Mozingo v. 2007 Gaslight Ohio, L.L.C. ( 2012 )

[Cite as Mozingo v. 2007 Gaslight Ohio, L.L.C., 2012-Ohio-5157.]
STATE OF OHIO ) IN THE COURT OF APPEALS
)ss: NINTH JUDICIAL DISTRICT
COUNTY OF SUMMIT )
ROBERT MOZINGO C.A. Nos. 26164
26172
Appellee
v.
APPEAL FROM JUDGMENT
2007 GASLIGHT OHIO, LLC, et al. ENTERED IN THE
COURT OF COMMON PLEAS
Appellants COUNTY OF SUMMIT, OHIO
CASE No. CV-2010-05-3516
DECISION AND JOURNAL ENTRY
Dated: November 7, 2012
WHITMORE, Presiding Judge.
{¶1} Defendant-Appellants, 2007 Gaslight Ohio, LLC (“Gaslight”) and George and
Patricia Waliga (“the Waligas”), appeal from the judgment of the Summit County Court of
Common Pleas, granting Plaintiff-Appellee, Robert Mozingo’s, motion to certify a class action
against them. This Court reverses.
I
{¶2} In May 1992, the Waligas purchased a mobile home park located in Tallmadge,
Ohio and currently known as Gaslight Village Mobile Home Park (“the Park”). The Park
consists of 104 units, but generally operates at less than capacity. Originally, the Waligas and
the Park’s prior owners provided natural gas to all of the Park’s tenants by charging the tenants a
monthly lump-sum that included rent, water, and gas. The rising cost of natural gas later led the
Waligas to install sub-meters for each unit in the Park so that each unit could be billed according
to its actual gas usage. The Waligas hired an outside company, Water Service Company, to read
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the sub-meters each month for a monthly flat fee of $5 per meter. They also notified the Park’s
tenants of the new system for natural gas billing. Beginning in April 2001, the Waligas billed
the Park’s tenants for individual natural gas usage on a monthly basis. The billing system
remained in place from that point forward. Gaslight continued to charge tenants according to
monthly, individual usage when it purchased the Park sometime in 2007.
{¶3} Mozingo bought a unit in the Park in April 2002. Sometime in 2007, Mozingo
asked the Park’s manager to explain the specific charges that appeared on his billing statement.
Mozingo also spoke with Dominion East Ohio (“Dominion”), the natural gas provider for the
Park, and discovered that the monthly usage rate Dominion generally charged its residential
customers was lower than the monthly usage rate the Park had billed Mozingo. As such,
Mozingo came to believe that the Waligas and Gaslight had continually charged the Park’s
tenants an undisclosed mark-up on their usage rate for natural gas. Mozingo also determined that
the $5 per month sub-meter reading fee charged by Water Service Company had been passed
onto the tenants in their monthly gas bill without their knowledge.
{¶4} On May 14, 2010, Mozingo filed a class action suit against Gaslight and the
Waligas based on allegations that they had repeatedly charged residents of the Park with
unreasonable, undisclosed fees associated with natural gas usage. Gaslight and the Waligas
answered the complaint, and discovery commenced. On April 15, 2011, Mozingo filed a motion
to certify a class consisting of all current and former residents of the Park who were subject to its
sub-metering system for natural gas usage and “charged for * * * their natural gas usage and
associated gas meter reading fee.” Both Gaslight and the Waligas opposed the motion to certify,
and the trial court scheduled a hearing on the motion. On October 21, 2011, the trial court
granted the motion and certified two subclasses: residents who were charged for natural gas
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through the sub-metering system before Gaslight’s purchase of Park, and residents who were
charged after Gaslight’s purchase.
{¶5} Gaslight and the Waligas now appeal from the trial court’s decision to grant
Mozingo’s motion for class certification and collectively raise five assignments of error for our
review. For ease of analysis, we consolidate the assignments of error.
II
Gaslight’s Assignment of Error Number One
THE TRIAL COURT ABUSED ITS DISCRETION IN MAKING A LEGAL
DETERMINATION OF THE MERITS OF PLAINTIFF’S CLAIM
REGARDING GASLIGHT’S ALLEGED VIOLATION OF CHAPTER 3733 OF
THE OHIO REVISED CODE.
