SHANELL GOREE, Plaintiff-Appellee, v. NORTHLAND AUTO ENTERPRISES INC., ET AL., Defendants-Appellants.
No. 108881
COURT OF APPEALS OF OHIO, EIGHTH APPELLATE DISTRICT, COUNTY OF CUYAHOGA
June 25, 2020
[Cite as Goree v. Northland Auto Ents. Inc., 2020-Ohio-3457.]
MARY EILEEN KILBANE, J.
JOURNAL ENTRY AND OPINION; JUDGMENT: AFFIRMED; RELEASED AND JOURNALIZED: June 25, 2020. Civil Appeal from the Cuyahoga County Court of Common Pleas, Case No. CV-11-758061.
Frederick & Berler, L.L.C., Ronald I. Frederick, Michael L. Berler, and Michael L. Fine, for appellee.
Gallagher Sharp L.L.P., Clark D. Rice, Richard C.O. Rezie, and Thomas G. Lobe, for appellants.
MARY EILEEN KILBANE, J.:
{1} Defendants-appellants, Northland Auto Enterprises, Inc. (“Northland“), North Coast Auto Sales, Inc. (“North Coast“), Al Lentsch (“Lentsch“), Joe Zawatski (“Zawatski“), and LTO Financial, L.L.C. (“LTO“) (collectively,
I. FACTUAL BACKGROUND
A. The Parties
{2} Northland is a Minnesota corporation and Lentsch is its CEO. Northland created the “Ren‘T‘Own®” and “Lease‘T‘Own™” programs and provides services to help auto dealers implement those programs. Cleveland-based North Coast is one such auto dealer that implemented Northland‘s Ren‘T‘Own program. Zawatski owns North Coast. LTO is a Minnesota corporation, owned and operatеd by Lentsch. It provided financing to North Coast related to the Ren‘T‘Own program and sometimes would take title of vehicles under the Ren‘T‘Own program.
{3} Goree was a North Coast customer who entered into an agreement to lease a 1999 Dodge Intrepid through Northland‘s Ren‘T‘Own program.
B. The Ren‘T‘Own Program
{4} Northland founded the Ren‘T‘Own program in 1990. It describes the program in a promotional brochure as an “in-house option for customers with bruised credit or customers who are unable to obtain financing.”
{5} Under the Ren‘T‘Own program, the dealer retains title to the vehicle, but customers’ payments go toward their purchase of the vehicle. When customers return their vehicle and obtain a new one under the Ren‘T‘Own program, they will likely incur new “origination fees,” which the lease documents attribute to
{6} To incentivize dealer participation in the program, Northland provides participating auto dealers with contingent liability insurance per vehicle plus physical damage insurance. Northland also claims the program benefits dealers because it sets up a system that allows dealers to avoid repossession costs and increase customer loyalty. It claims to accomplish this by instructing customers to return the vehicle if they cannot pay when payment is due. In reality, because customers do not gain title to their car while renting under the Ren‘T‘Own program, they can only trade in their vehicles from the dealer who rented it to them.
{7} Northland also offers certain options to dealers under the program that it claims can increase dealers’ profits. These options include purchasing digital GPS tracking devices and an engine-transmission warranty for vehicles sold through the Ren‘T‘Own program. The GPS tracking system allows dealers to remotely interrupt the starter of a vehicle if the customer fails to remit a timely payment. Goree alleges that this practice amounts to a repossession, while avoiding any of the formalities or expenses of repossession, because it effectively deprives the customer of the use of the vehicle.
C. Goree‘s Agreement
{9} Goree executed several documents around July 30, 2009. The documents appear to be on forms created by Northland for its Ren‘T‘Own program. These documents include the following: (1) Consumer Lease Agreement (the “Agreement“); (2) a promissory note; (3) a payment book, detailing the amount due on each payment date; (4) an addendum authorizing North Coast to track the vehicle with a GPS device and disable the vehicle if Goree defaulted on her payments; and (5) an extended product warranty registration agreemеnt.
{10} Goree entered into the Agreement with North Coast on July 30, 2009, for a 1999 Dodge Intrepid with 77,213 miles. The cash price of the vehicle is listed at $12,790.36 on the Agreement. Attached as exhibits to the complaint are Kelley Blue Book estimates that list the suggested retail value of $5,275 for a 2001 Dodge Intrepid in excellent condition with the 77,213 miles. The difference between the Kelley Blue Book estimate and the cash price listed on the Agreement indicates that North Coast increased the retail value by about 2-2.4% to determine the selling price of Goree‘s vehicle, which the Ren‘T‘Own program suggests dealers do.
