Roemisch v. Mutual of Omaha Ins. Co.

• Decision Date: 17 July 1974
• Docket Number: No. 73-953,73-953
• Citation: 39 Ohio St.2d 119,68 O.O.2d 80,314 N.E.2d 386
• Parties: , 68 O.O.2d 80 ROEMISCH, Appellant, v. MUTUAL OF OMAHA INSURANCE CO., Appellee.
• Court: Ohio Supreme Court

Page 119

39 Ohio St.2d 119

314 N.E.2d 386, 68 O.O.2d 80

ROEMISCH, Appellant, v. MUTUAL OF OMAHA INSURANCE CO., Appellee.

No. 73-953.

Supreme Court of Ohio.

July 17, 1974.

Syllabus by the Court

An order of a trial court, pursuant to Civ.R. 23(C)(1), determining that an action may not be maintained as a class action is a final, appealable order, pursuant to R.C. 2505.02.

In 1943, a sickness and accident policy of insurance was issued by Mutual of Omaha Insurance Company, appellee herein, to Lewis H. Roemisch, appellant herein. The policy remained in effect until appellee refused to renew it in 1970. In 1972, Roemisch instituted an action in the Court of Common Pleas 'on his own behalf and on behalf of all other claimants similarly situated,' alleging that 'as a direct and proximate result of the cancellation by defendant, plaintiff and all other policyholders similarly situated must seek other policies of insurance; and that the rates for equivalent coverage are considerably higher and further that some policyholders may now be uninsurable.'

Roemisch prayed 'that defendant be ordered to continue the coverage of said policies,' and demanded judgment against defendant for himself and 'all insureds similarly situated' in the amount of $1,000,000.

Proceeding under Cir.R. 23(C)(1), Roemisch filed a motion for determination whether the action could be maintained as a class action. In response to that motion, the court entered the following order:

'This case came on to be heard on plaintiff's motion for an order of determination pursuant to Rule 23(C)(1), and upon consideration of the pleadings and arguments of counsel for both parties, the court finds that the class action aspect of this case shall not be maintained for the reason that Rule 23(B)(3) cannot be complied with in that the management problems of a class action would require the court to conduct a search for other potential litigants-there being no other similar litigation pending against the defendant-and, if some are located and not excluded, in all probability any claims or defenses relating to liability and/or damages would result in individual issues of fact and damages being separately tried and the court can find no compelling reason as to why it would be superior or advantageous to proceed in this forum with the class aspect of this cause; and it is therefore the order of this court that the class action aspect of this case not be maintained and the same is hereby dismissed.'

Roemisch appealed to the Court of Appeals, contending therein that 'the trial court erred in refusing the maintenance of the class action and dismissing the class action portion of the suit.'

The Court of Appeals concluded that the order appealed from was not a final order. It dismissed the appeal and remanded the cause to the Court of Common Pleas for further proceedings. Subsequently, however, the Court of Appeals, finding its judgment to be in conflict with the judgment of the Court of Appeals for Lucas County in Miles v. N. J. Motors (1972), 32 Ohio App.2d 350, 291 N.E.2d 758, certified the record of the case to this court for review and final determination.

Roemisch & Wright, M. Alfred Roemisch and Donald N. Jaffe, Cleveland, for appellant.

Altick, McDaniel & Radabaugh and Francis S. McDaniel, Dayton, for appellee.

WILLIAM B. BROWN, Justice.

The certified question presented in this case is whether an order of a trial court, pursuant to Civ.R. 23(C)(1), determining that an action may not be maintained as a class action is a final, appealable order. In holding the order of dismissal is not appealable, the Court of Appeals concluded that it did not affect the rights of plaintiff 'or any other known complaining party' of prevent a judgment in his favor and therefore was not a final order under R.C. 2505.02.

The court in Miles v. N. J. Motors, supra 32 Ohio App.2d 350, 291 N.E.2d 758, the decision in conflict with the decision of the Court of Appeals in the instant case, found a similar order dismissing a class action to be a final, appealable order, relying upon the 'death knell' theory ¹ enunciated in Eisen I. ² (Eisen v. Carlisle & Jacquelin (1966), 370 F.2d 119.)

In this state, appealable orders are defined in R.C. 2505.02, which provides, in part, as follows:

'An order affecting a substantial right in an action which in effect determines the action and prevents a judgment, and order affecting a substantial right made in a special proceeding or upon a summary application in an action after judgment * * * is a final order which may be reviewed, affirmed, modified, or reversed, with or without retrial.'

We believe that the characteristics of an order striking the allegation of a class action are wholly consistent with the requirements of R.C. 2505.02.

