Civil Appeal from Court of Common Pleas of Mahoning County, Ohio Case No. 10CV110
For Plaintiff-Appellee Attorney Alan H. Abes Attorney Elizabeth M. Shaffer 1
For Defendants-Appellants Attorney Anand N. Misra, Attorney Robert S. Belovich
Hon. Gene Donofrio Hon. Cheryl L. Waite Hon. Mary DeGenaro
(¶1} Defendant-appellant Vicki Young appeals a decision of the Mahoning County Common Pleas Court denying her motion for class certification of her counterclaims against plaintiff-appellee Unifund CCR Partners, et al (Unifund). Unifund, which is in the business of buying debt in default and then attempting to collect on it, purchased a credit card debt that Young had incurred on a card issued by Citi Bank and had fallen into default. Unifund sued Young on the debt and Young filed numerous counterclaims, including state and federal consumer-protection-act claims. Young's counterclaims were based primarily upon its contention that Unifund, a New York partnership, lacked the capacity to sue because it had failed to file a partnership certificate as required under Ohio law by R.C. 1777.02 (since repealed) and that its assignment of collection rights did not comply with R.C. 1319.12.
II. FACTS & PROCEDURAL HISTORY
(¶2} Unifund filed its original complaint against Young in Mahoning County Court Area No. 2 in Boardman, Ohio on February 8, 2007, seeking judgment for an alleged credit card debt of over $11, 811.66 plus interest and costs. Unifund obtained a default judgment against Young on June 15, 2007.
(¶3} Nearly two years later, Young then filed and was granted a motion to vacate the default judgment on April 16, 2009. She subsequently filed a motion for a more definite statement which the trial court granted on June 9, 2009. In response, Unifund filed an amended complaint on June 15, 2009, noting that the debt had grown to $21, 472.07 taking into account accrued interest. Young moved to dismiss the amended complaint. On September 14, 2009, a magistrate granted Young's motion to dismiss, finding that Unifund had failed to attach to either its original complaint or amended complaint an assignment evidencing value or consideration given for the assignment of Young's account from Citi Bank to Unifund in compliance with R.C. 1319.12 (governing collection of assigned debts).
(¶4} Unifund filed objections to the magistrate's decision and Young responded. Meanwhile, on October 28, 2009, Young filed a counterclaim purportedly as a class action setting forth seven counts: (1) Violations of the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq.; (2) Deceptive, Unfair or Unconscionable Acts in violation of the Ohio Consumer Sales Practices Act (OCSPA), R.C. 1345.01 et seq.; (3) Deceptive trade practices in violation of the Ohio Deceptive Trade Practices Act (ODTPA), R.C. 4165.01 et seq.; (4) Fraud; (5) Civil Conspiracy; (6) Abuse of Process; (7) Defamation. Young's counterclaim sought statutory, compensatory, and punitive damages in excess of $25, 000.00.
(¶5} On December 29, 2009, the trial court vacated the magistrate's September 14, 2009 decision granting Young's motion to dismiss. The court found that Unifund's June 15, 2009 amended complaint and Young's October 28, 2009 counterclaim each sought damages in an amount exceeding that court's statutory jurisdiction. The case was transferred to the Mahoning County Common Pleas Court in January 2010.
(¶6} Young sought to certify her counterclaim as a class action under Civ.R. 23. Young sought to certify two classes. The first proposed class included each person named as a defendant in lawsuits filed between February 8, 2005 and December 12, 2007 in Ohio by Unifund CCR Partners as plaintiff. The second proposed class included each person named as a defendant in lawsuits filed between February 8, 2005 and August 6, 2008 in Ohio by Unifund CCR Partners as plaintiff and, at the time of filing of the lawsuit, the debt alleged in the complaint was owned by an entity other than Unifund CCR Partners.
(¶7} On April 8, 2011, a magistrate overruled Young's motion for class certification. Young filed objections to the magistrate's decision and Unifund filed a response. On June 29, 2011, the trial court adopted the magistrate's decision as its own, concluding that the classes as proposed by Young failed to meet five of Civ.R. 23's class certification requirements. First, because it found that "at least" three of her claims (FDCPA, OCSPA, and defamation) were barred by the applicable statutes of limitation, the court concluded that Young, as the class representative, was not a member of the class she proposed to certify. Second, the court concluded that Young had failed to establish the existence of an unambiguous, identifiable class. Without explanation, the court found that the proposed classes were otherwise "wrought with ambiguity and not readily identifiable." Third, relying on its conclusion that Young failed to show an unambiguous, identifiable class, the court found that Young failed to meet Civ.R. 23(A)'s numerosity requirement - that the classes be composed of a sufficient number of identifiable individuals to justify class certification. Fourth, based upon a review of Young's deposition testimony, the court found that she would not adequately represent the proposed classes because she lacked "even the most rudimentary understanding" of the claims she purported to certify as class actions. Fifth, the court found that Young failed to establish the applicability of any of the three Civ.R. 23(B) requirements.
