Katz v. Avalonbay Cmtys., Inc.

KATHERINE KATZ and YUDENIA MESA,¹on behalf of themselves and others similarly situated, Plaintiffs, v. AVALONBAY COMMUNITIES, INC., et al., Defendants.

Civil Action No.: 15-2740 (JLL)

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

October 24, 2018

NOT FOR PUBLICATION

OPINION

LINARES, Chief District Judge.

This matter comes before the Court by way of Plaintiffs' Motion for Class Certification. (ECF No. 103). Defendant AvalonBay Communities, Inc. ("Defendant") filed an Opposition, (ECF No. 104), and Plaintiffs have filed a reply, (ECF No. 105). The Court has read the submissions of the parties and considers this matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons set forth below, the Court grants Plaintiffs' Motion.

I. BACKGROUND

This purported class action arises out of a January 2015 building fire that occurred in a dual-building residential complex known as the Avalon in Edgewater, New Jersey, owned and operated by Defendant, a real estate investment and development company. (ECF No. 78 ("SAC") ¶¶ 1-2, 14). The Avalon was composed of two adjacent four-story luxury apartment buildings—the Russell Building and the River Building (also referred to as the River Mews Building). (SAC ¶¶ 2, 19). On January 21, 2015, a fire swept through the Russell Building, growing large enough to be seen across the Hudson River from Manhattan. (SAC ¶¶ 1, 6). According to a Cause and Origin Report by investigators at the Bergen County Prosecutor's Office, maintenance workers employed by Defendant started the fire while soldering pipes with a blow torch inside a wall in a first-floor apartment bathroom in the Russell Building. (SAC ¶¶ 28-34). In the hours that followed, the fire grew so large that "[a]pproximately 500 firefighters and other emergency personnel" from over thirty neighboring areas were needed to extinguish it. (SAC ¶¶ 36-37). The fire destroyed the Russell Building, rendering it "uninhabitable" and permanently displacing all of its approximately 500 residents. (SAC ¶¶ 3, 20, 38). There were no human fatalities, but two residents were treated for minor injuries, and many Russell Building residents lost pets in the fire. (SAC ¶¶ 7, 48).

On December 6, 2016, Defendant settled with a class of residents and occupants of the Russell Building. DeMarco v. AvalonBay Communities, Inc., No. 15-628 (D.N.J. filed Jan. 29, 2015) (the "DeMarco Action"), ECF No. 125-3 at 3. That class was defined as: "All residents and occupants of the Russell Building at Avalon at Edgewater as identified on the operative lease agreements as of January 21, 2015, whose property in a Russell Building apartment or storage unit was destroyed by The Fire." DeMarco Action, ECF No. 223 at 2. Defendants did not oppose certification of the Russell Building class for purposes of the settlement. (ECF No. 103-1 ("Cert. Br.") at 6); see also DeMarco Action, ECF No. 125-3 at 17. This Court granted final approval of the Russell Building class settlement on July 11, 2017. DeMarco Action, ECF No. 223 at 2. The AvalonBay fire is the subject of at least 22 additional individual lawsuits against Defendant. (ECF No. 104 ("Opp. Br.") at 10).

This action, brought on behalf of tenants and occupants of the adjacent River Building, had been consolidated with the DeMarco action but was severed when that action settled. (ECF No. 32; Cert. Br. at 6). Now, Plaintiffs Katherine Katz and Yudenia Mesa seek to proceed as a class against Defendant on behalf of River Building occupants. (See ECF No. 103 at 2; SAC ¶ 89). Although the fire did not cause as much structural damage to surrounding buildings as it did to the Russell Building, tenants and occupants of the River Building were nevertheless affected by the fire. Plaintiffs allege that they were "displaced from their homes for four days" following the fire, during which time they were "forced to pay for lodging, food, clothing, and other basic necessities[,] as they had little or no time to collect any possessions" before evacuating. (SAC ¶¶ 59-60). Plaintiffs further allege that a "pervasive odor," "water and smoke damage," as well as "an accumulation of soot," have "rendered the River Mews Building uninhabitable." (Cert. Br. at 6; SAC ¶¶ 62, 66). Defendant claims that it took steps to clean River Building apartments, eliminate odors, and "ensure that the premises were safe for its residents." (Opp. Br. at 9). Defendant further claims that it offered tenants certain "concessions and credits" to cover losses related to the four-day displacement. (Opp. Br. at 10).

