Midland Funding, L.L.C. v. Colvin , 2022 Ohio 572 ( 2022 )

[Cite as Midland Funding, L.L.C. v. Colvin, 2022-Ohio-572.]
IN THE COURT OF APPEALS OF OHIO
THIRD APPELLATE DISTRICT
HANCOCK COUNTY
MIDLAND FUNDING, LLC,
PLAINTIFF-APPELLANT, CASE NO. 5-21-04
v.
CASSANDRA COLVIN, ET AL., OPINION
DEFENDANTS-APPELLEES.
Appeal from Hancock County Common Pleas Court
Trial Court No. 2013 CV 00459
Judgment Affirmed
Date of Decision: February 28, 2022
APPEARANCES:
H. Toby Schisler for Appellant
Ronald L. Frederick for Appellee
Case No. 5-21-04
SHAW, J.
{¶1} Plaintiffs/counterclaim-defendants-appellants, Midland Funding LLC
(“Midland”), Midland Credit Management (“Midland Credit”) and Encore Capital
Group, Inc. (“Encore”), collectively (the “Midland parties”), appeal the January 19,
2021 judgment of the Hancock County Common Pleas Court granting the motion
for class certification filed by defendant/counterclaim-plaintiff-appellee, Cassandra
Colvin (“Colvin”).
Background
{¶2} Midland is a “debt collector” as defined in 15 U.S.C. § 1692a(6) of the
Federal Debt Collection Practices Act (“FDCPA”). Generally, Midland purchases
consumer debt from other entities and attempts to collect it. Midland operates
throughout the United States and it has filed thousands of collection actions in Ohio
alone.1
{¶3} On April 22, 2013, Midland filed a complaint against Colvin in the
Hardin County Municipal Court alleging that Colvin had defaulted on a Chase Bank
credit-card account, that Midland had purchased Colvin’s delinquent account from
Chase Bank, and that, despite Midland’s informal efforts to collect the amount
owed, Colvin failed to pay the balance due.
1
Colvin alleged that in the year prior to Midland filing suit against her, Midland filed approximately 11,000
lawsuits in Ohio. For the sake of argument, the Midland parties used the 11,000 figure as an average number
of yearly filings in their motion against class certification.
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{¶4} Attached to the complaint was Colvin’s former Chase account summary
showing Colvin’s address as “7850 US Route 30 #30” in “Forest, OH 45843-8845.”
(Doc. No. 8). The Village of Forest, Ohio, is located in Hardin County.2 In the
complaint that Midland filed in the Hardin County Municipal Court, Midland
requested judgment against Colvin in the amount of $950.60 along with other
related relief.3
{¶5} On June 5, 2013, Colvin filed a motion to dismiss Midland’s complaint
alleging that she “lives in Hancock County, Ohio, and has never lived in Hardin
County, Ohio.” (Emphasis added.) (Id.) Colvin contended that while the Village of
Forest was located in “the Northwest corner of Hardin County,” her actual residence
was outside of Forest, in Hancock County. (Doc. No. 115). Further, Colvin noted
that Midland “made no allegation that there was any contract signed in Hardin
County, or any other connection to Hardin County.” (Id.) Colvin thus argued that
the Hardin County Municipal Court did not have subject-matter jurisdiction over
Midland’s action because Midland’s action did not have a territorial connection to
the court. On June 14, 2013, Midland filed a memorandum in opposition to Colvin’s
motion to dismiss citing the fact that Colvin’s listed address on her Chase account
2
The “General Definitions” in Forest, Ohio’s Codified Ordinances define “County” as “Hardin County,
Ohio.” 101.02(e). Accessible online at: https://codelibrary.amlegal.com/codes/forest/latest/forest_oh/0-0-
0-512.
3
Midland alleged that Colvin owed $929.18 along with $21.42 in interest, totaling $950.60.
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was in Forest, Ohio, and the action had been filed in Hardin County, where Forest
was located.
{¶6} On June 27, 2013, the Hardin County Municipal Court issued its ruling
on Colvin’s motion to dismiss determining that Colvin “at all times relevant lived
in Hancock County, Ohio” and that “there does not appear to be any nexus to the
territory over which [the Hardin County Municipal Court] has jurisdiction.” (Doc.
No. 8). However, the Hardin County Municipal Court did not dismiss Midland’s
action outright; rather, the court transferred Midland’s action to the Findlay
Municipal Court at Midland’s cost.
{¶7} On September 3, 2013, after the case had been transferred to the Findlay
Municipal Court, Colvin filed a combined answer to Midland’s complaint,
counterclaim against Midland, and third-party complaint adding third-party
defendants-appellees, Midland Credit and Encore, as third-party defendants.4 In her
counterclaim and third-party complaint, Colvin alleged that the Midland parties
violated FDCPA provision 15 U.S.C. § 1692i(a) when Midland filed suit against her
in the Hardin County Municipal Court because she did not reside within the
territorial jurisdiction of the Hardin County Municipal Court at the time Midland
4
Although Midland was the only plaintiff named in the complaint filed against Colvin in the Hardin County
Municipal Court, Colvin alleges that Midland, Midland Credit, and Encore “operate as a de facto single
business interest, and jointly plan all significant operations and business activities, including but not limited
to, debt collection and litigation of collection lawsuits in Ohio * * *.” (Doc. No. 8). The Midland parties
adamantly dispute this allegation.
