Stephen v. Enterprise Rent-A-Car

• Decision Date: 29 October 1991
• Docket Number: RENT-A-CAR,No. A051130,A051130
• Citation: 235 Cal.App.3d 806,1 Cal.Rptr.2d 130
• Court: California Court of Appeals Court of Appeals
• Parties: Charles STEPHEN, Plaintiff and Appellant, v. ENTERPRISEOF SAN FRANCISCO et al., Defendants and Respondents.

Page 130

1 Cal.Rptr.2d 130

235 Cal.App.3d 806

Charles STEPHEN, Plaintiff and Appellant, v. ENTERPRISE RENT-A-CAR OF SAN FRANCISCO et al., Defendants and Respondents.

No. A051130.

Court of Appeal, First District, Division 2, California.

Oct. 29, 1991.

Certified for Partial Publication ^*

Ernest M. Thayer, Oakland, Joseph Wood, San Francisco, for plaintiff and appellant.

Adams, Duque & Hazeltine, George G. Weickhardt, San Francisco, for defendants and respondents.

SMITH, Associate Justice.

Plaintiff Charles Stephen brought this individual and purported class action against defendants Enterprise Rent-A-Car of San Francisco and others (collectively Enterprise) ¹ seeking relief, on various theories, for alleged unconscionably high rates charged by Enterprise for a risk-allocation option called collision damage waiver (CDW) in its rental contracts. Stephen appeals from an order denying, as untimely, his "Renewed Motion for Class Certification," brought under Code of Civil Procedure section 1008, subdivision (b). We will affirm the order.

BACKGROUND

The following fact recital honors a stipulated protective order limiting the disclosure of commercially sensitive matters in the record. We confine our recital to the Stephen filed the action in July 1988 as a purported class action. He brought a motion for class certification in March 1989 to which Enterprise filed voluminous opposition on the merits. The court did not reach the merits. It ordered the matter off calendar for failure to comply with local rules.

essential events necessary to frame the issues.

Stephen filed a second motion for class certification in September 1989, after intervening discovery. Opposition focused, as it had before, on a claimed lack of admissible evidence on class issues of commonality, typicality/adequacy and ascertainability. (See Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d 462, 470, 174 Cal.Rptr. 515, 629 P.2d 23.) At a hearing on October 31, Enterprise challenged in particular a purported expert whose declaration Stephen offered for the first time in reply papers. Enterprise challenged the expert's qualifications and reliance on hearsay. The court continued the hearing to allow Enterprise to depose the expert and, apparently to bolster the commonality showing, allowed Stephen to conduct discovery on costs versus revenues for CDW. The court set a schedule for discovery and submitting further evidence and briefing. A hearing was set for six weeks later, December 13. The schedule was revised and the hearing reset for December 20 on Stephen's motion.

The parties meanwhile submitted evidence and arguments on what costs were properly allocable to CDW. Stephen supported his position with raw cost data and a declaration from counsel; Enterprise submitted a contrary analysis in a declaration by an accounting expert. On the court's own motion, the hearing was continued another three weeks. Stephen did not seek to present further evidence during that time, although he did object on December 29 that the accounting expert's declaration had been untimely and improperly submitted.

The hearing was held on January 11, 1990. Argument centered on the cost allocation problem and, more generally, on the broader class issues. The motion was submitted and later that day denied by minute order. A formal, signed order filed on January 23 stated: "Plaintiff's Motion for Class Certification is denied." Notice of entry of the order was mailed on January 24. Stephen did not appeal the order, and it became final on March 26, 1990. (Cal.Rules of Court, rule 2(a).)

On July 7, Stephen filed a "Renewed Motion for Class Certification" purportedly "pursuant to Code of Civil Procedure section 1008(b), on the basis of new facts concerning cost-price disparity and rates of profit realized by defendants from the sale of [CDW]." The asserted new facts consisted of cost data from one defendant and a cost-allocation expert's analysis and deposition testimony.

Enterprise opposed the motion in part as untimely and not based on new facts. After extensive briefing and a hearing, the court denied the motion as untimely. Stephen appeals after entry of a formal order.

APPEAL

Enterprise contends that a motion to reconsider the order denying the second class certification motion, which order was appealable and had become final, did not lie. Stephen concedes that the prior order denying certification was final but counters that a "renewed" motion was authorized (1) on new evidence (Code Civ.Proc., § 1008, subd. (b)) ² regardless of the time lapse and (2) under class action policy assertedly allowing successive certification motions to be brought up until the time of final judgment. In effect, he urges that his appeal is not from the order denying his second certification motion, but from an order erroneously denying him the opportunity to try again at class certification. He asks us to reverse and direct that his renewed motion be considered on the merits.