Plaintiffs raise additional allegations concerning the decreased rental value of their apartments. River Building residents lost the use of certain luxury amenities located in the Russell Building that were damaged or destroyed in the fire. (SAC ¶¶ 81-82). Plaintiffs allege that Defendant consequently charges lower rent for new residents in the River Mews Building, but has not reduced Plaintiffs' rent to reflect the same decrease in rental value. (SAC ¶¶ 83-85). Defendants have allegedly "offered to allow Plaintiffs to cancel their lease[s] and move out," but Defendant has not offered to compensate Plaintiffs for any moving expenses or losses related to increased rent payments at more expensive alternative accommodations. (SAC ¶¶ 73, 76).Plaintiffs are "faced with the unenviable choice [between:] a) moving out of the area altogether, b) moving into a similarly priced, but smaller residence in the area, or c) moving into a similarly sized, but significantly more expensive residence in the area." (SAC ¶ 74).

Plaintiffs therefore seek to recover for the following:

[T]he loss of use or deprivation of property; reimbursement of any rent payments made for the time in which the Avalon was uninhabitable; reimbursement of any excess rent payments incurred by former River Mews tenants as a result of their displacement; recovery for any improvements made by any River Mews tenants; and other expenses incurred as a direct result of the [f]ire, including for food, clothing, housing, relocation, transportation, medicine, medical treatment, and such other items as are necessary to continue one's activities of daily living.

(SAC ¶ 10). Plaintiffs seek to certify claims for common law negligence, private nuisance, and breach of contract. (SAC ¶¶ 98-119; Cert. Br. at 22 n.5). Plaintiffs allege that Defendant is liable for the losses caused by the fire because, inter alia, Defendant used a lightweight wood known to be flammable in the construction of the Avalon buildings, (SAC ¶¶ 8, 41, 54, 103), Defendant failed to install adequate sprinklers in certain areas of the buildings, (SAC ¶¶ 9, 44), the Russell Building lacked adequate fire walls, fire dampers, and fire doors, (SAC ¶¶ 45-46), and the maintenance workers who started the fire did not promptly call 9-1-1, nor did any other employee of Defendant, (SAC ¶¶ 9, 23).

Plaintiffs Katherine Katz and Yudenia Mesa were residents of the River Building at the time of the fire, and both were forbidden from entering their homes for four days. (SAC ¶¶ 12-13). Plaintiff Katz alleges that she was "forced to move into another apartment in the [Edgewater] area of comparable size and quality, but with a rental price approximately $850 per month greater than" her rent in the River Building. (SAC ¶ 12). Plaintiff Mesa alleges that she lived in New York City for "approximately two and a half months" following the fire, after which she continuedto live in her home in the River Building for two additional years. (SAC ¶ 13). She alleges that, although Defendant "significantly reduced the rental rates for new residents at River Mews" following the fire, Defendant continued to increase Plaintiff Mesa's rent, such that she "paid much more for her apartment than a resident in a comparable apartment that moved in after the fire." (SAC ¶ 13). Plaintiff Mesa was ultimately forced to seek less expensive accommodations. (SAC ¶ 13).

Plaintiffs now seek to certify a class pursuant to Federal Rules of Civil Procedure 23(a) and 23(b)(3) of tenants and occupants of the River Building, or, alternatively, one subclass of tenants and one subclass of occupants. (Cert. Br. at 14-15; see also SAC ¶ 89). Defendant opposes certification, arguing that Plaintiffs fail to meet the requirements of Rule 23 under any proposed class definition. (See generally Opp. Br.).

II. LEGAL STANDARD

"Class certification is proper only 'if the trial court is satisfied, after a rigorous analysis, that the prerequisites' of Rule 23 are met." In re Hydrogen Peroxide Antitrust Litig., 552 F.3d 305, 309 (3d Cir. 2008) (quoting Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 161 (1982)). To meet the prerequisites of Rule 23, Plaintiffs must establish both that the four requirements of Rule 23(a) have been met—numerosity, commonality, typicality, and adequacy—as well as that the pleading requirements of Rule 23(b)(1), (2), or (3) have been met. Fed. R. Civ. P. 23; see also In re Hydrogen Peroxide, 552 F.3d at 309 n.6. Plaintiffs must also establish that the class is ascertainable, since "[a]scertainability functions as a necessary prerequisite (or implicit requirement) because it allows a trial court effectively to evaluate the explicit requirements of Rule 23." Byrd v. Aaron's Inc., 784 F.3d 154, 162 (3d Cir. 2015). In analyzing whether the Rule 23requirements have been met, "the district court must make whatever factual and legal inquiries are necessary and must consider all relevant evidence and arguments presented by the parties." In re Hydrogen Peroxide, 552 F.3d at 307. This is true even if the class certification inquiry overlaps with the merits of the causes of action. Id.

Rule 23(b)(3) requires a finding "that the questions of law or fact common to class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy." Fed. R....