EILEEN JONES, as substituted for BRADLEY ENSINGER, and LYNN M. MCGOWAN-RUSSELL v. SHAREFAX CREDIT UNION, INC.
APPEAL NO. C-210260
TRIAL NO. A-1802940
IN THE COURT OF APPEALS FIRST APPELLATE DISTRICT OF OHIO HAMILTON COUNTY, OHIO
January 26, 2022
[Cite as Jones v. Sharefax Credit Union, Inc., 2022-Ohio-176.]
Civil Appeal From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Reversed and Cause Remanded
Bricker & Eckler, L.L.P., and Daniel C. Gibson, for Defendant-Appellee.
{¶1} Plaintiff-appellant Eileen Jones, as substituted for Bradley Ensinger,1 has appealed from the trial court‘s judgment denying class-action certification. Jones argues: (1) the trial court erred in failing to perform a rigorous analysis of the
Factual Background
{¶2} Plaintiffs Bradley Ensinger and Lynn M. McGowan-Russell2 purchased vehicles in 2011 and 2015, respectively, from local automotive dealerships. They financed their purchases through separate retail installment sales contracts, which were assigned to Sharefax. Plaintiffs defaulted on their loans and Sharefax repossessed both vehicles in December 2017. After repossession, Sharefax sent plaintiffs notices of sale and notices of deficiency.
{¶3} On June 13, 2018, plaintiffs filed a class-action suit, contending, inter alia, that Sharefax engaged in commercially unreasonable sales and sent them deficient notices of sale and deficiency in violation of the Retail Installment Sales Act (“RISA“) and the Ohio Uniform Commercial Code (“OUCC“).
{¶5} Plaintiffs claimed that Sharefax had issued the same defective “form” notices and engaged in commercially unreasonable sales in other repossession cases involving retail installment sales contracts. Therefore, they requested class-action certification of three classes of debtors similarly situated: the RISA class, the notice-of-sale class, and the notice-of-deficiency class.
{¶6} Plaintiffs also requested the following forms of relief: declaratory judgment, actual damages, an injunction prohibiting Sharefax from collecting any deficiency and from continuing its improper practices, statutory damages, restitution/disgorgement of fees, costs and deficiency balances unlawfully collected, an order requiring removal of adverse credit information reported by Sharefax to outside credit reporting agencies, interest, and attorney fees.
{¶7} Several of the claims for relief were settled prior to the class-certification hearing. Through discovery, it became apparent plaintiffs had not paid any repossession fees or deficiency balances. On October 29, 2019, Sharefax
{¶8} On November 11, 2019, plaintiffs filed their motion for class certification. The newly-elected judge held a hearing and denied certification without explanation by a written entry filed March 23, 2021.
Mootness
{¶9} Before we address Jones‘s assignments of error, we must address the mootness issue raised by Sharefax in its motion for summary judgment, in opposition to class-action certification, and on appeal. It argues the case is moot because it has provided complete relief to plaintiffs.
{¶10} Mootness concerns subject-matter jurisdiction and may be raised by an appellee on appeal without the necessity of a cross-appeal. See WBCMT 2007-C33 Office 7870, LLC v. Breakwater Equity Partners, LLC, 2019-Ohio-3935, 133 N.E.3d 607, ¶ 39 (1st Dist.), citing Paulus v. Beck Energy Corp., 2017-Ohio-5716, 94 N.E.3d 73, ¶ 29 (7th Dist.) (matters of subject-matter jurisdiction may be raised for the first time on appeal); JG City LLC v. State Bd. of Pharmacy, 10th Dist. Franklin No. 21AP-38, 2021-Ohio-4624 (“the filing of a cross-appeal is not a prerequisite to
{¶11} “The subject-matter jurisdiction of common pleas courts is limited to justiciable matters.” City of Cincinnati v. Fourth Natl. Realty, LLC, 1st Dist. Hamilton Nos. C-180156 and C-180174, 2019-Ohio-1868, ¶ 25. “A justiciable matter indicates the existence of an actual controversy, a genuine dispute between adverse parties.” Id. Where the claims of the named plaintiffs are moot, the certification question becomes moot as well. Castillo v. Nationwide Fin. Servs., 10th Dist. Franklin No. 02AP-1393, 2003-Ohio-4766, ¶ 26.
