Rimmer v. CitiFinancial, Inc. ( 2020 )

[Cite as Rimmer v. CitiFinancial, Inc., 2020-Ohio-99.]
COURT OF APPEALS OF OHIO
EIGHTH APPELLATE DISTRICT
COUNTY OF CUYAHOGA
KAREN RIMMER, INDIVIDUALLY :
AND ON BEHALF OF ALL OTHERS
SIMILARLY SITUATED, :
Plaintiffs-Appellants, :
No. 108081
v. :
CITIFINANCIAL, INC., :
Defendant-Appellee. :
JOURNAL ENTRY AND OPINION
JUDGMENT: AFFIRMED
RELEASED AND JOURNALIZED: January 16, 2020
Civil Appeal from the Cuyahoga County Court of Common Pleas
Case No. CV-05-564493
Appearances:
Dworken & Bernstein Co., L.P.A., and Patrick J. Perotti;
Brian Ruschel, for appellants.
Thompson Hine, L.L.P., Kip T. Bollin, and Mark R.
Butscha, Jr., for appellee.
MICHELLE J. SHEEHAN, J.:
This case concerns several issues involving the class definition and
identification of class members in a class action. This is the seventh appeal by Karen
Rimmer in the class action she initiated 15 years ago in 2005. In 2000, Rimmer
executed a note and security agreement with Bank of Yorba Linda for $5,000. Her
loan was subsequently assigned to Associates Financial Services, Inc., which then
merged with CitiFinancial Inc. (“Citi”), and Citi became the holder of Rimmer’s
mortgage. On April 10, 2001, Rimmer paid off her loan in full.
R.C. 5301.36 requires a bank to file an entry of satisfaction of mortgage
with the county recorder within 90 days of full payment of the mortgage. Citi,
however, did not file the entry of Rimmer’s full payment of her mortgage until
August 16, 2001, past the statutory time of 90 days.
Four years later, in 2005, Rimmer filed a class action complaint
against Citi, alleging Citi failed to file an entry of satisfaction of mortgage with the
county recorder within 90 days of full payment of the mortgage, in violation of
R.C. 5301.36. Rimmer sought automatic damages ($250), interest, and costs as
allowed under R.C. 5301.36(C).
Throughout 2005 and 2006, the parties engaged in extensive
discovery, including written discovery, document productions, and depositions.
Rimmer served more than six dozen requests for production of documents.
On January 25, 2006, Rimmer filed a motion for class certification
seeking to represent a class of individuals who paid off their mortgages in full but
for whom Citi failed to timely file an entry of satisfaction of those mortgage with the
county recorder. On March 13, 2006, Citi filed an opposition to class certification.
Citi raised the issue of arbitration provisions contained in the majority of the loan
agreements. It represented to the trial court that its records showed that out of
98,206 loans that were paid off during the relevant period (March 8, 1999, to
December 31, 2005), all but 5,254 were subject to an arbitration agreement. Citi
submitted affidavits with attached business records identifying the loans subject to
arbitration agreements.
Citi produced, for the inspection of Rimmer’s counsel, spreadsheets
that identified loans that were satisfied during the pertinent period but were not
released within 90 days. On June 29, 2006, Rimmer’s counsel reviewed the
documents produced. In addition to the spreadsheets, Citi also identified witnesses
available for deposition regarding these loans.
Rimmer moved the court to strike Citi’s claim regarding the
arbitration agreement. The trial court denied the motion. Rimmer then moved for
partial summary judgment as to her individual claim against Citi. Citi filed its cross-
motion for summary judgment, alleging that it mailed the entry of satisfaction
within the statutory time but the recorder failed to timely process the entry. The
trial court granted summary judgment in favor of Rimmer on her individual claim.
The trial court, however, denied her motion for class certification without providing
an analysis.
Rimmer I
Rimmer appealed the trial court’s denial of class certification. This
court affirmed the summary judgment in favor of Rimmer on her individual claim,
rejecting Citi’s claim that it timely processed Rimmer’s release and was entitled to a
presumption of timely delivery.
