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Satterfield v. Ameritech Mobile Communications, Inc.

Court of Appeals of Ohio, Eighth District, Cuyahoga

March 16, 2017


         Civil Appeal from the Cuyahoga County Court of Common Pleas Case No. CV-03-517318.

          ATTORNEYS FOR APPELLANT For Cincinnati SMSA Limited Partnership James F. Lang Matthew J. Kucharson Calfee, Halter & Griswold, L.L.P. Kerin Lyn Kaminski Karen L. Giffen Giffen & Kaminski, L.L.C. Hans J. Germann (pro hac vice) Mayer Brown, L.L.P.

          ATTORNEYS FOR APPELLEES For Intermessage Communications Randy J. Hart Randy J. Hart, L.L.P. Carla M. Tricarichi Tricarichi & Carnes, L.L.C. Dennis R. Rose Royce R. Remington Hahn Loeser & Parks, L.L.P. Thomas R. Theado Gary, Naegele & Theado, L.L.C. Mark D. Griffin Law Offices of Mark Griffin

          BEFORE: Kilbane, J., Keough, A.J., and Laster Mays, J.



         {¶1} Defendant-appellant, Cincinnati SMSA Limited Partnership (operating under the trade name Ameritech Mobile ("Ameritech")), appeals from the trial court's order certifying a class action complaint brought by plaintiffs-appellees, Cindy Satterfield ("Satterfield"), Cindy Satterfield, Inc., n.k.a. Highland Speech Services, Inc. ("Highland"), and Intermessage Communications ("Intermessage") (collectively referred to as "plaintiffs"). For the reasons set forth below, we affirm.

         {¶2} In December 2003, Satterfield, Highland, and Intermessage filed a class action complaint against Ameritech, Ameritech Mobile Communications, Inc., Verizon Wireless a.k.a. New Par, Verizon Wireless ("VAW"), L.L.C., and Airtouch Cellular Eastern Region, L.L.C. (the last three of which are collectively referred to as ("Verizon")). Ameritech and Verizon are providers of wholesale and retail cellular telecommunications services and equipment.

         {¶3} Satterfield and Highland purchased cellular service from Verizon. Intermessage was a retail customer of Ameritech owned primarily by Kevin Moore ("Moore") and Robert Schimmelphennig ("Schimmelphennig"). Intermessage operated a two-way radio business and sold backup panels for alarm systems. Intermessage purchased cellular service from Ameritech and placed it into a product that was used to back up the alarm systems it sold. Intermessage paid Ameritech directly for the cost of the cellular service and then passed those costs to its customers. Intermessage dissolved in 2001 and Moore and Schimmelphennig created a new business, Wireless Associates, Ltd. ("Wireless Associates"). Moore sold his interest in Wireless Associates to Schimmelphennig in 2005.

         {¶4} The complaint is based upon a prior ruling of the Public Utilities Commission of Ohio ("PUCO"), finding that Ameritech and Verizon discriminated against Cellnet, an independent reseller of cellular services, with respect to their offering of wholesale services to Cellnet. See In the Matter of Complaint of Westside Cellular, Inc. d.b.a. Cellnet v. New Par Cos. d.b.a. AirTouch Cellular & Cincinnati SMSA Ltd. Partnership, PUCO Case No. 93-1758-RC-CSS, 2001 Ohio PUC LEXIS 18 (Jan. 18, 2001) ("Cellnet Order "). Cellnet alleged that Ameritech and Verizon had discriminated against it by unlawfully providing cellular service, equipment, and features to their own retail operations at rates, terms, and conditions more favorable than those that they made available to Cellnet. The PUCO found that Ameritech and Verizon committed numerous acts prohibited by R.C. Chapter 4905 (titled Public Utilities Commission - General Powers), commencing October 18, 1993.[1] Specifically, Ameritech and Verizon provided retail cellular service to end users at rates and upon terms and conditions more favorable than those that they made available to Cellnet.