{12} Goree also executed a promissory note on July 30, 2009. The promissory note lists $1,288.63 as the total due at signing. It reflects a down payment in the amount of $800, leaving $488.63 due by September 28, 2009. Apparently, Goree would pay the $488.63 by adding about $81.44 to the first six bi-weekly payments. Pursuant to the promissory note, $12.09 was added to each bi-weekly payment to cover the sales tax. The promissory note also shows a charge of $10.78, but the reason for the charge is not identified. Goree alleges that the charge
{13} The payment book Goree received reflects that the charges for the car insurance (at or about $10.78) and the sales tax (at or about $12.09) were added to the biweekly base payment of $155.98 reflected on the Agreement, raising the actual total base biweekly payment to $178.84.2 In addition, for the first six payments, $81.44 was added to each payment to cover the remaining amount due at signing, temporarily raising the total due to $260.28 for those six payments.
{14} Goree also executed an addendum to the Agreement. The addendum authorized North Coast to track the vehicle using a GPS device. In the event Goree defaulted on her payments, North Coast could use the GPS device to disable the starting system of the vehicle. The addendum further provided that the GPS device was “required as a condition of approving our extension of credit to you” but “is not being sold with the Vehicle.”
{15} Goree also purchased an extended warranty. The warranty form provides several options. There is a check mark denoting the option for a 2 years/30,000 miles term for vehicles with 0-100,000 miles at $389. However, the total amount due on Goree‘s warranty claim is listed as $399, which is the price for a 2 years/30,000 miles term for vehicles with 100,001-140,000 miles.
{16} Goree alleges that many of the charges associated with her lease were imposed unlawfully and without proper disclosure. She alleges that (1) the $925 origination fee exceeded the maximum amount permitted in
{17} The class complaint raises four causes of action against Appellants: (1) Violation of
1. Consumer Protection Claims
{18} Counts 1 and 4 are both сonsumer protection claims. Count 1 is raised under OCSPA,
any act, omission or practice undertaken by a merchant which unfairly takes advantage of the lack of knowledge, ability, experience or capacity of a consumer; or results in a gross disparity between the value received by a consumer and the price paid, to the consumer‘s detriment.
“Unconscionable trade practices” shall also mean any act or practice declared unconscionable by statute, by regulation, by decision of a judicial body or administrative body in the State of Ohio, or by a rule or regulation promulgated by the regulation promulgated by the Director.
{19} The OCSPA prohibits “an unfair or deceptive act or practice in connection with a consumеr transaction” and “an unconscionable act or practice in connection with a consumer transaction.”
(B) It shall be a deceptive and unfair act or practice for a dealer, manufacturer, advertising association, or advertising group, in connection with the advertisement or sale of a motor vehicle, to:
(21) Advertise any price for a motor vehicle unless such price includes all costs to the consumer except tax, title, and registration fees, and a documentary service charge, provided such charge does not exceed the maximum documentary service charge permitted to be charged pursuant to section 1317 of the Revised Code.
{20} Pursuant to
2. Fraud or Misrepresentation
{21} Count 2 of the complaint alleges that Appellants systematically, through the Ren‘T‘Own program, misrepresented or failed to disclose the true cash price of vehicles sold to Goree and the putative class members. Appellants allegedly did so by routinely rolling the extended warranty, GPS device, and rental insurance into the cash price of the vehicle without disclosing those costs.
3. Conspiracy
{22} Count 3 of the complaint alleges that Appellants conspired to commit fraud and violate state laws through the Ren‘T‘Own program. The complaint alleges that Northland‘s guidelines, instructions, and promotional materials under the Ren‘T‘Own program instructed North Coast and other Ohio car dealers to include the cost of an extended warranty, GPS device, and rental insurance in the cash price of vehicles without disclosing those costs on the face of the lease forms. It also alleges that Northland provided the forms to allow North Coast and other dealers to carry out this scheme. The Appellants allegedly used the Ren‘T‘Own program to target individuals with low incomes or poor credit.
II. PROCEDURAL BACKGROUND
{23} Goree filed her complaint against Appellants on June 20, 2011. The original complaint was not a class action. North Coast moved to stay proceedings and compel arbitration on August 3, 2011. Northland, North Coast, and Lentsch
{24} On November 5, 2012, Lentsch moved to dismiss for lack of personal jurisdiction or, alternatively, for judgment on the pleadings. On January 30, 2014, the court denied the motion to compel arbitration in part and reserved ruling on the alleged unconscionability of the arbitration clause until after a hearing. Defendants appealed that order on December 27, 2014, but we dismissed the appeal sua sponte on July 16, 2014, because the trial court had only ruled on part of the motion to compel. On February 23, 2017, North Coast moved to withdraw its motion to compel arbitration. The court granted that motion on March 3, 2017.
