Prime Meats, Inc. v. Yochim
| Decision Date | 27 January 1993 |
| Citation | 619 A.2d 769,422 Pa.Super. 460 |
| Parties | PRIME MEATS, INC., an Ohio Corporation v. William YOCHIM and Patrice Yochim, Appellants, v. VERNICK FINANCIAL SERVICES, INC. |
| Court | Pennsylvania Superior Court |
Gary H. Nash, Erie, for appellants.
Edwin W. Smith, Erie, for appellees.
Before ROWLEY, President Judge, and JOHNSON and HESTER, JJ.
William and Patricia Yochim appeal from the order of the Court of Common Pleas of Erie County denying them class certification. After scrutinizing the uncontroverted testimony of appellants, it is clear that they were unable to establish the common law elements of fraud. Specifically, they failed to prove misrepresentation of a material fact and justifiable reliance upon that misrepresentation. As a finding of fraudulent conduct is a prerequisite to invoking the Consumer Protection Law under which appellants appeal, and as this is the basis upon which appellants assert their ability to represent the proposed class, we must affirm the order denying certification.
On March 12, 1987, appellants purchased a food contract and a service contract from appellee, Prime Meats, Inc., a retailer of food to consumers. The food contract consisted of a six-month supply of meat which would be custom-cut as per appellants' specifications and delivered to their home, and re-order assistance was given when requested by the customer. In addition, if the order was not to the customer's satisfaction, if the ordered items were not delivered, or if the quality was not as expected, generally, the company would replace the order. Also, if the purchasers should relocate before the completion of the contract, it would be transferred to a similar company in the customer's new location. As an added service to the customer, the delivery person would unload the meat order and pack it in the customer's freezer before leaving. Customers were given the opportunity to renew the food service contract at the end of the six-month period.
The service contract was a separate agreement between appellants and appellee. It, too, offered a quality guarantee and assurance that the delivery driver would pack the customer's order in their freezer upon arrival. Additional services were: a twenty percent discount on the price of the order; replacement meat if the order spoiled due to to freezer malfunction; repair service on freezers owned by customers, as long as the units were ten years old or less; repair service on all freezers sold by appellee; and delivery of "loaner" freezers while repairs were made to a customer's freezer. In addition, the contract provided a guarantee against food order price increases for twenty-four months.
The price of the food contract was $720. Financing was arranged for appellants by appellee through Vernick Financial Corporation. After financing, the total amount owed by appellants was $758.22. The price of the service contract was $999. At a 17.995% interest rate, the total amount financed by appellants for the service contract was $1196.64. It lasted for ten years, after which time the customer could renew for $19.95 a year. Appellants were told that by law, they had three days to cancel the contracts.
At the hearing, appellants testified that they understood their right to cancel either or both contracts but that the method of cancellation was unclear. 1 They testified that no misrepresentations were made to them during the sale of the contacts, and that the contracted services were performed as promised. Finally, appellants testified that they were told that only freezers ten years old or less would be covered, and that the salesman told them that their freezer was at least sixteen years old. Nonetheless, appellants testified that they purchased the $999 service agreement specifically for the freezer service guarantee. Appellants clearly reiterated their knowledge that their freezer was not warranted, Notes of Testimony, 5/24/91, at 9, 18, and 19. Specifically, Mrs. Yochim testified that after the contracts were signed, but prior to the salesman's departure, the salesman reiterated the fact that their freezer was not covered by the service contract because it was approximately sixteen years old. While Mr. Yochim testified on the other hand, that upon reflection, he felt that even if his freezer had been covered, and even if Prime Meats had come to his home to repair it on multiple occasions, regardless of how many times the meat had been cut to his specifications or replaced, and regardless of the discount, he "felt the price was too high for what [they] received." Reproduced Record ("R.R."), at 181.
On May 24, 1990, Prime meats filed a collection suit against appellants, seeking payment on the unpaid balance of $759.62 on the service contract. Appellants responded by filing an answer, new matter, and a counterclaim against Prime Meats. In the counterclaim, appellants' alleged that the contract was "unconscionable" as it was excessive in price for the services provided. They also alleged numerous other violations of interstate and consumer acts. Specifically, they claimed that the contract was printed in small print, it did not contain an easily detachable notice of cancellation, and that appellee had failed to complete a portion of appellants' contract. 2 Appellants sought to establish a proposed class of individuals consisting of all other Pennsylvania customers of appellee who had signed retail installment agreements with it and had financed those retail agreements through Vernick Financial Services, Inc., or any other financial institution through which financing was arranged directly or indirectly by appellee from July 25, 1984, through the date of the filing of their complaint, May 24, 1990. In addition, appellants joined Vernick Financial Services, Inc., the financing agency for the Prime Meat contract, as an additional defendant in the class action counterclaim.
