Williams v. Kisling, Nestico, & Redick, L.L.C. ( 2023 )

[Cite as Williams v. Kisling, Nestico, & Redick, L.L.C., 2023-Ohio-4510.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
MEMBER WILLIAMS, et al. C.A. Nos. 30602
30604
Appellees
v.
APPEAL FROM JUDGMENT
KISLING NESTICO & REDICK, LLC, et ENTERED IN THE
al. COURT OF COMMON PLEAS
COUNTY OF SUMMIT, OHIO
Appellants CASE No. CV-2016-09-3928
DECISION AND JOURNAL ENTRY
Dated: December 13, 2023
SUTTON, Presiding Judge.
{¶1} Defendants-Appellants, Kisling Nestico & Redick, LLC (“KNR”) and Sam N.
Ghoubrial, M.D., appeal from the judgment of the Summit County Court of Common Pleas. This
Court reverses and remands for further proceedings.
I.
Relevant Background
{¶2} As this Court explained in Williams v. Kisling, Nestico, & Redick, LLC, 9th Dist.
Summit Nos. 29630, 29636, 2022-Ohio-1044, ¶ 2-5, 19-20, (“Williams I”):
***
The instant appeal arises out of a class action lawsuit alleging unlawful business
practices by KNR and several healthcare providers. The trial court ultimately
certified two classes pursuant to Civ.R. 23, one involving an alleged price-gouging
scheme and the other involving an alleged bogus investigation fee charged by KNR.
This matter was pending in the Summit County Court of Common Pleas for several
years before the sixth amended complaint was filed with leave of court in 2019. A
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number of defendants and claims were added as the litigation progressed over time.
In the sixth amended complaint, the named class representatives were Member
Williams, Thera Reid, Monique Norris, and Richard Harbour, all of whom were
KNR clients who sought treatment from healthcare providers recommended by the
firm. The named defendants were Dr. Ghoubrial, Dr. Minas Floros, and KNR, as
well as Alberto Nestico and Robert Redick in their capacities as owners of KNR.
Dr. Ghoubrial is a medical doctor who operates a pain management clinic. Dr.
Floros is a chiropractor who frequently treats individuals involved in car accidents.
KNR is a law firm with a large personal injury practice.
The sixth amended complaint alleged three fraudulent schemes perpetrated by
KNR.
The first set of claims involved an alleged price-gouging scheme between KNR and
certain healthcare providers. Specifically, the plaintiffs sought to pursue claims of
fraud, breach of fiduciary duty, unjust enrichment, unconscionable contract, and
violations of the Ohio Corrupt Practices Act on behalf of KNR clients who were
allegedly charged “exorbitantly inflated prices for medical treatment and
equipment provided by KNR’s ‘preferred’ healthcare providers pursuant to a price-
gouging scheme by which the clients were pressured into waiving insurance
benefits that would have otherwise protected them[.]” The named plaintiffs for
these claims were Reid, Norris, and Harbour, in addition to Class A.
***
In granting the motion to certify, in part, with respect to Class A, the trial court
determined that certain aspects of the alleged price-gouging scheme involved
common questions that could be resolved by common evidence in a single
adjudication. * * * In regard to the portion of the scheme that alleged a price-
gouging arrangement between KNR and Dr. Ghoubrial, the trial court stated as
follows:
Evidence was presented that many of Dr. Ghoubrial’s patients were administered
trigger point injections and sold TENS units and back braces. Evidence was
presented that Dr. Ghoubrial substantially overcharged his patients for these items.
There was evidence that only Nestico was authorized to reduce Dr. Ghoubrial’s
bills and the reductions when they were made [were] only a twenty percent
reduction. * * * There was evidence presented that although more than 50% of Dr.
Ghoubrial’s personal injury patients were covered by some form of health
insurance, he required the patients to make payments out of the settlement proceeds.
It is also undisputed that KNR prepared the letter o[f] protection on Ghoubrial’s
stationary to insure the payment was made. It is clear that payments made to Dr.
Ghoubrial in this manner insured the charges he made would escape scrutiny by the
insurance carriers and other government agencies. * * * The argument by Dr.
Ghoubrial and KNR that there are no common questions which predominate
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because some of Dr. Ghoubrial’s patients received a reduction in their charges for
these items is not persuasive.
The trial court further found that a class action was the superior method for
litigating the claims for Class A as eligible class members would realize no benefit
by filing their own separate lawsuits and the cost of such litigation would otherwise
be prohibitive. While the trial court acknowledged that there might be some
difficulties in the management of the class action, those difficulties were not so
burdensome as to deny class certification. The trial court observed that Dr.
Ghoubrial's patients who did not receive reductions could form a class and those
who did could be placed in a sub-class in accord with the percentage of the
reduction.
