Bell v. Beneficial Consumer Discount Co.

Citation348 A.2d 734,465 Pa. 225
PartiesEdward J. BELL and Marie J. Bell, his wife, on behalf of themselves and all others similarly situated, appellants, v. BENEFICIAL CONSUMER DISCOUNT COMPANY, a corporation.
Decision Date26 November 1975
CourtUnited States State Supreme Court of Pennsylvania

Page 734

348 A.2d 734
465 Pa. 225
Edward J. BELL and Marie J. Bell, his wife, on behalf of
themselves and all others similarly situated, appellants,
v.
BENEFICIAL CONSUMER DISCOUNT COMPANY, a corporation.
Supreme Court of Pennsylvania.
Argued Sept. 25, 1975.
Decided Nov. 26, 1975.

[465 Pa. 226] James F. Israel, Gerald W. Weaver, Bagley, Weaver & Sydor, Pittsburgh, for appellants.

Robert L. Potter, J. Tomlinson Fort, Reed, Smith, Shaw & McClay, Pittsburgh, for appellee.

Before EAGEN, O'BRIEN, ROBERTS, POMEROY, NIX and MANDERINO, JJ.

OPINION OF THE COURT

ROBERTS, Justice.

The question presented is whether a pre-trial order dismissing the class aspects of a suit, but allowing the case to proceed as an individual action, is an appealable final order. We hold that it is.

Appellants Edward and Marie Bell brought a class action pursuant to Pa.R.Civ.P. 2230 1 against appellee Beneficial[465 Pa. 227]

Page 735

Consumer Discount Company alleging that appellee failed to record the satisfaction of mortgages as required by statute. 2 Appellee filed preliminary objections. The trial court sustained the preliminary objections to the suit as a class action, but permitted the named plaintiffs to proceed in their individual capacities. An appeal from this order was taken to the Superior Court which granted appellee's motion to quash the appeal. On reconsideration, the court affirmed its order per curiam (Spaeth, J., filed a dissenting opinion in which Hoffman, J., joined). 3 We granted appellants' petition for allowance of appeal to decide whether an order dismissing a class action is final and appealable. 4

With exceptions not relevant here 5 the Appellate Court Jurisdiction Act gives the appellate courts of the Commonwealth jurisdiction over appeals only from 'final[465 Pa. 228] orders.' 6 We must decide whether orders denying class action status are 'final' within the meaning of that Act.

Whether an order is final and appealable cannot necessarily be ascertained from the face of a decree alone, nor simply from the technical effect of the adjudication. The finality of an order is a judicial conclusion which can be reached only after an examination of its ramifications. We follow the reasoning of the United States Supreme Court that a finding of finality must be the result of a practical rather than a technical construction. Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 546, 69 S.Ct. 1221, 1226, 93 L.Ed. 1528 (1949). 7

Page 736

In resolving this question we are faced with three alternatives: (1) orders denying class status are final and [465 Pa. 229] appealable; (2) such orders are interlocutory and not appealable; and (3) only those orders which effectively terminate the action are appealable (the 'death knell' doctrine).

We believe that orders denying class action status possess sufficiently practical aspects of finality to make them appealable. When an action is instituted by a named individual on behalf of himself and a class, the members of the class are more properly characterized as parties to the action. A subsequent order of a trial court allowing an action to proceed as a class action is not a joinder of the parties not yet in the action. The class is in the action until properly excluded. An order dismissing the class aspects of a suit puts the class members out of court, is a final order for those parties and is therefore appealable. See Alexander v. Mastercraft Construction Co., Inc., 455 Pa. 579, 317 A.2d 278 (1974); Zakian v. Liljestrand, 438 Pa. 249, 264 A.2d 638 (1970); Brandywine Joint Area School Authority v. VanCor, Inc., 426 Pa. 448, 233 A.2d 240 (1967); Rau v. Manko, 341 Pa. 17, 17 A.2d 422 (1941). That the named plaintiffs can, in theory, individually pursue the action further, and the ousted members of the class can bring separate individual actions against the defendant does not alter the conclusion that the denial of class action status has put the ousted members of the class 'out of court' for the purpose of this particular action.

This is the reasoning this Court relied on in Lee v. Child Care Services, --- Pa. ---, --- n. 1, 337 A.2d 586, 588 n. 1 (1975), where we stated:

'an order sustaining preliminary objections and dismissing the class aspects of (an) action is a final order even though individual aspects of the action may survive the order. The order effectively puts out of court those members of the class not parties to the individual action. . . . DeAngeli v. Fitzgerald, 433 Pa. 529, 252 A.2d 706 (1969).'

[465 Pa. 230] In Brandywine Joint Area School Authority v. VanCor, Inc., 426 Pa. 448, 233 A.2d 240 (1967), we used the same rationale to support our decision that an order dismissing an additional party complaint was a final appealable order. Mr. Justice O'Brien stated for a unanimous Court:

'We conclude that while an order overruling preliminary objections to an additional party complaint is interlocutory, an order granting such objections and dismissing the complaint is final and appealable. Although the plaintiff in the additional party complaint may have a further cause of action against the defendant in the additional party complaint subsequent to the resolution of the basic litigation, he is precluded in the basic litigation from determining his rights vis-a-vis the additional defendant in the litigation.'

Id. at 51, 233 A.2d at 241. See McCahill v. Roberts, 421 Pa. 233, 236, 219 A.2d 306, 308 (1966); Posternack v. American Casualty Company of Reading, 421 Pa. 21, 23, 218 A.2d 350, 351 (1966); cf. Adcox v. Pennsylvania Manufacturers' Association Casualty Insurance Co., 419 Pa. 170, 175--76, 213 A.2d 366, 368 (1965); Broido v. Kinneman, 375 Pa. 568, 101 A.2d 647 (1954).

Our determination that these orders are appealable avoids the harsh consequences attendant to a conclusion that orders which put parties out of court are unappealable. 8

Page 737

Moreover, it is consistent with the policies to be served by Pa.R.Civ.P. 2230.

[465 Pa. 231] Although our class action...

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