{25} The defendants then moved to dismiss, or, alternatively, grant judgment on the pleadings on May 8, 2017. The motion sought dismissal under
{26} Goree filed her motion for class certification on January 31, 2018. Appellants filed an opposition to class certification on April 23, 2018. Goree replied to the opposition on April 30, 2018. The trial court granted class certification on
The Fraud Class – All Ohio residents, who from June 21, 2007, to the present, entered into a transaction to purchase, rent or lease a vehicle from any Ohio dealer that utilizes Northland‘s Ren‘T‘Own program, where:
a. the cash pricе of the vehicle included charges for goods or services that are in addition to the cost of the vehicle, and/or;
b. the amount charged for the title transfer and/or license fees is in excess of the amount actually paid to the State of Ohio, and/or;
c. the charge for an origination fee exceeded $250.
The CSPA Class – All Ohio residents, who from June 21, 2009, to the present, entered into a transaction to purchase, rent or lease a vehicle from any Ohio dealer that utilized Northland‘s Ren‘T‘Own program, where:
a. the case price of the vehicle included charges for goods or services that are in addition to the cost of the vehicle, and/or;
b. the amount charged for the title transfer and/or license fees is in excess of the amount actually paid to the State of Ohio, and/or;
c. the charge for an origination fee exceeded $250.
{27} This appeal follows. Appellants have raised the following three assignments of error:
Assignment of Error No. 1
The trial court erred in finding it had personal jurisdiction over Northland, Al Lentsch, and or LTO.
Assignment of Error No. 2
The trial court abused its discretion when it determined that Ms. Goree met the requirements of class certification pursuant to
The trial court abused its discretion when it found that Plaintiff met the requirements of class certification under
III. LAW AND ANALYSIS
A. Personal Jurisdiction
{28} Appellants first argue that the trial court erred in finding it had personal jurisdiction over them. Goree counters that the issue of personal jurisdiction is not properly before this court and that Appellants have improperly attempted to bootstrap personal jurisdiction to the trial court‘s resolution of the class certification motion. In response, Appellants argue that personal jurisdiction is a predicate issue so intertwined with the court‘s class certification determination that it is properly on appeal. We find that the issue of personal jurisdiction is not properly before this court.
{29} The Ohio Constitution limits appellate jurisdiction to the review of final judgments of lower courts.
{30} Appellants moved the trial court for dismissal under
{31} Appellants nevertheless argue that personal jurisdiction is properly before this court because it is a predicate issue so “inextricably intertwined” with the issue of class certification that it must be reviewed with the trial court‘s determination of class certification. They direct us to two cases that found a review of predicate issues necessary to review a class certification: Unifund CCR Partner v. Piaser, 11th Dist. Ashtabula No. 2016-A-0076, 2019-Ohio-183 and Satterfield v. Ameritech Mobile Communications, Inc., 155 Ohio St.3d 463, 2018-Ohio-5023, 122 N.E.3d 144. In Unifund, the 11th District determined that whether Ohio‘s or New Jersey‘s statute of limitations applied was a predicate issue to its review of class certification. But, unlike personal jurisdiction here, the statute of limitations was part of the trial court‘s rationale in denying class certification. Unifund at ¶ 23. In Satterfield, the Ohio Supreme Court reviewed the predicate issue of whether the class could recover statutory treble damages in reversing a class certification. However, the treble damages issue in Satterfield, unlike personal jurisdiction here, substantively affected whether the class had brought a valid claim. Satterfield at ¶ 23.
B. Class Actions and Standard of Review
{33}
- an identifiable class must exist and the definition of the class must be unambiguous;
- the named representatives must be members of the class;
- the class must be so numerous that joinder of all members is impracticable;
- there must be questions of law or fact common to the class;
- the claims or defenses of the representative parties must be typical of the claims or defenses of the class;
- the representative parties must fairly and adequately protect the interests of the class; and
- one of the three
Civ.R. 23(B) requirements must be met.
Cullen v. State Farm Mut. Auto. Ins. Co., 137 Ohio St.3d 373, 2013-Ohio-4733, 999 N.E.2d 614, ¶ 15, quoting Stammco, L.L.C. v. United Tel. Co. of Ohio, 125 Ohio St.3d 91, 2010-Ohio-1042, 926 N.E.2d 292, ¶ 6.
