PHOENIX v. U.S. HOMES CORPORATION, No. 1:2014cv01615 - Document 11 (D.N.J. 2014)

Court Description: OPINION. Signed by Judge Joseph H. Rodriguez on 11/3/2014. (tf, )

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PHOENIX v. U.S. HOMES CORPORATION Doc. 11 1 U N ITED S TATES D ISTRICT COU RT D ISTRICT OF N EW JERSEY Cydnee Phoen ix, : Plaintiff, : : v. U.S. Hom e Corporation d/ b/ a Lennar Hom es, Hon. J oseph H. Rodriguez Civil Action No. 14-1615 : OPIN ION : Defendant. This m atter is before the Court on Defendant’s m otion to dism iss pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons set forth below, the m otion will be granted (in part?). I. Backgro u n d The following facts are taken from Plaintiff’s com plaint, and, as such, the Court accepts them as true for the purposes of this m otion. In Septem ber 20 13, Plaintiff Cyndee Phoen ix (“Plaintiff or Phoenix”), along with her sister, m other, and a real estate agent, visited a planned residential com m unity known as Cedar Point, where Plaintiff would eventually purchase property (“Property”). (Com pl. ¶ 5, 9.) A sales agent and representative of Defendant, Ray DeChristie (“DeChristie”), m et Plaintiff and her fam ily at the Property. (Com pl. ¶ 9.) Defendant—U.S. Hom e Corporation, d/ b/ a Lennar Hom es (“Lennar”)—is the builder, developer, and broker of the houses in Cedar Point, including the Property. (Com pl. ¶ 6.) During this visit, Plaintiff encountered Kevin Elville Potter (“Potter”), who resides across the street from the Property. (Com pl. ¶ 10 .) 1 Dockets.Justia.com 2 Potter spoke with the sales representative about the lack of services by Defendant and told Plaintiff and her fam ily not to let Lennar do to you what they have done to us (referring to him self and his fam ily). (Com pl. ¶ 11.) After this encounter, Plaintiff asked DeChristie whether there was a problem with Potter. (Com pl. ¶ 12.) DeChristie inform ed them that there was “no problem ,” im plying that Potter was no longer eligible for services because of the am ount of tim e that had passed sin ce his hom e was purchased. (Com pl. ¶ 13.) On Septem ber 21, 20 13, Plaintiff signed the Agreem ent of Sale, and on Septem ber 23, 20 13, Defen dant signed the Agreem ent of Sale. (Com pl. ¶ 14.) On October 30 , 20 13, Plaintiff purchased the Property from Defendant and has resided there since Novem ber 7, 20 13. (Com pl. ¶ 4.) In deciding to purchase the Property, Plaintiff relied on Defendant’s advertisem ents, which spoke to the “wonderful lifestyle” of the com m unity and stated that “Quality, Value and Integrity are the hallm arks” of the com m unity. (Com pl. ¶ 7, 8 .) After purchasing the Property, Plaintiff learned that Potter was not receiving services as a result of his “harassing, hostile, and volatile interactions” with Defendant’s agents, em ployees, and/ or workers. (Com pl. ¶ 15.) This inform ation was known by Defendant an d DeChristie before Plaintiff’s Septem ber visit. (Com pl. ¶ 15.) Prior to purchasing the property, Plaintiff was never inform ed of Potter’s harassing, hostile, and volatile behavior. (Com pl. ¶ 19.) If Plaintiff had known of Potter’s behavior, she would not have purchased the Property. (Com pl. ¶ 20 .) After purchasing the Property, Plaintiff becam e aware that Potter parked his vehicles in front of her Property, blocking the driveway. (Com pl. ¶ 21, 22, 23.) Upon Plaintiff’s request, Potter agreed to m ove his cars when Plaintiff m oved in. (Com pl. ¶ 22.) Unbeknownst to Plaintiff, on October 1, 20 13, Defendant’s general counsel, Marcie 2 3 R. Getelm an, sent a letter to Potter’s wife telling her that her husband’s “frustration with Lennar is m isplaced and the harassing conduct needs to stop im m ediately.” (Com pl. ¶ 23.) The letter referenced Potter’s parking his vehicles in front of Plaintiff’s residence. (Com pl. ¶ 23.) However, neither Plaintiff nor any m em ber of her fam ily told Defendant about Potter blocking her driveway, nor did they request a letter to be sent. (Com pl. ¶ 25.) Upon