Piper, W. v. Elkhart Brass Mfg. Co. ( 2016 )

J-A33026-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
WILLIAM R. PIPER JR. IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellant
v.
ELKHART BRASS MANUFACTURING
COMPANY, INC. AND FIRE TECH
AUTOMATIC SPRINKLER, INC.
Appellees No. 1018 EDA 2015
v.
TRIAD FIRE PROTECTION
Appellee
Appeal from the Order Entered March 5, 2015
In the Court of Common Pleas of Philadelphia County
Civil Division at No: February Term, 2013 No. 03348
BEFORE: FORD ELLIOTT, P.J.E., STABILE, and STRASSBURGER,* JJ.
MEMORANDUM BY STABILE, J.: FILED APRIL 22, 2016
Appellant, William J. Piper, Jr., appeals from the March 5, 2015 trial
court order denying class certification.1 We affirm.
On May 29, 2012, flooding occurred in Center City One, a
condominium building located at 1326 Spruce Street, Philadelphia. Center
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*
Retired Senior Judge assigned to the Superior Court.
1
An order denying class certification is an appealable collateral order under
Rule 313 of the Pennsylvania Rules of Appellate Procedure. McGrogan v.
First Commonwealth Bank, 74 A.3d 1063, 1078-79 (Pa. 2013).
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City One is a mixed use commercial and residential building. The flooding
was a result of two separate failures in the building’s standpipes. On the
sixth floor, a valve manufactured by Appellee, Elkhart Brass Manufacturing
Company, Inc. (“Elkhart”),2 failed, causing damage to fourteen residential
units on the fifth and sixth floors. On the thirtieth floor, a cap manufactured
by Appellee Firetech Automatic Sprinkler, Inc. (“Firetech”), failed, causing
damage to sixty residential units on floors seventeen through thirty.
Appellant owned two units on the twenty-ninth floor of Center City One
and occupied one of them. On March 1, 2013, Appellant filed a class action
complaint. The complaint alleged causes of action in negligence and private
nuisance. On June 16, 2014, Appellant filed a motion for class certification.
Appellant’s proposed class of plaintiffs includes persons who suffered
property damage, economic loss, and/or the loss of use and enjoyment of
their condominium because of the flooding. The trial court conducted a class
certification hearing on January 14 and 15, 2015. On March 5, 2015, the
trial court entered the order on appeal denying class certification.
Appellant presents two questions for our review:
1. Did [Appellant] make a prima facie showing that the
proposed class’s damages claims could be determined on a
class-wide basis by introducing into evidence liability and expert
opinions refuting [Appellees’] causation defense and determining
the proposed class members’ economic damages could be
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2
Elkhart joined Appellee Triad Fire Protection Engineering Corp. (“Triad”) as
an additional defendant. Triad allegedly maintained the failed pipe system.
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accomplished on a class-wide basis (and who actually reviewed
damages claims and opined that they were reasonable property
damage estimates)?
2. Where, as here, [Appellees] admitted at the class
certification hearing that ‘if this case were bifurcated [between
liability and damages] . . . then it would simply be an accounting
procedure for the people to present their damage claims and
make some kind of adjustment,’ did the trial court neglect to
consider the requirements of the class action rules, or abuse its
discretion in applying them, when it found that ‘damages to units
below and above the 6th floor may be found to have different
causes resulting in damages against different defendants?’
Appellant’s Brief at 8. We will consider these questions together.3
A plaintiff seeking class certification must meet the criteria set forth in
Rule 1702 of the Pennsylvania Rules of Civil Procedure:
One or more members of a class may sue or be sued as
representative parties on behalf of all members in a class action
only if
(1) the class is so numerous that joinder of all members is
impracticable;
(2) there are questions of law or fact common to the class;
(3) the claims or defenses of the representative parties are
typical of the claims or defenses of the class;
(4) the representative parties will fairly and adequately
assert and protect the interests of the class under the criteria set
forth in Rule 1709; and
(5) a class action provides a fair and efficient method for
adjudication of the controversy under the criteria set forth in
Rule 1708.
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3
Appellant fails to develop his second assertion of error in the argument
section of his brief in violation of Pa.R.A.P. 2119(a).
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Pa.R.C.P. 1702. In determining whether a class action is a fair and efficient
means of adjudication, the trial court must consider the factors set forth in
Rule 1708. Pa.R.C.P. 1708. Rule 1709 governs the trial court’s analysis of
whether the class representatives will provide fair and adequate
representation of the class. Pa.R.C.P. 1709.
“Class certification presents a mixed question of law and fact.”
Samuel-Bassett v. Kia Motors America, Inc., 34 A.3d 1, 15 (Pa. 2011),
cert. denied, 133 S. Ct. 51 (2012). “[T]he policy of this Commonwealth
toward certification of class is both liberal and inclined toward maintaining
class actions[.]” Eisen v. Indep. Blue Cross, 839 A.2d 369, 371 (Pa.