This court, however, reversed the trial court’s decision denying class
certification. Rimmer v. Citifinancial, 8th Dist. Cuyahoga No. 89407,
2008-Ohio-1814 (“Rimmer I”). This court determined that Rimmer met all seven
requirements for class certification under Civ.R. 23:1 she has defined an identifiable
and manageable class; a question of law common to all members of the class
predominates over any individual legal issues that may arise; and a single
adjudication as a class action is the most efficient and fair manner by which to
resolve the matter. Rimmer I at ¶ 30. Regarding the arbitration agreement in many
mortgagors’ mortgage agreements, this court determined that the existence of the
arbitration agreement would not defeat the class certification. 2 Id. at ¶ 27.
1 The seven findings required for class certifications are:
(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 the members is
impracticable (numerosity); (4) there must be questions of law or fact
common to the class (commonality); (5) the claims or defenses of the
representative parties must be typical of the claims or defenses of the class
(typicality); (6) the representative parties must fairly and adequately
protect the interests of the class (adequacy); and (7) questions of law or fact
common to 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.”
Rimmer I at ¶ 23, citing Hamilton v. Ohio Savs. Bank, 82 Ohio St. 3d 67, 79-80,
1998-Ohio-365, 694 N.E.2d 442.
2 Regarding the arbitration agreement contained in many potential class members’
loan agreement, this court stated:
Citi appealed this court’s decision to the Supreme Court of Ohio. That
court accepted the case for review but held the case for its decision in Alexander v.
Wells Fargo Fin. Ohio 1, Inc., 122 Ohio St. 3d 341, 2009-Ohio-2962, 911 N.E.2d 286.
The Supreme Court of Ohio subsequently released Alexander, holding that
arbitration agreements in loan documents apply to claims for late recording of
mortgage satisfactions. After Alexander was released, the Supreme Court of Ohio
remanded the case to this court for further consideration of the case in light of
Alexander. Rimmer v. CitiFinancial, Inc., 123 Ohio St. 3d 128, 2009-Ohio-4902,
914 N.E.2d 406. Upon the remand from the Supreme Court of Ohio, this court in
turn remanded the case to the trial court to apply Alexander and to decide whether
to certify a class in light of Alexander.
The Trial Court Certified the Class in 2013
As to the fourth and seventh requirements of Civ.R. 23 — that there
be questions of law or fact common to the class and that such questions
predominate over individualized legal issues — there is but one question of
law that clearly predominates in this case. Specifically, whether Citi violated
its duty to record a satisfaction of mortgage within 90 days from the date of
payoff. Even for the contracts that, unlike Rimmer’s loan agreement,
contain an arbitration clause, the law regarding when to record the
satisfaction is unambiguous. Although there may be some different defenses
and issues presented with regard to those members, they are “subordinate
to the far larger common defense that [Citi] asserts against the Complaint.”
See Finnan v. L.F. Rothschild & Co., Inc. (S.D.N.Y. 1989), 726 F. Supp. 460,
465. The fact that some members may be subject to arbitration does not
compel a finding that individual issues predominate over common ones
since there is still a sufficient nucleus of common issues.
Rimmer I at ¶ 27.
Three and one-half years after this court remanded the case, on
March 11, 2013, the trial court certified the class, excluding from the class those who
had an arbitration agreement in their loan agreements. The trial court defined the
class as:
All persons who from March 8, 1999 entered into a residential
mortgage agreement (as defined by R.C. 5301.36) with Citifinancial,
Inc. without entering into an arbitration provision agreement with
Citifinancial, Inc. relating to disputes arising out of said mortgage
agreement, and thereafter satisfied their obligation where
Citifinancial, Inc. (or any predecessor or other entity acquired or
merged with, or otherwise now part of Citifinancial, Inc., including
any affiliates, subsidiaries, and/or related lending institutions) was
the mortgagee at the time of satisfaction, and, for each such satisfied
mortgage, Citifinancial, Inc. did not record the fact of the satisfaction
in the appropriate county recorder’s office and pay fees required for
the recording within 90 days from the date of satisfaction.
(Emphasis added.)
Rimmer II
Rimmer appealed the trial court’s class definition. Although the class
as defined by the trial court limited its members to those who entered into a
mortgage and paid off the loan from March 8, 1999 and thereafter, Rimmer did not
challenge this aspect of the class definition. Instead, she raised three other issues
regarding the class definition. First, she argued Alexander did not require the trial
court to exclude individuals who had an arbitration agreement from the class. This
court disagreed, finding the trial court properly applied Alexander in excluding from
the class individuals whose loan agreements contained an arbitration agreement.
Rimmer v. Citifinancial, Inc., 2013-Ohio-5732, 6 N.E.3d 621, ¶ 32 (8th Dist.)