m oving onto the Property, Potter’s vehicles were still parked in front of the Property, occasionally close to Plaintiff’s m ailbox. (Com pl. ¶ 27, 29.) Potter refused to m ove them upon Plaintiff’s request, referencing the October 1, 20 13 letter. (Com pl. ¶ 28.) The location of these vehicles has interfered with the United States Postal Service’s ability to approach Plaintiff’s m ailbox, resulting in the m ail carrier n ot delivering m ail and requiring Plaintiff to physically pick up her m ail from the post office. (Com pl. ¶ 9.) Potter’s behavior becam e hostile, belligerent, and increasingly harassing, such that Plaintiff worried that Potter would becom e violent in the future. (Com pl. ¶ 28, 29.) Potter has m ade snide and racist com m ents about Plaintiff and her fam ily; spit in the direction of Plaintiff and her fam ily; blasted his m usic loudly; taken pictures of Plaintiff’s guests and stared them down in attem pts to intim idate them ; and called the police on Plaintiff, am ong other m eans of harassm ent and intim idation. (Com pl. ¶ 29.) In response to his behavior, Plaintiff and her sister filed com plaints for harassm ent against Potter in Municipal Court on Novem ber 12, 20 13. (Com pl. ¶ 30 .) Plaintiff also hired a security guard in fear of retaliation for filing the harassm ent com plaints. (Com pl. ¶ 31.) Plaintiff’s counsel inform ed Defen dant’s general counsel of Potter’s harassing conduct, asking Defendant to elim inate the problem s caused by Potter. (Com pl. ¶ 33.) 3 4 Defendant has not taken any action to stop the harassm ent. (Com pl. ¶ 34.) Potter’s behavior has not stopped, an d, as a result, Plaintiff claim s to have been dam aged. (Com pl. ¶ 35.) Plaintiff now brings claim s for fraud, equitable fraud, negligence m isrepresentation and om ission, violation of the New J ersey Consum er Fraud Act (“CFA”), violation of the Planned Real Estate Developm ent Full Disclosure Act (“PREDFDA”), and negligent infliction of em otional distress. II. Stan d ard A com plaint should be dism issed pursuant to Rule 12(b)(6) if the alleged facts, taken as true, fail to state a claim . Fed. R. Civ. P. 12(b)(6). When deciding a m otion to dism iss pursuant to Rule 12(b)(6), ordinarily only the allegations in the com plaint, m atters of public record, orders, and exhibits attached to the com plaint, are taken into consideration. 1 See Chester County Interm ediate Unit v. Pa. Blue Shield, 8 96 F.2d 8 0 8, 8 12 (3d Cir. 1990 ). It is not necessary for the plaintiff to plead evidence. Bogosian v. Gulf Oil Corp., 561 F.2d 434, 446 (3d Cir. 1977). The question before the Court is not whether the plaintiff will ultim ately prevail. Watson v. Abington Twp., 478 F.3d 144, 150 (20 0 7). Instead, the Court sim ply asks whether the plaintiff has articulated “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twom bly, 550 U.S. 544, 570 (20 0 7). 1 “Although a district court m ay not consider m atters extraneous to the pleadin gs, a docum ent integral to or explicitly relied upon in the com plaint m ay be considered without converting the m otion to dism iss into one for sum m ary judgm ent.” U.S. Express Lines, Ltd. v. H iggins, 281 F.3d 38 3, 38 8 (3d Cir. 20 0 2) (internal quotation m arks and citations om itted) (em phasis deleted). 4 5 “A claim has facial plausibility 2 when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the m isconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 663 (20 0 9) (citing Twom bly, 550 U.S. at 556). “When there are well-pleaded factual allegations, a court should assum e their veracity and then determ ine whether they plausibly give rise to an entitlem ent to relief.” Iqbal, 556 U.S. at 680 . The Court need not accept “‘unsupported conclusions and unwarranted inferences,’” Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir. 20 0 7) (citation om itted), however, and “[l]egal conclusions m ade in the guise of factual allegations . . . are given no presum ption of truthfulness.” Wyeth v. Ranbaxy Labs., Ltd., 448 F. Supp. 2d 60 7, 60 9 (D.N.J . 