The Waligas’ Assignment of Error Number One
THE TRIAL COURT ABUSED ITS DISCRETION AND MADE A MISTAKE
OF LAW BY SPECIFICALLY CONSIDERING AND DECIDING THE
MERITS WHEN DETERMINING THE PROPRIETY OF CLASS ACTION.
Gaslight’s Assignment of Error Number Two
THE TRIAL COURT ABUSED ITS DISCRETION GRANTING PLAINTIFF’S
MOTION TO CERTIFY THIS CASE AS A CLASS ACTION.
The Waligas’ Assignment of Error Number Two
THE TRIAL COURT ABUSED ITS DISCRETION BY FAILING TO
PROPERLY APPLY CIVIL RULE 23(A) WHEN GRANTING PLAINTIFF-
APPELLEE’S MOTION TO CERTIFY AS CLASS ACTION.
The Waligas’ Assignment of Error Number Three
THE TRIAL COURT ABUSED ITS DISCRETION BY FAILING TO
PROPERLY APPLY CIV[.]R. 23(B) CONCERNING THE
UNMANAGEABILITY OF THE CLASS ACTION[.]
{¶6} In their first assignments of error, Gaslight and the Waligas argue that the trial
court abused its discretion by making legal conclusions on the merits in determining whether to
grant Mozingo’s motion to certify. In their remaining assignments of error, Gaslight and the
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Waligas argue that the trial court abused its discretion by granting the motion in the absence of
evidence that all of the prerequisites for class action certification exist. We agree with both
propositions.
{¶7} Civ.R. 23 governs class action certifications. Before a court may certify a case as
a class action:
(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 impractical; (4) there
must be 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 satisfied.
In re Consol. Mtge. Satisfaction Cases, 97 Ohio St.3d 465, 2002-Ohio-6720, ¶ 6. Mozingo
relied upon Civ.R. 23(B)(3) in his motion to certify. A trial court must make two findings to
certify a class pursuant to Civ.R. 23(B)(3). Id. at ¶ 7. “First, it must find that questions of law or
fact common to the members of the class predominate over any questions affecting only
individual members; and second, the court must find that a class action is superior to other
available methods for the fair and efficient adjudication of the controversy.” Id. It was
Mozingo’s burden to establish that he met all of the prerequisites for class action certification.
Sliwinski v. Capital Properties Mgt. Ltd., 9th Dist. No. 25867, 2012-Ohio-1822, ¶ 12.
{¶8} “A trial judge has broad discretion in determining whether a class action may be
maintained and that determination will not be disturbed absent a showing of an abuse of
discretion.” Rimedio v. SummaCare, Inc., 9th Dist. No. 25068, 2010-Ohio-5555, ¶ 33, quoting
Marks v. C.P. Chem. Co., Inc., 31 Ohio St.3d 200 (1987), syllabus. “A determination by a trial
court regarding class certification that is clearly outside the boundaries established by Civ.R. 23,
or that suggests that the trial court did not conduct a rigorous analysis into whether or not the
5
prerequisites of Civ.R. 23 are satisfied, will constitute an abuse of discretion.” (Internal citations
and quotations omitted.) Hill v. Moneytree of Ohio, Inc., 9th Dist. No. 08CA009410, 2009-
Ohio-4614, ¶ 9, quoting Cicero v. U.S. Four, Inc., 10th Dist. No. 07AP-310, 2007-Ohio-6600, ¶
10. In reviewing a motion to certify, a trial court is “confined solely to the question of the
appropriateness of class certification” and may not make any findings regarding the merits of the
plaintiff’s cause(s) of action. Hill at ¶ 13.
{¶9} The trial court wrote the following in its order granting Mozingo’s motion to
certify:
The defendants do not dispute [mark-up] fees were not disclosed by either the
Waligas or [] Gaslight. Instead, the defendants assert that, because differences
exist between individual class members regarding the length of time in residence,
whether they are in default of payment on their rent to the park, or the contract,
Mr. Mozingo has failed to identify a sufficiently numerous class, that Mr.
Mozingo is not a representative of the class, and that there are no common
elements that predominate over the individual claims and defenses.
Without deciding the merits of Mr. Mozingo’s complaint, the Court finds
substantial evidence to sustain certification of the class action in this matter. The
evidence presented at hearing demonstrates a class of sufficient numerosity that it
would be inefficient to bring each claim individually. The class is approximately
100 persons. To bring each claim to court on substantially identical statutory
violations would be unmanageable. Each of these class members was
undisputedly charged a mark[-]up to their gas fees without disclosure as required
by statute. This is a common question of law throughout the class. Mr. Mozingo
has been a resident in the manufactured home park since 2002, and has never
received written notice of the mark[-]up to gas fees from either the Waligas or []
Gaslight. Therefore, he is typical, and sufficiently represents the interests both of
residents who lived in the park when the Waligas owned it, and those who lived
there under [] Gaslight’s ownership.