Super. 2003), appeal denied, 857 A.2d 679 (Pa. 2004). If the complaint
contains well-pled facts supporting a class action, the proponent must
present evidence in support of the pleadings at the certification hearing.
Janicik v. Prudential Ins. Co. of Am., 451 A.2d 451, 456 (Pa. Super.
1982). “Because the requirements for class certification are closely
interrelated and overlapping, the class proponent need not prove separate
facts supporting each[.]” Id. “[R]ather, her burden is to sufficiently
establish those underlying facts from which the court can make the
necessary conclusions and discretionary determinations.” Id. The
proponent need only make out a prima facie showing that the five
requirements of Rule 1702 are satisfied. Debbs v. Chrysler Corp., 810
A.2d 137, 153-54 (Pa. Super. 2002), appeal denied, 829 A.2d 311 (Pa.
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2003). Prima facie evidence is “[e]vidence which, standing alone and
unexplained, would maintain the proposition and warrant the conclusion.”
Cosmas v. Bloomingdales Bros. 660 A.2d 83, 86 (Pa. Super. 1995)
(quoting Black’s Law Dictionary (6th ed. 1990)). In sum, the proponent of
the class does not face a heavy burden. Cambanis v. Nationwide Ins.
Co., 501 A.2d 635, 637 (Pa. Super. 1985).
Nonetheless, we will not disturb an order denying certification unless
the trial court abused its discretion. Samuel-Bassett, 34 A.3d at 15. ”An
abuse of discretion will be found if the certifying court’s decision rests upon a
clearly erroneous finding of fact, an errant conclusion of law, or an improper
application of law to fact; the trial court must have exercised unreasonable
judgment, or based its decision on ill will, bias, or prejudice.” Id. “The
existence of evidence in the record that would support a result contrary to
that reached by the certifying court does not demonstrate an abuse of
discretion by that court.” Id.
Instantly, the trial court found the class to be sufficiently numerous
(Rule 1702(1)) and that the class representatives and their counsel would
fairly and adequately represent the class (Rules 1702(4) and 1709). Those
findings are not presently at issue. The trial court denied certification
because of insufficient commonality of questions of fact (Rule 1702(2)),
insufficient typicality among the various claims and defenses at issue (Rule
1702(3)), and because the court believed a class action was not a fair and
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efficient method of adjudicating the parties’ dispute (Rules 1702(5) and
1708).
Commonality exists if “the class members’ legal grievances arise out of
the ‘same practice or course of conduct’ on the part of the class opponent.”
Janicik 451 A.2d at 457 (quoting Albin, Inc. v. Bell Telephone Co. of
Pennsylvania, 435 A.2d 208, 213 (Pa. Super. 1981)). “The existence of
individual questions essential to a class member’s recovery is not necessarily
fatal to the class, and is contemplated by the rules.” Id. The Janicik Court
referenced Rule 1708, which provides that the common issues of law or fact
must predominate. Id. (citing Pa.R.C.P. 1708(a)(1)). “The standard for
showing predominance is more demanding than that for showing
commonality [. . .], but is not so strict as to vitiate Pennsylvania’s policy
favoring certification of class actions.” Samuel-Bassett, 34 A.3d at 23.
The trial court addressed commonality and predominance as follows:
The liability claims in this case can be broken into two
groups, claims for apartments above the 6th floor and claims for
apartments below. Plaintiff claims residential units on the 5 th
and 6th floors suffered damages from water flowing in the
proximity of Elkhart’s 6th floor PRV. They claim further that this
failure also resulted in the failure of the 30th floor ‘riser end cap.’
Elkhart claims that no such failure would have occurred if the
standpipe system had been properly maintained by Triad, or
properly designed and installed by Fire Tech. Elkhart further
claims that all damages to units above the 6th floor occurred
because of these intervening causes. Thus, the damages to
units below and above the 6th floor may be found to have
different causes resulting in damages against different
defendants. As to liability these differences alone would not
preclude certification, even though they involve claims of strict
liability and negligence and different parties. Indeed, if there
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was a possible certification for liability purposes only, this would
be the perfect opportunity to avoid inconsistent liability verdicts
and to determine significant issues in all the cases at one time.