{34} The party seeking class certification under
{35} The Ohio Supreme Court has set forth the standard of review we apply when reviewing class action certifications:
A trial judge has broad discretion in determining whether a class action may be maintained and that determination will not be disturbed absent a showing of an abuse of discretion.
A trial court, however, abuses its discretion when its decision is unreasonable, arbitrary, or unconscionable. This standard applies to the ultimate decision of the trial court, as well as to its determination regarding each requirement of the rule.
However, as we clarified in Eastley v. Volkman, 132 Ohio St.3d 328, 2012-Ohio-2179, 972 N.E.2d 517, “[i]n a civil case, in which the burden of persuasion is only by a preponderance of the evidence, rather than beyond a reasonable doubt, evidence must still exist on each element (sufficiency) and the evidence on each element must satisfy the burden of persuasion (weight).” Id. at ¶ 19.
(Quotations and citations omitted.) Cullen at ¶¶ 19-20.
{36}
{37} This appeal challenges the trial court‘s determination that the proposed class met the requirements of
{38} Before addressing the merits of class certification under
{39} As Appellants note, the trial court cited the Cullen standard in its judgment entry. We see no reason to conclude that the trial court did not follow that standard. The trial court not only reviewed the allegations in the complaint, but also reviewed the Agreement and other documents related to Goree‘s lease and the Ren‘T‘Own program. These documents lend evidentiary support to the allegations in the complaint. Accordingly, we find that the trial court‘s judgment entry demonstrates a careful consideration of the relevant facts, applicable law, and evidence and thus satisfies the Cullen standard.
D. Civ.R. 23(A)
{40}
Prerequisites. One or more members of a class may sue or be sued as representative parties on behalf of all members only if:
(1) the class is so numerous that joinder of all members is impracticable,
(2) there are questions of law or fact common to the class,
(3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, (4) the representative parties will fairly and adequately protect the interests of the class.
{41} To summarize, Appellants argue that class certification is not permissible because (1) each class member signed a different agreement; (2) each class member negotiated individually with a sales representative; (3) dealers are not required to include the same terms in all agreements, specifically the GPS device; and (4) each class member‘s damages are individualized and unique. In addition, Appellants argue that the putative class members cannot prove justifiable reliance with common proof to sustain a class action fraud claim.3
1. Identifiability
{42}
The definition of the class must be unambiguous. Classes such as “all people active in the peace movement,” “all people who have been оr may be harassed by the police” and “all poor people,” are too amorphous to permit identification within a reasonable effort and thus may not be certified.
{43} The “class definition must be precise enough ‘to permit identification within a reasonable effort.‘” Hamilton v. Ohio Sav. Bank, 82 Ohio St.3d 67, 71-72, 694 N.E.2d 442 (1998), quoting Warner at 96. “The test is whether the means is specified at the time of certification to determine whether a particular individual is a member of the class.” Hamilton at 74. Whether different factual or legal issues will defeat certification “does not enter into the analysis until the court begins to consider the
{44} The trial court found that class members could be easily identified using Northland and North Coast‘s records and that the two class definitions were unambiguous. Appellants argue that the class definitions are overly broad because the only way to determine whether certain charges were not disclosed to class members would require that each agreement be analyzed and each class member interviewed. They further argue that determining the scope of the class is impractical because not all deаlerships require customers to purchase the GPS device that Goree claims was included in the cost of her vehicle.
{45} We find that the trial court did not abuse its discretion in holding that the class here was identifiable and unambiguous based on a reasonable review of the Appellants’ own records. Plaintiffs allege that Appellants used a preset scheme, the Ren‘T‘Own program, to unlawfully charge class members excessive amounts. The
{46} Appellants direct us to a Tenth District case, Bungard v. Dept. of Job & Family Servs., 10th Dist. Franklin No. 05Ap-43, 2006-Ohio-429, ¶ 15, to argue that the class definitions would require the court to assess the facts and circumstances surrounding each individual claim by interviewing each customer to determine whether Appellants disclosed the charges Goree identified in the complaint. In Bungard, the plaintiff defined class members as those who did not receive child support services from the defendant that complied with the law and claimed that class members could be identified by reviewing the defendant‘s records. The defendant‘s records, however, would have only revealed who received services from the county. The records would not have revealed whether the services provided were unlawful because the plaintiff failed to identify any uniform practices or customs by the defendant that were allegedly unlawful. Id. at ¶ 16.
