Jones v. Sharefax Credit Union, Inc.
| Docket Number | C-210260 |
| Decision Date | 26 January 2022 |
| Citation | 2022 Ohio 176 |
| Parties | EILEEN JONES, as substituted Plaintiff-Appellant, for BRADLEY ENSINGER, and LYNN M. MCGOWAN-RUSSELL, Plaintiff, v. SHAREFAX CREDIT UNION, INC., Defendant-Appellee. |
| Court | Ohio Court of Appeals |
Civil Appeal From: Hamilton County Court of Common Pleas, Trial No A-1802940
Frederick & Berler, L.L.C., Ronald I. Frederick, Michael L. Berler and Stephen A. Bailey, for Plaintiff-Appellant,
Bricker & Eckler, L.L.P., and Daniel C. Gibson, for Defendant-Appellee.
{¶1} Plaintiff-appellant Eileen Jones, as substituted for Bradley Ensinger, [1]has appealed from the trial court's judgment denying class-action certification. Jones argues: (1) the trial court erred in failing to perform a rigorous analysis of the Civ.R. 23 class-action-certification requirements; (2) the trial court abused its discretion to the extent it denied class certification on the basis of defendant-appellee Sharefax Credit Union, Inc.'s, ("Sharefax") mootness argument; and (3) assuming arguendo that the trial court did conduct a rigorous analysis of the Civ.R. 23 requirements, its decision denying class certification was an abuse of discretion.
{¶2} Plaintiffs Bradley Ensinger and Lynn M. McGowan-Russell[2] purchased vehicles in 2011 and 2015, respectively, from local automotive dealerships. They financed their purchases through separate retail installment sales contracts, which were assigned to Sharefax. Plaintiffs defaulted on their loans and Sharefax repossessed both vehicles in December 2017. After repossession, Sharefax sent plaintiffs notices of sale and notices of deficiency.
{¶3} On June 13, 2018, plaintiffs filed a class-action suit, contending, inter alia, that Sharefax engaged in commercially unreasonable sales and sent them deficient notices of sale and deficiency in violation of the Retail Installment Sales Act ("RISA") and the Ohio Uniform Commercial Code (OUCC").
{¶4} Plaintiffs alleged that Sharefax's notices of sale violated RISA because the notices did not state the amount, by itemization, required to cure the default. See R.C. 1317.12. They claimed the notices of sale also violated the OUCC because the notices did not advise them they could attend the sale and bring bidders. See R.C. 1309.614. Plaintiffs alleged that the notices of deficiency violated the OUCC because the notices failed to explain the calculation of the deficiency in the specific order required by R.C. 1309.616(C). Finally, plaintiffs alleged that the sale of the vehicles was commercially unreasonable because Sharefax failed to notify them of their right to attend the sale and bring bidders, and then sold the vehicles for substantially less than the minimum bid price stated in the notices of sale. See R.C. 1309.610.
{¶5} Plaintiffs claimed that Sharefax had issued the same defective "form" notices and engaged in commercially unreasonable sales in other repossession cases involving retail installment sales contracts. Therefore, they requested class-action certification of three classes of debtors similarly situated: the RISA class, the notice-of-sale class, and the notice-of-deficiency class.
{¶6} Plaintiffs also requested the following forms of relief: declaratory judgment, actual damages, an injunction prohibiting Sharefax from collecting any deficiency and from continuing its improper practices, statutory damages, restitution/disgorgement of fees, costs and deficiency balances unlawfully collected, an order requiring removal of adverse credit information reported by Sharefax to outside credit reporting agencies, interest, and attorney fees.
{¶7} Several of the claims for relief were settled prior to the class-certification hearing. Through discovery, it became apparent plaintiffs had not paid any repossession fees or deficiency balances. On October 29, 2019, Sharefax submitted an "Automated Universal Data" form to the credit reporting agencies requesting that all negative reporting regarding plaintiffs' credit be removed. On November 1, 2019, Sharefax filed notices waiving its right to collect any deficiencies owed by plaintiffs. Sharefax also sent two checks to plaintiffs on October 29, 2019-one to Ensinger for $5, 500 and one to McGowan-Russell for $9, 500-but plaintiffs returned the checks without cashing them. Sharefax filed for summary judgment on the ground of mootness, arguing they had provided complete relief to plaintiffs. The motion was denied by a judge who retired from the bench shortly thereafter.
{¶8} On November 11, 2019, plaintiffs filed their motion for class certification. The newly-elected judge held a hearing and denied certification without explanation by a written entry filed March 23, 2021.
{¶9} Before we address Jones's assignments of error, we must address the mootness issue raised by Sharefax in its motion for summary judgment, in opposition to class-action certification, and on appeal. It argues the case is moot because it has provided complete relief to plaintiffs.
