164 P.3d 1028 (Okla. 2006), 102,128, Harvell v. Goodyear Tire and Rubber Co.
|Citation:||164 P.3d 1028, 2006 OK 24|
|Opinion Judge:||KAUGER, J.|
|Party Name:||Lori HARVELL, Individually and on behalf of herself and all others similarly situated, Plaintiff/Appellee, v. The GOODYEAR TIRE & RUBBER COMPANY, Defendant/Appellant.|
|Attorney:||Harry Scoufos, Thomas W. Condit, Sallisaw, OK, for Appellee., William K. Orendorff, Sallisaw, OK, and P. Jefferson Ballew, Adrienne E. Dominguez, Dallas, TX, for Appellant.|
|Case Date:||April 25, 2006|
|Court:||Supreme Court of Oklahoma|
As Corrected May 9, 2006 and July 3, 2007.
[Copyrighted Material Omitted]
Appeal from the District Court of Sequoyah County; Honorable John C. Garrett, Trial Judge.
¶ 0 In July of 2004, Lori Harvell brought her car in for service at a Goodyear Auto Service Center in Tulsa, Oklahoma. After performing a diagnostic check, the service center presented Harvell with an invoice which included a charge for shop supplies. Although Harvell disputed the necessity of the charge, she paid the fee in order to retrieve her car. On August 26, 2004, Harvell filed a class action lawsuit against the Goodyear Tire & Rubber Company, seeking certification of a national class action of consumers who had paid Goodyear a shop supply fee regardless of whether shop supplies were used. The trial court, Honorable John C. Garrett, certified the class and Goodyear appealed. We retained the cause and hold that the trial court abused its discretion in certifying the class.
Harry Scoufos, Thomas W. Condit, Sallisaw, OK, for Appellee.
William K. Orendorff, Sallisaw, OK, and P. Jefferson Ballew, Adrienne E. Dominguez, Dallas, TX, for Appellant.
¶ 1 The only issue presented 1 is whether the trial court abused its discretion in certifying a class pursuant to 12 O.S.2001 § 2023. 2 We hold that it did.
¶ 2 On July 28, 2004, the plaintiff/appellee, Lori Harvell (Harvell/customer) noticed that the check engine light in her car was on. After spotting a Goodyear Auto Service Center (service center) a few blocks away, she pulled into the service center to get her car checked. After performing a diagnostic check on the vehicle, the service center recommended that she replace the spark plugs and told her that her brakes were worn. Rather than have the spark plugs or the brakes replaced at that time, she drove home.
¶ 3 The service center presented the customer with two copies of an invoice. One was an estimate invoice, the other was an actual invoice for the services performed. Although an estimate invoice is typically given to customers before any work is done, it was not given to Harvell before the service center checked her car. The actual invoice itemized the charges as $36.50 for labor, $0.00 for parts, $2.56 for shop supplies for a total of $39.28 which included $.22 for taxes on the $2.56 shop supply charge. The shop supply charge also appeared on the estimate invoice. 3 Both invoices contained an explanation of the shop supply fee at the bottom of the page which provided: "SHOP SUPPLY FEES COVER MISC MATERIALS USED IN SERVICING YOUR VEHICLE THAT DO NOT APPEAR ELSEWHERE ON THIS INVOICE AND FOR PROFIT."
¶ 4 When the customer questioned the cashier about the shop supply fee, she was told not to worry about it, that it was just part of the bill. She asked whether she would get her car back if she failed to pay the $2.56 charge, and was told that she had to pay it. Harvell paid the invoice.
¶ 5 On August 26, 2004, the customer filed a class action lawsuit against the defendant/appellant, the Goodyear Rubber & Tire Company (Goodyear), seeking certification of a national class action of consumers who, in approximately 37 states, had paid Goodyear a shop supply fee since 1998. 4 She alleged that Goodyear was illegally charging a shop supply fee based on 7% of the labor charge, regardless of whether shop supplies were used. She asserted claims for breach of contract, unjust enrichment, and a violation of the Ohio Consumer Sales Practices Act (the Ohio Act). 5
¶ 6 A hearing for class certification was held on March 29, 2005. On stipulation of the parties, the trial court admitted deposition testimony, affidavits, and exhibits into evidence. The evidentiary materials show, among other things, that the shop supply fee was initiated 6 and tracked from Goodyear's corporate offices in Ohio, but because stores purchased their own supplies, the brand, supplier, and cost of the supplies varied from store to store.