{48} Appellants also argue that it would be impracticable to determine the scope of the class because Goree‘s agreement may be different from every other customer‘s agreement. They specifically argue that the GPS device that Goree claims was included in her vehicle without being identified as a cost, may not have been included and nondisclosed on other customers’ agreements. Appellants’ argument does not defeat the identifiability requirement for at least two reasons.
{49} First, individualized fact-finding only defeats identifiability when the cause of the problem is an overly broad class definition. Cantlin v. Smythe Cramer Co., 2018-Ohio-4607, 114 N.E.3d 1260, ¶ 19 (8th Dist.). We do not find that the trial court abused its discretion in finding that class members could be identified based on a review of Appellants’ records and that the definitions are not overbroad. Second, all class members need not be victim to the exact same unlawful charges. Rather, class members need only have been victim to the alleged unlawful practice of not disclosing all costs. That individual losses may be different among class members does not defeat certification. Binder v. Cuyahoga Cty., 2019-Ohio-1236, 134 N.E.3d 807, ¶ 122 (8th Dist.).
{¶ 50}
3. Commonality and Typicality
{¶ 51} Although the trial court made separate findings on commonality and typicality, Appellants address those elements together. They argue that commonality and typicality are not supported by the preponderance of the evidence because each class member‘s cоntract could be different. They further contend that commonality and typicality are defeated because each customer and sales representative would have to be interviewed to determine the merits of each class member‘s claim. Appellants further argue that calculating damages would be impracticable as damages would vary based on the value of each vehicle, the alleged markup by the dealer, and any undisclosed charges added to the purchase price of the vehicle.
{¶ 52} The trial court found commonality satisfied because Goree would only have to establish once that Appellants misrepresented the price of the vehicles sold to class members by failing to disclose the inclusion of the warranty, GPS device, or rental insurance costs. The trial court found that typicality was satisfied because each class member‘s claim was based on the same legal theory and wrong; namely, that Appellants employed the Ren‘T‘Own program to charge unlawful or excessive fees to Goree and thе other putative class members. We find that the trial court did not abuse its discretion in finding that the class claims satisfy commonality and typicality.
{¶ 53} “Commonality requires ‘a common nucleus of operative facts.‘” Binder, 2019-Ohio-1236, 134 N.E.3d 807, at ¶ 115, quoting Warner at 97. “Commonality may be found where the basis for liability is common to the proposed class or where a common factual question exists on issues of negligence, breach of contract, illegal practice, or other applicable causes of action[.]” Binder at ¶ 115, quoting Berdysz v. Boyas Excavating, Inc., 2017-Ohio-530, 85 N.E.3d 288, ¶ 29 (8th Dist.); Grant v. Becton Dickinson & Co., 10th Dist. Franklin No. 02AP-894, 2003-Ohio-2826, ¶ 36. Commonality is often “met without difficulty for the parties and very little time need be expended on it by the * * * judge.” Binder at ¶ 115, quoting Warner at 97.
{¶ 54} Commonality is satisfied here because the basis for Appellants’ alleged liability for fraud and violation of Ohio‘s and Cleveland‘s consumer protection statutes is based on common factual questions – i.e., whether certain costs were disclosed in the sale price of the vehicle and whether еxcessive fees were charged. That damages may vary among class members does not destroy commonality regarding liability, which is all that is required under
{¶ 55} “Typical” under
a plaintiff‘s claim is typical if it arises from the same event or practice or course of conduct that gives rise to the claims of other class members, and if his or her claims are based on the same legal theory. When it is alleged that the same unlawful conduct was directed at or affected both the named plaintiff and the class sought to be
represented, the typicality requirement is usually met irrespective of varying fact patterns which underlie individual claims.
Id. at 485, quoting 1 Newberg, Class Actions, Section 3.13. at 3-74 to 3-77 (3d Ed.1992).
{¶ 56} Thus, a representative‘s claim need not be identical to those of all class members, but will be “typical if it arises from the same event or practice or course of conduct that gives rise to the claims of other class members, and if his or her claims are based on the same legal theory.” Spitzer, 2003-Ohio-1735 at ¶ 23.
{¶ 57} We do not find that the trial court abused its discretion in finding typicality where there is nothing in the record that demonstrates an express conflict between Goree‘s claims and the class-wide claims. Goree has alleged that the same common practices – failing to disclose certain costs included in the price of vehicles or charging excessive fees – gave rise to all the claims alleged. The claims are also all based on the same legal theories: fraud or misrepresentation or violations of consumer protection laws. That putative class members may have slightly different agreements and negotiated with differеnt sales representatives does not amount to a conflict between Goree and the class where the alleged nondisclosures are based on common practices and support the same legal theories across the class. Likewise, individualized damage calculations do not render the claims atypical. Binder at ¶ 122 (“disparate damages does not bar a class from certification” for lack of typicality).