         {¶5} In their complaint, Satterfield, Highland, and Intermessage defined the members of its class as all subscribers to the Verizon defendants' service from 1991-1997 and all subscribers to Ameritech service from 1993-1998. Plaintiffs asserted the following three causes of action: (1) recovery for treble damages under R.C. 4905.61; (2) unjust enrichment; and (3) tortious acquisition of a benefit. They essentially claimed that

[Ameritech] cheated Ohio cellular telephone consumers out of millions of dollars by excluding competitors that charged lower rates and by locking-in customers before other competitors could enter the market. By manipulating the market for cellular telephone service in Ohio - practices for which the PUCO has already found [Ameritech] liable - [Ameritech] caused each Class Member, including [Intermessage], to pay more for cellular telephone service than the market otherwise would have charged.

         {¶6} In January 2006, the trial court dismissed plaintiffs' causes of action for unjust enrichment and tortious acquisition, finding that R.C. 4905.61 is the exclusive remedy for the plaintiffs. Under R.C. 4905.61, a plaintiff may recover against a public utility when the PUCO finds that a public utility engaged in conduct prohibited by statute or a PUCO order and the plaintiff suffered damages as a result of that conduct.

         {¶7} In September 2008, the court granted Verizon's motion for judgment on the pleadings against Satterfield and Highland on statute of limitations grounds. In October 2008, the parties agreed to dismiss all claims against Ameritech Mobile Communications, Inc. Therefore, the remaining cause of action before the trial court was Intermessage's claim against Ameritech under R.C. 4905.61, which was limited by the trial court to the period of October 18, 1993 through September 8, 1995.

         {¶8} Also in September 2008, the trial court concluded that Intermessage's claim for 1995-1998 was barred by the statute of limitations. The court found that the statute of limitations for the 1995-1998 claim expired on January 18, 2002, which was one year after the PUCO issued the Cellnet Order. The court found, however, that Intermessage could maintain its claim for the 1993-1995 period because such claim is controlled by the Ohio Supreme Court's decision that reviewed the Cellnet Order Westside Cellular, Inc. v. Pub. Utils. Comm., 98 Ohio St.3d 165, 2002-Ohio-7119, 781 N.E.2d 199. In Westside Cellular, the Ohio Supreme Court reversed that part of the Cellnet Order, finding that Cellnet could not have suffered economic injury prior to 1995 because it had not earlier made a formal request to Ameritech for wholesale service. Instead, the court held that the applicable time frame commenced on October 18, 1993, which was the date of Cellnet's complaint to the PUCO. Id. at ¶ 10.

         {¶9} Then in December 2008, Intermessage filed a motion for class certification. Intermessage sought certification on behalf of "all retail subscribers of [Ameritech] who purchased service with an Ohio area code during the period October 18, 1993 through September 8, 1995." In June 2015, the trial court conducted a pretrial conference to discuss the pending motion and required the parties to submit proposed orders.

         {¶10} On February 9, 2016, the trial court entered an opinion and order granting Intermessage's motion for class certification. In a 19-page order, the trial court certified a class under Civ.R. 23(A) and (B)(3) consisting of "all retail subscribers of [Ameritech] who purchased service with an Ohio area code within geographic areas in which the PUCO decision found wholesale price discrimination during the period October 18, 1993 through September 8, 1995." In a thorough 19-page opinion, the trial court certified this class "on all the remaining claims, issues, and defenses presented in this action."

         {¶11} It is from this order that Ameritech appeals, raising the following assignment of error for review.

Assignment of Error
The trial court erred in granting the motion for class certification filed by [Intermessage].

         {¶12} In the sole assignment of error, Ameritech claims the court erred in granting class certification to Intermessage because it lacks standing to pursue its purported claim against Ameritech. Ameritech further argues that even if Intermessage had standing to bring the class action, the class was erroneously certified because: (1) it necessarily includes persons who were not injured; (2) individualized issues predominate over common questions of fact or law; (3) its claims are not typical of the purported class; and (4) a class action is not superior to other methods of adjudication.


         {¶13} Ameritech first argues that the class certification fails because Intermessage lacks standing as an adequate class representative for the following three reasons: (1) Intermessage no longer owns its claim against Ameritech, but assigned it to others after it dissolved; (2) after dissolving, Intermessage failed to pursue its claim against Ameritech as speedily as practicable under R.C. 1701.88(D); and (3) the violations at issue found by the PUCO concerned duties Ameritech owed to an independent reseller regarding the provision of wholesale services, while Intermessage and the purported class it seeks to represent consist of indirect, retail purchasers. We disagree.