However, Pennsylvania law does not permit such limited
certification.[4]
As to damages the mere delineation of the types of
damages claimed demonstrates the fact that commonality of
claims has not been demonstrated. Although this action involves
only a limited number of resident class members and limited
number of units, and a limited number of class members who
have rented their apartments and a limited number of insurance
companies claiming subrogation rights, there is a vast array of
personalized damages issues presented. It is alleged that water
damage caused personal property damage requiring
replacement, personal property damage necessitating repair,
loss of use occupancy damage, loss of rental income damage,
loss due to insurance deductible damage, and loss to insurance
company payments. Each item of damage must be individually
proven at trial. The damages sustained by each class member
are dramatically diverse and individual. These diverse and
individual damages may depend on whether the condominium
unit was occupied or vacant at the time of the flood, whether it
was occupied by the owner or someone other than the owner at
the time of the flood, whether there was a financial loss due to
the need for alternative housing and the extent of those loss
[sic], when each unit was restored to habitability, what was the
cost of the restoration, whether there was insurance coverage
for any losses, what were the individualized insurance
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4
The Dissent argues that since Pennsylvania Rule 1710 tracks its federal
counterpart, F.R.C.P. 23(c)(4), we should look to federal law to ascertain
whether Pennsylvania law permits certification for liability only. Dissenting
Memorandum, at 3-4. Citing a case from the Federal District Court of West
Virginia, the Dissent concludes the trial court could have considered a limited
certification here. Id.
We decline to address this issue because it is not properly before us.
Appellant argues that all issues in the case, including damages, are
amenable to class certification. Appellant has not argued for certification on
liability only. We therefore have no occasion to endorse or reject the trial
court’s views on the legality of certification for liability only.
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deductibles, was the property damage to the structure of the
interior walls, interior surfaces, floors, or fixtures, whether
furniture or other personal property was damaged including
whether there had been any prior damage, whether any repair
or replacements made were reasonable necessary due to the
flood and whether the amounts actually paid were reasonable.
With respect to personal property loss, the condition at the time
of loss may need to be evaluated. Indeed, all the different
criteria which go into the evaluation of any individual water
damage loss would be required for a proper assessment of
damages as to every class member.
Trial Court Opinion, 6/11/15, at 9-10.
Citing Cambanis, Appellant argues certification is appropriate even if
the class members stand to receive different amounts of damages.
Cambanis, 501 A.2d at 640 (“It is well-settled that questions as to the
amount of individual damages do not preclude a class action.”). The
Cambanis Court noted that class certification would be rare if it occurred
only where class members sustained identical damages. Id. The Court
further expounded on the broad discretion of trial courts to manage class
action litigation:
Pennsylvania Rules of Civil Procedure 1710, 1713 and
1714 grant the court extensive powers to manage the class
action. These include the ability to limit the class action as to
issues, divide the class into subclasses, approve settlements and
monitor the conduct of the action. In [Janicik], this Court
stated that: ‘The court should rely on the ingenuity and aid of
counsel and upon its plenary authority to control the action to
solve whatever management problems litigation may bring.’
[Janicik, 451 A.2d at 462.] The determination of damages is an
appropriate area for the exercise of these powers.
A trial limited to the issue of liability is an efficient method
of deciding [defendant’s] liability [. . .]. If the issue of liability is
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decided in favor of the estates, then the question of the amounts
of individual damages will be considered.
Where damages may be determined by a
mathematical or formula calculation and may be
considered a mechanical task, then a class action may be
proper. [Windham v. American Brands, Inc., 565 F.2d 59(4th Cir. 1977), cert. denied, 435 U.S. 968 (1978)]. [. . .] The
amount of damages due to each estate would appear to be a
straight-forward calculation once liability is shown. The damage
issue is, therefore, suitable for class action treatment.
Id. at 640-41 (emphasis added).
In Cambanis, this Court found class certification appropriate where
the varying amounts of damages were ascertainable from actuarial tables.
Id. at 640. Similarly in ABC Sewer Cleaning Co. v. Bell of
Pennsylvania, 438 A.2d 616 (Pa. Super. 1981), the plaintiffs alleged the
defendant artificially inflated the cost of advertising in the Yellow Pages.
This Court held a class action was permissible where the plaintiffs’ damages
awards would be calculable based upon a finding of the reasonable rate the
defendants could charge for advertising. Id. “The question of what rate is
reasonable for the defendants to charge will be answered objectively, one
time, for all members of the class.” Id. at 620.
The only remaining question, if unreasonableness be
proved, will be the objective amounts of damage to which
individual class members are entitled. Presumably, the same
proportion will apply to each class member. Even if there are
differences in the amounts of damages, however, a class action
is clearly not barred[.]
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The foregoing cases are distinguishable from the instant matter. Here,
this is not a situation where Appellant’s damages can be “determined by a
mathematical or formula calculation and may be considered a mechanical
task.” Cambanis, 501 A.2d at 641.5 The trial court issued detailed findings
in support of its opinion that the class members’ damages will vary in kind
and amount, and the record supports the trial court’s findings.
Appellant references another Philadelphia case, Schall v.
Windermere Court Apartments, Docket number 1247 of 2011, in which
the trial court certified a class action for an apartment fire. Appellant’s Brief
at 14-15. Appellant asserts that its damages expert was able to assess
damages to the trial court’s satisfaction in Schall. The Schall court
apparently did not issue a reported opinion, and even if it did, its opinion
would not bind other judges of the Philadelphia County Court of Common
Pleas or this Court.