20 0 6) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)); see also Kanter v. Barella, 489 F.3d 170 , 177 (3d Cir. 20 0 7) (quoting Evancho v. Fisher, 423 F.3d 347, 351 (3d Cir. 20 0 5) (“[A] court need not credit either ‘bald assertions’ or ‘legal conclusions’ in a com plaint when deciding a m otion to dism iss.”)). Accord Iqbal, 556 U.S. at 679 (finding that pleadings that are n o m ore than conclusions are not entitled to the assum ption of truth). Further, although “detailed factual allegations” are not necessary, “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitlem ent to relief’ requires m ore than labels and con clusions, an d a form ulaic recitation of a cause of action’s elem ents will not do.” Twom bly, 550 U.S. at 555 (internal citations om itted). See also Iqbal, 556 U.S. at 678 2 This plausibility standard requires m ore than a m ere possibility that unlawful conduct has occurred. “When a com plaint pleads facts that are ‘m erely consistent with’ a defendant’s liability, it ‘stops short of the line between possibility and plausibility of ‘entitlem ent to relief.’” Id. 5 6 (“Threadbare recitals of the elem ents of a cause of action, supported by m ere conclusory statem ents, do not suffice.”). Thus, a m otion to dism iss should be granted unless the plaintiff’s factual allegations are “enough to raise a right to relief above the speculative level on the assum ption that all of the com plaint’s allegations are true (even if doubtful in fact).” Twom bly, 550 U.S. at 556 (internal citations om itted). “[W]here the well-pleaded facts do not perm it the court to infer m ore than the m ere possibility of m isconduct, the com plaint has alleged-but it has not ‘shown’-‘that the pleader is entitled to relief.’” Iqbal, 556 U.S. at 679 (quoting Fed. R. Civ. P. 8(a)(2)). Further, Rule 9(b) states that “[i]n alleging fraud or m istake, a party m ust state with particularity the circum stances constituting fraud or m istake. Malice, intent, knowledge, and other conditions of a person’s m ind m ay be alleged generally.” Fed. R. Civ. P. 9(b). III. D is cu s s io n Counts I, II, III and VI of Plaintiff’s Com plaint allege claim s of fraud, equitable fraud, Plaintiff now brings claim s for fraud, equitable fraud, negligence m isrepresentation and om ission, and n egligent infliction of em otional distress respectively. These claim s will be referred to as the com m on law claim s. Counts IV and V allege violations of the New J ersey Consum er Fraud Act and the Planned Real Estate Developm ent Full Disclosure Act, respectively. The Court will address the issues in turn. Plaintiff’s characterization of Potter’s actions paints an unpleasant and unenviable experience. While Plaintiff m ay seek redress against Potter, the Com plaint here, for the reasons that follow, fails to state a claim upon which relief can be granted 6 7 as to Lenn ar. New J ersey does not recognize a duty to disclose an undesirable neighbor. The standard of review governing fraud claim s, pursuant to Fed. R. Civ. P. 9(b), requires the pleading of particularized circum stances constituting fraud. Here, such particularity is lacking, specifically as to Defendant’s knowledge of Potter’s behavior toward other neighbors. In addition, to the extent that Defendant’s agent m ade certain statem ents to Plaintiff following an encounter with Potter, the Court finds that those statem ents do not constitute m aterial m isrepresentation of fact. While the Court sym pathizes with Plaintiff’s grievances as to Potter, the Com plaint fails to state a claim upon which relief can be granted as to Defendant Lennar. A. Co m m o n Law Claim s Plaintiff’s fraud claim s fail as a m atter of law because Defendants did not owe a duty to Plaintiff to disclose Potter’s behavior. In New J ersey, "any tort of negligence requires the plaintiff to prove that the putative tortfeasor breached a duty of care . . . ." S. Broward Hosp. Dist. v. MedQuist, Inc., 516 F. Supp. 2d 370 , 395 (D.N.J . 