German By German v. Federal Home Loan Mortg. Corp.

896 F. Supp. 1385

Jennifer GERMAN and Wellington German, infants by their Mother and Natural Guardian Ana Maritza GERMAN, and Ana Maritza German, Individually, Plaintiffs, v. FEDERAL HOME LOAN MORTGAGE CORP., Property Services Company, Caisi Management Company, Inc., 1710 Montgomery Realty Assoc., L.P., and Jerome Deutsch, Defendants.

No. 93 Civ. 6941 (RWS).

United States District Court, S.D. New York.

August 22, 1995.

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Fitzgerald & Fitzgerald, P.C. Yonkers, NY (John M. Daly, Brian J. Farrell, John E. Fitzgerald, of counsel), and Bronx Legal Services New York City by Lucy Billings, Matthew J. Chachere, for plaintiffs.

Siff Rosen, P.C., New York City (William G. Ballaine, Thomas G. Merrill, John C. Morland, Lance Wolf, of counsel), for defendants Federal Home Loan Mortg. Corp. and Caisi Management Co., Inc. and Harold Beck d/b/a Tebec Management Co.

Wilson, Elser, Moskowitz, Edelman & Dicker, New York City (Paul J. Bottari, of counsel), for New York City Housing Authority.

Weinstein, Chayt & Chase, P.C., Brooklyn, NY (Irwin J. Weinstein, of counsel), for defendants 1710 Montgomery Realty Assoc., P.C., Property Services Co., Wittenstein, Wagman and Deutsch.

Paul A. Crotty, Corp. Counsel of the City of New York, New York City (Gabriel Taussig, Steven Levi, Lisa S.J. Yee, of counsel), for defendant City of New York.

OPINION

SWEET, District Judge.

Defendant Federal Home Loan Mortgage Corporation ("Freddie Mac") has moved for reargument of a portion of the May 8, 1995 opinion of this action (the "Opinion"), or in the alternative, for leave to appeal two issues to the Court of Appeals pursuant to 28 USC § 1292(b). Defendants 1710 Montgomery Realty Associates, L.P. ("1710") and partners Todd Wittenstein ("Wittenstein"), Alex Wagman ("Wagman"), and Jerome Deutsch ("Deutsch") (collectively the "1710 Defendants") have moved for clarification of the Opinion and to sever the action against them. Defendant the City of New York (the "City") has moved for reargument, or in the alternative to appeal, pursuant to 28 U.S.C. 1292(b), the issue of its liability, pursuant to 42 U.S.C. § 1983, under the Community Development Block Grant ("CDBG") program and the Lead Paint Poisoning Prevention Act (the "LPPPA"). Plaintiffs have moved to reargue the dismissal of their negligence per se claims. Hector Luis David, Marilyn Bernardez and Florentina David move to intervene as class plaintiffs.

For the reasons set forth below, Defendants Freddie Mac and New York City's motions are denied, the 1710 Defendants' motion is denied and Plaintiffs' motion to reargue, is granted and the motion to intervene is granted.

The Parties

The parties, facts and prior proceeding are fully described in earlier opinions of this court, familiarity with which is assumed. See German v. Federal Home Loan Mortgage Corp., 1994 WL 319154 (S.D.N.Y. June 28, 1994) (German I); German v. Federal Home Loan Mortgage Corp., 885 F.Supp. 537 (S.D.N.Y.1995) (German II or the "Opinion"). A review of those facts and prior proceedings relevant to this motion is presented below.

Freddie Mac allegedly was the owner of the Montgomery Building from December 1988 until October 31, 1991, and from May 8, 1992, until September 16, 1992.

The City owned and operated the Montgomery Building from October 31, 1991, until May 8, 1992. In addition, the City receives and administers federal funds to operate buildings under section 8 (42 U.S.C. § 1437f) and the Community Development Block Grant ("CDBG") program (42 U.S.C. § 5301). The complaint alleges that the City, as a Public Housing Authority ("PHA"), used federal funds in the German home to repair and rehabilitate as part of a Community Development Block Grant program.

Defendant 1710 Montgomery Realty Associates, L.P. ("1710") and partners Todd Wittenstein ("Wittenstein"), Alex Wagman ("Wagman"), and Jerome Deutsch ("Deutsch") allegedly have owned the Montgomery Building from September 16, 1992, until the present. 1710 has its principal office in Valley Stream, New York. Wittenstein and Deutsch reside in the City of New York. Wagman resides in Valley Stream, New York.

Defendant Freddie Mac allegedly owned the St. Nicholas Building until September 1, 1994.

NYCHA receives and administers Section 8 funds to property throughout New York City.