4. Adequacy of representation
{¶ 58} “A class representative is considered adequate as long as its interest is not antagonistic to the interest of other class members.” Spitzer at ¶ 28, citing Hamilton, 82 Ohio St.3d at 77, 78, 694 N.E.2d 442. The trial court determined that Goree and her counsel did not have any conflicts of interest with other class members; that Goree‘s pursuit of her own claims will also advance the interests of the class; and that Goree‘s counsel is qualified and experienced in class action lawsuits. Appellants do not argue that this ruling was an abuse of discretion and we do not find otherwise.
{¶ 59} Having found that the trial court did not abuse its discretion in finding that the requirements of
E. Civ.R. 23(B)(3)
{¶ 60} “A trial court judge must find that one of the three
(B) Types of class actions. A class action may be maintained if
Civ.R. 23(A) is satisfied, and if:* * *
(3) the court finds that the questions of law or fact common to the class members predominate over any questions affecting only individual members, and that a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.
The matters pertinent to these findings include: (a) the class members’ interests in individually controlling the prosecution or defense of
separate actions; (b) the extent and nature of any litigation concerning the controversy already begun by or against class members; (c) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (d) the likely difficulties in managing a class action.
{¶ 61} Thus,
1. Predominance
{¶ 62} “For common questions of law and fact to predominаte, it is not sufficient that such questions merely exist; rather, they must represent a significant aspect of the case. Furthermore, they must be capable of resolution for all members in a single adjudication.” Cantlin, 2018-Ohio-4607, 114 N.E.3d 1260, at ¶ 33, quoting Marks v. C.P. Chem. Co., 31 Ohio St.3d 200, 204, 509 N.E.2d 1249 (1987). The Ohio Supreme Court has further explained that
deciding whether a claimant meets the burden for class certification pursuant to
Civ.R. 23 requires the court to consider what will have to be proved at trial and whether those matters can be presented by common proof. * * * Thus, * * * in resolving a factual dispute when a requirement ofCiv.R. 23 for class certification and a merit issue overlap, a trial court is permitted to examine the underlying merits of the claim as part of its rigorous analysis, but only to the extent necessary to determine whether the requirement of the rule is satisfied.
Cullen, 137 Ohio St.3d 373, 2013-Ohio-4733, 999 N.E.2d 614, at ¶ 17.
{¶ 63} The trial court rigorously reviewed what Goree would have to prove at trial to succeed on the consumer protection, fraud or misrepresentation, and conspiracy claims to determine whether questions of fact or law common to class
a. Consumer Protection and Fraud or Misrepresentation Claims
{¶ 64} We address the consumer protection and fraud or misrepresentation claims together because Appellants’ primary argument for denying class certification is that individualized inquiries dominate the reliance element for both claims and render the trial court‘s finding of predominance an abuse of discretion.
(1) Elements of Consumer Protection Claims
{¶ 65} The OCSPA specifically authorizes, and even encourages, consumer class actions. Spitzer, 2003-Ohio-1735 at ¶ 32, citing
{¶ 66} Similar to the OCSPA,
“Unconscionable trade practices” means any act, omission or practice undertaken by a merchant which unfairly takes advantage of the lack of knowledge, ability, experience or capacity of a consumer; or results in a gross disparity between the value received by a consumer and the price paid, to the consumer‘s detriment. “Unconscionable trade practices” shall also mean any act or practice declared unconscionаble by statute, by regulation, by decision of a judicial body or administrative body in the State of Ohio, or by a rule or regulation promulgated by the regulation promulgated by the Director.
{¶ 67} In finding that common issues predominated the consumer protection claims, the trial court reasoned that “any individual falling within the class definition was party to a transaction where one or more of the allegedly unlawful acts was committed” and that the class need only prove one time that the alleged conduct violated the applicable consumer protection laws.
(2) Elements of Fraud or Misrepresentation Claim
{¶ 68} “The elements of fraud are: (a) a misrepresentation or concealment of fact; (b) that is material to the transaction at hand; (c) made falsely, with knowledge of its falsity or with utter disregard and recklessness as to whether it is false; (d) with the intent of misleading another into relying upon it; (e) justifiable reliance upon the misrepresentation or concealment; and (f) resulting injury
{¶ 69} The trial court found that common issues predominate the fraud claim because whether the alleged fraudulent acts аmount to a misrepresentation can be determined based on a review of class members’ lease documents. The complaint identifies certain common misrepresentations or nondisclosures made to Goree and putative class members in connection with vehicle leases through the Ren‘T‘Own program.