20 0 7) (quoting Highlands Ins. Co. v. Hobbs Group, LLC, 373 F.3d 347, 351 (3d Cir. 20 0 4)). Therefore, in order for the fraud claim s to succeed, Defendant m ust have a duty to disclose Potter’s behavior to Plaintiff. Under New J ersey law, hom e sellers only have a duty to disclose “off-site physical conditions known to [them ] and unknown and not readily observable by the buyer if the existen ce of those conditions is of sufficient m ateriality to affect the habitability, use, or enjoym ent of the property and, therefore, ren der the property substantially less desirable or valuable to the objectively reasonable buyer.” Strawn v. Canuso, 140 N.J . 43, 65 (1995). Potter’s behavior is not an off-site physical condition, but a social 7 8 condition that Lennar had no duty to disclose. See, Levine v. Kram er Group, 354 N.J . Super. 397, 40 5 (App. Div. 20 0 2) (where the court found that there was no duty to disclose the existence of a disgruntled neighbor). In this regard, Plaintiff’s reliance on two California state court decisions is unavailing. First, the cases are not bin ding on this Court. More im portantly, California has a statute that requires a broker to disclose the “[n]eighborhood n oise problem s or other nuisances” in cluding “difficult neighbors.” See Alexander v. McKnight, 7 Cal. App. 4 th 973, 976 (Cal. Ct. App. 1998); see also Shapiro v. Sutherland, 64 Cal. App. 4 th 1534, 1545 (Cal. Ct. App. 1992). There is no such statute in New J ersey requiring a sim ilar disclosure and, pursuant to Strawn, there is no obligation to disclose the presen ce of a disgruntled neighbor to a prospective buyer. Strawn, 140 N.J . at 64. Moreover, the Com plaint fails to set forth sufficient facts that dem onstrate that Defendant assum ed a duty to disclose Potter’s behavior upon being asked by Plaintiff whether Potter was a problem and then volunteering a response. “Although a party m ay keep absolute[ly] silen[t] and violate no rule of law or equity, … if he volunteers to speak and to convey inform ation which m ay influence the conduct of the other party, he is bound to discover the whole truth. A partial statem ent then becom es a fraudulent concealm ent, and even am ounts to a false and fraudulent m isrepresentation.” Berm an v. Gurwicz, 189 N.J . Super. 8 9, 93 (Ch. Div. 1981) (quoting Pom eroy, Equity J urisprudence (5th ed.), § 90 1a (1941)). Here, the Com plaint fails to allege sufficient facts to plausibly conclude that Defendant was aware of additional inform ation requiring disclosure. First, there is nothing in the Com plaint that suggests that Plaintiff had a specific n eed that Defendant fraudulently assuaged. While it is axiom atic that prospective hom ebuyers wish for 8 9 “good” neighbors, Potter’s behavior was on full view to Plaintiff and there are no facts plead in dicating that Defendant was aware that Potter was “harassing, volatile, or hostile” with his neighbors. Com pl. ¶15. At m ost, Defendant’s October 1, 20 13 letter to Potter dem onstrates Defendant’s awareness of Potter’s unneighborly conduct of parking his vehicle in front of Plaintiff’s future hom e; the Com plaint fails to plead with particularity the details of the “hostile, volatile, and harassing” actions Potter took against Defendant’s personnel and/ or the other neighbors. Iqbal, 556 U.S. at 680 ; Fed. R. Civ. P. 9 (b). The act of parking in front of Plaintiff’s future hom e, which according to the letter was taken for the purpose of frustrating Defendant’s sales effort, does not dem onstrate that Defendant was aware, or could even surm ise, that Potter’s frustrations would be directed toward Plaintiff in the m anner that has occurred. In addition, the letter was sent after Plaintiff’s Septem ber visit to the property where Plaintiff had the opportunity to observe Potter’s parking. Second, Defendant’s statem ent, even if it falls short of com plete propriety, is not a m isrepresentation of a m aterial fact. Alexander v. CIGNA Corp., 991 F. Supp. 427, 435 (D.N.J . 