Assuming without deciding that Appellant’s expert’s report provided
some evidence to support certifying a class here, reversal still is not
warranted. We have already explained that the existence of evidence
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5
We do not hold, as the Dissent seems to suggest, that certification is
appropriate only where the damages calculation is purely formulaic. See
Dissenting Memorandum, at 2. We have no occasion to make so broad a
statement. We conclude only that the record supports the trial court’s
finding that damages are very diverse—in kind and in amount—among the
proposed class members, and that the trial court did not err in its application
of the law to the facts before us.
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potentially supporting a contrary result does not by itself create a reversible
abuse of discretion. Samuel-Bassett, 34 A.3d at 15. Rather, reversible
error occurs where the trial court fails to apply the class certification rules or
abuses its discretion in applying them. D’Amelio v. Blue Cross of Lehigh
Valley, 500 A.2d 1137, 1141 (Pa. Super. 1985), appeal denied, 522 A.2d
556 (Pa. 1986). Here, the trial court’s opinion evinces a thorough
assessment of the certification rules, and the record supports its conclusion
that the class members’ potential recoveries rest on “dramatically diverse
and individual” circumstances. Trial Court Opinion, 6/11/15, at 10. We
therefore conclude the trial court did not abuse its discretion in finding
commonality and the predominance of common issues lacking.6
The trial court relied on similar considerations to find, pursuant to
Pa.R.C.P. 1702(3) and (5) and 1708, that Appellant’s claims were not
sufficiently typical of the claims of the class members, and that a class
action would not be a fair and efficient means of adjudicating this matter.
Id. at 11-16.
A challenge to the typicality requirement presumes
that commonality has been established. The purpose of the
typicality requirement is to ensure that the class representative’s
overall position on the common issues is sufficiently aligned with
that of the absent class members to ensure that her pursuit of
her own interests will advance those of the proposed class
members.
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6
Our conclusion on commonality provides sufficient grounds to affirm the
trial court’s order.
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Samuel-Bassett, 34 A.3d at 30 (internal quotation marks omitted)
(emphasis added). Given our affirmance of the trial court on commonality,
Appellant’s argument as to typicality also fails.
Rule 1708 requires the trial court to consider the following as to
fairness and efficiency of a class action:
(1) whether common questions of law or fact predominate
over any question affecting only individual members;
(2) the size of the class and the difficulties likely to be
encountered in the management of the action as a class action;
(3) whether the prosecution of separate actions by or
against individual members of the class would create a risk of
(i) inconsistent or varying adjudications with respect
to individual members of the class which would confront
the party opposing the class with incompatible standards
of conduct;
(ii) adjudications with respect to individual members
of the class which would as a practical matter be
dispositive of the interests of other members not parties to
the adjudications or substantially impair or impede their
ability to protect their interests;
(4) the extent and nature of any litigation already
commenced by or against members of the class involving any of
the same issues;
(5) whether the particular forum is appropriate for the
litigation of the claims of the entire class;
(6) whether in view of the complexities of the issues or the
expenses of litigation the separate claims of individual class
members are insufficient in amount to support separate actions;
(7) whether it is likely that the amount which may be
recovered by individual class members will be so small in
relation to the expense and effort of administering the action as
not to justify a class action.
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Pa.R.C.P. 1708(a).
In considering typicality, the trial court relied largely on the findings it
set forth in its commonality analysis. This is not unusual in a certification
case, as the class certification requirements often depend on overlapping
evidence. Janicik, 451 A.2d at 456. Concerning Rule 1708(a)(1),
governing the predominance of common questions of law or fact, the trial
court simply incorporated by reference its commonality analysis. Trial Court
Opinion, 6/11/15, at 13. The trial court deemed the class unmanageable
under Rule 1708(a)(2) because of the highly individualized facts underlying
each damages claim. Id. at 14. The trial court also found that Appellant did
not offer sufficient evidence for the court to determine whether the separate
claims of individual class members were too small to support separate
actions, per rule 1708(a)(6). Id. at 15-16.
In summary, the trial court provided a detailed analysis in support of
its conclusion that this case is distinguishable from cases such as Cambanis
and ABC Sewer, in which the courts held that varying amounts of class
member damages will not defeat a class action. Here, the class members’
damages vary in kind—property damage, lost rental income, loss of use and
enjoyment, etc.—and in amount. Each class member’s recovery will be fact
specific and not discernible by mechanical application of a formula.
Based on all of the foregoing, we conclude the trial court acted within
its permissible discretion.
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Order affirmed.
President Judge Emeritus Ford Elliott joins the memorandum.
Judge Strassburger files a dissenting memorandum.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 4/22/2016
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