(3) Justifiable Reliance
{¶ 70} Appellants take issue with the reliance element of the consumer protection and fraud or misrepresentation claims and argue that the claims cannot be certified because each customer‘s agreement was unique and based on an individualized negotiation with a different sales representative. Appellants contend that the element of justifiable reliance requires individualized proof, which defeats predominance. In support of their position, Appellants argue that the trial court‘s reliance on Cope v. Metro. Life Ins. Co. is misplaced. Cope v. Metro. Life Ins. Co, 82 Ohio St.3d 426, 696 N.E.2d 1001 (1998). We disagree and find that the trial court did not abuse its discretion in finding that Goree has raised common misrepresentations across the class that satisfy the predominance element оf
{¶ 71} The Ohio Supreme Court has reversed the denial of class certification in consumer fraud cases where it found that reliance could be presumed or inferred
{¶ 72} We have similarly held that justifiable reliance in a class claim “may be sufficiently established by inference or presumption from circumstantial evidence to warrant submission to a jury without direct testimony from each member of the class.” Cantlin, 2018-Ohio-4607, 114 N.E.3d 1260, at ¶ 40, quoting Amato v. Gen. Motors Corp., 11 Ohio App.3d 124, 128, 463 N.E.2d 625 (8th Dist.1982). We further explained that
It is not necessary to establish inducement and reliance upon material omissions by direct evidence. When there is nondisclosure of a material fact, courts permit inferences or presumptions of inducement and reliance. Thus, cases involving common omissions across the entire class are generally certified as class actions, notwithstanding the need for each class member to prove these elements.
(Emphasis added.) Cantlin at ¶ 40, quoting Cope at 436.
{¶ 73} We have also previously summarized the facts of Cope, which Appellants argue forecloses class certification here:
[T]he plaintiff-consumers alleged thаt defendant-life insurance companies had omitted a required disclosure from form documents in furtherance of their scheme to obtain higher commissions by selling existing MetLife policyholders policies that were classified as new when, in fact, the policies were replacement policies that should have been classified and charged for as such. The trial court and the court of appeals found that the plaintiffs had failed to satisfy Civ.R. 23(B)‘s predominance and superiority requirements because an individual scrutiny of each transaction would be required to determine what the plaintiffs were told by their respective agents.
Spitzer, 2003-Ohio-1735 at ¶ 42.
{¶ 74} In Cope, the Ohio Supreme Court rejected the defendants’ arguments and concluded that the trial court had abused its discretion in denying class certification because the case involved “the use of form documents, standardized practices and procedures, common omissions spelled out in written contracts, and allegations of a widespread scheme to circumvent statutory and regulatory disclosure requirements * * * .” Spitzer at ¶ 43, quoting Cope at 437. The court also noted that courts “generally find that a wide variety of claims may be established by common proof in cases involving similar form documents or the use of standardized procedures and practices.” Id., quoting Cope at 430.
{¶ 75} Appellants ask us to read Cope, 82 Ohio St.3d 426, 696 N.E.2d 1001, too narrowly and hold that class certification must be denied because there might be slight variances in each class member‘s lease documents. Cope, however, contemplated class claims “involving similar form documents or the use of standardized procedures and practices,” which is exactly what the complaint alleges. Cope at 430. Thus, in this instance, the court did not abuse its discretion in finding that justifiable reliance did not require individualized evidence.
