423 S.E.2d 312 | N.C. Ct. App. | 1992
Herbert A. NOBLES, Plaintiff
v.
FIRST CAROLINA COMMUNICATIONS, INC.; E.B. Chester, Jr.; Aiken Cablevision, Inc., formerly known as F.C. Barnwell, Inc; F.C. Aiken, Inc.; Gary Phillips; C. David Smith; A.P. Thorpe, III; G.W. Thorpe; Thomas D. Livingston; Frank B. Cannon; Lon Carruth, Roy F. Coppedge, III; Anthony J. Bolland; Walter F. Payne, Jr.; 1st Cablevision, Inc., a Nevada corporation; Defendants.
Herbert A. NOBLES, Plaintiff
v.
KILPATRICK & CODY, a Georgia general partnership, Defendant
Court of Appeals of North Carolina.
*314 Clark Wharton & Berry, by David M. Clark and B. Douglas Martin, Greensboro, and Terry W. Alford and William W. Aycock, Jr., Tarboro, for plaintiff appellant.
Smith Helms Mulliss & Moore, by E. Osborne Ayscue, Jr., Catherine E. Thompson, and Bradley R. Kutrow, Charlotte, for defendant appellees First Carolina Communications et al.
Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, by James D. Blount, Jr., Michael E. Weddington, and Donald H. Tucker, Raleigh, Jr. for defendant appellee Kilpatrick & Cody.
WALKER, Judge.
Pursuant to N.C. Rules of Appellate Procedure, Rule 3(c)(2), the time period for filing and serving a notice of appeal is tolled by a timely motion under Rule 52(b). Insofar as the trial court failed to find that plaintiff's motion to amend judgment pursuant to Rule 52(b) was untimely, plaintiff's notice of appeal in the present case was appropriately given on 27 December 1990 after Judge Brown's order denying plaintiff's Rule 52(b) motion was entered on 27 November 1990. The motions of First Carolina and Kilpatrick & Cody to dismiss plaintiff's appeal are therefore denied. However, if notice of appeal had not been timely filed, we would have granted plaintiff's alternative petition for certiorari on the grounds that the order denying class certification affects substantial legal rights which might be lost if review were denied. Since it is not necessary for us to grant certiorari in order to dispose of this case on *315 its merits, plaintiff's petition for certiorari under G.S. 7A-32 and alternative petition for certiorari pursuant to G.S. 7A-32 are denied.
Plaintiff presents three assignments of error for this Court to consider on appeal. He contends (1) the trial court erred in denying his motion for class certification because all requisites for a class action were present; (2) the court erred in refusing to leave open for later determination the question of whether class certification should be granted; and (3) the court erred in failing to make additional findings of fact and conclusions of law as requested by plaintiff and as required pursuant to G.S. 1A-1, Rule 52.
We note at the outset the significance of a trial court's decision regarding class certification, since our research reveals no instance where our courts have determined whether there is any continuing review of this issue. Contrary to its counterpart in the federal rules, N.C.G.S. § 1A-1, Rule 23 contains no provision providing for continuing or subsequent review of this determination. However, this Court has previously held that an order denying certification of a class action is appealable, and this action is now properly before us. Perry v. Cullipher, 69 N.C.App. 761, 318 S.E.2d 354 (1984).
The North Carolina Supreme Court set forth the salient principles applicable to Rule 23(a) and the prerequisites for certification of a class action in Crow v. Citicorp Acceptance Co., Inc., 319 N.C. 274, 354 S.E.2d 459 (1987). Under Crow, plaintiff must first establish that a class exists.
[A] "class" exists under Rule 23 when the named and unnamed members each have an interest in either the same issue of law or of fact, and that issue predominates over issues affecting only individual class members.
Id. at 280, 354 S.E.2d at 464. Plaintiff must also show that the named representative will fairly and adequately represent the interests of all members of the class, including out-of-state residents; that there is no conflict of interest between the named representatives and the unnamed class members; and that the class members are so numerous that it is impractical to bring them all before the court. Id. at 282-83, 354 S.E.2d at 465-66. See also English v. Holden Beach Realty Corp., 41 N.C.App. 1, 254 S.E.2d 223, disc. review denied, 297 N.C. 609, 257 S.E.2d 217 (1979). The trial court has broad discretion in determining whether class certification is appropriate, however, and is not limited to those prerequisites which have been expressly enunciated in either Rule 23 or in Crow. Id. at 284, 354 S.E.2d at 466; Perry v. Union Camp Corp., 100 N.C.App. 168, 394 S.E.2d 681 (1990). Maffei v. Alert Cable TV of North Carolina, Inc., 75 N.C.App. 473, 331 S.E.2d 188 (1985), reversed on other grounds, 316 N.C. 615, 342 S.E.2d 867 (1986).
Since the decision to grant or deny class certification rests within the sound discretion of the trial court, the appropriate standard for appellate review is whether the trial court's decision manifests an abuse of discretion. In this regard, an appellate court is bound by the court's findings of fact if they are supported by competent evidence. Howell v. Landry, 96 N.C.App. 516, 386 S.E.2d 610 (1989), disc. review denied, 326 N.C. 482, 392 S.E.2d 90 (1990). In the instant case, the trial court denied class certification after having "determined that there are not sufficient elements present to justify certification of a class" based upon its consideration of "the pleadings, the evidence of record, the legal memoranda submitted by the parties and the arguments of counsel." The court did not specify which elements were lacking and the order contains no other findings. Although we do not now decide whether these elements have been satisfied such that plaintiff may maintain this action as a class action, we find this order deficient in that the findings of fact are inadequate to enable us to determine whether the court's decision was based upon competent evidence. See Cotton v. Stanley, 94 N.C.App. 367, 380 S.E.2d 419 (1989).