I

We hold, first, that no policy in the law allowed Stephen to "renew" a class certification motion which had been denied on the merits by a final, appealable order.

The one-final-judgment rule generally precludes piecemeal litigation through appeals from orders which dispose of less than an entire action. (9 Witkin, Cal.Procedure (3d ed. 1985) Appeal, § 43, pp. 66-67; Vasquez v. Superior Court (1971) 4 Cal.3d 800, 806, 94 Cal.Rptr. 796, 484 P.2d 964 (Vasquez ).) An order denying class certification does not finally dispose of an action since it leaves it intact as to the individual plaintiff. However, the order is appealable if it effectively terminates the entire action as to the class, in legal effect being "tantamount to a dismissal of the action as to all members of the class other than plaintiff. [Citations.]" (Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 699, 63 Cal.Rptr. 724, 433 P.2d 732; Richmond v. Dart Industries, Inc., supra, 29 Cal.3d 462, 470, 174 Cal.Rptr. 515, 629 P.2d 23.) The appeal is allowed, as a matter of state law policy, because the order has "the 'death knell' effect of making further proceedings in the action impractical...." (General Motors Corp. v. Superior Court (1988) 199 Cal.App.3d 247, 251, 244 Cal.Rptr. 776.) Federal law, by contrast, while acknowledging death-knell consequences, denies a right of direct appeal in any circumstances. (Ibid.; Coopers & Lybrand v. Livesay (1978) 437 U.S. 463, 469-470, 98 S.Ct. 2454, 2458-2459, 57 L.Ed.2d 351.)

Because California allows direct appeals of death-knell orders, a plaintiff who fails to appeal from one loses forever the right to attack it. The order becomes final and binding. Two cases from this district illustrate the concept, holding that plaintiffs could not, on appeal from final judgments on the merits of their cases, attack final orders denying class certification. (Guenter v. Lomas & Nettleton Co. (1983) 140 Cal.App.3d 460, 465, 189 Cal.Rptr. 470; Morrissey v. City and County of San Francisco (1977) 75 Cal.App.3d 903, 906-908, 142 Cal.Rptr. 527.) This, of course, is the reverse of federal law, which makes certification orders reviewable only on appeal from the final judgment. ( General Motors Corp. v. Superior Court, supra, 199 Cal.App.3d 247, 251, 244 Cal.Rptr. 776.)

The order denying Stephen's second certification motion was a "death knell" order precluding maintenance of a class action on any cause of action. It was on the merits, was never appealed and became final. Stephen urges that it was not binding, however, because state law favors bringing successive motions on class certification. ³ We disagree in this context.

Federal courts interpreting rule 23 of the Federal Rules of Civil Procedure (28 U.S.C.) (hereafter rule 23) freely allow successive certification motions. This is because rule 23 encourages certification decisions early in the proceedings, when discovery is incomplete and facts bearing on the propriety of maintaining a class action may be unknown, and because it contemplates that initial orders may be conditional and altered or amended before a judgment on the merits. Trial courts thus should stand ready to modify and amend initial rulings as the case and record develop. "Under Rule 23 the district court is charged with the duty of monitoring its class decisions in light of the evidentiary development of the case. The district judge must define, redefine, subclass, and decertify as appropriate in response to the progression of the case from assertion to facts." (Richardson v. Byrd (5th Cir.1983) 709 F.2d 1016, 1019; Elster v. Alexander (5th Cir.1979) 608 F.2d 196, 197; Anderson v. Douglas & Lomason Co. (N.D.Miss.1988) 122 F.R.D. 502, 504; Harriss v. Pan American World Airways, Inc. (N.D.Cal.1977) 74 F.R.D. 24, 36-38.) Cases have applied that rationale to allow a renewed certification motion where a prior one has been denied. (See, e.g., Elster v. Alexander supra, 608 F.2d at p. 197; Anderson v. Douglas & Lomason Co., supra, 122 F.R.D. at pp. 503-504.)

California cases drawing on rule 23 for guidance in the development of state law (§ 382; Civ.Code, § 1750 et seq.) have seen a similar need for flexibility. "In the event of a hiatus [in state law], rule 23 ... prescribes procedural devices which a trial court may find useful. (Cf. Daar v. Yellow Cab Co., supra, 67 Cal.2d 695, 709, 63 Cal.Rptr. 724, 433 P.2d 732.) It is desirable for the trial court to retain some measure of flexibility in the pretrial and trial of a class action, for conceivably even after an initial determination of the propriety of such an action the trial court may discover subsequently that it is not appropriate. For example, it is possible that, after notice to the class members, the court might find that an insufficient number of the class desires to participate in the suit to justify its maintenance as a class action and may determine that joinder or some other procedural device would be a more suitable method of proceeding. S...