(“Rimmer II”).
Second, Rimmer argued that a subgroup of mortgagors whose
arbitration agreements lacked a certain sentence should not be excluded from the
case.3 This court rejected the claim as well.
Third, Rimmer argued the trial court’s definition improperly excluded
those individuals who entered into loan agreements with Citi’s predecessors or other
entities that were acquired by or merged with Citi. This court agreed and remanded
the matter to the trial court for a revision of the class definition to properly include
these individuals.4
3 Some mortgagors’ loan agreements contained an arbitration agreement that
stated:
Claims Excluded from Arbitration[:] * * * Any matter where all
parties seek monetary damages in the aggregate of $15,000 or less in total
damages (compensatory and punitive), costs, and fees. * * * Any claim
asserted on behalf of a putative class of persons will, for purposes of this
exclusion, be deemed to exceed $15,000.
(Emphasis added.)
The arbitration agreements in other loan agreements did not contain the italicized
sentence. Rimmer argued the additional sentence was significant. She labelled provisions
containing this sentence “Type B” arbitration clause and those without it “Type A”
arbitration clause. She acknowledged that individuals with a “Type B” clause should not
be included in the class, but argued that those with a “Type A” arbitration clause should
be included in the class. Rimmer II at ¶ 33-34.
4
Citi cross-appealed the trial court’s decision, claiming the trial court erred by
placing the burden on Citi to provide notice to the class. Citi also claimed the trial court
failed to address which party was responsible for identifying the members of the class.
This court, citing Oppenheimer Fund v. Sanders, 437 U.S. 340, 356, 98 S. Ct. 2380, 57
L. Ed. 2d 253 (1978), explained that while it is generally the representative plaintiff who
On remand from Rimmer II, the trial court issued a decision on March
19, 2014, revising the class definition as follows:
All persons who from March 8, 1999 entered into a residential
mortgage agreement (as defined by R.C. 5301.36) with Citifinancial,
Inc. without entering into an arbitration provision agreement with
Citifinancial, Inc. relating to disputes arising out of said mortgage
agreement, and thereafter satisfied their obligation where
Citifinancial, Inc. (or any predecessor or other entity acquired or
merged with, or otherwise now part of Citifinancial, Inc., including
any affiliates, subsidiaries, and/or related lending institutions) was
the mortgagee at the time of satisfaction, and, for each such satisfied
mortgage, Citifinancial, Inc. did not record the fact of the satisfaction
in the appropriate county recorder’s office and pay fees required for
the recording within 90 days from the date of satisfaction.
Rimmer III
The class definition, as stated by the trial court in its March 19, 2014
decision, again failed to include individuals who entered into a mortgage agreement
with Citi’s predecessors or other entities that were acquired or merged with Citi.
Rimmer appealed from the decision; in her sole assignment of error, she argued the
trial court did not follow this court’s mandate in Rimmer II to include those
individuals in the class. This court agreed and remanded the matter for the trial
court to correct the class definition as follows:
All persons who from March 8, 1999 entered into a residential
mortgage agreement (as defined by R.C. 5301.36) with Citifinancial,
Inc. (or any predecessor or other entity acquired or merged with, or
otherwise now part of Citifinancial, Inc., including any affiliates,
subsidiaries, and/or related lending institutions) without entering
into an arbitration provision agreement with Citifinancial, Inc.
should perform the task of sending the class notice, in some instances, the defendant may
be able to perform the task with less difficulty or expense; in these cases, the trial court
may exercise its discretion to order the defendant to perform the task. Rimmer II at ¶ 51.
relating to disputes arising out of said mortgage agreement, and
thereafter satisfied their obligation where Citifinancial, Inc. (or any
predecessor or other entity acquired or merged with, or otherwise now
part of Citifinancial, Inc., including any affiliates, subsidiaries, and/or
related lending institutions) was the mortgagee at the time of
satisfaction, and, for each such satisfied mortgage, Citifinancial, Inc.
did not record the fact of the satisfaction in the appropriate county
recorder’s office and pay fees required for the recording within 90
days from the date of satisfaction.
Rimmer v. Citifinancial, Inc., 8th Dist. Cuyahoga No. 101254, 2014-Ohio-5287,
¶ 10 (“Rimmer III”).
