Konarzewski v. Ganley, Inc.Konarzewski v. Ganley, Inc.
Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-647589
ATTORNEYS FOR APPELLANTS
Michael L. Fine
Petronzio, Schneier Co., L.P.A.
5001 Mayfield Road, Suite 201
Cleveland, Ohio 44124
Lewis A. Zipkin
Zipkin Whiting Co., L.P.A.
Zipkin Whiting Building
3637 South Green Road
Beachwood, Ohio 44122
ATTORNEYS FOR APPELLEES
David D. Yeagley
Paul R. Harris
Ulmer & Berne, L.L.P.
Skylight Office Tower
1660 West 2nd Street, Suite 1100
Cleveland, Ohio 44113-1448
N.B. This entry is an announcement of the court‘s decision. See
JAMES J. SWEENEY, J.:
{¶ 2} On March 10, 2007, Rachel McCormick (“McCormick“) bought a used 2006 Dodge Charger from Ganley, Inc. (“Ganley“), a car dealership located at 7115 Brookpark Road, Parma, Ohio. As part of the transaction, McCormick signed three standard form agreements: a Motor Vehicle Purchase Contract (“purchase agreement“); a Retail Installment Sales Contract (“RISC“); and a Conditional Delivery Agreement (“CDA“). Additionally, the transaction included a $2,000 trade-in credit for William Konarzewski‘s (“Konarzewski“) 1996 Ford F150 pick-up truck. After signing the forms, McCormick left the dealership in the Charger.
{¶ 3} The RISC that McCormick signed states that it is the entire agreement between the parties, that Ganley will finance the transaction, and that Ganley “assigns its interest in this contract to WFS Financial, Inc.” However, the CDA that McCormick signed states that it is incorporated into the agreement between the parties and that the transaction is conditional “pending financing approval.”
{¶ 4} On March 15, 2007, Ganley notified McCormick that it could not obtain financing for the transaction. Ganley wanted an additional $7,000 to secure financing according to the payment schedule in the RISC. McCormick
{¶ 5} On April 12, 2007, Ganley contacted McCormick again and offered to finance the transaction under the terms of the RISC. McCormick declined this offer, returned the Charger to Ganley, and got Konarzewski‘s truck back.
{¶ 6} On January 16, 2008, plaintiffs filed suit against Ganley,1 alleging violations of the Ohio Consumer Sales Practices Act (“CSPA“), violations of the Ohio Retail Installment Sales Act (“RISA“), breach of contract, fraud, intentional infliction of emotional distress, gross negligence, and wrongful identification. On October 20, 2008, plaintiffs filed a motion to certify a class action for the CSPA claims, defining the purported class as follows:
{¶ 7} “All consumers, who from within two years prior to the commencement of this action to the present, purchased or attempted to purchase
{¶ 8} On December 5, 2008, the court denied plaintiffs’ motion to certify a class action. Additionally, the court granted partial summary judgment in favor of plaintiffs, finding that Ganley violated various provisions of the CSPA and the RISA.
{¶ 9} Plaintiffs appeal the court‘s denial of their motion for class certification and raise four assignments of error, which we will address together:
{¶ 10} “I. The trial court abused its discretion in holding that Bill and Rachel did not meet the ‘typicality’ requirement of
{¶ 11} “II. The trial court abused its discretion in holding that Bill and Rachel did not meet the requirement of an identifiable class, when they limited the proposed class definition to those consumers who engaged in a transaction with Ganley involving both a RISC and CDA.
{¶ 12} “III. The trial court abused its discretion in holding that Bill and Rachel did not meet the requirements of
{¶ 13} “IV. The trial court abused its discretion [by] failing to consider whether class certification would be appropriate under
{¶ 15} Before a class may be certified, the trial court must make seven affirmative findings: (1) an identifiable class must exist and the definition of the class must be unambiguous (identity and definition); (2) the named representatives must be members of the class; (3) the class must be so numerous that joinder of all the members is impracticable; (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 (typicality); (6) the representative parties must fairly and adequately protect the interests of the class; and (7) the class must be maintainable under one of the three requirements found in
{¶ 16} The Ohio Supreme Court has stressed that “[c]lass action certification does not go to the merits of the action.” Ojalvo v. Bd. of Trustees of Ohio State Univ. (1984), 12 Ohio St.3d 230, 233 (emphasis in original).