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Case No. 5-21-04
filed its complaint and she did not sign the contract underlying her alleged debt to
Chase Bank within the territorial jurisdiction of the Hardin County Municipal
Court.5
{¶8} Colvin further maintained that the Midland parties “regularly file[]
collection actions against Ohio residents in counties where the defendant does not
live and did not sign a contract, including * * * instances where [the Midland parties]
used the city or village of defendants’ postal address without determining the
physical location of the address,” in violation of the FDCPA. (Doc. No. 8).
Accordingly, Colvin asserted claims on behalf of a class of plaintiffs who were
injured by the Midland parties’ alleged violations of the FDCPA. Colvin referred
to this class of plaintiffs as the “FDCPA Class.” (Id.) Colvin requested a declaration
that the Midland parties violated the FDCPA when they brought suit against class
members in improper venues, actual and statutory damages as provided for by 15
5
15 U.S.C. 1692i reads:
(a) Venue
Any debt collector who brings any legal action on a debt against any consumer shall—
(1) in the case of an action to enforce an interest in real property securing the
consumer's obligation, bring such action only in a judicial district or similar legal
entity in which such real property is located; or
(2) in the case of an action not described in paragraph (1), bring such action only in
the judicial district or similar legal entity—
(A) in which such consumer signed the contract sued upon; or
(B) in which such consumer resides at the commencement of the action.
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Case No. 5-21-04
U.S.C. § 1692k(a)(1)-(2)6, and costs of the action and reasonable attorney’s fees as
provided for by 15 U.S.C. § 1692k(a)(3).
{¶9} Due to the fact that the amount of recovery Colvin was seeking
exceeded the jurisdictional limit of the Findlay Municipal Court the case was
subsequently transferred to the Hancock County Common Pleas Court.
{¶10} On November 7, 2013, the Midland parties filed their joint answer to
Colvin’s counterclaim and third-party complaint. The answer was amended
December 5, 2013.7
{¶11} In March 2015, Colvin moved to consolidate her case with case
number 2015-CV-94, Caitlin Gilbert v. Midland Funding LLC (“Gilbert”). See
Gilbert v. Midland Funding, L.L.C., 3d Dist. Hancock No. 5-19-11, 2019-Ohio-
5295, ¶ 5. On May 21, 2015, the trial court ordered that Colvin’s case be
consolidated with Gilbert for purposes of discovery.
{¶12} On February 22, 2016, with leave of the trial court, Colvin filed an
amended counterclaim/third-party complaint. On March 4, 2016, the Midland
parties filed their answer to Colvin’s amended counterclaim/third-party complaint.
6
Pursuant to 15 U.S.C. 1692k(a)(2)(B), in the case of a class action, recovery is “not to exceed the lesser of
$500,000 or 1 per centum of the net worth of the debt collector[.]”
7
In its amended answer, Midland noted that Colvin’s zip code “falls within three different counties.” (Doc.
No. 23). Because of the unusual zip code, Midland asserted, inter alia, the affirmative defense of “Bona Fide
error” to Colvin’s claims, arguing that the mistake was not intentional, which would prevent liability under
15 U.S.C. § 1692k(c), which reads “A debt collector may not be held liable in any action brought under this
subchapter if the debt collector shows by a preponderance of evidence that the violation was not intentional
and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to
avoid any such error.”
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{¶13} On June 1, 2017, Colvin filed a motion for class certification pursuant
to Civ.R. 23. Colvin sought to certify a class defined as:
a. All persons who have been sued in Ohio Courts by [the
Midland parties] from April 22, 2012 until the time this class
is certified;
b. where the address on the face of the complaint and/or the
address at which the Defendant was served are not within the
geographical limits of the court where the suit was filed; or
c. where [the Midland parties] filed suit in a court where the
contract was not signed; and
d. the debt alleged by [the Midland parties] was incurred for
personal, family or household use.
(Doc. No. 106). On June 22, 2017, the Midland parties filed their memorandum in
opposition to Colvin’s motion for class certification.
{¶14} On June 12, 2018, the trial court filed an entry analyzing Colvin’s
motion for class certification. The trial court set forth the appropriate legal
authority, including the 7 requirements for class certification under Civ.R. 23, which
all had to be satisfied in order for a class action to proceed. Cullen v. State Farm
Mut. Auto. Ins. Co., 137 Ohio St.3d 373, 2013-Ohio-4733, ¶ 16; Hamilton v. Ohio
Sav. Bank, 82 Ohio St.3d 67, 71 (1998). These 7 requirements include the
following:
(1) an identifiable class must exist and the definition of the class
must be unambiguous; (2) the named representatives must be
members of the class; (3) the class must be so numerous that
joinder of all members is impracticable; (4) there must be
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questions of law or fact common to the class; (5) the claims or
defenses of the representative parties must be typical of the claims
or defenses of the class; (6) the representative parties must fairly
and adequately protect the interests of the class; and (7) one of the
three Civ.R. 23(B) requirements must be met.