On October 30, 1990, after appellants had filed preliminary objections, the trial court ruled, "Unconscionability may be used as an affirmative defense by the defendant but not for affirmative relief on the counterclaim." R.R. at 63. Consequently, appellants filed an amended claim seeking to raise unconscionability as an affirmative defense under the Pennsylvania Unfair Trade Practices Act. Prime Meats filed an amended complaint seeking to limit the legal theories for the creation of appellants' class to specifically pleaded provisions of the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPA"), 73 Pa.C.S. § 201-1 et seq. In response, appellants alleged that Prime Meats was guilty of unconscionable and unfair pricing practices under UTPA. In addition, they averred that Prime Meats had violated two specific violations of the Federal Trade Commission Trade Regulation Rule concerning cool-off periods for door-to-door sales, 16 C.F.R. 429, and the Pennsylvania Unfair Trade Practices and Consumer Protection Law, 73 Pa.C.S. § 201-7. 3 On February 25, 1991, the trial court ruled that the parties R.R. at 102.
After a period of discovery, appellants moved for class certification. Appellees, who opposed certification, argued that appellants had failed to prove the prerequisites which are necessary to a class action. After briefs were filed, and arguments were heard, the court issued its order denying certification of appellants' proposed class on March 12, 1992. Appellants filed a motion for consolidation of all pending collection actions. On December 20, 1990, the hearing court issued an order which consolidated specific cases and stayed collection activity by appellees during the pending class action certification process. Appellees' request for bond pending the stay was denied by the hearing court on January 14, 1991. Consequently, appellees appealed both the December 20, 1990 order and the January 14, 1991 order. On October 22, 1991, we quashed the appeal. This appeal from the order denying class certification followed.
Appellants' only argument on appeal is a challenge to the order denying them the permission to proceed as a class. Specifically, they charge that appellees are guilty of fraudulent conduct and unfair trade practices because they charged an unconscionable sales price for the service agreement. They argue that the unconscionable sales price constitutes unfairness in violation of Federal Trade Commission ("FTC") standards. Before addressing the merits of appellants' claim, we look to Pa.R.C.P. 1702 4 for the prerequisites of a class action.
One or more members of a class may sue or be sued as representative parties on behalf of all members in a class action 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;
(4) the representative parties will fairly and adequately assert and protect the interests of the class under the criteria set forth in Rule 1709; and
(5) a class action provides a fair and efficient method for adjudication of the controversy under the criteria set forth in Rule 1708. Adopted June 30, 1977, effective Sept. 1, 1977.
Further, to determine whether the representative parties adequately will represent the class under Pa.R.C.P. 1702(5), we must look to the criteria set forth in Pa.R.C.P. 1708 5 which provides:
In determining whether a class action is a fair and efficient method of adjudicating the controversy, the court shall consider among other matters the criteria set forth in subdivisions (a), (b) and (c).
To continue reading
Request your trial
-
Banker v. Family Credit Counseling Copr.
...of an existing fact, scienter, justifiable reliance, and damages. Gilmour, 2005 WL 241181, at *11; Prime Meats, Inc. v. Yochim, 422 Pa.Super. 460, 619 A.2d 769, 773 (1993). 2. Defendants' Defendants argue that plaintiffs have not sufficiently pled the elements of a claim under the UTPCPL. D......
-
Seldon v. Home Loan Services, Inc.
...Piper v. Am. Nat'l Life Ins. Co. of Tex., 228 F.Supp.2d 553, 560 (M.D.Pa. 2002) (citing Prime Meats v. Yochim, 422 Pa.Super. 460, 619 A.2d 769, 773 (Pa.Super.Ct.1993), appeal denied, 538 Pa. 627, 646 A.2d 1180 (1994) for proposition that claim under § 201-2(4)(xxi) requires proof of common ......
-
Weisblatt v. Minnesota Mut. Life Ins. Co.
...806 (1972)) (applying clear and convincing standard to common law fraudulent misrepresentation claims); Prime Meats, Inc. v. Yochim, 422 Pa.Super. 460, 468, 619 A.2d 769, 773, Appeal denied, 538 Pa. 627, 646 A.2d 1180 (1994) (table) (holding that in order to recover under the prohibition on......
-
In re K-Dur Antitrust Litigation
...required that a plaintiff acting under the Catchall Provision prove the elements of common law fraud. See Prime Meats, Inc. v. Yochim, 422 Pa.Super. 460, 619 A.2d 769, 773 (1993) ("to recover under [the Catchall Provision] the elements of common law fraud must be proven"). After the amendme......
-
Grimes: Another Look At Reliance And Loss Under Pa.'s UTPCPL
...ascertainable loss under Section 201-9.2. Granting allocatur in Grimes should be read in historic context. In Prime Meats v. Yochim, 619 A.2d 769 (Pa. Super. 1993), the Superior Court ruled that the UTPCPL's catch-all fraud provision was coextensive with common-law fraud and, therefore, req......