Skalbania v. Simmons
| Decision Date | 30 December 1982 |
| Docket Number | No. 2-382A71,2-382A71 |
| Citation | 443 N.E.2d 352 |
| Parties | Nelson SKALBANIA and Indianapolis Racers 1977, Inc., Appellants (Defendants Below), and World Hockey Association, New England Whalers, Quebec Nordiques, Winnepeg Jets, Cincinnati Stingers, Edmonton Oilers, and Birmingham Bulls, Appellants (Defendants Below), and Indianapolis Racers, Indianapolis Racers Limited, Hockey Management Inc., and Hockey World, Ltd., Non-Appealing Defendants, v. Al SIMMONS, Keith Marshall and Michael Kelly, Appellees (Plaintiffs Below). |
| Court | Indiana Appellate Court |
William H. Stone, Columbus, Jones & Loveall, Franklin, for appellants Nelson Skalbania and Indianapolis Racers 1977, Inc.
William C. Barnard, Gordon L. Pittenger, Sommer & Barnard, Indianapolis, for appellants World Hockey Ass'n.
Robert F. Zoccola, Locke, Reynolds, Boyd & Weisell, Indianapolis, for appellees Al Simmons, Keith Marshall and Michael Kelly.
The Indianapolis Racers Hockey Team (Racers), its owner, Nelson Skalbania, the World Hockey Association, and its constituent hockey teams bring this interlocutory appeal from the certification of a class of plaintiffs consisting of 1978-79 Racers season ticket holders, arguing that the trial court abused its discretion in granting class certification because individual questions predominate over matters common to the class.
We affirm.
This case arose from the collapse of the Indianapolis Racers professional hockey franchise during the 1978-79 season. At the time the team ceased operation, only 13 of 40 scheduled home games had been played.
Plaintiffs are a class of persons comprising 1978-79 Racers season ticket holders. Through their representatives Al Simmons (Simmons) and Michael Kelly (Kelly), they brought suit against the various corporate entities owning and operating the Racer franchise. 1 They also sued Nelson Skalbania (Skalbania), the owner of the Racers, the World Hockey Association (WHA), the league in which the Racers competed, and the constituent teams which comprised that league during the Racers' final season.
In their complaint, plaintiffs request damages from Skalbania and the Racers for breach of contract (Count II, R. at 16); breach of warranty (Count III, R. at 17); and negligent operation of the Racer franchise (Count VI, R. at 18-19). Against the WHA, its constituent teams, Skalbania, and the Racers, plaintiffs request damages for common law fraud (Count I, R. at 15); common law fraud and breach of fiduciary duty (Count IV, R. at 17-18); tortious interference with the rights of the Racers and plaintiffs in the services and contracts of Racer players (Count V, R. at 18); negligent and reckless operation of and negligent failure to disclose facts indicative of the negligent and reckless operation of the Racer franchise (Count VII, R. at 19-20); tortious interference with the contractual relationship between plaintiffs and the Racers based upon merger negotiations which were conducted between the WHA, the Racers, and the National Hockey League (Count VIII R. at 20); and conduct supporting an award of punitive damages (Count IX, R. at 21).
For clarity we list these various claims on the following scorecard:
COUNT DEFENDANTS CLAIM
I All Fraudulent disclosure and failure to
disclose the poor financial condition of
the franchise
II Racers and Skalbania Breach of contract
III Racers and Skalbania Breach of express and implied warranaties.
IV All Conspiracy to misappropriate and
misappropriation of season ticket funds;
breach of fiduciary duty.
V All Conspiracy to interfere with and
interference with Racer player contracts.
VI Racers and Skalbania Negligent operation of Racer franchise.
VII All Failure to supervise Racer franchise;
nondisclosure of poor operation of the
franchise.
VIII All Negligent conduct of merger negotiations.
IX All Punitive damages.
On May 22, 1981 plaintiffs filed a "motion to determine the propriety of class action" (R. at 26). On December 4, 1981 a hearing was held upon that motion to determine whether the class should be certified. During that hearing the depositions of Simmons and Kelly were published. Evidence elicited at the hearing established that out of 40 promised games, only 13 were played (R. at 270) and that the proposed class consists of 1,140 persons (id.), holding about 3,500 season tickets (R. at 269). Supporting Kelly's appointment as a class representative is his purchase of two season tickets at a total cost of $580. (Id.). Simmons bought four tickets for $1,160 (R. at 275).