1998) (“Sim ilarly, statem ents that can be categorized as “puffery” or “vague and ill-defined opinions” are not assurances of fact and thus do not constitute m isrepresentations.”) (citing Diaz v. J ohnson Matthey, Inc., 869 F. Supp. 1155, 1165 (D.N.J . 1994) (citations om itted). To establish her claim s of fraud, Plaintiff m ust dem onstrate that the Defendants knowingly withheld m aterial facts to induce Plaintiff to purchase the property. See Gennari v. Weichert Co. Realtors, 148 N.J . 582, 610 (1997); Strawn, 140 N.J . at 60 . 9 10 Here, DeChristie’s com m ents are nothing m ore than an “ill-defined opinion.” In this regard, Defendant’s reliance on Perri v. Prestigious Hom es, Inc., 20 12 WL 95564 (N.J . Super. A.D. J an. 13, 20 12) is instructive. In Perri, a realtor told a buyer that “flooding was not som ething to worry about” in regards to a hom e located in a flood zone. In determ ining that the realtor was not liable under the CFA and com m on law fraud, the Appellate Division concluded that the plaintiff could not establish that the realtor m ade a statem ent of fact that was false. Rather, the Appellate Division concluded that the statem ent did not “describe a direct assertion of fact; at best, it indicates an idle com m ent [the realtor] m ade conveying her opinion about the seriousness of the problem posed by flooding.” at *5 (citing Gennari, 148 N.J . at 60 7 (differentiating m aterial m isrepresentations from “idle com m ents or m ere puffery”). Plaintiff asked DeChristie his opinion of Potter’s behavior, which she personally observed, and his response is not a m aterial fact. Perri, 20 12 WL 95564 at *4. Likewise, DeChristie’s com m ent as to the reasons Potter was no longer eligible for services is not a m aterial fact. Finally, the Sales Agreem ent disclaim s any reliance on statem ents outside of the contract and Plaintiff cannot now claim fraud. Alexander, 991 F. Supp. at 436; see also Pathfinder Mgm t., Inc. v. Mayne Pharm a, 20 0 8 WL 3192563 (D.N.J . Aug. 5, 20 0 8) (“Since the Purchase Agreem ent explicitly states that Plaintiff is aware that no representations are being m ade to them outside those contained within the Purchase Agreem ent and specified schedules and instrum ents, the representations m ade by [Defendant] in the J anuary 20 0 3 presentation cannot be justifiably relied upon by Plaintiff.”). 10 11 Accordingly, Defendant had no duty to Plaintiff to disclose inform ation regarding Potter’s conduct. Therefore, Plaintiff’s fraud claim m ust be dism issed. Additionally, the equitable fraud, negligent m isrepresentation and om ission, and n egligent infliction of em otional distress claim s are also dism issed because Defendant did not owe a duty to Plaintiff. B. Vio latio n o f th e N e w Je rs e y Co n s u m e r Frau d Act Plaintiff’s claim under the New J ersey Con sum er Fraud Act is dism issed. “[T]o state a claim under the CFA, a plaintiff m ust allege each of three elem ents: (1) unlawful conduct by the defendants; (2) an ascertainable loss on the part of the plaintiff; and (3) a causal relationship between the defendants' unlawful conduct and the plaintiff's ascertainable loss.” N.J . Citizen Action v. Schering-Plough Corp., 367 N.J . Super. 8 , 1213 (App. Div. 20 0 3). There are two bases for Plaintiff’s CFA claim . First, Plaintiff alleges a violation stem m ing from the m isrepresentation and om ission of facts con cerning Potter’s conduct. Second, Plain tiff alleges false representations in written advertisem ents provided by Defendant. Both claim s fail as a m atter of law and are insufficient to m aintain a CFA action. Plaintiff’s CFA claim based upon Defendant’s alleged failure to speak the whole truth when the sales representative volunteered that Potter’s conduct was of no m om ent is dism issed as there are no facts in the Com plaint that sufficiently allege that Defendant was aware of any further inform ation regarding Potter’s conduct that warranted disclosure. In addition, pursuant to the Rule 9(b) standard governing fraud claim s, the plaintiff m ust also allege “substantial aggravating circum stances.” Naporano Iron & 11 12 Metal Co. v. Am . Crane Corp., 79 F. Supp. 2d 494, 50 7 (D.N.J . 