Court of Appeals of Ohio, Third District, Hancock
from Hancock County Common Pleas Court Trial Court No.
Toby Schisler for Appellants
I. Frederick and Gregory S. Reichenbach for Appellee
Defendants-appellants, Midland Funding LLC
("Midland"), Midland Credit Management, Inc.
("Midland Credit"), and Encore Capital Group, Inc.
("Encore") (collectively "the Midland
parties"), appeal the March 12, 2019 order of the
Hancock County Court of Common Pleas granting
plaintiff-appellee, Caitlin Gilbert's
("Gilbert"), motion for class certification. For
the reasons that follow, we reverse.
The protracted history of this case begins on February 16,
2011, with a complaint filed by Midland against Gilbert in
the Findlay Municipal Court. (See Doc. No. 1,
Plaintiffs Ex. 1). In that case, Midland asserted that
Gilbert had defaulted on an obligation to repay $1, 443.29-a
debt Gilbert allegedly incurred using a credit card issued by
HSBC Bank Nevada, N.A. ("HSBC"). (Id.).
Midland claimed that it had purchased Gilbert's allegedly
delinquent account from HSBC and that Gilbert had failed to
make any payment toward satisfaction of the outstanding debt
despite Midland's demand that she do so. (Id.).
Although Midland apparently obtained proper service on
Gilbert in May 2011, Gilbert failed to plead or otherwise
defend against Midland's action. (Doc. No. 1,
Plaintiff's Ex. 4). As a result, Midland filed a motion
for default judgment, which the Findlay Municipal Court
granted on July 6, 2011. (Id.). Gilbert did not
appeal the Findlay Municipal Court's entry of default
judgment, and she did not seek (and has not sought) to have
the default judgment set aside by the Findlay Municipal
Court. Gilbert eventually paid the sum due under the default
judgment, though it is unclear whether she did so voluntarily
or under threat of garnishment. (Doc. Nos. 1, 19).
On March 19, 2015, Gilbert filed a complaint against the
Midland parties in the Hancock County Court of Common
Pleas. (Doc. No. 1). In her complaint, Gilbert
averred that she was a resident of Montgomery County, Ohio,
rather than Hancock County, Ohio, when Midland filed suit
against her in the Findlay Municipal Court. (Id.).
She further claimed that she "did not sign any written
contract for the Alleged Debt in Hancock County."
(Id.). Gilbert alleged that the Findlay Municipal
Court therefore did not have jurisdiction to enter default
judgment against her and that the default judgment entered
against her is consequently void. (Id.). She
contended that the Midland parties are not entitled to retain
the money she paid to them in satisfaction of the default
judgment. (See id.).
Gilbert asserted that the lawsuit filed against her in the
Findlay Municipal Court was but one of a number of similar
suits filed by the Midland parties. She alleged that the
Midland parties "regularly file collection actions
against Ohio residents in [county or municipal court
jurisdictions] where the defendant does not live and did not
sign a contract," thus resulting "in numerous void
judgments being entered against class members in courts with
no subject matter jurisdiction." (Id.). Gilbert
claimed that the Midland parties' actions caused the
"incorrect reporting of void judgments on class
members' credit reports" and led to "class
members' wages, bank accounts, and other valuable
property being garnished and executed upon pursuant to void
judgments, and payments by class members."
(Id.). Accordingly, Gilbert sought to represent two
classes of plaintiffs: the "Unjust Enrichment
Class" and the "Collection Suit Defense
Class." (Id.). Gilbert requested that the
trial court grant declaratory relief and a class-wide
injunction prohibiting the Midland parties from (1) filing
suit and obtaining judgments against class members in Ohio
county and municipal court jurisdictions where class members
do not reside and did not sign the contracts underlying their
alleged debts and (2) executing on said judgments.
