Blankenship v. Omaha Public Power Dist., 40107

• Decision Date: 08 January 1976
• Docket Number: No. 40107,40107
• Parties: Robert BLANKENSHIP, Appellant, v. OMAHA PUBLIC POWER DISTRICT, Appellee.
• Court: Nebraska Supreme Court

Page 86

237 N.W.2d 86

195 Neb. 170

Robert BLANKENSHIP, Appellant, v. OMAHA PUBLIC POWER DISTRICT, Appellee.

No. 40107.

Supreme Court of Nebraska.

Jan. 8, 1976.

Syllabus by the Court

1. The right of a party to sue as representative of a class may be determined on motion for summary judgment.

2. The statutes of this state authorize a partial summary judgment. Whether a partial summary judgment is a final and appealable order depends upon its effect.

3. A party having an interest adverse to the interests of the parties sought to be represented may not sue as representative of a class under the provisions of section 25--319, R.R.S.1943.

4. Potentially conflicting interests within the class are incompatible with the maintenance of a true class action.

5. Where, on motion for summary judgment, the record demonstrates the potentiality of conflict, either within the class or between the person who seeks to represent the class and the class, it is appropriate to dispose of the class aspect of the case upon motion for summary judgment.

Charles I. Scudder, Howard Kaiman, Omaha, for appellant.

Hird Stryker, Fraser, Stryker, Veach, Vaughn & Meusey, P.C., Omaha, for appellee.

Heard before WHITE, C.J., and SPENCER, BOSLAUGH, McCOWN, NEWTON, CLINTON and BRODKEY, JJ.

CLINTON, Justice.

The question for determination in this case is whether the plaintiff was entitled to maintain this action as representative of a class under the provisions of section 25--319, R.R.S.1943. The defendant is a public power district and political subdivision of the State of Nebraska organized under the provisions of Chapter 70, R.R.S.1943, and is engaged in the distribution and sale of electrical energy. The plaintiff is a resident of the city of Omaha and a customer of the defendant. He seeks in this action to have certain 'late payment charges' or 'forfeited discounts,' which are imposed by the defendant as a part of its rate structure, declared usurious. He further requests an accounting and refund of all such allegedly unlawful charges to those entitled thereto after deduction of court costs and attorneys' fees. He asks the court to enjoin future imposition of such late charges and seeks other relief.

The plaintiff's right to bring the action as representative of a class was challenged on a motion of the defendant for summary judgment. Supporting and contending affidavits were received. The court granted the motion for summary judgment and dismissed the action without prejudice to the right of the plaintiff to sue on his own behalf.

The plaintiff alleged two causes of action. In the first cause the claimed class which the plaintiff asks to represent are all those customers or rate payers of the defendant who have, in the 5 years preceding the filing of the petition, paid late charges or forfeited discounts because of failure to pay by the due date. In the second cause of action the claimed class is all those customers who will be 'forced' in the future to pay the alleged illegal late charges.

The record establishes that the rate schedules of the defendant contain the following provisions:

'Schedule No. 10

Residential Service

"The net monthly bill, computed in accordance with the net monthly rate; plus an amount of ten percent, but not to exceed $5.00, which amount will be deducted if the bill is paid on or before the gross date thereon.'

'Schedule No. 30

General Service

"The net monthly bill, computed in accordance with the net monthly rate, plus an amount of ten percent, but not to exceed $25.00, which amount will be deducted if the bill is paid on or before the gross date thereon."

The plaintiff adduced, by way of affidavit, expert opinion evidence which characterized the late charges as 'interest' and calculated the amount of such 'interest' so as to show it usurious under the laws of this state.

