Cope v. Metro. Life Ins. Co.
Decision Date | 29 July 1998 |
Docket Number | No. 97-567,97-567 |
Citation | 696 N.E.2d 1001,82 Ohio St.3d 426 |
Parties | COPE et al., Appellants, v. METROPOLITAN LIFE INSURANCE COMPANY et al., Appellees. |
Court | Ohio Supreme Court |
"Beginning in or about 1983, MetLife, through its agents, developed, implemented and otherwise approved a widespread scheme to obtain higher commissions and extra charges by selling existing MetLife policyholders policies that were classified and/or charged as new policies when, in fact, they were replacement policies and should have been classified and/or charged as such." 1
The scheme, as summarized by appellants, worked as follows:
Based on these underlying allegations, appellants presented the following twelve claims for relief: (1) breach of contract, (2) contract entered upon a mutual mistake of fact, (3) contract entered on a unilateral material mistake of fact, (4) breach of fiduciary duty, (5) negligent supervision, (6) deceit by concealment, (7) common-law nondisclosure, (8) breach of duty of good faith and fair dealing, (9) violations of New York insurance law, (10) violations of New York general business law, (11) violations of the Delaware Consumer Fraud Act, and (12) prima facie tort.
On May 1, 1995, appellants moved for class certification pursuant to Civ.R. 23(A) and (B)(3). In their motion, appellant sought to have certified a class consisting of:
"Ohio residents who were owners of existing life insurance or annuity policies with [MetLife] from 1983 to the present and were sold subsequent policies that were classified and/or charged as new policies when, in fact, they were replacement policies and should have been classified and/or charged as such."
On July 6, 1995, the trial court entered its order denying class certification. The court found that all of the prerequisites of Civ.R. 23(A) had been met, i.e., identifiable class, class membership, numerosity, commonality, typicality, and adequacy of representation. However, the court found that appellants failed to satisfy Civ.R. 23(B)(3)'s predominance and superiority requirements because "an individual determination as to what the plaintiffs were told by their respective agents will be crucial in determining liability."
The court of appeals affirmed the trial court's order, finding that "individualized proof" or "individualized scrutiny of each transaction" would be necessary to determine each claim. According to the court of appeals:
The cause is now before this court pursuant to the allowance of a discretionary appeal.
Murray & Murray and John T. Murray, Sandusky; McLaughlin, McNally & Carlin and Clair M. Carlin, Youngstown; Specter, Specter, Evans & Manogue, P.C., Howard A. Specter, David J. Manogue and Joseph N. Kravec, Jr., Pittsburgh, PA; Malakoff, Doyle & Finberg, P.C., Michael P. Malakoff and James M. Pietz, Pittsburgh, PA, for appellants.
Porter, Wright, Morris & Arthur, Adele E. O'Conner, Patrick J. Smith and Charles C. Warner, Columbus; Yeagley, Roberts & Kirkland and Robert C. Roberts, Salem, for appellees.
Waite, Schneider, Bayless & Chesley, Co., L.P.A., and Louise M. Roselle, Cincinnati, urging reversal for amicus curiae, Ohio Academy of Trial Lawyers.
Vorys, Sater, Seymour & Pease, F. James Foley and Richard M. Rolwing, Columbus, urging affirmance for amici curiae, Ohio Association of Life Underwriters and Association of Ohio Life Insurance Companies.
Jones, Day, Reavis & Pogue, Stephen Goodman, Carol M. Stapleton and Harry I. Johnson III, Washington, DC, urging affirmance for amicus curiae, American Council of Life Insurance.
The issue presented is whether the trial court abused its discretion in denying class certification on the basis that appellants failed to satisfy Civ.R. 23(B)(3)'s requirement of predominance and superiority. 2 For the reasons that follow, we hold that the trial court abused its discretion in failing to give adequate consideration to whether the asserted claims are susceptible of class-wide proof, thereby obviating the need for separate adjudications.
Recently, the United States Supreme Court declared that "[p]redominance is a test readily met in certain cases alleging consumer or securities fraud or violations of the antitrust laws." Amchem Prods., Inc. v. Windsor (1997), 521 U.S. 591, ----, 117 S.Ct. 2231, 2250, 138 L.Ed.2d 689, 713. As the Supreme Court of California explained in Vasquez v. Superior Court of San Joaquin Cty. (1971), 4 Cal.3d 800, 808, 94 Cal.Rptr. 796, 800-801, 484 P.2d 964, 968-969:
It is now well established that "a claim will meet the predominance requirement when there exists generalized evidence which proves or disproves an element on a simultaneous, class-wide basis, since such proof obviates the need to examine each class member's individual position." Lockwood Motors, Inc. v. Gen. Motors Corp. (D.Minn.1995), 162 F.R.D. 569, 580.
As explained in the 1966 Advisory Committee Notes to Fed.R.Civ.P. 23(b)(3):
Courts generally find that the existence of common misrepresentations obviates the need to elicit individual testimony as to each element of a fraud or misrepresentation claim, especially where written misrepresentations or omissions are involved. They recognize that when a common fraud is perpetrated on a class of persons, those persons should be able to pursue an avenue of proof that does not focus on questions affecting only individual members. If a fraud was accomplished on a common basis, there is no valid reason why those affected should be foreclosed from proving it on that basis. See Shields v. Lefta, Inc. (N.D.Ill.1995), 888 F.Supp. 891, 893; Murray v. Sevier (D.Kan.1994), 156 F.R.D. 235, 248-249; Davis v. Southern Bell Tel. & Tel. Co. (S.D.Fla.1994), 158 F.R.D. 173, 176-179; Mayo v. Sears, Roebuck & Co. (S.D.Ohio 1993), 148 F.R.D. 576, 583; Heastie v. Community Bank of Greater Peoria (N.D.Ill.1989), 125 F.R.D. 669, 678; Skalbania v. Simmons (Ind.App.1982), 443 N.E.2d 352, 360; Vasquez, supra.
Courts also generally find that a wide variety of claims may be established by common proof in cases involving similar form documents or the use of standardized procedures and practices. Most recently, in Hamilton v. Ohio Sav. Bank (1998), 82 Ohio St.3d 67, 77, 694 N.E.2d 442, 452, plaintiffs brought an action on behalf of themselves and others similarly situated to challenge certain methods used to amortize their residential mortgage loans. We reversed the trial court's denial of class certification, and allowed the action to proceed on plaintiffs' asserted common-law claims for breach of contract,...
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