Hamilton at 71, citing Civ. R. 23(A) and (B); Warner v. Waste Mgt., Inc., 36 Ohio
St.3d 91 (1988).8
{¶15} In conducting its analysis on the class certification issue, the trial court
first concluded that the proposed class definition was identifiable and unambiguous
(satisfying requirement 1), that Colvin was a member of the proposed class
(satisfying requirement 2), and that the proposed class was sufficiently numerous
with over 150 purported examples of people who could be class members (satisfying
requirement 3). Thus the trial court found that the first 3 of the 7 class requirements
were met.
{¶16} However, in proceeding to address the “commonality,” “typicality,”
and “adequacy-of-representation” requirements (numbers 4-6 above, respectively),
the trial court determined that there were significantly different questions of law and
fact between Colvin and the proposed class members. The trial court reasoned that
Colvin’s suit was transferred to the correct jurisdiction unlike other potential class
members, that Colvin had not had a judgment rendered against her unlike other class
members, and that Colvin was only seeking statutory damages, whereas some
8
Importantly, as argued in this case under Civ.R. 23(B)(3), the 7th requirement broken into two parts:
“predominance” and “superiority.”
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potential class members might be entitled to actual damages as well. Based on these
issues, the trial court found that the proposed class did not meet all the requirements
for certification, failing requirements 4, 5, and 6. The trial court thus denied
Colvin’s motion for class certification, never reaching the 7th requirement for
certification due to its finding that requirements 4 through 6 were not met.
{¶17} Colvin appealed the trial court’s denial of class certification to this
Court in Midland Funding LLC v. Colvin, 3d Dist. Hancock No. 5-18-15, 2019-
Ohio-5382 (“Colvin I”) arguing that the trial court abused its discretion by
determining that the “commonality,” “typicality,” and “adequacy-of-
representation” requirements were not met in this matter. We analyzed each
requirement in turn, first determining that Colvin met the “commonality”
requirement because, “provided that the Midland parties did in fact file suit against
Colvin and the rest of the proposed class in improper venues, Colvin and the rest of
the proposed class suffered the exact same, complete injury as soon as suit was filed
against them.” Colvin I at ¶ 23.
{¶18} Further, we rejected the trial court’s argument that Colvin’s claims
were not common or typical of the class because her damages were only statutory
while other potential class members might have actual damages, finding that the
trial court should not dispose of a class certification solely on that basis. Further,
we noted that an examination of differing damages was “more appropriately
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addressed in the analysis of Civ.R. 23(B)(3)’s predominance and superiority
requirements,” which is the 7th requirement for class certification—the requirement
that the trial court never reached. Id. at ¶ 24. Unlike the “commonality”
requirement, the “predominance inquiry is far more demanding” and the damages
issue raised by the trial court could have been particularly relevant there. Williams
v. Countrywide Home Loans, Inc., 6th Dist. Lucas No. L-01-1473, 2002-Ohio-5499,
¶ 35, citing Jackson v. Motel 6 Multipurpose, Inc. (C.A.11, 1997), 130 F.3d 999,
1005. However, we found that using damages as the primary disqualifier in what
was effectively a lower bar to the commonality requirement was improper.
{¶19} Whereas the trial court focused on the differences between potential
class members with respect to the commonality requirement (requirement 4), we
focused on the shared attributes between Colvin and the proposed class, finding that
commonality was met in this matter. The shared attributes included the allegations
that Midland engaged in a pattern of filing suit against individuals in jurisdictions
where the individuals did not reside at the time the suit was filed and where the
individuals did not sign the contracts underlying the alleged debts. “[T]he common
issue of law is whether the Midland parties’ pattern of filing suit in such
jurisdictions, if proven, resulted in violations of the FDCPA.” Id. at ¶ 27. Thus we
determined that Colvin had satisfied the commonality requirement.
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{¶20} With the requirement of “commonality” satisfied (requirement 4), we
next addressed the issue of “typicality” (requirement 5), finding that the trial court
erred by determining that Colvin’s injury was atypical of the other members of the
class. We reasoned that Colvin and the other class members had the same injury
because “[b]eing sued in the improper venue is the injury.” Id. at ¶ 30. We
determined that even if some members of the class would be seeking actual damages
in addition to statutory damages, typicality was not defeated in this matter. After
conducting a lengthy review of the “typicality” requirements and the parties’
arguments regarding them, we summarized that:
although Colvin is claiming only statutory damages, her claims
are not atypical of the claims of class members who may be
entitled to both statutory damages and actual damages.