{¶ 17} In the instant case, the court conducted a detailed analysis of three of the
Identity and definition
{¶ 18} To properly identify a class, “the description [must be] sufficiently definite so that it is administratively feasible for the court to determine whether a particular individual is a member.” Hamilton, supra, at 71-72 (internal citation omitted). In the instant case, the court found that plaintiffs’ proposed class was too indefinite and uncertain to meet this standard. “Plaintiffs ask that the class be defined to include both individuals who purchased vehicles from Ganley dealerships and those who attempted to purchase vehicles. To include individuals who attempted to purchase vehicles is to search for the unidentifiable. How does one define an attempt? Is merely inquiring about a car or entering into negotiations sufficient? Is it necessary that a purchase agreement be signed? Plaintiffs do not say.” Konarzewski v. Ganley, Inc. (Dec. 5, 2008), Cuyahoga County Common Pleas Case No. CV-647589.
{¶ 19} A review of plaintiffs’ motion for class certification shows that they further identify and define their class with two narrowing criteria: “(1) the consumer was a customer of a Ganley Dealership, and (2) the consumer signed a RISC and CDA during the identified time period.”2 We find that it is
{¶ 20} Ganley argues that plaintiffs’ attempt at creating a class of “all consumers” is overly broad and similar attempts have been rejected by Ohio courts. Ganley‘s argument is without merit for two reasons. First, the proposed class definition does not encompass “all consumers.” Rather, it encompasses all Ganley customers who signed a RISC and a CDA from January 2006 through the present. This Court previously upheld a trial court‘s analysis concluding that a similar class was properly identified and defined:
{¶ 21} “The court need only look to the actions or practices of [the defendant] to determine whether an individual is a member of the proposed class. * * * [The defendant] has records of all individuals who previously signed such ‘buyer‘s agreement[s]’ * * *. As such, it would be administratively feasible to determine whether a particular person is a member of the class.” Washington v. Spitzer Mgt., Inc., Cuyahoga App. No. 81612, 2003-Ohio-1735.
{¶ 22} Second, Ganley attempts to direct attention to irrelevant issues, arguing, inter alia, that some proposed class members never purchased a vehicle, some understood the RISC and the CDA, and some were able to obtain financing.
{¶ 23} Furthermore, although unnecessary to defining a class, we note that the trial court granted partial summary judgment to plaintiffs, determining that Ganley‘s RISC, when executed with the CDA, is unconscionable and deceptive on its face under provisions of the CSPA and RISA; thus, liability ensues. The court also determined that Ganley‘s delivery of a car under the CDA is deceptive and violates provisions of the CSPA. Ganley does not dispute that these same form documents are used at all Ganley dealerships as part of everyday business. Accordingly, a putative class member‘s understanding of the documents and the details of each sales transaction is, once again, irrelevant to claims in which liability has already been determined.3 See, also, Crye v. Smolak (1996), 110 Ohio App.3d 504; Dantzig v. Sloe (1996), 115 Ohio App.3d 64 (holding that damages need not be proven in an individual action under the CSPA).
{¶ 24} Accordingly, we hold that the trial court abused its discretion in denying class certification based on the proposed class‘s identification and definition.
{¶ 25} Plaintiff‘s second assignment of error is sustained.
Named representative
Typicality
{¶ 27}
{¶ 28} In the instant case, the court found that plaintiffs’ claims were not typical of the proposed class‘s claims because McCormick‘s allegation of suffering “severe emotional distress arising from Ganley‘s efforts to repossess the motor vehicle is a significant and, perhaps, unique aspect of her claim.” The court further reasoned that the emotional injuries “considerably outweigh any claim for monetary damages related to the common Consumer Sales Practice[s] Act violations which form the basis of the requested class action.”
