Rivera-Ceren v. Presidential Limousine & Auto Sales, Inc.
| Decision Date | 02 December 2021 |
| Docket Number | No. CV-21-279,CV-21-279 |
| Citation | 2021 Ark. 219,635 S.W.3d 304 |
| Parties | Jennifer RIVERA-CEREN, on Behalf of Herself and All Others Similarly Situated, Appellant v. PRESIDENTIAL LIMOUSINE AND AUTO SALES, INC., Appellee |
| Court | Arkansas Supreme Court |
Corey D. McGaha PLLC, by: Corey D. McGaha ; and Turner and Turner, P.A., by: Todd M. Turner, Arkadelphia and Dan O. Turner, for appellant.
One brief only.
In this interlocutory appeal, appellant Jennifer Rivera-Ceren, on behalf of herself and all others similarly situated, appeals from the circuit court's denial of her motion for class-action certification in her suit against appellee Presidential Limousine and Auto Sales, Inc. ("Presidential"). For reversal, Rivera-Ceren argues that the circuit court abused its discretion by denying her motion. We reverse and remand.
On August 22, 2018, Rivera-Ceren entered into a retail installment contract with Presidential to finance the sale of a 2003 Jeep Liberty. Presidential repossessed the vehicle and sent Rivera-Ceren a "Mandatory Notice of Private or Public Sale" ("Notice") on June 20, 2019. The Notice informed Rivera-Ceren that the vehicle would be sold at a public sale on or after June 30, 2019, and that she would be liable for any remaining deficiency in the event the vehicle did not sell for an amount sufficient to satisfy the total outstanding indebtedness. The Notice further indicated that Rivera-Ceren could redeem the property by "paying the amount due and unpaid on your obligation, with interest accruing at the rate of 9.5% per day[.]"
On July 23, 2019, Rivera-Ceren filed a class-action complaint against Presidential alleging that the Notice failed to comply with the Uniform Commercial Code ("UCC") and Arkansas law because it did not disclose that she was entitled to an accounting of the unpaid indebtedness and the charge, if any, for an accounting as required by Arkansas Code Annotated sections 4-9-613(1)(D) and 4-9-614(1)(A) (Repl. 2020). She further claimed that the 9.5 percent per-day interest rate, in addition to the underlying obligation that must be paid to redeem the collateral, violated Arkansas Code Annotated section 4-9-623, the Arkansas Deceptive Trade Practices Act ("ADTPA"), and the Arkansas Constitution's prohibition against usurious interest rates. Rivera-Ceren sought injunctive relief and damages on behalf of herself and each member of the class.
In its answer, Presidential admitted that the Notice sent to Rivera-Ceren could have been construed as requiring interest over and above the installment-contract rate but claimed that this was not Presidential's actual intent. Presidential further admitted that the Notice provided did not comply with Arkansas law but alleged that Rivera-Ceren was not harmed by the omission because she had already been provided with this information prior to receiving the Notice. In addition, Presidential asserted that it had not made any attempt to collect a deficiency from Rivera-Ceren.
Following discovery, Rivera-Ceren filed a motion for class certification on September 14, 2020. Her proposed class definition included those Arkansas consumers who, in the five years preceding the filing of the complaint (a) have or had a retail installment contract held by Presidential under which personal property was held as collateral; (b) had their personal property repossessed by Presidential or its agents; and (c) were sent a post-repossession notice that failed to disclose the consumer's right to an accounting of the unpaid indebtedness and the charge, if any, for such an accounting.1 Rivera-Ceren argued that all of the elements required for class certification pursuant to Arkansas Rule of Civil Procedure 23 had been met in this case. She noted that, according to Presidential's responses to interrogatories, approximately 200 vehicles were repossessed during the five-year time period referenced in the class definition, and after each repossession, one of the three form notices provided during discovery would have been sent to the consumer. She argued that the common, as well as the predominant, issue to be decided on behalf of the class was whether the repossession notices sent to those borrowers violated the UCC because the notices did not inform the consumer that he or she was entitled to an accounting of their indebtedness. Rivera-Ceren also claimed that the UCC provides a uniform formula for calculating damages for noncompliance and that there were no individualized issues preventing class certification. She further asserted that her claims were typical of the class members, that she and her counsel would fairly and adequately represent the class, and that a class action was superior to other available methods to resolve the controversy.