Procedural History Post Rimmer III
On remand from Rimmer III, the trial court defined the class as
instructed by this court in an order dated January 21, 2015. Thereafter, on
March 11, 2015, the trial court issued a judgment entry ordering that class notice be
sent “only to the individuals who did not enter into arbitration agreements with
Citifinancial, Inc., or with any predecessors or other entities acquired or merged
with, or otherwise now part of Citifinancial, Inc., including any affiliates,
subsidiaries, and/or related lending institutions.” Rimmer appealed from this
judgment entry (8th Dist. Cuyahoga No. 102845), claiming the trial court changed
the class definition. She argued the only individuals to be excluded from the class
were those who had an arbitration agreement with Citi, and those who had an
arbitration agreement with predecessors of Citi or other entities acquired or merged
with Citi should not be excluded from the class. This court dismissed the appeal
because the March 11, 2015 order, which dealt with class notice, was not a final
appealable order. The issue argued by Rimmer in Appeal No. 102845 is not raised
in the instant appeal.
a. Rimmer Sought to Modify the Class Definition
On June 11, 2015, Rimmer moved the trial court to modify the class
definition. For the first time, after three appeals, Rimmer argued that the first
sentence of the trial court’s class definition (“All persons who from March 8, 1999
entered into a residential mortgage agreement * * *”) should be modified to read as
follows: “All persons who, from March 8, 1999 and thereafter paid off a residential
mortgage * * *.” Rimmer pointed to the data provided by Citi that showed that from
March 8, 2013, through December 31, 2005, a total of 98,206 loans were paid off
(and all but 5,254 of these loans contained an arbitration agreement). Based on the
data provided, Rimmer argued Citi itself had also understood the class members to
be those who paid off their loans rather than those who entered into the loan
agreement during the pertinent time period.
On August 10, 2015, the trial court denied Rimmer’s motion to modify
the class definition on the ground that the class as defined in Rimmer III was the
law of the case.
b. Citi Identified 275 Members Fitting the Class Definition
Subsequently, Rimmer asked the trial court to order Citi to identify
the class members. While Citi opposed Rimmer’s request, the trial court ordered
Citi to identify and provide notice to the class members. Out of 5,254 loans without
the arbitration agreement that were paid off during the class period, only 2,814 were
entered into during the class period. Citi provided a spreadsheet of 2,814 accounts
to a title company, which then searched the records of the county recorders
throughout the state to identify the late filings among the 2,814 potential class
members. Among the 2,814 potential class members, most of the mortgage
satisfactions were filed timely within the 90-day period statutory period. In
addition, for more than 200 accounts, the title company did not find a mortgage
recorded, rendering the issue of mortgage satisfaction filing moot. At the end, the
title company identified 275 class members fitting the class definition set forth in
Rimmer III. On April 14, 2016, Citi presented the results of the title company’s
search, consisting of a spreadsheet with 275 accounts, to Rimmer and the trial court.
c. Rimmer Sought to Reopen Discovery Regarding Arbitration
Agreements
After the identification of 275 class members, on May 31, 2016,
Rimmer filed a motion to reopen discovery. For the first time since 2006, Rimmer
asked Citi to produce a separately signed arbitration agreement for proof of a
mortgagor’s agreement to arbitration. The trial court denied Rimmer’s motion,
emphasizing that Rimmer’s request for additional discovery was made 11 years after
her complaint was filed and, during the 11 years this case remained pending,
defendant Citi had complied with all prior discovery requests and made relevant
mortgagor files available for inspection.
On October 12, 2016, with the court’s approval, Citi mailed the class
notice to the 275 class members.
d. Rimmer’s Motion to Expand the Class Notice
More than two months after the class notice was mailed to the 275
class members, on December 29, 2016, Rimmer filed a motion to expand the class
notice. Rimmer claimed Citi must produce separately signed arbitration
agreements to justify the exclusion of those whose loan agreements contained an
arbitration agreement. She argued that the class notice should be sent to any
individuals whose loan agreements contained an arbitration agreement unless Citi
could produce signed arbitration agreements to justify the exclusions. Attached to
Rimmer’s motion were affidavits from five individuals, who averred that they had
no record or recollection of separately signing an arbitration agreement. On
January 18, 2017, the trial court denied Rimmer’s motion to expand the class notice.
e. Judgment Regarding Citi’s Liability
Subsequently, on May 25, 2017, Citi submitted a stipulated judgment,
which conceded Citi’s liability to each class member of $250 in statutory damage,
for a total liability of $68,750. On June 15, 2017, the trial court issued a judgment
entry that stated Citi has stipulated to its liability to the 275 class members and,
based on the stipulation, the court determined Citi was liable for the statutory
damage of $250 to each of the 275 class members for a total judgment of $68,750.
