Fiala v. Metropolitan Life Insurance

Order, Supreme Court, New York County (Herman Cahn, J.), entered January 31, 2007, which, in an action arising out of the demutualization of defendant life insurance company, granted plaintiffs’ motion for class action certification as to their claims under Insurance Law § 7312 and denied certification as to their claims for common-law fraud, unanimously modified, on the facts, to remove plaintiff Mark Smilow as a class representative, and otherwise affirmed, without costs. The named plaintiffs clearly possess an “adequate understanding of the case” (Rollin v Frankel & Co., 290 AD2d 368, 369 [2002]), and their attorneys clearly possess the requisite “competence, experience and vigor” (Pruitt v Rockefeller Ctr. Props., 167 AD2d 14, 24 [1991]). However, the presumed reliance of class representatives on their attorneys’ expertise, and the avoidance of an appearance of impropriety, require that plaintiff Mark Smilow, an associate at plaintiffs’ co-lead counsel, be removed as a class representative, even though he has personally retained other counsel (see Meachum v Outdoor World Corp., 171 Misc 2d 354, 371-372 [1996]). Certification of the common-law fraud claims was properly denied because class actions sounding in fraud require proof of reliance by each class member and a host of factors could have influenced a class member’s individual decision to accept or reject the demutualization plan (see Hazelhurst v Brita Prods. Co., 295 AD2d 240, 241-242 [2002]; Katz v NVF Co., 100 AD2d 470, 473 [1984]). We have considered the parties’ other arguments for affirmative relief and find them unavailing. Concur—Tom, J.P, Friedman, Renwick and DeGrasse, JJ.