Onofrio v. Playboy Club of New York, Inc.

Botein, P. J. This is an appeal from an order granting the major portion of the relief sought by defendant-respondent’s motion to dismiss each of two causes of action contained in a consolidated amended complaint asserting a class action on behalf of a large number of alleged members of defendant club. The first cause of action seeks to impress a constructive trust upon and secure an accounting for a large fund created through individual contributions made by the members of the club; and plaintiffs claim that such members, as beneficiaries of the resulting constructive trust, can maintain a class action. This cause of action was properly dismissed, since plaintiffs do not claim fraud, merely breach of an agreement, and there does not appear to have been any confidential relationship between the parties (Cassidy v. Cassidy, 309 N. Y. 332; Peppard Realty Co. v. Emdon, 204 App. Div. 8). Furthermore, plaintiffs have an adequate remedy at law, as will be indicated. [5] Special Term granted that branch of the motion addressed to the second canse of action, which alleged breach of the numerous contracts entered into between the members of the class and defendant, to the extent of holding that this cause of action may not be maintained by the named plaintiffs as representatives of a class, but that each of them should separately state and number his cánse of action. In such cases as Brenner v. Title Guar. & Trust Co. (276 N. Y. 230), Society Milion Athena v. National Bank of Greece (281 N. Y. 282), Kahlmeyer v. Green-Wood Cemetery (287 N. Y. 787) and Noel Holding Corp. v. Carvel Dari-Freeze Stores (140 N. Y. S. 2d 640, affd. 286 App. Div. 1066), a thread runs from the defendant to each member of the putative class but none operates as a common binding among the members themselves. That is not the instant pattern. Alleged here is that there was collected a $25 contribution from each of approximately 50,000 persons upon the undertaking that it would use the fund thus collected solely to acquire, operate and maintain a private club for the exclusive use of the contributors; and that the Playboy Club organization failed to provide such a club but instead utilized the contributions to finance a restaurant for the use and enjoyment of the public at large. Return of the contributions is the relief sought and would seem to be the only species of recovery available. While the Playboy undertakings with the contributors were individual with each, they exhibit sufficient interdependence to satisfy the “ common or general interest ” requirement (Civ. Prac. Act, § 195; CPLR 1005, subd. [a]). A club, obviously, cannot be established by the expenditure of $25; each contributor understood that his money would be combined with that of his fellows to finance the enterprise; and a club enterprise is plainly a common one. A comparable situation was considered in Beeching v. Lloyd (3 Drew. 227) and was similarly decided. In that case it was alleged that subscriptions to shares in a projected stock company had been obtained fraudulently. The subscriptions were paid into a banking house and two of the subscribers brought a representative action on behalf of themselves and other subscribers for return of their deposits. To adapt the language of Beeching v. Lloyd to the present case, there is not only a common object or purpose as concerns the defendant but also a common object or purpose on the part of the contributors (and, see, Markt & Co. v. Knight S. S. Co. [1910], 2 K. B. 1021, 1031-1032, 1045-1046 ; The Annual Practice, 1963, vol. 1, p. 338). The same reasoning would appear to underlie the decision in Ackert v. Union Pacific R. R. Co. (4 AD 2d 819). There stockholders of Spokane [6] International Railroad Company agreed with Union Pacific, which wished to acquire control of Spokane, to exchange their stock for stock of Union Pacific, and for that purpose lodged their certificates with a depositary. It was a condition of each agreement, inserted to free the transactions from Federal income tax consequences, that the exchange offer should be accepted by the holders of 80% or more of Spokane stock. A community of interest among the Spokane stockholders thus arose from their common object, although their agreements with Union Pacific were several. Upon allegations that the Interstate Commerce Commission had not approved the exchange within the time limited by the agreements for such approval, the court permitted a class suit for recovery of the deposited stock. A class action seems otherwise fully appropriate here. The ¡members of the class are extremely numerous, the stake of each small, the expenses of conventional, individual litigation out of all proportion to such a stake, the issues to be litigated are common, the relief available uniform (see, also, Atkins v. Trowbridge, 162 App. Div. 161, 629). We deal with a complaint and note the express and comprehensive protective powers granted the court by subdivision (b) of section 1005 of the Civil Practice Law and Rules. The order entered August 7, 1963 should be modified, on the law, to provide that defendant-respondent’s motion, to the extent addressed to the second cause of action, is denied, and otherwise affirmed, with costs to abide the event. The appeal from the short-form order entered June 25, 1963 should be dismissed, without costs.