The court ordered Citi to notify the class members of the judgment within 30 days
and stated it would make an award of attorney fees after the class members had an
opportunity to object to the judgment.
f. Motions to Intervene
Before the class members were notified, on July 12, 2017, Rimmer
appealed from the court’s June 15, 2017 judgment entry (8th Dist. Cuyahoga
No. 105989). On August 23, 2017, this court dismissed the appeal due to a lack of a
final appealable order. This court noted that the trial court gave the class members
30 days to object to the judgment and, furthermore, the attorney fees issue was still
pending.
While Appeal No. 105989 was pending, on July 5, 2017, the four
individuals who had previously submitted an affidavit alleging they had no record
or recollection of separately signing an arbitration agreement filed identical motions
to intervene in the class action. The trial court denied their motions.
Rimmer IV
These four individuals appealed from the trial court’s decision
denying their motions to intervene. This court affirmed the trial court’s judgment.
This court noted that the class definition was certified on January 21, 2015, and the
class notice was sent to the class members on October 12, 2016, yet the motions to
intervene were not filed until July 5, 2017, three weeks after the final judgment of
$68,750 was entered against Citi and almost seven months after the trial court
denied Rimmer’s motion to expand the class notice to include individuals in
appellants’ situation. This court concluded appellants’ late intervention would have
caused significant costs and considerable delay in the proceedings between the
existing parties. Rimmer v. Citifinancial, Inc., 2018-Ohio-2845, 117 N.E.3d 862, ¶
29 (8th Dist.) (“Rimmer IV”). This court also characterized the late interventions as
possibly merely an attempt to relitigate the discovery issues.
On December 11, 2018, the trial court entered a judgment of $68,750
in favor of the class and awarded $27,500 in attorney fees, to be subtracted from the
total judgment amount of $68,750. The instant appeal follows.
This Appeal
In this appeal, Rimmer raises seven assignments of error for our
review:
I. The trial court erred in entering its June 15, 2017 and December 11,
2018 money judgments based on no motion, evidence, hearing, or
trial — solely on statements of CitiFinancial’s attorneys in their
briefing.
II. The trial court erred in excluding numerous persons from the class
and from recovery, based solely on CitiFinancial arguing that
excluded persons “should have” signed arbitration agreements —
when CitiFinancial’s answer filed July 12, 2005 (never amended)
did not mention arbitration (even as an affirmative offense); there
was no signed (or even written) arbitration agreement in the
record for any of these persons; CitiFinancial stopped using
arbitration agreements August 1, 2005; and there is no evidence
that anyone (including Citi) ever requested or will request
arbitration of this matter or there is even any “dispute” that anyone
(including Citi) wants “arbitrated.”
III. The trial court erred in failing to hold any hearing, trial, or any
other evidentiary proceeding to determine who was entitled to
class membership, notice, and relief, including for the four
[o]bjectors who each stated, “I request a hearing on the record on
this objection and any reasons why I am being excluded recovery
in this action.”
IV. When the issue of whether and what persons, if any, had signed
arbitration agreements became relevant, the trial court erred and
abused its discretion in denying Rimmer’s requests for discovery
about CitiFinancial’s purported “identification” and exclusion of
numerous class members based on purposed signed arbitration
agreements, when no signed Ohio agreement was ever submitted
to the trial court.
V. The presumption under Ohio law is against arbitration where there
is a dispute whether the person entered into an arbitration
agreement. The trial court therefore erred in excluding persons
without introduction of their signed agreement with Citifinancial,
Inc. to arbitrate.
VI. The trial court erred in ordering class notice to only 275 people and
excluding notice to numerous others for whom Citi had excluded
while introducing no signed agreement to arbitrate.
VII. The trial court erred in overruling Rimmer’s motion for the trial
court to correct a plain, clerical error in the class definition so that
the class membership was correctly based on when the subject
mortgages were paid off, and not when they were entered into.