Furthermore, the fact that Colvin is not subject to the defense of
res judicata does not make her atypical of the class because res
judicata is likely inapplicable to many members of the proposed
class as well. Similarly, the bona fide error defense that the
Midland parties may assert against Colvin is not atypical of the
bona fide error defenses that the Midland parties may assert
against class members who were sued by the Midland parties’
internal legal department. Ultimately, Colvin’s FDCPA fair-
venue claim arises from the same alleged conduct that gives rise
to the fair-venue claims of absent class members, and Colvin's
claim is based on the same legal theory. See Tedrow [v. Cowels,
S.D. Ohio No. 2:06-cv-637], 2007 WL 2688276, *7; Holloway [v.
Pekay, N.D. Ill. No. 94 C 3418], 1995 WL 736925, *2. Moreover,
at least concerning class members who were sued by the Midland
parties’ internal legal department, we have been unable to
identify any express conflict between Colvin and the class. For
these class members at least, Colvin will advance their interests
and claims. Tedrow at *7 (“The proofs that are required for [the
class representatives’] claims to prevail are those necessary for
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the putative class to prevail. That is, all interests are advanced by
proving that Defendant has a policy and/or practice of bringing
civil actions against debtors in violation of federal * * * law.”).
Accordingly, we conclude that the trial court erred by holding
that Colvin completely fails to satisfy Civ.R. 23(A)(3)’s typicality
requirement.
Id. at ¶ 45.
{¶21} With our determination that the 4th and 5th requirements for class
certification had been satisfied in the trial court (commonality and typicality,
respectively), we considered the trial court’s determination with respect to the
“adequacy-of-representation” requirement in Civ.R. 23(A)(4) (requirement 6). In
our analysis, we determined that the trial court improperly focused solely on
whether the record established that Colvin was an adequate representative for her
class rather than whether Colvin’s counsel was adequate. We determined that
Colvin’s counsel was adequate and that Colvin was an adequate representative.
Further, we found that many of the same reasons the trial court used to disqualify
the commonality and typicality requirements, such as differing damages between
Colvin and other class members, were not sufficient to disqualify Colvin under the
adequacy-of-representation requirement.
{¶22} Thus, after determining that the trial court erred by denying class
certification on the basis of the 4th, 5th, and 6th requirements for class certification,
we reversed the trial court’s judgment, finding that the trial court would need to
proceed to address the 7th class certification requirement in the first instance:
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namely whether the proposed class met any of the requirements of Civ.R. 23(B).
However, we specifically stated that we offered no opinion as to whether the trial
court should ultimately certify Colvin’s proposed class.
{¶23} The Midland parties appealed our decision to the Supreme Court of
Ohio and the Court declined to accept jurisdiction. Midland Funding, L.L.C. v.
Colvin, 158 Ohio St.3d 1489, 2020-Ohio-1634 (Kennedy and DeWine, J.J.,
dissenting). After the Supreme Court of Ohio declined jurisdiction, with the case
officially remanded, the trial court held a “Zoom” hearing to discuss the impact of
this Court’s reversal. The trial court indicated that the remaining issue to be decided
with respect to class certification was whether Colvin had satisfied the 7th
certification requirement, which required Colvin to establish the presence of one of
the factors of Civ.R. 23(B). Colvin argued that the class should be certified
specifically under Civ.R. 23(B)(3), which required her to establish that “questions
of law or fact common to class members predominate over any questions affecting
only individual members, and that a class action is superior to other available
methods for fairly and efficiently adjudicating the controversy.” (Emphasis added.)
Civ.R. 23(B)(3).9
{¶24} The trial court allowed the parties to submit written memoranda
regarding class certification in order to make its determination on remand. Initially,
9
In short, we will refer to the Civ.R. 23(B)(3) requirements as “predominance” and “superiority.”
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the Midland parties submitted a memorandum arguing that another case released by
this Court the week before Colvin was decided—by the same panel of judges—
Gilbert v. Midland Funding LLC, 3d Dist. Hancock No. 5-19-11, 2019-Ohio-5295,
should prevent the certification of Colvin’s class, regardless of Civ.R. 23(B)(3)
factors. In essence, the Midland parties argued that our decision in Gilbert, which
interpreted the Supreme Court of Ohio’s decision in Lingo v. State, 138 Ohio St.3d
427, 2014-Ohio-1052, established that it would be improper for the Hancock County
Common Pleas Court to determine the validity of other court’s final judgments, thus
the class in that case could not be certified.
{¶25} Colvin disagreed with Midland’s reading of Gilbert, arguing that to
some extent we had already rejected the Midland parties’ arguments in Colvin I,10
and further that an FDCPA claim concerned the method of collecting debt, not
whether the underlying debt in other courts was valid. Thus Colvin argued that both
Gilbert and Lingo were inapplicable.
{¶26} With Gilbert and Lingo addressed in separate memoranda, the parties
then submitted memoranda specifically as to the issue of the remaining class
certification requirements in Civ.R. 23(B)(3). Importantly, Colvin’s memorandum
stated that in light of our decision in Colvin I, the proposed class had “reconsidered
the relief sought and available in the FDCPA matter,” stating that the proposed class
10
Gilbert was not mentioned in Colvin I other than to indicate the cases were consolidated for discovery
purposes. Lingo was not mentioned at all.