(Id.). Gilbert also demanded (1) "[a]n order
directing [the Midland parties] to cause judgments against
class members to be vacated in the courts where the judgments
were obtained, to cause certificates of judgment to be
vacated in any courts in which they were filed, and to cause
class members' credit reports to be corrected"; (2)
"[a]ctual damages, including but not limited to, all
amounts collected by [the Midland parties] on the debts of
class members"; and (3) "[disgorgement and
restitution, including but not limited to, all money
garnished by [the Midland parties] on [their] judgments or
otherwise obtained by executing on void judgments."
On March 19, 2015, the same day that Gilbert filed her
complaint, Gilbert filed a motion to consolidate her case
with case number 2013-CV-459, Midland Funding LLC v.
Cassandra Colvin ("Colvin "). (Doc.
No. 11). On April 21, 2015, the Midland parties filed their
answer to Gilbert's complaint. (Doc. No. 19). On May 21,
2015, the trial court ordered that Gilbert's case be
consolidated with Colvin for purposes of discovery.
(Doc. No. 26).
On July 31, 2018, Gilbert filed a motion for class
certification. (Doc. No. 43). On August 21, 2018, the Midland
parties filed their memorandum in opposition to Gilbert's
motion for class certification. (Doc. No. 44). In addition to
arguing that Gilbert could not satisfy the requirements of
Civ.R. 23, the Midland parties contended that the Supreme
Court of Ohio's decision in Lingo v. State, 138
Ohio St.3d 427, 2014-Ohio-1052, bars the trial court from
even considering Gilbert's claims. (Id.). The
Midland parties argued that Lingo precludes the
trial court from entertaining Gilbert's claims because
"the effect of the relief sought by Gilbert would
require [the trial court] to make a determination that
judgments entered by municipal [and county] courts against
putative class members are void because those courts
allegedly lacked jurisdiction to enter those judgments,"
and the trial court, as a court of common pleas, does not
have jurisdiction to effectively vacate, as void, the
judgments of municipal and county courts. (Id.).
On August 27, 2018, Gilbert filed her reply to the Midland
parties' memorandum in opposition to her motion for class
certification. (Doc. No. 45). On December 3, 2018, the
Midland parties filed their supplemental memorandum in
opposition to Gilbert's motion for class certification.
(Doc. No. 49).
On March 12, 2019, the trial court granted Gilbert's
motion for class certification. (Doc. No. 50). First, the
trial court concluded that the Supreme Court of Ohio's
decision in Lingo does not prohibit it from
considering Gilbert's claims. (Id.). The trial
court noted that while Gilbert's claims "require
[the] Court to determine whether a judgment is void, it does
not require [the] Court to actually declare the judgment
void." (Id.). It observed that "[t]he
distinction is fine, but critical," and it concluded
that "[e]quity would authorize [it to] require [the
Midland parties] to pay for any proven damages that have
arisen from collection actions taken pursuant to void
judgments or to cease collection actions against the
The trial court then found that Gilbert met all seven
requirements of Civ.R. 23 with respect to both of her
proposed classes and certified the classes. (Id.).
The first class, the "Collection Suit Defense
Class," is defined as:
[A]ll individuals who have been sued in Ohio by [the Midland
parties] at any time through the present:
a. where [the Midland parties were] awarded a judgment or
where the suit has not been dismissed;
b. where the lawsuit was filed in a county or municipal court
jurisdiction where the defendant did not reside at the time
of the filing and did not sign the underlying contract while
a resident of that county or municipal and/or county [court]
c. where the lawsuit was filed in a municipal or county court
and not in a court of common pleas; and
d. where the lawsuit was filed in a county or municipal court
jurisdiction, where that jurisdiction was not a location
where payment was required to be made.
(Id.). The definition of the second class, the
"Unjust Enrichment Class," is identical to the
definition of the "Collection Suit Defense Class"
except that the "Unjust Enrichment Class" includes
only "individuals who have been sued in Ohio by Midland
from March 18, 2009 to ...