Uncontroverted affidavits produced by the defendant established the following: For the years 1969 through 1973 (the approximate 5 years to which the plaintiff's petition applies), 98-plus percent of the defendant's customers came under schedules 10 and 30 and were subject to the late charges or forfeited discounts when the accounts were not paid 'on or before the gross date'; that the total of the 'forfeited discounts' for the 5 years in question was $2,409,397.31, or approximately $500,000 annually; that the defendant has the capability of determining from its records, with minor exceptions, 'the identity and amounts of forfeited discounts'; and that if the defendant is required to 'make refunds of forfeited discounts and/or to discontinue the gross-net billing procedure it will be necessary to replace the sums represented thereby by the adoption of new rate schedules the burden of which will be borne by all rate payers of the District including the plaintiff, Robert Blankenship in order for the District to cover its operating expenses, debt service requirements and capital improvements.' The affidavits further state: '. . . that approximately 85% Of the rate payers pay the District for electrical energy before the due date shown on the rate-payer's billing, thus automatically being entitled to the net charge without regard to the gross. As to the remaining approximately 15% The discount is forfeited, subject, however, to the dollar ceiling set forth in the District's rate schedules'; and that 1973 is a typical year and in that year billings for electrical energy by the defendant were $70,715,403.26 and forfeited discounts for that year were $570,257.25.

We observe that the defendant is not a utility whose charges for sale of energy are regulated by a public body empowered to regulate rates generally, but that its rates are fixed by its own board of directors in accordance with statutory standards. § 70--655, R.R.S.1943. The law further authorizes the public power districts to operate in a successful and profitable manner. City of O'Neill v. Consumers Public Power Dist., 179 Neb. 773, 140 N.W.2d 644; York County Rural Public Power Dist. v. O'Connor, 172 Neb. 602, 111 N.W.2d 376. See, also, § 70--636, R.R.S.1943. The statutes, however, do provide for intervention by the Power Review Board where an applicant for service and the supplier cannot agree upon the terms of service or where an applicant claims discrimination in the service. § 70--1017, R.S.Supp., 1974.

We must first dispose of a procedural point. Plaintiff urges that a motion for summary judgment is not an appropriate method for disposing of the issue of the plaintiff's right to sue as representative of a class and that the trial court erred in so doing. His position is that the remedy of summary judgment is available only to determine whether or not there is a factual issue upon which legal liability rests and that the right to represent a class is not such an issue. Section 25--1332, R.R.S.1943, provides that summary judgment 'shall be rendered forthwith if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.' Our summary judgment act authorizes partial summary judgments. §§ 25--1330, 25--1332, 25--1333, R.R.S.1943. See, Burroughs Corp. v. James E. Simon Constr. Co., 192 Neb. 272, 220 N.W.2d 225; Hart v. Ronspies, 181 Neb. 38, 146 N.W.2d 795. While a partial summary judgment will not usually be a final order, it may be when the effect is to wholly determine the case. It was a final order in this case because the summary judgment determined the merits of the plaintiff's claim to represent the class and hence directly affected much of the relief for which he prayed.

If under the undisputed facts the right of a plaintiff to sue as representative of a class is one of law, then there appears to be no reason why that portion of the plaintiff's 'claim' should not be determined under the provision of the statute authorizing such judgment upon 'all or any part thereof.' § 25--1330, R.R.S.1943. No party cites any case directly on point and we have found none. Defendant called to our attention Coffelt v. Arkansas Power & Light Co., 248 Ark. 313, 451 S.W.2d 881, which involved a claim such as the one at issue here and was decided upon summary judgment. However, there was in that case no challenge on the class action aspect of the suit. We hold that the right of a party to sue as representative of a class may be raised by a motion for summary judgment.

The defendant's position on the main issue before us is that persons having an interest adverse to the parties purported to be represented cannot maintain a class suit on behalf of the latter. It relies upon our opinion in Evans v. Metropolitan Utilities Dist., 185 Neb. 464, 176 N.W.2d 679. The plaintiff, on the other hand, argues that Evans is distinguishable from the present situation and urges that our opinion in Gant v. City of Lincoln, 193 Neb. 108, 225 N.W.2d 549, is determinative. In Gant we did not determine whether or not the suit was properly brought as a class action. The question there was the power of the trial court to vacate the judgment after term under the provisions of section 25--2001, R.R.S.1943. We there said: 'In determining whether a class action is properly brought, considerable discretion is vested in the trial court. In the absence of appeal, that decision is final and even though it may have been erroneous, it is not void. In the present instance the case did not come within the purview of section 25--2001, R.R.S.1943 (power of the District Court to vacate judgment after term in which it was entered), and unless the judgment was void, the District Court was without authority to set it aside.' Whatever else was said in that case about the characteristics of a class suit was dicta. We made no determination that Gant was a proper class action, we simply said that having so proceeded did not make the judgment void.

Section 25--319...