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now sought to amend the prayer for relief to seek only statutory damages on behalf
of the entire class, rather than statutory and actual damages. (Doc. No. 133). Colvin
argued that with this amendment to the damages being sought, any arguments that
the Midland parties made that differing damages among class members should
prevent a finding of predominance or superiority were, effectively, moot.
{¶27} In response, the Midland parties argued that even if Colvin met all 6
of the other requirements for class certification, which Midland still disputed despite
our holding on appeal, Colvin could not meet the predominance and superiority
requirements in Civ.R. 23(B)(3) because of the various differences between Colvin
and the class members. The Midland parties contended that the differences required
a significant amount of individual analysis in each case, especially with respect to
different defenses like “bona-fide error” and “statute of limitations.” Moreover, the
Midland parties emphasized that even if Colvin had passed the lower bar of the class
certification requirement of commonality, “A predominance inquiry is far more
demanding than the Civ.R. 23(A) commonality requirement and focuses on the legal
or factual questions that qualify each class member’s case as a genuine
controversy.” Williams v. Countrywide Home Loans, Inc., 6th Dist. Lucas No. L-
01-1473, 2002-Ohio-5499, ¶ 35, citing Jackson v. Motel 6 Multipurpose,
Inc. (C.A.11, 1997), 130 F.3d 999, 1005.
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{¶28} On January 19, 2021, the trial court filed its “Decision on Remand”
readdressing Colvin’s motion for class certification in light of this Court’s
determination in Colvin I. The trial court indicated that the remaining issue before
it was to determine whether Colvin satisfied the 7th requirement for certification,
specifically Civ.R. 23(B)(3). In order to do so, Colvin had to establish the
“predominance” and “superiority” requirements. With regard to predominance, the
trial court held as follows:
In making this [predominance] determination, the Court cannot
ignore the findings of the Appellate Court on the question of
commonality addressed in its Civ.R. 23(A) analysis. * * *
This Court’s focus on the damages question as the difference
maker was rejected. With that distinction eliminated from the
equation, the Court cannot find a basis under Civ.R. 23(B) to deny
certification. Upon review of the basic underlying legal and
factual issues they remain essentially the same for all members,
i.e. were they sued in the wrong jurisdiction? See generally
Schmidt v. Avco Corp., 15 Ohio St.3d 310, 473 N.E.2d 822.
The Court further notes that, unlike in [Gilbert], a similar
case to this, the class action will not fail on the grounds that it
violates the precedent set by Lingo v. State of Ohio, 138 Ohio St.3d
427, 2014-Ohio-1052. Here, Colvin makes clear that the only
damages she now seeks are for statutory damages that arise under
the FDCPA as a result of the alleged violations by Midland of the
fair-venue provision. See 15 U.S.C. § 1692i.
Colvin does not seek equitable relief in the form of
disgorgement of proceeds collected as a result of these actions. As
a result, and unlike in Gilbert, this Court would not be tasked
with determining the validity of other Court’s judgments, rather,
the only determination would be whether the fair-venue provision
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of the FDCPA was violated, and if so, award appropriate damages
under the federal statute.
(Doc. No. 135). Thus the trial court determined that “predominance” was satisfied
here.
{¶29} After finding that the “predominance” requirement was satisfied, the
trial court proceeded to the “superiority” requirement, determining that
[t]here is a significant benefit to all the proposed class members
to have this matter litigated collectively. The evidence suggests
there are many individual claims across the four corners of this
state. This presents a great difficulty to adequately address these
issues and makes likely the prospect of uneven or even conflicting
legal responses. Moreover, as many of the potential class
members never had their day in court and in some cases not been
served personally with the complaint and summons, they may not
even be aware of the potential injury. A broad based attempt to
notify class members would provide an opportunity for the
potentially aggrieved to participate. For these reasons, a class
action would be the superior method of addressing these claims.
(Id.)
{¶30} Finally, after rejecting other arguments made by the Midland parties,
the trial court found that Colvin’s motion for class certification was well-taken. The
Midland parties appealed from the trial court’s determination, asserting the
following assignment of error for our review.11
11
In its decision, the trial court ordered “Counsel for Plaintiff” to prepare an appropriate final entry. Before
a final entry could be filed, the Midland parties filed a notice of appeal. This Court administratively noted
the issue of the lack of a final appealable order since a judgment entry had not been filed, and a judgment
entry was subsequently filed reflecting the trial court’s decision. Notably, the judgment entry granted the
motion for class certification and incorporated the decision as if by reference as if it were fully restated.
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Assignment of Error
The trial court erred by granting Colvin’s Motion for Class
Certification.
{¶31} In their assignment of error, the Midland parties argue that the trial
court abused its discretion by certifying the class in this matter. Specifically, the
Midland parties argue that the predominance and superiority requirements of Civ.R.