{¶3} In reversing the trial court’s decision as to Class A, the price-gouging class, this
Court stated:
As the trial court here failed to undertake a rigorous analysis of the requirements of
Civ.R. 23(B) with respect to the price-gouging class, this matter must be remanded
for the trial court to undertake that analysis in the first instance. See Midland
Funding LLC v. Colvin, 3d Dist. Hancock No. 5-18-15, 2019-Ohio-5382, ¶ 53. This
Court takes no position as to whether the trial court should ultimately certify the
proposed class.
Williams I at ¶ 37.
{¶4} Upon remand, the trial court issued a judgment entry recertifying Class A and
identifying a number of potential subclasses. KNR appealed raising three assignments of error. Dr.
Ghoubrial appealed raising two assignments of error. We consolidate the assignments of error to
facilitate our review.
II.
KNR ASSIGNMENT OF ERROR I
THE TRIAL COURT ABUSED ITS DISCRETION IN RECERTIFYING
CLASS A WITHOUT DIRECTLY ADDRESSING THIS COURT’S
CONCERNS EXPRESSED IN WILLIAMS I AND INSTEAD DIVIDED THE
CLASS INTO MULTIPLE, INCOMPLETE, AND IMPERMISSIBLY
VAGUE SUBCLASSES WITHOUT RIGOROUS ANALYSIS AS TO
WHETHER EACH SUBCLASSES WITHOUT RIGOROUS ANALYSIS AS
TO WHETHER EACH SUBCLASS [INDEPENDENTLY] SATISFIES
RULE 23.
4
KNR ASSIGNMENT OF ERROR II
UNDER ANY THEORY OF LIABILITY, KNR’S LIABILITY FOR THE
ALLEGEDLY EXCESSIVE CHARGES OF DR. GHOUBRIAL CANNOT
BE DETERMINED BY EVIDENCE COMMON TO ALL CLASS
MEMBERS IN A SINGLE ADJUDICATION.
KNR ASSIGNMENT OF ERROR III
THE TRIAL COURT ABUSED ITS DISCRETION IN RECERTIFYING
CLASS A BECAUSE IT DID NOT CONDUCT A RIGOROUS ANALYSIS
WHEN IT SUMMARILY CONCLUDED THAT DISGORGEMENT WAS
AN APPROPRIATE REMEDY.
GHOUBRIAL ASSIGNMENT OF ERROR I
THE TRIAL COURT ERRED IN FAILING TO UNDERTAKE A
RIGOROUS ANALYSIS OF APPELLEES’ CLASS-CERTIFICATION
THEORY, DESPITE THIS COURT’S SPECIFIC ORDER ON REMAND
PURSUANT TO CIV.R. 23.
GHOUBRIAL ASSIGNMENT OF ERROR II
THE TRIAL COURT ERRED IN CERTIFYING CLASS A (“THE PRICE-
GOUGING CLASS”) ON CLAIMS ONE (FRAUD), THREE (UNJUST
ENRICHMENT), AND FOUR (UNCONSCIONABLE CONTRACT) OF
THE SIXTH AMENDED COMPLAINT.
{¶5} In their assignments of error, KNR and Dr. Ghoubrial argue the trial court erred in
re-certifying Class A because it failed to follow the prior mandate of the Williams I Court to perform
a rigorous analysis of the requirements Civ.R. 23(B).
{¶6} A plaintiff bears the burden of establishing the right to a class action by a
preponderance of the evidence. Sliwinski v. Capital Properties Mgt. Ltd., 9th Dist. Summit No.
25867, 2012-Ohio-1822, ¶ 12 (“The burden of establishing the right to a class action rests upon the
plaintiff.”); Martin v. Servs. Corp. Internatl., 9th Dist. Summit No. 20392, 2001 WL 688896, *2
(June 20, 2001) (noting the preponderance-of-the-evidence standard). There are seven prerequisites
to class certification, four of which are provided in Civ.R. 23(A) as follows:
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(1) [t]he class is so numerous that joinder of all members is impracticable;
(2) [t]here are questions of law or fact common to the class;
(3) [t]he claims or defenses of the representative parties are typical of the claims or
defenses of the class; [and]
(4) [t]he representative parties will fairly and adequately protect the interests of the
class.
{¶7} “These prerequisites are commonly referred to as numerosity, commonality,
typicality, and adequacy of representation.” Winrod v. City of Lorain, 9th Dist. Lorain No.
19CA011503, 2020-Ohio-157, ¶ 4. “In addition to establishing the four prerequisites of Rule 23(A),
a plaintiff must also establish one of the three requirements under Rule 23(B).” Id. Civ.R. 23(B)(3)
“requires a trial court to find 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.’” Id., quoting Civ.R.
23(B). “The requirements under this prerequisite are commonly referred to as predominance and
superiority.” Id., see also Duncan v. Hopkins, 9th Dist. Summit No. 23342, 2007-Ohio-1425, ¶ 8.
