King v. Club Med, Inc.

Murphy, P. J. (dissenting).

Defendants sponsored a tour at their resort, La Caravelle, in Guadaloupe during the period July 24 through July 31, 1977. The plaintiffs, members of that tour, served a complaint containing causes of action for (1) conspiracy to defraud, (2) breach of contract, and (3) fraud. *129They alleged, inter alia, that prior to their departure Guadaloupe had been experiencing a drought. However, the defendants never informed them of this fact. Plaintiffs further assert that the disruptions caused by this drought included but were not limited to (1) sporadic electric service, (2) no air conditioning, (3) intermittent use of water facilities, and (4) nonoperative toilets. They now seek to have this proceeding certified as a class action under CPLR article 9.

The first question is whether the plaintiffs may properly assert claims in a class action based upon fraud and misrepresentation. CPLR 901 (subd a) provides the following prerequisites to a class action:

"a. One or more members of a class may sue or be sued as representative parties on behalf of all if:

"1. the class is so numerous that joinder of all members, whether otherwise required or permitted, is impracticable;

"2. there are questions of law or fact common to the class which predominate over any questions affecting only individual members;

"3. the claims or defenses of the representative parties are typical of the claims or defenses of the class;

"4. the representative parties will fairly and adequately protect the interests of the class; and

"5. a class action is superior to other available methods for the fair and efficient adjudication of the controversy.”

For purposes of discussion, it will be assumed that paragraph 1 is satisfied. With regard to paragraph 2, it will be assumed that there are some questions of law or fact common to the class that the plaintiffs seek to represent on the causes founded upon fraud and misrepresentation. However, the critical element of reliance in both of these causes of action is highly subjective. This element will vary from one individual on the tour to another. (Brenner v Title Guar. & Trust Co., 276 NY 230; Ballen v Storch Int. Asti Tours, 46 AD2d 643.) In the words of the statute, the element of reliance affects "only individual members” of the class. (CPLR 901, subd a, par 2.)

In this background, the more critical subissue presented in reference to paragraph 2 is whether the questions of law or fact common to the class "predominate” over the single question of reliance that varies from individual to individual. This subissue of "predominance” must be decided in qualitative rather than quantitative terms. Therefore, even though there *130may be many questions of law or fact common to the class, the overriding fact remains that a trier of fact must consider the element of reliance upon a case-by-case basis (Brenner v Title Guar. & Trust Co., supra; Ballen v Storch Int. Asti Tours, supra). In this perspective, the plaintiffs failed to show that the common questions in this proceeding "predominate” so as to satisfy the prerequisite embodied in paragraph 2. As will be discussed below, the plaintiffs also failed to meet the requirements set forth in paragraphs 3, 4 and 5.

With regard to CPLR 901 (subd a, par 3), any claims by the plaintiffs founded upon fraud and misrepresentation are not “typical” of claims that might be made by other members of the tour. In each instance, a trier of fact must examine the particular facts upon which an individual relied.

With reference to paragraph 4, the plaintiffs cannot fairly and adequately protect the interests of the class with respect to claims based upon fraud and misrepresentation. The plaintiffs do not know, and thus, could not prove the facts that led to each instance of reliance.

Paragraph 5 is not satisfied because a class action on the causes under discussion will not be superior to other available methods for the fair and efficient adjudication of those causes. A class action on these causes is impractical since the trier of fact must necessarily address itself to the merits of each claim. To avoid unnecessary confusion, separate actions and separate trials should be had on claims of this nature.

The plaintiffs, upon the particular facts in this proceeding, have not demonstrated that they have met the prerequisites for maintaining a class action bottomed on fraud and misrepresentation. Under the circumstances herein, the first and third causes of action, predicated upon fraudulent representation and false advertising, will not support a class action.

The second question is whether plaintiffs have met the prerequisites of CPLR 901 so as to permit them to proceed on behalf of a class for breach of contract. This record raises as many questions as it answers. First, there is a discrepancy as to the size of the class. The complaint states that there are no fewer than 250 persons while plaintiffs’ brief alleges that there are no fewer than 193 persons. Second, it is not clear from the record how many persons actually stayed in La Caravelle and how many stayed in other resorts on Guadaloupe. Third, there is no indication as to how many persons were New York State residents and how many were nonresi*131dents. Fourth, there is no mention of whether any other person on the subject tour has filed a claim against the defendants. Fifth, the plaintiffs have not shown in sufficient detail that they have the financial resources to prosecute this action on behalf of a class.

Because of these deficiencies in the record, it cannot be intelligently determined whether plaintiffs have met the prerequisites of CPLR 901. Consequently, their motion must be denied with leave to renew on the second cause upon a proper showing that this proceeding satisfies the prerequisites for a class action (Gottlieb v March Shipping Passenger Servs., 67 AD2d 879).

In reply to the majority opinion, the following observations must be made. First, the Committee to Advise and Consult never stated that, under CPLR article 9, causes of action based upon fraud and misrepresentation would become proper subjects of a class action (Eighteenth Ann Report of NY Judicial Conference, 1973, PA35 et seq.) Second, the majority makes no attempt to explain how such causes of action fit within CPLR 901 (subd a, pars 3, 4). Third, in his 1978 Practice Commentary, Dean McLaughlin (McKinney’s Cons Laws of NY, Book 7B, CPLR C901:6, p 25, 1979-1980 Pocket Part) also states: "In the three years that the new class action statute has been in effect it has become clear that the New York courts have not embraced the class action with the same warmth it has received in the federal courts. Thus, where fraud is involved the state courts seem predisposed to find that questions of reliance and damage (which, of course, will differ with each member of the class) predominate over the common question whether a fraudulent misrepresentation occurred. Accordingly, a class action is inappropriate. See, e.g., Strauss v. Long Island Sports, Inc., 1978, 60 A.D.2d 501, 401 N.Y.S.2d 233.”

Accordingly, the order of the Supreme Court, New York County (Shainswit, J.), entered June 12, 1979, granting plaintiffs’ motion to renew, and upon renewal, granting their motion for class action certification, should be reversed, on the law, and the motion should be denied with leave to renew on the second cause upon a proper showing.

Kupferman and Lynch, JJ., concur with Sandler, J.; Murphy, P. J., and Lupiano, J., dissent in an opinion by Murphy, P. J.

*132Order, Supreme Court, New York County, entered on June 12, 1979, affirmed. Respondents shall recover of appellants $50 costs and disbursements of this appeal.