Evidence before the court, included in the depositions, indicates that Racers' advertising appeared which featured the WHA logo (R. at 351) and that the WHA was the sanctioning body for the Racers franchise (R. at 380). The WHA, as the sanctioning league, permitted the team to exist and operate (R. at 432). By allowing the Racers to embark upon the 1978-79 season, plaintiffs allege that at the least, the league implicitly asserted that the Racers possessed the economic wherewithal to complete the season (R. at 444). Such representations were made prior to the purchase of season tickets by members of the class (R. at 384). The WHA itself continued operation after the Racers folded and the league completed the season in question. (R. at 272).
Plaintiffs also allege that the WHA and member teams received Racers players for inadequate or non-existent compensation (R. at 457). Such player transfers, which commenced after the season began, were detrimental to the Racers because the player sales constituted the disbanding of a competitive team. (R. at 358).
Insofar as Skalbania's conduct vis-a-vis the WHA is concerned, the evidence shows that, at the time he acquired the Racers, Skalbania also owned the Edmonton Oilers. Despite the conflict of interest ramifications of such dual ownership, the WHA let Skalbania own the two teams at once. (R. at 353).
Plaintiffs also testified that merger negotiations between the WHA, the Racers, and the National Hockey League were harmful to the Racers because the uncertainty regarding the team's continued operation which those negotiations engendered depressed attendance at Racers games. (R. at 401).
Both Simmons and Kelly testified that they want their season ticket expenditures back (R. at 403, 435). Kelly described all season ticket holders as "being in the same seat as I'm in that as far as having lost the dollars that they invested." (R. at 441).
Following the hearing, the trial court, on February 12, 1982, certified this case as a class action pursuant to Ind.Rules of Procedure, Trial Rule 23:
ORDER CERTIFYING CLASS ACTION
This matter, having come before the court on December 4, 1981, for a hearing to determine the propriety of permitting this action to proceed as a class action, and the court having heard the evidence now makes the following findings and entry:
1. The named plaintiffs, Al Simmons and Michael Kelly, are owners of season tickets for the Indianapolis Racers 1978-79 hockey season.
2. There were approximately 1,140 individual season ticket owners and a total of approximately 3,500 season tickets purchased for the Indianapolis Racers 1978-79 hockey season, including the aforementioned plaintiffs, and joinder of all such owners of 1978-79 season tickets is impracticable.
3. A class action is superior to other available methods for the fair and efficient adjudication of the controversy between the 1978-79 season ticket owners and the named defendants.
4. The plaintiffs Al Simmons and Michael Kelly seek to represent the class of 1978-79 season ticket owners in their claims against defendants to recover compensatory damages plus interest and punitive damages as a result of the cessation of operations of the 1978-79 Racers.
5. The claims of plaintiffs are typical of the claims of all 1978-79 season ticket owners, and involve common questions of law and fact which predominate over any questions involving only individual members.
6. The plaintiffs Al Simmons and Michael Kelly fairly and adequately represent the interests of all 1978-79 season ticket owners.
7. There is no other known litigation pending wherein a 1978-79 season ticket owner is seeking damages from any of these defendants as a result of the cessation of operations of the 1978-79 Racers.
IT IS THEREFORE ORDERED AS FOLLOWS:
1. This case shall be maintained as a class action by the plaintiffs, Al Simmons and Michael Kelly, as representatives of the class of 1978-79 Racer season ticket owners, pursuant to Trial Rule 23(B)(3).
2. Notice of this class action shall be made by first-class mail to each individual member of the class whose identity and address can be determined from the appropriate records of the Indianapolis Racers or other defendants. The defendants are to make such identities and addresses available to counsel for plaintiffs on or before the 1st day of March, 1982, and within sixty (60) days thereafter, counsel for the plaintiffs shall send out Notice to each member of the class.
3. The Notice to each member of the class shall be in the following form:
Dear 1978-79 Indianapolis Racer Season Ticket Owner:
From certain records maintained by the Indianapolis Racers you are listed as the owner of one or more season tickets for the Indianapolis Racers 1978-1979 hockey season. If your address is listed incorrectly or if your address has changed, please notify the attorneys listed below regarding your proper address.
A claim for damages has been filed with the Marion County Superior Court, Cause No. S178-1491, in Indianapolis, Indiana,...
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