“Finally, a plaintiff must establish that an identifiable class exists and that its definition is
unambiguous, and that the named representatives are members of the class.” Winrod at ¶ 4. “These
prerequisites are commonly referred to as ascertainability and class membership.” Id. “Failure to
satisfy any one of these seven prerequisites results in denial of certification.” Id. citing Sliwinski at
¶ 12. Additionally, “[a] determination by a trial court regarding class certification that * * *
suggests that the trial court did not conduct a rigorous analysis into whether or not the prerequisites
of Civ.R. 23 are satisfied, will constitute an abuse of discretion.” Setliff v. Morris Pontiac, Inc., 9th
Dist. Lorain No. 08CA009364, 2009-Ohio-400, ¶ 7, quoting Cicero v. U.S. Four, Inc., 10th Dist.
Franklin No. 7AP-310, 2007-Ohio-6600, ¶ 10.
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{¶8} In Willaims I, this Court addressed deficiencies in the trial court’s certification of
Class A and directed the trial court to perform a rigorous analysis of the requirements of Civ.R.
23(B). The Williams I Court at ¶ 32-36 stated, in relevant part:
***
The alleged price-gouging scheme pertinent to Class A was the most elaborate of
the three fraudulent schemes set forth in the sixth amended complaint. Although
the trial court found that there was no basis to certify the class in regard to the
alleged unlawful referral network, it certified Class A with respect to a number of
claims pertaining to the portion of the scheme whereby KNR conspired with Dr.
Ghoubrial to overcharge clients for medical care with the aim of increasing the
value of each client's legal settlement. A careful review of the trial court's journal
entry in this matter reveals that it failed to conduct a rigorous analysis with respect
to the predominance and superiority requirements as to Class A. Accordingly, this
matter must be remanded for the trial court to conduct that analysis in the first
instance.
While the trial court carefully identified many of the arguments advanced by the
parties with respect to the certification of Class A, it failed to ultimately resolve
some of the foremost evidentiary conflicts regarding whether the plaintiffs’ claims
could be resolved by evidence common to all parties in a single adjudication. See
Cullen at ¶ 16 (concluding that the rigorous analysis required under Civ.R. 23
“requires the court to resolve factual disputes relative to each requirement and to
find, based upon those determinations, other relevant facts, and the applicable legal
standard, that the requirement is met”).
Perhaps most notably, the trial court failed to undertake a rigorous analysis of how
the plaintiffs could prove liability with common evidence when the evidence
showed that the individual class members were not similarly situated with respect
to health insurance coverage. One of the core allegations of the price-gouging
scheme was that class members were overcharged for medical care compared to
what would have been charged had they been able to use health insurance. Many
class members who sought treatment from Dr. Ghoubrial did not have health
insurance at all. Some members, such as class representative Richard Harbour,
maintained health insurance coverage but expressed a preference not to use it for
the purposes of pain management treatment. Still other class members were willing
to use either Medicare or their private health insurance but were forced not to do so
in order to obtain treatment from Dr. Ghoubrial. The trial court made a general
finding that KNR and Dr. Ghoubrial conspired to remove insurance companies
from the equation so that Dr. Ghoubrial's charges “would escape scrutiny by the
insurance carriers and other government agencies.” Notably, however, the trial
court declined to analyze how the plaintiffs could prove their claims by common
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evidence under circumstances where the insurance situations of the individual class
members varied.
Furthermore, in addressing the contention by KNR and Dr. Ghoubrial that the
plaintiffs could not satisfy the predominance requirement regarding the payment
plan because some patients received significant reductions in their charges for
medical care, the trial court simply found that this argument was “not persuasive”
and cited a number of cases in support of the proposition that individual differences
among class members with respect to damages will not defeat class certification.
The trial court also suggested that “[Dr.] Ghoubrial[’s] patients who did not receive
reductions could form a class and those who did could be placed in a sub-class of
the price-gouging class representing the percentage of reduction.” The Supreme
Court has held that “[p]laintiffs in class-action suits must demonstrate that they can
prove, through common evidence, that all class members were in fact injured by
the defendant's actions.” Felix v. Ganley Chevrolet, Inc., 145 Ohio St.3d. 329,
2015-Ohio-3430, ¶ 33. Here, resolution of the plaintiffs’ claims with respect to the
price-gouging scheme will at a minimum require determinations with respect to
whether Dr. Ghoubrial’s standardized rates constituted an overcharge for medical
care and equipment, the extent to which Dr. Ghoubrial's clinic ultimately accepted
reduced payments as satisfaction for each patient's bill, as well as the manner in
which KNR attorneys played an active role in facilitating those reductions based on
the settlement value of each case in order to perpetuate the scheme. The trial court
failed to undertake a rigorous analysis as to whether these issues could be resolved
by common evidence in a single adjudication. See Cullen at ¶ 30.