{¶ 76} Appellants’ argument overlooks the nature of Goree‘s allegations as they relate to the fraud or misrepresentation claim. This is not a case where a different misrepresentation was allegedly made to each individual member of the class. The alleged material misrepresentations identified in the class definitions are not so varied as to preclude a presumption of reliance on a class-wide basis. The аllegations here identify a common practice by which Appellants allegedly
{¶ 77} The trial court may be presented with different evidence relating to different car dealer‘s overcharges or nondisclosures. But the mere fact that some evidence as to different transactions may need to be gathered to determine the amount of damages does not defeat the predominance inquiry. Spitzer, 2003-Ohio-1735 at ¶ 48. See also Begala v. PNC Bank, Natl. Assn., 1st Dist. Hamilton No. C-990033, 1999 Ohio App. LEXIS 6331, *13-16 (Dec. 30, 1999) (rejecting defendant-bank‘s argument that common issues did not predominate because bank representatives could have made additional oral statements to individual class members where bank‘s form letter to putative class members was materially identical); Pyles v. Johnson, 143 Ohio App.3d 720, 758 N.E.2d 1182 (4th Dist.2001) (finding predominance where fact and law issues arose from the defendant‘s use of
b. Conspiracy Claim
{¶ 78} “To establish a civil conspiracy claim, the plaintiff must prove: ‘(1) a malicious combination of two or more persons, (2) causing injury to another person or property, and (3) the existence of an unlawful act independent from the conspiracy itself.‘” Bentkowski v. Trafis, 2015-Ohio-5139, 56 N.E.3d 230, ¶ 50 (8th Dist.), quoting Kelley v. Buckley, 193 Ohio App.3d 11, 2011-Ohio-1362, 950 N.E.2d 997, ¶ 70 (8th Dist.), citing Williams v. Aetna Fin. Co., 83 Ohio St.3d 464, 700 N.E.2d 859 (1998).
{¶ 79} The trial court found that common issues also predominate the civil conspiracy claim because the claim only depends on the acts of the Appellants and would not require proof related to individual class members. Appellants do not take issue with this finding, and we do not find that the trial court abused its discretion on this point.
c. Damages
{¶ 80} Damages is a common element to each claim. The complaint alleges that Goree and the putative class members suffered damages by entering into lease transactions through the Ren‘T‘Own program that charged them unlawful charges. Appellants argue throughout their brief that class certification is improper because damages will have to be calculated separately for each class member based on
{¶ 81} To satisfy predominance, the class plaintiff need only establish that all class members were injured, not that all class members suffered damages in the same amount. Estate of Mikulski v. Centerior Energy Corp., 2019-Ohio-983, 133 N.E.3d 899, ¶ 45 (8th Dist.), citing Felix v. Ganley Chevrolet, Inc., 145 Ohio St.3d 329, 2015-Ohio-3430, 49 N.E.3d 1224, ¶ 34. Thus, the need for an individualized inquiry to determine the amount of damages does not destroy predominance.
{¶ 82} The trial court acknowledged that “particularized evidence will be required to calculate the amount of damages owed to each class member,” but otherwise reasoned that because any individual falling into one of the class definitions was subject to allegedly unlawful charges, the only element left to prove for the consumer protection claims is whether the alleged conduct violated consumer protection laws. As discussed, whether Appellants’ conduct violated consumer protection laws can be proved with common evidence. The trial court did not expressly consider damages as to the fraud or misrepresentation and civil conspiracy claims, but its reasoning regarding consumer protection law damages applies to the other claims as well.
{¶ 83} The class definitions sufficiently ensure that each class member has suffered injury as a result of Appellants’ alleged conduct because they require that class members had entered into transactions that charged them unlawful amounts. See Ritt v. Billy Blanks Ents., 171 Ohio App.3d 204, 2007-Ohio-1695, 870 N.E.2d 212
{¶ 84} Similarly, the existence of damages here can be determined by reviewing whether the class members’ lease documents reflect the alleged unlawful charges identified in the class definitions. As the trial сourt reasoned, the class definitions ensure that only those who have suffered injury will be identified as class members. Differences in vehicle price and lease terms, or the fact that some class members may have terminated their leases early go to the amount of damages, rather than the existence of damages.
2. Superiority
{¶ 85}
- the class members’ interests in individually controlling the prosecution or defense of separate actions;
the extent and nature of any litigation concerning the controversy already begun by or against class members; - the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and
- the likely difficulties in managing a class action.
{¶ 86} The trial court concluded that a class claim would be superior to any other methods of adjudication. It analyzed the four factors set forth in
{¶ 87} Appellants argue that it will be difficult to manage this case as a class action because the damages calculation for each class member will vary depending on the vehicle and terms of the agreement.
{¶ 88} We find that the trial court did not abuse its discretion in finding that a class claim would be superior to other methods in this case. In line with the trial court‘s analysis, we note that concentrating this litigation as a single case in state court appears to be superior because common issues predominate, the alleged transactions occurred in Ohio, and violations of Ohio law are alleged. Regarding Appellants’ argument about damages, managing these claims as a class action where
{¶ 89} Having found that the trial court did not abuse its discretion in certifying the class pursuant to
{¶ 90} Judgment affirmed.
It is ordered that appellee recover from appellants costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate be sent to said court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to
MARY EILEEN KILBANE, JUDGE
EILEEN T. GALLAGHER, A.J., and
KATHLEEN ANN KEOUGH, J., CONCUR