In re Consol. Mtge. Satisfaction Cases
Civil procedure—Class actions—Civ.R. 23(B)(3), applied—Trial court did not act unreasonably, arbitrarily, or unconscionably in certifying a class action in cases brought by mortgagors against their respective lenders for alleged violations
FRANCIS E. SWEENEY, SR., J.
{¶ 1} This case involves motions for class certification in 12 cases brought by appellants-mortgagors1 against their respective lenders. The mortgagors in each case allege that the lenders violated
{¶ 2} Ostensibly to deal with the high volume of separate claims on its docket invoking
{¶ 3} Appellees, which are the mortgagees,2 appealed the certification of the classes. The First District Court of Appeals reversed the trial court. The cause is before this court upon the allowance of a discretionary appeal.
{¶ 4} We are asked to determine whether the certification of the classes by the trial court was proper based on the law and facts before it. In particular, we are called upon to discern whether appellants met the predominance requirement for certifying a class, found in
{¶ 5} At the outset, we are mindful that a trial judge is given broad discretion when deciding whether to certify a class action. Marks v. C.P. Chem. Co., Inc. (1987), 31 Ohio St.3d 200, 31 OBR 398, 509 N.E.2d 1249, syllabus; Schmidt v. Avco Corp. (1984), 15 Ohio St.3d 310, 312-313, 15 OBR 439, 473 N.E.2d 822. Moreover, “[a]bsent a showing of abuse of discretion, a trial court‘s determination as to class certification will not be disturbed.” Id. An abuse of discretion connotes more than a mere error of law or judgment, instead requiring a finding that the trial court‘s decision was unreasonable, arbitrary, or unconscionable. Blakemore v. Blakemore (1983), 5 Ohio St.3d 217, 219, 5 OBR 481, 450 N.E.2d 1140. In the case at bar, the court of appeals found that the trial court had abused its discretion because appellants had failed to satisfy the predominance requirement of
{¶ 6} Seven prerequisites must be met before a court may certify a case as a class action pursuant to
{¶ 7}
{¶ 8} While
{¶ 9} Appellees contend, and the court of appeals found, that class certification is inappropriate because to determine liability under
{¶ 10} Respectfully, we reject the conclusion of the court of appeals. Clearly, the claims brought by each plaintiff invoke a common question of law: whether a particular lender violated its duty to record a satisfaction of mortgage. In resolving this common question, the trial court of course will be presented with different evidence relating to each lender‘s failure to record a satisfaction of a residential mortgage. While appellees assert that sifting through these facts in a class action suit will be arduous, we are not compelled to agree. The mere existence of different facts associated with the various members of a proposed class is not by itself a bar to certification of that class. If it were, then a great majority of motions for class certification would be denied.
{¶ 11} In answering the common legal question, the trial court will need to gather evidence relating to each mortgagor-mortgagee relationship. For example, evidence will need to be presented concerning each appellant‘s date of indebtedness and date of mortgage satisfaction. As noted by appellants, it is possible that the facts surrounding each claim can be systematically obtained in a single adjudication through the use of bank records and databases. The facts to be presented are not so complicated that use of the class action tool would be unduly cumbersome. Instead, the nature of this evidence demonstrates that there is factual commonality among class members.
{¶ 12} We find that the trial court is in the best position to consider the feasibility of gathering and analyzing class-wide evidence. Since the trial court‘s ruling did not exceed the bounds of reasonableness, we find that it acted within its discretion in resolving that there are common questions of fact among class
{¶ 13} We next must consider whether a class action is the superior method to be utilized in achieving a fair and efficient adjudication of this controversy. When evaluating “the utility and propriety of employing the class action device,” Schmidt, 15 Ohio St.3d at 314, there are four factors to consider: “(a) the interest of the members of the class in individually controlling the prosecution or defense of separate actions; (b) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (c) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (d) the difficulties likely to be encountered in the management of the class action.”
{¶ 14} With respect to the first factor, appellants assert that, as opposed to bringing each suit individually, they have an interest in grouping their actions due to the very nature of the remedy sought. Since appellants each seek only $250 under
{¶ 15} As to the second and third factors listed above, it is apparent that in the forum of Hamilton County there are many claims concerning violations of
{¶ 16} As to the fourth factor, we are certain that there will be some difficulties incurred in the management of these class actions. However, we are convinced that the trial court gave adequate thought to the problems that might arise and determined that any risk was overpowered by the circumstances supporting class action certification. Thus, our review of the relevant factors
{¶ 17} In a situation such as the one at bar, the class action is the preferable method for dealing with evidence of a party‘s recurring malfeasance because the ability to avoid duplication of a court‘s time, effort, and resources is an important and relevant consideration. We liken the case at hand to our previous decision in Cope v. Metro. Life Ins. Co. (1998), 82 Ohio St.3d 426, 696 N.E.2d 1001. The plaintiffs in that case alleged that an insurance company improperly targeted existing policyholders, sold them replacement insurance as new insurance, and intentionally omitted mandatory disclosure warnings. In certifying the class in that case, we reasoned 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. at 430. ” ‘Frequently numerous consumers are exposed to the same dubious practice by the same seller so that proof of the prevalence of the practice as to one consumer would provide proof for all. Individual actions by each of the defrauded consumers are often impracticable because the amount of individual recovery would be insufficient to justify bringing a separate action; thus an unscrupulous seller retains the benefits of its wrongful conduct.’ ” Id. at 429, quoting Vasquez v. Superior Court of San Joaquin Cty. (1971), 4 Cal.3d 800, 808, 94 Cal.Rptr. 796, 484 P.2d 964.
