Alford Chevrolet-Geo v. Jones

• Court: Texas Court of Appeals
• Writing for the Court: Grant
• Citation: Alford Chevrolet-Geo v. Jones, 91 S.W.3d 396 (Tex. App. 2002)
• Decision Date: 25 October 2002
• Docket Number: No. 06-02-00058-CV.,06-02-00058-CV.
• Parties: ALFORD CHEVROLET-GEO, et al., Appellants, v. Jett JONES and Envo-Tech, Inc., Appellees.

91 S.W.3d 396

ALFORD CHEVROLET-GEO, et al., Appellants, v. Jett JONES and Envo-Tech, Inc., Appellees.

No. 06-02-00058-CV.

Court of Appeals of Texas, Texarkana.

Submitted October 1, 2002.

Decided October 25, 2002.

Rehearing Overruled December 27, 2002.

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Robert T. Mowrey, Thomas G. Yoxall, Locke, Liddell & Sapp, LLP, Dallas, William F. Ikard, Popp & Ikard, LLP, Austin, Suzanne H. Woods, Williams & Connolly, LLP, Washington, DC, Michael C. Holmes, Christopher W. Byrd, Vinson & Elkins, Houston, for appellant.

Robert L. Templeton, John T. Smithee, Templeton, Smithee, Hayes, Fields & Young, Amarillo, Damon Young, Young & Pickett, Texarkana, for appellee.

Before MORRISS, C.J., GRANT and ROSS, JJ.

OPINION

Opinion by Justice GRANT.

Alford Chevrolet Geo, et al. (Dealers), a group of over 600 car dealerships, appeal from an interlocutory order¹ granting class certification to a group consisting of over a million individuals who purchased cars from those dealerships after September 1, 1995.

This lawsuit was filed on behalf of a group of customers against a group of car dealerships, alleging they made misrepresentations about the nature of a tax, the dealers inventory tax, representing to consumers that it was a type of vehicle inventory tax the customer was required to pay. The customers also allege the Dealers, as a group, engaged in a civil conspiracy to force, coerce, or confuse consumers into paying a tax that was levied against and was properly payable by the Dealers.

Extensive discovery has been completed. The trial court, after a hearing, certified a class of consumers. The keystone of the lawsuit lies in the nature of the term used by each dealership to describe the tax — and the allegations of an agreement among the new car dealers of the State of Texas to charge that tax to the consumer. If the term dealers inventory tax was used in a sales document, the court concluded the purchaser does not qualify as a plaintiff member of the class. If one of twenty-nine other less accurate or descriptive terms was used to describe the charge, then an individual qualifies as a member of the class. (The terms were taken from sales documents obtained during discovery.)

Standard for Interlocutory Review of Class Certification

An appellate court reviews a trial court's determination that a case should be certified as a class action using an abuse of discretion standard. W. Teleservices, Inc. v. Carney, 37 S.W.3d 36, 40 (Tex.App.-San Antonio 2000, no pet.); Health & Tennis Corp. of Am. v. Jackson, 928 S.W.2d 583, 587 (Tex.App.-San Antonio 1996, no writ). The trial court abuses its discretion when it does not properly apply the law to the undisputed facts, when it acts arbitrarily or unreasonably, or when its ruling is based on factual assertions unsupported by the record. Carney, 37 S.W.3d at 40.

The Dealers' arguments center around their contention that the information provided to the trial court did not support its conclusion that common issues predominate.²

The arguments as set out by the Dealers focus on the question of whether the trial court abused its discretion by deciding the plaintiffs had satisfied Rule 42(b)(4). That rule requires the court to conclude that questions of law or fact common to the class predominate over questions affecting only individual members and that class treatment is superior to other available methods for the fair and efficient adjudication of the controversy. TEX.R. CIV. P. 42(b)(4); see Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 615, 117 S.Ct. 2231, 138 L.Ed.2d 689 (1997); Southwestern Ref Co. v. Bernal, 22 S.W.3d 425, 433 (Tex.2000). In making this determination, the trial court is required to perform a "rigorous analysis" before ruling on class certification to determine whether all the prerequisites to certification are met. Bernal, 22 S.W.3d at 435.³

This rigorous analysis includes indicating how the claims will likely be tried so that conformity with TEX.R. CIV. P. 42 can be meaningfully evaluated. Id. A court must understand the claims, defenses, relevant facts, and applicable substantive law in order to make a meaningful determination of the certification issues. Id.