23(B)(3) were not established.
Standard of Review
{¶32} At the trial court level, the party seeking to maintain a class action has
the burden to demonstrate that the factual and legal prerequisites to class
certification have been met. Blue Ash Auto, Inc. v. Progressive Cas. Ins. Co., 8th
Dist. Cuyahoga No. 104251, 2016-Ohio-7965, ¶ 11. However, once a trial court
has made its determination with regard to class certification, that “‘determination
will not be disturbed absent a showing of an abuse of discretion.’” Stammco, L.L.C.
v. United Tel. Co. of Ohio, 136 Ohio St.3d 231, 2013-Ohio-3019, ¶
25 quoting Marks v. C.P. Chem. Co., Inc., 31 Ohio St.3d 200, 201 (1987); Colvin I
at ¶ 15. “[T]he appropriateness of applying the abuse-of-discretion standard in
reviewing class action determinations is grounded not in credibility assessment, but
in the trial court’s special expertise and familiarity with case-management problems
and its inherent power to manage its own docket.” Hamilton v. Ohio Sav. Bank, 82
Ohio St.3d 67, 70 (1988). “‘Abuse of discretion has been defined as more than an
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error of law or judgment; it implies an attitude on the part of the trial court that is
unreasonable, arbitrary, or unconscionable.’” Stammco at ¶ 25, quoting Marks at
201. “‘A finding of abuse of discretion, particularly if the trial court has refused to
certify, should be made cautiously.’” Id., quoting Marks at 201.
{¶33} Notably, the trial court’s discretion, while expansive, “‘is not
unlimited, and indeed is bounded by and must be exercised within the framework
of Civ.R. 23. The trial court is required to carefully apply the class action
requirements and conduct a rigorous analysis into whether the prerequisites of
Civ.R. 23 have been satisfied.’” State ex rel. Davis v. Pub. Emps. Retirement Bd.,
111 Ohio St.3d 118, 2006-Ohio-5339, ¶ 20, quoting Hamilton at 70.
Analysis
{¶34} This appeal requires us to determine whether the trial court abused its
discretion by finding that Colvin established the final requirement of class
certification pursuant to Civ.R. 23(B)(3). CivR. 23(B)(3) reads as follows:
(B) * * * A class action may be maintained if Civ.R. 23(A) is
satisfied, and if:
***
(3) the court finds that the questions of law or fact common to
class members predominate over any questions affecting only
individual members, and that a class action is superior to other
available methods for fairly and efficiently adjudicating the
controversy. The matters pertinent to these findings include:
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(a) the class members’ interests in individually controlling the
prosecution or defense of separate actions;
(b) the extent and nature of any litigation concerning the
controversy already begun by or against class members;
(c) the desirability or undesirability of concentrating the
litigation of the claims in the particular forum; and
(d) the likely difficulties in managing a class action.
{¶35} With regard to analyzing Civ.R. 23(B)(3), the Supreme Court of Ohio
has stated,
While Civ.R. 23(B)(3) sets forth the general rule, clear guidance
as to its meaning and application has been elusive. Schmidt, 15
Ohio St.3d at 313, 15 OBR 439, 473 N.E.2d 822. However, we have
held that “it is not sufficient that common questions merely exist;
rather, the common questions must represent a significant aspect
of the case and they must be able to be resolved for all members
of the class in a single adjudication. And, in determining whether
a class action is a superior method of adjudication, the court must
make a comparative evaluation of the other procedures available
to determine whether a class action is sufficiently effective to
justify the expenditure of judicial time and energy involved
therein.” Id.In re Consol. Mtge. Satisfaction Cases, 97 Ohio St.3d 465, 2002-Ohio-6720, ¶ 8.
{¶36} Some case authority has developed further guidance. For example,
numerous Ohio Appellate Courts have stated that “A predominance inquiry is far
more demanding than the Civ.R. 23(A) commonality requirement and focuses on the
legal or factual questions that qualify each class member’s case as a genuine
controversy.” (Emphasis added.) Repede v. Nunes, 8th Dist. Cuyahoga No. 87277,
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2006-Ohio-4117, ¶ 13,citing Williams v. Countrywide Home Loans, Inc., 6th Dist.
Lucas App. No. L-01-1473, 2002-Ohio-5499; Haas v. Behr Dayton Thermal Prods.,
L.L.C., 2d Dist. Montgomery No. 21586, 2007-Ohio-571, ¶ 27; Assn. for Hosp. &
Health Sys. v. Ohio Dept. of Human Serv., 10th Dist. Franklin No. 04AP-762, 2006-
Ohio-67, ¶ 25.
{¶37} In its decision on the matter, the trial court recited the controlling
authority then proceeded to analyze whether Civ.R. 23(B)(3) was met here. With
regard to predominance, the trial court noted that in its original decision that was
reversed by this Court, it had found that Colvin’s claims were not common or typical
of other class members largely due to Colvin seeking only statutory damages, while
other class members would be seeking statutory and actual damages. The trial court
found this to be a significant difference that was the primary factor in defeating class
certification. We disagreed with the trial court that the issue of differing damages
defeated the commonality or typicality requirements, and reversed the trial court.