At the outset, we are mindful that the trial court’s determination in
class action matters are reviewed for an abuse of discretion. “The 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.” Washington v. Spitzer Mgt., 8th Dist. Cuyahoga
No. 81612, 2003-Ohio-1735, ¶ 9, citing Hamilton, 82 Ohio St. 3d at 70, 694 N.E.2d
442. “A trial court which routinely handles case-management problems is in the
best position to analyze the difficulties which can be anticipated in litigation of class
actions. It is at the trial level that decisions as to class definition and the scope of
questions to be treated as class issues should be made.” Marks v. C.P. Chem. Co.,
31 Ohio St. 3d 200, 201, 509 N.E.2d 1249 (1987).
Before we address Rimmer’s claims in this appeal, we observe first
that our review of the extensive record in this case reflects that this class action
litigation appears to have been litigated over the years in almost a piecemeal fashion.
Rimmer’s claims regarding the class and class members appear to “evolve” during
the 14-year history of this class action. After this court decided in Rimmer I that the
trial court should have granted Rimmer’s motion for class certification and the trial
court subsequently certified the class in accordance with Alexander, 122 Ohio St. 3d
341, 2009-Ohio-2962, 911 N.E.2d 286 (holding arbitration agreements in loan
agreements apply to mortgage satisfactions claims), Rimmer argued in Rimmer II
that (1) Alexander did not require the exclusion of those with an arbitration
agreement in this case, (2) a certain group of mortgagors whose arbitration
agreement lacked a certain sentence should not be excluded from the case, and (3)
the trial court’s class definition improperly excluded those who had entered into
loan agreements with Citi’s predecessors or entities that were acquired by or merged
with Citi.
Following Rimmer III, where this court set forth the class definition
and instructed the trial court to adopt the definition, Rimmer for the first time
sought to revise the phrase “entered into a residential mortgage agreement” in the
first sentence of the class definition even though the same phrase was in the class
definition since March 2013, when the trial court first defined the class. After Citi
identified the class members as ordered by the trial court and narrowed the class to
275 members fitting the class definition, Rimmer sought to reopen discovery,
claiming for the first time that Citi must produce separately signed arbitration
agreement for proof of an agreement for arbitration. Rimmer raised this claim ten
years after the issue of arbitration agreement was raised, as the trial court
emphasized. Following the trial court’s denial of the belated discovery request,
Rimmer apparently attempted to relitigate the discovery issue through several
intervenors, as this court observed in Rimmer IV.
The class definition was settled by this court in Rimmer III, and Citi
subsequently stipulated to its liability to the 275 members fitting the class definition.
The latest round of litigation — the main issue in this appeal — concerned Rimmer’s
claim, raised for the first time in May 2016, when she requested discovery be
reopened, claiming that Citi must produce evidence of separately signed arbitration
agreements in order to support the exclusion of those whose loan agreements
contained an arbitration agreement. The first six assignments in this appeal,
although separately argued, relate to this issue. Rimmer argues the trial court
abused its discretion in not reopening discovery to require Citi to produce evidence
of signed arbitration agreements; the class action notice should be sent to all but
those whose signed arbitration agreement was produced by Citi; and the trial court
erred in not holding a hearing before entering a judgment finding Citi’s liability in
the amount of $68,750. Because the arguments in these six assignments of error
are intertwined, we address them together.
Whether Citi Must Produce Separately Signed Arbitration
Agreements to Support Exclusions from the Class
Rimmer claims the arbitration agreements contained in the mortgage
agreements are not valid and do not warrant an exclusion from the class unless Citi
produced a separately signed arbitration agreement. While a claim regarding the
enforceability of the arbitration agreement could potentially be raised by those
individuals subject to an arbitration agreement in their own actions against Citi, the
instant class action concerned the class of mortgagors who did not have an
arbitration agreement in their mortgage agreements, as set forth in the class
definition. Thus, whether Citi must prove the validity of an agreement to arbitrate
by producing a separately signed arbitration agreement is not pertinent for this
certified class. Conceivably, Rimmer could have proposed a class definition to
incorporate the requirement that individuals with an arbitration agreement in their
mortgage agreement can only be excluded from the class by a proof of a separately
signed arbitration agreement. However, the class as defined does not incorporate
this evidentiary requirement. In addition, the trial court concluded Citi complied
with prior discovery requests and previously made relevant mortgagor files available
for inspection. Therefore, Rimmer’s claim that Citi must produce evidence of a
separately signed arbitration agreement in order to exclude the mortgagors whose
mortgage agreements contained an arbitration agreement lacks merit.