Such order clearly affects 'a substantial right' of the class which 'in effect determines the action and prevents a judgment' adverse or favorable to the class. Rights and judgments do not attach in the abstract, but rather to persons. Civ.R. 23 contemplates an action between a class and 'the party opposing the class.' In this action, a member of the class, acting as the nominal, representative plaintiff, brought suit on behalf of his class. The class action was dismissed, thus foreclosing a judgment for or against the class, determining the class action to be at an end, and denying the class the right, pursuant to Civ.R. 23, to maintain the action.

In DAAR V. YELLOW CAB CO. (1967), 67 CAL.2D 695, 63 CAL.RPTR. 724, 433 P.2D 732,³ the California Supreme Court concluded that a class action termination order was in legal effect a final judgment from which an appeal lies. The court reasoned, at page 699, 63 Cal.Rptr. at page 728, 433 P.2d at page 736, as follows:

'* * * We must assay the total substance of the order. It determines the legal insufficiency of the complaint as a class suit and preserves for the plaintiff alone his cause of action for damages. In its legal effect' * * * the order is tantamount to a dismissal of the action as to all members of the class other than plaintiff. * * * It has virtually demolished the action as a class action. If the propriety of such disposition could not now be reviewed, it can never be reviewed.' ⁴ (Citations omitted.)

In our opinion, the underlying purpose of R.C. 2505.02 is to limit the absolute number of appeals taken. ⁵ If a trial court determines that a class of plaintiffs in not permitted to function as such in a lawsuit, the number of actions filed will approach the magnitude of the number of class members, and possible appeals from those actions would far exceed any number of 'piecemeal' appeals arising from a unified class action. Judicial economy would be sacrificed at both the trial and appellate level.

The termination of a class action is of critical import in that the rights of a class, sui juris, are either denied or affirmed at that stage. The finality requirement would be insurmountable if the class was not permitted an immediate appeal from an order which carries with it such compelling significance. To hold otherwise would effectively place the existence of class actions in the unreviewable discretion of trial courts.

Accordingly, the judgment of the Court of Appeals is reversed and the cause is remanded to that court for an appeal upon the merits.

Judgment reversed.

C. WILLIAM O'NEILL, C. J., and HERBERT and STERN, JJ., concur.

CORRIGAN, CELEBREZZE and PAUL W. BROWN, JJ., dissent.

C. WILLIAM O'NEILL, Chief Justice (concurring).

The opinion of the Court of Appeals misconstrues the nature of a class action, ignores the plain wording of R.C. 2505.02, rejects without reason the relevant non-Ohio cases, and rendered unappealable a trial court order that a class action lawfuit is not maintainable.

The cornerstone of the Court of Appeals' opinion is the declaration that 'here, the order of the Court of Common Pleas does not affect the rights of Roemisch or any other known complaining party. Nor does the order determine the action and prevent a judgment in favor of Mr. Roemisch.' The position of the Court of Appeals indicates that a class action complaint institutes not one lawsuit, but two, and that a trial court can segregate the named plaintiff's action from the unnamed plaintiffs' action. Such treatment of a class action complaint flouts not only the spirit of Rule 23 of the Ohio Rules of Civil Procedure, but also the express language of the rule. Rule 23(A) specifies that if the requirements of a class action are present, 'one or more members of a class may sue or be sued as representative parties on behalf of all * * *.' A class action complaint does not commence two distinct lawsuits; instead, the pleading initiates a unitary lawsuit. See Amrican Pipe and Construction Co. v. Utah (1974), 414 U.S. 538, 94 S.Ct. 538, 38 L.Ed.2d 713.

Viewing a class action complaint in its proper perspective leads inexorably to a holding that an order of a trial court that a class action is not maintainable is a final and, hence, appealable order. R.C. 2505.02 defines a final order as 'an order affecting a substantial right in an action which in effect determines the action and prevents a judgment * * *.' It is beyond argument that an order that a class action is not so maintainable determines the class action and totally prevents a judgment thereon. Since the class action is terminated by such an order, the labeling of the order as 'interlocutory' is simply incorrect.

The Supreme Courts of Arizona and California have considered the precise question decided by this court today, and both have reached the same conclusion-an order that a class action is not maintainable as such is a final order. Reader v. Magma-Superior Copper Co. (1972), 108 Ariz. 186, 494 P.2d 708; Daar v. Yellow Cab Co. (1967), 67 Cal.2d 695, 63 Cal.Rptr. 724, 433 P.2d 732. Although these cases are not binding on this court, they are persuasive authority containing reasoning...