(¶8} This appeal followed.
III. STANDARD OF REVIEW
(¶9} Young contends that the standard of review in this case is de novo. She states that the trial court's judgment was based on an erroneous interpretation of the law and that when this happens, "an abuse of discretion standard is not appropriate." Citing Medical Mutual of Ohio v. Schlotterer, 122 Ohio St.3d 181, 2009-Ohio-4171, 909 N.E.2d 1237, ¶ 13.
(¶10} Unifund contends that the standard of review is abuse of discretion. Unifund cites the decision in State ex rel. Davis v. Pub. Emps. Ret. Bd. holding that an appellate court reviews the decision of the trial court to deny a motion for class certification under the abuse of discretion standard. 111 Ohio St.3d 118, 2006-Ohio-5339, 855 N.E.2d 444, ¶ 18. Therefore, Unifund alleges, in order to overrule the trial court, this court must find that the lower court abused its discretion on every one of its five conclusions.
(¶11} Class certification in Ohio is governed by Civ.R. 23, which is nearly identical to Fed.R.Civ.P. 23. Citing the need for trial courts to have the ability to manage their dockets appropriately, the Ohio Supreme Court explained the standard of review for certifying class actions as abuse of discretion:
We have consistently held that 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." * * * In rejecting a de novo standard of review urged in an appeal from a decision based only on a written record that denied class certification, we noted that "appellate courts overwhelmingly, if not universally, give trial courts broad discretion in deciding whether to certify a class" and that "the appropriateness of applying the abuse-of-discretion standard in reviewing class action determinations is grounded not in credibility assessment, but in the trial court's special expertise and familiarity with case-management problems and its inherent power to manage its own docket.
(¶12} Therefore, the correct standard of review is abuse of discretion. Abuse of discretion is more than an error of law or judgment; it implies an attitude on the part of the trial court that is unreasonable, arbitrary, or unconscionable. Marks v. C.P. Chem. Co., Inc., 31 Ohio St.3d 200, 509 N.E.2d 1249 (1987).
(¶13} "At the certification stage in a class-action lawsuit, a trial court must undertake a rigorous analysis, which may include probing the underlying merits of the plaintiffs claim, but only for the purpose of determining whether the plaintiff has satisfied the prerequisites of Civ.R. 23." Stammco, LLC. v. United Tel. Co. of Ohio, Slip Opinion No. 2013-Ohio-3019.
(¶14} A party seeking class certification must meet all the requirements set forth in Civ.R. 23(A) and (B). The seven requirements of Civ.R. 23 are as follows: (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 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; (6) the representative parties must fairly and adequately protect the interests of the class; and (7) one of the three Civ.R. 23(B) requirements must be met. Hamilton, 82 Ohio St.3d at 71, 694 N.E.2d 442 (1998).
(¶15} If the proposed class meets the first six prerequisites of Civ.R. 23(A), the trial court must then determine whether a class action is maintainable under at least one of the three subsections in Civ.R. 23(B). Warner v. Waste Mgt., Inc., 36 Ohio St.3d 91, 94, 521 N.E.2d 1091 (1988).
(¶16} Under Civ.R. 23(B)(1)(a), a class action is maintainable "if separate actions would create a risk of inconsistent or varying adjudications with respect to individual members of the class that would establish incompatible standards of conduct for the party opposing the class, " and subsection (B)(1)(b) "will permit certification if separate actions would create a risk of adjudications that would as a practical matter be dispositive of the claims of non-parties or substantially impair or impede their ability to protect their interests." Id . at 95, 521 N.E.2d 1091.
(¶17} Under Civ.R. 23(B)(2), a class action is maintainable if "its primary application [is] injunctive relief." Id.
(¶18} And finally, under Civ.R. 23(B)(3), a class action is maintainable if the plaintiff is seeking damages and the court makes two findings: "that the common questions predominate over questions affecting only individual members and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." Id. at 96, 521 N.E.2d 1091.
(¶19} "The failure to meet any one of these prerequisites will defeat a request for class certification * * *." Schmidt v. Avco Corp., 15 Ohio St.3d 310, 313, 473 N.E.2d 822 (1984).
IV. STATUTES OF LIMITATION
(¶20} Young's first assignment of error states:
The trial court erred to the prejudice of defendant-appellant in concluding that Ms. Young's claims are time-barred. (R-51, 6/29/2011 JE, at p. 6.)
(¶21} The trial court denied Young class certification in part because some of her claims were time-barred by the applicable statutes of limitation. The statute of limitations is one year for Young's FDCPA claim and two years for her OCSPA claim. Unifund initially sued Young on the credit card debt on February 8, 2007, and service of the summons and complaint was obtained on April 14, 2007. Young did not file her class action counterclaims until over two and half years ...