Hi-Lo Auto Supply, L.P. v. Beresky

Decision Date25 February 1999
Docket NumberNo. 09-98-342CV,HI-LO,09-98-342CV
Citation986 S.W.2d 382
PartiesAUTO SUPPLY, L.P., Appellant, v. Charles BERESKY, Appellee.
CourtTexas Court of Appeals

Scott J. Atlas, Anne M. Pike, William R. Thompson, II, Michael C. Holmes, Vinson & Elkins, Houston, for appellant.

Ethan L. Shaw, Moore, Landrey, LLP, Beaumont, for appellee.

Before WALKER, C.J., BURGESS and STOVER, JJ.

OPINION

RONALD L. WALKER, Chief Justice.

On behalf of a putative class, Charles Beresky sued Hi-Lo Auto Supply, L.P., for deceptive trade practices, breach of contract, negligence, fraud, and negligent misrepresentation, alleging Hi-Lo sold "old" and "used" automotive batteries as "new" batteries. Beresky alleges Hi-Lo developed a scheme to promote, offer, and sell as new automotive batteries that were old, used, or out of manufacturer's warranty. The trial court signed a proposed class certification order, and Hi-Lo appealed. TEX. CIV. PRAC. & REM.CODE ANN. § 51.014(a)(3) (Vernon Supp.1999). Hi-Lo presents six issues:

1. Whether the trial court abused its discretion in certifying this multi-state class action because Beresky's claims and defenses are not typical of the claims and defenses of the members of the putative class.

2. Whether the trial court abused its discretion in certifying this multi-state class action because Beresky cannot fairly and adequately protect the interests of the absent members of the putative class.

3. Whether the trial court abused its discretion in certifying this multi-state class action because questions of law and fact affecting only individual members of the putative class clearly predominate over any questions of law and fact common to the members of the putative class.

4. Whether the trial court abused its discretion in certifying this multi-state class action because a class action is not a superior method for the fair and efficient adjudication of any claims of the class action.

5. Whether the trial court abused its discretion in certifying this multi-state class action because Beresky does not have standing to sue individually or on behalf of the putative class.

6. Whether the trial court abused its discretion in certifying this multi-state class action because the putative class is overbroad and is not administratively feasible.

The Texas Supreme Court recognizes the benefits of class action suits:

Class action suits furnish an efficient means for numerous claimants with a common complaint to obtain a remedy "[w]here it is not economically feasible to obtain relief within the traditional framework of a multiplicity of small individual suits for damages." Deposit Guar. Nat'l Bank v. Roper, 445 U.S. 326, 339, 100 S.Ct. 1166, 1174, 63 L.Ed.2d 427 (1980).... Class actions also facilitate "the spreading of litigation costs among numerous litigants with similar claims." United States Parole Comm'n v. Geraghty, 445 U.S. 388, 403, 100 S.Ct. 1202, 1212, 63 L.Ed.2d 479 (1980).

General Motors Corp. v. Bloyed, 916 S.W.2d 949, 952-53 (Tex.1996).

One or more members of a class may sue as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class. TEX.R. CIV. P. 42(a). A class action is maintainable if Rule 42(a) is met, and the trial court finds that 1) the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and 2) a class action is superior to other available methods for the fair and efficient adjudication of the controversy. TEX.R. CIV. P. 42(b)(4). The trial court considers: 1) the interest of members of the class in individually controlling the prosecution of separate actions; 2) the extent and nature of any litigation concerning the controversy already commenced by members of the class; 3) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and 4) the difficulties likely to be encountered in the management of a class action. Id.

We review the trial court's decision to certify a class for abuse of discretion. Sun Coast Resources, Inc. v. Cooper, 967 S.W.2d 525, 529 (Tex.App.--Houston [1st Dist.] 1998, pet. dism'd w.o.j.) (citing General Motors Corp., 916 S.W.2d at 955 (Tex.1996)). "There is an abuse of discretion if the record clearly shows that (1) the trial court misapplied the law to the established facts, (2) the material in the record does not reasonably support the findings, or (3) the trial court acted arbitrarily or unreasonably." Id. (citing Weatherly v. Deloitte & Touche, 905 S.W.2d 642, 647 (Tex.App.--Houston [14th Dist.] 1995, writ dism'd w.o.j.), mandamus denied, 951 S.W.2d 394 (Tex.1997)).