In its response opposing the motion for class certification, Presidential admitted that its notice of sale failed to notify Rivera-Ceren of her right to an accounting. However, Presidential claimed that it had previously given her an accounting of her payments toward her indebtedness when she brought the vehicle in for repairs before it was abandoned and then repossessed. According to Presidential, this made Rivera-Ceren's situation unique and caused her to receive a different notice than other debtors. Presidential argued that a majority of the notices sent after repossession were not identical to Rivera-Ceren's and that she had therefore failed to meet the elements of numerosity, commonality, and typicality. Presidential also contended that the proposed class was not sufficiently numerous because (1) the class period should have been three years instead of the five-year period applicable to a breach of contract claim based on the relief requested in the complaint; and (2) the potential class members cited by Rivera-Ceren failed to account for those instances wherein strict foreclosure was used, the debtor redeemed the collateral after notice, the debtor surrendered the collateral due to a bankruptcy filing, or the debtor voluntarily surrendered the collateral without notice to the defendant.
Rivera-Ceren filed a reply disputing Presidential's contention that class certification was not appropriate. She stated that the numerosity requirement was satisfied because approximately 200 vehicles had been repossessed during the proposed class period and at least two of the three versions of the repossession notices sent to those consumers did not include any mention of an accounting. Rivera-Ceren argued that Presidential cited no authority for its assertion that the class period should be limited to three years instead of five, and she noted that the statute of limitations is four years for claims under the UCC and five years for ADTPA claims. With regard to Presidential's argument that her situation was not typical of the proposed class because she received an accounting of her indebtedness prior to the repossession, Rivera-Ceren contended that Presidential was confusing an accounting as required under the UCC with an estimate of the cost to repair her vehicle. She argued that while every repossession or voluntary surrender occurs under different circumstances, the common question presented on behalf of the class was whether Presidential complied with the UCC by not informing them in the notices of their right to an accounting.
Despite Rivera-Ceren's request for a hearing on her motion for class certification, no hearing on the issue was held. In an April 16, 2021 letter order, the circuit court stated that it was denying the motion for the reasons stated in Presidential's response and brief and instructed counsel to prepare an order to that effect. The order denying the motion for class certification was entered on April 27, 2021, and Rivera-Ceren filed a timely notice of appeal from this interlocutory order. She now argues on appeal that the circuit court abused its discretion by not certifying the class. Presidential did not file a brief in response.
Class certification of a lawsuit is governed by Arkansas Rule of Civil Procedure 23. Vaughn v. Mercy Clinic Fort Smith Communities , 2019 Ark. 329, 587 S.W.3d 216. There are six requirements for class-action certification under Rule 23 : (1) numerosity, (2) commonality, (3) typicality, (4) adequacy, (5) predominance, and (6) superiority. Id. In reviewing a circuit court's decision on whether to grant or deny class certification, we give circuit courts broad discretion and reverse only when the appellant can demonstrate an abuse of discretion. Id. When we review a circuit court's class-certification order, we review the evidence contained in the record to determine whether it supports the circuit court's decision. GGNSC Arkadelphia, LLC v. Lamb ex rel. Williams , 2015 Ark. 253, 465 S.W.3d 826. It is not appropriate for either this court or the circuit court to delve into the merits of the underlying claims at this stage, as it is immaterial whether the petition will succeed on the merits or whether it even states a cause of action. Id.
Presidential challenged only three of the Rule 23 requirements in its response to the motion for class certification––numerosity, commonality, and typicality—and the circuit court based its decision on the arguments made by Presidential. Rivera-Ceren therefore focuses on these three requirements on appeal.2 We discuss each in turn.
Rule 23(a)(1) provides that a class action is maintainable only if "the class is so numerous that joinder of all members is impracticable." Ark. R. Civ. P. 23(a)(1) (2020). We have held that the exact size of the proposed class and the identity of the class members need not be established for the court to certify a class and that the numerosity requirement may be supported by common sense. Infinity Healthcare Mgmt. of Ark., LLC v. Boyd , 2019 Ark. 346, 588 S.W.3d 22 ; FirstPlus Home Loan Owner 1997-1 v. Bryant , 372 Ark. 466, 277 S.W.3d 576 (2008). We have declined to adopt a bright-line rule...
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Altice USA, Inc. v. City of Gurdon ex rel. Kelley
...we will reverse only if the appellant can demonstrate the circuit court abused its discretion. Rivera-Ceren v. Presidential Limousine & Auto Sales, Inc. , 2021 Ark. 219, at 6, 635 S.W.3d 304, 308. We only consider the evidence in the record to determine whether it supports the circuit court......