Williams v. Kisling, Nestico, & Redick, L.L.C.
2022 Ohio 1044
Ohio Ct. App.2022Background
- Plaintiffs filed a class action against law firm Kisling, Nestico & Redick (KNR), doctors (including Dr. Sam Ghoubrial and Dr. Minas Floros), and KNR owners, alleging three uniform schemes tied to KNR’s high-volume "settlement mill" practice: (1) a price‑gouging scheme with Dr. Ghoubrial that inflated medical bills to boost settlements (Class A); (2) a "narrative fee" kickback to chiropractors for referrals (Class B); and (3) a standardized "investigation" or sign‑up fee charged to clients that allegedly reimbursed marketing/overhead rather than actual investigation (Class C).
- The trial court certified portions of Class A (fraud, breach of fiduciary duty, unjust enrichment, unconscionable contract against most defendants), denied certification for Class B, and certified Class C against KNR and its owners.
- Plaintiffs relied in part on an expert affidavit characterizing KNR as a settlement mill and describing patterns (rapid turnover, aggressive advertising, standardized practices, and medical buildup).
- KNR and Dr. Ghoubrial appealed the certification rulings, arguing Civ.R. 23(B)(3)’s predominance/superiority requirements were not satisfied because individual issues (insurance status, differing treatments, bill reductions, and contract terms) would dominate.
- The appellate court: affirmed certification of Class C; concluded the trial court failed to perform the required rigorous analysis for Class A (predominance and remedy issues) and remanded Class A for further proceedings; judgment affirmed in part, reversed in part, and remanded.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Class A (price‑gouging claims) met Civ.R. 23(B)(3) (predominance/superiority) | KNR and Ghoubrial ran a common scheme to overcharge clients; common proof can show standardized overcharges and KNR’s role in paying inflated bills from settlements. | Individualized inquiries (varying insurance coverage, differing treatments, bill reductions, evolving rates) predominate; damages require case‑by‑case mini‑trials. | Court held trial court failed to conduct the required rigorous predominance/superiority analysis for Class A; remanded for the trial court to resolve factual disputes and reanalyze Civ.R. 23(B). |
| Whether disgorgement across Class A is an appropriate, administrable remedy | Plaintiffs: disgorgement of overcharges (and attributable contingent fees) is an appropriate remedy calculable from common evidence. | Defendants: calculating overcharge and attributable contingent fee per member is individualized and unworkable in class format. | Court found the trial court summarily adopted a disgorgement formula without rigorous analysis; remanded for the trial court to consider administrability. |
| Whether Class C (investigative/sign‑up fee) met Civ.R. 23(B)(3) | Investigation fee was a standardized sham charged to all clients; common misrepresentations and lack of case‑by‑case accounting make common proof adequate. | Contract authorized reimbursement for reasonable expenses; services varied by case so reasonableness and performance require individualized proof. | Court affirmed certification of Class C: trial court reasonably found fraud was common (standardized charge, no accounting), and predominance/superiority satisfied. |
Key Cases Cited
- Bates v. State Bar of Arizona, 433 U.S. 350 (1977) (background on growth of advertising and settlement‑oriented practices after Bates)
- Cullen v. State Farm Mut. Auto. Ins. Co., 137 Ohio St.3d 373 (2013) (trial court must perform a rigorous, fact‑resolving analysis under Civ.R. 23 before certifying a class)
- Felix v. Ganley Chevrolet, Inc., 145 Ohio St.3d 329 (2015) (plaintiffs must show they can prove classwide injury through common evidence)
- Hamilton v. Ohio Savs. Bank, 82 Ohio St.3d 67 (1998) (lists the seven Civ.R. 23 requirements for class actions)
- Blakemore v. Blakemore, 5 Ohio St.3d 217 (1983) (standard for abuse of discretion review)
- Vinci v. Am. Can Co., 9 Ohio St.3d 98 (1984) (individual differences in damages do not always defeat class certification)
- Baughman v. State Farm Mut. Auto. Ins. Co., 88 Ohio St.3d 480 (2000) (fraud accomplished on a common basis may be proved by common proof)
- Cope v. Metro. Life Ins. Co., 82 Ohio St.3d 426 (1998) (standardized procedures/documents can permit classwide proof)
- Marks v. C.P. Chem. Co., Inc., 31 Ohio St.3d 200 (1987) (common questions must be capable of resolution for all members in a single adjudication)
- Stammco L.L.C. v. United Telephone Co. of Ohio, 136 Ohio St.3d 231 (2013) (at certification stage, probing merits is permissible only to the extent necessary to evaluate Civ.R. 23 prerequisites)