After remand, the trial court stated that we had removed “damages” from the
equation “as the difference maker” in Colvin I, thus intimating that differing
damages could not prevent class certification.
{¶38} The trial court’s statement in its decision is not precisely accurate, as
we stated in Colvin I that the differing damage issue did not prevent the
“commonality” requirement from being satisfied; however, we specifically stated
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that the issue of “differing damages” was more “appropriately addressed” in the
analysis of Civ.R. 23(B)(3)’s predominance and superiority requirements. Colvin I
at ¶ 18. Thus the different damages cited by the trial court in its first decision prior
to Colvin I could have been particularly relevant in the predominance analysis
before us.
{¶39} However, after Colvin I remanded the case to the trial court, Colvin
indicated that the entire class was no longer seeking actual damages; rather, the
entire class was only seeking statutory damages. In its decision certifying the class,
the trial court emphasized this change in the damages being sought by Colvin,
stating that “Colvin makes clear that the only damages she now seeks are for
statutory damages that arise under the FDCPA as a result of the alleged violations
by Midland of the fair-venue provision.” (Doc. No. 135). Thus while the differing
damages could have been particularly relevant to the predominance issue, the class
members elected only to seek statutory damages, largely removing the issue of
damages from the analysis as the trial court ultimately stated.
{¶40} With differing damages removed from the equation, the trial court
found that the underlying factual and legal issues remained the same for all class
members: “i.e. were they sued in the wrong jurisdiction?” (Id.) Thus the trial court
determined that predominance was satisfied in this case.
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{¶41} The Midland parties attempt to undermine the trial court’s finding that
common questions of law and fact predominate in this matter by arguing, inter alia,
that the Midland parties have different defenses with respect different members of
the class. The Midland parties argue that in some cases, including Colvin’s, they
would have a very viable defense of bona-fide error under 15 U.S.C.A. 1692k(c).
In other cases, the Midland parties argue that they have a res judicata defense, or a
statute of limitations defense.
{¶42} Contrary to their argument, the Midland parties cite no controlling
authority showing that defenses against members of the class should prevent
certification of the class. While the Midland parties may have some defenses to
some or all of the class members, we cannot find that the trial court abused its
discretion in determining that the issue of defenses does not prevent certification.
This is particularly true where, as the trial court stated, the factual and legal issues
remain essentially the same, that being whether the class members were sued in the
wrong jurisdiction. “[C]lass action treatment is appropriate where the claims arise
from standardized forms or routinized procedures, notwithstanding the need to
prove reliance.”12 (Emphasis added.) Hamilton v. Ohio Sav. Bank, 82 Ohio St.3d
67, 84 (1998). With the differing damages issue removed from the equation, we
12
The Midland parties argue that no routine procedures have been established in this matter; however, there
are allegations that Midland routinely filed collection actions in the inappropriate jurisdiction, and their
general process for filing by in-house counsel was detailed by Kimberly Klemenok’s in her deposition.
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cannot find that the trial court abused its discretion by determining that the
remaining questions common to the class predominate. The singular, narrow
question of whether the class members were sued in the wrong jurisdiction is a
“significant aspect of the case” and it is “capable of resolution for all members in a
single adjudication.” Marks v. C.P. Chem. Co., 31 Ohio St.3d 200, 204 (1987).
{¶43} We are also not persuaded by the lengthy string-cite the Midland
parties presented in their brief to this Court in an attempt to establish that
“predominance” has not been met in this matter. As Colvin responded in her brief,
there are significantly different factual and legal issues in the cases cited by the
Midland Parties that require far more individualized analysis of each class member.
For example, in Marks, supra, the Supreme Court of Ohio upheld a trial court’s
discretion denying class certification where events prior to commission of the tort
would have to be looked at for each individual, the nature of the wrongdoing would
have to be analyzed for each individual, the identity of the responsible parties had
to be established, the standard of care owed to class members could differ, and legal
liability could differ. Marks at 206.
{¶44} Similarly, in Schmidt v. Avco Corp., 15 Ohio St.3d 310, 314 (1984),
the Supreme Court of Ohio found that a trial court did not abuse its discretion by
denying class certification when individual issues predominated. The Court thus
upheld a trial court’s discretion in addition to finding that individual issues
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predominated, namely that elements of inducement and reliance had to be proven
on an individual basis. Some other cases cited by the Midland parties contain factual
or legal distinctions that do not undermine, but often in fact reaffirm, a trial court’s
broad discretion. See Hall v. Jack Walker Pontiac Toyota, Inc., 143 Ohio App.3d
678, 687 (2nd Dist.2000) (upholding trial court’s denial of class certification where
issues had to be determined such as whether contracts, advertising and loan
agreements violated the CSOA and it had to be determined the behavior of appellee
towards an individual appellant to determine whether that made appellee a credit
services organization); Cannon v. Fid. Warranty Servs., Inc., 5th Dist. Muskingum
No. CT2005-0029, 2006-Ohio-4995 (upholding trial court’s denial of class
certification where common questions did not predominate). Others cases cited by
the Midland parties just strongly illustrate how different the factual and legal
circumstances are. See Linn v. Roto Rooter, Inc., 8th Dist. Cuyahoga No. 82657,
2004-Ohio-2559, ¶ 23 (individual issues predominated where, inter alia, each
potential class member would have to be analyzed to determine “the nature of the
service provided, the representations made by technicians, and each plaintiff’s
understanding of the fee.”).13
13
We are aware that the Midland parties cite many other cases in addition to those mentioned in this opinion.