Finally, the trial court did not conduct a rigorous analysis when it summarily
concluded that disgorgement was an appropriate remedy. In its judgment entry, the
trial court stated, “Dr. Ghoubrial would be required to disgorge to the class
members the amount of the overcharge. KNR would be required to disgorge the
amount of the contingent fee attributable to the overcharges made by Dr. Ghoubrial.
For example, if the settlement amount was increased by $4,000.00 in overcharge,
and KNR's contingent fee was one-fourth of the recovery, then KNR would have
to disgorge $1,000.00 of the fee as to that class member.” The trial court's damages
formula involves identifying the amount of the overcharge in each class member's
case. As discussed above, the calculation of the overcharge would involve a number
of considerations. In addition to the fact that not all class members received the
same course of treatment, the record suggests that some of Dr. Ghoubrial's patients
received little to no reduction in their medical bills while other patients received
significant reductions. The trial court did not scrutinize whether the calculation of
the overcharge could be established by common evidence in a single adjudication.
***
{¶9} “When a case is remanded to a trial court from an appellate court, the mandate of
that appellate court must be followed.” Kaechele v. Kaechele, 61 Ohio App.3d 159, 162 (10th
8
Dist.1989), citing Nolan v. Nolan, 11 Ohio St.3d 1 (1984). “Absent extraordinary circumstances,
such as an intervening decision by the Supreme Court, an inferior court has no discretion to
disregard the mandate of a superior court in a prior appeal in the same case.” Nolan at syllabus.
“Moreover, the trial court is without authority to extend or vary the mandate given.” Id. at 4, citing
Briggs v. Pennsylvania RR. Co., 334 U.S. 304, 306 (1948).
{¶10} Here, the trial court did not follow the prior mandate of this Court. The trial court
did not engage in a rigorous analysis of the requirements of Civ.R. 23 (B). Instead, the trial court
removed from Class A “any patient or client who did receive a specific reduction of those [medical]
bills from Dr. Ghoubrial in the settlement of their lawsuit.” The trial court also created vague
subclasses to Class A. In so doing, the trial court did not discuss whether any of the named Plaintiffs
actually qualify as a class representative for each subclass. Moreover, the trial court did not perform
a rigorous analysis of whether Class A as a whole meets the requirements of Civ.R. 23(B), let alone
each of its subclasses. Further, as to superiority, the trial court merely stated, “it is unlikely any of
the patients of Dr. Ghoubrial or clients of KNR would pursue their own lawsuit to recover the
alleged overcharges because it would be prohibitive to do so for amounts so small.” See Schmidt
v. Avco Corp., 15 Ohio St.3d 310, 315 (1984) (“This court is well aware that Civ.R. 23(C)(4)(b)
specifically authorizes the court to divide the class into appropriate subclasses. Nonetheless, the
requirements for a class action must still be met. Under Civ.R. 23(B)(3), a class action must be
superior to all other available methods for adjudication of the controversy and one of the tests of
superiority is the manageability of the action.”). As to disgorgement, the trial court again concluded
it was an appropriate remedy without rigorous analysis regarding whether an overcharge could be
established by common evidence in a single adjudication.
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{¶11} Accordingly, because the trial court must perform a rigorous analysis of the
requirements of Civ.R. 23(B), as this Court previously ordered in Williams I, and the trial court
must address any potential issues regarding class representation, such as ascertainability and class
membership, the parties’ assignments of error are sustained.
III.
{¶12} KNR’s three assignments of error are sustained. Dr. Ghoubrial’s two assignments
of error are sustained. The judgment of the Summit County Court of Common Pleas is reversed
and the cause is remanded for the trial court to perform a rigorous analysis of the class certification
requirements.
Judgment reversed,
cause remanded.
There were reasonable grounds for this appeal.
We order that a special mandate issue out of this Court, directing the Court of Common
Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy
of this journal entry shall constitute the mandate, pursuant to App.R. 27.
Immediately upon the filing hereof, this document shall constitute the journal entry of
judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period
for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is instructed to
mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the
docket, pursuant to App.R. 30.
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Costs taxed to Appellees.
BETTY SUTTON
FOR THE COURT
HENSAL, J.
STEVENSON, J.
CONCUR.
APPEARANCES:
BRADLEY J. BARMEN, Attorney at Law, for Appellant.
R. ERIC KENNEDY and DANIEL P. GOETZ, Attorneys at Law, for Appellants.
JAMES M. POPSON, Attorney at Law, for Appellants.
THOMAS P. MANNION, Attorney at Law, for Appellants.
PETER PATTAKOS, ZORAN BALAC, and GREGORY GIPSON, Attorneys at Law, for
Appellees.