Martin v. Amana Refrigeration, Inc.

• Decision Date: 25 January 1989
• Docket Number: No. 87-851,87-851
• Citation: 435 N.W.2d 364
• Parties: Connie MARTIN, Appellee, v. AMANA REFRIGERATION, INC., Appellant.
• Court: Iowa Supreme Court

Page 364

435 N.W.2d 364

Connie MARTIN, Appellee, v. AMANA REFRIGERATION, INC., Appellant.

No. 87-851.

Supreme Court of Iowa.

Jan. 25, 1989.

Richard G. Hileman, Stephen J. Holtman, and James M. Peters of Simmons, Perrine, Albright & Ellwood, Cedar Rapids, for appellant.

Michael M. Sellers of Dreher, Wilson, Simpson, Jensen, Sellers, Adams & Kaiser, P.C., Des Moines, for appellee.

Considered by HARRIS, P.J., and LARSON, SCHULTZ, LAVORATO and NEUMAN, JJ.

SCHULTZ, Justice.

Plaintiff Connie Martin purchased a combination gas furnace and water heater manufactured by Amana Refrigeration, Inc. (Amana). Plaintiff has filed suit against Amana, alleging breach of implied warranty in the design and construction of the furnace and water heater. ¹ She asserts that the water heater as a whole is defective and that the furnace has inherent flaws, allowing flames to escape. Among her damages is the claim that defendant should provide for the removal of the entire system from her home.

Plaintiff also requested her suit be certified as a class action on behalf of a plaintiff class of "residential home owners in the Des Moines, Polk County, central Iowa metropolitan area" who are "purchaser-owners" of the same model, design and type of furnace or furnace and water heater combination. Martin alleges that the defects of the furnace and water heater include an inadequate heating response to water with a high mineral content, such as that found in the Des Moines area.

Defendant filed a resistance to the class certification application, supported by an affidavit from its vice-president of customer services. This affidavit pointed out that Amana has warranty and extended service programs covering these products. The affiant is not aware of any extended class of customers in the Des Moines area who presently have unresolved complaints that have not or cannot be most appropriately resolved through the company's warranty and extended service programs.

At the certification hearing, plaintiff presented testimony from the general manager of a former distributor of Amana products in the Des Moines area. He attested that the distributor sold 164 Amana furnaces, of which 99 were combination furnace and water heaters similar to plaintiff's. He described the problems caused by both units, noting that about fifty water heaters had mineral build-up problems which impair the speed with which it heats water. He further indicated that when their distributorship terminated, they inspected all of the furnaces sold, finding twenty-seven or twenty-eight of the units had cracked heat-transfer modules. He also stated that Amana had not refused to give satisfaction to his customers' complaints.

After the hearing, the district court certified this suit as a class action. The court defined the plaintiff's class as "all persons who have purchased an Amana Energy Command gas furnace from Clark-Peterson Company (the former distributor)" and created a sub-class of "all persons who have purchased an Amana Energy Command gas furnace with the optional water heater combination."

Defendant filed a notice of appeal from the district court order. Plaintiff asserts that the district court order was not a final judgment, thereby entitling defendant only to request an interlocutory appeal. Defendant claims there is an appeal as a matter of right from a certification order and that the district court abused its discretion by certifying a class action.

I. Appeal as a matter of right. Plaintiff urges that this appeal should be dismissed because there is no final judgment and Amana failed to obtain permission to take an interlocutory appeal. Amana responds that there is an appeal as a matter of right from a certification order.

These contentions bring into play two of our Rules of Civil Procedure. Iowa Rule of Civil Procedure 42.4(c) provides: "An order certifying or refusing to certify an action as a class is appealable." Iowa Rule of Appellate Procedure 1, in pertinent part, provides that "no interlocutory ruling or decision may be appealed except as provided in Rule 2, Rules of Appellate Procedure (applications for interlocutory appeal), until after the final judgment or order."

Amana claims that the plain language of rule 42.4(c) makes the class certification order appealable as a matter of right. However, plaintiff maintains that rule 1 generally prohibits interlocutory appeals except in the situations specified.

Although we have not directly ruled on this issue, we did previously note that "Rule 42.4(c) appears to give an unqualified right to appeal from an order certifying or refusing to certify an action as a class action." Ackerman v. International Business Mach. Corp., 337 N.W.2d 486, 489 (Iowa 1983). Similarly, in Vignaroli v. Blue Cross of Iowa, 360 N.W.2d 741, 743 (Iowa 1985), we stated, "[a]ppeal of certification order, although interlocutory, is authorized by rule 42.4(c)." While this issue was not squarely before us in Ackerman or Vignaroli, we clearly indicated there was an appeal as a matter of right from a class certification ruling. We see no reason to depart from this position.

