, James A. Barry, Charles N. Riley, and Mr. Bell, on the brief).

          Sean X. Kelly argued the cause for respondent (Marks, O'Neill, O'Brien, Doherty & Kelly, P.C., attorneys; Sean Robins and Mr. Kelly, on the brief).

          Before Judges O'Connor, Whipple, and Mawla.


          MAWLA, J.S.C.

         Plaintiffs Robert Mellet and Betty Evans appeal from an April 29, 2016 order denying class certification and granting defendant summary judgment. We affirm.

         We derive the following facts from the record. Defendant Aquasid, LLC, is a health club operated at two locations in Cherry Hill, New Jersey. Plaintiffs entered membership agreements with defendant on February 21, 2014, and subsequently stopped paying their memberships. Specifically, when Mellet sought to cancel his membership in July 2014, defendant declined his request and charged him $1, 256.71, comprised of three months of late fees, a collection fee, administrative fee, and fifteen months of dues. Defendant attempted to collect these funds from Mellet. In September 2014, Evans sought to cancel her membership, but defendant declined her request. Evans' October 2014 payment was declined for insufficient funds and she was charged a $25 fee. Defendant continued to charge Evans, and sought to collect $198.34 from her.

         Plaintiffs filed suit asserting the form of their membership contracts and the fees defendant charged violate the Retail Installment Sales Act (RISA), Consumer Fraud Act (CFA), Health Club Services Act (HCSA), and the Truth in Consumer Contract, Warranty, and Notice Act (TCCWNA). They allege at least one hundred other similarly improper contracts were entered into by other members. Plaintiffs sought class certification for all persons who entered into a membership agreement with defendant on or after April 9, 2008. Defendant contested class certification and moved for summary judgment.

         After hearing oral argument, the trial judge denied plaintiffs' motion for class certification and granted defendant's request for summary judgment. Regarding plaintiffs' individual claims, the trial judge concluded RISA did not apply to defendant's installment contracts with plaintiffs because the contracts did not afford them an ownership interest in either an object or service at its conclusion. The trial judge also found Attorney General review and approval of the membership forms containing the contract fees, as required by the HCSA, barred any claim under RISA, and concluded defendant's exculpatory clause was enforceable.

         The trial judge found plaintiffs did not have a clearly established right under TCCWNA to assert their waiver claim. He found no CFA claim because the fees plaintiffs sought to recover under the CFA were RISA fees, which were barred because defendant's membership agreements passed muster under the HCSA. The trial judge did not make any findings as to the HCSA requirement that the total fees charged appear on the front of the contract.

         Class certification was denied for lack of the necessary predominance on the issue of calculation of total fees and whether the total fees must appear on the front of every contract, as required by the HCSA. The trial judge concluded HCSA claims are individual in nature, not class based, because defendant's contracts contained no common price. Finding no individual or class claims, the trial judge entered summary judgment for defendant. This appeal followed.

         Plaintiffs contend the trial judge erred in granting summary judgment because the membership agreements violate RISA, the HCSA, TCCWNA, and CFA. They contend New Jersey favors class certification, and all the prerequisites to certification under Rule 4:32-1 (a) were met, as well as the requirements of independent justification for class certification required by Rule 4:32-l(b). Plaintiffs further contend the trial judge erred in considering defendant's cross motion for summary judgment on short notice.

         We review the grant of summary judgment by a trial court de novo. Templo Fuente De Vida Corp. v. Nat'l. Union Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016). We apply the same principles governing an adjudication of a motion for summary judgment as the trial court. Atl. Mut. Ins. Co. v. Hillside Bottling Co., 387 N.J.Super. 224, 230 (App. Div.), certif. denied, 189 N.J. 104 (2006). Rule 4:46-2(c) states an order granting summary judgment shall be entered if "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." A fact is material if it is substantial in nature. See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 529 (1995).

         "A court deciding a summary judgment motion does not draw inferences from the factual record as does the factfinder in a trial, 'who may pick and choose inferences from the evidence to the extent that a miscarriage of justice under the law' is not created." Globe Motor Co. v. Igdalev, 225 N.J. 469, 480 (2016) (quoting Brill, supra, 142 N.J. at 536). Rather, in reviewing summary judgment orders, the Court must look at the facts in a light most favorable to the non-moving party and determine whether a genuine issue of material fact exists sufficient to be tried. See Brill, supra, 142 N.J. at 523.


         Plaintiffs argue RISA covers health club contracts because the plain language of RISA specifically states it applies to services, including health club services. They assert the trial judge's interpretation of RISA is contradictory to the finding of our Supreme Court in Perez v. Rent-A-Center, 186 N.J. 188 (2006), cert, denied, 549 U.S. 115, 127 S.Ct. 984, 166 L.Ed.2d 710 (2007).

         The health club contracts at issue here were twenty-month membership contracts payable in monthly installments. Plaintiffs state these contracts also included various administrative and late fees charged month-to-month for the period of the contract. They argue defendant committed several clear violations of RISA: charging a late fee of more than $10, N. J.S.A. 17:16C-42 (a); charging more than $20 for a returned check for insufficient funds, N.J.S.A. 17:16C-42(e); charging more than $10 for a collection fee, N.J.S.A. 17:16C-42(b); and applying charges to customer accounts, which were not court costs, attorney fees, or the expense to retake goods authorized by law, N.J.S.A. 17:16C-50.

         Defendant argues RISA does not apply to their membership agreements and Perez controls because the entire premise of the installment sales contract contemplated by RISA is possession and eventual ownership of a specified good by a buyer. Defendant argues plaintiffs were paying not to eventually own but rather to utilize the ...

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