The Proposed Intervenors

Proposed intervening plaintiff Hector Luis David ("Hector Luis") was born on August 17, 1989, and has resided at 1670 Boston Road, Apartment 21-C, Bronx, New York (the "Boston Road building") since birth. He was diagnosed as lead poisoned on November 9, 1992.

Proposed intervening plaintiff Marilyn Bernardez ("Marilyn") was born on October 20, 1980, and has resided at the Boston Road building since January 16, 1984. Marilyn is currently 6 months pregnant. She was diagnosed in 1984 and in March of 1995 as lead poisoned.

Proposed intervening plaintiff Florentina David is the mother and natural guardian of plaintiffs Hector Luis and Marilyn. She has lived at the Boston Road building since January 1984 and brings this suit on behalf of herself, her children and Marilyn's fetus.

According to the Intervening Complaint, the Boston Road building is owned and operated by the City of New York. The City receives and uses federal Community Development Block Grant Funds for this property.

Facts and Prior Proceedings

This case was originally transferred to federal court from the State Court in New York on October 5, 1993.

Pursuant to a Summons with Notice and Verified Complaint dated July 26, 1993, the Germans instituted an action in Supreme Court, Bronx County, against PSC, CAISI, 1710, Freddie Mac, Deutsch, Wittenstein, and Wagman. The complaint sought damages for personal injuries to the infant Germans and sought relief for Ana German in her individual capacity as mother and natural guardian of the infant plaintiffs.

Pursuant to 28 U.S.C. § 1446(b), Freddie Mac, as an entity created by federal legislation, removed this action to this Court on October 5, 1993.

Argument was heard on a motion to amend the complaint on May 11, 1994. An opinion on that motion was issued on June 28, 1994, granting the plaintiffs' right to amend their complaint to include additional defendants and to supplement their claims. See German v. Federal Home Mortgage Corporation, 1994 WL 319154 (S.D.N.Y.).

On August 17, 1994, this Court denied the Goffin plaintiffs' request for an order blocking the sale of the building, (Proceedings, Aug. 17, 1994, at 20), and on August 22, 1994 the Goffins filed an intervening complaint in this action which sought individual and class relief.

As of September 1, 1994 Freddie Mac had sold the St. Nicholas Avenue property. As of November 1994, none of the defendants owned the building.

A Second Amended Complaint (the "Complaint") was filed on September 14, 1994 in which the plaintiffs sought class certification and an order requiring defendants to take steps necessary to protect their tenants from lead poisoning.

On September 29, 1994 the Germans and the Goffins filed a motion asking for class certification. Motions to dismiss and for partial summary judgment were also filed by all the defendants in September. Argument was heard on the motions on November 22, 1995.

On May 8, 1995 the Opinion was filed which resolved motions submitted by all parties. In sum, it granted in a modified form plaintiffs' motion to certify a class, granted defendants' motions to dismiss state claims based on theories of negligence per se, strict product liability, and liability for ultrahazardous substances. Defendants' motions to dismiss the other state causes of action were denied.

The plaintiffs requested certification for the following class and subclasses:

Class Warning and Notice

All persons residing on premises either owned, managed, or operated by any of the defendants or where they administer assistance payments under a federal housing program.

Sub-Class # 1: Medical Monitoring

All persons age 8 years and under and all women of child-bearing age (12-50 years old) residing in buildings owned, managed, or operated by defendants or where they administer assistance payments under a federal housing program.

Sub-Class # 2: Abatement

All persons age 8 years and under and all women of child-bearing age (12-50 years old) residing in buildings owned, managed, or operated by defendants or where they administer assistance payments under a federal housing program, and where there is lead-based paint in or on the dwelling or common area.

By opinion dated May 8, 1995, the Court granted the class certification motion, in a somewhat modified form. Specifically, the Court held that:

The classes certified will include "children under seven years old residing in buildings owned, managed, or operated by defendants or where they administer assistance payments under a federal housing program." While the Court agrees that as a practical matter, notice of the risks and signs of lead paint problems will need to be sent to all tenants to insure that those at risk of injury are notified, the class can only contain those at risk. The sub-class for Medical Monitoring will include the modification that there must be the risk of lead-based paint, consistent with the statutes, including the statutory presumptions. The remainder of the class definitions requested by plaintiffs will remain as requested by plaintiffs and as described herein.

German II, at 561.

In the final analysis, the class was certified as against the City as a PHA under the claims brought by the German plaintiffs and Freddie Mac as an owner and NYCHA as the PHA under the claims brought by the Goffin plaintiffs.

A motion to intervene the Franklin family as plaintiffs was filed on June 27, 1995 and has been pending sub judice since August 4, 1995 when the final papers were filed on the motion.

Discussion

I. The Davids' Motion to Intervene will be...