{¶ 18} The rationale applied in Cope applies with equal force here. Individual plaintiffs in this case have been grouped with other plaintiffs to present suits against the same lenders. These lenders presumably have utilized standardized procedures for recording satisfactions of residential mortgages, procedures that are allegedly faulty. While of course we take no stand on the merits of the allegations by appellants, Cope is instructive on the issue of class certification.
{¶ 19} We conclude that the predominance requirement of
Judgment reversed
and cause remanded.
MOYER, C.J., DOUGLAS, RESNICK and PFEIFER, JJ., concur.
COOK, J., dissents.
LUNDBERG STRATTON, J., dissents.
{¶ 20} Like Justice Lundberg Stratton, I would affirm the judgment of the court of appeals that the trial court abused its discretion in finding that the plaintiffs had met the predominance requirement for certifying a class as required by
LUNDBERG STRATTON, J., dissenting.
{¶ 21} Because I believe that the trial judge abused his discretion in finding that questions of law or fact common to the members of the class predominated over questions affecting only individual members, I respectfully dissent.
{¶ 22} In a class action seeking damages, the court must find that common questions of law or fact predominate over questions that are particular to members of the class. Hamilton v. Ohio Sav. Bank (1998), 82 Ohio St.3d 67, 79, 694 N.E.2d 442. In finding that common issues predominate over individual issues, the trial court stated that “[t]he gravamen of every complaint within each class is the same and relates to the violation of
{¶ 23} “‘[A] claim will meet the predominance requirement when there exists generalized evidence which proves or disproves an element on a simultaneous, class-wide basis, since such proof obviates the need to examine each class member‘s individual position.“’ (Emphasis added.) Cope v. Metro. Life Ins. Co. (1998), 82 Ohio St.3d at 429-430, quoting Lockwood Motors, Inc. v. Gen. Motors Corp. (D.Minn.1995), 162 F.R.D. 569, 580. Thus, common issues do not predominate for purposes of certifying a class action where individualized proof is required in order for each class member to recover. Accordingly, “where no one set of operative facts establishes liability” and “individual issues outnumber common issues,” a court “should properly question the appropriateness of a class action for resolving the controversy.” Sterling v. Velsicol Chem. Corp. (C.A.6, 1988), 855 F.2d 1188, 1197.
{¶ 24} In the case at bar, there are evidentiary issues that require individualized proof for each plaintiff, including identification of each mortgagee (complicated by assignments and reassignments), determination of each mortgage‘s payoff date, determination of whether each mortgage was satisfied or could be satisfied if it was an open-ended mortgage, determination of the transmittal dates of each
Murdock, Goldenberg, Schneider & Groh, L.P.A., John C. Murdock, Jeffrey S. Goldenberg and Theresa Groh; Zelle, Hofmann, Voelbel, Mason & Gette, L.L.P., and Eric Berg, for appellants.
Taft, Stettinius & Hollister, L.L.P., and Timothy C. Sullivan, for appellee Firstar Bank, N.A.
Jones, Day, Reavis & Pogue, Shawn J. Organ and Brian G. Selden, for appellee Nationsbanc Mortgage Corporation.
Porter, Wright, Morris & Arthur, L.L.P., and Jennifer T. Mills, for appellee Huntington National Bank.
Janik & Dorman, L.L.P., Andrew J. Dorman and Barry R. Murner, for appellee Beneficial Ohio, Inc.
Porter, Wright, Morris & Arthur, L.L.P., and David P. Shouvlin, for appellee Fleet Mortgage Corporation.
Kegler, Brown, Hill & Ritter, and Robert G. Cohen; J. Preston Turner, for appellee First Union Home Equity Bank, N.A..
Thompson Hine, L.L.P., Stephen J. Butler and Carey L. Allen; and Jan T. Chilton, for appellees Countrywide Home Loans and Associates Financial Services Corporation.
Schroeder, Maundrell, Barbiere & Powers, and Christopher Moore; Briggs and Morgan, P.A., and Mark G. Schroeder, for appellee Capstead, Inc.
Keating, Meuthing & Klekamp, P.L.L., James E. Burke, Gregory M. Utter and Douglas L. Hensley, for appellees Provident Bank, Union Savings Bank, and Guardian Savings Bank.
Chester Willcox & Saxbe, L.L.P., and J. Craig Wright, for amicus curiae, National Association of Consumer Advocates.
Janet L. Phillips Co., L.P.A., and Janet L. Phillips, for amicus curiae, Ohio Academy of Trial Lawyers.