This Court also finds common questions of law and fact predominate over all
individual claims and defenses in this matter and class action is the superior
method to adjudication. The language of R.C. § 3733.11 is unequivocal and
mandatory. If written notice was not issued to the residents, it appears to this
court that collection of gas fees was improper.
(Emphasis added.) The italicized portions of the trial court’s decision do not bear upon the
propriety of class certification, but instead amount to an attempt, “contrary to the applicable law,
6
to reach the merits of the claim.” Hill at ¶ 11, quoting Ojalvo v. Bd. of Trustees of Ohio State
University, 12 Ohio St.3d 230, 233 (1984).
{¶10} Relying upon the United States Supreme Court’s decision in Eisen v. Carlisle &
Jacquelin, 417 U.S. 156 (1974), this Court has previously held:
We find nothing in either the language or history of Rule 23 that gives a court any
authority to conduct a preliminary inquiry into the merits of a suit in order to
determine whether it may be maintained as a class action. Indeed, such a
procedure contravenes the Rule by allowing a representative plaintiff to secure the
benefits of a class action without first satisfying the requirements for it. He is
thereby allowed to obtain a determination on the merits of the claims advanced on
behalf of the class without any assurance that a class action may be maintained.
This procedure is directly contrary to the command of subdivision (c)(1) that the
court determine whether a suit denominated a class action may be maintained as
such as soon as practicable after the commencement of the action. * * *
In determining the propriety of a class action, the question is not whether the
plaintiff or plaintiffs have stated a cause of action or will prevail on the merits, but
rather whether the requirements of Rule 23 are met.
Additionally, we might note that a preliminary determination of the merits may
result in substantial prejudice to a defendant, since of necessity it is not
accompanied by the traditional rules and procedures applicable to civil trials. The
court’s tentative findings, made in the absence of established safeguards, may
color the subsequent proceedings and place an unfair burden on the defendant.
(Internal citations and quotations omitted.) Hill at ¶ 12, quoting Eisen at 177-178. By finding
that the Waligas and Gaslight failed to disclose mark-up fees to the Park’s tenants and that each
tenant of the Park, including Mozingo, was charged a mark-up on their gas fees without the
required statutory disclosure, the trial court “explicitly examined the merits of the class action.”
Hill at ¶ 13. Accord Ojalvo at 233 (court went beyond class certification analysis when it
determined a “certainty that a common issue of breach of three to six thousand contracts
probably exists”). “As the trial court was confined solely to the question of the appropriateness
of class certification, it was an abuse of discretion for the trial court to make any merit findings.”
Hill at ¶ 13.
7
{¶11} Although the court wrote in its decision that it found evidence to sustain a class
certification “[w]ithout deciding the merits of [the] complaint,” the remainder of the court’s
decision and the record contradict that statement. The vast majority of the class action
certification hearing focused on whether a mark-up on the natural gas usage rate had occurred,
the reasons for the mark-up, and whether the Park’s tenants received notice of the mark-up. All
of those topics distinctly bear upon the merits of Mozingo’s complaint rather than the
prerequisites for class certification. See In re Consol. Mtge. Satisfaction Cases, 97 Ohio St.3d
465, 2002-Ohio-6720, at ¶ 6-7. Moreover, several components of the appropriate analysis for
class action certification are noticeably absent from the trial court’s decision. See Setliff v.
Morris Pontiac, Inc., 9th Dist. No. 08CA009364, 2009-Ohio-400, ¶ 7-10 (trial court abused its
discretion when it did not appear that the court conducted a rigorous analysis of several of Civ.R.
23’s prerequisites to certification).
{¶12} While not explicitly set forth in Civ.R. 23, two prerequisites to class certification
are that the class be (1) identifiable, and (2) unambiguous. Warner v. Waste Management, Inc.,
36 Ohio St.3d 91 (1988), paragraphs one and two of the syllabus. “The requirement that the
certified class be identifiable and unambiguous ‘does not require a class certification to identify
the specific individuals who are members so long as the certification provides a means to
identify such persons.’” Rimedio, 2010-Ohio-5555, at ¶ 40, quoting Planned Parenthood Assn.
of Cincinnati, Inc. v. Project Jericho, 52 Ohio St.3d 56, 63 (1990). “The test is whether the
means is specified at the time of certification to determine whether a particular individual is a
member of the class.” Project Jericho at 63.