{¶10} Mootness concerns subject-matter jurisdiction and may be raised by an appellee on appeal without the necessity of a cross-appeal. See WBCMT 2007-C33 Office 7870, LLC v Breakwater Equity Partners, LLC, 2019-Ohio-3935, 133 N.E.3d 607, ¶ 39 (1st Dist.), citing Paulus v. Beck Energy Corp., 2017-Ohio-5716, 94 N.E.3d 73, ¶ 29 (7th Dist.) (); JG City LLC v. State Bd. of Pharmacy, 10th Dist. Franklin No. 21AP-38, 2021-Ohio-4624 ("the filing of a cross-appeal is not a prerequisite to challenging a court's subject-matter jurisdiction, as subject-matter jurisdiction cannot be waived and may be raised at any time").
{¶11} "The subject-matter jurisdiction of common pleas courts is limited to justiciable matters." City of Cincinnati v. Fourth Natl. Realty, LLC, 1st Dist. Hamilton Nos. C-180156 and C-180174, 2019-Ohio-1868, ¶ 25. "A justiciable matter indicates the existence of an actual controversy, a genuine dispute between adverse parties." Id. Where the claims of the named plaintiffs are moot, the certification question becomes moot as well. Castillo v. Nationwide Fin. Servs., 10th Dist. Franklin No. 02AP-1393, 2003-Ohio-4766, ¶ 26.
{¶12} Jones argues that if the trial court considered the mootness question at the class-certification stage, that was improper because the question was already decided by the previous trial judge when he denied Sharefax's motion for summary judgment. However, we note that the trial court did not contradict the previous judge's order denying summary judgment because the court specifically did not hold that the case was moot. The court simply held, without explanation, that the motion for class certification was denied and allowed the case of the individual plaintiffs to proceed. Nevertheless, the trial court was free to revisit the issue of mootness. "[I]t is well settled that the denial of a motion for summary judgment generally is considered an interlocutory order not subject to immediate appeal." Meece v. Am. & Foreign Ins. Co., 1st Dist. Hamilton Nos. C-030088 and C-020818, 2003-Ohio-6504, ¶ 16. A trial court is free to "reconsider an interlocutory order entered in the same case." Murphy v. Murphy, 1st Dist. Hamilton No. C-130229, 2014-Ohio-656, ¶ 20. Therefore, the prior judge's denial of summary judgment on the basis of mootness did not preclude the trial court from considering the mootness question at the class-certification stage.
{¶13} Next, Jones argues that (1) complete relief was not provided because Ensinger rejected the check sent by Sharefax, and (2) the potential recovery of the class representative incentive payment gives Jones a continuing interest in the litigation. We find that Jones's rejection of the check is dispositive of the issue, so we do not address whether the potential recovery of the class representative incentive payment provides Jones with the requisite interest in the litigation.
{¶14} Jones does not claim the amount of the check was inadequate. Rather, she argues the rejection of the check equated to a rejection of Sharefax's offer to settle the case.
{¶15} This issue was addressed by the United States Supreme Court in Campbell-Ewald Co. v. Gomez, 577 U.S. 153, 136 S.Ct. 663, 193 L.Ed.2d 571 (2016). In that case, the plaintiff filed a class-action complaint. Prior to the agreed-upon deadline for the plaintiff to file a motion for class certification, the defendant served plaintiff with an offer of judgment pursuant to Fed.Civ.R. 68. Id. at 157-158. The plaintiff let the offer lapse by failing to respond within the time required by the rule. Id. at 158. The defendant argued that despite the plaintiffs failure to accept the offer, the offer of judgment had satisfied the plaintiffs claims, and therefore, the claims were moot. Id.
{¶16} The Campbell-Ewald majority disagreed and adopted Justice Kagan's dissent in Genesis HealthCare Corp. v. Symczyk, 569 U.S. 66, 72, 133 S.Ct. 1523, 185 L.Ed.2d 636 (2013), which stated that "an unaccepted offer of judgment cannot moot a case." Campbell-Ewald at 162 ("We now adopt Justice Kagan's analysis, as has every Court of Appeals ruling on the issue post Genesis Health Care."). In Genesis, the Court "assumed, without deciding, that an offer of complete relief pursuant to Rule 68, even if unaccepted, moots a plaintiffs claim." Id. at 161. In rejecting the mootness argument, the Campbell-Ewald court relied on "basic principles of contract law" and adopted the following reasoning from Justice Kagan's Genesis dissent:
When a plaintiff rejects such an offer-however good the terms-her interest in the lawsuit remains just what it was before. And so too does the...
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