We acknowledge that neither Rule 23 nor applicable case law expressly mandate findings *316 of fact by the trial court with regard to its decision to grant or deny class certification. However, in light of the numerous requisites which must be shown in order to be entitled to class certification, and the fact that the trial court's decision is not limited to consideration of the enumerated factors, an order denying certification without adequate findings of fact and conclusions does not provide appropriate grounds for review by an appellate court. We cannot undertake to ascertain whether or not a ground for denying class certification exists in the record since such a determination would require us "to deal with subsidiary questions requiring resolution of factual disputes or exercise of discretion judicial actions which are not appropriately a part of the appellate function." Inda v. United Air Lines, Inc., 565 F.2d 554, 563 (9th Cir.1977), cert. denied, 435 U.S. 1007, 98 S. Ct. 1877, 56 L. Ed. 2d 388 (1978). Thus, absent findings, the appellate court can only speculate as to the basis for the court's denial of certification and cannot ascertain with some degree of certainty whether the trial court abused its discretion or whether its decision was based upon competent evidence.
Consequently, we now hold that findings of fact are required by the trial court when rendering a judgment granting or denying class certification in order for the appellate courts to afford meaningful review under the abuse of discretion standard. See Andrews v. Peters, 318 N.C. 133, 347 S.E.2d 409 (1986). Such findings must be made with sufficient specificity to allow effective appellate review. See Quick v. Quick, 305 N.C. 446, 290 S.E.2d 653 (1982); Coble v. Coble, 300 N.C. 708, 268 S.E.2d 185 (1980). We note that this holding, although not mandated by the language of Rule 23, is in accord with the law of other states which require findings upon which the trial court determines that an action is or is not certifiable as a class. The Indiana Court of Appeals has ruled, and we agree, that "the District Court has broad discretion and its decision will not be disturbed on appeal in the absence of a finding of abuse, provided the court has made findings which reflect the material facts and the reasons on which its decision is based," despite the absence of such mandatory statutory language. Kuespert v. State of Indiana, 177 Ind.App. 142, 149, 378 N.E.2d 888, 893 (1978). See also Maryland Rules of Civ.Pro., Rule 2-231(c) ("The order shall include the court's findings and reasons for certifying or refusing to certify the action as a class action."); Florida Rules of Civ.Pro., Rule 1.220(d)(1) ("Irrespective of whether the court determines that the claim or defense is maintainable on behalf of a class, the order shall separately state the findings of fact and conclusions of law upon which the determination is based.") We also note that this Court has previously supplemented the language of Rule 23 by directing that adequate notice be given to members of the class, although Rule 23(a) does not expressly require it. English v. Holden Beach Realty Corp., supra.
Therefore, upon remand, we remind the trial court that:
Rule 23 should receive a liberal construction, and it should not be loaded down with arbitrary and technical restrictions.... The rule has as its objectives "the efficient resolution of the claims or liabilities of many individuals in a single action" and "the elimination of repetitious litigation and possible inconsistent adjudications involving common questions, related events, or requests for similar relief." (Citations omitted.)
English v. Holden Beach Realty Corp., 41 N.C.App. at 9, 254 S.E.2d at 230-31. There are approximately 589 potential class members who are similarly situated to plaintiff. Plaintiff must therefore make a showing of some preliminary interest of potential class members so as not to unnecessarily burden the trial court with the responsibility, time and expense of notifying these potential members if indeed they are not united in interest from the outset. See Perry v. Union Camp Corp., supra.
Plaintiff additionally assigns error to the trial court's failure to make additional findings of fact and conclusions of law with regard to its orders, since plaintiff *317 requested such pursuant to Rule 52(a)(2). Although we now hold that findings of fact are required where the trial court denies class certification, we do not conclude that the court's denial of plaintiff's Rule 52(a)(2) motions was error. This Court has previously stated that a request for findings and conclusions under Rule 52(a)(2) is untimely if made after the entry of a trial court's order. Strickland v. Jacobs, 88 N.C.App. 397, 363 S.E.2d 229 (1988). In the instant case, the record indicates that the orders denying class certification were entered on 28 September 1990 and on 2 October 1990, and plaintiff's motions pursuant to Rule 52(a)(2) were dated 5 October 1990. Plaintiff argues in his brief that his motions were made in a timely fashion prior to entry of the orders, however, we are unable to extrapolate from the record any evidence confirming this contention. Hence, the trial court's denial of plaintiff's Rule 52(a)(2) motions was not error. Plaintiff's appeal from the trial court's denial of his motions to amend the judgment under Rule 52(b) is dismissed as abandoned pursuant to Rule 28(b)(5), N.C. Rules of Appellate Procedure.
Remanded for further proceedings not inconsistent with this opinion including a de novo hearing if deemed necessary by the trial court.
ARNOLD and PARKER, JJ., concur.