Again, broadly, we do not find that the cases cited by the Midland parties compel us to find an abuse of
discretion here.
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{¶45} We also do not find that the Midland parties have offered compelling
legal authority that would require us to overturn the trial court’s discretion on this
issue. Accordingly, we find that the trial court did not abuse its discretion by
determining that the predominance requirement for certification was met here.
{¶46} Next, we turn to the trial court’s finding with regard to the
“superiority” requirement of class certification. In its decision, the trial court found
that there was a significant benefit to the class members to have the case adjudicated
collectively. The trial court also found that there were numerous claims all over the
state that could lead to uneven or conflicting legal responses. Further, the trial court
stated, “A broad based attempt to notify class members would provide an
opportunity for the potentially aggrieved to participate.” (Doc. No. 135). Thus the
trial court determined that a class action would be the superior method of addressing
these claims.
{¶47} Again, we can find no abuse of discretion with the trial court’s
analysis. We reiterate that the Supreme Court of Ohio has stated, “[T]he
appropriateness of applying the abuse-of-discretion standard in reviewing class
action determinations is grounded not in credibility assessment, but in the trial
court’s special expertise and familiarity with case-management problems and its
inherent power to manage its own docket.” (Emphasis added.) Hamilton v. Ohio
Sav. Bank, 82 Ohio St.3d 67, 70 (1988). Stated differently, “[a] trial court which
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routinely handles case-management problems is in the best position to analyze the
difficulties which can be anticipated in litigation of class actions.” Marks v. C.P.
Chem. Co., 31 Ohio St.3d 200, 201 (1987). Here, the trial court seems satisfied that
there is a desirability of concentrating the litigation, that the Hancock County
Common Pleas Court would be an appropriate forum to produce more uniform
responses to the matter, and that the class itself is manageable. See Civ.R. 23(B).
{¶48} Moreover, the Supreme Court of Ohio stated in Hamilton,
The purpose of Civ.R. 23(B)(3) was to bring within the fold of
maintainable class actions cases in which the efficiency and
economy of common adjudication outweigh the interests of
individual autonomy. * * * Thus, “[t]his portion of the rule also
was expected to be particularly helpful in enabling numerous
persons who have small claims that might not be worth litigating
in individual actions to combine their resources and bring an
action to vindicate their collective rights.” 7A Wright, Miller &
Kane, supra, at 518, Section 1777.
Hamilton at 80. After reviewing the record, the applicable legal authority, and the
arguments of the parties, we cannot find that the trial court abused its discretion by
finding that the “superiority” requirement of class certification was met here.
{¶49} Finally, before we conclude, we must address a separate argument
raised by the Midland parties. Throughout their brief, the Midland parties contend
that Gilbert v. Midland Funding, L.L.C., 3d Dist. Hancock No. 5-19-11, 2019-Ohio-
5295, and Lingo v. State, 138 Ohio St.3d 427, 2014-Ohio-1052, should prevent
recovery in this matter because, in order for Colvin’s class to prevail, the trial court
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would have to invalidate or “void” judgments from other courts over which the trial
court did not have jurisdiction. We disagree. Just as the trial court suggested,
recovery in this matter (assuming any affirmative defenses such as bona-fide error
are overcome) depends only upon whether the FDCPA was violated. The validity
of other court’s judgments would not be determined.14 Thus we do not find that
Gilbert or Lingo control here.
{¶50} In sum, we find that the trial court did not abuse its discretion by
finding that the “predominance” and “superiority” requirements of class
certification were established in this matter. The Midland parties’ arguments to the
contrary are not well-taken, and their assignment of error is overruled.
Conclusion
{¶51} For the foregoing reasons the Midland parties’ assignment of error is
overruled and the judgment of the Hancock County Common Pleas Court is
affirmed.
Judgment Affirmed
ZIMMERMAN, P.J. and WILLAMOWSKI, J., concur
/jlr
14
The Midland parties argue that Gilbert is a member of Colvin’s proposed class, and affirming the trial
court’s class certification here would lead to the “peculiar” outcome of Gilbert being unable to recover in her
case individually, but being able to recover as part of Colvin’s class. However, Gilbert’s case did not involve
an FDCPA claim like the one before us, thus it is not the same. Notably, there was also disagreement at oral
argument about whether Gilbert was actually a member of Colvin’s proposed class.
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