Rule 42(a), (b)(4)⁴

The Dealers complain at length that the common issues do not predominate over questions affecting only individual members. Specifically, they complain that proof of conspiracy will require 600 minitrials and that each individual plaintiff will have to prove reliance separately in order to recover on each plaintiff's Deceptive Trade Practices Act (DTPA) claims. Alternatively, the Dealers argue that the defenses raised by each dealer will differ for each and every sale. Therefore, they conclude, the requirements of Rule 42(b)(4) have not been met.

Predominance of Individual Issues

In the terms' of the analysis, we must apply the central theme of this appeal, which is that the trial court abused its discretion by certifying the class because common issues do not predominate as required by Rule 42(b)(4); or alternatively, that separate defensive issues would require multitudinous mini-trials.⁵ We do not review the record de novo, but we must determine whether the trial court adhered to the rule's requirements in making its decision, based on the "rigorous analysis" described above.

In deciding that matter, the trial court looks to see "if common issues predominate by identifying the substantive issues of the case that will control the outcome of the litigation, assessing which issues will predominate, and determining if the predominating issues are, in fact, those common to the class." Bernal, 22 S.W.3d at 434. The test for predominance is not whether common issues outnumber uncommon issues, but "whether common or individual issues will be the object of most of the efforts of the litigants and the court." Id. "If, after common issues are resolved, presenting and resolving individual issues is likely to be an overwhelming or unmanageable task for a single jury, then common issues do not predominate." Id. "Ideally, `a judgment in favor of the class members should decisively settle the entire controversy, and all that should remain is for other members of the class to file proof of their claim.'" Id.

The predominance requirement "is intended to prevent class action litigation when the sheer complexity and diversity of the individual issues would overwhelm or confuse a jury or severely compromise a party's ability to present viable claims or defenses." Id.; Carney, 37 S.W.3d at 41.

In this case, the trial court reviewed numerous affidavits presented by the parties and heard arguments of counsel on this matter. Although appellants complain in passing that the court only spent a few hours on the certification hearing, there is no authority requiring either an unnecessarily lengthy hearing or live testimony. We find that submission of affidavits is adequate and believe that in many certification efforts of either alleged or real complexity, written materials are both more readily digested and analyzed by the court in reaching this decision. So that this may be accomplished, we also note counsel will necessarily be quite reasonably required to provide to the trial court the information they want considered early enough to allow the court to consider it. Late-filing of such documents should not occur, and the trial court would be well within its authority to refuse to consider such in making its decision.

The Findings of the Trial Court

The trial court found the following issues were predominant: (1) whether the plaintiff class were consumers; (2) whether the charging of the vehicle inventory tax in addition to the sales price is a false, misleading, or deceptive act or practice; (3) whether such acts were a producing cause of damages; and (4) the amount of damages.

Conspiracy Claim

Our review of the certification is to consider as one factor the evidence produced to show that the issues involved are in common. One portion of the Dealers' argument takes the position there is nothing to show that conspiracy can lie as to all members of the class. They take the position the conspiracy cannot be proven generally, but that all elements must be proven separately as to each defendant dealer. The elements of a civil conspiracy are (1) two or more persons, (2) an object to be accomplished, (3) a meeting of the minds on the object or course of action, (4) one or more unlawful, overt acts, and (5) damages as a proximate result. Operation Rescue-Nat'l v. Planned Parenthood of Houston and Southeast Tex., Inc., 975 S.W.2d 546, 553 (Tex.1998).

As set out in the findings of the trial court, discovery shows that twenty-nine different terms were used by the defendants other than the term dealers inventory tax. The customers allege that those terms did not fully or accurately inform the customers about the nature of the tax and that those terms actively misled the customers about the nature of the tax. The customers point to discovery showing the common plan orchestrated by the Dealers' trade organizations to ensure that all dealers charged the tax in the same manner and point to language in the organizations' literature and seminars to show an absolute and clearly expressed intent to shift the cost of the tax directly to the consumer. The plaintiffs allege the Dealers acted in a substantially uniform manner and caused them damages.

A common question is raised in this case: the nature of the alleged wrongdoing and the way in which it was accomplished — through the shifting of a tax against the dealer to the purchaser of the vehicle. The documents and depositions obtained through discovery clearly reflect that the Dealers' trade organizations designed the mode in which the tax would be presented to the purchaser and also made it clear that the reason for doing it in this fashion was to add thirty to fifty dollars to the bottom line of every sale.

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