King v. Club Med, Inc.

76 A.D.2d 123, 430 N.Y.S.2d 65, 1980 N.Y. App. Div. LEXIS 11738
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJuly 10, 1980
StatusPublished
Cited by26 cases

This text of 76 A.D.2d 123 (King v. Club Med, Inc.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
King v. Club Med, Inc., 76 A.D.2d 123, 430 N.Y.S.2d 65, 1980 N.Y. App. Div. LEXIS 11738 (N.Y. Ct. App. 1980).

Opinions

OPINION OF THE COURT

Sandler, J.

In this action brought under CPLR article 9, plaintiffs, husband and wife, sue on behalf of themselves and members of a class defined as persons who contracted with the defendants and their agents for participation in a vacation travel package to a hotel and village known as "La Caravelle,” located in the French West Indies, which covered the last week of July, 1977.

Three causes of action are set forth, one alleging contract violations, and two charging fraudulent misrepresentations. One of the fraud causes of action (the first), seeks punitive damages in addition to recovery of damages actually sustained. The other fraud action (the third), seeks in the alternative rescission and return of moneys paid to the defendants.

The defendants are in the business of marketing vacation travel packages to the general public. Through their agents and subagents, defendants solicit "membership” in the Club Mediterranee and market vacation travel packages. In brochures and promotional materials alleged to have been distributed and received by plaintiffs and other members of the class, defendants offered two distinctly different types of vacation sites. One type, designated as "classical villages”, featured simple huts "with neither electricity nor plumbing”. The second type, called "hotel villages”, is described as buildings of permanent construction with private bathrooms and hot and cold water. La Caravelle, one of the latter type, was portrayed in defendants’ promotional literature as a luxury hotel with modern air-conditioned rooms, private bathrooms and electricity.

[125]*125Contrary to these explicit representations, it is alleged in the complaint that during the last week in July, 1977, the hotel at La Caravelle "had sporadic electricity, no air conditioning, either no hot or cold running water or intermittent hot or cold running water and that the toilet and other sanitary facilities in the rooms at the hotel were either not operational or sporadic.” The complaint further alleges that for a long period of time prior to the departure of the tour in question, the defendants knew that the facilities at La Caravelle were not in accordance with the written representations that had been made, and failed to inform the plaintiffs and other members of the tour of the true conditions.

The principal issue on this appeal is presented by defendants’ contention that fraud actions are genetically unsuitable for class certification under CPLR article 9. We find no support in article 9 for this claimed exclusion. The issue of class certification for actions sounding in fraud, as in any other action, should turn on compliance with the prerequisites enumerated in CPLR 901 and consideration of the factors specified in CPLR 902. So tested, we agree with Special Term’s determination to grant the motion herein for class certification.

The rule was, of course, otherwise prior to the adoption of article 9, effective September, 1975. (See, e.g., Ballen v Storch Int. Asti Tours, 46 AD2d 643.) The holding in Ballen was consistent with the basic rules that had developed over a century in interpreting a statute first enacted in 1849, rules that came to be considered widely as unduly restrictive and unsuitable to modern needs.

Notably, in Moore v Metropolitan Life Ins. Co. (33 NY2d 304, 313 [1973]), the Court of Appeals described as urgent the need for new class action legislation "in light of the general and judicial dissatisfaction with the existing restrictions on class action which in many instances may mean a total lack of remedy, as a practical matter, for wrongs demanding corrections.” (See, also, Homburger, State Class Actions and the Federal Rule, 71 Col L Rev 609.)

In recommending the bill eventually enacted as CPLR article 9, the Committee to Advise and Consult with the Judicial Conference on the Civil Practice Law and Rules described the then existing law, and its judicial interpretation, in the following terms:

"The present provision has remained in force without sub[126]*126stantial change since the addition of its predecessor to the Field Code (L. 1849, ch. 438) * * * Under the present law, unless the subject matter of the controversy is a limited fund or specific property, or the relief sought is common to the class in the sense that satisfaction of the individual claims before the court also automatically satisfies the claims of all other class members * * * a class action can qualify only if a bond of 'privity’ exists between the multiple parties forming the class * * *

"Aside from the undesirable vagueness of the term 'privity’ * * * the privity doctrine, derived from ancient feudal law, prevents the use of the class action device in the adjudication of such typically modern claims as those associated with mass exposure to environmental offenses, violations of consumer rights, civil rights cases, the execution of adhesion contracts and a multitude of other collective activities reaching virtually every phase of human life. What is needed is a more flexible and functional approach which maintains judicial control, but does not unduly restrict the court within traditional legalisms and the passive role it habitates within the adversary system.” (Eighteenth Ann Report of NY Judicial Conference, 1973, pp A35-A36.)

Article 9 could not be clearer on the precise issue before us. CPLR 901 (subd a) explicitly authorizes a class action where, in addition to other prerequisites, "2. there are questions of law or fact common to the class which predominate over any questions affecting only individual members”.

As has been frequently observed, this statutory language plainly authorizes class actions even where there are subsidiary questions of law or fact not common to the class. The point is underlined even more emphatically by CPLR 906 which provides:

"When appropriate,

"1. an action may be brought or maintained as a class action with respect to particular issues, or

"2. a class may be divided into subclasses and each subclass treated as a class.”

That CPLR article 9 made available class action in fraud cases was the uniform view of the leading authorities. Typical was the observation of Dean McLaughlin: "The pre-1975 cases holding that a class action will not lie for fraud can no longer be regarded as controlling * * * If the question of fraud lies at [127]*127the heart of the class action and clearly preponderates over the uncommon questions, such as reliance and damages, a class action will now lie.” (McLaughlin, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR, C901:3, p 325.)

Identical views were expressed in Siegel, New York Practice (at p 179), who described the class action as "especially appropriate” when a single fraud has harmed a large number, and in Weinstein-Korn-Miller (NY Civ Prac, vol 2, par 901.08).

All of the cases that have previously addressed this question squarely are to precisely the same effect. (See Guadagno v Diamond Tours & Travel, 89 Misc 2d 697; Dupack v Nationwide Leisure Corp., 70 AD2d 568; Klakis v Nationwide Leisure Corp., 73 AD2d 521; Strauss v Long Is. Sports, 60 AD2d 501.)

It is true that in Strauss v Long Is. Sports (supra,

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Bluebook (online)
76 A.D.2d 123, 430 N.Y.S.2d 65, 1980 N.Y. App. Div. LEXIS 11738, Counsel Stack Legal Research, https://law.counselstack.com/opinion/king-v-club-med-inc-nyappdiv-1980.