German v. Federal Home Loan Mortg. Corp.

• Citation: 885 F. Supp. 537
• Decision Date: 08 May 1995
• Docket Number: No. 93 Civ. 6941 (RWS).,93 Civ. 6941 (RWS).
• Parties: 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.
• Court: U.S. District Court — Southern District of New York

885 F. Supp. 537

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.

May 8, 1995.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Fitzgerald & Fitzgerald, P.C. by Brian Farrell, John E. Fitzgerald, of counsel, Yonkers, NY, and Bronx Legal Services by Lucy Billings, New York City, for plaintiff.

Siff Rosen, P.C. by William G. Ballaine, Thomas G. Merrill, of counsel, New York City, 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 by Paul J. Bottari, of counsel, New York City, for New York City Housing Authority.

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

Paul A. Crotty by Gabriel Taussig, Lisa S.J. Yee, Steven Levi, Terri Feinstein Sasanow, of counsel, Corp. Counsel of City of New York, New York City, for defendant City of New York.

OPINION

SWEET, District Judge.

Plaintiffs have moved for class certification pursuant to Rule 23, Fed.R.Civ.P. Defendants have moved for dismissal and summary judgment on various grounds. For the reasons set forth below, plaintiffs' motion is granted as modified, Defendants' motions are granted in part and denied in part as set forth below.

The Parties

Plaintiff Jennifer German has resided at 1710 Montgomery Avenue (the "Montgomery Building"), Apartment 2H, Bronx, New York ("Apartment 2H"), since her birth in 1991. Her mother was informed that she was lead poisoned on December 9, 1992.

Plaintiff Wellington German has resided in the Montgomery Building, Apartment 2H since 1988. He was diagnosed with a blood lead level of 12 ug on or before October 22, 1992. Wellington was born in September 1988.

Plaintiff Ana Maritza German (together with Jennifer and Wellington German, the "Germans"), is the mother and natural guardian of Jennifer and Wellington German. She has resided in the Montgomery Building, Apartment 2H, since 1988.

Defendant Federal Home Loan Mortgage Corporation ("Freddie Mac"), is a privately-owned corporate instrumentality of the United States chartered by Congress to increase the supply of money that primary mortgage lenders can make available to home buyers. See 12 U.S.C. ?? 1451-1459. Freddie Mac fulfills its mission by purchasing mortgages from financial institutions covering residential dwellings located throughout the United States. 12 U.S.C. ? 1454(a)(1). 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.

Defendant City of New York (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 and thus is obligated to comply with the Lead Paint Poisoning Prevention Act (the "LPPPA") and related federal regulations.

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 CAISI Management Company ("CAISI") was retained as managing agent of the Montgomery Building between December 1, 1988 and October 31, 1991, and between May 8, 1992 and September 16, 1992. CAISI has its principal place of business in Melville, New York.

Defendant Harold Beck d/b/a Tebec Management Co. ("Tebec") was retained as managing agent of the Montgomery Building from January 1, 1990, to December 31, 1990.

Defendant Property Services Company ("PSC") has been the managing agent for the Montgomery Building from September 16, 1992, until the present. PSC is a domestic corporation with its principal place of business in Valley Stream, New York. 1710, Wittenstein, Wagman, Deutsch and PSC are collectively known as the "1710 defendants."

Plaintiff Marcus Coran was born on October 8, 1990, and has resided at 1061 St. Nicholas Avenue (the "St. Nicholas Building"), Apartment # 5, New York, New York, since March 10, 1994. The building was allegedly built before 1960 and has peeling, scaling and cracked paint. The complaint alleges that the apartment contains paint on other chewable and lead dust generated surfaces that have been found to contain excessive levels of lead in violation of federal and local laws.

Plaintiff Raniqua Smith was born on January 3, 1991, and has resided at the St. Nicholas Building, Apartment # 5, New York, New York since March 10, 1994. Plaintiffs claim that Marcus and Raniqua have been diagnosed with at least slightly elevated blood levels. Marcus' blood lead level was measured at 12 ug/dL.

Plaintiff Denise Goffin (together with Marcus Coran and Raniqua Smith, the "Goffins"), is the mother and natural guardian of Marcus and Raniqua. She has resided in the St. Nicholas Building, Apartment 2H, since 1988.

Defendant Freddie Mac allegedly owns the St. Nicholas Building, receives and uses federal Section 8¹ funds for the property.

Defendant NYCHA receives and administers federal Section 8 funds for residential property defendant Freddie Mac owns and operates.

Prior Proceedings

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,² (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 Ave. 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.

In general, plaintiffs allege that none of the defendants ever notified any of the plaintiffs of the hazards of lead in their residences, nor did defendants maintain the premises so as to reduce or eliminate the lead hazard in the residence. Among the steps not undertaken by the defendants were inspection, maintenance and repair. Specifically, the plaintiffs allege that the defendants did not cover up, seal, and eliminate the lead paint or dust and otherwise prevent plaintiffs' exposure to lead. See Complaint at ? 37.

Plaintiffs claim that their need for injunctive relief stems from the fact that they are being directly harmed by the immediately hazardous lead paint in their homes and that as a result of their continued exposure to lead paint, plaintiffs need the relief to ensure that the children are not now and will not become lead poisoned.

Specifically they seek an order requiring the defendants to: 1) notify their tenants regarding the lead hazards in defendants' buildings, 2) to take the steps necessary to minimize the harmful effects of lead to the tenants, 3) to create a fund, paid for by defendants, to provide medical surveillance and monitoring of the children in these buildings, 4) to refrain from evicting tenants and withholding security deposits, and 5) to abate the lead hazards in the buildings.

The complaint also states twenty causes of action and seeks damages and injunctive relief. The causes of action include: 1 and 2)³ negligence; 3 and 4) negligence per se for violation of New York City Administrative Code ?? 27-2013(h) & 27-2126, 24 R.C.N.Y. ? 173.13 and ? 173.14 and 24 C.F.R. Part 35 and Part 570 (claim against NYCHA and NYC does not include ? 173.13 and is Part 882, not ? 171.13); 5 and 6) breach of contract and implied warranty of habitability; 7 and 8) products liability for selling a product defendants knew was inherently dangerous and for which they should be held strictly liable; 9 and 10) strict liability for ultrahazardous substances; 11 and 12) nuisance and absolute nuisance for failure to inspect, warn or take action to prevent further poisoning after being informed of German plaintiffs' poisoning (including damages); 13 and 14) intentional infliction of mental...