{¶12} Jones argues that if the trial court considered the mootness question at the class-certification stage, that was improper because the question was already decided by the previous trial judge when he denied Sharefax‘s motion for summary judgment. However, we note that the trial court did not contradict the previous judge‘s order denying summary judgment because the court specifically did not hold that the case was moot. The court simply held, without explanation, that the motion for class certification was denied and allowed the case of the individual plaintiffs to proceed. Nevertheless, the trial court was free to revisit the issue of mootness. “[I]t is well settled that the denial of a motion for summary judgment generally is considered an interlocutory order not subject to immediate appeal.” Meece v. Am. & Foreign Ins. Co., 1st Dist. Hamilton Nos. C-030088 and C-020818, 2003-Ohio-6504, ¶ 16. A trial court is free to “reconsider an interlocutory order entered in the same case.” Murphy v. Murphy, 1st Dist. Hamilton No. C-130229, 2014-Ohio-656, ¶ 20. Therefore, the prior judge‘s denial of summary judgment on the basis of
{¶13} Next, Jones argues that (1) complete relief was not provided because Ensinger rejected the check sent by Sharefax, and (2) the potential recovery of the class representative incentive payment gives Jones a continuing interest in the litigation. We find that Jones‘s rejection of the check is dispositive of the issue, so we do not address whether the potential recovery of the class representative incentive payment provides Jones with the requisite interest in the litigation.
{¶14} Jones does not claim the amount of the check was inadequate. Rather, she argues the rejection of the check equated to a rejection of Sharefax‘s offer to settle the case.
{¶15} This issue was addressed by the United States Supreme Court in Campbell-Ewald Co. v. Gomez, 577 U.S. 153, 136 S.Ct. 663, 193 L.Ed.2d 571 (2016). In that case, the plaintiff filed a class-action complaint. Prior to the agreed-upon deadline for the plaintiff to file a motion for class certification, the defendant served plaintiff with an offer of judgment pursuant to
{¶16} The Campbell-Ewald majority disagreed and adopted Justice Kagan‘s dissent in Genesis HealthCare Corp. v. Symczyk, 569 U.S. 66, 72, 133 S.Ct. 1523, 185 L.Ed.2d 636 (2013), which stated that “an unaccepted offer of judgment cannot moot a case.” Campbell-Ewald at 162 (“We now adopt Justice Kagan‘s analysis, as has
When a plaintiff rejects such an offer—however good the terms—her interest in the lawsuit remains just what it was before. And so too does the court‘s ability to grant her relief. An unaccepted settlement offer—like any unaccepted contract offer—is a legal nullity, with no operative effect. As every first-year law student learns, the recipient‘s rejection of an offer “leaves the matter as if no offer had ever been made.” Nothing in Rule 68 alters that basic principle; to the contrary, that rule specifies that “[a]n unaccepted offer is considered withdrawn.” So assuming the case was live before—because the plaintiff had a stake and the court could grant relief—the litigation carries on, unmooted.
Id. at 162, citing Genesis at 81 (Kagan, J., dissenting), quoting Minneapolis & St. Louis Ry. v. Columbus Rolling Mill, 119 U.S. 149, 151, 7 S.Ct. 168, 30 L.Ed. 376 (1886), and
{17} The Court held that the plaintiff‘s complaint was “not effaced” by the unaccepted offer to satisfy his individual claim. Campbell-Ewald at 162. Absent acceptance, the defendant‘s settlement offer remained only a proposal, binding neither party. Id. at 163.
“Under basic principles of contract law, * * * [an] offer of judgment, once rejected, has no continuing efficacy” and Top Flite may not rely on such lapsed offers “to avoid a potential adverse decision, one that could expose it to damages a thousand-fold larger than” the offers Bridging Communities and Gamble declined to accept here.
Id., quoting Campbell-Ewald at 670.
{¶19} Jones agrees that the amount of the check sent by Sharefax would fully satisfy her monetary demands. But Ensinger rejected the offer and returned the check. The parties are in the same position monetarily as they were before the offer was made. Therefore, Jones‘s claim for monetary damages is still “live” and the case is not moot.
First Assignment of Error
{¶20} In her first assignment of error, Jones contends the trial court abused its discretion by not conducting a rigorous analysis of the
{¶21} “A class action is an exception to the usual rule that litigation is conducted by and on behalf of only the individually named parties. Therefore, to fall within the exception, the party bringing the class action must affirmatively demonstrate that each requirement of
A trial court may not certify a class action pursuant to
Civ.R. 23 unless seven prerequisites have been met: (1) an identifiable class must exist and the definition of the class must be unambiguous; (2) the named representatives must be members of the class; (3) the class must be so numerous that joinder of all members is impractical; (4) there must be questions of law or fact common to the class; (5) the claims or defenses of the representative parties must be typical of the claims or defenses of the class; (6) the representative parties must fairly and adequately protect the interests of the class; and (7) one of the threeCiv.R. 23(B) requirements must be satisfied. Failure to satisfy any one of the requirements will result in the denial of class certification.
Robinson v. Johnston Coca-Cola Bottling Group, Inc., 153 Ohio App.3d 764, 2003-Ohio-4417, 796 N.E.2d 1, ¶ 2 (1st Dist.).
{¶22} “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.” Hamilton v. Ohio Savs. Bank, 82 Ohio St.3d 67, 70, 694 N.E.2d 442 (1998). “[T]he appropriateness of applying the abuse-of-discretion standard in reviewing class action determinations is grounded * * * in the trial court‘s special expertise and familiarity with case-management problems and its inherent power to manage its own docket.” Id.