8
{¶13} The trial court did not discuss whether the class Mozingo proposed to certify was
identifiable and unambiguous in its decision. Further, Mozingo did not present any evidence to
support a finding of those prerequisites. Mozingo wrote in his motion to certify:
[a]s the Park experienced move-outs, evictions, move-ins and other tenant
attrition and additions throughout the course of at least fourteen (14) years (1996-
present), the number of affected past and current residents is reasonably estimated
to be in the hundreds.
Multiple individuals also testified regarding the high attrition rate at the Park over the years and
the fact that written leases of any kind were a rarity for tenants. There was no discussion in
Mozingo’s motion or finding in the court’s decision regarding the means Mozingo had to
identify all the affected past and current residents. See Rimedio at ¶ 40, quoting Jericho at 63.
Further, the trial court wrote in its decision that “[t]he class [was] approximately 100 persons.”
The testimony at the certification hearing was that there were approximately 100 tenants that
currently lived at the Park. Despite identifying them as a subclass, the court did not account for
all of the tenants who had resided at the Park since the installation of the sub-metering system in
2001. The court’s decision does not support the conclusion that the court performed a rigorous
analysis with regard to the requirements that a class be identifiable and unambiguous. See Setliff,
2009-Ohio-400, at ¶ 9-10.
{¶14} Another prerequisite to class action certification is that the named class
representative actually be a member of the class he or she seeks to certify. See In re Consol.
Mtge. Satisfaction Cases, 97 Ohio St.3d 465, 2002-Ohio-6720, at ¶ 6. The class membership
prerequisite requires that the class representative possess standing and “have an action” for the
remedy he or she seeks on behalf of the class. (Emphasis sic.) Hamilton v. Ohio Sav. Bank, 82
Ohio St.3d 67, 74 (1998). The trial court did not specifically discuss the class membership
prerequisite, but implicitly found that Mozingo was a member of the class he sought to certify in
9
discussing other prerequisites of Civ.R. 23(A). Specifically, the court found that Mozingo was a
typical and adequate class representative because he had lived in the Park since 2002 and never
received written notice of any mark-up. There was no discussion in the court’s decision,
however, regarding the statute of limitations and whether the statute of limitations applicable to
Mozingo’s claims had expired. The Ohio Supreme Court has held that the statute of limitations
is not reason to deny certification when some, but not all, members of the class may be barred by
it. Id. at 84. The difference here is that Mozingo is the class representative, not simply a
member of the class. Moreover, he is the only class representative. Several federal courts have
determined that a class cannot be certified when the claims of its sole representative are barred
by the statute of limitations because the individual cannot be said to be a member of the class.
See, e.g., Franze v. Equitable Assurance, 296 F.3d 1250, 1254 (11th Cir.2002); Great Rivers Co-
op. of Southeastern Iowa v. Farmland Industries, Inc., 120 F.3d 893, 899 (8th Cir.1997). By not
addressing the issue, the trial court failed to conduct a rigorous analysis of the class membership
prerequisite to certification. See Setliff at ¶ 9-10.
{¶15} Our review of the trial court’s decision leads us to conclude that the court
properly analyzed the remaining requirements of Civ.R. 23(A). In particular, the court
determined through the evidence Mozingo introduced that (1) the class he sought to certify
encompassed at least 100 individuals, (2) the claims he filed on behalf of the class arose from the
common question of whether contractual and/or statutory violations had occurred, and (3) he had
an interest in maintaining the claims on behalf of the class because his status as a tenant
subjected him to the same allegedly wrongful conduct as the other tenants. See Martin v.
Services Corp. Intern., 9th Dist. No. 20392, 2001 WL 688896, *3 (June 20, 2001) (“Generally,
evidence of a class of more than forty people satisfies the numerosity requirement for class
10
certification.”); Hamilton at 77 (commonality prerequisite satisfied if a “common liability issue”
exists); Rimedio v. SummaCare, Inc., 9th Dist. No. 21828, 2004-Ohio-4971, ¶ 23-24 (typicality
satisfied if representative’s claim arises from same course of conduct as other class members and
rests upon same legal theory); Hamilton at 77-78 (“[A] representative is deemed adequate so
long as his or her interest is not antagonistic to that of other class members.”). Yet, the same
cannot be said about the trial court’s analysis of Civ.R. 23(B)(3).
