Strawn v. Canuso

140 N.J. 43, 657 A.2d 420 (1995)

 

RULE:

A matter is material if (a) a reasonable man would attach importance to its existence or nonexistence in determining his choice of action in the transaction in question; or (b) the maker of the representation knows or has reason to know that its recipient regards or is likely to regard the matter as important in determining his choice of action, although a reasonable man would not so regard it.

FACTS:

Plaintiff home buyers brought a class action lawsuit against defendant, building developer and marketing brokers, for consumer fraud under the New Jersey Consumer Fraud Act, N.J. Stat. Ann. 56:8-1 to -66, common law fraud, and negligent misrepresentation. Plaintiffs alleged that defendants failed to disclose that the purchased homes had been constructed near an abandoned hazardous-waste dump. The trial court rendered summary judgment in favor of defendants. On appeal, the appellate court reversed and held that defendants had a duty to disclose and that class action certification was proper. Defendants challenged the appellate court's judgment.

ISSUE:

Do a building developer and marketing broker have a duty to disclose that purchased homes had been constructed near an abandoned hazardous-waste dump?

ANSWER:

Yes.

CONCLUSION:

 The court held that defendants had a duty to disclose to plaintiffs the location of the abandoned hazardous waste dump as an off-site physical condition that an objectively reasonable and informed buyer would have deemed material to the home buying transaction. The court held that class certification was necessary because the claims involved common issues of law and fact, and class action was a superior method for adjudication in consumer fraud.

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