A related issue is Rimmer’s claim that the trial court erred in denying
her request in 2016 for additional discovery seeking the production of signed
arbitration agreements. It is well settled that a trial court has broad discretion in
controlling the discovery process. State ex rel. Daggett v. Gessaman, 34 Ohio St. 2d
55, 295 N.E.2d 659 (1973); Mauzy v. Kelly Servs., Inc., 75 Ohio St. 3d 578, 592, 664
N.E.2d 1272 (1996). The trial court abuses its discretion in discovery matters if it
acts in an unreasonable, arbitrary, or unconscionable manner. State ex rel. Denton
v. Bedinghaus, 98 Ohio St. 3d 298, 2003-Ohio-861, 784 N.E.2d 99, ¶ 31.
Rimmer engaged in extensive discovery in 2005 and 2006. In
response to her discovery requests, Citi had made the loan documents available for
inspections and copying. Rimmer knew since March 2006 that, pursuant to Citi’s
research of their business records, all but 5,254 loan agreements contained an
arbitration agreement. Thereafter, on June 29, 2006, her counsel reviewed the loan
documents produced by Citi. As the trial court noted, Rimmer never complained
that Citi’s response to her discovery request was inadequate until a decade later, in
2016, when she asked the trial court to reopen discovery, claiming for the first time
that Citi must produce separately signed arbitration agreements in order to prove
those mortgagors agreed to arbitration. In denying Rimmer’s motion to reopen
discovery, the trial court noted that Citi had complied with all prior discovery
requests and Rimmer’s counsel had had ample opportunity to request documents
and review the files made available regarding the arbitration agreement. The trial
court’s decision denying Rimmer’s belated request to reopen discovery concerning
the arbitration agreement was not unreasonable, arbitrary, or unconscionable.
Rimmer also claims that the trial court should have held a hearing
before entering the final judgment regarding Citi’s liability. As Citi admitted liability
to the class members, the only dispute remaining was who the class members were.
Rimmer did not seem to dispute that, among the 5,254 mortgagors whose mortgage
agreements contained an arbitration agreement, only 275 individuals fit the class
definition. What she disputed was the exclusion of mortgagors whose mortgage
agreement contained an arbitration agreement but no separately signed arbitration
agreement was produced by Citi. As discussed above, we find the claim to be without
merit. In any event, Rimmer never requested a hearing regarding the identification
of the members under the class definition. The only request for a hearing was made
by the four individuals whose mortgage agreements contained an arbitration
agreement, and this court in Rimmer IV held the trial court properly denied their
motions to intervene. Rimmer never asserted before the trial court that a hearing
was required for the identification of the class members.5 Because she did not raise
5 In Rimmer’s reply brief at p. 4, she questions the data presented by Citi showing
that out of more than 98,000 loans, all but about 5,200 had arbitration agreements. The
record reflects that, as early as March 13, 2006, Citi represented to the trial court that the
result of the examination of the computer records by two Citi employees (Miguel Lopez
and Esteves Wild) showed all but 5,254 loans were subject to an arbitration agreement.
In addition, a third employee, Lani Dodson, stated in her affidavit that, effective May 4,
1998, all loans originated by Associates (one of Citi’s predecessors in interest) in Ohio
contained arbitration provisions and all borrowers were required to sign a separate
arbitration agreement in conjunction with the loan agreement. In Rimmer II, this court
stated that Citi’s records showed that during the relevant period, all but 5,254 loan
agreements contained an arbitration agreement. Rimmer II at ¶ 15. Despite her
awareness since 2006 that Citi’s research of its records showed all but 5,245 loan
agreements were subject to an arbitration agreement, Rimmer never requested an
evidentiary hearing on this issue.
the issue before the trial court, we reject this argument raised for the first time on
appeal. A party who fails to raise an issue in the trial court waives the right to raise
it on appeal. Harding Pointe, Inc. v. Ohio Dept. of Job & Family Servs., 2013-Ohio-
4885, 1 N.E.3d 804, ¶ 43 (10th Dist.).
Finally, under the second assignment of error, Rimmer claims, for the
first time, that because arbitration is an affirmative defense and Citi did not mention
arbitration in its answer, it therefore cannot raise the arbitration agreement as a
basis for excluding individuals whose loan agreements contained an arbitration
agreement.