¶ 7 On April 14, 2005, the trial court issued an order granting the customer's motion for class certification. The trial court found that the four requirements of 12 O.S.2001 § 2023 (A): numerosity, commonality, typicality, and representation, were satisfied. It also determined that two of the requirements of
§ 2023(B) were applicable because there was a predominance of common questions of law or fact, a superiority of class action adjudication, and injunctive relief was appropriate. It also found that Ohio substantive law applied to all three claims. 7 Goodyear appealed, and we retained the cause on June 3, 2005. The briefing cycle was completed on October 18, 2005.
THE TRIAL COURT ABUSED ITS DISCRETION IN CERTIFYING THE CLASS.
¶ 8 Title 12 O.S.2001 § 2023 requires that four prerequisites for class certification under § 2023(A) and one of the three additional requirements contained in § 2023(B) must be met in order to certify a class. 8 Subsections 1 through 4 of § 2023(A), respectively, require: 1) numerosity of class members; 2) commonality of questions of law or fact; 3) typicality of claims or defenses of the class representatives with the class; and 4) adequacy of representative parties to protect class interests. Subsection 1 through 3 of § 2023(B) requires either: 1) a risk of inconsistent adjudications by separate actions or substantial impairment of non-parties to protect their interests; 2) appropriateness of final injunctive or declaratory relief; or 3) predominance of common questions of law or fact to class members and superiority of class action adjudication.
¶ 9 A trial court's class certification order is reviewed for abuse of discretion. 9 An abuse of discretion occurs when a court bases its decision on an erroneous conclusion of law or where there is no rational basis in evidence for the ruling. 10 If the record does not demonstrate that the requisites for class action have been met, the trial court has abused it's discretion. 11
¶ 10 The party who seeks certification has the burden of proving each of the requisite elements for class action. 12 We take as true all uncontroverted allegations in the instruments in the record and the undenied statements of counsel in the briefs. 13 A trial court is allowed flexibility and discretion to modify, or even set aside, its order of certification if later developments demonstrate a need to do so. 14 Consequently, in the face of a close question as to certification, the Court has held that the pragmatic action is to sustain certification. 15
¶ 11 To resolve whether the prerequisites for class-certification are met, we need not reach the merits of the claim. 16 Nevertheless, determining whether the trial court applied the correct legal standards when it assessed § 2023's requirements for class certification necessitates identification and review of the core liability issues asserted
by the class. 17
¶ 12 The customer argues that because she proved that the four elements required pursuant to 12 O.S. § 2023 (A) [numerosity, commonality, typicality, and representation] and that two of the three standards of § 2023(B) [the appropriateness of injunctive or declaratory relief or predominance of common questions of law or fact and the superiority of class action adjudication] were met, the trial court's certification order must be affirmed. The primary focus of Goodyear's challenge to the trial court's certification is that certification must fail because Harvell did not satisfy the requirements of either appropriateness of injunctive or declaratory relief or predominance of common questions of law or fact over questions affecting only individual members. Goodyear also argues that Ohio law is inapplicable to the claims. We agree with Goodyear's challenges.
¶ 13 A factor weighing heavily in this case is the geographic dispersion of the class members and the consequent, potential applicability of the law of multiple jurisdictions. This factor is important because we have previously held that where the substantive law of multiple jurisdictions may apply, common issues of law or fact generally do not predominate as required by 12 O.S.2001 § 2023 (B)(3) 18 and class certification should be defeated. 19
i. Breach of Contract Claim
¶ 14 The trial court analyzed the applicability of the law of multiple jurisdictions in terms of the most significant relationship test of the Restatement (Second) Conflicts of Law §§ 6 and 188 (1971). 20 However, in Oklahoma, 21 the established choice of law rule in contract actions known as lex loci contractus is that, unless the contract terms
provide otherwise, the nature, validity, and interpretation of a contract are governed by the law where the contract was made. 22 Although variations from this rule have been applied in the unique context of motor vehicle insurance policies with contract terms contrary to law or the public policy of the state where enforcement is sought, 23 and contracts involving the sale of goods under the Uniform Commercial Code 24--neither of the exceptions are involved here. 25
¶ 15 The place of performance of any alleged contract for each person charged a supply fee for the service of vehicles is the state in which the vehicle was serviced. 26 Consequently, the law of each of the 37 states involved governs the breach of contract claims. While the elements for breach of contract may be substantially similar in each state, the trial court...
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