{¶16} Under Civ.R. 23(B)(3), class action certification is appropriate if:
the court finds that the questions of law or fact common to the members of the
class predominate over any questions affecting only individual members, and that
a class action is superior to other available methods for the fair and efficient
adjudication of the controversy. The matters pertinent to the findings include: (a)
the interest of members of the class in individually controlling the prosecution or
defense of separate actions; (b) the extent and nature of any litigation concerning
the controversy already commenced by or against members of the class; (c) the
desirability or undesirability of concentrating the litigation of the claims in the
particular forum; (d) the difficulties likely to be encountered in the management
of a class action.
The trial court concluded that common questions of law and fact predominated over individual
claims and defenses simply because the same contractual and/or statutory violations would be at
issue in “a great number of cases.” A predominance analysis, however, is “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.” Setliff at ¶ 9, quoting Miller v.
Volkswagen of America, Inc., 6th Dist. No. E-07-047, 2008-Ohio-4736, ¶ 45. The trial court did
not consider any of the specific “matters pertinent to the findings” as listed in Civ.R. 23(B)(3)
and quoted above. Civ.R. 23(B)(3). Further, the court did not conduct a meaningful analysis of
the superiority prerequisite encompassed in Civ.R. 23(B)(3). “[I]n 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
11
the expenditure of judicial time and energy involved therein.” In re Consol. Mtge. Satisfaction
Cases, 97 Ohio St.3d 465, 2002-Ohio-6720, at ¶ 8, quoting Schmidt v. Avco Corp., 15 Ohio St.3d
310, 313 (1984). Accord Henes v. Ostrov Corp., 30 Ohio App.3d 108, 110 (9th Dist.1986)
(reasonable alternatives to class certification discussed). The trial court did not discuss any other
available procedures in its decision granting certification. Based on our review, “[i]t does not
appear * * * that the trial court conducted a rigorous analysis of the predominance and
superiority requirement pursuant to Civ.R. 23(B)(3).” Setliff at ¶ 10.
{¶17} As discussed herein, the trial court did not conduct a rigorous analysis of all the
prerequisites required for class action certification and also inappropriately engaged in several
merits findings rather than limiting itself to the narrow issue of certification. We agree with
Gaslight and the Waligas that the trial court abused its discretion by granting Mozingo’s motion
to certify. Consequently, Gaslight’s and the Waligas’ assignments of error are sustained for the
reasons set forth in this opinion.
III
{¶18} Gaslight’s and the Waligas’ assignments of error are sustained. The judgment of
the Summit County Court of Common Pleas is reversed, and the cause is remanded for further
proceedings consistent with the foregoing opinion.
Judgment reversed,
and cause remanded.
There were reasonable grounds for this appeal.
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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.
Costs taxed to Appellee.
BETH WHITMORE
FOR THE COURT
CARR, J.
CONCURS.
DICKINSON, J.
CONCURRING.
{¶19} I agree with the majority that this matter must be remanded for the trial court to
examine class certification without considering the merits of Mr. Mozingo’s claims. “Although I
acknowledge that, in Ojalvo v. Bd. of Trs. of Ohio State Univ., 12 Ohio St.3d 230, 466 N.E.2d
875 (1984), the Ohio Supreme Court termed a trial court’s improper consideration of the merits
in determining whether to certify a class an abuse of discretion, the true problem is that doing so
is ‘incorrect as a matter of law.’” Hill v. Moneytree of Ohio Inc., 9th Dist. No. 08CA009410,
2009-Ohio-4614, ¶ 15 (quoting Ojalvo, 12 Ohio St. 3d at 233) (Dickinson, J., concurring). I
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join in the majority’s opinion, therefore, not because I believe the trial court abused its
discretion, but because it made a mistake of law.
APPEARANCES:
BRENDON P. FRIESEN, Attorney at Law, for Appellant.
SCOTT J. FLYNN, Attorney at Law, for Appellant.
THOMAS J. CONNICK and NICOLE D. LECLAIR, Attorneys at Law, for Appellee.
GEORGE W. COCHRAN, Attorney at Law, for Appellee.