Hi-Lo contends Beresky lacks standing to represent the proposed class because he cannot meet the threshold requirement of individual standing to sue. Standing is a component of subject matter jurisdiction. Cedar Crest Funeral Home v. Lashley, 889 S.W.2d 325, 330 (Tex.App.--Dallas 1993, no writ). Hi-Lo argues Beresky suffered no direct injury resulting from Hi-Lo's conduct. The class consists of purchasers of automotive batteries from Hi-Lo on or after May 1, 1990. Beresky purchased batteries from Hi-Lo on May 1, 1997, and July 28, 1997. Beresky alleges he purchased old, used, or out of warranty automotive batteries that were falsely advertised, installed, or sold at full price by Hi-Lo as new batteries. The petition describes a real controversy between the class and Hi-Lo, and a direct injury to Beresky who falls within the class. We hold Beresky has standing to represent the class. Issue five is overruled.

Hi-Lo contends the proposed class is not administratively feasible and is overbroad because it includes persons suffering no injury and having no standing. Hi-Lo argues the defined class of Hi-Lo battery purchasers is too broad because it includes persons who purchased "new" batteries. Hi-Lo also argues that a class defined as purchasers of "old" or "used" batteries sold as "new" is too difficult to ascertain. Thus, it argues, there is no definable class. For a class to be sufficiently definite, the identity of the class members must be ascertainable by reference to objective criteria. Intratex Gas Co. v. Beeson, 960 S.W.2d 389, 394 (Tex.App.--Houston [1st Dist.] 1998, pet. denied). A class composed of purchasers of batteries from Hi-Lo during a specific period of time is ascertainable by reference to objective criteria. Limiting the class definition to persons who suffered an injury requires an impermissible inquiry into the merits of each claim at a preliminary stage of the trial. Ford Motor Co., Inc. v. Sheldon, 965 S.W.2d 65,73-74 (Tex.App.--Austin 1998, pet. granted). The Austin Court of Appeals reasoned a class could be appropriately defined, without addressing the merits, by defining a class as persons who allege an injury. Id. The order entered by the trial court in this case accomplishes the same goal, as all of the class members were exposed to the same scheme, and the extent of injury to each individual may be ascertained at a later date, after the plaintiffs have completed their discovery. The trial court may then create subclasses or otherwise modify the class certification. Dresser Industries, Inc. v. Snell, 847 S.W.2d 367, 376 (Tex.App.--El Paso 1993, no writ). Issue six is overruled.

Hi-Lo argues the trial court abused its discretion in holding that common questions of law and fact predominate over individual questions. Appellant further argues that the common issues identified by the trial court "pale in comparison to the myriad of individual issues." The commonality requirement does not mean all questions of law and fact must be identical. Dresser, 847 S.W.2d at 372. The threshold is not high, being met when at least one issue's resolution would affect the claims of all or a significant number of class members. Ford Motor Co., 965 S.W.2d at 69. Class certification will not be prevented merely because damages must be determined separately for each class member. Angeles/Quinoco Sec. Corp. v. Collison, 841 S.W.2d 511, 516 (Tex.App.--Houston [14th Dist.] 1992, no writ). Likewise, defensive issues peculiar to different members do not destroy the entire class. Id. Beresky alleges Hi-Lo practices a single scheme in all of its stores. The same conduct relates to all potential class members. Chevron U.S.A. Inc. v. Kennedy, 808 S.W.2d 159, 162 (Tex.App.--El Paso 1991, writ dism'd w.o.j.).

All of the claims within the suit are substantially similar; they need not be identical or perfectly coextensive. Cedar Crest, 889 S.W.2d at 331. The test in evaluating the predominance issue is not whether the common issues outnumber the individual issues, but whether the court and the litigants will concentrate most of their efforts on the common or individual issues. Microsoft Corp. v. Manning, 914 S.W.2d 602, 611 (Tex.App.--Texarkana 1995, writ dism'd w.o.j.). The issue of whether Hi-Lo offered "old" or "used" batteries for sale as "new" throughout its chain of stores is a single unifying issue common to the entire class. Further, Hi-Lo's speculation regarding variance in the laws of Texas, Louisiana, and California, is premature, as the trial court has not yet made a choice-of-law decision and may modify the class should such issues ultimately be found to predominate. Microsoft Corp., 914 S.W.2d at 613. Issue three is overruled.

Hi-Lo also argues that a class action is not a superior method of resolving the class members' claims because a "multitude of individual fact issues" predominate in the case, presenting management problems. The individual issues identified by Hi-Lo, however, may be...

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