         {¶14} R.C. 1701.88, which establishes the powers of a corporation after dissolution, provides that "[a]ny claim existing or action or proceeding pending by or against the corporation may be prosecuted to judgment, with right of appeal as in other cases." Id. at (C). Therefore, "the dissolution of a corporation does not abate '[a]ny claim existing or action or proceeding pending by or against the corporation or which would have accrued against it * * *.'" State ex rel Falke v. Montgomery Cty. Residential Dev., 40 Ohio St.3d 71, 74, 531 N.E.2d 688 (1988), quoting R.C. 1701.88(B).

         {¶15} Ameritech argues that Intermessage lacks standing because Intermessage transferred its claim to either Wireless Associates, Ltd., or Schimmelphenning and Moore, after dissolving. In support of its contention, Ameritech relies on certain deposition testimony of Moore and Schimmelphennig. However, when asked about Intermessage's assets Schimmelphennig stated that "I can't tell you specifically * * * [b]ecause I don't recall." Additionally, Moore was never asked whether Intermessage had transferred its claim against Ameritech. In his affidavit attached to Intermessage's motion for class certification, he stated that "[t]he claims brought in this suit on behalf of [Intermessage] existed in favor of [Intermessage] at the time of its dissolution, and are being pursued in this litigation pursuant to [R.C. 1701.88.]" Thus, Intermessage's claim against Ameritech remained an asset of Intermessage after dissolution.

         {¶16} Ameritech also contends that Intermessage lacks standing to pursue its claim against it because Intermessage did not commence this action "as speedily as is practicable" when winding up its affairs. R.C. 1701.88(D) provides that the directors of a dissolved corporation "shall proceed as speedily as is practicable to a complete winding up of the affairs of the corporation." "A corporation continues to exist after dissolution, for the purpose of winding up its affairs[.]" Diversified Prop. Corp. v. Winters Natl. Bank & Trust Co., 13 Ohio App.2d 190, 193, 234 N.E.2d 608 (2d Dist.1967), paragraph one of syllabus.

         {¶17} Ameritech claims that Intermessage waited 33 months to bring this suit. Ameritech acknowledges that Intermessage filed within the statute of limitations, but argues that it was not "speedily enough." The damages Intermessage seeks against Ameritech occurred from October 18, 1993, through September 8, 1995. However, recovery of those damages can be only be obtained through a lawsuit brought under R.C. 4905.61, which cannot be initiated without a prior finding that the utility had violated a PUCO statute or order. Cleveland Mobile Radio Sales, Inc. v. Verizon Wireless, 113 Ohio St.3d 394, 2007-Ohio-2203, 865 N.E.2d 1275, ¶ 21, citing R.C. 4905.61; Milligan v. Ohio Bell Tel. Co., 56 Ohio St.2d 191, 383 N.E.2d 575 (1978), paragraph one of the syllabus. In the instant case, the liability finding was not made until 2001 by the Cellnet Order, which was not rendered final until 2002 by Cincinnati SMSA L.P. v. Pub. Util. Comm. of Ohio, 98 Ohio St.3d 282, 2002-Ohio-7235, 781 N.E.2d 1012. That finding expressly excluded the period of time now at issue in this lawsuit - October 18, 1993 through September 8, 1995. Cellnet Order, 2001 Ohio PUC LEXIS 18 at 269-271. The first finding of liability involving the relevant 1993-1995 time period was not made until December 26, 2002, by the Supreme Court in Westside Cellular. Intermessage's complaint was filed within a year later on December 16, 2003. R.C. 1701.88(A) provides that a corporation may do such acts as are required to wind up its affairs and for this purpose the dissolved corporation "shall continue as a corporation for period of five years from the dissolution[.]" Intermessage filed this lawsuit within three years of its dissolution. Therefore, Intermessage commenced its complaint as speedily as practicable in accordance with R.C. 1701.88.

         {¶18} Ameritech further argues that Intermessage lacks standing because the Cellnet Order did not establish liability as to Intermessage or any other retail customer. In the Cellnet Order, the PUCO held that Ameritech had violated Ohio statutes and PUCO orders, which provided that cellular telephone companies were required to maintain separate wholesale and retail operations; and the terms, conditions, and rates that the Ameritech's wholesale operations made ...

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