1999) (citing Suber v. Chrysler Corp., 10 4 F.3d 578, 587 (3d Cir. 1997)). Plaintiff has not satisfied either of these burdens. As to the claim of fraudulent m isrepresentation, the statem ent that Potter was “no problem ” does not constitute a m isrepresentation as it is not a statem ent of m aterial fact. Under the CFA, “[t]he m isrepresentation has to be one which is m aterial to the transaction an d which is a statem ent of fact, found to be false, m ade to induce the buyer to m ake the purchase.” Gennari, 148 N.J . at 60 7 (citing Gennari v. Weichert Co. Realtors, 288 N.J . Super. 50 4, 535 (App. Div. 1996)). Not all erroneous statem ents constitute a sufficient m isrepresentation to bring a claim under the CFA. Id. The statem ent that Potter was “no problem ” is not a statem ent of fact; instead, it is an idle com m ent which is insufficient to constitute a m isrepresentation. See Gennari, 148 N.J . at 60 7. As for the written advertisem ents claim ing a “wonderful lifestyle” and speaking to the “Quality, Value and Integrity” of the neighborhood, these statem ents alone do not justify a claim under the CFA. “Whether a practice itself is unfair [for purposes of the New J ersey Consum er Fraud Act] is a classic jury question. However, where the claim is based on written statem ents, the court m ust m ake the legal determ ination of whether a practice can be said to be unfair in light of the written statem ents.” Slack v. Suburban Propane Partners, L.P., 20 10 WL 3810 870 , at *5 (D.N.J . Sept. 21, 20 10 ) (quoting Hassler v. Sovereign Bank, 374 Fed. Appx. 341, 344 (3d Cir. 20 10 )). Therefore, the question of whether this claim is actionable is a m atter of law. “Mere puffery does not constitute consum er fraud.” Bubbles N’ Bows, LLC v. Fey Publ’g. Co., 220 7 WL 240 698, at *9 (D.N.J . Aug. 20 , 20 0 7) (citing Turf Lawnm ower 12 13 Repair, In c. v. Bergen Record Corp., 139 N.J . 392, 416 (1995)). Further, “vague and illdefined opinions” cannot be construed as a m isrepresentation. Bubbles N’ Bows, 220 7 WL 240 698, at *9. Specifically, vague statem ents about “integrity” are m ere puffery an d cannot be construed as prom ises. Id. In deciding whether a statem en t is puffery or som ething m ore, courts have looked to whether the statem ents would “victim ize the average consum er.” Turf Lawnm ower Repair, 139 N.J . at 416. The allegedly fraudulent statem ents provided by Defendant would not victim ize the average consum er. Rather, phrases like a “wonderful lifestyle” are statem ents of opinion, not fact. Therefore, Plaintiff’s CFA claim m ust be dism issed. C. Vio latio n o f th e Pla n n e d Re al Es tate D e ve lo p m e n t Fu ll D is clo s u re Act The PREDFDA states that any developer who “m akes an untrue statem ent of m aterial fact or om its a m aterial fact… or who m akes a m isleading statem ent… shall be liable to the purchaser.” N.J .S.A. 45:22A-37 (1978). As previously stated, the Com plaint does not allege facts sufficient to determ ine that Defendant possessed knowledge of Potter’s conduct prior to Plaintiff’s purchase of the Property to satisfy a Rule 12(b)(6) m otion. The Court need not accept “‘unsupported conclusions and unwarranted inferences,’” Baraka, 481 F.3d at 195. Without m ore, the Com plaint sim ply con cludes that Potter engaged in “harassing, hostile, an d volatile conduct” with Defendant’s em ployees and other neighbors; such bare statem ents are insufficient under Rule 12(b)(6). Iqbal, 556 U.S. at 679. Accordingly, the PREDFDA claim m ust be dism issed. IV. Co n clu s io n For the reasons stated above, Defendant’s Motion to Dism iss is granted on the entirety of the Com plaint. 13 14 An appropriate order shall issue. Dated: Novem ber 3, 20 14 s/ J oseph H. Rodriguez Hon. J oseph H. Rodriguez, UNITED STATES DISTRICT J UDGE 14

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