The special language in rule 42.4(c), directing that a certification ruling "is appealable," shows an intent to allow an exception to Appellate Rules 1 and 2. Were this phrase not to provide an appeal of right separate from the typical appeal process, the words would be meaningless and thereby violative of the well-established rule of statutory construction that the legislature does not engage in meaningless acts. Slockett v. Iowa Valley Community School Dist., 359 N.W.2d 446, 448 (Iowa 1984); Iowa Code § 4.4(2).

Our interpretation also furthers the purposes of the class action procedure. Among the reasons for the act is to provide small claimants an economically viable vehicle for redress in court. Ackerman, 337 N.W.2d at 488. Class actions are also favored as achieving judicial economy while preserving, as much as possible, the rights of litigants. Vignaroli, 360 N.W.2d at 744. It would be financially burdensome for the plaintiff and a waste of judicial resources to allow a class action to proceed without a review of the parties and then, at the end of the litigation, find that the certification ruling was in error.

Additionally, the certification application is a special procedural mechanism to determine whether other parties' causes of action may be asserted in the lawsuit. The certification ruling generally will have little relationship to the merits of the lawsuit. See T. Dickerson, Class Actions: The Law of 50 States § 6.08 (1988). Logically, it would make better sense to allow an immediate appeal of this ruling, which affects the number of parties involved, rather than the merits of the lawsuit.

Finally, plaintiff notes that the North Dakota supreme court's interpretation of the uniform class action act held that its rule, which is similar to our rule 42.4(c), did not require an immediate appeal from a certification ruling. Holloway v. Blue Cross, 294 N.W.2d 902 (N.D.1980). Instead, Holloway found the ruling was subject to its interlocutory appeal procedures. Id. at 905. However, the court did allow an interlocutory appeal because the class certification ruling "in effect, determines the action" and prevents a judgment from which a meaningful appeal might be taken. Id. at 906. Holloway noted the potential waste of time and money involved in notifying members, determining class numbers, calculating damages and the effect on possible settlements as factors favoring immediate review. Id. at 905.

Other jurisdictions have allowed appeals as a matter of right from the class certification ruling. Ford Motor Credit Co. v. Nesheim, 285 Ark. 253, 686 S.W.2d 777 (1985); Amato v. General Motors Corp., 67 Ohio St.2d 253, 423 N.E.2d 452 (1981); Mitchem v. Melton, 167 W.Va. 21, 277 S.E.2d 895 (W.Va.1981). Although Holloway arrives at the same outcome, allowing an immediate appeal, we find the better-reasoned rule to be allowing a prompt appeal as a matter of right.

Having determined that a class certification order is appealable as a matter of right, this appeal is properly before our court, allowing us to address the merits of the case.

II. The order certifying the action. Amana claims that the trial court abused its discretion in certifying this class action. It asserts that plaintiff failed to meet her burden of proof that (1) a certifiable class exists, (2) the supposed class is so numerous as to render joinder impracticable, (3) there exists a question of fact or law common to the members of the supposed class, (4) a class action will foster the fair and efficient adjudication of the controversy, and (5) that she can fairly and adequately protect the interests of the supposed class.

Our review of the trial court's ruling is limited; we will reverse only if the decision constitutes an abuse of discretion. Vignaroli, 360 N.W.2d at 743. In the trial court, the burden is on the plaintiff to establish that a purported plaintiff class meets the prerequisites of Iowa Rule of Civil Procedure 42. Id. at 744. The trial court is vested with considerable discretion in assessing what weight, if any, is to be afforded class certification criteria. Id. This court will not find an abuse of discretion unless it is shown that discretion was exercised on grounds clearly untenable or, to an extent, clearly unreasonable. Rowen v. LeMars Mut. Ins. Co., 357 N.W.2d 579, 583 (Iowa 1984).

A. Existence of a certifiable class. Amana asserts that plaintiff has failed to establish that a class exists as a general matter. It urges that every class member must have suffered an actual injury to have a presently-existing, justiciable claim against the defendant. It urges that plaintiff's own evidence establishes that a majority of the class members have suffered no injuries from mineral build-up in their water heaters or cracks in their furnaces' heat-transfer modules. Thus, it argues...