FIALA v. METROPOLITAN LIFE INSURANCE COMPANY (2008)

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 A.D.2d 368, 369, 737 N.Y.S.2d 33 [2002] ), and their attorneys clearly possess the requisite “competence, vigor, and experience” (Pruitt v. Rockefeller Ctr. Props., 167 A.D.2d 14, 24, 574 N.Y.S.2d 672 [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, 654 N.Y.S.2d 240 [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 A.D.2d 240, 241-242, 744 N.Y.S.2d 31 [2002];  Katz v. NVF Co., 100 A.D.2d 470, 473, 473 N.Y.S.2d 786 [1984] ).   We have considered the parties' other arguments for affirmative relief and find them unavailing.