{¶23} “It is at the trial level that decisions as to class definition and the scope of questions to be treated as class issues should be made. A finding of abuse of
{¶24} “However, the trial court‘s discretion in deciding whether to certify a class action is not unlimited, and indeed is bounded by and must be exercised within the framework of
{¶25} A rigorous analysis “requires the court to resolve factual disputes relative to each requirement and to find, based upon those determinations, other relevant facts, and the applicable legal standard,” that the requirements of
***
However, 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.
{¶26} In Hamilton, the Ohio Supreme Court held that conducting a “rigorous analysis” does not require the trial court to make formal findings to support its decision. Hamilton, 82 Ohio St.3d at 70, 694 N.E.2d 442. But it recognized that formal findings are preferable. It stated:
Aside from the obvious practical importance, articulation of the reasons for the decision tends to provide a firm basis upon which an appellate court can determine that the trial court exercised its discretion within the framework of
Civ.R. 23 , and discourages reversal on the ground that the appellate judges might have decided differently had they been the original decisionmakers. On the other hand, the failure to provide an articulated rationale greatly hampers an appellate inquiry into whether the relevantCiv.R. 23 factors were properly applied by the trial court and given appropriate weight, and such an unarticulated decision is less likely to convince the reviewing court that the ruling was consistent with the sound exercise of discretion.
It is exceedingly difficult to apply an abuse-of-discretion standard to
{¶27} In Robinson, 153 Ohio App.3d 764, 2003-Ohio-4417, 796 N.E.2d 1, at ¶ 3, the trial court merely recited each of the class-certification requirements and stated that plaintiffs had met the requirements. This court held, “Based on the record furnished to us, we are unable to discern whether the trial court conducted a thorough analysis into whether the prerequisites of
[T]he trial court‘s decision provided no articulated rationale that would enable a meaningful appellate inquiry. * * * [T]here is no indication in the record that the trial court applied the requirements of
Civ.R. 23 when it granted class certification. This is not “one of those rare cases” in which separate findings on the part of the trial court are unnecessary for this court‘s review.
Id. at ¶ 11, quoting Bardes v. Todd, 139 Ohio App.3d 938, 943, 746 N.E.2d 229 (1st Dist.2000) (holding “this is one of those rare cases in which neither an evidentiary hearing nor separate findings on the part of the trial court are necessary” because certification of appellant‘s proposed class of “Ohio mothers” subject to various divorce and support statutes was clearly improper under
{¶28} There is a notable difference between a grant of certification and a denial. A party seeking class certification must prove all seven requirements in
{¶29} But that does not mean that findings are not necessary or important where certification has been denied. In Hamilton, the Ohio Supreme Court acknowledged the difficulty in reviewing a trial court‘s denial of certification where the trial court did not articulate its rationale or disclose which of the seven
{¶31} First, this is not one of those “rare” cases where certification is clearly improper. Compare Bardes, 139 Ohio App.3d at 943, 746 N.E.2d 229 (certification was clearly improper where the pro se plaintiff sought to certify a class of all “Ohio mothers” subject to certain divorce and support statutes). Rather, this case presents complex issues, making it more like Dunkelman, 170 Ohio App.3d 224, 2006-Ohio-6825, 866 N.E.2d 576, at ¶ 15 (“this case presents complex issues related to class certification“) than Bardes.
{¶32} Next, the fact that the trial court reviewed the briefs and conducted a hearing does not mean it conducted a rigorous analysis. See Maas, 11th Dist. Trumbull No. 2003-T-0123, 2004-Ohio-7233, at ¶ 30-31 (rejecting appellees’ argument that the briefs filed by the parties and the hearing conducted by the court were sufficient to show that the court conducted a rigorous analysis); Dunkelman at ¶ 9 (even though the trial court conducted a one-hour hearing on the motions for summary judgment and class certification, this court reversed the trial court‘s order certifying the class because it failed to articulate its rationale). The transcript of the hearing in the present case was only 18 pages long and the trial court did not indicate during the hearing which
{¶33} Finally, this is not a case where the defendant opposed certification on a single basis. Because several of the
{¶34} We hold that because the record does not demonstrate that the trial court conducted a rigorous analysis, we are unable to properly review for an abuse of discretion. See Dunkelman, 170 Ohio App.3d 224, 2006-Ohio-6825, 866 N.E.2d 576, at ¶ 15; Hamilton, 82 Ohio St.3d at 71, 694 N.E.2d 442; Gordon, 6th Dist. Ottawa No. OT-13-040, 2014-Ohio-4970, at ¶ 24. Therefore, we sustain the first assignment of error.
{¶35} Our disposition of the first assignment of error renders the second and third assignments of error moot. The judgment of the trial court is reversed and the cause is remanded for further proceedings consistent with the law and this opinion.
Judgment reversed and cause remanded.
WINKLER and BOCK, JJ., concur.
Please note:
The court has recorded its own entry on the date of the release of this opinion.