In Gembarski v. PartsSource, Inc., Slip Opinion No. 2019-Ohio-3231,
the Supreme Court of Ohio addressed the question of when the defense of
arbitration should be raised by the class action defendant to avoid a waiver of that
defense. The court determined that, when a case originates with a single named
plaintiff and that plaintiff is not subject to an arbitration agreement, the defendant
need not raise a specific argument referring or relating to arbitration in the
defendant’s answer. Id. at ¶ 2. The court held that, in such circumstances, the
defendant may raise an argument that relates to arbitration at the class-certification
stage of the proceedings. Id. Accordingly, Citi need not mention arbitration in its
answer and was not precluded from subsequently seeking to exclude individuals
whose loan agreements contained an arbitration agreement. For all the foregoing
reasons, the first to sixth assignments of error are overruled.
Class Definition: Law of the Case
Under the seventh assignment of error, Rimmer argues the class
definition contains a plain, clerical error. She alleges that, as defined, the class was
erroneously limited to those who entered into and paid off the loan agreement after
March 8, 1999, resulting in a significantly reduced number of class members.
In Rimmer III, this court set forth the class definition in paragraph
ten of the opinion, which contained the phase “entered into a residential mortgage
agreement,” and the trial court adopted the definition in an order dated January 21,
2015. Rimmer did not appeal Rimmer III to the Supreme Court of Ohio, nor did she
appeal the trial court’s January 21, 2015 order to this court.
Citi argues the trial court’s January 21, 2015 order granting class
certification is a final appealable order and, as such, Rimmer must appeal from it
within 30 days. Citi is incorrect. While an order denying class certification is a final
appealable order, Lotfi-Fard v. First Fed. of Lakewood, 8th Dist. Cuyahoga No.
87207, 2006-Ohio-3727, an order granting class certification is not a final
appealable order. Blumenthal v. Medina Supply Co., 100 Ohio App. 3d 473, 654
N.E.2d 368 (8th Dist.1995). Therefore, we do not agree with Citi’s contention that
Rimmer failed to timely appeal the January 21, 2015 order and was therefore
precluded from challenging the class definition set forth in that order.
However, under the circumstances of this case, we find the law-of-the-
case doctrine precluded Rimmer’s claim. Under the doctrine, the decision of an
appellate court in a prior appeal will be followed in a later appeal in the same case
and court. Nolan v. Nolan, 11 Ohio St. 3d 1, 4, 462 N.E.2d 410 (1984).
The law-of-the-case doctrine reflects a strong public policy to “‘ensure
consistency of results in a case, to avoid endless litigation by settling
the issues, and to preserve the structure of superior and inferior
courts.’” Brothers v. Morrone-O’Keefe Dev. Co., 10th Dist. No. 06AP-
713, 2007 Ohio 1942, ¶ 35, quoting Hubbard ex rel. Creed v. Sauline
(1996), 74 Ohio St. 3d 402, 404, 1996 Ohio 174, 659 N.E.2d 781 (1996).
HealthSouth Corp. v. Testa, 132 Ohio St. 3d 55, 2012-Ohio-1871, 969 N.E.2d 232,
¶ 31, fn. 2.
The first sentence of the class definition now disputed by Rimmer,
which limits the class to those who entered into a mortgage agreement after
March 8, 1999, was the same as the class definition stated in the trial court’s
March 11, 2013 order. On appeal from that order, Rimmer raised two issues
regarding the trial court’s class definition but did not challenge this aspect of the
class definition. Rimmer II. Upon remand, the trial court’s order of March 19, 2014,
reflected the same phrase in the first sentence of the class definition. In Rimmer III,
this court ordered the trial court to adopt a class definition that also contained the
same phrase. Rimmer did not appeal our decision in Rimmer III to the Supreme
Court of Ohio. The class definition this court ordered the trial court to adopt in
Rimmer III was therefore the law of the case and is not reviewable by this panel.
The seventh assignment of error lacks merit.
Judgment affirmed.
It is ordered that appellee recover of appellants costs herein taxed.
The court finds there were reasonable grounds for this appeal.
It is ordered that a special mandate issue out of this court directing the
common pleas court to carry this judgment into execution.
A certified copy of this entry shall constitute the mandate pursuant to Rule
27 of the Rules of Appellate Procedure.
____________________________
MICHELLE J. SHEEHAN, JUDGE
LARRY A. JONES, SR., P.J., and
EILEEN A. GALLAGHER, J., CONCUR