{¶ 29} The court focused on whether plaintiffs’ class action claims predominate over plaintiffs’ individual claims. However, the issue under the typicality prong of a class certification analysis is whether plaintiffs’ class claims are typical of the claims of the class sought to be certified. As far as typicality is concerned, we find that plaintiffs’ class claims arose from Ganley using standard form contracts that patently violate the CSPA and RISA. This same conduct gives rise to the claims of the other putative class members, and the claims are governed by the same legal theory. See Cope, at 82 Ohio St.3d at 429 (holding that class certification is encouraged when “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 * * *” and the judicial process may be alleviated “of the burden of multiple litigation involving identical claims“) (internal citation omitted).
{¶ 31} Plaintiffs’ first assignment of error is sustained.
Civ.R. 23(B) requirements for a maintainable class
{¶ 32} When the threshold requirements of
{¶ 33} In the instant case, the court determined that “[t]he predominant remedy sought by [plaintiffs] * * * is damages.” Therefore, the court limited its analysis to
{¶ 34} Plaintiffs’ fourth assignment of error is overruled.
{¶ 36} In the instant case, plaintiffs seek to litigate the CSPA violations in a class action; all other causes of action plaintiffs seek to litigate individually. Plaintiffs’ claims for RISA violations, breach of contract, fraud, intentional infliction of emotional distress, gross negligence, and wrongful identification have no bearing on whether a class action is an appropriate method to litigate the CSPA claims. Therefore, our analysis is restricted to the CSPA claims, and the balancing test weighs the common issue of liability against the individual question of damages.
{¶ 37} In Schmidt v. Avco Corp. (1984), 15 Ohio St.3d 310, 313, the Ohio Supreme Court held that “in determining whether common questions of law or fact predominate over individual issues, it is not sufficient that common questions
{¶ 38} In Schmidt, supra, at 728, the Ohio Supreme Court further explained the proper analysis under
{¶ 39} In the instant case, the court first found that “[t]he nature or existence of any loss may differ greatly among different members of the class.” We have already determined that Ganley‘s liability for the CSPA violations is an issue common to both plaintiffs and other potential class members. The only issue related to the class that would require an individual determination is the issue of damages. As disparity in damages alone is not enough to deny class certification, we find that the common issue of liability predominates over the individual issue of damages. See, also, Cope, at 82 Ohio St.3d, at 429-30 (holding that the predominance requirement is met “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“). (Internal citation omitted.)
{¶ 40} Here, the court found that plaintiffs’ non-class action claims — namely, RISA violations, breach of contract, fraud, intentional infliction of emotional distress, gross negligence, and wrongful identification — predominate over plaintiffs’ class action claims. The court denied class certification after
{¶ 41} While “the interest of members of the class in individually controlling the prosecution * * * of separate actions” is a factor to considered under
{¶ 42} Accordingly, we find error in the court‘s determination that this class action does not meet the requirements of
{¶ 43} Plaintiffs’ third assignment of error is sustained.
Class actions under the CSPA and R.C. 1345.09(B)
{¶ 45} Pursuant to
{¶ 46} The court in the instant case correctly found that
{¶ 47} In the instant case, plaintiffs’ proposed class definition is inconsistent with the limitations on damages found in
{¶ 48} In Ritt v. Billy Blanks Enterprises, Cuyahoga App. No. 80983, 2003-Ohio-3645, at ¶21, this Court held that “the trial court should have modified
{¶ 49} We emphasize that our finding is limited to the instant case because certification of plaintiffs’ class is appropriate under all requirements of
{¶ 50} Judgment affirmed as to Assignment of Error IV only. Judgment denying class certification is reversed and remanded for proceedings consistent with this opinion.
Judgment affirmed in part and reversed and remanded in part.
It is ordered that appellants recover of appellees their costs herein taxed.
It is ordered that a special mandate issue out of this Court directing the Common Pleas Court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to
JAMES J. SWEENEY, JUDGE
KENNETH A. ROCCO, P.J., and LARRY A JONES, J., CONCUR